Doing nothing IS having a position. Always remember that.
The decolonisation of Africa in the 1950s and 1960s was seen as the great opportunity for the continent to finally realise its potential independently. Spurred by the sustained demands for self-determination by leading nationalists such as Jomo Kenyatta and Kwame Nkrumah, many countries throughout Africa would take back their sovereignty from their European possessors. For the first time in more than a century, Africans had once again acquired control of their resource-rich continent, and could now build upon their individual liberation movements and fulfil their ambitions to not only compete with, but overtake their former oppressors. However, merely twenty years after independence several African countries encountered severe economic complications. Thus, asAfrica’s principal development partner,the World Bank, alongside its partner organisation theInternational Monetary Fund (IMF)stepped in by supplying loans to cash-strapped African economies throughStructural Adjustment Programmes (SAPs). However,the SAPs – and the programme’s specific…
View original post 1,299 more words
With the election just around the corner, I think it’s time to reflect on the next stage of the populist movement. We’ve had it in the U.K. with the referendum, the US with Trump’s win (God help us), and Italy with the downfall of Renzi.
In the link above I described the rise of populism and why Trump won. That is specific to the US. However now I feel that a more pressing issue for the future of the EU and Eurozone is on the horizon with the French election.
If you have been following my articles recently, you’d know how much I dislike the Eurozone. Have a read of that article before proceeding if you haven’t already.
So with what you’ve just read in mind, let’s take a look at this first point.
Marine Le Pen, the far right National Front leader, has most support from the youth according to polls.
Many after the UK referendum said that the old had decided the future of the UK – this time, the young in France are fuelling the populist movement. The National Front are obviously abhorrent, but this is not the point here. The point is to understand the rise in right wing thinking. And amongst this age group, it’s very easy to discern.
Youth employment tends to be more low skilled. This means that companies that can produce for a lower cost base elsewhere within the EU will relocate and take advantage of the single market opportunities of free trade and transfer pricing far more easily than age groups where you are more likely to have higher skilled workers.
Alongside this, having fixed monetary policy across varied economies means that there is no way for countries to remain competitive via exchange rate devaluation. This gives rise to labour market supply shocks, such as the one we are experiencing in the French youth market where demand for this age group is highly elastic.
The problems in France remains structural. Here’s what Moody’s had to say when they downgraded France’s credit status last year.
“The current economic recovery in France has already proven to be significantly slower — and Moody’s believes that it will remain so — compared with the recoveries observed over the past few decades. In part, this is due to the erosion of competitiveness and loss of growth potential following the global financial crisis. It is becoming increasingly clear, in the rating agency’s view, that these problems will continue to constrain growth long after the cyclical recovery from the crisis is completed. In Moody’s opinion, France’s potential annual growth rate is at most 1.5% over the medium term. France faces material economic challenges, such as a high rate of structural unemployment, relatively weak corporate profit margins, and a loss of global export market share that have their roots in long-standing rigidities in its labour and product markets.”
I am highly critical of Quantitative Easing’s effects, but I’m not so critical of the ability of a state who can govern its own monetary policy long term. The chart for U.K. youth unemployment is below.
We do not necessarily have a structural unemployment problem since we are able to have the relative (to EZ countries) flexibility to absorb demand and supply shocks caused by downturns. This is why we have recovered pretty quickly post 2008. I know there are certain measures that may muddy these stats such as zero hour contracts and part time work, however this would not cause the huge disparity between the UK’s youth unemployment levels and France’s.
When we talk about populism, we must not disregard certain racist agendas. At the same time, we must maintain an understanding of why thinking changes. Nothing happens ‘just because’; you can always find a root cause.
Follow me on Twitter
A guestpost I wrote for this-is-forex.com.
Check Miad’s site out. Great stuff. Link below.
View original post 363 more words
Creating an environment of easy and affordable debt to boost economic growth has been pursued for many years now and has contributed to many of the misallocations of wealth in the economy. There ha…
Price velocity of the SPX has been rising while the VVIX and VIX have been falling over Q4 of 2016.
Here is one suggestion:
You’d have expected the VIX to rise due to an increase in the US base rate, which would cause volatility increases but this hasn’t happened. An introduction of the risk free rate should lead to a flight from higher risk assets to holding cash in an account (technically). This hasn’t happened.
What’s more is that the SKEW hit 6 year highs in January. This is the evaluative measure of tail end risk in out of the money options. Short term hedging ends up costing more, which prices a risk event short term. View the tweet from Chris Lemieux here:
I’m bored of saying that something is coming but it’s best to be aware of a few different events and when there is a feeling of complacency then there could be an issue.
I asked if anyone wanted to guest post for me and Miad (@ZFXtrading) responded with a great post on how he trades inside bars.
Take a look at his other content at www.this-is-forex.com. Some cracking stuff on volume spread analysis, a particular method that I incorporate in my trading.
Insidebar swing trading is a lot about doing nothing and sitting on your hands. Then when the setup comes it’s everything about execution and continued sitting on your hands again until markets treats you to a TP or slap you with your SL. Insidebars are born out of lacklustre and failure of market participants to break the previous seasons price range. Statistically insidebars and the inevitable breakout give a 50/50 chance of success. Where success is measured by yielding more or at least equally as much as you risked losing. But there are rare moments and in particular Certain environments where IBs are the calm before the storm, the build up before the momentum stretch and that’s where IBs get their reputation from. Catching that explosive move with a tight stop is everyone’s desire big or small players and IBs open up such provocative opportunities.
Wicks are arrows
Now in order to separate poor setups from roulette once you want to understand the power of wicks. Every candle wick tells a story, mostly a boring one without any substance just like my old uncle. Nevertheless it has direction, and in a cluster of unbiased spikes these wicks become your beacon of light. If there are dozens of candles arrayed like sardines in a tin with obvious wicks pointing up the way then that’s because market participants are interested in higher prices. While everyone else is busy trying to figure out what’s going on, you can shape a bias based on price strength at the wicks.
It is incredible how in this chart example the lows got defended. Every dip got pushed back up leaving wicks pointing higher. In tight ranges like that it is impossible to figure out a breakout direction unless you look for your clues.
Realising that candle wicks are actually arrows and the bigger they are the more meaning they have opens up totally new horizons.
Swing high and low
Breaking down price behaviour into pivots gives us a better perspective. Now pivots with less noise and clusters around them have much more ease and room to flex. Hence when we observe a turnaround point in the middle of nowhere it tends to be a smoother sail as opposed to noisy conditions. So whenever you see price has broken free and leaves generous room to move be advised that it has an equal chance of returning to where it came from. All it needs is a spark, that spark could be an IB.
Bringing it together
When a mother bar and the subsequent insidebar both have wicks pointing lower then a breakout to the downside is likely to advance further. And when all of that happens at a swing high , well you got yourself a golden goose.
IB trade management
Dropping a Fibonacci line from the bottom to the top of an IB range will plot 161,261 and 423 extension levels.
And here is the drool, I have forward tested IB setups as outlined above and 7/10 times 161 gets hit in the very first burst and 9/10 times 161 levels gets hit during the lifetime of a trade (mic drop). You’ll see 261 tested 7/10 times which accounts for a RR of 1.6 . Combined take profits will yield RR0.6+RR1.6= RR2.2 with an average strike rate of %70.
Great article from @breakingoutbad on building an edge & its importance
This article, which examined 70M+ trades, emphasizes the importance of keeping your losers small and your winners big. The concept is simple enough, yet the vast majority of traders fail at trading because they struggle to do this effectively over time. As the article explains, most traders do the opposite: They cut their winners quickly and let their losers run, which results in a positive win rate but a negative expectancy (the negative expectancy matters a lot more – unless you like losing money with a high win rate). Note: I refer to R-Multiples a number of times in this post – if you’re not familiar with them, then read Van Tharp’s informative explanation of R-Multiples.
Possessing the ability to both 1) respect (and accept) your…
View original post 2,395 more words
Great post on credit building
I’m just going to jump right in,
It is funny how the majority of the black community are against borrowing money, credit cards, financing cars or other items. It seems like the black community, in general, look down on people that lease or finance cars and look at credit cards as some type of VIP one-way ticket to hell. Not understanding, that financially (for people with a stable income), these things are more beneficial in our short and long term lives.
Personally, I think the problem is thelack of financial education or with the understanding of how the banking system works or how it makes its money.
View original post 1,539 more words