Well, why do you want to make money? To buy a nicer home for my family. Now, why do you want that?

Stop here for a moment. Think about everything you are doing, every first thought you have when you get out of the bed. Human beings can do many things for many reasons but as the chart above shows, we ultimately want happiness.

Won’t it be great if we spend some time soul searching ourselves, and get straight to happiness? Or some shortcuts there?

So many people say things like “if I make a million I will be happy, if I can be the xxx position at the xxx job I will be happy.” Why should happiness be conditional upon some other factor? If you do not meet that criteria does that mean you are never really happy?

A lot of us spend our time learning the science of trading, for example trading strategies, trading systems, investing formulas. But until we are happy trading and investing, we will never be masters at it.

There are broadly 3 Types of Happiness

In the picture above, we see the smiley faces to the right – that indicates how long the happiness lasts once you take the activity away.

• Rockstars are people who go to the casino or make bets and gambles. They get high when they make money, but this happiness quickly fades away when they stop the activity.

• Flow happens when you are doing something and you lose track of time. This is when you are totally engaged and the happiness lasts longer. For us at AsiaPacFinance.com, Flow happens alot when we are researching and testing trading strategies, or when we are working out at the gym. The more time you spend in the flow, the happier you become.

• And the third and longest-lasting happiness effect is when you are doing something which means more than the result. This is the reason why many successful people donate a large chunk of their wealth to helping others, it gives their lives more meaning and purpose, and makes them happier. On one extreme, you see people giving up everything to serve a higher calling, because it makes them happy. Anything else will be shortchanging their happiness.

Trading is not a sprint, it is a marathon. If you knew you were running a marathon, won’t you want to understand the science of it, instead of running randomly around the parking lot?

The media enjoys worshiping market wizards who struck it big in the shortest period of time, because these stories excite people. But really, understand that your trading career is long term, and your approach to every individual trade will change. You will stick to your rules more, you will study your performance and find ways to systematically improve so you finally get to your destination. If you were running a marathon, you would pace yourself and not go all out at the start, the latter causes people to burn out or give up.

We have heard of so many people quit trading or investing. They say things like:

“I learnt nothing from the seminar” – these people wanted to be spoon-fed. They paid money expecting the Holy Grail which we have explained here, does not exist.

“I lost money” – these people give up too easily after a setback. They associate the period of loss with the activity of trading and investing. They wanted a quick fix.

What is your higher purpose in life and how does trading fit in? We hope we have led you on the path to happiness by planting these seeds in you. Feel free to share your answers below.

The vast majority of those who opt to enter the world of currency trading – or forex as it is better known – end up failing, not because of a lack of knowledge, but more frequently a lack of a trading system, or strategy as it can also be known.

Dipping into forex rather than trading it professionally full-time is possible but the market is vast and can move far quicker than conventional stocks and shares. This is why even those who only wish to trade as a hobby need to be certain of the ins and outs of how they want to trade or else risk a wipeout within minutes.

There is a vast array of trading systems out there in the market and many so-called experts will attempt to peddle their version to you, usually at an inflated cost. Some will add value and assist, but the majority will be no more than repackaged information available for free elsewhere on the internet.

One of the biggest hurdles to trading is the human psyche; we are not designed to cast aside all emotion and make fact-based decisions at speed. One of the biggest risks to the success of a trader is getting carried away with a deal which has either gone badly, or conversely, one that has gone too well.

Having a position which has lost money can feel like a failure and it takes a strong person to cut their losses and move on. However, in order to be successful this is exactly what needs to be done because losses are an integral part of trading, even the most experienced traders get some things wrong. The trick to being successful is knowing how to minimise losses and recognise a losing position as soon as possible.

However, the natural instinct is to plough on in the desperate hope that there will be a shift in the market to recoup the money lost. This can result in utter bankruptcy. At the opposite end of the spectrum, a winning streak can lead to over-confidence and taking up overly aggressive or poorly thought-out positions, which once again will lead to a financial wipe-out.

Having a trading system removes the emotion from trading and with pre-planned entry and exit positions, including stop losses, there is no risk of getting carried away in the heat of the moment. A good tip is to never open a position without having a trading system already in place.

Traders can be split into two main schools of thought – fundamental and technical.

Fundamental traders try and predict the movement of the market based upon political and economic indicators and current affairs. Technical traders believe this all has no relevance and base their strategy upon past market performances, believing that there is a looping pattern of currency movement and that any political impact is already priced in.

In reality, the best traders take a pinch from both approaches and combine them to come up with their own trading system, using a variety of tools such as Japanese candlesticks and Bollinger bands.

It is possible to trade via an automated trading tool, also known as a robot. There are many in the market and some traders swear by the freedom they provide, meaning it is possible to take a break without fearing missing a market movement.

However, the downside of trading via a robot is that the system rules must be programmed in impeccably as the system will implement exactly what it is told to do, regardless of how foolish a trade may be. There have been many stories of successful traders who have lost significant sums of money using robots because they failed to take proper care setting their system up.

A good forex trading system can lead to significant gains, with a full-time income easily possible from a trader who is committed and disciplined enough. It is recommended that anyone considering this should first trade for an extended period of time to perfect their system and establish a regular income stream before leaving their paid employment.

Earning an income from forex can be unstable and viewed dimly by lenders. It is therefore essential that financial affairs are in order before switching careers as it is unlikely that a substantial mortgage or loan will be approved for some time after changing. For those already paying for credit, it may be worthwhile using an online loan or mortgage calculator to check to see if it would be better to change to a different deal to offer more flexibility in the future.

The first time a merchant sold his goods across a national border the need for a foreign exchange rate became suddenly apparent. International commerce cannot be conducted without these rates, but the market mechanics of determining what is a fair and equitable rate for two separate trading countries is a complex process that happens daily with oversight from each country’s respective central bank. Currencies come in pairs, and their relative value represents an overall comparison of the economic health of each country.

Fundamental economic data weighs heavily in this valuation process. Central banks, along with large international banks and hedge funds, have elaborate financial models that incorporate various factors to suggest an appropriate exchange rate for their proprietary use. However, it is the forex market and its many varied participants, including you and your forex broker, that set ongoing price levels on a minute-by minute basis. There are many variables that can impact these daily valuations, but a few key factors have the most influence. Here are the major market movers from a fundamental perspective:

• Interest rates: Global capital is always seeking higher returns, and the measure of a currency’s “yield” is often seen as the prevailing interest rate posture of a nation’s economy. The general rule is that higher interest rates attract foreign capital and thereby strengthen a currency, but forex traders usually focus more on the interest rate differential between two currencies;
• Inflation: Inflation, or the expectation of its influences on prices, is the factor that drives a central bank’s actions relative to interest rate changes. Slight inflation can be good in that it may indicate a growing and strong economy, something that would suggest a stronger currency. However, if price inflation is high, it erodes the purchasing power of the currency, thereby weakening it;
• Money Supply: The actions of the central bank are watched closely, even those that do not concern interest rates. Expanding the money supply in any fashion dilutes the purchasing power of a currency, thereby weakening it;
• Employment Data: High unemployment warns of an unhealthy economy, but improvements suggest job growth and an improving economic picture. At present, signs of real recovery will strengthen the Dollar versus its competitors in the marketplace;
• Domestic Production: Signs of increased production in the manufacturing sector of the economy is always a positive influence. More activity accompanies growth and a return to financial health;
• Retail Sales: Consumer activity is closely watched, especially in an advanced economy, since it reflects consumer confidence in the future and expanding disposable income. Consumer demand can drive a domestic economy, but its effect on imports, it not managed correctly, can lead to trade imbalances, which are a negative factor;
• International Trade: Imports and exports are significant since their “net” figure will cause either increased debt, a negative effect, or an increase in foreign reserves, a positive effect.
• Foreign Currency Reserves: If a country exports more than it imports, it will naturally accumulate foreign currency reserves. For example, China has over $2 trillion in these reserves at present. These funds will often be used to make infrastructure improvements within a country, thereby offsetting the positive influence of this factor on the currency’s value;
• Investment Capital Flows: Capital flows can also impact a country’s balance of payments in a similar manner to trade. Investment opportunities and higher rates of interest attract foreign capital. In times of crisis, capital usually seek “safe havens”, which have traditionally been U.S. Treasury securities. Positive capital flows increase demand for a currency, thereby strengthening it.

Risk Warning: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.

quote

“July 1 (Bloomberg) — The euro may climb to almost a two- month high against the yen next week after rising above key technical levels, Ueda Harlow Ltd. said, citing trading patterns.

The 17-nation currency broke above its 21-day moving average and the so-called cloud this week in a daily ichimoku chart, said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow, which provides foreign-exchange margin-trading services.

The chart also shows the first and second leading span lines are set to converge, compressing the cloud at around the 116.60 yen level on around July 4. Should the euro enter the cloud and stay inside after the cloud flips to above the first span line, the next target will be 118.38 yen, according to Yamauchi.

“There’s a bit of room for an upside move for the euro,” said Yamauchi. “If the currency breaches the top of the cloud after the flip, the euro may advance to 120 yen next week at the earliest.”

The euro was at 116.82 yen at 7:33 a.m. in Tokyo from 116.84 yen in New York yesterday. It last traded at 120 yen on May 4.

Ichimoku analysis is used to predict a currency’s direction through analyzing the midpoints of historical highs and lows. The cloud refers to the area between the first and second leading span lines on the ichimoku gauge and is used to show an area where buy orders may be clustered.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.netKazumi Miura in Tokyo at Kmiura1@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net .”Unquote

My comments:

This is the chart of Daily EURJPY as described above.

Chikou Span breaking above the cloud would be further confirmation of the bullish momentum as shown below:

However looking at the weekly charts below, EURJPY is moving sideways, being stuck inside the cloud with no clear signs of directions.

The Tenkan, Kijun and Chikou Span are all inside the cloud as well. Not a setup that we like to take a position on at the moment.

The twisting of future Kumo is bullish though. And we would be watching for further developments and confluence of the various elements.

Singapore’s inflation rate in 2011 was 5.2%, median monthly household income was $7,000. Now assuming you save all of your income, this is what you will have left in the years to come:

2015: $5,654

2020: $4,329

2024: $3,496

This is what inflation does, it reduces the value of money you hold over time. In just 13 years at current inflation rates, your money loses more than half it’s value. Scary isn’t it?

But look at this article….

According to a 2011 report by Boston Consulting Group, Singapore has the highest concentration of millionaire households, with 16% of all households having at least $1 million in assets. We also have the fastest-growing number of millionaire households,170,000, up nearly a third from 2009.

Hmmm… How did these Singaporeans thrive in an environment of financial crisis, high inflation rates, falling stock prices, falling home prices, and rising unemployment?

We did a study and found out these Singaporeans all shared something in common. And we will email to you their secret, for FREE. Simply fill in and submit the form below.

But assuming you have decided on the above factors, there are a variety of strategies that you can look into, and it will help to become familiar with each of them so that you have more choices for your betting regardless of what the market is doing. You should take them one by one, learning each and seeing how it fits in with your preferences before moving on to examine the next one. Whatever strategies you use, you will need to develop some knowledge of technical analysis so that you can develop anticipation of the markets.

The first strategy is trading with the trend. This is considered by many to be a standard, and may be all you need to make money with spread betting. Just as the name suggests, you simply place a bet on a trending price with the presumption that it will continue. You use technical analysis to get some idea of whether the trend is weakening or about to reverse, but assuming it is not you can hope that the trend continues for a reasonable profit. The process consists of identifying a trend, considering your bet size and stop loss position, ensuring that the risk/reward ratio is worthwhile, and making your bet. You exit the bet when the trend shows signs of finishing, or if the price goes back to the stoploss.

The second strategy is countertrend trading. In some ways the opposite of the first strategy, you must find a price that is showing signs of reversing, and choose your moment to enter the bet soon after the reversal starts. Once again, you need to assess your bet size from considering possible gains and losses. If you have misjudged the trend reversal, you must be quick to exit the bet and cut your losses.

Assuming there is no trend, you can also consider using delta neutral spread betting strategies. These do not depend on an overall upward or downward movement of the price, although you still have to make an assessment by technical analysis to determine the financial securities to bet on. These strategies include pairs trading, where you bet on two companies in the same market sector, one long and one short, so that any sector movement is cancelled out and you profit from the relative merits of the companies.

Whatever spread betting strategies you decide to adopt, make sure that they are clear and you have tested them for profitability.

The red sloping line is a resistance lines which told us to sell. As every trading textbook will tell you, multiple confirmations increase your probability, so we entered a short position when the blue line below crossed below zero. The vertical red line is a very clear instruction to sell.

Just one trade, and 2 months later the strategy is up over 900 pips. Easy to use and powerful, you can get this strategy and all the indicators you see right here.

Our brain is split into 3 parts. The conscious brain is the only part we can directly access. The nonconscious brain processes emotions and drives most of our behaviour, including keeping our hearts beating and our lungs breathing.

Because we live in an information rich world, our brains are designed to take conscious information and turn it into unconscious information. For example, when learning to drive a car, we have to consciously think about every action when we are new to driving. But after a few weeks of driving, it becomes automatic and our subconscious brain does the job for us.

This applies to trading as well. Depending on which trading strategy we newly employ, we initially use much of our conscious brain to make decisions. With practise, a great portion of this decision making becomes subconscious, and we can more quickly and accurately select profitable trades.

We give more weight to information that we are conscious of, but our subconscious brain has over 200,000 times more processing capacity than our conscious brain. The subconscious brain learns from its past experiences and mistakes, while the conscious brain relies on short-term memory.

Before you give up on your trading system or indicator, do allow yourself some time to practise and gain experience. Once your subconscious takes over, things get easier.

1. It costs a fraction of the price.

2. You do not have to travel all the way to a physical seminar.

3. You can learn at your own time, at your own pace.

4. If you are unsure about any terms, Google is right there waiting for you.

5. You can learn over and over again. Most people only pick up a certain % of information on hearing it the first time.

6. You can find the exact strategy/ system/ company to learn from, no need to compromise on vendors and quality.

7. Quality is consistent.

8. You can watch together with your friends.

9. You can test your understanding with the quizzes, usually included.

10. With a detailed course outline, you know exactly what you can benefit from. No guesses.

If you are interested in technical analysis online trading courses for all asset classes, including forex and stocks, do visit AsiaPacFinance.com’s store!