David Waring

Bloomberg: Global Stocks Rise on Fannie, Freddie Takeover; Treasuries Drop - Stocks rose in Europe and Asia, sending the MSCI World Index to its biggest gain since July, on speculation the U.S. government's takeover of Fannie Mae and Freddie Mac will shore up the mortgage market. U.S. index futures climbed, while Treasuries fell the most in two months.

Bloomberg: U.S. Takeover of Fannie, Freddie Offers `Stopgap' - reasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart yesterday placed the two firms in a government-operated conservatorship, ousting their chief executives and eliminating their dividends. The Treasury may purchase up to $200 billion of stock in the firms to keep them solvent. The takeover is aimed at keeping the companies going into 2009, while leaving the next president and Congress to decide their long-term structure.

More on Fannie/Freddie Takeover:

Bloomberg: Fannie, Freddie Credit-Default Swaps May Be Unwound

CNNMoney: Paulson changes the rules of the capital game

CNNMoney: U.S. seizes Fannie and Freddie

Marketwatch: Washington takes over Fannie Mae, Freddie Mac


CNNMoney: Oil rallies as Ike threatens - Light, sweet crude oil for October delivery was up $1.07 at $107.30 a barrel amid fears about Hurricane Ike's course through the Gulf of Mexico and ahead of OPEC's meeting in Vienna.

Marketwatch: Dollar mixed after Fannie, Freddie rescue - The dollar index rose 1% overnight after initially coming under pressure on the Fannie and Freddie news which caused traders to reverse out of safe haven plays.

Marketwatch: Gold for December delivery rose $12.2, or 1.5%, to $815 an ounce as demand for gold as a hedge against inflation increased on rising oil price.

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My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

KP FX Trader

Hi Dave,

Have you heard Kathy Lien and Bori Schlossberg have left FXCM and are working with GFT?

On a separate note, can you speak to the practice of brokers taking the other sides of trades? I really dont know much about it but figured Id start here with learning. I heard something mention in passing on a recent webinar.

David Waring

Hey KB FX Trader,

Glad to hear from you.

Yes I heard that Boris and Kathy have left FXCM I am sure that they will be missed.

Below is a link where you can learn more about the different ways brokers execute trades in the forex market:

Who pays you the profits??

Let me know if there are any other questions.

Best Regards,
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

KP FX Trader

Hi Dave,

Weren't Kathy and Boris founders of FXCM? Should there be concern about them departing?

David Waring

Hey KP,

No FXCM was founded by 6 people in 1999 5 of whom are still actively involved in the firm and one of whom is retired. Boris and Kathy were employees of the firm who were hired on in 02 or 03.

Best Regards,
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

KP FX Trader

Excellent, thanks. I really appreciate you and your site. I have a question that I don't think the broker I am dealing with will answer.
I asked what the average profit for the 5% of successful traders was. The answer was in so many words, its unknown.
Ill take the question one step further, what is the average account balance and how many clients?
In addition, if a broker boasts they are a , say....70 million company. What does that mean? They are broker for 70 mil. in currency a year?
You see where I am going. I am working on my long term money mgmt strategy, as I intend to be a full time professional independent trade by year end, and this will help in evaluating how realistic my goals.

KP FX Trader

Hi Dave,

CFTC shows adjusted net capital at 70 mil. pls compare with this and help me reconcile the two:
Forex Broker


Thx!
KP

David Waring

Hey KP,

Glad to hear from you.

I wouldn't know the average profit of the top 5% of traders either however I have done a video on setting realistic profit expectations which may help shed some light on the question:

Profit Expectations: What Millionaire Traders Know

As for what it means if a company says they are a $70 Million company I would have to see the context under which this was said because as you have pointed out this could mean many things.

Best Regards,
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

David Waring

Hi KP,

In addition to offices in the US FXCM has offices in Hong Kong, London, and Tokyo which they also have to capitalize seperately from the US office. So the difference is the money they have to meet capital requirements for their foreign offices.

Best Regards,
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.