While there are many characteristics of the Forex market, there are three that help new traders learn exactly what the foreign exchange market is all about. These characteristics are those that every new trader should know long before they make their first trade. The Forex system is one that is made to encompass the entire globe.
It can be difficult to interpret and even more difficult to trade successfully within. Knowing how the system works is the first step to being a successful trader however. So, before you even think about opening a Forex account, be sure that you are familiar with the foreign exchange market’s geographical, functional, and participant characteristics.
Geographical Characteristics
The Forex is a huge market that encompasses the entire globe. This is a market that spans from the United States to Europe, to China, and back. There is no area it cannot touch. This is one thing that makes the market so popular. There is simply something for everyone with the Forex market. It is easily accessed due to it being open all day in every country. Its 24-hour access makes it even more attractive for investors.
No matter what time of day you want to trade, there will be someone trading in some distant location around the world. Although there is trading in the Forex in every corner of the globe, the major exchanges are Singapore, Hong Kong, Tokyo, Bahrain, London, New York, San Francisco, and Sydney. The geographical characteristics of the foreign exchange market can help new traders realize the size and volume of the Forex. It is simply unmatched in volume and size. This makes the Forex a powerful tool for investors everywhere.
Functional Characteristics
The entire Forex market functions to transfer purchasing power. This is done between countries. When trades are made, they are allowing partners to convert currency revenues into their domestic currency. When one country’s purchasing power is strong, another country’s may be weaker. It also functions to obtain and provide credit for international trade and to avoid an exchange rate catastrophe. When it comes to international trade, the Forex is helpful because it can help the movement of goods between countries and offer credit for financing.
Participant Characteristics
There are two main parts to the foreign exchange market. The first part is the interbank, which is often called the wholesale market. The second part is the client, which is often called the retail market. Throughout these two categories, there are approximately five different types of participants.
The bank and non-bank foreign exchange dealers are those that buy at bid prices and sell at asking prices. This helps the efficiency of the market as a whole. An interesting thing to note is that by trading currencies, banks often make up to 20% of their profits.
Individuals and commercial and investment firms make up the second type of participants. This group consists of importers, exporters, tourists, and other portfolio investors. They use the market basically to help them invest. These are often those participants that use the Forex to hedge, which is a way to reduce their risk.
Speculators and arbitragers are the third group type that seeks to profit from the foreign exchange market. These people are those that are out to make money for themselves. They are acting in their own self-interest. They seek profitable rate changes in order to help them profit and try to profit with the least possible risk involved. Large banks are sometimes a part of this group.
Central banks and treasuries are also involved in the Forex. They use it to change the value of their own currency, or to at least attempt to do so. This is something that they do with reserves. Their motive is not to profit but to influence the market. They want the value of their domestic currency to benefit their interests.
Lastly, foreign exchange brokers are the last of the five groups involved in the participant characteristic of the Forex. These participants are those who facilitate trading but are not partners in the transaction. They typically charge a fee for their service,which is most often on a commission scale. They are often seen as go betweens for large traders.
Wednesday, August 26, 2009
Where to Begin With Forex Trading?
Where to Begin With Forex Trading?
(With Thanks/Help from a Forex Book with same title)
Eager to jump into the Forex World???
Dont know what to do?
Watch closely....
Topics Covered:
Three Main Characteristics of the Forex Market.
Six Trading Tips for the Forex Newbie.
Rules for Trading in Forex Markets.
Top Ten Basic Terms in Forex Trading and Their Definitions.
The Appeal of Forex Trading Versus the Stock Market.
Forex Charts: What Are They and How Do You Read Them?
A Crash Course in Forex Education: What You Need to Know to Get Started.
Five No Nonsense Strategies in Forex Trading.
Money Management Basics for Forex Traders.
The Basics on Understanding Forex Options.
The Lowdown on Day Trading.
(With Thanks/Help from a Forex Book with same title)
Eager to jump into the Forex World???
Dont know what to do?
Watch closely....
Topics Covered:
Three Main Characteristics of the Forex Market.
Six Trading Tips for the Forex Newbie.
Rules for Trading in Forex Markets.
Top Ten Basic Terms in Forex Trading and Their Definitions.
The Appeal of Forex Trading Versus the Stock Market.
Forex Charts: What Are They and How Do You Read Them?
A Crash Course in Forex Education: What You Need to Know to Get Started.
Five No Nonsense Strategies in Forex Trading.
Money Management Basics for Forex Traders.
The Basics on Understanding Forex Options.
The Lowdown on Day Trading.
Tuesday, August 25, 2009
Conclusion
Needless to say, knowledge is another key of handling your risks well. Before you get into Forex market, the best thing you should do is educate yourself. What drives currency price movement? How to read analysis data? How to read chart indicators? Learn detail about how currency price move and how to trade foreign currency exchange in order to avoid unnecessary risks.
You come to this article probably because of you are new to FOREX and were looking for some readings on the Internet. To be frank, Forex can be very profitable but the risk lie beneath is equally great. But what else in life does not involve risk? You can be fired from your job, factory may malfunctions, stock market may collapse, your boss may runaway with your wages, and hey! These are all risk. Learning in risk management is the key to handle your life.
Trade smartly, and gain the maximum out of Forex
You come to this article probably because of you are new to FOREX and were looking for some readings on the Internet. To be frank, Forex can be very profitable but the risk lie beneath is equally great. But what else in life does not involve risk? You can be fired from your job, factory may malfunctions, stock market may collapse, your boss may runaway with your wages, and hey! These are all risk. Learning in risk management is the key to handle your life.
Trade smartly, and gain the maximum out of Forex
Diversification in Forex trading
Diversification is another way to manage risks in Forex market. Trading one currency pair will generate few entry signals. If you wish to lower your risk in Forex market, it would be better to diversify your trades between several currencies.
Try simultaneously trade on different pair of currency. Say you have capital of $1,000, instead of putting all your money to long EUR/USD, you can split the money half to long EUR/USD and GBD/USD ($500 each) as these two currencies are highly correlated and tends to move in the same directions.
Avoid too high margin trade
Another way to manage your risks well in Forex market is to trade without overleveraged. Forex dealers want you to trade with high leverage values as this means more spread income for them. Also, trading in high leverage may increase your profit or your losing. There are high possibilities that one lose money more than he or she can afford in margin trading.
Forex can be extraordinarily beneficial to a variety of people. It gives huge leverage rates, it gives incompatible liquidity to your money, it gives convenience to trade on the Internet, and it can definitely give you a lot of money if you trade smartly. Like any other trading business, if you are new to it, best advice you can get is to learn and practice more before you test your ‘wings’. Seminars, eBooks, Internet, papers, video courses – all these are handy to get yourself ready. You can also try out your skill on the demo account provided free. After all, Forex trades 24hours a day and there is always money to make in the market, so why not be patience until you are fully ready for it?
Stop loss order
The Forex market could move against you. No one can predict with certainty which way exchange rates will go, and the Forex market is volatile. Fluctuations in the foreign exchange rate between the time you place the trade and the time you attempt to liquidate it will affect the price of your Forex contract and the potential profit and losses relating to it. To avoid losing all of your investment capital, you should have a pre-arrangement on your risk profile. A solid risk profile will limit the Forex dealer not to overtake risk that you cannot handle. For example, if you have 100,000 to invest, you can say that you are willing to risk 10,000 of that capital with the potential to gain another 100,000. This can be easily implemented by a fund manager, so your losses can be limited to 10% or 5% of invested capital.
Picking up the right Forex dealer
One of the best methods to avoid unnecessary risks is avoid fraud dealer.
Forex is a special trading business with no centralized market. Thus, unlike regulated futures exchanges, there is no central market place for Forex buyers or sellers therefore the price offered by different Forex dealers may vary a lot. When you are trading in Forex market, you are totally relying on the dealer’s integrity for a fair deal.
Further more, you need to select a right Forex dealer to avoid scams. There may be Forex dealers that are not regulated legally and there maybe investment scams, especially on the Internet.
Be very careful on who you are dealing with in Forex and always check cautiously on the investment offer.
Forex is a special trading business with no centralized market. Thus, unlike regulated futures exchanges, there is no central market place for Forex buyers or sellers therefore the price offered by different Forex dealers may vary a lot. When you are trading in Forex market, you are totally relying on the dealer’s integrity for a fair deal.
Further more, you need to select a right Forex dealer to avoid scams. There may be Forex dealers that are not regulated legally and there maybe investment scams, especially on the Internet.
Be very careful on who you are dealing with in Forex and always check cautiously on the investment offer.
Understanding the risks in Forex trading
Forex: To trade, or not to trade? Many are reluctant to involve in Forex trading because of its ‘risks’. Generally speaking, there are risks everywhere in our life: Factories may malfunction, customer may not walk-in if you open a shop, stock market may crush, and if you are employed you may get fired during company downsizing. There are risks everywhere! The important issue here is how you learn and maintain your risk. So if you are considering participating in Forex market, you should learn managing the risk involved, instead of being terrified.
Forex Trading - Risks inherent to Forex
High Risk Investment
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Monday, August 24, 2009
Foreign Currency Trading is a snap with FX Trading
Every day in the FOREX market, approximately $2 trillion are traded; that's more than all of the equity markets in the world combined! Forex's 24 hour nature allows traders to tailor their trading schedule to their lifestyles, capitalizing on global economic news releases while the non FX equity markets are closed. FX Trading provides 24/7 customer service, assuring you'll never be left trading alone.
FX Trading specializes in trading the OTC (Over the Counter), Spot global Foreign Exchange (Forex or FX) market. We offer the industry leading FX Trading Platform and managed account services, all while passing savings onto our clients. Our FX Trading Platform is fully customizable to your preferences and provides instant execution. As a result of our 1 Wide Spreads (bid/ask ration) on USD majors and up to 500:1 Leverage, you'll enjoy industry low per trade costs while your investment goes further than with our competitors.
Download the MetaTrader4 Platform
Download the MetaTrader4 Platform
http://www.fxtrading.com/
FX Trading specializes in trading the OTC (Over the Counter), Spot global Foreign Exchange (Forex or FX) market. We offer the industry leading FX Trading Platform and managed account services, all while passing savings onto our clients. Our FX Trading Platform is fully customizable to your preferences and provides instant execution. As a result of our 1 Wide Spreads (bid/ask ration) on USD majors and up to 500:1 Leverage, you'll enjoy industry low per trade costs while your investment goes further than with our competitors.
Download the MetaTrader4 Platform
Download the MetaTrader4 Platform
http://www.fxtrading.com/
Sunday, August 23, 2009
Canadian Dollar To Weaken Further As Labor Market Falters
Fundamental Forecast for Canadian Dollar: Bearish- Canadian GDP Contracts in April, Factory Prices Tumble Lower in May- USD/CAD Sentiment MixedThe Canadian dollar weakened against the greenback following the drop in risk appetite, and the loonie may continue to face increased selling pressures over the following week as the economic calendar foreshadows a weakening outlook for the world’s eighth largest economy. As a result, fears of a protracted recession could lead the Bank of Canada to take additional steps this month in an effort to stem the downside risks for growth and inflation, and speculation for further easing could weigh on the exchange rate over the near-term.At the same time, the BoC saw a risk for a prolonged recession, stating that the appreciation in the USD/CAD could ‘fully offset’ the recent improvements in the real economy, and the board is likely to hold a dovish policy stance over the medium-term as they pledge to hold the benchmark interest rate at the record-low into the following year. However, as researchers at the central bank see high uncertainties tied to ‘quantitative easing,’ the board may continue to hold a neutral policy stance going forward, and long-term expectations for higher interest rates could drive the Canadian dollar higher throughout the second half of the year.The economic docket for the week ahead is expected to show a rise in business spending, with economists forecasting the Ivey purchasing managers index to increase to 50.3 from 48.4 in May, while housing starts are projected to increase for the third consecutive month in June. A rise in business activity paired with a rebound in home construction could raise the outlook for the region as the government takes unprecedented steps to stimulate the ailing economy, and speculation for a global recovery could drive the Canadian dollar higher as market sentiment improved. Nevertheless, the labor market is widely expected to weaken further in June, with market participants expecting the annual rate of unemployment to reach an 11-year high of 8.7%, while the trade deficit is projected to widen in May on the back of falling exports. As firms face fading demands from home and abroad, businesses may continue to scale back on production and employment, and the data is likely to encourage a weakening outlook for the economy as central bank forecasts economic activity to contract at an annual pace of 3.0% this year, which would be the biggest decline since 1933. - DS
Foreign Exchange Markets: A Practical Guide
This online guide aims at creating a coherent understanding of the foreign exchange market, by tying in real life market scenarios with the relevant theories of international finance and the classic schools of technical and quantitative analysis. Although there is a vast amount of literature on international finance, technical analysis and chartism, there is a scarcity of instructional materials incorporating actual market events such as interest rate decisions, interventions and geopolitical events.
Another area largely overlooked by currency guides is the integration of fundamental and technical analysis for making decisions. The distinctiveness between the two types of approaches dissuades many from factoring them together. But knowing how to combine them can be highly advantageous in unraveling the trend and timing of currency moves.This material focuses on teaching how to think for yourself in understanding global currency markets, rather than depending on a pre-set trading system which recommends decisions without providing input on the whys of making right and wrong decisions. Rather than rehashing the classic theories driving currency analysis, this guide will offer investors, researchers and students an innovative approach, paramount in grasping and anticipating the moves in the major currency pairs.
Another area largely overlooked by currency guides is the integration of fundamental and technical analysis for making decisions. The distinctiveness between the two types of approaches dissuades many from factoring them together. But knowing how to combine them can be highly advantageous in unraveling the trend and timing of currency moves.This material focuses on teaching how to think for yourself in understanding global currency markets, rather than depending on a pre-set trading system which recommends decisions without providing input on the whys of making right and wrong decisions. Rather than rehashing the classic theories driving currency analysis, this guide will offer investors, researchers and students an innovative approach, paramount in grasping and anticipating the moves in the major currency pairs.
European Stocks Follow Wall Street Lower
European stocks opened lower Wednesday, as investors take their lead from overnight losses on Wall Street amid concerns about the strength of the global economic recovery.The pan-European Dow Jones Stoxx 600 shed 0.3%. The U.K. FTSE 100 also lost 0.3%, while the French CAC-40 declined 0.6% and Germany's DAX slipped 0.1%."Equity markets could be set for another grueling session after the Dow Jones Industrial Average posted a triple-digit loss last night and Asian markets have followed suit," said Matt Buckland, a dealer at CMC Markets.On Tuesday, the Dow Jones Industrial Average fell 161.27 points, or 1.9%, to 8163.60. The Standard & Poor's 500-stock index lost 17.69, or 2.0%, to 881.03. The Nasdaq Composite Index lost 41.23, or 2.3%, to 1746.17."Commodity prices remain under pressure, which is clearly weighing on the resource stocks, whilst the downbeat economic outlook is hardly doing anything to impress the banks either," Mr. Buckland added.Attention will turn to the start of the second-quarter corporate earnings season in the U.S., with numbers from Alcoa leading things off.Elsewhere, Asian stock markets were lower Wednesday, dragged down by ongoing weakness in oil and metal prices."The market's in a holding pattern," said Macquarie Equities broker Brad Gordon in Auckland. "There's all the talk of green shoots yet there are also lagging indicators of job losses."NetResearch Asia chairman Kevin Scully warned the risk of further correction was high if the upcoming earnings season were to disappoint. "We might see some of the quick recovery premiums being given back, especially if and when the reporting season delivers or gives guidance that is lower than the forecasts."Japan's Nikkei 225 closed down 2.4% at 9420.75, closing below 9500 for the first time since May 28. South Korea's Kospi Composite closed 0.2% lower, while Hong Kong's Hang Seng Index was last seen down 1.4%.In the currency markets, the dollar gained against the euro Tuesday as risk appetite eroded with falling U.S. stocks ahead of the earnings season.The dollar also found some favor after world leaders dismissed previous reports that a new world reserve currency to replace the dollar would be on the Group of Eight leading nations' meeting agenda. The gathering of heads of state begins Wednesday in L'Aquila, Italy.The yen, which benefits from safe-haven flows as well, advanced against both the euro and dollar. The euro recently traded at $1.3872, and the dollar at 94.20 yen."A disappointing earnings season could push equities lower, and we expect further negative surprises to push the euro to test the downside of its recent $1.3750-$1.4350 summer range," said Ashley Davies at UBS.Crude-oil futures have continued to weaken as doubts over the prospect of an economic revival continue to plague the market.The August crude contract on Globex stood at $62.04 per barrel, down 89 cents, having settled Tuesday at $62.93 per barrel on the New York Mercantile Exchange.European government bond markets opened firmer, benefiting from a flight to quality as money leaves the equity markets. The September bund contract stood at 122.18,
Forex Course - With so Many Offered Online, How do I Know Which one is the Best?
If you really want to learn currency trading at a level that will enable you to be profitable consistently in the FX markets you are going to need enroll in a Forex course. There are plenty of free learning materials all over the internet that you can check out. This is always a good idea do this first; it will help you decide if you want to continue to go forward with this new little project of yours.But, what you will quickly find out is that the free material is simply not sufficient at providing you enough knowledge or insight into the markets to possibly make a long term sustainable career out of it. You're going to need to invest in yourself and your education if you really want to pursue income in this industry.That being said, there are essentially two types of class you can take. One teaches a specific little method of making money in the markets. The second is a comprehensive program that reviews everything there is to know from top to bottom. Each one has it positive and negatives.The program that instructs one simple trading technique, of course is much easier to learn, simpler to trade with and you are able to start making money with it much quicker than the long lasing programs. The all-inclusive classes require more effort on your part in addition to the time required to take in all the material you will be presented with. But, you will be fully prepared for a long term career when you complete the program if you upheld your end of the bargain, which was to study hard. Which ever type of Forex course you initially decide on, if you choose a top rated class you will receive good value for your money. I have taken all of the following and found them all very useful. There names are Forex Trading Made E Z, Fap Winner and Hector Trader. Why not check out the sites and see what you think for yourself?Our firm's personnel has examined and tested many of the top Forex Trading Systems and Currency Software Trading Systems available today. To view there reports check out Currency Trading Software. We have a large list of the best Currency Courses and Forex Trading Courses that provide a great Forex education online. To view them go to Learn Currency Trading at Trading Forex
Thursday, August 20, 2009
Forex Products Reviews
FOREX trading is exciting but think before you jump into the fire! Try practicing in a simulated FOREX market with FOREX Tester. Testing your strategy with this simulator will prepare you for trading with the big dogs in a manner that will save you both time and money! FOREX Tester allows you to test your trading strategies against historical data in mock trades without risking real money. It comes equipped with built-in indicators or you can create your own indicators using FOREX Tester API. This is a much faster alternative to testing yourself in real time through FOREX demo accounts. FOREX Tester is highly recommended if you are serious about mastering your trading skills! It’s simple to learn and navigate. The only real negative is a fully functional version of the program comes with a price betwee
French Presidency: G8 Unlikely To Discuss Forex
PARIS (Dow Jones)--The heads of the Group of the Eight leading nations are unlikely to discuss foreign exchange issues during their meeting in L'Aquila, Italy, from Wednesday, an official from the French presidency said Tuesday.Speaking at a briefing ahead of the meeting, the official said G8 summits of heads of states and government "generally don't discuss foreign exchange matters."Several countries are increasingly worried about the weakness of the U.S. currency against others, notably in Europe, as U.S. products are then less expensive on the export market than theirs.During a conference in Aix-en-Provence, southern France, Sunday, European Central Bank President Jean-Claude Trichet said "it is extremely important that the United States of America...has been...saying that a strong dollar is in the interests of the United States of America."The G8 will have a discussion about oil prices with the aim of defining a "reasonable" price range acceptable to both producing and consuming countries, which would help avoid extreme volatility of crude prices, another official said during the same briefing.
DailyForex Blog Reviews: TheForexArticles
TheForexArticles:TheForexArticles is maintained by James Woolley, who trades the market himself, and does not hold anything back when it comes to giving away his secrets to success, a factor that makes the blog an attractive source of information for anybody interested in Forex. Here is the interview I conducted with James: 1. Please tell us a little bit about yourself including your name, your profession, and your location."My name's James Woolley and I'm a full-time forex trader currently living in Somerset, south-west England. I also run a number of websites, including my forex blog, but most of my income comes from forex trading".2. How long have you been involved in the Forex market? "I've been trading UK stocks and the FTSE 100 index since around 2001 but I've only been trading the forex markets for around 4 or 5 years now".3. How long have you been blogging? "I started my forex blog back in October 2007 but actually came close to quitting in January 2008 when I was only getting a handful of visitors a day. However I received an email from someone saying how much they enjoyed reading my posts and asking why I'd stopped posting, so I decided to continue blogging, and I haven't looked back since".4. Who is your primary audience? "The objective of my blog is to help as many people as possible to become profitable traders. Therefore it is targeted towards forex traders of all levels, from rank amateurs to the more experienced traders who are still struggling to make any money".5. Why should someone read your blog? "Well for a start I believe I'm one of the very few traders who gives away their profitable trading strategy for nothing. Plus as well as posting my latest trading results every week, I also provide long-term analysis of various forex pairs and regularly discuss various different technical indicators and the latest forex systems that I'm currently working on".6. In your opinion, what are the main advantages of the Forex market? "Well for me there are several advantages. Firstly you can trade 24 hours a day which means you can trade the hours that suit you, or you can do what I do and that's to keep an eye on the markets all day long and wait for the very best set-ups to occur. Secondly there is also the fact that forex pairs conform extremely well to technical analysis, both on the short-term and long-term charts, so they are much easier to trade than stocks, for instance. Finally because many forex brokers offer leverage, there are very few barriers to entry because anyone can open an account and start trading with just a few hundred dollars if they so wish. Conclusion: Between James' technical analysis, brokers' reviews, Forex strategies, and general product reviews, there really is nothing missing from the site in terms of content. The site is written well and updated frequently, so whether you are a beginner or an experienced trader, there is what to gain from reading TheForexArticles.Advantages:Updated frequentlyWide variety of topicsHigh level writingUseful and practical information Disadvantages:The site's look can be improved, with such top notch content, the site deserves a better design.As a result of the lack of a better design, the site's useful information is not easily accessible.While all traders can benefit from the site, most of the daily content is aimed toward more experienced and knowledgeable Forex traders.Final Words: TheForexArticles is a serious contender for the top Forex blogs with its updated and relevant information. The site offers very helpful analysis, strategies, and even videos from which the average Forex trader can benefit. The main issue with the site, and this is a clear indication of how superior the site really is, would be the lack of a modern and eye catching design. As James stated during our interview, there was a point at which he almost stopped blogging. All we can say is we are happy he decided to continue since he has done a great job in making his site a helpful resource for Forex traders around the globe.
Common Trade Types
Common Order Types
Market Order
An order to buy or sell at the current market price.
Limit Order
An order to buy or sell at a pre-specified price level.
Stop-Loss Order
An order to restrict losses at a pre-specified price level.
Limit Entry Order
An order to buy below the market or sell above the market at a pre-specified level, believing that the price will reverse direction from that point.
Stop-Entry Order
An order to buy above the market or sell below the market at a pre-specified level, believing that the price will continue in the same direction.
OCO Order
One Cancels Other. An order whereby if one is executed, the other is cancelled.
GTC Order
Good Till Cancelled. An order stays in the market until it is either filled or cancelled
An order to buy or sell at the current market price.
Limit Order
An order to buy or sell at a pre-specified price level.
Stop-Loss Order
An order to restrict losses at a pre-specified price level.
Limit Entry Order
An order to buy below the market or sell above the market at a pre-specified level, believing that the price will reverse direction from that point.
Stop-Entry Order
An order to buy above the market or sell below the market at a pre-specified level, believing that the price will continue in the same direction.
OCO Order
One Cancels Other. An order whereby if one is executed, the other is cancelled.
GTC Order
Good Till Cancelled. An order stays in the market until it is either filled or cancelled
Manual Execution
An order which is executed by dealer intervention.
Automatic Execution
The order is executed automatically without dealer intervention or involvement.
Slippage
The difference between the order price and the executed price, measured in pips. Slippage often occurs in fast moving and volatile markets, or where there is manual execution of trades.
Drawdown
The decline in account balance from peak to valley, until the account surpasses the previous high, usually measured in percentage terms.
Support
Support is a technical price level where buyers outweigh sellers, causing prices to bounce off a temporary price floor.
Resistance
Resistance is a technical price level where sellers outweigh buyers, causing prices to bounce off a temporary price ceiling.
Automatic Execution
The order is executed automatically without dealer intervention or involvement.
Slippage
The difference between the order price and the executed price, measured in pips. Slippage often occurs in fast moving and volatile markets, or where there is manual execution of trades.
Drawdown
The decline in account balance from peak to valley, until the account surpasses the previous high, usually measured in percentage terms.
Support
Support is a technical price level where buyers outweigh sellers, causing prices to bounce off a temporary price floor.
Resistance
Resistance is a technical price level where sellers outweigh buyers, causing prices to bounce off a temporary price ceiling.
Monday, August 17, 2009
French Presidency: G8 Unlikely To Discuss Forex
PARIS (Dow Jones)--The heads of the Group of the Eight leading nations are unlikely to discuss foreign exchange issues during their meeting in L'Aquila, Italy, from Wednesday, an official from the French presidency said Tuesday.Speaking at a briefing ahead of the meeting, the official said G8 summits of heads of states and government "generally don't discuss foreign exchange matters."Several countries are increasingly worried about the weakness of the U.S. currency against others, notably in Europe, as U.S. products are then less expensive on the export market than theirs.During a conference in Aix-en-Provence, southern France, Sunday, European Central Bank President Jean-Claude Trichet said "it is extremely important that the United States of America...has been...saying that a strong dollar is in the interests of the United States of America."The G8 will have a discussion about oil prices with the aim of defining a "reasonable" price range acceptable to both producing and consuming countries, which would help avoid extreme volatility of crude prices, another official said during the same briefing.
Forex ECN Broker
CN is an acronym for Electronic Communications Network. A Forex ECN broker does not have a dealing desk but instead provides a marketplace where multiple market makers, banks and traders can enter in competing bids and offers into the platform and have their trades filled by multiple liquidity providers in an anonymous trading environment. The trades are done in the name of your ECN broker, thereby providing you with complete anonymity. A trader might have their buy order filled by liquidity provider "A", and close the same order against liquidity provider "B", or have their trade matched internally by the bid or offer of another trader. The best bid and offer is displayed to the trader along with the market depth which is the combined volume available at each price. A greater number of marketplace participants providing pricing to the ECN broker leads to tighter spreads. ECN's typically charge a small fee for matching trades between their clients and liquidity providers.
NDD
An acronym for 'No Dealing Desk'. A no-dealing desk broker does not have a dealing desk but instead uses external liquidity providers to provide pricing and liquidity for its clients. The liquidity providers send in competing bids and offers into the platform, resulting in the best bid and offer being displayed to the client. Some no-dealing desk brokers may display the market depth which is the amount of liquidity available at each price. A greater number of liquidity providers providing pricing to the no-dealing desk broker leads to tighter spreads. A no-dealing desk broker may increase the spread to earn its commission.
Friday, August 14, 2009
Forex Training is Vital if you want to Obtain Wealth Due to the FX Markets by Investing and Trading
Each and every day, new investors from every corner on the globe are becoming wealthy thanks to the FX markets. The one trait they have in common is that before they invested any money in the markets, they invested in themselves and there Forex training. They realized what has been obvious for centuries now, the better prepared you are for your choosing craft, simply put, the more success you will experience. Education and knowledge are recognized worldwide as individual accomplishments in addition to creating paths to achievement. Investing and trading in the currency markets are no different than any other profession. The more you know, the more you will eventually make. This is not a difficult concept to understand, nor is it disputed by any reasonable person anywhere.Why so many people with absolutely no training at all, simply decide overnight they are going to become rich by investing in the Forex markets, is completely beyond me. Would you want the pilot of your plane to be taking there first flight with you as a there first passenger? I wouldn't, and if you would, I have no idea why you're reading this article.There are many Forex trading courses offered over the internet today. Many of these classes have been on the market for years. During that time they have advanced and polished there programs multiple times staying up to date on the latest and most sophisticated investing and trading methods. If I wanted to acquire the best of the best Forex training I would strongly consider enrolling in one of the following programs. I have taken all of them and can testify to the quality and ensure you that you will be receiving good value for your money. The classes are Forex Trading Made E Z, Fap Winner and Hector Trader. They are all offered online and you can review them for free at there websites. In fact, some of them offer the first class for free, so what have you got to lose. At our company we have reviewed 100's of Forex Trading Systems, Currency Trading Software and Forex Platforms. We kept the best and eliminated the rest for you to examine at Forex Trading Platforms. We have an extensive list of the top Currency Courses and Forex Classes to help you learn Forex trading, you can see them at Learn Forex Trading
Learn Forex First to Groom Yourself for Success Before you Start Trading and Opening Forex Accounts
There is a saying I was taught at a very early age, which goes something like this, "People don't plan to fail, the fail to plan." Nothing rings truer in the FX markets than those words with so many new investors thinking they are going to become rich over night. They have heard that so many others have done it; they think it is easy, and they don't have the first inclination about what they are doing. Before you start investing, start trading or opening your Forex accounts, do yourself a favor and take time to learn Forex first. It is absolutely correct, that each and every day many people from every corner of the globe are becoming wealthy thanks to the currency markets. What most new comers don't realize, is that those people that have experienced great achievement in the markets had one common trait. Which was, they spent time learning Forex trading from its most central concepts to it most complex principles before they started investing. Today, with the internet stretching to almost every place imaginable, it has never been easier to get up to speed quickly and be well equipped for this wild adventure your about to enter. Where one second, you will swear you’re the smartest person every placed on the planet and fifteen minutes latter you won't believe you could do something that dumb. That's what these markets will do to you, and its not only novice investors that this will happen too. The professionals experience the same feelings almost everyday also. So don't feel bad. To learn Forex trading your going to need to enroll in a top rated currency course. A few of my favorites, that I have taken and taught me a great deal are the following; Forex Trading Made E Z, Fap Winner and Hector Trader. Yes, your going to need to invest in yourself and in your education before you start investing in the markets. That is, if you want to make money. If you don't care about making money then just open a few Forex accounts and see how you do. Real life is a great teacher and you will soon realize the mistake you have made and what you need to do to correct them. Our staff stand firm in out efforts to equip you with only the most exclusive Forex Trading Software, Automated Currency Software Trading Systems and Currency Trading Software. You can research our reports at Automated Currency Software Systems. The people who work at Trading Forex Reviews.Com have created an inventory of most competent Currency Training Classes and Forex Trading Courses to help you learn Forex trading at the uppermost point, to see them go to Learn How to Trade the Currency Markets.http://www.tradingforexreviews.com
Wednesday, August 12, 2009
Opening an Account
Step 1: Submit Account Application
Opening an Account To open an account, simply fill out an application. It only takes a few minutes. Most applications are processed on the same business day. At Forex Club, we strictly adhere to the "know your customer" principles, rules and procedures established by the CFTC and National Futures Association, making it mandatory for all clients to submit an application. Who knows, signing up may be the greatest decision of your life. You'll never know unless you sign up, right?
Step 2 : Fund your account
CREDIT CARD
Simply log in to MY FXCLUB, click "Deposit Funds" and input your card information and your funds will appear in your account in minutes. A processing fee of 2.24% to 2.59% will be charged to your Visa or Master Card, depending on the card. Deposits made with Discover Cards will not be charged a processing fee. If you deposit before the closing of a weekly trading session, the money will reach your account immediately, as long as your transaction clears. The end of the weekly trading session occurs at 21:00GMT on Fridays, except for holidays.LOGIN TO MYFXCLUB
ONLINE CHECK
Forex Club's US customers now have the option of depositing funds into their account via Checks. Write your trading account number on each check. Please note that check transactions are deposited to accounts only after they clear our bank. Use our convenient online check option to make a deposit by check:Online CheckYou can also mail your check to our office address:Forex Club Financial Co, Inc.1200 South Ave. Suite 203Staten Island NY 10314Attn: Financial Dept.
BANK WIRE
Funds sent via bank wire will be deposited to your trading account as soon as they reach our bank. Forex Club does not charge any fees, but it is not responsible for any fees charged by processing banks.
MONEY ORDER
Money Orders are the one of the safest ways to send your funds through the mail. Money Orders can be sent to Forex Club Financial Company, 1200 South Ave. Suite 203, Staten Island NY 10314.
Opening an Account To open an account, simply fill out an application. It only takes a few minutes. Most applications are processed on the same business day. At Forex Club, we strictly adhere to the "know your customer" principles, rules and procedures established by the CFTC and National Futures Association, making it mandatory for all clients to submit an application. Who knows, signing up may be the greatest decision of your life. You'll never know unless you sign up, right?
Step 2 : Fund your account
CREDIT CARD
Simply log in to MY FXCLUB, click "Deposit Funds" and input your card information and your funds will appear in your account in minutes. A processing fee of 2.24% to 2.59% will be charged to your Visa or Master Card, depending on the card. Deposits made with Discover Cards will not be charged a processing fee. If you deposit before the closing of a weekly trading session, the money will reach your account immediately, as long as your transaction clears. The end of the weekly trading session occurs at 21:00GMT on Fridays, except for holidays.LOGIN TO MYFXCLUB
ONLINE CHECK
Forex Club's US customers now have the option of depositing funds into their account via Checks. Write your trading account number on each check. Please note that check transactions are deposited to accounts only after they clear our bank. Use our convenient online check option to make a deposit by check:Online CheckYou can also mail your check to our office address:Forex Club Financial Co, Inc.1200 South Ave. Suite 203Staten Island NY 10314Attn: Financial Dept.
BANK WIRE
Funds sent via bank wire will be deposited to your trading account as soon as they reach our bank. Forex Club does not charge any fees, but it is not responsible for any fees charged by processing banks.
MONEY ORDER
Money Orders are the one of the safest ways to send your funds through the mail. Money Orders can be sent to Forex Club Financial Company, 1200 South Ave. Suite 203, Staten Island NY 10314.
Market Research
Senior foreign exchange correspondent Nicholas Hastings reports our Dow Jones news with an insight found nowhere else in the industry. Read his daily articles for ideas of where currencies will move.
Autochartist, one of the most advanced signal tracking software on the market, offers Forex Club customers a daily article with a detailed account of a powerful forming trend.
Forex Club is proud to offer you Forex Factory's daily economic calendar. By making a study of the calendar and its events, you can ensure that you'll be on the right side of every trade.
FOMC Will Put Safe Havens Back In Spotlight. By Nicholas HastingsA cautious U.S. Federal Reserve should lower global growth expectations and send investors back into safe havens, such as the dollar. Although the U.S. central bank may signal an end to recent quantitative easing, its assessment of the U.S. economy should prove more dovish than the market anticipates.
AUD/USD Intraday Pullbacks within Daily UptrendThe AUD/USD has been pulling back across intraday time frames ranging from the 15, 30, 60 and 240 minute charts. These corrections are important to watch as the daily time frame is still holding onto an uptrending cycle. It is trading within the shape of a Continuation Rising Wedge chart pattern.
Forex Club is proud to offer you Forex Factory's daily economic calendar. By making a study of the calendar and its events, you can ensure that you'll be on the right side of every trade.
Autochartist, one of the most advanced signal tracking software on the market, offers Forex Club customers a daily article with a detailed account of a powerful forming trend.
Forex Club is proud to offer you Forex Factory's daily economic calendar. By making a study of the calendar and its events, you can ensure that you'll be on the right side of every trade.
FOMC Will Put Safe Havens Back In Spotlight. By Nicholas HastingsA cautious U.S. Federal Reserve should lower global growth expectations and send investors back into safe havens, such as the dollar. Although the U.S. central bank may signal an end to recent quantitative easing, its assessment of the U.S. economy should prove more dovish than the market anticipates.
AUD/USD Intraday Pullbacks within Daily UptrendThe AUD/USD has been pulling back across intraday time frames ranging from the 15, 30, 60 and 240 minute charts. These corrections are important to watch as the daily time frame is still holding onto an uptrending cycle. It is trading within the shape of a Continuation Rising Wedge chart pattern.
Forex Club is proud to offer you Forex Factory's daily economic calendar. By making a study of the calendar and its events, you can ensure that you'll be on the right side of every trade.
Forex.com
Our Mission is to be your premier source for all things forexAt FOREX.com, advanced trading tools, 24-hour customer support, and a secure online trading experience are all part of our commitment to offer more to the individual investor.
Take advantage of the resources available on FOREX.com:
Test drive FOREXTrader for 30 days
Access free market research
Take a guided tour of our trading platform
Visit our Learning Center to learn more about Forex and trading online
Start trading today - open an account with as little as $250
Letter From the Chairman
There has never been a more challenging and exciting time to be trading in the foreign exchange market. Since we launched operations in 1999, we've watched the industry grow in leaps and bounds. What started out as a market for professionals is now attracting traders from all over the world and of all experience levels. More
FOREX.com is a division of GAIN Capital Group, LLC, one of the most respected online forex trading firms in the industry. The company's flagship service, GAIN Capital, is used by institutional investors, professional money managers and experienced day traders from over 140 countries. GAIN Capital Group is pleased to offer individual investors access to its award-winning trading platform and professional-level services via FOREX.com.FOREX.com is a registered Futures Commission Merchant (NFA ID #0339826) and a member of the National Futures Association. As an FCM, FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC), must uphold the highest standards and business practices and is subject to strict financial requirements and reporting.
Take advantage of the resources available on FOREX.com:
Test drive FOREXTrader for 30 days
Access free market research
Take a guided tour of our trading platform
Visit our Learning Center to learn more about Forex and trading online
Start trading today - open an account with as little as $250
Letter From the Chairman
There has never been a more challenging and exciting time to be trading in the foreign exchange market. Since we launched operations in 1999, we've watched the industry grow in leaps and bounds. What started out as a market for professionals is now attracting traders from all over the world and of all experience levels. More
FOREX.com is a division of GAIN Capital Group, LLC, one of the most respected online forex trading firms in the industry. The company's flagship service, GAIN Capital, is used by institutional investors, professional money managers and experienced day traders from over 140 countries. GAIN Capital Group is pleased to offer individual investors access to its award-winning trading platform and professional-level services via FOREX.com.FOREX.com is a registered Futures Commission Merchant (NFA ID #0339826) and a member of the National Futures Association. As an FCM, FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC), must uphold the highest standards and business practices and is subject to strict financial requirements and reporting.
Monday, August 10, 2009
Daily forex News 8-11-2009
Friday’s market reaction to the surprise non-farm payrolls July figures might signal a crucial shift for currencies and markets in general. US non-farm payrolls for July were better than expected, falling by -247k, while the unemployment rate dipped to 9.4% from 9.5%. After initial claims and a major US bank reset their forecast at -250k, participants were unsure where consensus lay and provided with high drama (volatility) on the release. But when the smoke cleared, it was the USD that continued to rally on the stronger US data. The recognized correlation between EURUSD and US 10yr yields appears to have decoupled and traders are now focusing on to the 2yr interest rate differential between Eurozone and US. This is a shift that suggests that positive economic data will now support the domestic currency. The USD benefiting from positive US recovery data is a theme not seen in a while (negative correlations between USD and risk entrenched itself post Lehman). What seems to have changed on Friday was that markets are looking at the growth differential story over just the risk appetite (risk aversion positive for USD) trade, which is important since most analysts agree that the US will be one of the first developed countries to recovery, which could have positive consequences for the USD. This shift also suggests that the US recovery is well on its way and that the Fed will begin (and has the economic cushion) to adjust rates higher due in time. The accompanying statement following the FOMC Wednesday meeting will be important, since it should provide direction. Overall, we expect a pinch of more optimism, no expansion of treasury purchase program and maintain their intention to keep rates unchanged at an "exceptionally low and for an extended period". There are a few reasons why this fragile trend might break down (we have seen it do so in the recent past) such as capital flows and oil prices, so this week’s economic indicators like US industrial production and Retail sales will put the theory to the test. As the market struggles with the EURUSD / US 10yr dilemma, we still expect stronger than consensus data around the world to have positive impact on select risky currencies such as AUD, CAD, NZD and Ems currencies
Euro / US Dollar Reversal is the Real Deal
A recent divergence between the Euro futures contract and the US dollar index is just one piece of evidence suggesting that the EURUSD has reversed course. Additional evidence includes a long term cycle, wave structure at multiple degrees of trend, and recent momentum considerations.
Sunday, August 9, 2009
ECB On Hold Once More?
The ECB meets this week in Frankfurt (Germany). Rates should stay on hold once more, as the recovery process is just beginning in Europe. The U.S. dollar, in the mean time, is still at key support levels against major currencies.
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U.S.: Consumer confidence weak.The process might be slow and the recovery could not take the form of the classical V shape. However, the worst should be over for U.S. economy, after more than one year of losses. Leading indicators increased last month for the third consecutive time, while some corporate earnings have risen above expectations. In addition, manufacturing industries have reduced inventories and orders have improved, despite the sector remaining very volatile. In June, durable goods new orders slumped 2.5% after having increased 1.3% in May and 1.4% in April. Nevertheless, excluding transportation, orders would have jumped 1.1%. The real estate market has found a bottom at current levels and the increase of sales could boost consumer confidence. New home sales moved up 11% in June to 384,000 units. The up move was well distributed among all the U.S. regions with the exception of the South where sells declined 5.3%. Inventories are now at 8.8 months of supply from 10.2 months, while building permits, a forecasting indicator, rose almost 9.0%. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
U.S.: Consumer confidence weak.
EUROPE: companies still cutting jobs.
Can$ meets key support
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U.S.: Consumer confidence weak.The process might be slow and the recovery could not take the form of the classical V shape. However, the worst should be over for U.S. economy, after more than one year of losses. Leading indicators increased last month for the third consecutive time, while some corporate earnings have risen above expectations. In addition, manufacturing industries have reduced inventories and orders have improved, despite the sector remaining very volatile. In June, durable goods new orders slumped 2.5% after having increased 1.3% in May and 1.4% in April. Nevertheless, excluding transportation, orders would have jumped 1.1%. The real estate market has found a bottom at current levels and the increase of sales could boost consumer confidence. New home sales moved up 11% in June to 384,000 units. The up move was well distributed among all the U.S. regions with the exception of the South where sells declined 5.3%. Inventories are now at 8.8 months of supply from 10.2 months, while building permits, a forecasting indicator, rose almost 9.0%. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
U.S.: Consumer confidence weak.
EUROPE: companies still cutting jobs.
Can$ meets key support
Friday, August 7, 2009
Tradeable Reports
With all of these countries to choose from, there are easily five to ten economic news releases almost every day! Also, the great thing about focusing on news releases is that they are scheduled in advance, so you know exactly when you can schedule your trading hours.
You may be thinking that five to ten news releases per day may be a lot to keep up with, but you really do not have to pay attention to every single report – you can pick and choose. There are a few key reports, most of which come out every month, that produce a significant amount of pip movement.
For this lesson, we will focus on U.S. news and economic reports, mostly because the U.S. dollar is involved in a majority of currency trades, and therefore tends to have the most significant impact on the currency markets. Here is a list of some of the top U.S. market moving reports:
Employment Growth
Interest Rate decisions
Trade Balance
Gross Domestic Product
Retail Sales
Durable Goods
Inflation reports (Consumer Price Index and Producer Price Index)
Foreign Purchases report (TIC Data)
Every country has a set of major reports similar to this list and can be as potentially volatile. Again, since these reports are scheduled in advance there are plenty of websites on the Internet with schedules and potential volatility rankings.
You may be thinking that five to ten news releases per day may be a lot to keep up with, but you really do not have to pay attention to every single report – you can pick and choose. There are a few key reports, most of which come out every month, that produce a significant amount of pip movement.
For this lesson, we will focus on U.S. news and economic reports, mostly because the U.S. dollar is involved in a majority of currency trades, and therefore tends to have the most significant impact on the currency markets. Here is a list of some of the top U.S. market moving reports:
Employment Growth
Interest Rate decisions
Trade Balance
Gross Domestic Product
Retail Sales
Durable Goods
Inflation reports (Consumer Price Index and Producer Price Index)
Foreign Purchases report (TIC Data)
Every country has a set of major reports similar to this list and can be as potentially volatile. Again, since these reports are scheduled in advance there are plenty of websites on the Internet with schedules and potential volatility rankings.
Standard + Poor's has put the UK credit rating on negative watch which has pushed the UK currency sharply lower
Standard + Poor's has put the UK credit rating on negative watch which has pushed the UK currency sharply lower
Thursday, August 6, 2009
Technical Trading Guide
1. Chart the Trends and Range Bound MarketsUse long term charts to decide trends or range bound markets. Begin a chart analysis with daily, weekly and even monthly charts spanning several years if possible. A larger scale chart essentially shows the life of the market and provides clearer visibility and a better long-term perspective on a market. Once the long-term has been established, consult daily and intra-day charts, these charts can include anything from say 10 minute to daily charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer-term trends. If there is no trend then a different strategy is necessary, possibly playing the range until the market begins to trend once more.As can be seen in the 1-hour EUR/USD candle chart below there has been an uptrend with three peaks and three troughs. Long entry positions would at 1.2700, 1.2760 and 1.2800.
2. Follow the Trend
If you determine the trend, then follow it. Market trends come in a variety of terms - long-term, intermediate-term and short-term. The first thing you have to determine is what type of a trader are you, long term or day trader, that decision will determine which charts you should be using. For instance, if you're day trading, use the daily and intra-day charts, but always use the longer-range chart to determine the trend, and then use the shorter-term chart for timing. Make sure you trade in the direction of that trend and then buy on dips if the trend is up and sell on rallies if the trend is down.
3. Locate Support and Resistance Levels
Find the support and resistance levels. As above when you want to buy an instrument, its best to buy near support levels. The support is usually a previous reaction low. Using the same logic, the best place to sell an instrument would be near its resistance levels. The resistance level is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old high becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies - the old low can then become the new high.
4. Retracements
Measure retracements in percentage terms. Market corrections up or down often retrace a significant portion of the previous trend. One can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. Therefore popular buy points in an uptrend are usually between 33-38% retracement of the original trend.As can be seen from the chart below, when joining the trough at 1.2750 to the peak at 1.2890 in the 1-hour EUR/USD chart we can see the Fibonacci levels drawn out. The first retracement ended at the 38% line and the major retracement at the 62% line.
5. Trend Lines
One of the simplest and most effective charting tools are trend lines – use them. Draw a straight line that join two points on the chart. Up trend lines are drawn along two successive lows and down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines often signals a change in a trend. The longer a trend line has been in effect, and the more times it has been tested, the more significant it becomes; a trend line becomes valid if it is touched at least three times.
6. Moving Averages
Moving averages often provide objective buy and sell signals, hence they should be watched. They show you if an existing trend is still in motion and help confirm a trend change. Do not rely on moving averages to tell you in advance if there is a trend change imminent; use it as a back-up to your chart analysis for trend identification. A combination chart of two moving averages is the most popular way of finding trading signals. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day and 200-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.As can be seen in the EUR/USD 1-hour chart below the 5-period and 25-period moving averages project and confirm the trend in progress. The 5-period moving average crosses over the slower 25-period moving average at 1.2715 confirming the up-trend with an exit point at 1.2770. The same rate 1.2770 is another indication of a resume in the up-trend with an exit at 1.2850.
7. Oscillators
Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a trending market, oscillators can often warn us in advance that a market has rallied or fallen too far and will soon turn or retrace. Two of the most popular oscillators are the Relative Strength Index or RSI and the Stochastics. Both these oscillators work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Oscillator divergences often warn of market turns and as opposed to moving averages they work best in range bound markets. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.As can be seen in the EUR/USD 1-hour chart below, the Stochastics break through the 80-20 barriers and cross over themselves on corrections of the price. This occurs several times.
8. Know the Warning Signs
The Moving Average Convergence Divergence (MACD) indicator combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Longer-period signals take precedence over shorter-period signals. The MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a histogram because vertical bars are used to show the difference between the two lines on the chart.As can be seen in the EUR/USD 1-hour chart below, the MACD indicators cross over one another beneath the zero line to show a buy signal and vice versa for the sell signal. This occurs most prominently at 1.2760 to buy, 1.2870 to sell.
9. Trend or Range Bound Market
The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or range bound phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Study
Technical analysis is a skill that improves with experience and study. The more you learn and practice the better you'll be, keep studying, fine tune methods, learn what works for you and what doesn't and remain technical and not emotional.
2. Follow the Trend
If you determine the trend, then follow it. Market trends come in a variety of terms - long-term, intermediate-term and short-term. The first thing you have to determine is what type of a trader are you, long term or day trader, that decision will determine which charts you should be using. For instance, if you're day trading, use the daily and intra-day charts, but always use the longer-range chart to determine the trend, and then use the shorter-term chart for timing. Make sure you trade in the direction of that trend and then buy on dips if the trend is up and sell on rallies if the trend is down.
3. Locate Support and Resistance Levels
Find the support and resistance levels. As above when you want to buy an instrument, its best to buy near support levels. The support is usually a previous reaction low. Using the same logic, the best place to sell an instrument would be near its resistance levels. The resistance level is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old high becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies - the old low can then become the new high.
4. Retracements
Measure retracements in percentage terms. Market corrections up or down often retrace a significant portion of the previous trend. One can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. Therefore popular buy points in an uptrend are usually between 33-38% retracement of the original trend.As can be seen from the chart below, when joining the trough at 1.2750 to the peak at 1.2890 in the 1-hour EUR/USD chart we can see the Fibonacci levels drawn out. The first retracement ended at the 38% line and the major retracement at the 62% line.
5. Trend Lines
One of the simplest and most effective charting tools are trend lines – use them. Draw a straight line that join two points on the chart. Up trend lines are drawn along two successive lows and down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines often signals a change in a trend. The longer a trend line has been in effect, and the more times it has been tested, the more significant it becomes; a trend line becomes valid if it is touched at least three times.
6. Moving Averages
Moving averages often provide objective buy and sell signals, hence they should be watched. They show you if an existing trend is still in motion and help confirm a trend change. Do not rely on moving averages to tell you in advance if there is a trend change imminent; use it as a back-up to your chart analysis for trend identification. A combination chart of two moving averages is the most popular way of finding trading signals. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day and 200-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.As can be seen in the EUR/USD 1-hour chart below the 5-period and 25-period moving averages project and confirm the trend in progress. The 5-period moving average crosses over the slower 25-period moving average at 1.2715 confirming the up-trend with an exit point at 1.2770. The same rate 1.2770 is another indication of a resume in the up-trend with an exit at 1.2850.
7. Oscillators
Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a trending market, oscillators can often warn us in advance that a market has rallied or fallen too far and will soon turn or retrace. Two of the most popular oscillators are the Relative Strength Index or RSI and the Stochastics. Both these oscillators work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Oscillator divergences often warn of market turns and as opposed to moving averages they work best in range bound markets. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.As can be seen in the EUR/USD 1-hour chart below, the Stochastics break through the 80-20 barriers and cross over themselves on corrections of the price. This occurs several times.
8. Know the Warning Signs
The Moving Average Convergence Divergence (MACD) indicator combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Longer-period signals take precedence over shorter-period signals. The MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a histogram because vertical bars are used to show the difference between the two lines on the chart.As can be seen in the EUR/USD 1-hour chart below, the MACD indicators cross over one another beneath the zero line to show a buy signal and vice versa for the sell signal. This occurs most prominently at 1.2760 to buy, 1.2870 to sell.
9. Trend or Range Bound Market
The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or range bound phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Study
Technical analysis is a skill that improves with experience and study. The more you learn and practice the better you'll be, keep studying, fine tune methods, learn what works for you and what doesn't and remain technical and not emotional.
Introduction to forex
The Foreign Exchange market (also referred to as the Forex or FX market) is the largest financial market in the world, with over $1.5 trillion changing hands every day. This section covers the basic essentials of understanding forex and should help you decide if forex is right for you.
What is Forex? Whether or not you are aware of it, you already play a role in currency trading. The simple fact that you have money in your pocket makes you an investor in a nation's currency. By holding US Dollars, for example, you have elected not to hold the currencies of other nations. When a currency is traded, the transaction is carried out on the Foreign Exchange market (also referred to as the Forex or FX market). The Forex market is the largest financial market in the world, with over $1.5 trillion changing hands every day!
Unlike other financial markets that operate at a centralized location (i.e., the stock exchange), the worldwide Forex market does not have a central location. It is a global electronic network of banks, financial institutions and individual Forex traders, all involved in the buying and selling of national currencies. A major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. However, with advances in technology over the years along with the industry's high leverage options, the Forex market is now available to everybody, from banks to money managers to individual Forex traders.
What is Forex? Whether or not you are aware of it, you already play a role in currency trading. The simple fact that you have money in your pocket makes you an investor in a nation's currency. By holding US Dollars, for example, you have elected not to hold the currencies of other nations. When a currency is traded, the transaction is carried out on the Foreign Exchange market (also referred to as the Forex or FX market). The Forex market is the largest financial market in the world, with over $1.5 trillion changing hands every day!
Unlike other financial markets that operate at a centralized location (i.e., the stock exchange), the worldwide Forex market does not have a central location. It is a global electronic network of banks, financial institutions and individual Forex traders, all involved in the buying and selling of national currencies. A major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. However, with advances in technology over the years along with the industry's high leverage options, the Forex market is now available to everybody, from banks to money managers to individual Forex traders.
Forex
Foreign Exchange market, also referred to as the "Forex" or "FX" market is the largest financial market in the world, with a daily average turnover of US$1.9 trillion -- 30 times larger than the combined volume of all U.S. equity markets."Foreign Exchange" is the simultaneous buying of one currency and selling of another. Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation.For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called "the Majors." Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.The FX market is considered an Over The Counter (OTC) or 'interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network. Trading is not centralized on an exchange, as with the stock and futures markets.More informationTrading currencies on margin lets you increase your buying power. Here's a simplified example: If you have $2,000 cash in a margin account that allows 100:1 leverage, you could purchase up to $200,000 worth of currency-because you only have to post 1% of the purchase price as collateral. Another way of saying this is that you have $200,000 in buying power.Benefits of MarginWith more buying power, you can increase your total return on investment with less cash outlay. To be sure, trading on margin magnifies your profits AND your losses.Here's a hypothetical example that demonstrates the upside of trading on margin:With a US$5,000 balance in your margin account, you decide that the US Dollar (USD) is undervalued against the Swiss Franc (CHF).To execute this strategy, you must buy Dollars (simultaneously selling Francs), and then wait for the exchange rate to rise.The current bid/ask price for USD/CHF is 1.2322/1.2327 (meaning you can buy $1 US for 1.2327 Swiss Francs or sell $1 US for 1.2322 francs)Your available leverage is 100:1 or 1%. You execute the trade, buying a one lot: buying 100,000 US dollars and selling 123,270 Swiss Francs.At 100:1 leverage, your initial margin deposit for this trade is $1,000. Your account balance is now $4000.As you expected, USD/CHF rises to 1.2415/20. You can now sell $1 US for 1.2415 Francs or buy $1 US for 1.2420 Francs. Since you're long dollars (and are short francs), you must now sell dollars and buy back the francs to realize any profit.You close out the position, selling one lot (selling 100,000 US dollars and receiving 124,150 CHF) Since you originally sold (paid) 123,270 CHF, your profit is 880 CHF.To calculate your P&L in terms of US dollars, simply divide 880 by the current USD/CHF rate of 1.2415. Your profit on this trade is $708.82SUMMARYInitial Investment:$1000Profit:$708.82Return on investment:70.8%If you had executed this trade without using leverage, your return on investment would be less than 1%.Managing a Margin AccountTrading on margin can be a profitable investment strategy, but it's important that you take the time to understand the risks. You should make sure you fully understand how your margin account works. Be sure to read the margin agreement between you and your clearing firm. Talk to your account representative if you have any questions.The positions in your account could be partially or totally liquidated should the available margin in your account fall below a predetermined threshold.You may not receive a margin call before your positions are liquidated.You should monitor your margin balance on a regular basis and utilize stop-loss orders on every open position to limit downside risk. For information on managing margin in your FOREX.
new trade
Short 150,000 usd/jpy from 116.15 , stop 116.32 * this trade is comprised of two positions- one for 100,000 and a second for 50,000 . The usd/jpy trade is in response to a fall below 116.20 towards 116. We'll have to see what happens at 116 , but I'm assuming it will penetrate towards 115.7 again. eur/usd is up to 1.0080 again. There's a good chance it will hit 1.01 tonight , but to this point hasn't displayed sufficient momentum to break significantly higher. I'm frankly not sure which way it will move in the near term , so I'm sitting still. If there's a retracement to .99 or .98 , these levels might provide good buying opportunities. I have a suspicion that we'll be looking at 1.025 within the next month. This may not last long , but until dollar pressure has abated somewhat the dollar down draft will pull the euro higher.
Stocks News
Learn, Practice, Trade Currencies at Forex.com®...UPDATE 2-Xstrata Q1 coal output up 7.7 pct, copper down...UPDATE 2-Xstrata Q1 coal output up 7.7 pct, copper down...Crude Oil Prices Rise Monday...Grains Mixed In Chicago Monday...India NALCO sells aluminium ingots at premium-source...Central Afr. Min & Exp Completes Bauxite Drilling Test (DJ)...Egypt Cotton Output May Fall, U.S. Attache Says...India NALCO sells aluminium ingots at premium-source...UPDATE 1-Xstrata Q1 coal output up 7.7 pct, copper down...BRIEF-CAMEC gets first JORC estimate for Mali bauxite project...Oil prices drops in Asian trade...BRIEF-Xstrata Q1 coal output up 7.7%, copper down 8.9%...Pakistan Steel products prices will be linked with international market...Zimbabwe: Wheat Planting Starts...Commodities: Oil rises above $54...Oil prices rise marginally after a week's rally...UPDATE 2-Xstrata Q1 coal output up 7.7 pct, copper down...Late week weather helps Nebraska corn planting...Iowa corn planting at 60%, but problems persist...U.S. corn planting at 33% complete as of Sunday...
Forex Course - With so Many Offered Online, How do I Know Which one is the Best?
If you really want to learn currency trading at a level that will enable you to be profitable consistently in the FX markets you are going to need enroll in a Forex course. There are plenty of free learning materials all over the internet that you can check out. This is always a good idea do this first; it will help you decide if you want to continue to go forward with this new little project of yours.But, what you will quickly find out is that the free material is simply not sufficient at providing you enough knowledge or insight into the markets to possibly make a long term sustainable career out of it. You're going to need to invest in yourself and your education if you really want to pursue income in this industry.That being said, there are essentially two types of class you can take. One teaches a specific little method of making money in the markets. The second is a comprehensive program that reviews everything there is to know from top to bottom. Each one has it positive and negatives.The program that instructs one simple trading technique, of course is much easier to learn, simpler to trade with and you are able to start making money with it much quicker than the long lasing programs. The all-inclusive classes require more effort on your part in addition to the time required to take in all the material you will be presented with. But, you will be fully prepared for a long term career when you complete the program if you upheld your end of the bargain, which was to study hard. Which ever type of Forex course you initially decide on, if you choose a top rated class you will receive good value for your money. I have taken all of the following and found them all very useful. There names are Forex Trading Made E Z, Fap Winner and Hector Trader. Why not check out the sites and see what you think for yourself?Our firm's personnel has examined and tested many of the top Forex Trading Systems and Currency Software Trading Systems available today. To view there reports check out Currency Trading Software. We have a large list of the best Currency Courses and Forex Trading Courses that provide a great Forex education online. To view them go to Learn Currency Trading at Trading Forex Reviews.Com.http://www.tradingforexreviews.com
Forex Training is Vital if you want to Obtain Wealth Due to the FX Markets by Investing and Trading
Each and every day, new investors from every corner on the globe are becoming wealthy thanks to the FX markets. The one trait they have in common is that before they invested any money in the markets, they invested in themselves and there Forex training. They realized what has been obvious for centuries now, the better prepared you are for your choosing craft, simply put, the more success you will experience. Education and knowledge are recognized worldwide as individual accomplishments in addition to creating paths to achievement. Investing and trading in the currency markets are no different than any other profession. The more you know, the more you will eventually make. This is not a difficult concept to understand, nor is it disputed by any reasonable person anywhere.Why so many people with absolutely no training at all, simply decide overnight they are going to become rich by investing in the Forex markets, is completely beyond me. Would you want the pilot of your plane to be taking there first flight with you as a there first passenger? I wouldn't, and if you would, I have no idea why you're reading this article.There are many Forex trading courses offered over the internet today. Many of these classes have been on the market for years. During that time they have advanced and polished there programs multiple times staying up to date on the latest and most sophisticated investing and trading methods. If I wanted to acquire the best of the best Forex training I would strongly consider enrolling in one of the following programs. I have taken all of them and can testify to the quality and ensure you that you will be receiving good value for your money. The classes are Forex Trading Made E Z, Fap Winner and Hector Trader. They are all offered online and you can review them for free at there websites. In fact, some of them offer the first class for free, so what have you got to lose. At our company we have reviewed 100's of Forex Trading Systems, Currency Trading Software and Forex Platforms. We kept the best and eliminated the rest for you to examine at Forex Trading Platforms. We have an extensive list of the top Currency Courses and Forex Classes to help you learn Forex trading, you can see them at Learn Forex Trading Online.http://www.tradingforexreviews.com
Tuesday, August 4, 2009
Trading characteristics
Trading characteristics
Most traded currencies,Currency distribution of reported FX market turnover
Rank
Currency
ISO 4217 code(Symbol)
% daily share(April 2007)
1
United States dollar
USD ($)
86.3%
2
Euro
EUR (€)
37.0%
3
Japanese yen
JPY (¥)
17.0%
4
Pound sterling
GBP (£)
15.0%
5
Swiss franc
CHF (Fr)
6.8%
6
Australian dollar
AUD ($)
6.7%
7
Canadian dollar
CAD ($)
4.2%
8-9
Swedish krona
SEK (kr)
2.8%
8-9
Hong Kong dollar
HKD ($)
2.8%
10
Norwegian krone
NOK (kr)
2.2%
11
New Zealand dollar
NZD ($)
1.9%
12
Mexican peso
MXN ($)
1.3%
13
Singapore dollar
SGD ($)
1.2%
14
South Korean won
KRW (₩)
1.1%
Other
14.5%
Total
200%
There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the Chicago Mercantile Exchange and Reuters, called Fxmarketspace opened in 2007 and aspired but failed to the role of a central market clearing mechanism.
The main trading center is London, but New York, Tokyo, Hong Kong and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.
Fluctuations in exchange rates are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in gross domestic product (GDP) growth, inflation (purchasing power parity theory), interest rates (interest rate parity, Domestic Fisher effect, International Fisher effect), budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX is expressed (called base currency). For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.5465 dollar. Out of convention, the first currency in the pair, the base currency, was the stronger currency at the creation of the pair. The second currency, counter currency, was the weaker currency at the creation of the pair.
The factors affecting XXX will affect both XXX/YYY and XXX/ZZZ. This causes positive currency correlation between XXX/YYY and XXX/ZZZ.
On the spot market, according to the BIS study, the most heavily traded products were:
EUR/USD: 27%
USD/JPY: 13%
GBP/USD (also called sterling or cable): 12%
and the US currency was involved in 86.3% of transactions, followed by the euro (37.0%), the yen (17.0%), and sterling (15.0%) (see table). Note that volume percentages should add up to 200%: 100% for all the sellers and 100% for all the buyers.
Trading in the euro has grown considerably since the currency's creation in January 1999, and how long the foreign exchange market will remain dollar-centered is open to debate. Until recently, trading the euro versus a non-European currency ZZZ would have usually involved two trades: EUR/USD and USD/ZZZ. The exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market. As the dollar's value has eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD, NZD, CAD, have also increased.
Most traded currencies,Currency distribution of reported FX market turnover
Rank
Currency
ISO 4217 code(Symbol)
% daily share(April 2007)
1
United States dollar
USD ($)
86.3%
2
Euro
EUR (€)
37.0%
3
Japanese yen
JPY (¥)
17.0%
4
Pound sterling
GBP (£)
15.0%
5
Swiss franc
CHF (Fr)
6.8%
6
Australian dollar
AUD ($)
6.7%
7
Canadian dollar
CAD ($)
4.2%
8-9
Swedish krona
SEK (kr)
2.8%
8-9
Hong Kong dollar
HKD ($)
2.8%
10
Norwegian krone
NOK (kr)
2.2%
11
New Zealand dollar
NZD ($)
1.9%
12
Mexican peso
MXN ($)
1.3%
13
Singapore dollar
SGD ($)
1.2%
14
South Korean won
KRW (₩)
1.1%
Other
14.5%
Total
200%
There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the Chicago Mercantile Exchange and Reuters, called Fxmarketspace opened in 2007 and aspired but failed to the role of a central market clearing mechanism.
The main trading center is London, but New York, Tokyo, Hong Kong and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.
Fluctuations in exchange rates are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in gross domestic product (GDP) growth, inflation (purchasing power parity theory), interest rates (interest rate parity, Domestic Fisher effect, International Fisher effect), budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX is expressed (called base currency). For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.5465 dollar. Out of convention, the first currency in the pair, the base currency, was the stronger currency at the creation of the pair. The second currency, counter currency, was the weaker currency at the creation of the pair.
The factors affecting XXX will affect both XXX/YYY and XXX/ZZZ. This causes positive currency correlation between XXX/YYY and XXX/ZZZ.
On the spot market, according to the BIS study, the most heavily traded products were:
EUR/USD: 27%
USD/JPY: 13%
GBP/USD (also called sterling or cable): 12%
and the US currency was involved in 86.3% of transactions, followed by the euro (37.0%), the yen (17.0%), and sterling (15.0%) (see table). Note that volume percentages should add up to 200%: 100% for all the sellers and 100% for all the buyers.
Trading in the euro has grown considerably since the currency's creation in January 1999, and how long the foreign exchange market will remain dollar-centered is open to debate. Until recently, trading the euro versus a non-European currency ZZZ would have usually involved two trades: EUR/USD and USD/ZZZ. The exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market. As the dollar's value has eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD, NZD, CAD, have also increased.
FOREX CURRENCY TRADING
FX, Forex or Foreign Exchange, is all about exchange of currencies from one hand to another at an ongoing price in the market. Forex is all about investing money in foreign currencies, just gain profit by selling at a higher price, the one you hold, just to buy another one at a lower price. Earlier, not many traders were clear about the Forex trading and that Forex is just short for "foreign exchange", as it did not get much publicity through media.
Foreign Exchange market is the biggest financial market in the world, with a potential of fast and great gains and a sizable number of investors. The advent of internet technology is what made Forex trading grow considerably popular as well as accessible with various types of investors.About a decade ago, currency trading was only limited to large banks and financial firms because they were the only ones to have access to the tools and methods required to trade Forex market. However recently, due to up and coming efficient online platforms, technology has advanced to the point of being accessible to any and every individual trader who wishes to trade or invest in Forex. Marketforex.net being one of finest online trading platforms is easily accessible by all who are interested in investing in Forex.
Foreign Exchange market is the biggest financial market in the world, with a potential of fast and great gains and a sizable number of investors. The advent of internet technology is what made Forex trading grow considerably popular as well as accessible with various types of investors.About a decade ago, currency trading was only limited to large banks and financial firms because they were the only ones to have access to the tools and methods required to trade Forex market. However recently, due to up and coming efficient online platforms, technology has advanced to the point of being accessible to any and every individual trader who wishes to trade or invest in Forex. Marketforex.net being one of finest online trading platforms is easily accessible by all who are interested in investing in Forex.
Handling Forex with Risk management strategies
The enormous size of the Forex market gives it the speed and liquidity like no other financial world market. Losses exist, but Profits are even higher! But just like any other speculative trade, amplified risks are involved along with the probability for a higher profit/loss.
Exit the market at profit targets Limit orders let the Forex investors stop further trading and leave the market at preset profit objectives. Creating a disciplined trading methodology, Limit orders allow the traders to fix a limit of the profits which they want to make, and then exit the market. Also, they are free from the work of continuous monitoring the market sitting in front of their computers all day.
Limit your losses Stop/loss commands also follow the same motive as that of the limit orders, by allowing the investors to set an exit point for a loss. By limiting your losses to a pre set position, Stop/loss orders help investors control their risk conditions. By placing them well in advance, you have an almost accurate idea of how much in loss will you be, in case the stop/loss order is hit!
Accurate placing of stop and limit orders Where does the investor place his stop and limit orders respectively, determines the amount of risk he is taking up. It is advisable not to place your stop/loss orders too close to the normal market price, as a little fluctuation in the market, can then trigger the order. Likewise, limit orders should also reflect a rational hope of profits you are expecting, based on the market's trading activity. They should be set at the rate which is not overexposed to the trade, and also not too close to the market.'Stop-loss' and 'limit' orders can lower an investor's exposure to risk by a large proportion.
Analyze while trading Forex The things to know about Forex Comprehending all the intricacies of the basics behind an investment, and understanding behind the major market trading, is the right way to go about trading Forex. Skilled technical analysis and good money management skills are the basic essentials to trade well. Analyze the market and create a position, establishing rational stop loss and profit taking levels.
With MarketForex, an investor has the facility to change their trade orders as many times as they want, either as a stop loss order or as a limit order. Currency markets are highly unpredictable and tentative in nature, as any currency can fluctuate to becoming very expensive or very cheap in relation to other.
There is always a momentous risk in any Forex or currency deal, and thats the shortcomings of being a Forex Broker. At MarketForex, our expertise and tools link to the world’s Forex trading floors, getting you the lowest foreign currency rates with the prospects of making a transaction.
Exit the market at profit targets Limit orders let the Forex investors stop further trading and leave the market at preset profit objectives. Creating a disciplined trading methodology, Limit orders allow the traders to fix a limit of the profits which they want to make, and then exit the market. Also, they are free from the work of continuous monitoring the market sitting in front of their computers all day.
Limit your losses Stop/loss commands also follow the same motive as that of the limit orders, by allowing the investors to set an exit point for a loss. By limiting your losses to a pre set position, Stop/loss orders help investors control their risk conditions. By placing them well in advance, you have an almost accurate idea of how much in loss will you be, in case the stop/loss order is hit!
Accurate placing of stop and limit orders Where does the investor place his stop and limit orders respectively, determines the amount of risk he is taking up. It is advisable not to place your stop/loss orders too close to the normal market price, as a little fluctuation in the market, can then trigger the order. Likewise, limit orders should also reflect a rational hope of profits you are expecting, based on the market's trading activity. They should be set at the rate which is not overexposed to the trade, and also not too close to the market.'Stop-loss' and 'limit' orders can lower an investor's exposure to risk by a large proportion.
Analyze while trading Forex The things to know about Forex Comprehending all the intricacies of the basics behind an investment, and understanding behind the major market trading, is the right way to go about trading Forex. Skilled technical analysis and good money management skills are the basic essentials to trade well. Analyze the market and create a position, establishing rational stop loss and profit taking levels.
With MarketForex, an investor has the facility to change their trade orders as many times as they want, either as a stop loss order or as a limit order. Currency markets are highly unpredictable and tentative in nature, as any currency can fluctuate to becoming very expensive or very cheap in relation to other.
There is always a momentous risk in any Forex or currency deal, and thats the shortcomings of being a Forex Broker. At MarketForex, our expertise and tools link to the world’s Forex trading floors, getting you the lowest foreign currency rates with the prospects of making a transaction.
Forex Quotes and Charts
Marketforex.net provides its customers with distinctive yet informative analysis of the Forex trading market. Offering more than just raw data, our market facts and information is presented in neat and significant charts. These charts are of enormous help to the obsessed to win type of Forex Traders
Our in depth graphs and charts will give you all the information and statistics regarding major currencies in terms of real time, important cross rates and foreign currencies, We also provide essentials of Forex trading tips.
Our in depth graphs and charts will give you all the information and statistics regarding major currencies in terms of real time, important cross rates and foreign currencies, We also provide essentials of Forex trading tips.
Forex Glossary
The Foreign Exchange market has its own terminology which is normally used by all Forex brokers, investors and traders. Here is a brief list of the frequently used Forex terms and their meanings. Also besides terms, we provide you beneficial Hints For Forex Trading as well.Ask Price/ Offer PriceThe ask and offer price is the price at which the market is ready to trade a specific currency. This is the price where, an investor can purchase the base currency. When seeing a quote, it is located on the right side.For example, in the quote EUR/USD 1.4547/52, the ask price is 1.4552.
Base currencyThe currency listed first in a Currency Pair is known as the Base currency.
BidsA Bid is the price at which the investor is willing to purchase a currency.
Bid/Ask SpreadSimply stating, Bid/Ask spread is the variation between the bid and offer price. It can also be defined as the degree of difference in pips, amid the buying price and the selling price of a currency pair.
BrokerA person or an organization acting as an agent, putting together buyers and sellers for a commission or fee, can be defined as a Broker. They are the ones who work on behalf of their investors.
Counter CurrencyThe currency listed second in a Currency Pair is known as the Counter currency.
Currency symbolsEUR - EuroAUD - Australian DollarCAD - Canadian DollarCHF - Swiss Franc JPY - Japanese YenGBP - British Pound
Day Trading Day trading refers to the buying and selling of positions within a single day’s trade.
Foreign ExchangeAlso known as Forex or FX, it is the process of buying of one currency in exchange of other currency in an over-the-counter market.
LeverageLeverage is the ratio of the deposited amount to the amount that can be traded. Find out Importance of Forex Leverage
Limit orderLimit orders let the Forex investors stop further trading and leave the market at preset profit objectives. It is an order which restricts the greatest price to be paid or the lowest price to be received.
LiquidityLiquidity can be defined as the capacity of a market to allow fat transaction with negligible impact on the price stability.
MarginMargin is the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.
Pip / PointWhen dealing in terms of quotes, prices are expressed in terms of Pips. Pips can be defined as “percentage in points” and are mostly the fourth decimal point i.e. 1/100th of 1%. A pip can also be defined as the smallest value at which an exchange of currency can take place.
Stop Loss OrderStop/loss commands allow the investors to set an exit point for a loss. By limiting your losses to a pre set position, Stop/loss orders help investors control their risk conditions. 'Stop-loss' can lower an investor's exposure to risk by a large proportion.
Base currencyThe currency listed first in a Currency Pair is known as the Base currency.
BidsA Bid is the price at which the investor is willing to purchase a currency.
Bid/Ask SpreadSimply stating, Bid/Ask spread is the variation between the bid and offer price. It can also be defined as the degree of difference in pips, amid the buying price and the selling price of a currency pair.
BrokerA person or an organization acting as an agent, putting together buyers and sellers for a commission or fee, can be defined as a Broker. They are the ones who work on behalf of their investors.
Counter CurrencyThe currency listed second in a Currency Pair is known as the Counter currency.
Currency symbolsEUR - EuroAUD - Australian DollarCAD - Canadian DollarCHF - Swiss Franc JPY - Japanese YenGBP - British Pound
Day Trading Day trading refers to the buying and selling of positions within a single day’s trade.
Foreign ExchangeAlso known as Forex or FX, it is the process of buying of one currency in exchange of other currency in an over-the-counter market.
LeverageLeverage is the ratio of the deposited amount to the amount that can be traded. Find out Importance of Forex Leverage
Limit orderLimit orders let the Forex investors stop further trading and leave the market at preset profit objectives. It is an order which restricts the greatest price to be paid or the lowest price to be received.
LiquidityLiquidity can be defined as the capacity of a market to allow fat transaction with negligible impact on the price stability.
MarginMargin is the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.
Pip / PointWhen dealing in terms of quotes, prices are expressed in terms of Pips. Pips can be defined as “percentage in points” and are mostly the fourth decimal point i.e. 1/100th of 1%. A pip can also be defined as the smallest value at which an exchange of currency can take place.
Stop Loss OrderStop/loss commands allow the investors to set an exit point for a loss. By limiting your losses to a pre set position, Stop/loss orders help investors control their risk conditions. 'Stop-loss' can lower an investor's exposure to risk by a large proportion.
How to trade Forex
STEP 1:
The step 1 defines certain concepts and terms of Forex Trading-
Quotes are a vital part of the foreign exchange trading, as Forex trading is done in terms of quotes. Therefore, comprehending these quotes is the first important step.
Firstly, in a Forex quote, the currency listed first is known as the Base currency. For example, we have EUR/USD. Here, EUR is the Base currency.Secondly, the base currency has always the value 1. In other words, the rate of other currency is calculated against 1 pt of the Base currency. For example, we have EUR/USD where EUR is the Base currency. Then 1 EUR = 1.2323 USD or the value of one currency against the other in the pair. Thirdly, when dealing in terms of quotes, prices are expressed in terms of Pips. Pips can be defined as “percentage in points” and are mostly the fourth decimal point i.e. 1/100th of 1%.
Also used while trading through quotes, are two significant terms known as Bid and Ask. These two terms are responsible for making trading quote, a two-sided quote.Bid can be defined as ''The price at which the base currency is sold concurrently buying the counter currency. Ask can be defined as “The price at which the base currency can be bought concurrently selling the counter currency''
STEP 2:
Step 2 illustrates the other key features of Forex trading which are namely, the leverage and the Margin. These two are immensely important in attracting the interest of the traders as they enhance the trading power of the investors.
The leverage is the ratio of the deposited amount to the amount that can be traded. Leverage enables the investors to deposit a small amount of money but still trade for a much larger amount. This way, investors can trade easily, utilizing less money to deal.
Margin, therefore, is the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.
A detailed Example below illustrates exactly how Forex trading is done-Supposing the current bid/ask price for EUR/USD is going by the rate of 1.5027/30, giving you the option to buy 1 euro with 1.5030 US dollars or sell 1 Euro for 1.5027 US dollars. Now, if you feel that the Euro is underrated against the US dollar, you would opt on buying Euros, selling your dollars at the same time. So you buy 100,000 euros by paying 150,300 dollars. You can then start analyzing the market, waiting for the exchange rates to rise.As predicted, the rates begin to rise and then you decide a favorable rate at which you plan to sell your Euros to get a hefty profit. Supposing the Euro rises to 1.5090/93. Now, to realize your profits, you sell 100,000 euros at the current rate of 1.5090, and receive $150,900.You bought 100k Euros at 1.5030, paying $150,300. You sold 100k Euros at 1.5090, receiving $150900. That's a difference of $600 or in other words, you successfully earned a profit of $600.Return on Investment = $600
Always learn a lesson from the Forex Indicators, keep a watch, think long term and then take a step.
STEP 3:MarketForex does e-trading using high end MarketForex softwares. Easily accessible and user friendly, they have a simple operating process. For instance, the currency pair to be bought or sold can simply be dealt with, by clicking on the sell or the buy key, placed in front of that currency.After the deal to be done is selected, a quote is then displayed by the software, making it easier for the user to keep track of the records. Also, MarketForex software provides some attractive powerful features such as account details of the holder, like balance, leverage and margins, along with stop/limit orders.The trader also has the option of selecting various other currency pairs for trading purposes. Before investing always analyse the forex market with various types of forex analysis.
The step 1 defines certain concepts and terms of Forex Trading-
Quotes are a vital part of the foreign exchange trading, as Forex trading is done in terms of quotes. Therefore, comprehending these quotes is the first important step.
Firstly, in a Forex quote, the currency listed first is known as the Base currency. For example, we have EUR/USD. Here, EUR is the Base currency.Secondly, the base currency has always the value 1. In other words, the rate of other currency is calculated against 1 pt of the Base currency. For example, we have EUR/USD where EUR is the Base currency. Then 1 EUR = 1.2323 USD or the value of one currency against the other in the pair. Thirdly, when dealing in terms of quotes, prices are expressed in terms of Pips. Pips can be defined as “percentage in points” and are mostly the fourth decimal point i.e. 1/100th of 1%.
Also used while trading through quotes, are two significant terms known as Bid and Ask. These two terms are responsible for making trading quote, a two-sided quote.Bid can be defined as ''The price at which the base currency is sold concurrently buying the counter currency. Ask can be defined as “The price at which the base currency can be bought concurrently selling the counter currency''
STEP 2:
Step 2 illustrates the other key features of Forex trading which are namely, the leverage and the Margin. These two are immensely important in attracting the interest of the traders as they enhance the trading power of the investors.
The leverage is the ratio of the deposited amount to the amount that can be traded. Leverage enables the investors to deposit a small amount of money but still trade for a much larger amount. This way, investors can trade easily, utilizing less money to deal.
Margin, therefore, is the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.
A detailed Example below illustrates exactly how Forex trading is done-Supposing the current bid/ask price for EUR/USD is going by the rate of 1.5027/30, giving you the option to buy 1 euro with 1.5030 US dollars or sell 1 Euro for 1.5027 US dollars. Now, if you feel that the Euro is underrated against the US dollar, you would opt on buying Euros, selling your dollars at the same time. So you buy 100,000 euros by paying 150,300 dollars. You can then start analyzing the market, waiting for the exchange rates to rise.As predicted, the rates begin to rise and then you decide a favorable rate at which you plan to sell your Euros to get a hefty profit. Supposing the Euro rises to 1.5090/93. Now, to realize your profits, you sell 100,000 euros at the current rate of 1.5090, and receive $150,900.You bought 100k Euros at 1.5030, paying $150,300. You sold 100k Euros at 1.5090, receiving $150900. That's a difference of $600 or in other words, you successfully earned a profit of $600.Return on Investment = $600
Always learn a lesson from the Forex Indicators, keep a watch, think long term and then take a step.
STEP 3:MarketForex does e-trading using high end MarketForex softwares. Easily accessible and user friendly, they have a simple operating process. For instance, the currency pair to be bought or sold can simply be dealt with, by clicking on the sell or the buy key, placed in front of that currency.After the deal to be done is selected, a quote is then displayed by the software, making it easier for the user to keep track of the records. Also, MarketForex software provides some attractive powerful features such as account details of the holder, like balance, leverage and margins, along with stop/limit orders.The trader also has the option of selecting various other currency pairs for trading purposes. Before investing always analyse the forex market with various types of forex analysis.
Forex early warning
Thank you for visiting ForexEarlyWarning.com. Our mission is to provide you with high quality forex signals and forex trading plans twice daily when you log onto our web site. The spot forex trading market is a twenty four hour*, high liquidity market that provides the best opportunity for traders worldwide. Each forex trading plan is designed to put you into a swing trade or a longer term trade while trading with the trend. Even if you like forex day-trading you can use the FEW trading plans.Our forex trading alerts will contain complete and detailed trading plans, twice daily, at the low monthly price of $19.95! We believe that the low-cost quality forex trading-alert market is undeserved and we want to fill the void for anyone interested in retail foreign currency trading.The daily forecasts are buy/sell entry plans across 17 currency pairs issued twice daily. FEW trading plans can be used on a stand alone basis or along with our free forex trend indicators. These free FEW forex trend indicators can be installed on any forex charting system available from most brokers.Each trading plan from ForexEarlyWarning.com has a price alarm point to monitor each currency pair we are following. These daily forex trading signals, when combined with parallel/inverse analysis, and good money management, will provide pinpoint entries. The FEW forex trade signals and trading plan service is for the novice or professional currency trader who does not have time to do their own analysis or interested in following the forex trends with FEW.Sign up for the free thirty day trial. Then view the free FEW forex trading guide and listen to the free audio training sessions. Follow the FEW trading signals like an expert. Finally install the free FEW forex trend indicators and use the price alarms to assist with using the FEW forex trading plans . . . twice a day!The subscription price of $19.95 per month is very affordable and our forex trading plans can also be obtained free through special FEW brokerage partner rebates. Our daily forex forecast will warn you in advance of the existing and developing trends and potential movement cycles ahead of the major trading sessions. Our trading plans are issued four to twelve hours in advance of the major forex trading sessions.ForexEarlyWarning.com offers all this for free:30 day trial of ForexEarlyWarning trading alertsForex training informationForex trend indicatorsComplete forex audio training libraryWeekly live webinarsForex technical library on multiple timeframe analysisStart your free 30 day trial now or send us an email with your questions.* Standard forex market hours are Sunday 16:00EST to Friday 16:30EST. See broker web sites for individual broker trading hours as they may differ somewhat.
Things to Know When Trading News Reports
Now that we know “how” and “when” you can trade news reports, there are a few key concepts you should know before placing your first news trade.
While the actual news number or report is essential to the long-term movement of a currency pair, in the short-term the difference between the market expectations and the actual release is what causes potential breakout opportunities. This means economic numbers and reports that come out as the market expected generally do not cause a strong market reaction.
The quieter the market is before a news release, the more the market is poised for a significant move. Think about it: In a quiet market, less and less traders are buying and selling, possibly waiting for some sort of catalyst (like a news report maybe?). When this “catalyst” takes place, all of these traders waiting on the sidelines jump in at the same time causing a huge move in the market. So, the more traders wait (the quieter the market), the more will jump in after a news report (huge pips and a new Ferrari, right?).
Depending on the significance of the economic report, and the amount of deviation of the actual to the forecasted number, news breakout opportunities are generally short-lived and may last for only a few minutes or even a few seconds. Trading news releases may be better suited for scalpers and day traders.
While the actual news number or report is essential to the long-term movement of a currency pair, in the short-term the difference between the market expectations and the actual release is what causes potential breakout opportunities. This means economic numbers and reports that come out as the market expected generally do not cause a strong market reaction.
The quieter the market is before a news release, the more the market is poised for a significant move. Think about it: In a quiet market, less and less traders are buying and selling, possibly waiting for some sort of catalyst (like a news report maybe?). When this “catalyst” takes place, all of these traders waiting on the sidelines jump in at the same time causing a huge move in the market. So, the more traders wait (the quieter the market), the more will jump in after a news report (huge pips and a new Ferrari, right?).
Depending on the significance of the economic report, and the amount of deviation of the actual to the forecasted number, news breakout opportunities are generally short-lived and may last for only a few minutes or even a few seconds. Trading news releases may be better suited for scalpers and day traders.
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