Understanding drawdown

Drawdown means how much the stock, future, or underlying instrument has fallen before one is profitable. In order for one to trade more than 100 shares or 1 contract of a futures contract one needs to understand how to recognize specific trading setups which occur on a daily a weekly basis.

One can use these ideas to trader longer term over months or years but the risk greatly increases because of uncertain events that can occur which can make the initial analysis fail. In order to be unemotional in trading a trader needs to have a fixed stop loss which means a set amount he or she is willing to risk per trade whether it be 1 dollar or a hundred dollars.

Forex – USD/CAD trims gains after Canadian wholesales data – Sean Seshadri

The U.S. dollar trimmed back gains against the Canadian dollar on Wednesday after official data showed that Canadian wholesale sales were higher for a consecutive third month in June.USD/CAD was flat at 1.0942, off session highs of 1.0938.

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The pair was likely to find support at around 1.0920 and resistance at about the 1.0985 level.The Canadian dollar firmed up after Statistics Canada reported that wholesale sales rose 0.6% to C$53.0 billion in June. Economists had forecast an increase of 1.3%.

Wholesale sales for May were revised up to 2.3% from a previously reported gain of 2.2%.Demand for the greenback continued to be underpinned after recent reports indicated that the economic recovery is on track.

Data on Tuesday showed that U.S. housing starts jumped 15.7% in July, while the number of new permits granted to home-builders also accelerated.The data pointed to underlying strength in the housing sector, which stalled in the second half of last year.

The data offset a report showing that U.S. consumer prices rose just 0.1% in July.Investors were looking ahead to the minutes of the Fed’s latest meeting due for release later Wednesday for further indications on the future direction of monetary policy.

Market watchers were also awaiting a speech by Fed Chair Janet Yellen in Jackson Hole on Friday.Elsewhere, the loonie, as the Canadian dollar is also known, was higher against the broadly weaker euro, with EUR/CAD down 0.22% to 1.4543.


Crude drops on IEA report, waning fears of Iraq supply disruptions – Sean Seshadri

Crude prices fell on Tuesday in wake of a bearish report from the International Energy Agency as well as perceptions that Iraqi oil exports will flow as normal despite an insurgency taking place in the country.In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded down 0.95% at $97.15 a barrel during U.S. trading. New York-traded oil futures hit a session low of $96.87 a barrel and a high of $97.94 a barrel.

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The September contract settled up 0.44% at $98.08 a barrel on Monday.Nymex oil futures were likely to find support at $96.55 a barrel, last Thursday’s low, and resistance at $98.58 a barrel, Monday’s high.
The International Energy Agency earlier cut its 2014 global oil demand growth forecast by 180,000 barrels per day to 1.0 million due to lower‐than‐expected deliveries in the second quarter and the International Monetary Fund’s weaker outlook for economic growth.

As the economy improves in 2015, the agency said, demand is set to accelerate 1.3 million barrels per, though crude futures fell on concerns that the global economy is awash in crude.”Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin,” the IEA said in its monthly oil-market report.

Waning fears of supply disruptions pressured prices lower as well.In Iraq, Haidar al-Abadi, the deputy speaker of parliament, was named as the country’s new prime minister on Monday in place of Nuri al-Maliki, who has refused to step down.

Maliki said the decision was a “dangerous violation” of the constitution and vowed to “fix the mistake”.U.S. President Barack Obama said the naming of Abadi was an important step for Iraq towards rebuffing Islamic State militants.

The U.S. recently began air strikes targeting militants from the Islamic State insurgent group in the northern part of the country in an effort to protect Iraqi civilians from the uprising as well as U.S. personnel in the country.Still, the country’s major oilfields remain far to the south of the fighting, and with U.S. airstrikes halting the advance, fears of supply disruption eroded further on Tuesday, which further dampened oil futures.


Crude falls despite upbeat U.S. inventory report – Sean Seshadri

Crude prices fell on Wednesday despite an upbeat weekly U.S. inventory report, as investors traded on concerns that the global economy is awash in crude.In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded down 0.49% at $96.91 a barrel during U.S. trading. New York-traded oil futures hit a session low of $96.75 a barrel and a high of $98.12 a barrel.
The September contract settled down 0.93% at $97.38 a barrel on Tuesday.

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Nymex oil futures were likely to find support at $96.26 a barrel, the low from Feb. 3, and resistance at $102.10 a barrel, the high from July 28.The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories declined by 1.8 million barrels in the week ended August 1, compared to expectations for a decline of 1.7 million barrels.

Total U.S. crude oil inventories stood at 365.6 million barrels as of last week.The report also showed that total motor gasoline inventories decreased by 4.4 million barrels, confounding forecasts for a gain of 0.3 million barrels, while distillate stockpiles fell by 1.8 million barrels, stronger than expectations for an increase of 0.9 million barrels.

Still, while the U.S. economy continues to show signs of more sustained economic recovery, concerns the rest of the world isn’t catching up as quick watered down crude oil prices, as a less robust global economy will consume less fuel and oil.

Italy’s economy shrank for a second consecutive quarter in the three months to June, which technically means the country is in recession.ISTAT, Italy’s statistical office, reported that the country’s gross domestic product contracted by 0.2% in the second quarter, confounding expectations for growth of 0.2%.

Italy’s economy shrank 0.1% in the preceding quarter.Annualized GDP declined at a rate of 0.3%, worse than expectations for an increase of 0.1%.Earlier this week, China’s HSBC services purchasing managers’ index dropped to 50.0 in July from 53.1 in June, right on the 50 mark that separates expansion from contraction, which rattled nerves in energy markets amid fears of supply gluts.


Forex – Euro hits fresh 8-month lows against dollar – Sean Seshadri

The euro fell to fresh eight month lows against the dollar on Tuesday after data showed that U.S. consumer confidence rose to a seven year high this month, underlining the view that the economic recovery is gaining traction.

EUR/USD was down 0.21% to 1.3410, the lowest level since November 21.The pair was likely to find support at 1.3360 and resistance at 1.3443, the session high.The dollar gained ground after the Conference Board reported that its index of consumer confidence rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007 and was ahead of expectations for a decline to 85.3.

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Demand for the dollar continued to be underpinned ahead of preliminary data on U.S. second-quarter growth and the Federal Reserve’s latest rate statement, both due on Wednesday. Investors were also awaiting the U.S. nonfarm payrolls report for July on Friday.

Earlier this month Fed Chair Janet Yellen indicated that rates could rise sooner if the recovery in the labor market continued.The euro remained under heavy selling pressure amid concerns over the divergence in monetary policy between the European Central Bank and its major peers.

The euro zone was to release what would be closely watched data on consumer prices on Thursday, amid concerns over persistently low levels of inflation in the currency bloc.The euro was steady against the yen, with EUR/JPY at 136.93, holding above Thursday’s five month lows of 136.35.


Forex – GBP/USD holds steady, near 1-month lows – Sean Seshadri

The pound held steady against the U.S. dollar on Monday, hovering near one-month lows as Friday’s upbeat U.S. data continued to support the greenback and concerns over tensions in the Gaza Strip and Ukraine still weighed.

GBP/USD hit 1.6985 during European morning trade, the session high; the pair subsequently consolidated at 1.6979, inching up 0.02%.Cable was likely to find support at 1.6924, the low of June 18 and resistance at 1.7053, the high of July 24.

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The greenback remained supported by better than expected data on U.S. durable goods orders for June.The Commerce Department on Friday reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%.

The pound showed little reaction to data on Friday confirming that the U.K. economy grew 0.8% in the second quarter of 2014 and expanded by 3.1% on a year-over-year basis.Investors still remained cautious after Hamas Islamist militants in Gaza said on Sunday that they backed a 24-hour humanitarian truce in light of the Muslim holiday Eid al-Fitr.

Meanwhile, the European Union agreed to impose economic sanctions against Russia for its role in the Ukraine crisis. Moscow reacted to the sanctions by warning that they would hamper cooperation on global security issues.


Gold prices gain in Asia as geopolitical events point to volatility – Sean Seshadri

Gold prices rose slightly in Asia early on Friday, supported by tensions in the Ukraine and Middle East.On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at $1,292.60 a troy ounce, up 0.14%, after hitting an overnight session low of $1,288.00 and off a high of $1,305.60.

The U.S. believes Russia is firing artillery across its border at Ukrainian military positions, the State Department said on Thursday, an assertion that Moscow is playing a more direct role in the Ukrainian conflict.

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The latest accusations show U.S. officials raising pressure on Moscow and more closely examining Russian activities near the rebel-held portions of eastern Ukraine since the downing of Malaysia Airlines Flight 17, which Washington blames on pro-Russian separatist fighters.

Also on traders minds is the cycle of violence in the Middle East from Israel and Gaza to Iraq and Syria.Overnight, the U.S. Census Bureau reported new home sales dropped by 8.1% to 406,000 units last month, far worse than expectations for a 5.3% decline.

The data pointed to an underlying weakness in the housing sector, which stoked concerns that U.S. recovery is not red hot and may demand less fuel and energy than anticipated.Elsewhere, the U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to 284,000, down from the previous week’s total of 303,000.
Analysts had expected jobless claims to rise by 5,000 to 308,000 last week, though the home sales numbers as well as reports that European refineries are cutting runs or even idling plants due to an influx of oil products from the U.S. sent investors selling.

The dollar, which tends to trade inversely with gold, firmed earlier after data revealed initial jobless claims in the U.S. fell to an eight-year low last week.The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 18 declined by 19,000 to 284,000, down from the previous week’s total of 303,000.


Asian shares push higher, shrug off global tension – Sean Seshadri

Asian stocks touched a three-year peak on Tuesday, despite lingering concerns about crises in Ukraine and Gaza, while the yen eased against the dollar and the euro.MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent to its highest since 2011, while Japan’s Nikkei stock average rose about 1 percent after a national holiday closed markets on Monday.

“Investor sentiment has settled as the VIX has stayed calm,” said Akio Yoshino, chief economist at equity research and strategy department at Amundi Japan.The CBOE Volatility Index, which is a gauge of market risk aversion, jumped 32.2 percent on Friday in Asia, the biggest percentage rise since April 2013.

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U.S. shares slumped overnight, as the rising global tensions offset some upbeat U.S. earnings. So far this reporting period, 66 percent of S&P 500 companies have topped Wall Street’s profit expectations, according to Thomson Reuters data, above the 63 percent average since 1994.

But the three major U.S. indexes ended well off their lows, a sign that some appetite for riskier assets remained, and S&P 500 E-Mini futures edged higher in Asian trade.
Malaysia has reached an agreement with the leader of the separatist group to retrieve the bodies of the victims from last week’s downing of a Malaysia Airlines passenger jet as well as the plane’s two black boxes, Malaysian Prime Minister Najib Razak said on Tuesday.

Meanwhile, in the Gaza Strip, the Palestinian death toll jumped to more than 500 and Israeli losses mounted as well, as the United States stepped up efforts to secure a ceasefire.

Lower U.S. Treasury yields continued to weigh on the dollar on Tuesday, after safety-seeking investors bought U.S. government debt in recent days.The yield on the benchmark 10-year U.S. Treasury note stood at 2.472 percent in Asia, not far from its U.S. close of 2.475 percent.

The yield on the 30-year Treasury bond inched down to 3.262 percent from its U.S. close of 3.264 percent On Monday, when it fell as low as 3.249 percent, the lowest since June 2013.Investors also awaited U.S. consumer prices data due later in the session at 1230 GMT for clues as to the timing for monetary tightening by the Federal Reserve.

The Labor Department is expected to report that U.S. inflation eased slightly to 0.3 percent in June, after rising food prices pushed the index to its biggest increase in more than a year in May.The dollar edged higher on the day against its Japanese counterpart to 101.48 yen, while the euro stood at 137.25 yen, off last Friday’s five-month trough of 136.71 yen.

“Geopolitical developments channelled through higher oil prices will remain a key theme this week,” said Shinichiro Kadota, chief FX strategist at Barclays Bank in Tokyo.The euro was largely steady at $1.3524, pulling away from a five-month low of $1.3491 touched on Friday.


Crude oil futures slip lower on U.S. demand concerns – Sean Seshadri

Crude oil futures slipped lower on Friday, as concerns over U.S. demand still weighed, while worries over possible supply disruptions in the Middle East continued to subside.On the New York Mercantile Exchange, U.S. crude oil for delivery in August traded at $102.73 a barrel during European morning trade, down 0.20%.

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Prices gained 0.63% on Thursday to settle at $102.93.Futures were likely to find support at $101.55 a barrel, Thursday’s low and resistance at $104.20, the high from July 8.

Oil prices weakened earlier in the week, after weekly supply data released Wednesday showed that total motor gasoline inventories in the U.S. increased by 0.6 million barrels last week, disappointing forecasts for a drop of 0.3 million barrels.

The unexpected increase in gasoline stocks during the summer driving season in the U.S. was bearish for oil prices.Prices were also hit after data ealier in the week showed that Chinese exports in June climbed 7.2% from a year earlier, missing expectations for a gain of 10.6%, while imports rose 5.5%, below forecasts for a 5.8% increase.

China’s trade surplus narrowed to $31.6 billion last month from a surplus of $35.92 billion in May, compared to estimates for a surplus of $35.0 billion.The U.S. and China are the world’s two largest oil consuming nations.Meanwhile, supply concerns eased in the Middle East and Africa despite geopolitical tensions in Iraq, Libya and Gaza.


Gold declines on Fed rate hike speculation – Sean Seshadri

Gold futures were lower on Monday, as robust U.S. nonfarm payrolls data released last week revived speculation over when the Federal Reserve may start to raise interest rates.

On the Comex division of the New York Mercantile Exchange, gold for August delivery shed 0.51%, or $6.80, to trade at $1,314.50 a troy ounce during U.S. morning hours. Prices held in a range between $1,312.50 and $1,321.70 an ounce.

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Gold prices were likely to find support at $1,305.40, the low from June 25 and resistance at $1,334.90, the high from July 1.
Also on the Comex, silver for September delivery slumped 0.88%, or 18.7 cents, to trade at $21.01 a troy ounce.

The U.S. Department of Labor said last week that non-farm payrolls rose by a seasonally adjusted 288,000 in June, easily surpassing expectations for an increase of 212,000. The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years.

Investors now turned their attention to Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major U.S. economic reports on the calendar.

Wall Street investment bank Goldman Sachs brought forward its forecast for the first rate hike to the third quarter of 2015 from the first quarter of 2016, based on the strong improvement in the labor market over the past few months.Elsewhere in metals trading, copper for September delivery inched down 0.35%, or 1.1 cents, to trade at $3.259 a pound.