JANUARY - MARCH 2012

TRADER MAGAZINE

THE ECB ROLE . THE SECURITIES MARKETS PROGRAMME . MORE SEVERE FISCAL RULES . WHAT WILL DRIVE THE MARKETS IN 2012?

GBPWATC HE X P E R T ADVISORS

euro?

DISPLACED M O V I N G A V E R A G E

which future

M E N T A LT R AINING

for the

FUND TRADERBECOME A

FXCONTENTs

WHICH FUTURE FOR THE EURO?The role of the ECB, the Securities Markets Programme and the decision to implement severe fiscal rules will define the future of the euro.

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DISPLACED MOVING AVERAGE:

An active and flexible way to use MAs, cutting out the noise in intraday trading 18

BECOME A FUND TRADER:

Five-step introduction to the process of becoming a fund trader and trading professionally

FX TRADER MAGAZINE January - March 2012 3

04 Editor’s notE

FUndAMEntAL AnALYsis:10 Global FX Analysis: 2011 recap, and currency prospects for 2012

trAdinG strAtEGY:64 Seeing the Music of the Market: an approach to viewing the markets and constructing trades58 Automation, Diversification and the “Wrong Way” approach to forex trading

CoACHinG: 24 Mental Training: three well-proven exercises to use as a part of your mental training for trading success

CUrrEnCY WAtCH: 22 GBP Outlook: combined fundamental and technical analysis of the British Pound

tECHniCAL AnALYsis:77 Majors analysis, using ichimoku Kinko Hyo

86 Majors Report: EUr/GBP, EUr/Usd, EUr/JPY, Usd/JPY

intErViEWs: 53 Frederic Bettan, FX Manager and CEo of swing Capital

70 Samar Suleiman, institutional FX sales, swissquote Bank

MArKEt WAtCH:74 Expert Advisors and the reorganization of retail Forex

tECHniCAL oUtLooK: 82 Majors, Emerging and Asian Markets: trends and targets, Featured pairs: EUr/Usd, EUr/JPY, EUr/HUF, Usd/tHB

intErnAtionAL dAtA:90 FX spot Monitor91 Central Bank rates92 Economica data - FX Poll93 Markets View

94 EConoMiC CALEndAr

49Cover photo: Sebastian Zwez

“I am sure the Euro will oblige us to introduce a new set of economic policy instruments.

It is politically impossible to propose that now. But some day there will be a crisis and

new instruments will be created.”

R o m a n o P r o d i , E U C o m m i s s i o n P r e s i d e n t , D e c e m b e r 2 0 0 1

WHICH FUTURE FOR THE EURO ?

MONETARY POLICiesFX

30 FX TRADER MAGAZINE January - March 2012

FX TRADER MAGAZINE January - March 2012 31

KEY FACTS OF THE CRISIS

The sovereign debt crisis that broke out in Spring 2010 and was initially limited to Greece has since then expanded rapidly and led to a profound crisis of confidence. Since treasury bonds have traditionally formed the secure core of the financial system, the uncertainty has increasingly spilled over into the banking sector, which has in turn impacted negatively on the credit rating of public sector borrowers. Neither the ambitious consolidation programs in the countries in difficulty nor the rescue plans, floated on an

ever-larger scale, have been able to fundamentally change this vicious circle to date. The euro area’s increasing instability contrasts with conditions in Japan, the United States and the United Kingdom, countries which -despite far higher budget deficits during the same period - have been able to secure refinancing at historically low interest rates. This discrepancy reflects the constitutive element of a monetary union that bars its member states from taking the comfortable albeit highly questionable route of central bank financing from the viewpoint of stability policy.

In this article I will move from what is likely to be the main unknown able to drive markets in the first few months of 2012 (i.e. Will ECB print and how much?) to an attempt at forecasting the potential consequences of a break-up of the monetary union (thanks to a Nomura study). Re-offering a brilliant WSJ article from historian Niall Ferguson on a fantasy 2021 Europe will give us some solace before summing up that ECB help or a more severe enforcement of fiscal rules cannot be the solution of the euro area problems by themselves.

FXMONETARY POLICies