Brexit

ECONOMY OF NO NATION

implications

O I LUS SHALEPRODUCER S CAN’T LOSE

APRIL - JUNE 2016

WHAT HAS CAMERON NEGOTIATED? HOW WILL MARKETS REACT UNTIL 23RD JUNE?

F A I L U R ES W I N GPAT TERNS

NEURAL NETWORKTRADING SYSTEMS

BUILD YOUREDGE WITHTIME FRAMES

TRADER MAGAZINE

FXCONTENTs

OIL$30 in six monthsU.S. shale producers cannot lose

27

Identifying trend reversals at an early stage

37

07 EDITOR’S NOTE

MACROECONOMICS

42 Economy of no nation: the new role of currencies and Central Banks in the networked economy

FUNDAMENTAL ANALYSIS

11 JPY: BoJ puts the rate hike cycle on hold. Yen should dip back down

30 AUD/NZD: Milking the Market

TRADING PSYCHOLOGY

59 Take Control of Your Trading. How A Shift in Mindset Can Equal a Shift in Results

TRADING SYSTEMS

22 Creating a Trading System Using Neural Networks: learn how to create a simple trading system on the EUR/USD

74 Robots ain’t what they’re cracked up to be: the journey of an algo trader who systemized his own strateg y

MONETARY POLICIES

71 Is that Buzzing Sound Helicopter Money? Analyses the meaning and the idea behind Helicopter Money

13 Is the influence of Central Banks fading? Looks at current monetary policies and the drawbacks of negative interest rates on the economy

TECHNICAL OUTLOOK

17 USD: Dollar view remains bullish in a disjointed global puzzle

MARKET WATCH

79 Is the Market a Lottery? Can a financial market investment be compared to a lottery investment?

ASK THE COACH

34 Can simulators be a useful tool to keep concentrated in the real market?

TECHNICAL ANALYSIS

55 Using Technical Analysis for Stop Loss placement: Technical analysis can be an efficient risk management tool

67 Using Time Frames to Buid an Edge: Example of a trading method in a trending market

BOOK REVIEW

81 Simple Strategies of Highly Effective Traders by Alpesh B. Patel & Paresh H. Kiri

TECHNICAL REPORTS82 Currency Index:USD-G10 index, long-termSEK-G10 index, long-term

83 Trends and Targets:USD Majors, Major CrossesEmerging & Asian MarketsUSD/CHF, EUR/JPY, USD/RUB, USD/MYR

87 CONFERENCES &SEMINARSINTERNATIONAL DATA88 FX Spot Monitor89 Central Bank Rates90 Economic Data - FX Poll91 Markets View92 ECONOMIC CALENDAR

FAILURE SWING PATTERNS 63

BREXITHow will markets react until 23rd June? What are the implications for the Sterling?

FX TRADER MAGAZINE April - June 2016 3

Brexit: what are the implications?

What has Mr Cameron negotiated? And what do the Markets want?

Will the Sterling be sensitive to the in an out campaigns?

Markets and businesses are as much divided on this issue as anyone else

A new deal

UK Prime Minister David Cameron returned from his negotiations with other EU leaders in late February ‘clutching a piece of paper’, which he hopes will ensure Britain’s continued membership of the European Union.

However UK politicians have returned, flushed with success, from key European summits in the past, only to find that the terms of the agreements they had reached were not worth the paper they were written on.

True to his word Mr Cameron held

a cabinet meeting immediately on his return and his ministers agreed to hold a referendum on the 23 June 2016. Mr Cameron has allowed ministers to vote with their conscious and campaign as they feel appropriate, whether in or out. In effect the battle lines have

by Darren Sinden

FX TRADER MAGAZINE April - June 2016 63

FXFUNDAMENTAL ANALYSIS

FUNDAMENTAL ANALYSISFX

now been drawn, with the outgoing Mayor of London (and according to some, a possible successor to David Cameron), Boris Johnson joining the out campaign.

So what has Mr Cameron negotiated?

David Cameron has continued in the footsteps of a long line of UK leaders that have sought to extract favourable terms for the UK from Brussels. Britain has to date remained outside of the European single currency and has sought to protect what it sees as its own vital self-interests. Mr Cameron has negotiated in a similar vein and the key points of the agreement he has reached are as follows.

Migrant welfare payments:

The UK will have the ability to limit access to ‘in work benefits’ (tax credits and housing benefits) for EU migrant workers during their first four years in the UK. The so called ‘Emergency Brake’. However, this brake can only be applied for a maximum period of seven years.

Child benefits

Child benefits paid to migrant workers whose children are overseas will be recalculated to ref lect the cost of living in their home country.

The pound and the Eurozone

Britain can retain its own currency whilst in Europe without fear of discrimination and any money that the UK spends on Eurozone bailouts would be reimbursed.

The City Of London

Safeguards will be put in place for the UK’s large financial services industry to prevent it being subject

to Eurozone regulations

Sovereignty

The UK will not be forced into an ever closer union of EU states. This

c o m m i t m e n t is to be i n c o r p o r a t e d into an EU treaty change. N a t i o n a l parliaments will be able to band together to block EU regulations, if 55% of EU member p a r l i a m e n t s vote against that legislation.

There are also some concessions on restrictions to freedom of movement, about competitiveness and strengthening the single market.

Though Mr Cameron has come away with a deal, it is not the one he wanted. He has had to give ground in several key areas such as returning powers from Brussels to the UK and the practicalities of the agreement have yet to be agreed.

What do the out campaign want?

The out campaign is to some extent fragmented with up to three separate

Though Mr Cameron has come away with a deal, it is not the one he wanted and the practicalities of the agreement have yet to

be agreed

64 FX TRADER MAGAZINE April - June 2016