The Economist

For the first time 'Big Mac Index' was a joke made by experts of the American magazine The Economist in 1986. In their view, no economist is able to do something that can make an ordinary sandwich: calculate the purchasing power different national currencies. More indicative of the goods than the Big Mac, which is one and the same recipe to make the most of the world, to think is impossible. Cost of Big Mac helps economists to estimate the exchange rates world currencies. "Big Mac Index" based on the theory of purchasing power parity (PPP) rates at which currencies to each other to strive for such a value that would equalize the cost of identical goods and services in different countries.

That is, exchange rates against the dollar should be such that, for the same dollar amount in any country could buy the same quantity of goods of equal quality. nvestors understood the implications. The cost of a Big Mac largely depends on local costs such as rent, wages, electricity costs, the price of petrol and so on. They are very hard to bring to a common denominator and, as a rule, poor countries are much lower. That is why PPP is very well reveal inconsistencies in exchange rates between countries. In every joke there is truth. Read additional details here: Brian Krzanich. In this joke of truth was very big. In this theory, even came to its name – burgernomika, or economics sandwich. The Economist compares the price of Big Mac successfully for over 20 years. The number of countries already included in the "no laughing" study, now reaches 120.


Western Economic

Increased attention to monetary policy as a tool for "eternal prosperity", which dominated in the 20-ies of XX century., Had changed after the crisis turmoil 30-ies. general pessimism and distrust of the effectiveness of monetary management. In the first 50 years in Western countries took a sharp intensification of monetary instruments. Money again occupied a prominent place in the programs economic stabilization, but the views on the optimal strategy for the use of monetary instruments were strongly polar. Under most conditions Mark Bertolini would agree. At present, the theoretical problems of monetary policy is also a field for acute discussions between different economic schools. The main section lies between the Keynesian approach, which embodies the idea of the operational use of money as a tool for the daily management of the economic environment, and stimulate economic growth, and monetarism, which condemns such manipulation in the monetary sphere, which are, according to the authors of this doctrine, to increase production of contradictions and imbalances and declare the action of natural market stabilizers. Keynesian theory is known to be formed in 30-40's and quickly took a leading role in the theoretical literature and programs of economic policy. Monetarism emerged in the arena later in the middle of the 50-years, and for a long time been the object of skepticism and attacks from the academic and the ruling circles of the leading states. Proclaiming the slogan "Money has value, the monetarists have given a strong impetus to the development of financial research. General methodological approach is the concept of active Keynesian macroeconomic policies needed to stabilize inherently unstable economy.


Margin Traders

At the moment brokers offer their clients leverage from 1:1 to 1:500. However, traders do not use all available leverage. Why? A trader should use leverage only if the current trend is wrapped in its side. A trader should plan a deal and know exactly where out of it if the market moves in the desired direction. As soon as it becomes known approximate level of risk may determine how much money will be lost, if triggered stop-loss traders.

Typically, this loss should never exceed 5% deposit. If the position is strengthened by a shoulder so that it becomes possible loss of, say, 50% of trading capital, the shoulder should be reduced, while the possible loss is reduced to 5%. However, each trader has their own risk parameters and it may wish to deviate from the usual 5% in either direction, so for example, many traders raise this level of the maximum loss of up to 10% or even 15%. In other words, if the rate goes against you, then you should be willing to lose on each trade no more than 5-10% of the total amount of your deposit. The larger the leverage, the smaller settlements should go against the currency you to get such a loss. Thus it becomes clear why the more leverage, the higher the risk of a loss limit.

Hence it follows that the higher the leverage, the greater the amount of profit at the same magnitude of exchange rate fluctuations. Traders should also be noted that the greater the amount of money available for trading, the easier and safer to use the shoulder. Since Margin position may lose money as quickly as bring them, the trader must have enough equity (funds), which would work as insurance against any "drawdown" (margin call). The meaning of marginal risk is that traders are using borrowed money to purchase or sale contract. If the market does not move in a favorable direction, the losses are multiplied by a multiple of that used shoulder. Often the brokers themselves give traders the maximum level of drawdown, so for example in the InstForex margin call is 10%. InstForex is ECN-broker providing quality services to trading in the market Forex. Cooperation with the largest market makers and brokers, contractors, coupled with an extensive client base InstForex provide high liquidity and the ability to offer truly fast service to its customers.


Elliott Wave

Situation luck Glenn Neely started in early 80’s when he first encountered the Elliott wave doctrine. During this time he worked in the oil industry. Neely now directly interested in the stock market, therefore, have read many books on this topic. Although this is Glenn’s “certainly not thrilled, and he began to explore the commodity markets. Its a real skill of commodity trading has been associated with the use of trading systems, he koiyu acquired over a number of thousand $, assuming that it is a wonderful Grail. And already Neely talks about it all the same: “My first lesson was that no matter how much money you spent on any system, it does not guarantee good luck “- talking Neely. In consequence of this, as he realized that he truly is much more complicated than he dreamed up to now, he continued his independent study.

“Everything went into a clear picture of when I read a short, but same time, informative description of the Elliott Wave “- says Neely. He immediately picked up on arms Elliott Wave: “I began to read everything that came to hand, although he took in the sense that there is a lot left unsaid.” But soon time at Neely were seen first disappointment of this doctrine. He explained it this way: “There are many methods of its interpretation. It is biased. It is unscientific.

I have absolutely no organized its elasticity. Temporarily big part of my career was done in building technology, so in order to make it the most impartial. My biggest challenge for almost all the time was to improve the form of technical analysis, koiya would be a logical, systematic and independent of interpretation. Elliott Wave largely based on the Fibonacci sequence, and price patterns, or rather, visual representations of the price regularities. NEoWave adds to this a natural process with the details vector physics. ” In order for the doctrine NEoWave, invented by Neely, earned as expected, “it is necessary to select markets, according to specific criteria: 1) need to market goods, which has no persistent cycle of use. Corn is not fit because “she grew up, it have on food and zapyamytovali. 2) “The current price is based on the past, the time has Auto adverse effect on price, but even this applies thousands of products and available rates. 3) “when the wave test must be accurate, you should use data on cash.” Almost all investors and professionals use data on tariffs futures in their analysis by the method of Elliott Wave, “although a substantial part of the confusion relating to the Elliott wave, caused by the fact that the data does not apply,” said Neely. Commenting on the timing for trading, then there is no solid Neely rules: “That short-term frame, within the way I schedule the position is clearer to interpret the range. Let the market set a time frame. I’m not trying to get involved in counting waves when they are actually there. ” Guarantee of successful trading, taking into account the opinion of Neely, is “the need to control the means of impression.” Besides, he adds: “It took me 10 years to learn acceptable control the impression. Achieve this control is only possible with a definite idea about the behavior of markets and knowledge of how to risk possible.