Press review - page 633

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What is Margin Call in Forex (based on the article) 

Margin and leverage 

In order to understand a forex margin call, it is essential to know about the interrelated concepts of margin and leverage. Margin and leverage are two sides of the same coin.Margin is the minimum amount of money required to place a leveraged trade, whileleverage provides traders with greater exposure to markets without having to fund the full amount of the trade. It’s important to remember trading with leverage involves risk and has the potential to produce large profits as well as large losses. 

What causes a margin call in forex trading?
A margin call is what happens when a trader no longer has any usable/free margin. In other words, the account needs more funding. This tends to happen when trading losses reduce the usable margin below an acceptable level determined by the broker.
Below are the top causes for margin calls, presented in no specific order:
  • Holding on to a losing trade too long which depletes usable margin
  • Over-leveraging your account combined with the first reason
  • An underfunded account which will force you to over trade with too little usable margin
  • Trading without stops when price moves aggressively in the opposite direction.

What happens when a margin call takes place?

When a margin call takes place, a trader is liquidated or closed out of their trades. The purpose is two-fold: the trader no longer has the money in their account to hold the losing positions and the broker is now on the line for their losses, which is equally bad for the broker. It is important to know that leverage trading brings with it, in certain scenarios, the possibility that a trader may owe the broker more than what has been deposited.

How to avoid margin call?

Leverage is often and fittingly referred to as a double-edged sword. The purpose of that statement is that the larger leverage a trader uses – relative to the amount deposited - the less usable margin a traderwill have to absorb any losses. The sword only cuts deeper if an over-leveraged trade goes against a trader as the losses can quickly deplete their account.
When usable margin percentage hits zero, a trader will receive a margin call. This only gives further credence to the reason of using protective stopsto cut potential losses as short as possible.

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USD/JPY Intra-Day Fundamentals: Japan Adjusted Merchandise Trade Balance and range price movement 

2019-02-19 23:50 GMT | [JPY - Trade Balance]

  • past data is -0.22T
  • forecast data is 0.17T
  • actual data is -0.37T according to the latest press release

if actual > forecast (or previous good for currency (for USD in our case)

[JPY - Trade Balance] = Difference in value between imported and exported goods during the reported month.

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From rttnews article :

  • "Japan had a merchandise trade deficit of 1,452.2 billion yen in January, the Ministry of Finance said on Wednesday."

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USD/JPY M5: range price movement by Japan Adjusted Merchandise Trade Balance news event 

USD/JPY M5: range price movement by Japan Adjusted Merchandise Trade Balance news event

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Chart was made on MT5 with BrainTrading system (MT5) from this thread (free to download) as well as the following indicators from CodeBase:

All about BrainTrading system for MT5: 

 

AUD/USD Intra-Day Fundamentals: Australia Labour Price Index and range price movement 

2019-02-20 00:30 GMT | [AUD - Wage Price Index]

  • past data is 0.6%
  • forecast data is 0.6%
  • actual data is 0.5% according to the latest press release

if actual > forecast (or previous good for currency (for AUD in our case)

[AUD - Wage Price Index] = Change in the price businesses and the government pay for labor, excluding bonuses.

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From official report :

  • "The trend and seasonally adjusted indexes for Australia rose 0.5% in the December quarter 2018."
  • "The highest index rise at an industry level (in original terms) was recorded in Financial and insurance services (0.9%) and the lowest in Accommodation and food services (0.1%)."

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AUD/USD: range price movement by Australia Labour Price Index news event 

AUD/USD: range price movement by Australia Labour Price Index news event

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Chart was made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:

Same system for MT4:

  1. Brainwashing. Trades: manually and using EAs (MT4)
  2. Brainwashing EAs - the thread (MT4)
  3. Brainwashing: system setup for trading manually and for EAs (MT4) - the thread 
  4. Brainwashing: system development (MT4) - the thread
 

GBP/USD - Cable Pulls Back After FOMC Minutes; 1.31 is the key (based on the article)

GBP/USD weekly chart by Metatrader 5

  • "The British Pound is pulling back after testing above the 1.3100 level earlier this morning. This capped a strong topside run that showed up after the print of a fresh low less than a week ago. The month of January brought a stretch of strength into GBPUSD that likely caught many by surprise, especially considering the way that the year started for the pair: GBPUSD put in a rather large drop on January 3rd, slipping below 1.2500 temporarily as bears made a push. But the rest of January was marked by recovery, as GBPUSD climbed back above the 1.3000 psychological level to test above 1.3200."
  • "As looked at last week, prices began soften from that bullish theme in the final week of January. And that pullback ran for more than a couple of weeks as GBPUSD tested below the 50% marker of the January bullish run. But since then, buyers have made a pronounced entrance back into the equation, particularly over the past two days of price action, helping to firm prices back above the 1.3000-handle."

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The chart was made on weekly timeframe with Ichimoku market condition setup (MT5) from this post (free to download for indicators and template) as well as the following indicators from CodeBase:

GBPUSD: Cable Pulls Back From Fibonacci Resistance After FOMC Minutes
GBPUSD: Cable Pulls Back From Fibonacci Resistance After FOMC Minutes
  • James Stanley
  • www.dailyfx.com
- Brexit remains a difficult driver to work with and the prospect of longer-term trend substantiation can remain as a challenge around GBP-pairs in the near-term. But, given the volatility that’s continued to show around the currency, the door can remain open for short-term strategies utilizing support and resistance levels in order to...
 
Slippage in Forex Explained (based on the article) 


What is Slippage?

Slippage occurs when a trade order is filled at a price that is different to the requested price. This normally transpires during high periods of volatility as well as periods whereby orders cannot be matched at desired prices. Slippage in forex tends to be seen in a negative light, however this normal market occurrence can be a good thing for traders. When forex trading orders are sent out to be filled by a liquidity provider or bank, they are filled at the best available price whether the fill price is above or below the price requested.

Examples of forex slippage

Outcome #1 (no slippage)
The order is submitted, and the best available buy price being offered is 1.3650 (exactly what we requested), the order is then filled at 1.3650.

Outcome #2 (positive slippage)
The order is submitted, and the best available buy price being offered suddenly changes to 1.3640 (10 pips below our requested price), the order is then filled at this better price of 1.3640.

Outcome #3 (negativeNEGATIVE slippage)
The order is submitted, and the best available buy price being offered suddenly changes to 1.3660 (10 pips above our requested price), the order is then filled at this price of 1.3660.
Anytime we are filled at a price different to the price requested on the deal ticket, it is called slippage.

How to avoid it?

So how does forex slippage occur, and why can’t our orders be filled at our requested price? It all goes back to the basics of what a true market consists of: buyers and sellers. For every buyer with a specific price and trade size, there must be an equal number of sellers at the same price and trade size. If there is ever an imbalance of buyers or sellers, this is what causes prices to move up or down.

Which currency pairs are the least prone to slippage?

Under normal market conditions, the more liquid currency pairs will be less prone to slippage like the EUR/USD and USD/JPY. Although, when markets are volatile, like before and during an important data release, even these liquid currency pairs can be prone to slippage. News and data events can increase volatility drastically. 

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Forum on trading, automated trading systems and testing trading strategies

copy trader slippage

Aleksey Pak, 2017.01.30 08:59

Slippage during copy trading

The Slippage tab displays average slippage when executing trade operations on the servers of various brokers.

The average slippage is calculated based on statistics of trading signals execution at different brokers. Statistics is gathered for all signals at the provider's server. The difference between the order price placed by the signal provider and the order execution price at the subscriber's server is defined. The average value is calculated based on these data.

Number of slippage points is displayed according to the price accuracy (number of decimal places) at the signal provider's side.

Slippage can be caused by differences in quotes on the servers or trade execution delays. The lower the slippage, the higher the accuracy of the signal copying.

What is Slippage? Slippage in Forex Explained
What is Slippage? Slippage in Forex Explained
  • Warren Venketas
  • www.dailyfx.com
Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. These concepts will be explored in this article to shed some light on the mechanics of slippage in forex, as well as how...
 

Intra-Day Fundamentals - EUR/USD and Dollar Index: Markit Germany Manufacturing Purchasing Managers Index (PMI)

2019-02-21 08:30 GMT | [EUR - German Flash Manufacturing PMI]

if actual > forecast (or previous good for currency (for EUR in our case)

[EUR - German Flash Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

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From official report :

  • "The IHS Markit Flash Germany Manufacturing PMI dropped to a 74-month low of 47.6 in February."
  • "The IHS Markit Flash Germany Composite Output Index registered a reading of 52.7 in February, up from 52.1 in January and its highest since last October."

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EUR/USD: range price movement by Markit German PMI news events

EUR/USD: range price movement by Markit German PMI news events

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Dollar Index (DXY): range price movement by Markit German PMI news events

Dollar Index (DXY): range price movement by Markit German PMI news events

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Chart was made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:

Same system for MT4:

  1. Brainwashing. Trades: manually and using EAs (MT4)
  2. Brainwashing EAs - the thread (MT4)
  3. Brainwashing: system setup for trading manually and for EAs (MT4) - the thread 
  4. Brainwashing: system development (MT4) - the thread
 

USD/CAD Intra-Day Fundamentals: Canada Core Retail Sales and range price movement 

2019-02-22 13:30 GMT | [CAD - Core Retail Sales]

  • past data is -0.7%
  • forecast data is -0.5%
  • actual data is -0.5% according to the latest press release

if actual > forecast (or previous good for currency (for CAD in our case)

[CAD - Core Retail Sales] = Change in the total value of sales at the retail level, excluding automobiles.

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From official report :

  • "Retail sales edged down 0.1% to $50.4 billion in December. Lower sales at gasoline stations (-3.6%) were partly offset by higher sales at motor vehicle and parts dealers (+1.0%). Excluding gasoline stations, retail sales increased 0.4%."
  • "Retail sales declined 0.5% in the fourth quarter of 2018, following a 0.7% increase in the third quarter. In volume terms, retail sales were relatively unchanged in the fourth quarter."

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USD/CAD M5: range price movement by Canada Core Retail Sales news event 

USD/CAD M5: range price movement by Canada Core Retail Sales news event

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Chart was made on MT5 with BrainTrading system (MT5) from this thread (free to download) as well as the following indicators from CodeBase:

All about BrainTrading system for MT5: 

 

NZD/USD Intra-Day Fundamentals: New Zealand Overseas Merchandise Trade and range price movement  

2019-02-26 21:45 GMT | [NZD - Trade Balance]

if actual > forecast or previous good for currency (for NZD in our case)

[NZD - Trade Balance] = Difference in value between imported and exported goods during the reported month.

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From official report :

  • "Goods exports rose $128 million (3.0 percent) to $4.4 billion."
  • "Goods imports rose $379 million (7.7 percent) to $5.3 billion."
  • "The monthly trade balance was a deficit of $914 million. This is the largest trade deficit on record for a January month."

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NZD/USD: range price movement by New Zealand Overseas Merchandise Trade news event 

NZD/USD: range price movement by New Zealand Overseas Merchandise Trade news event

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Chart was made on MT5 with BrainTrading system (MT5) from this thread (free to download) as well as the following indicators from CodeBase:

All about BrainTrading system for MT5:

Overseas merchandise trade: January 2019 | Stats NZ
  • www.stats.govt.nz
Goods exports rose $128 million (3.0 percent) to $4.4 billion.
 

Dow Jones Industrial Average - weekly breakout with the bullish reversal; 26K level is going to be broken to above (based on the article)

Dow Jones Industrial Average weekly chart by Metatrader 5

  • "The 2019 US equity rally has continued into this week, as the Dow Jones Industrial Average set a fresh three-month-high on Monday. Since then, prices have been pulling back but support has continued to hold with the index currently re-testing the 26k psychological level."
  • "At this point, short-term strategies will likely be focusing on bullish continuation themes, looking for 2019 strength to continue. On a longer-term or swing-basis, the potential for reversal is building as noted by a rising wedge formation building near November/December swing-highs."

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Chart was made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:

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Same systems for MT4/MT5:

The beginning

  1. ASCTrend system, the beginning, part #1
  2. ASCTrend system, the beginning, part #2
  3. ASCTrend system, the beginning, part #3
  4. ASCTrend system, the beginning, part #4 
  5. Digital ASCTrend (Digital Filters with ASCTrend system combined).
  6. LabTrend (LabTrend indicators, LabTrendZigZag, templates, Labtrend EAs) - the thread 

After

DJIA: Dow Softens From 2019 Highs as 26k Re-Test Continues
DJIA: Dow Softens From 2019 Highs as 26k Re-Test Continues
  • James Stanley
  • www.dailyfx.com
- The 2019 US equity rally has continued into this week, as the Dow Jones Industrial Average set a fresh three-month-high on Monday. Since then, prices have been pulling back but support has continued to hold with the index currently re-testing the 26k psychological level. - At this point, short-term strategies will likely be focusing on...
 

USD/JPY Intra-Day Fundamentals: Japan Jobless Rate and range price movement 

2019-02-28 23:30 GMT | [JPY - Unemployment Rate]

if actual < forecast (or previous good for currency (for USD in our case)

[JPY - Unemployment Rate] = Percentage of the total work force that is unemployed and actively seeking employment during the previous month.

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From rttnews article :

  • "The number of unemployed persons in January 2019 was 1.66 million, an increase of 70 thousand or 4.4% from the previous year."
  • "The unemployment rate, seasonally adjusted, was 2.5%"

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USD/JPY M5: range price movement by Japan Jobless Rate news event 

USD/JPY M5: range price movement by Japan Jobless Rate news event

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Chart was made on MT5 with BrainTrading system (MT5) from this thread (free to download) as well as the following indicators from CodeBase:

All about BrainTrading system for MT5: 

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