The Yen is finally starting to show signs of weakness as it begins to unwind the imbalance that it has been building up. Ask the sentiment remains positive for USD/JPY, traders should be long, although a risk remains that another risk aversion event could put pressure on the pair.

It is amazing to me to read some of the expectation of traders new to forex. Perhaps lured by outsized claims of shady forex brokers, greed or simple naiveté, some newbie traders are expecting 50%, 100% or more per year. To do so is to place yourself far, far ahead of all other investors and [...]

Hi, I’ve gotten a lot of questions about forex options trading as there doesn’t seem to be that much information out there. I thought I’d list out the most common ones and help you get on the right track to trading profitably. By the way, Paul and my “Trading the Forex Market with Options” Ebook [...]

How to trade forex options objectively
Paul and my “Trading Forex with Options” ebook will be up for grabs tomorrow and I wanted to prep you for options trades before you learn the material. Paul sent me a copy of his trading planner that he uses for every single one of his trades so he can [...]

Check out Paul Stafford’s forex options trading instruction video, “Trade Forex without Fear.” In this video Paul addresses the problem of continuously getting stopped out of trades and getting the timing wrong in the market, and shows how you can avoid many of these issues by trading forex options. Paul goes over different ways to [...]

The Yen has been on a tear lately, driving the USD/JPY pair down to below the 90 figure. In particular this month a massive imbalance developed that can be seen from COT data and may yield a profitable opportunity soon. Let’s look at the factors that have been driving this pair lately [...]

One way of understanding what the market is feeling is to look at how price reacts to stimuli in the market such as economic data and central bank speeches. On an intraday basis, price is simply too random to predict because price movement is dominated by import and export transactions. During the [...]

The pound has started off the new year with a struggle and will require some good forex strategy to trade it profitably. Last week we saw the pound increase due to optimism ok a UK recovery. However, let’s look at the negative factors beginning to develop in this week’s forex forecast so that you can [...]

Today’s “Outside the Box” Forex strategy video is on the British Pound. This currency has been taking a beating lately, despite the weak fundamentals of the US Dollar. We have a short bias on the GBP/USD pair for the time being, and are aware that any shift in perception to the Pound being a “discount [...]

Warning: parts of this article (in particular the currency options section) may be for more advanced readers/traders
While most of us have focused for good reasons (liquidity, transparency) on the major currency pairs such as EUR/USD or USD/JPY, there’s a great opportunity waiting out there for those willing to take a chance with less well-known currencies [...]

The Outside the Box Trading Report for 3 December 2009 features currency analysis for the EUR/USD currency pair. Kris Matthews covers the bullish and bearish factors for this pair and weighs the possible outcomes.
This short video is intended to be a guide to help currency investors and traders select either a buying or selling bias for their [...]

The Outside the Box Trading Report for 25 November 2009 features currency analysis for the EUR/USD currency pair. Kris Matthews covers the bullish and bearish factors for this pair and weighs the possible outcomes.
This short video is intended to be a guide to help currency investors and traders select either a buying [...]

We have seen the first moves by central banks, notably RBA, having raised rates twice, and Norway as well. Let’s look at some of the major banks, their guiding principles and possibilities for rate increases in the next 6 months, in order of increasing strength…
The BoJ has kept rates at 0.1% since December, and the [...]

Successful trading is 20% mechanics and 80% psychology. I’ve created this video to help you understand what negative psychology is holding you back from successful trading and train yourself to trade forex profitably and without emotions. This is basically everything that I’ve gathered from my own experiences, from modeling after star traders from banks and [...]

A concise forecast of the currency market using forex fundamental analysis and strategy. This video covers what’s been happening in the Yen, how to weigh the outcomes, and what to expect so that you can develop an effective strategy and choose the right direction.

Outside the Box Trading Report by TradeForexFundamentally.com
 The Outside the Box Trading Report for 11 November 2009 features currency analysis for the EUR/USD currency pair. Kris Matthews covers the bullish and bearish factors for this pair and weighs the possible outcomes. Kris also considers factors that could come into play that could influence the direction [...]

With a second increase in the RBA (AUD) central bank rate to 3.5% and the Norges bank (NOK) also recently increasing its rate by 25 bps (target rate 1.25-2.25%), the carry trade may be resurrected from the ashes of 2008. The carry trade unwound completely this year as central banks reduced their rates (eg the [...]

This weekly forex fundamental analysis video covers the eur usd for profitable currency forecasting and trading

Volatility is a key concept in trading, whether you trade currencies, equities or even metals. In a nutshell, volatility is the speed of the market- how fast, and how far can an underlying move be. Volatility and its close cousin Value at Risk (VaR) are great tools for understanding and managing portfolio risk.
While there [...]

I started the “Outside the Box Trading Report” to help traders and investors following my material to make a more clear, objective decision on whether to have a long or short bias. I hope that by regularly submitting these videos the decision becomes more logical, less emotional, more profitable, and less confusing. These posts are intended [...]

In addition to looking at fundamentals and sentiment, there is another force at work in the markets, and that is the central banks. They have significant power to move markets, at least temporarily. They most often “jawbone”, or talk about what they want, or what is right, or what they might do. Less often, because [...]

The value of a currency is driven by two things- the country’s fundamentals, and currency sentiment. It is fairly obvious how to measure the fundamentals (central bank rate, current account balance, budget balance, GDP growth etc), although care must be taken, as governments distort these numbers to their own purposes. Gauging sentiment might appear to [...]

Hello everyone. Thanks to Kris for allowing me to share my fundamentals views on a weekly basis. I thought it might be interesting to think about the dollar and where it’s going long term. As it is the basis or counter currency for most FX volume, it behooves us to have a good handle on [...]

ForexPros just published a press release on FX Macro Trader and it contains a little bit of info about me (Kris Matthews) and the parent company, Paradigm Macro Trading Research. You can view the release at the following link:
ForexPros Press Release
(You may have to follow the “click here to read more” link if you [...]

I’m just letting you know that the long awaited FX Macro Trader is finally available. Traders who have been with me long enough realize I made this to satisfy their needs by interacting with them on a personal basis. The course includes 5 full length video modules and 5 interviews with star traders from the [...]

This video follows the last one where I begin to answer questions about trading forex with behavioral and fundamental analysis!
 

I realized I’ve been sending a lot of strategies and content about forex behavioral and fundamental trading but I never really introduced myself and my background. Here’s a chance for you to get to know Kris Matthews and also view my answers to your questions! After you get done you can view the next video which [...]

Understanding price action, looking for setups, and trading in the correct direction is not enough– you still need to account for changes in volatility in the market. In this video we cover how to make FX trades in different-volatility environments. It’s actually broken up into 2 sections because of the length so please view Part [...]

This is a brief, 9 min video on how to utilize information available in the market to spot fundamental and behavioral imbalances. Imbalances are key to discovering big moves before they happen. Once you identify an imbalance you look for clues that sentiment is shifting in the direction of the correction so that you can [...]

Here’s a video about spotting opportunities in the market  due to behavioral patterns of traders and investors. One thing people forget to realize is that the market is made up of human beings, not computers, lines, charts, and economic data. No matter how smart the market participants are, they are still prone to behavioral errors [...]

I read this interesting article in the Financial Times this morning. It may signify an imbalance in the Aussie Dollar (AUD).
Concerns over Aussie Dollar
Main factors suggesting a move, at least temporarily, to a short Aussie and long USD or JPY bias may be:

Falling overseas demand
CRB index diverging negatively against AUD
AUD failed to strengthen on positive [...]

After 50 years of domination by the LDP, the minority DPJ party finally gains control in Japan. The party claims big changes to Japan, and the market reacted by punishing stocks and rewarding Japanese Yen. USD/JPY has weakened to the 93 figure as of this writing. Among the bigger promises are reduced spending and a [...]

We’re still in the “summer doldrums” period where liquidity is thin and we are left with choppy, ranging markets. This is a good thing and a bad thing. The bad thing is we haven’t seen any big macro trade opportunities yet, even though a few imbalances have developed. When we spot an imbalance plus a [...]

Ok, everyone knows I hate to make bold claims because, as a trader, my opinion could change in a heartbeat. However, I like to point out potential imbalances that could turn into trades. One such imbalance that I see in the making is the recent rally of the Canadian Dollar. The currency has rallied considerably [...]

I read something recently by Dr. Van K. Tharp, a renowned trading psychologist, that resonated with me: He remarked, “Traders don’t trade the market, they trade their beliefs about the market.” Traders have pre-conceived notions of what the market is capable of doing, how it behaves, and even, what kind of returns are possible. It’s [...]

Tom Yeomans is a trader based in Canada who has made a big impact to the forex community by teaching methods to profit from the market based on what really moves markets- fundamentals. Tom demonstrated his expertise in markets and ability to teach others by putting his reputation on the line everyday in live trading [...]

I had the priviledge of getting to chat with Capricorn Advisory Mgmt. CIO/Head Trader Mikkel Thorup a few weeks ago. Mikkel is a professional with over 15 years of experience in the financial markets. His experience as a trader on the Prop Desk of Smith Barney eventually led him to form the Capricorn Group where [...]

Yesterday China released news that its foreign exchange reserves increased to $2 trillion! This is a gigantic number and I’m surprised why it was all over the news wires and bank reports yesterday but everyone seems to have forgotten it today. Perhaps earnings of big banks like JP Morgan are more important. It’s no wonder [...]

Last week marked a turning point in perceptions of a global economic recovery emerging (a.k.a. “Green Shoots”) especially with this week’s FOMC meeting on the horizon. The new sentiment in the markets is captured well by today’s headline in the Financial Times: “Recession Worries Rattle Markets.” Let’s take a look at what going on [...]

I’d like to post a brief update on the GBP/USD view. The pound has been holding high despite multiple threats to dollar buying over the past weeks. One should not confuse the pound as being too correlated to other currencies against the dollar. Many media outlets have been blaming the weakness in GBP/USD on a [...]

Inside the House of Money
In this post I review “Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets” by Steven Drobny. The book is a modern version of Jack Schwager’s Market Wizards in that it contains techniques that don’t rely on some kind of outright mispricing in the markets [...]

Where will the Pound go? The single unit climbed above 1.60 and now there are fears that it has gone too far too fast. If there’s one thing that ever remains the same it’s market pundits and analysts who have to ascribe an overbought or oversold rating on something simply because it has moved. This [...]

A number of weeks ago I wrote a post entitled, “An Imbalance Developing in GBP/USD.” We were waiting for the sentiment shift to come and it has arrived. I’m not saying that the Pound will definitely be higher some time from now as in some “the trend is your friend” context, but rather our bias [...]

All currencies except for the Yen have been moving up against the dollar. This classic signature of risk-taking sentiment is reflected by traders’ attention to news events which are indicating the possibility of an economic recovery. What’s happening here is a “confirmational” behavioral bias. This is the tendency for people to filter out facts from [...]

The news dominating headlines across the globe is the so called, “Swine Flu,” which started with pigs but is deadly and contagious among humans as well. The spread of reported cases from Mexico to Spain has got the Eurozone worried and Asia as well, due to their recent painful first hand experience with the SARS [...]

Yesterday UK Chancellor Darling announced in the country’s budget plan address that the British government will be issuing 220 billion pounds of loans in the form of UK gilts. This is an enormous amount of funds that the British government needs to raise to sustain the economy. The UK Gilts futures market (the British equivalent to the US [...]

One of the themes I tend to reinforce is that you must think outside the box and look where the majority isn’t looking to make money. I see a trade opportunity today on the Euro using this idea. Before I begin, please realize that this one trade has no guarantee of making money, but over [...]

Most macro instruments follow sentiment rather than fundamental factors such as supply and demand. The problem with strict fundamental analysis is that the economic data is very noisy and doesn’t provide a clear relationship of cause and effect between information and exchange rates. Furthermore, the efficient nature of such markets as foreign exchange makes it difficult [...]

 I came across the following article from a network of people that I interact with. Some of you may already recognize it and could let me know who the author is, because the article has been floating around without a name and I’d be happy to give credit where it’s due.
The author outlines the 5 [...]

                 At the Gestalt Shift, we look for imbalances and then signs that a shift is occurring so that we can catch the bigger, liquid moves in the currency market. A couple points of wisdom that form the core of our profitable trading methodology are the following: 1) The FX market is a zero-sum game, [...]

The recent dollar plunge as a result of falling US interest rates may be short lived. Last week the U.S. Federal Reserve cut its target rate to a band of 0-0.25% while the ECB overnight rate remained at 2.50%. Their statement included several indications of their willingness to continue quantitative easing, possibly foreshadowing a Japan-like [...]

Note: This article was put together initially on 10 December (last week) although it wasn’t completed and submitted until now.
The financial markets have done the equivalent of stuffing their money underneath their collective mattresses during bad times. 3 mo. US Treasury Bill real yields plunged into negative territory, meaning that investors are actually now paying [...]

I spent last weeks column in the Gestalt Shift writing about a shift in thought-paradigms to realize profits in the market. This week we will look at Gestalt shifts that have caused ends to trends in the market. Since price movements in markets are fractal phenomena, we can observe these shifts in different time frames, [...]

Please come back in the first week of january 2009 and all content will be loaded!