The British Pound (GBP) is rallying back toward its highest levels in nearly eight months versus the Dollar (USD), as the September retail sales report showed evidence of strengthening consumer activity in Europe’s third largest economy.  This is an important development, mostly because markets are in flux with respect to UK interest rate expectations.  Last week, we saw the release of the September meeting minutes from the Bank of England, which showed that members voted unanimously to suspend additional stimulus injections on signs of continued recovery.  

The British Pound (GBP) is rallying back toward its highest levels in nearly eight months versus the Dollar (USD), as the September retail sales report showed evidence of strengthening consumer activity in Europe’s third largest economy.  This is an important development, mostly because markets are in flux with respect to UK interest rate expectations.  Last week, we saw the release of the September meeting minutes from the Bank of England, which showed that members voted unanimously to suspend additional stimulus injections on signs of continued recovery.  

This is an extremely bullish scenario for the GBP and this week’s retail sales data give markets additional confirmation that the Bank of England has reached the completion of its easing cycle.  The GBP is now showing gains against all 16 major currency counterparts, showing a strong continuation of the momentum seen since the first quarter.  In the last six months, the GBP has gained nearly 6 percent against the USD, so the possibility of further gains will depend on central bank commentaries suggesting a willingness to begin raising interest rates. 

“Stronger retail sales are an important part of any economic recovery,” according to Ann Gorenkova at NordFX Company.  “This week’s data strengthen the interest rate outlook in the UK, and this should support the GBP near-term.” 

The UK retail sales gauge increased to 34 for the month of September (the highest level since the middle of 2012), up from 27 seen in August.  This improvement was particularly surprising because the consensus analyst estimates called for a decline to 23.   The GBP/USD has now firmly regained the 1.60 level, which is highly important from a psychological perspective.

Sustainable Momentum

For forex traders with longer term time horizons, it will be important to remain aware of the trend momentum in the GBP given that we are trading at elevated levels relative to near-term averages.  This leaves the currency vulnerable to downside corrections, especially if we see a re-introduction of “tapering” discussions from the US Federal Reserve.  At this stage, it is essentially a race to see which central bank commits to ending its stimulus programs first.  But the latest rallies in the GBP indicate traders are reluctant to believe we will see massive reductions in Fed stimulus before the end of this year. 

The Bank of England has made public statements suggesting we will see no interest rate increases until unemployment levels drop below 7 percent.  This is still a ways off, given that the jobless rate currently stands at 7.7 percent.  In order to achieve this goal, the UK economy would need to add another 750,000 jobs. 

If we see progress made in these areas, traders should expect to see additional rallies in the GBP as this will help to solidify the projection outlooks espoused to far by the Bank of England.  In any case, the GBP continues to show strength as one of the currency market’s outperformers, which well serves traders implementing breakout strategies.

By Richard Cox

Richard Cox is a university teacher in international trade and finance. Lessons in macroeconomics and price behavior in equity markets. He writes for MarketBulls.net, BinaryOptionShark.com, TheStreet,Seeking Alpha, and the Motley Fool.Investing strategies in these articles are based on technical and fundamental analysis of all the major asset classes (stock indices, currencies, and commodities). Trade ideas are generally suggestive of time horizons of one to six months.

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The consumer world is moving away from television and print media, and toward FaceBook and Twitter run on mobile devices.  But American small businesses have largely missed these trends.

The consumer world is moving away from television and print media, and toward FaceBook and Twitter run on mobile devices.  But American small businesses have largely missed these trends.

Studies show that while more than 80 percent of adults actively use the internet to research local businesses, 63 percent of small companies in America do not even have a website.  These trends are alarming and suggest that a majority of the marketplace has yet to capitalize on the benefits of establishing a greater online presence.  Luckily, many of the latest social media tools are free and relatively easy to set up.  Here, we look at 5 reasons your company will fall behind the pack if you fail to capitalize on the benefits of online media.

Establishing authority and building your reputation. 

The reality is that small businesses are forced to generate credibility without any outside help.  There are many small businesses that offer excellent products or services, but have no way of convincing the broader consumer audience that these offerings are right for them.  Companies that lack significant presence in the most popular online outlets will be viewed as outdated, incapable, and difficult to access.  As the media world changes, “word of mouth” in the online realm is going to determine the success or failure of many businesses – and it makes no sense to lose these advantages because they are relatively easy to implement.

Increase customer interaction. 

Communicating through Facebook, Twitter, and email is free and can be done 24 hours a day.  This makes it easier for customers to get in contact with you and offer feedback for potential product changes and new orders.  But the biggest advantage here is that these conversations can be initiated on your customers’ own time.  This helps to ensure that orders will not be missed simply because your business did not have a customer service rep available to answer the call.  Online media tools will continue to help companies build stronger relationships with their clients, as they can be accessed at any time of the day or week. 

Establish your target demographic. 

Online media offers access to direct markets and consumer bases that are more likely to use your services.  Targeted email lists and social network groups allow you to set your audience and communicate with that audience in ways that are more efficient, and tailored to specific needs and developing trends.  Old media required large budgets and significant man-hours to reach a targeted demographic.  Without a plan to build a stronger online presence for your business, you can expect to see a lot of wasted resources in demographic areas that are unlikely to have an in your products in the first place. 

All of these factors offer ways to strengthen your brand and are critical for the success of your business.   The new market environment that has become increasingly dominated by online PR practices, and the companies that fail to use these resources are only going to fall further behind ones that don’t.  If you think these trends don’t apply to you, remember that most small businesses fall into the category that fails to address the growing need to have an ongoing PR program.  If you miss out on the advantages of online PR programs, you miss out on conversions — and you give your customer base to companies that are better established in the areas that characterize the modern promotional market.

By Richard Cox

Richard Cox is a university teacher in international trade and finance. Lessons in macroeconomics and price behavior in equity markets. He writes for MarketBulls.net, BinaryOptionShark.com, TheStreet,Seeking Alpha, and the Motley Fool.Investing strategies in these articles are based on technical and fundamental analysis of all the major asset classes (stock indices, currencies, and commodities).  Trade ideas are generally suggestive of time horizons of one to six months.

The post What Small Businesses are Missing in Online Presence appeared first on Economy Watch.

To say that the trading environment has changed drastically over the last ten years would be an understatement. The all-encompassing use of the internet from home computers and mobile devices has taken investors out of the trading exchanges and into the environment of their choice.

To say that the trading environment has changed drastically over the last ten years would be an understatement. The all-encompassing use of the internet from home computers and mobile devices has taken investors out of the trading exchanges and into the environment of their choice.

Options trades can now be placed at any time of day and all relevant market information can be accessed in seconds. This essentially means that options trading has democratized, and market access is now open to all that wish to play these markets. There are very few downsides in these developments and here we will look at some of the positives — the most important of which is the rise of social trading as an alternative to the traditional exchange environment. 

Traditional Options Trading Floors

Historically, traders speculated in the financial markets on trading floors in chaotic environments where most of the relevant information was available only to those with privileged connections and a direct connection to the associated exchange.

Those days are over. What we are now seeing is a new crop of social trading communities where investors mull over and debate position outlooks using forum posts and real-time news alerts. Ultimately, this means market sentiment will be a much more accurate reflection of what is truly happening in the world economy and in the minds of individual traders. This is also the reason social trading communities mark the future in speculator interaction.

Advantages of Social Options Environments 

Success in options trading is largely determined by sentiment. In order to win, markets have to push prices above or below your strike price. Success or failure is determined by whether or not your position agrees with the majority of the market. If the wider market does not agree with your trading decisions, losses will follow.  To help with this, social trading networks have started popping up, allowing traders to interact, debate, discuss strategies, and even copy trades of more experienced participants. These types of communities (something like a FaceBook for traders) have many advantages — especially for those just getting started in the markets.

One example of a social trading network can be found in the MQL5 Community, with its well-detailed performance record. In addition to educational resources, traders can access sample trade ideas from experts that are updated in real-time. These types of networks allow less experienced traders to follow the progress of the experts (with detailed stats on winning and losing trades) and to base positions on their recommendations. But what is best about these arrangements is that newer traders can find more experienced traders that share the same strategies and outlook on the market. For example, you might be a trend trader and you are looking for a more experienced mentor to guide you through the steps of finding the best trading opportunities. In other cases, you might have a conservative risk tolerance and you are looking for ways to find less aggressive trading opportunities that are less likely to accrue large losses. 

Alternative Trading Strategies

There are many types of trading strategies (scalping, swing trading, breakout trading, etc) so it is usually not enough to side with the advice of any one trader. It makes much more sense to become an active member of a trading community, and then align your methods with the subset that is most in-line with your trading goals. For example, if you do not have time to be in front of your trading station for a few hours each day, it would not make sense to follow the trades of a scalper or news trader. In these cases, you would want to establish a partnership with groups that use longer term time horizons that do not require positions to be opened and closed each day.

But, of course, the biggest advantage of working with a social trading network is that you are able to learn the process of trading without the risk of loss that most new traders encounter. New traders usually find themselves in one of two positions: We either jump into the markets with live money (and lose most or all of it), or we spend a lot of time demo trading in order to learn the inner workings of the market (but this does not generate real money gains). Working with mentors and trading networks helps solve both of these problems, as this allows us to find and enter high probability positions without the added risk of trading with live accounts while we are still in the early stages of the learning process.

All of these advantages combined suggest that social trading networks are the way of the future, as investors move away from the traditional exchanges and into more specialized facilities. These networks have much to offer, even for those with more trading experience as they provide an outlet to display their knowledge and gain a following with like-minded traders. As always, it makes sense to research the reputations of these networks before any live money is used in a trade. Internet forums offer an excellent way of doing this, as you will likely come across other traders that have tested these services and can report back on whether or not a given network deserves its reputation.

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