Aussie Fundamentals

As all FX Traders should know, the currency rate depends mostly in the rates differential (expectations) between two countries, on Monday's night (ET) the RBA will release the Cash Rate, and the big question is what the RBA should do with the Cash Rate?


First take a look to the Unemplyment Rate, as you see in the chart, during the last two years the employment is consistently improving in Australia

Second, look at the CPI, as you see in the chart inflation is in the highest points in the last two years, this is a very good sign that the australian economy is improving, this is a good indicator that the RBA will increase the Cash Rate in the following months. 

Finally, look at the Cash Rate chart, I believe that this "fundamental analysis" shows that is very probable to see rate increases during the year, and this would definitely would boost the Aussie against the USD 

The Aussie will break 1.10 this week?

Be careful!, the RBA will release their rate statement on Monday night (ET), if the stament left some room for rate increases the Aussie should break easily the 1.10 resistance, on the other hand any notice that confirms a slower recovery could iniciate a short trend for the following weeks!

Simple Trading Strategy

Hi everyone,

This strategy is designed for traders (like me) that just have a couple of trading hours everyday, it works better in the daily timeframe. You will need the following indicators::

• Exponential Moving Average,10 period, EMA10
• Bill Williams Awesome Oscillator
• Parabolic SAR

Go Long (Short) when the Awesome Oscillator is positive, and the EMA10 and the Parabolic SAR indicators are bellow (above) the price level, don't forget to place the Stop Loss at the minimum of 5% (NEVER RISK MORE THAN 5% OF YOUR TRADING ACCOUNT) Stop Loss or the Parabollic SAR level.

Exit the Trade when the Parabolic SAR and/or the Awesome Oscillator crosess.

If you have a comment please let me know!!!

Happy Trading

Money Management

Keeping your money at a decent level is the biggest key to success. For example, if you lost 50% of the money in your account, then you would have to make back 100% just to be back at the starting amount. The following are some strategies to help you keep your money secure by keeping losses small and running big profits.

In order to cover the inevitable small losses, a trader knows he has to risk an amount that will make a difference in his/her account. For example if your risk percentage is 2% and your account is $1,000, then you are only risking $20. Do you really think that is going to make a difference in your account? Now, if you risk 10-20% on high odds trades you have the potential to make a decent profit. The key is to stay strong and don't go against the goals and/or stops you put in place. No, this is not foolhardy. It is simply risking an amount that will be beneficial. 

Most traders make the common mistakes of trading too much, taking trades with low odds, and risking too little money. These basically set the trader up for failure. The successful trader simply trades less, makes trades with higher odds, and risks a little more of his/her money. These actions increase is chances of making a profit.

Due to the fact that Forex trading is based on taking risks, you have to make risks that will make a difference if you are going to make a decent profit. By failing to follow these strategies, a trader will slowly lose all his/her money and never find the big trend to follow, and will eventually fail completely.