Thread: FXB Trading Articles

It’s prime time to trade Netflix shares

Netflix share price has risen 59% already this year and is expected to rise even further after the company posts its third quarter earnings figures

If you’re already a Netflix (NFLX) subscriber you probably don’t need too much convincing about how good it is and will appreciate why analysts are predicting that its share price is set to rise even higher, despite the fact that it has already grown 59% this year as it teases the $200 per share mark.

You will notice from the chart that Netflix share price has a tendency to reach a peak as quarterly earnings figures are announced followed by a drop before picking up on its overall upward trend.

If you’re not a Netflix subscriber then you’re one of the reasons why these analysts expect its share price to keep on rising. They expect that you soon will be. Streaming is the present and the future.

It’s a service that meets the entertainment needs of our increasingly demanding lives. And once you’ve subscribed it’s hard to live without.

Think of it as having unlimited access to one of those old video stores that you used to rent DVDs from. Only with Netflix you never need to leave your home to get your viewing entertainment and you watch what you want, when you want and as many times as you want.

Premium service

Opt for the premium service and you can also view the content simultaneously from another screen, tablet or smartphone. That way you enjoy your favourite show while other members of your family watch what they want.

Most importantly, Netflix offers some of the best shows and movies around in an app that’s very easy to use. So far, they’ve produced hits like “House of Cards”, “Orange is the New Black”, “Narcos”, “Peaky Blinders” and “The Killing”.

Last week Netflix announced a price rise which immediately boosted stock prices. And they are not worried about losing subscribers because it’s still value for money. By comparison, the monthly subscription for the premium service costs about the same as a cinema ticket.

Third quarter growth expected

Wall Street firm UBS has told its clients that Netflix will report Q3 subscriber growth. This has been achieved without the addition of any compelling new content.

However, new content is being rolled out in the fourth quarter. They’re releasing new seasons of “Stranger Things” and the “The Crown” – two of the network’s most popular shows.


For more detail : It’s prime time to trade Netflix shares

Buckle up Tesla share price ride is going to be bumpy

Tesla share price has risen on expectations electric cars will dominate automobile sales in the future and high demand for its models. But damaging news reports have concerned the markets and might affect the company’s short term value

This looks like the time for traders to bet against Tesla (TSLA) shares in the short term as the market reacts to reports that Model 3 electric vehicle (EV) deliveries are going to be delayed with news stories about escalating production costs, production line issues and lay-offs throwing doubt on the company’s ability to turn a significant profit on its new model.

The chart above shows that after steep rise of 68% throughout the year the share price is showing signs of volatility.

Barclays were among the first to advise their clients to short Tesla. Their analyst Brian Johnson suggesting a $210 price target – well below the $340 consensus on Wall Street.

Barclays feel Tesla’s November 19 announcement about truck production will be decisive in swaying investor confidence in the company.

Tesla production projections

Tesla are projecting production targets of several million per year in the near future. Telsa also expects significant progress in other business opportunities like battery storage.

On the back of these projections some analysts have been uber-bullish about Tesla. Morgan Stanley’s Adam Jonas (widely followed on Wall Street) has raised his 12-month price target from $317 to $379.

Jonas is basing his outlook on a long-term perspective.

Traditional manufacturers will also produce electric vehicles

Traditional manufacturers, like General Motors, have revealed plans to roll out their own EVs. This has raised fears about Tesla’s ability to handle competition.

However, Tesla have already made a huge investment in infrastructure for EVs. Over $8 billion has been spent on service centres, stores, galleries and the world’s largest battery factory. There has also been proprietary investment in superchargers and destination chargers globally. And this is where Tesla have a significant advantage over traditional manufactures.

In the short-term, negative news stories are having a negative impact on the share price. Reports that Model 3 parts are being made by hand, job losses and missed production targets don’t go down well.


For more detail : Buckle up Tesla share price ride is going to be bumpy

Strategies for successful forex trading

Are you already a trader who is involved in the forex business and would like to increase your knowledge of the financial markets in order to become a more skilled trader? Or maybe you have just started forex trading and require all the relevant information about forex? Whatever the situation may be, it is your opportunity to start implementing what you have in mind. You can earn a large amount of money using these new trading strategies. You just need to monitor several forex indicators, and the rest is simple.

Successful strategies

You do not need to monitor the events in the market all the time. You can effectively manage the events while simultaneously enjoying trading using these forex trading strategies. Certainly, several traders have already tried to employ them and have achieved great results in the process.

These recent strategies have been devised after thorough forex market research This is based on intensive analysis of the patterns and estimating the specific number of indicators that are responsible for given processes and changes that influence the market. These indicators are the basis of any successful Forex trading.

Let’s move towards achieving goals

1. Have you been unsuccessful in forex trading? Or maybe you are a beginner who has heard a lot about making money through forex trading but don’t know how? We can help you to overcome these difficulties.

2. We advise you to forget all bad experiences in order to move ahead and start planning the future. We can develop new strategies to help you.


For more detail : Strategies for successful forex trading

Starbucks might be about to surprise Wall Street

For years Starbucks’ shares have mirrored the company’s phenomenal success. However, recently the coffee giant has come under attack from McDonalds and other fast food giants as well as indie coffee shops. This has been reflected in the value of their share price.

After reaching a peak price of $64.87 in June, Starbucks’ shares are down 1.41% overall this year. However, Starbucks has expanded into new territories and brought greater convenience to its clients with the use of innovation. This has prompted some analysts to predict that the coffee-making giant will surprise Wall Street when it releases its fourth-quarter earnings on November 2.

Starbucks experienced tremendous growth between 2011 and 2016 with sales growth above 5%. It all changed in the third quarter of 2016 when sales growth was just 4% while for the first time transaction growth was flat. For the next quarter, sales growth remained below 5% while transaction growth was negative (-1%).

Competition

Starbucks’ growth has been affected by competition from indie coffee shops and traditional fast food giants who have widened their menus to capture some of the coffee drinking market.

Indie coffee shops are opening everywhere and have taken away the trend-focused millennials market. In contrast, the price-focused crowd is going to McDonalds for their coffee.

Changing consumer preferences have had a big influence on Starbucks’ recent performance. The competition has expanded their menu options and physical store locations to better reach a wider customer base. Therefore, consumers have been drawn away from Starbucks which has resulted in the slow down of sales growth.

As a result, Starbucks has embarked on a three-pronged response to the threats.

Response to competition

Mobile app

The first is Starbucks’ mobile ordering and pay app which boosted sales last quarter. Mobile payments now account for 30% of Starbucks transactions in US stores, up from 29% in Q2 and 27% in Q1.

High-end roasteries

Starbucks is concerned that it could lose its edge to independent coffee shops. Therefore, as the second part of its response, Starbucks has invested in opening high-end roasteries to maintain its upscale reputation. It intends to open 20 to 30 Roasteries, which are tourist-friendly mega-locations roasting coffee in-house and serving expensive drinks.


For more detail : Starbucks might be about to surprise Wall Street

Australia’s economy is going down and under

Australia’s economy has enjoyed 26 years of growth but it’s about to come to an abrupt end. It will be triggered by the bursting of its property bubble and falling revenues from its main export commodities iron ore and coal

Australia recently recorded its 104th consecutive quarter of growth without a recession, breaking the record set by the Netherlands. It prompted Australia’s federal Treasurer Scott Morrison to claim that the economy was in “surprisingly good shape”. His statement is reminiscent of that old joke. How can you tell if a politician is lying? His lips are moving.

Australia’s economy is not in good shape. Its growth has been built on demand for commodities like coal and steel from China and investment in an over-inflated property market. These dual dependencies are about to be brutally exposed.

The exact timing and full impact of Australia’s economic tailspin is unknown. However, the precise date and exact magnitude are unnecessary to take advantage of the collapse as a trader. The circumstances that make an economic crash inevitable are already in place and it is far better to be five months early rather than five minutes late for an opportunity like this.

Financial meltdown

The inevitability of Australia’s financial meltdown is in part due to an external factor which it has no control over: China.

Societe Generale’s China economist Wei Yao recently said: “Chinese banks are looking down the barrel of a staggering $1.7 trillion worth of losses”. Hyaman Capital’s Kyle Bass calls China a “$34 trillion experiment” which is “exploding”, where Chinese bank losses “could exceed 400% of the US banking losses incurred during the sub-prime crisis”.

Simply put, if China’s economy bends Australia’s will buckle.

Falling demand

Australia’s biggest export is iron ore and frequently the country’s main driver of a trade surplus and GDP growth with 81% of its iron ore exports going to China. However, demand for iron ore in China is falling because 50% of it comes from property development which in 2017 is under stress as prices level off and credit dries up. Critically, the price of iron ore has fallen 60% over the last 6 years.

Australia’s second biggest export is coal with supply increasing to 388Mt in 2016 from 261Mt in 2008. Unfortunately, its value has crumbled over that same period dropping from $54.7 billion to $34 billion. Worse still is the fact that Japan and China are Australia’s biggest customers, and both are scaling back their use of it, with China recently committing to ending all coal imports in the near future.

Perhaps the most damning statistic for Australia’s mining industry is that between 2015-16 $179billion in revenue cost $171 billion which represents a paltry 3.9% margin. It explains why mining has dropped from 19% of GDP to just 6.8% and will continue to fall.


For more detail : Australia’s economy is going down and under

Learn to read between the lines to make better trades

So, you’ve got the trading bug. You’ve made your first profits – albeit modest – by making safe trades. Understanding how markets behave will help you to make better trades. There are riskier trading strategies that can earn bigger profits but the risks are too great.

What do top traders do?

So how do top traders end up making so much more money?

It’s not by taking bigger risks but by learning to read between the lines to make better trades.

Profitable traders earn more because they’re better at predicting and understanding how markets react to news and economic data. They read between the lines of the constant stream of information that is available on trading platforms to make more profitable judgements.

The best traders use information to make a trade before the trend is visible to others. For profitable traders, breaking news stories and economic data is information to be deciphered into factors that can affect the market.

It’s not easy. If it was, everyone would do it. It’s actually far from impossible and can be learned. Understanding economic performance and what affects it is an area where profitable traders excel.

The examples below demonstrate the importance of being able to translate data and news into something meaningful.

Example 1

Gross Domestic Product (GDP) is one of the key indicators used to gauge how a country’s economy is performing.

During the last recession in the US, the economy’s GDP was $14.3 trillion (2008), $14.2 trillion (2009) and $14.6 trillion (2010).

During one of the worst economic periods in recent history, the US economy was actually flattish and very slightly growing. However, it felt a lot worse and to most people, it probably felt like it was shrinking.

So why was there a disparity between perception and the economic indicator? The answer is that America has been accustomed to growth. Since 1945 the US economy had averaged 3.3% growth per year. Small changes in GDP can have a huge impact on stock market values. 4% feels like a boom and is reflected in consumer sentiment. 2% growth feels like a recession and flat conjures up bleak, black and white newsreel from the 1930s.

Any GDP figures above the 3.3% average triggers investors to pull their money out of safe havens, employers start hiring and consumers start buying. Anything less than the 3.3% average triggers negative reactions.

Example 2

How should you react when Apple, IBM or Microsoft post successful quarterly, half-year or yearly results?

These are companies with combined revenues that run into the hundreds of billions of dollars. So, clearly, they are important. But a far more significant indicator of economic health is the success of startups, not the giant corporations.

The Kauffman Foundation, the US’s top entrepreneurial think tank, revealed that the most important contributor to a nation’s economic growth is the number of startups that generate billion-dollar revenues within 20 years.

They suggest that the US needs between 75-125 billion-dollar startups per year to maintain economic growth.


For more detail : Learn to read between the lines to make better trades

Catalunya independence bid plunges Spain into crisis

Madrid‘s attempts to quell momentum in the bid for independence in Catalunya by triggering Article 155 has resulted in Spain’s biggest political crisis in decades and is set to have repercussions for EU

The Catalan parliament‘s declaration of independence from Spain is set to wreak political turmoil in the country and is sure to have far-reaching repercussions for Europe.

In response, Madrid passed measures to take direct control over the region and called for regional elections for December 21.

On Sunday Spain’s prime minister, Mariano Rajoy, sacked Catalan president, Carles Puigdemont, who now faces up to 30 years in jail for his role in the regional parliament’s declaration of independence.

The Catalan parliament vote came after Rajoy sought senate approval for the government’s request to impose direct rule on Catalunya.

Over the weekend hundreds of thousands of people took to the streets of Barcelona to call for unity.

The Euro plunged as news of the declaration broke, the single currency held near three-month lows versus the dollar.

Markets react

Madrid’s blue-chip index the Ibex 35 was down 1.9% in afternoon trading, with all but two of its constituents falling.

Banks based in Catalunya were among the biggest losers, with Banco de Sabadell down 6% and CaixaBank down 4.6%. IAG, the parent company of British Airways and Iberia, was the biggest single faller in Madrid, down by over 6%.

Investors also sold Spain’s government bonds, sending the yields on benchmark 10-year debt up by 5 basis points to 1.603%.

The European Commission has been under pressure to mediate in the row given its destabilising effect on EU unity. It has ruled out the possibility that an independent Catalunya could become part of the EU.

Domino effect throughout Europe?

The EU is in a phase where unity and economic viability is a priority. However, the Catalunya crisis may trigger a domino effect throughout Europe.

Just days ago, referendums in the northern Italian regions of Lombardy and Veneto voted 95% in favour of transferring more powers from the central government to the regional institutions.

The result prompted a more conciliatory response from Rome. It said it was ready to begin discussions on greater autonomy for both the regions.

The economic impact on the EU will also be a worry. The effect of Spain’s rift with Catalunya could surpass Brexit’s affect on Europe.


For more detail : Catalunya independence bid plunges Spain into crisis

Catalunya independence bid plunges Spain into crisis

Madrid‘s attempts to quell momentum in the bid for independence in Catalunya by triggering Article 155 has resulted in Spain’s biggest political crisis in decades and is set to have repercussions for EU

The Catalan parliament‘s declaration of independence from Spain is set to wreak political turmoil in the country and is sure to have far-reaching repercussions for Europe.

In response, Madrid passed measures to take direct control over the region and called for regional elections for December 21.

On Sunday Spain’s prime minister, Mariano Rajoy, sacked Catalan president, Carles Puigdemont, who now faces up to 30 years in jail for his role in the regional parliament’s declaration of independence.

The Catalan parliament vote came after Rajoy sought senate approval for the government’s request to impose direct rule on Catalunya.

Over the weekend hundreds of thousands of people took to the streets of Barcelona to call for unity.

The Euro plunged as news of the declaration broke, the single currency held near three-month lows versus the dollar.

Markets react

Madrid’s blue-chip index the Ibex 35 was down 1.9% in afternoon trading, with all but two of its constituents falling.

Banks based in Catalunya were among the biggest losers, with Banco de Sabadell down 6% and CaixaBank down 4.6%. IAG, the parent company of British Airways and Iberia, was the biggest single faller in Madrid, down by over 6%.

Investors also sold Spain’s government bonds, sending the yields on benchmark 10-year debt up by 5 basis points to 1.603%.

The European Commission has been under pressure to mediate in the row given its destabilising effect on EU unity. It has ruled out the possibility that an independent Catalunya could become part of the EU.

Domino effect throughout Europe?

The EU is in a phase where unity and economic viability is a priority. However, the Catalunya crisis may trigger a domino effect throughout Europe.

Just days ago, referendums in the northern Italian regions of Lombardy and Veneto voted 95% in favour of transferring more powers from the central government to the regional institutions.

The result prompted a more conciliatory response from Rome. It said it was ready to begin discussions on greater autonomy for both the regions.

The economic impact on the EU will also be a worry. The effect of Spain’s rift with Catalunya could surpass Brexit’s affect on Europe.


For more detail : Catalunya independence bid plunges Spain into crisis

Virtual trading and the global economy

We have seen the rise of virtual trading in the twenty-first century, which is a world that exists entirely on the internet. This has had an effect on the global economy. Bitcoin has now become a widely used currency, especially in China, the economic powerhouse. However, the lack of physical form makes it completely different to what money should be.

A long time ago, the value of money was worth exactly what it was made of. The value of gold coins depended on the amount of gold in circulation. Nowadays, most money is printed on paper, which does not have that much value. Therefore, the government can print as much money as it wants as long as it has the cheap materials needed to print the money.

Bitcoin transactions

Bitcoin is the next step in this worrying trend regarding the creation money. They have no physical form, and they cost almost nothing to create. However, using this currency is very convenient. Online transactions can be carried out using a currency which is suitable for expediting simple financial transactions.

China has become a common user of Bitcoin, and its population uses it for purchases from abroad. The widespread use of Bitcoin in China has resulted in it becoming noted as a large factor in China’s overall economy. A sudden, unexpected drop in the value of Bitcoin has resulted in a slowing down of China’s economy; a negative trend in China’s economy will definitely have an effect on the global economy as a whole.

Most Bitcoin transactions used Yuan, the Chinese currency. When China’s economy suddenly slowed down, the value of Bitcoin began to fall as there wasn’t a large demand for it as before. As a consequence, many Chinese consumers who bought items using Bitcoin owned a currency that was worth less; this discouraged consumers from buying from abroad as they just couldn’t afford it anymore.

The fall in imports requested from China was critical, and it sent shockwaves all over the financial world. The decrease in value of the Bitcoin has decreased trade, and this has resulted in a certain slow down of the global economy. Many businesses dealt with Chinese customers entirely because they were able to purchase their items using Bitcoins.


For more detail : Virtual trading and the global economy