TRADER MAGAZINE CENTRAL BANKS DI SREGARDING THE DOllAR? B ROKER REVIEWS GREEN SHOOTS R ECOVERY brokers CLS GLOBAL MARKET GATE survival MAJORS guide REPORT T RADING PSYCHOLOGY THE IMPACT OF NEW US REGULATIONS AND THE MARKETS AND THE PRIVATE TRADERS CHOICE JULY - SEPTEMBER 2009 THE NEW MASERATI QUATTROPORTE ARTWORK FOR CONNOISSEURS. Maserati Quattroporte S 4,7 litres 430 CV and Quattroporte 4,2 litres 400 CV. V8 engine, PininFarina design. Combined consumption : 14,7 l/100 km (4,2) - 15,7 l/100 km (4,7) - CO2 emissions : 340 g/km (4,2) - 365 g/km (4,7) - www.maserati.com 079-Quattroporte-UK.indd 1 26/01/09 17:01:54 CONTENTs FX CENTRAL BANKS DISREGARDING THE DOLLAR ? A study about central banks’ current monetary policies 13 16 FORE O X BR KER SURVIVAL GUIDE: The impact of the new NFA regulations and the traders’ choice from the Forexds Awards 2009 TRADING SYSTEMS: Why building a reliable FX historical database is a real challenge 28 05 EDITOR’S NOTE INTERVIEW TECHNICAL ANALYSIS 34 Mike Buzzeo, Sr. Vice President 54 Majors Technical Outlook MACROECONOMICS Marketing, FXCM, shares his views on EUR/USD – EUR/GBP 07 Green Shoots Recovery: the new US regulations and explains the 57 New Zealand Dollar fundamental analysis of the first company’s current development economic recovery signs and their 59 Majors Report impact on currencies 59 Dollar/Yen, Euro/Dollar, 43 Franz Schmadl, CIO, OSV Partners, Euro/Yen, Euro/GBP FOREX INDUSTRY explains the importance of risk management 24 CLS : a gate for the global FX coupled with a solid investment and INTERNATIONAL DATA market independent decision making process 63 FX Spot Monitor BROKER REVIEWS TRADING PSYCHOLOLGY 64 Central Bank Rates 48 ODL Securities Limited 40 Why successful trading has very little 65 Economica Data - FX Poll 51 GFT UK to do with the market 66 Markets View OPTIONS FOCUS 67 ECONOMIC CALENDAR 37 The dynamics of option 46 Bonds: How to choose a bond, pricing balancing risk and reward FX TRADER MAGAZINE July-September 2009 3 FX CONTRIBUTORS Alessandro Balsotti, is head of FX trading in Tradermades technical analysis service. Fully Abax Bank and covered the same role previously annotated Technical commentaries are in Banca Caboto. For several years he has been provided on Tradermades Maverick charting the FX market-maker of Italian Lira, Greek system. The service is available as an add-on to Dracma and Czech Crown in JP Morgan. Maverick, or via a separate web-based login. To arrange for a free trial, call 020-8313-0992 or D. Roy Fraser, is the Managing Director of e-mail [email protected] Incapital Europe Limited, the investment bank that runs a platform providing regulated Ruggero Mameli spent 11 years in London financial intermediaries with investment-grade working in FX, Derivatives and Fixed Income. bonds. Their tenet of “Bonds For Today’s He joined Danske Bank and worked between Editor : Investor” can be further explored at incapital. London and Copenhagen and was also Emmanuelle Girodet com, internotes.com and structuredinvestments. involved in some project developments with [email protected] com the New York office. He is a contributor to Bloomberg Television, CNBC Class and CNB Steffen Gregersen has played a leading role in Arabya. He is a specialist in Islamic Finance Advertising manager: Saxo Bank’s Quantitative Analysis and Advance and Geopolitics of the Middle East. Monique Atlan Research Department in its development of [email protected] the bank’s option pricing models. He holds a Caspar Marney, started his trading career, as a degree in Mathematics and Economics from spot currency trader and technical analyst with the University of Copenhagen where his thesis HSBC in London. He then moved to SBC Webma ster : was on the effects of jumps in underlying prices Warburg (later UBS) as a proprietary trader Hristo Katzarski on option prices. and global head of technical analysis for FX [email protected] and precious metals, where he became one of Jason Alan Jankovsky is a 20+ year veteran the bank’s most successful traders and a regular Graphic design: of leveraged transaction trading. He has been commentator on financial television. trading extensively in Futures, Options, and Preslav Dobrev FOREX since 1986. Working in almost all Giorgio Martini has been a forex trader since facets of the business, he has authored several 2000 and has worked for leading Italian banking Editorial support: trading systems, he has trained other successful groups. His articles are regularly published on Lorenzo Lorenzi traders and has been published in many industry the Italian financial portal www.smartTrading. Luca Di Bari periodicals. His numerous articles on global it . He also collaborates with Age Italia, an cash FOREX have appeared in “Tradersavvy”, independent financial consultancy firm. Kylie Lippert “The Perspective”, “SFO Magazine” and other industry publications. He is the author of Maurizio Milano, began his career as forex “Trading Rules that Work: The 28 Essential dealer in 1995. He started the technical Lessons Every Trader Must Master” and “The analysis department at Banca Sella Group. He T rading carries a high level of risk, and may not be Art of The Trade: what I learned (and lost) teaches technical analysis at the University suitable for all investors. The objective of FX Trader trading the Chicago futures markets” (Wiley & of Turin, Italy. His contributions can be Magazine is to give readers the tools, training and information which will help them be better prepared Sons, October 2006). Both books are Amazon. found in the most renowned Italian financial to trade on the foreign exchange. However, any analysis, com top-100 best seller. newspapers and televisions: Borsa&Finanza, news, research, strategy, or other information contained Il Sole24Ore, Il Corriere della Sera, Class- on this magazine is provided as general market JW Partners is an independent FX solution CNBC, RadioRai1. He is member of SIAT information and does not constitute investment advice. provider, based in Milan, with a strong (the association of the Italian technical analysts) FX Trader Magazine, will not accept liability for any FX specific know-how. JW supports and IFTA (the International Federation of loss or damage, including without limitation to, any loss institutional investors and HNWI in building Technical Analysis). of profit, which may arise directly or indirectly from use quality FX multimanager portfolios, and FX of or reliance on such information. underlying structures. Javier Paz is the CEO of Forex Datasource, a boutique market research firm that continues Steve Jarvis has over 20 years experience of to track and attract broker evaluations from providing technical analysis to FX professionals. traders worldwide through its website www. Formerly Chief Technical Analyst at MCM forexds.com. The firm will announce on May Subscriptions: Currencywatch and Informa Global Markets, 2010 the results of its 2nd Forexds Trader’s www.fxtradermagazine.com Steve is head of technical analysis at InterpreTA, Choice Awards. 4 FX TRADER MAGAZINE July-September 2009 EDITOR’s note FX N ew US broker regulations for a better protection of the FX trader W elcome to the second edition of can now expect a complete new set of protection and service supply but, FX Trader Magazine. It’s with great of regulatory decisions which will most importantly, in terms of trading pleasure that we publish this edition, transform the industry in the next execution transparency and price considering the big success of the years, and inevitably generate further quotations. previous issue. industry consolidation. We might start to see a change The magazine has not only been of market sentiment in the various downloaded by a great number of Europe will very probably follow internet forums regarding issues like traders but, we also received many the same path as well, as soon as Stop Hunting and other aspects of compliments and messages of forex will have reached Mass Market trading execution, which are at the congratulation from disadvantage of forex traders. the industry, for the And why not expect best quality of the articles execution to be introduced and of the editorials. on the retail market as well? This, of course, is This is possible too.I n other our best reward but, words, a very exciting future also emphasizes that is ahead of us… the interest for forex TheI nterview of Michael markets is always there Buzzeo, Sr. Vice President and continues to grow. Marketing of FXCM, also So, we will try to do allows to understand why our best to pursue our one the leading international mission by continuing forex brokers supports those to provide readers new regulations and explains with quality editorial how, in his opinion, they content. could impact the European In this issue, we’ve markets. chosen Javier Paz’s Safe Keeping Cage of Thomson and Mckinnon Brokerage Firm To summarize, the forex article as the main market continues to expand one, because the author underlines dimensions. This could even happen and get better structured. FX Trader the progressive regulation process of before we expect it to, considering Magazine will be there to follow the FX market, currently taking place the strong disparity in terms of costs industry developments and will in the US. The introduction of rule and regulation procedures, which continue to inform you and analyze 2,43b from the NFA is the first strong currently benefitsE uropean brokers, new important market news and signal that the regulation entities want as Javier points out in his article. If, on events. to protect the final client. This is, we the one hand, this implies higher costs believe, a positive thing. From the for brokers in the future, on the other original “far west” market conditions hand, this invevitable process will that were ruling FX in its infancy, we benefit the final client, both in terms Emmanuelle Girodet FX TRADER MAGAZINE July-September 2009 5 MACROECONOMIcs FX Green Shoots Recovery I am not young enough to know everything Sir James Matthew Barrie (with Peter Pan’s voice) T he macro framework in the last victory for the CAD (+12%).