So you've got the basics down. You have a thorough understanding of how the forex market works and how to use support and resistance levels to execute profitable trades. You experienced some profitable trades and learned from your unsuccessful trades. Your mentality is sharpening to the point where you do not lose your mind every single time you make a dollar or lose a penny. Well, it is time I introduce you to some more advanced trading strategies.
You are probably familiar with options, but have not really explored how to successfully exploit in the forex market. The beauty of these derivative instruments is that they allow you increase your profits while limiting risk. I am going to give you a brief overview of options and how to use them.
There are two types of options: call/put and SPOT (single payment option trading). The conventional option is the call/put and functions similar to a stock option. The SPOT derivative is unique in that it gives traders more flexibility than the call/put option.
Stock options enable you to purchase something from the option seller, with worrying about actually having to purchase it, at a set price and time. You can choose the price and date you want the option to be valid. Once you select the date and price, you will receive a quote stating the premium to pay to obtain the option.
The scenario I just broke down is applicable to the call/put option in the forex market. However, they have two option to choose from: American-style and European-style. American-style option is defined by its ability to be exercised at any point before its expiration date. The European-style option can only be exercised at its expiration.
Thursday, April 30, 2009
How to Pick Out a Winning Forex Currency Trading Program
Forex currency trading programs can make your trading life a great deal easier and more profitable. But since their inception just a few years ago, there have been a number of hastily thrown together programs which are hardly worth their e-weight, let alone their purchase prices, which have come out onto the market, as well. Unfortunately, it's difficult to tell the few winning programs apart from the lemons short of hand testing them, and even then, it's difficult to know on what metric to judge a system. Keep these key points in mind.
Customer Service - Just to get this one out of the way, I'll put it first. Ideally you'll never have any issues with whatever forex currency trading program that you go with, but if you do ever have any concerns, you'll want to know that they'll be answered swiftly and effectively. Send the publisher an email if they have no phone support and mention that you're simply interested in their product and gauge their response time accordingly. A reputable publisher of a likewise reputable program will more than likely be interested in your opinion of them and will get back to you quickly.
Interface - You've heard the old adage "keep it simple, stupid!". Well this is the motto to live by when selecting a forex currency trading program, as well. This program is meant to make your life easier, not more complicated. The system is meant to stay dialed into the market throughout the day and deliver profitable opportunities and trades within it to you around the clock, you don't need a lot of bells and whistles. Look for basics like stop loss and take profit protocols. You can learn a lot from a product review or testing the program first hand, many publishers offer trial money back guarantee periods for this very reason.
Response Time - This is where you'll be making the bulk of your money through your forex currency trading program. These programs analyze market data around the clock and react on them to automatically trade throughout all market conditions, with the best products reacting the quickest to changes in the market and trends, faster than the most capable traders and brokers alike even. Again, money back guarantees exist for a reason, take advantage of them if applicable and see how you feel. In touching on the interface aspect briefly once more, most programs are designed with beginners in mind and consequently attest that you'll be up and trading minutes after the installation is complete.
Money Back Guarantee - I've mentioned this one a couple of times already. If the publisher of a forex currency trading program doesn't offer some sort of trial period money back guarantee of 8 weeks or something to that effect, that should be an indication that they don't stand behind their product and neither should you. You can learn a lot about a product from even just testing it after a day or so, so take advantage of it and use it.
Customer Service - Just to get this one out of the way, I'll put it first. Ideally you'll never have any issues with whatever forex currency trading program that you go with, but if you do ever have any concerns, you'll want to know that they'll be answered swiftly and effectively. Send the publisher an email if they have no phone support and mention that you're simply interested in their product and gauge their response time accordingly. A reputable publisher of a likewise reputable program will more than likely be interested in your opinion of them and will get back to you quickly.
Interface - You've heard the old adage "keep it simple, stupid!". Well this is the motto to live by when selecting a forex currency trading program, as well. This program is meant to make your life easier, not more complicated. The system is meant to stay dialed into the market throughout the day and deliver profitable opportunities and trades within it to you around the clock, you don't need a lot of bells and whistles. Look for basics like stop loss and take profit protocols. You can learn a lot from a product review or testing the program first hand, many publishers offer trial money back guarantee periods for this very reason.
Response Time - This is where you'll be making the bulk of your money through your forex currency trading program. These programs analyze market data around the clock and react on them to automatically trade throughout all market conditions, with the best products reacting the quickest to changes in the market and trends, faster than the most capable traders and brokers alike even. Again, money back guarantees exist for a reason, take advantage of them if applicable and see how you feel. In touching on the interface aspect briefly once more, most programs are designed with beginners in mind and consequently attest that you'll be up and trading minutes after the installation is complete.
Money Back Guarantee - I've mentioned this one a couple of times already. If the publisher of a forex currency trading program doesn't offer some sort of trial period money back guarantee of 8 weeks or something to that effect, that should be an indication that they don't stand behind their product and neither should you. You can learn a lot about a product from even just testing it after a day or so, so take advantage of it and use it.
How to Make Serious Cash With Forex
Maybe you have heard about Forex trading and how much money can be made trading in the currency market. On the other hand, you may have heard about the vast numbers of people that lost all their capital on Forex trading. The truth is that both depictions are accurate. There are some, not many, that have made millions having started with very little and make big money day in and day out. Then you have the great majority which have started with dreams and ended with nightmares because of the decisions they made while trading on the currency market. So, you are probably interested in knowing if there really is a legitimate way to make serious cash with Forex? The simple answer is, "Yes!" I will tell you how. It involves three things: ability to trade without fear, staying away from greed, and trading with the right tools. Let's take a quick look at these.
One sure way NOT to make money and lose it all in Forex trading is to stay in a move too long because you are looking to "clean up." Bad move! You must have a clear strategy to get in and out of a trade or you will lose everything, I promise. The bottom line is that you must be disciplined and stick with your trade method. Use objectivity when trading. I suggest using a few trading indicators, such as the Relative Strength Indicator (RSI) and the 200 day moving average. They will help develop a mechanized manner of trading that assists in staying away form poor emotionally led decisions.
Most importantly, I would suggest using effective Forex trading software that provides consistently winning trading signals. I have included a link to the best one I know at the bottom of the page. Good trading ahead.
One sure way NOT to make money and lose it all in Forex trading is to stay in a move too long because you are looking to "clean up." Bad move! You must have a clear strategy to get in and out of a trade or you will lose everything, I promise. The bottom line is that you must be disciplined and stick with your trade method. Use objectivity when trading. I suggest using a few trading indicators, such as the Relative Strength Indicator (RSI) and the 200 day moving average. They will help develop a mechanized manner of trading that assists in staying away form poor emotionally led decisions.
Most importantly, I would suggest using effective Forex trading software that provides consistently winning trading signals. I have included a link to the best one I know at the bottom of the page. Good trading ahead.
A FOREX Expert Adviser Can Help Make Your Financial Trades Easier
One way of making your life easier in foreign exchange is to let a FOREX expert advisor help you do the trading for you. The foreign exchange is a very volatile market, and with such a lot of factors to determine how the currency will flow from day to day, it is quite difficult to gain financially. It is only recently that institutional investors have begun to tap into the services of these expert advisors (EA) and have drastically improved their chances in earning.
These types of programs are quite a new technology, but the experiences of FOREX expert advisors who developed the system go way back. They were created by specialists in the business who fully understand how the market works and varies, and that is why they have put their knowledge into this product to make life simpler for new and old traders alike.
One aspect is that the buying and selling of currencies is done in several different time zones around the world, which run on a twenty-four hour a day cycle. Without the help of FOREX expert advisors, traders would need to monitor the particular currencies of those who want to bid and sell. And that by itself is a task that is close to impossible to do. They would then just have to make the best out of each day’s trading. But by employing the aid of a FOREX expert advisor, all the user has to do is set the proper signals and the robot will act accordingly to the tags instantaneously. This also eliminates emotion in trading and gives you better advantage in making those split second decisions that will be the cause of either losing or making money.
Try to stay away from systems that claim they can plot historical data to affect the chances of trades. This is not true at all. No record of past or present transactions can determine the outcome of a future trade, simply because these are independent outcomes not relevant to the trade at hand. There are very many and complex factors that determine the rise and fall of a particular currency value, and its history has no attachment to the present outcome.
Another thing that you can do to help find those correct opportunities is to do research on the currency pair you have chosen. Knowing all events and activities that affect the particular pair you picked to play with will help a lot in projecting or assuming a stake at a certain point in time. These factors may include economy of the country, system of government, trade policies, political and business atmosphere, and budget spending and appropriation.
There is really no perfect system but armed with the knowledge and the correct FOREX expert advisor by your side, you will improve your chances of making a profit in this very lucrative and high-stake market.
Want to take the guesswork out of Forex trades? Read this detailed review on the most popular and profitable forex trading robots that are making successful trades on autopilot for their traders.
These types of programs are quite a new technology, but the experiences of FOREX expert advisors who developed the system go way back. They were created by specialists in the business who fully understand how the market works and varies, and that is why they have put their knowledge into this product to make life simpler for new and old traders alike.
One aspect is that the buying and selling of currencies is done in several different time zones around the world, which run on a twenty-four hour a day cycle. Without the help of FOREX expert advisors, traders would need to monitor the particular currencies of those who want to bid and sell. And that by itself is a task that is close to impossible to do. They would then just have to make the best out of each day’s trading. But by employing the aid of a FOREX expert advisor, all the user has to do is set the proper signals and the robot will act accordingly to the tags instantaneously. This also eliminates emotion in trading and gives you better advantage in making those split second decisions that will be the cause of either losing or making money.
Try to stay away from systems that claim they can plot historical data to affect the chances of trades. This is not true at all. No record of past or present transactions can determine the outcome of a future trade, simply because these are independent outcomes not relevant to the trade at hand. There are very many and complex factors that determine the rise and fall of a particular currency value, and its history has no attachment to the present outcome.
Another thing that you can do to help find those correct opportunities is to do research on the currency pair you have chosen. Knowing all events and activities that affect the particular pair you picked to play with will help a lot in projecting or assuming a stake at a certain point in time. These factors may include economy of the country, system of government, trade policies, political and business atmosphere, and budget spending and appropriation.
There is really no perfect system but armed with the knowledge and the correct FOREX expert advisor by your side, you will improve your chances of making a profit in this very lucrative and high-stake market.
Want to take the guesswork out of Forex trades? Read this detailed review on the most popular and profitable forex trading robots that are making successful trades on autopilot for their traders.
Awesome Forex Trading Indicator - Try This Strategy
Forex trading is more popular than ever and for good reason: The currency market has the means to make someone a millionaire in a very short period of time. What is even better is the fact that you can become wealthy trading in the Forex market without having to have much start up capital, it is called super leverage! Of course, it is not easy to make money trading in the Forex market as evidenced by the droves that have lost it all trying to do so. In truth, this is a shame because making consistent money trading currency is not that hard if you follow a few basic principles and use the right trading indicator. Let's talk about this a little further.
First, you need to be aware that there is not trading system that will make you money in Forex if you are greedy or give in to fear. Let's get that out of the way form the onset/. If you do not know when to get out of a move then you will lose it all, this is not a game for little kids that are used to monopoly. It is an excellent way for people looking to make significant gains day in and day out if they are willing to determine a definite point for entry into moves and have a clearly defined exit strategy that they WILL follow when the situation arises. OK, now that we are done with that, let's take a look at the best Forex trading indicator and how to use it to become successful in Forex trading.
The best Forex trading indicator that I know of is the Relative Strength Indicator (RSI). It is a measurement tool that provides feedback for when a currency is overbought or oversold. This is important because the more overbought or oversold a currency is the more like it is to reverse in the opposite direction. It really is that simple. When it is beyond 10 or 90 then the Forex trader should simply look to get in the opposite trade. I can complicate this with a bunch of theoretical nonsense but it really is that easy. I do however suggest two things:
One, I would suggest using the 200 day moving average as a confirmation tool.
First, you need to be aware that there is not trading system that will make you money in Forex if you are greedy or give in to fear. Let's get that out of the way form the onset/. If you do not know when to get out of a move then you will lose it all, this is not a game for little kids that are used to monopoly. It is an excellent way for people looking to make significant gains day in and day out if they are willing to determine a definite point for entry into moves and have a clearly defined exit strategy that they WILL follow when the situation arises. OK, now that we are done with that, let's take a look at the best Forex trading indicator and how to use it to become successful in Forex trading.
The best Forex trading indicator that I know of is the Relative Strength Indicator (RSI). It is a measurement tool that provides feedback for when a currency is overbought or oversold. This is important because the more overbought or oversold a currency is the more like it is to reverse in the opposite direction. It really is that simple. When it is beyond 10 or 90 then the Forex trader should simply look to get in the opposite trade. I can complicate this with a bunch of theoretical nonsense but it really is that easy. I do however suggest two things:
One, I would suggest using the 200 day moving average as a confirmation tool.
The Best Forex Software - Based on Performance
There are many approaches to determine which is the best forex software, but of course, I think you will agree with me that performance or profit potential is what matters the most when looking at the different options. Indeed, many factors can influence your perception of what the best forex software should be like, ranging from automation capabilities to user friendliness, but in the end, when you purchase this kind of tool you are essentially looking for one thing: profits.
Now, does it means that you should ignore all those factors and focus only on performance?
No, not at all, but it does mean that you have to make sure that the software you regard as the best for you is not only a great software, but a great performer.
I have used many forex software (some of which I simply have returned for a refund) and I did not know whether they where the best or not until I put them to use. However, in my continuous quest for the best trading tools, I have had the opportunity to see some very friendly softwares, some of which were fully automated while others where semi-automated.
My natural preference of course has always gone in favor of the fully automated forex software, but this fact has not blinded my judgment at the time of choosing the best trading tool, because although I love "easy to use" and "do nothing" capabilities, my main concern always will be "how much money will it make".
Until recently, it was hard to get a real idea about the performance of any given forex software before buying it, because all you could see once you landed on the website were the claims from its creators stating that "this one" is the best.
However, the landscape of the trading tools market has gone through some interesting changes due to serious improvements in the technology behind the best forex software, and now you can find what is called "live proof" of earnings in a few of those websites.
This means that the performance of a particular forex software has ceased to be a simple hyped promise to turn into an actual and live demonstration of trading capabilities. Based on this, it is far easier to make the right decision and really get the best trading tool, with the assurance that you are actually considering what matters the most: performance.
So when choosing the best forex software, sure it is important to consider things like your time availability (because that might determine the convenience for a fully automated option) and other factors, but always make sure that your choice is truly capable of making you money.
Now, does it means that you should ignore all those factors and focus only on performance?
No, not at all, but it does mean that you have to make sure that the software you regard as the best for you is not only a great software, but a great performer.
I have used many forex software (some of which I simply have returned for a refund) and I did not know whether they where the best or not until I put them to use. However, in my continuous quest for the best trading tools, I have had the opportunity to see some very friendly softwares, some of which were fully automated while others where semi-automated.
My natural preference of course has always gone in favor of the fully automated forex software, but this fact has not blinded my judgment at the time of choosing the best trading tool, because although I love "easy to use" and "do nothing" capabilities, my main concern always will be "how much money will it make".
Until recently, it was hard to get a real idea about the performance of any given forex software before buying it, because all you could see once you landed on the website were the claims from its creators stating that "this one" is the best.
However, the landscape of the trading tools market has gone through some interesting changes due to serious improvements in the technology behind the best forex software, and now you can find what is called "live proof" of earnings in a few of those websites.
This means that the performance of a particular forex software has ceased to be a simple hyped promise to turn into an actual and live demonstration of trading capabilities. Based on this, it is far easier to make the right decision and really get the best trading tool, with the assurance that you are actually considering what matters the most: performance.
So when choosing the best forex software, sure it is important to consider things like your time availability (because that might determine the convenience for a fully automated option) and other factors, but always make sure that your choice is truly capable of making you money.
Foreign Currency Trade For Beginners
Foreign currency trade, or Forex, is the worlds biggest business and trillions of dollars are traded every day. Unfortunately over ninety five percent of new traders lose money when they start out because they are unaware of how it works. Read the below tips to better prepare yourself for the world of foreign currency trading.
First, it is important to realize that trading is a learned skill. Anybody can learn it if they have the right education.
Second, trading is not easy. It is difficult to do successfully, but it can be made easier with the use of automated trading robots such as FAP Turbo.
Third, it is important to use discipline. While you are trading, it could be easy to let your emotions dictate your trades, which almost always leads to financial ruin. Keep your head on straight, and stick with your plan and you are sure to come out on top. There are many people who have a great strategy planned out, but then when they start trading with real money on this plan, they might lose a bit and then let their emotions get in the way, which leads to no profits at all.
Fourth, work smart not hard. You don't need to be educated in a college setting in order to do well in this market. Try to ignore the myths about currency exchange and develop your own strategy. By using your own strategy, you can easy get a second income in your home. If you follow myths or trends, you will only find yourself with a drained account.
When it comes to foreign currency trade, many beginners fail because they have been misinformed with regards to currency exchange. With the right information, you will be better prepared to get out there and start trading for profit.
First, it is important to realize that trading is a learned skill. Anybody can learn it if they have the right education.
Second, trading is not easy. It is difficult to do successfully, but it can be made easier with the use of automated trading robots such as FAP Turbo.
Third, it is important to use discipline. While you are trading, it could be easy to let your emotions dictate your trades, which almost always leads to financial ruin. Keep your head on straight, and stick with your plan and you are sure to come out on top. There are many people who have a great strategy planned out, but then when they start trading with real money on this plan, they might lose a bit and then let their emotions get in the way, which leads to no profits at all.
Fourth, work smart not hard. You don't need to be educated in a college setting in order to do well in this market. Try to ignore the myths about currency exchange and develop your own strategy. By using your own strategy, you can easy get a second income in your home. If you follow myths or trends, you will only find yourself with a drained account.
When it comes to foreign currency trade, many beginners fail because they have been misinformed with regards to currency exchange. With the right information, you will be better prepared to get out there and start trading for profit.
Forex Trading Profits - The Simplest Method to Make Big Profits
If you want to make bigger Forex trading profits then the method enclosed is simple to understand, apply and can make you huge profits. Let's take a closer look at it.
The method is long term trend following using breakouts and it's a timeless way to make money, as Forex markets trend long term and all these trends start and continue from breakouts to new highs or lows.
Breakouts are simply breaks of previous chart highs or lows that have acted as resistance or support before.
Most traders don't use breakout trading, as when the move occurs they want a pullback as they want to be in right at the start of the move, the problem is once the break has occurred of a previous strong level of support and resistance, stops get hit and push the trend away from the breakout point and as the price starts to move, the trend is accelerated by fresh buying and selling.
When trading breakouts, all you need to look for is a level that has been tested a few times and is considered important by traders (the minimum is twice but the more times it's tested the better) and if the time frames are wide apart that tends to lend weight to the validity of the breakout.
Most traders don't like breakout trading, as they like to try and get the trend change exactly, by predicting moves but this is impossible, as Forex markets simply cannot be predicted. By trading the reality of price change as you see it on the chart, the odds are in your favour and you don't have to predict anything.
It's a simple high odds way of trading and you can get the odds in your favour even more, by adding a few momentum indicators to confirm your trading signals. You can learn a couple of good ones in an hour and there the RSI and stochastic indicator, look them up.
Money management couldn't be simpler, just behind the level that breaks up or down so your stop is very tight and if your wrong, your loss will be small.
While this method seems incredibly simplistic, most of the worlds top trading systems will use breakout methodology because, as long as Forex markets trend it will continue to work. The method is simple to understand and very robust and is a timeless way to make big Forex profits.
The method is long term trend following using breakouts and it's a timeless way to make money, as Forex markets trend long term and all these trends start and continue from breakouts to new highs or lows.
Breakouts are simply breaks of previous chart highs or lows that have acted as resistance or support before.
Most traders don't use breakout trading, as when the move occurs they want a pullback as they want to be in right at the start of the move, the problem is once the break has occurred of a previous strong level of support and resistance, stops get hit and push the trend away from the breakout point and as the price starts to move, the trend is accelerated by fresh buying and selling.
When trading breakouts, all you need to look for is a level that has been tested a few times and is considered important by traders (the minimum is twice but the more times it's tested the better) and if the time frames are wide apart that tends to lend weight to the validity of the breakout.
Most traders don't like breakout trading, as they like to try and get the trend change exactly, by predicting moves but this is impossible, as Forex markets simply cannot be predicted. By trading the reality of price change as you see it on the chart, the odds are in your favour and you don't have to predict anything.
It's a simple high odds way of trading and you can get the odds in your favour even more, by adding a few momentum indicators to confirm your trading signals. You can learn a couple of good ones in an hour and there the RSI and stochastic indicator, look them up.
Money management couldn't be simpler, just behind the level that breaks up or down so your stop is very tight and if your wrong, your loss will be small.
While this method seems incredibly simplistic, most of the worlds top trading systems will use breakout methodology because, as long as Forex markets trend it will continue to work. The method is simple to understand and very robust and is a timeless way to make big Forex profits.
How to Develop Your Forex Trading Strategy
Developing your own Forex trading strategy is critical to your success as a Forex trader. Forex trading can be profitable, but the market is very volatile and you need to take a methodological approach which not only helps you to maximize profits but also minimize losses. Your trading strategy will consist of using a variety of tools and indicators as well as learning how to manage both your money and emotions effectively.
Your first step in developing the best Forex trading strategy for you is to master the fundamentals of Forex trading. This includes have a good working knowledge of how Forex markets work as well as learning the nuts and bolts of both technical and fundamental analysis and the tools and signals used in these analyses.
An important step you must take is to determine what your investing goals are as well as what funds you have available for trading. Another important factor which will help to determine your Forex trading strategy is to determine the time frame that you will trade in. You will need a much different strategy for short term, medium term and long term Forex trading.
There are certain principles you should incorporate into any trading strategy. One thing you can do to minimize losses is to always incorporate stop losses into your trades. You should also diversify your trades by not limiting yourself to just one currency pair or putting all your money into just a few trades.
For the small investor, taking a medium term approach may be the best strategy. Short term, or Forex day trading, is extremely difficult to succeed with. Traders are looking to capitalize on small price movements using leverage within very short time frames. Day trading requires a lot of capital and is very high risk.
A long term Forex trading strategy also requires a large capital investment to protect against volatility in open positions. The small investor may also not have the patience to hold on for the long term.
With a medium term or swing trading approach, the Forex trader will use technical analyses to make trades over the course of several days to several weeks. There are fewer trading opportunities using the criteria, but it is a safer approach than short term trading and does not require the same amount of patience and capital requirements as a long term approach.
A swing trading strategy will make use of variety of technical indicators within several time frames to weigh trading opportunities. As a trader you are looking to find situations where most of the technical signals are pointing in the same direction. You will make use of candlestick charts in various time frames as well as other technical indicators.
Developing your own trading strategy is absolutely essential if you hope to be a successful Forex trader. Master the fundamentals, set your investment objectives, minimize your losses through the use of stop losses and diversifying your trades, and determine the time frame and technical indicators you will use to evaluate your trades. If you work out a well developed Forex trading strategy you will give yourself an excellent chance of becoming a very successful Forex trader.
Your first step in developing the best Forex trading strategy for you is to master the fundamentals of Forex trading. This includes have a good working knowledge of how Forex markets work as well as learning the nuts and bolts of both technical and fundamental analysis and the tools and signals used in these analyses.
An important step you must take is to determine what your investing goals are as well as what funds you have available for trading. Another important factor which will help to determine your Forex trading strategy is to determine the time frame that you will trade in. You will need a much different strategy for short term, medium term and long term Forex trading.
There are certain principles you should incorporate into any trading strategy. One thing you can do to minimize losses is to always incorporate stop losses into your trades. You should also diversify your trades by not limiting yourself to just one currency pair or putting all your money into just a few trades.
For the small investor, taking a medium term approach may be the best strategy. Short term, or Forex day trading, is extremely difficult to succeed with. Traders are looking to capitalize on small price movements using leverage within very short time frames. Day trading requires a lot of capital and is very high risk.
A long term Forex trading strategy also requires a large capital investment to protect against volatility in open positions. The small investor may also not have the patience to hold on for the long term.
With a medium term or swing trading approach, the Forex trader will use technical analyses to make trades over the course of several days to several weeks. There are fewer trading opportunities using the criteria, but it is a safer approach than short term trading and does not require the same amount of patience and capital requirements as a long term approach.
A swing trading strategy will make use of variety of technical indicators within several time frames to weigh trading opportunities. As a trader you are looking to find situations where most of the technical signals are pointing in the same direction. You will make use of candlestick charts in various time frames as well as other technical indicators.
Developing your own trading strategy is absolutely essential if you hope to be a successful Forex trader. Master the fundamentals, set your investment objectives, minimize your losses through the use of stop losses and diversifying your trades, and determine the time frame and technical indicators you will use to evaluate your trades. If you work out a well developed Forex trading strategy you will give yourself an excellent chance of becoming a very successful Forex trader.
FOREX 101: Make Money with Currency Trading
For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
Monday, April 27, 2009
Theme of the day: Swiss franc Weakness!
Currently, the USD/CHF is up 1.68% on the day while CHF/JPY is down 1.78% on the day. So the clear momentum mover on the day is the Swiss franc. It’s dropping like a rock…so the franc short sellers have been the ones to have the movement today thus far.
Those of you that are in the AUD/JPY swing trade are probably up about 50 pips thus far from yesterday’s mention of it in my blog.
Aussie has been the most “fundamentally strong” currency out there for a while now…so its best to buy the “best” fundamentally when markets are trying to work their way out of a global recession.
That’s why traders should keep an eye on AUD/USD, AUD/JPY, AUD/CHF, etc. and value those buy signals that they get higher than the buy signals that they get on other pairs (in my opinion of course).
Those of you that are in the AUD/JPY swing trade are probably up about 50 pips thus far from yesterday’s mention of it in my blog.
Aussie has been the most “fundamentally strong” currency out there for a while now…so its best to buy the “best” fundamentally when markets are trying to work their way out of a global recession.
That’s why traders should keep an eye on AUD/USD, AUD/JPY, AUD/CHF, etc. and value those buy signals that they get higher than the buy signals that they get on other pairs (in my opinion of course).
It’s a mixed bag today!
By Sean Hyman | April 20, 2009
It’s a mixed bag today folks! The top gainer on the day is USD/TRY up 2.12% followed by EUR/AUD, USD/CAD, USD/ZAR and GBP/AUD.
The top losers on the day are AUD/JPY down 3.52% and AUD/USD down 2.81%.
Therefore there are two themes emerging this morning. One is that the dollar is strong, particularly against the exotic currencies. The other theme is that the Aussie dollar is weak across the board today. That is due to the Aussie PPI number falling off the map. It was such as big dive that it shocked the Aussie dollar.
Also, another theme is that the yen is strong across the board too as it drags just about every yen pair to the bottom of the pack.
Short term plays on Aussie weakness (shorting AUD/JPY and AUD/USD) could give some great opportunities should the weakness continue. Also, look for any new intraday highs/lows that get taken out from Friday’s daily candle. These can present some good “short term pops” too.
It’s a mixed bag today folks! The top gainer on the day is USD/TRY up 2.12% followed by EUR/AUD, USD/CAD, USD/ZAR and GBP/AUD.
The top losers on the day are AUD/JPY down 3.52% and AUD/USD down 2.81%.
Therefore there are two themes emerging this morning. One is that the dollar is strong, particularly against the exotic currencies. The other theme is that the Aussie dollar is weak across the board today. That is due to the Aussie PPI number falling off the map. It was such as big dive that it shocked the Aussie dollar.
Also, another theme is that the yen is strong across the board too as it drags just about every yen pair to the bottom of the pack.
Short term plays on Aussie weakness (shorting AUD/JPY and AUD/USD) could give some great opportunities should the weakness continue. Also, look for any new intraday highs/lows that get taken out from Friday’s daily candle. These can present some good “short term pops” too.
AUD/JPY is down over 5% on the day!
AUD/JPY is down 5% today alone! Wow, what a correction….NZD/JPY down over 4%…AUD/USD down over 3.6% on the day now! So the downside momentum on the day is about double the percentage gainers on the day today. The strength of the yen today is amazing….when these yen crosses went up recently, they did so fearlessly. However, the corrections have been rather swift. So the use of stops are very, very important here.
Trading Concept: Inside Trading Days
This morning the British pound (GBP) is dropping due to increasing unemployment and jobless claims (as well as a decrease in hourly earnings for those who are employed).
The GBP/USD and GBP/JPY just broke uptrends on the hourly chart and are still headed south.
This is also causing EUR/GBP to be the top % gainer on the day so far at 1.68%. GBP/JPY is the biggest loser on the day so far at -1.80%.
EUR/CHF pierced its lows on the “inside day” trade and has since gone back inside its range. Now let’s see if it takes another “stab” at heading lower since many carry trades are headed south this morning…it could influence this one out of its sideways range as well.
Sean Hyman
www.forextradingblog.com
Tags: blog, carry trade, CHF, EUR, forex, forextrading, gbp, jpy, lower, pound, Sean Hyman, time, trades, trend, unemployment, uptrend, USD
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Trading Concept: Inside Trading Days
By Sean Hyman | April 21, 2009
One concept that short term traders look for are “inside days”. What is this? It’s where a completed candle’s high/low of the day is within the range of the previous day’s high/low. See the chart below and I think you will see what I mean. Notice that the current closed candle is within the boundaries of the previous day’s high/low (blue lines).
When there are one or two “inside days” from a previous candle, it means that the volatility is compressing (or coiling up). When this happens, there is a huge chance of a sizable breakout to one side or the other.
The strategy is to put an order on either side of the breakout with a reasonable limit (15-20 pips). When one of the order triggers, cancel the order that would be in the opposite direction to ensure that it doesn’t get hit too.
Yesterday, I noticed that there were two “inside days” on the daily charts. Remember, you have to wait until the candle closes at 5pm EST before you can say it’s closed. EUR/CHF and AUD/NZD were the two pairs. Since AUD/NZD has a much smaller spread to overcome, I’d favor the EUR/CHF pair.
Place an entry order on either side of the pairs previous day high/low by 1 to 2 pips. Also, include a limit order at that time too and a stop. The limit would need to be 10-20 pips (something near term). That way, any real spike could trigger your limit. You’d want a wider stop (you decide…but something wide enough to handle the volatility…maybe 50-60 pips). The thought being that there should be much more of a likelihood of the limit hitting than the stop, therefore making the wider stop worth its distance.
The GBP/USD and GBP/JPY just broke uptrends on the hourly chart and are still headed south.
This is also causing EUR/GBP to be the top % gainer on the day so far at 1.68%. GBP/JPY is the biggest loser on the day so far at -1.80%.
EUR/CHF pierced its lows on the “inside day” trade and has since gone back inside its range. Now let’s see if it takes another “stab” at heading lower since many carry trades are headed south this morning…it could influence this one out of its sideways range as well.
Sean Hyman
www.forextradingblog.com
Tags: blog, carry trade, CHF, EUR, forex, forextrading, gbp, jpy, lower, pound, Sean Hyman, time, trades, trend, unemployment, uptrend, USD
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Trading Concept: Inside Trading Days
By Sean Hyman | April 21, 2009
One concept that short term traders look for are “inside days”. What is this? It’s where a completed candle’s high/low of the day is within the range of the previous day’s high/low. See the chart below and I think you will see what I mean. Notice that the current closed candle is within the boundaries of the previous day’s high/low (blue lines).
When there are one or two “inside days” from a previous candle, it means that the volatility is compressing (or coiling up). When this happens, there is a huge chance of a sizable breakout to one side or the other.
The strategy is to put an order on either side of the breakout with a reasonable limit (15-20 pips). When one of the order triggers, cancel the order that would be in the opposite direction to ensure that it doesn’t get hit too.
Yesterday, I noticed that there were two “inside days” on the daily charts. Remember, you have to wait until the candle closes at 5pm EST before you can say it’s closed. EUR/CHF and AUD/NZD were the two pairs. Since AUD/NZD has a much smaller spread to overcome, I’d favor the EUR/CHF pair.
Place an entry order on either side of the pairs previous day high/low by 1 to 2 pips. Also, include a limit order at that time too and a stop. The limit would need to be 10-20 pips (something near term). That way, any real spike could trigger your limit. You’d want a wider stop (you decide…but something wide enough to handle the volatility…maybe 50-60 pips). The thought being that there should be much more of a likelihood of the limit hitting than the stop, therefore making the wider stop worth its distance.
The Pound drops on Fundamental and Technical data!
This morning the British pound (GBP) is dropping due to increasing unemployment and jobless claims (as well as a decrease in hourly earnings for those who are employed).
The GBP/USD and GBP/JPY just broke uptrends on the hourly chart and are still headed south.
This is also causing EUR/GBP to be the top % gainer on the day so far at 1.68%. GBP/JPY is the biggest loser on the day so far at -1.80%.
EUR/CHF pierced its lows on the “inside day” trade and has since gone back inside its range. Now let’s see if it takes another “stab” at heading lower since many carry trades are headed south this morning…it could influence this one out of its sideways range as well.
Sean Hyman
www.forextradingblog.com
The GBP/USD and GBP/JPY just broke uptrends on the hourly chart and are still headed south.
This is also causing EUR/GBP to be the top % gainer on the day so far at 1.68%. GBP/JPY is the biggest loser on the day so far at -1.80%.
EUR/CHF pierced its lows on the “inside day” trade and has since gone back inside its range. Now let’s see if it takes another “stab” at heading lower since many carry trades are headed south this morning…it could influence this one out of its sideways range as well.
Sean Hyman
www.forextradingblog.com
Daytrading:Know when to Hold’em…Know when to Fold’em!
So far, today is one of those days where the movements are mild so far (except in the exotic currencies: USD/ZAR and EUR/TRY which are the biggest % gainers on the day).
Nothing is either gaining or falling rapidly today. Daytraders typically need momentum and breakouts and days like today (unless it changes all of the sudden) are not conducive to that.
Now, if someone is a range trader and they play ranges, picking something in the “middle of the pack” like AUD/CAD, CHF/JPY, etc.
Nothing is either gaining or falling rapidly today. Daytraders typically need momentum and breakouts and days like today (unless it changes all of the sudden) are not conducive to that.
Now, if someone is a range trader and they play ranges, picking something in the “middle of the pack” like AUD/CAD, CHF/JPY, etc.
Traders circle the Pound like vultures!
Traders are circling the British pound like vultures this morning as a news article came out that said that Moodys is considering cutting the U.K.’s AAA credit rating.
This has caused the EUR/GBP pair to come to the top of the % gainers list (up 1.69%) and GBP/JPY and GBP/CHF are at the very bottom of the % list (coming in as the biggest % losers on the day).
Also, the dollar is noticeably weak this morning…which puts NZD/USD, EUR/USD, AUD/USD towards the top of the pack too.
One thing that I’ve noticed in the past week or so…is that there have been several major companies that have beaten their earnings lately. What does that have to do with forex? Tons…. If that “streak” continues overall, then it could mean that the worst is behind us (like I’ve been saying for a bit now) and that we could be “starting” the process of coming out of the recession.
If so, this could bode well for the yen crosses overall (to the upside)…especially the commodity currencies vs. the yen (AUD/JPY, NZD/JPY, etc.)
This has caused the EUR/GBP pair to come to the top of the % gainers list (up 1.69%) and GBP/JPY and GBP/CHF are at the very bottom of the % list (coming in as the biggest % losers on the day).
Also, the dollar is noticeably weak this morning…which puts NZD/USD, EUR/USD, AUD/USD towards the top of the pack too.
One thing that I’ve noticed in the past week or so…is that there have been several major companies that have beaten their earnings lately. What does that have to do with forex? Tons…. If that “streak” continues overall, then it could mean that the worst is behind us (like I’ve been saying for a bit now) and that we could be “starting” the process of coming out of the recession.
If so, this could bode well for the yen crosses overall (to the upside)…especially the commodity currencies vs. the yen (AUD/JPY, NZD/JPY, etc.)
Medium Term Fundamental Trade: A Case for the Euro!
I want to show you how to crawl into the mind of a fundamental trade. As an example, I’d like to show you a recent example of how I go about formulating a longer term fundamental view of the euro (EUR/USD). So let’s take a look below…
For the first time in a long time, I see the start of a fundamental shift for the Euro Zone. It’s not just one thing but actually there are six pieces to this pie as I see it. Let’s take a look at them for a moment.
The talk among the European central bankers is starting to change. For instance, over this past weekend, the ECB’s Wellink is talking about a “floor for the benchmark interest rate”. Others have stated that it may not be a wise move to take interest rates lower.
So for the first time in a while we’re seeing the European central bank members talking about halting the interest rate decreases. That’s a first step in halting the fall of the euro.
Also over this past weekend, the Group of Seven (G-7) nations got together and have released a statement that said, “Economic activity should begin to recover later this year”. Then they went on to say that, “Recent data suggests that the pace of decline in our economies has slowed and some signs of stabilization are emerging”.
This will give investors a sigh of relief and it will encourage them to “come back out of hiding” from within the dollar and yen and to inch back into beaten down currencies that have a huge chance for appreciation. The first place money usually runs to is the euro (nicknamed the anti-dollar). So if money leaves the dollar (and I think it is), then the first stop is the euro.
Now, the next changes that I’ve begun to notice are the recent changes in the sentiment indicators for the Euro Zone (particularly Germany).
For instance, the German ZEW economic sentiment indicator came in at -3.5 two months ago but was expected to come in at +1.8. However, it blew out those expectations by coming in at +13.
Another sentiment indicator complimented the ZEW. It’s called the German Ifo report and it is a survey that has to do with the business climate. Two months ago, it came in at 82.2. This past month, it was expected to inch fractionally higher to 82.4. Yet it blew by those expectations and came in at 83.7.
So with the Euro Zone being in such disarray and the sentiment numbers still coming in more bullish than expected, it becomes a huge vote of confidence going forward for the euro.
Then we come to the final pieces of the puzzle which are the recent improvements in both the manufacturing and services numbers for Germany. These improvements, along with the stabilization of commodities help to underpin the euro and stem its fall too.
What does the stabilization of commodities have to do with the euro? The EUR/USD pair is predominately driven by “dollar flows”. So as the dollar falls, the EUR/USD rises and vice versa. As commodities rise, the dollar tends to become weighed down. As commodities fall, it’s like the ankle weights are being taken off of it and it propels higher. So if commodities have completed their fall and they’ve based sideways, it’s only a matter of time before they turn upward and head higher once again. As that happens, the dollar will plummet and the euro will be one of the biggest beneficiaries of the slide off in the dollar.
Therefore, for these six reasons mentioned above, I believe that the euro has put in a floor around the 1.25 level to the dollar and that we will see it start to head higher in the months ahead.
For many, this will be a “hard pill to swallow”. After all, I hardly know of anyone out there talking about the euro going higher in the months ahead. Almost everyone is betting on the rise of the dollar in the months ahead because of how well it has done in the past year. However, the dynamics that blessed the dollar with a good year last year are starting to change….and my readers are tipped off to it ahead of the masses.
For the first time in a long time, I see the start of a fundamental shift for the Euro Zone. It’s not just one thing but actually there are six pieces to this pie as I see it. Let’s take a look at them for a moment.
The talk among the European central bankers is starting to change. For instance, over this past weekend, the ECB’s Wellink is talking about a “floor for the benchmark interest rate”. Others have stated that it may not be a wise move to take interest rates lower.
So for the first time in a while we’re seeing the European central bank members talking about halting the interest rate decreases. That’s a first step in halting the fall of the euro.
Also over this past weekend, the Group of Seven (G-7) nations got together and have released a statement that said, “Economic activity should begin to recover later this year”. Then they went on to say that, “Recent data suggests that the pace of decline in our economies has slowed and some signs of stabilization are emerging”.
This will give investors a sigh of relief and it will encourage them to “come back out of hiding” from within the dollar and yen and to inch back into beaten down currencies that have a huge chance for appreciation. The first place money usually runs to is the euro (nicknamed the anti-dollar). So if money leaves the dollar (and I think it is), then the first stop is the euro.
Now, the next changes that I’ve begun to notice are the recent changes in the sentiment indicators for the Euro Zone (particularly Germany).
For instance, the German ZEW economic sentiment indicator came in at -3.5 two months ago but was expected to come in at +1.8. However, it blew out those expectations by coming in at +13.
Another sentiment indicator complimented the ZEW. It’s called the German Ifo report and it is a survey that has to do with the business climate. Two months ago, it came in at 82.2. This past month, it was expected to inch fractionally higher to 82.4. Yet it blew by those expectations and came in at 83.7.
So with the Euro Zone being in such disarray and the sentiment numbers still coming in more bullish than expected, it becomes a huge vote of confidence going forward for the euro.
Then we come to the final pieces of the puzzle which are the recent improvements in both the manufacturing and services numbers for Germany. These improvements, along with the stabilization of commodities help to underpin the euro and stem its fall too.
What does the stabilization of commodities have to do with the euro? The EUR/USD pair is predominately driven by “dollar flows”. So as the dollar falls, the EUR/USD rises and vice versa. As commodities rise, the dollar tends to become weighed down. As commodities fall, it’s like the ankle weights are being taken off of it and it propels higher. So if commodities have completed their fall and they’ve based sideways, it’s only a matter of time before they turn upward and head higher once again. As that happens, the dollar will plummet and the euro will be one of the biggest beneficiaries of the slide off in the dollar.
Therefore, for these six reasons mentioned above, I believe that the euro has put in a floor around the 1.25 level to the dollar and that we will see it start to head higher in the months ahead.
For many, this will be a “hard pill to swallow”. After all, I hardly know of anyone out there talking about the euro going higher in the months ahead. Almost everyone is betting on the rise of the dollar in the months ahead because of how well it has done in the past year. However, the dynamics that blessed the dollar with a good year last year are starting to change….and my readers are tipped off to it ahead of the masses.
Monday, April 20, 2009
Forex Tools: The Trendy and Judicious way of Forex Trading
Forex trading system of the world performs trade of about $2 trillion each day. The enormity of the gigantic financial capacity of the forex trade can be truly grasped if you compare this mammoth amount to the $25 billion that New York Stock Exchange trader's trade per day. The quintessential qualities of a forex trader are discipline and endeavor. If you are diligent and logical in studying the forex market trends then it wouldn't take you much time to hit the jackpot in Forex trade. However, if you cannot manually manage to analyze all the currency trends yourself then you might take the help of a automatic signal service or a forex trading software which would send you alerts and signals about buying and selling currency after elaborate research and analysis. If you use one of the automated Forex tools available in the market then you would be able to evaluate the trends of exchange rates and forex market conditions within a few minutes with the help of the data provided by your FX software. As a result you will be able to close your forex deal in less than an hour. Thus an automated forex tool would ensure that you are making optimum use of your trading time. The global forex trading market is only merely remarkable because of the huge volume of monetary transactions that happens through it but it is also a commendable phenomenon due to its geographical dispersion. With the help of automated FX software you can trade in various local as well as international forex markets within different time zones without personally monitoring those various markets day in and day out.However, before you decide to buy particular FX software, you need to put in a little effort to search for a forex tool which is easy to use and is ideal for beginners. Glean information about that particular forex tool which you plan to buy and thoroughly read the testimonials for that particular forex trading software before you purchase it. If you really want to test the accuracy of your Forex trading robot then you must try to find forex trading software which has the ability to paper trade too.
Forex Currency Trading - FAQ
Foreign exchange is the simultaneous purchase of one currency and sale of another – currencies are always traded in pairs. International currencies are traded on floating exchange rates. There is a daily average turnover of about US$1.5 trillion in the foreign exchange markets. The foreign exchange market is known as the "Forex," or "FX" market. It is the largest financial market in the world.
Is there a central location for the Forex Market?
Forex trading is not managed through an exchange. Since transactions are conducted between two counterparts, the FX market is an “inter-bank,” or over the counter (OTC) market.
Who participates in the FX market?
Central, commercial and investment banks have traditionally dominated the Forex market. Other market participation is rapidly increasing, and now includes international money managers and brokers, multinational corporations, registered dealers, options and futures traders, and private investors.
When is the FX market open for trading?
Forex is a true global 24-hour marketplace. The trading day begins in Sydney, and moves around the globe as each financial center comes to life. Tokyo follows, then London, and finally New York. Investors can respond in real time to any fluctuations caused by current economic, social and political events.
What are the most common currencies in the Forex markets?
The most “liquid” currencies in the Forex market are those of countries with low inflation, stable governments, and respected central banks. Nearly 85% of daily transactions involve the major currencies, including the U.S. Dollar, Japanese Yen, the European Union Euro, British Pound, Swiss Franc, and the Canadian and Australian Dollars.
Is is capital intensive to trade forex?
Forex Capital Management requires a minimum deposit of $300 to open a Mini Account and $2000 for a regular account. Your relationship with Forex Capital Management enables you to conduct highly leveraged trades (as much as a 200 to 1 leverage ration in the Mini Account.) You set the degree of leverage that you wish to deploy. Unless otherwise specified, your leverage level is set at the most lenient level required by your account size. Please remember that while this degree of leverage enables you to maximize your profit potential, there is an equally great potential for loss.
What is Margin?
Margin is a performance bond that insures against trading losses. Margin requirements in the FX marketplace allow you to hold positions much larger than the asset value of your account. Trading with Forex Capital Management includes a pre-trade check for margin availability, the trade is executed only if there are sufficient margin funds in your account. The Forex Capital Management trading system calculates cash on hand necessary to cover current positions, and provides this information to you in real time. If funds in your account fall below margin requirements, the system will close all open positions. This prevents your account from falling below your available equity, which is a key protection in this volatile, fast moving marketplace.
What are “short” and “long” positions?
Short positions are taken when a trader sells currency in anticipation of a downturn in price. Making this move allows the investor to benefit from a decline. Long positions are taken when a trader buys a currency at a low price in anticipation of selling it later for more. Making these moves allows the investor to benefit from changing market prices. Remember! Since currencies are traded in pairs, every forex position inevitably requires the investor to go short in one currency and long in the other.
What is the difference between an "intraday" and "overnight position"?
Intraday positions are all positions opened anytime during the 24 hour period AFTER the close of Forex Capital’s normal trading hours at 5:00pm EST. Overnight positions are positions that are still on at the end of normal trading hours (5:00pm EST), which are automatically rolled by Forex Capital Management.
How is pricing determined for certain currencies?
The full range of economic and political conditions impact currency pricing. It is generally held that interest rates, inflation rates and political stability are top among important factors. At times, governments participate in the forex market in order to influence the traded value of their currencies. These and other market factors such as very large orders can cause extreme relative volatility in currency prices. The sheer size of the forex market prevents any single factor from dominating the market for any length of time.
How can I manage risk?
The most common risk management tools in Forex trading are the stop-loss order and the limit order. The stop-loss order directs that a position be automatically liquidated at a certain price in order to guard against dramatic changes against the position. A limit order sets the maximum price that the investor is willing to pay in a transaction, as well as a minimum price to be received in exchange. The foreign exchange marketplace is so liquid that it is easy to execute stop-loss and limit orders. Forex Capital Management guarantees execution of stop-loss and limit orders at the specified price on orders up to US$1 million.
What trading strategy should I use?
Both economic fundamentals and technical factors influence the decisions of currency traders. Those who follow economic fundamentals use government issued reports, current news, and broad economic trends to anticipate movements in price. Technical traders rely on trend lines, support and resistance levels, and a variety of charts and mathematical analysis to identify trading opportunities. Over time, the most significant price movements occur in close association with unexpected events. Perhaps the central bank changes rates without warning, or an election puts an unexpected candidate in power. News from conflicts certainly impacts currency pricing. More often than not, it is the expectation of a certain event rather than the actual event that drives price pressures.
How often can trades be made?
As one might expect, trading activity on any particular day is dictated by current market conditions. Some small to medium size traders might make as many as 10 transactions in a day. By not charging commission and offering tight spreads, Forex Capital Management investors can take positions as often as is necessary without concern for excessive transaction costs.
How long should a position be maintained?
Forex traders generally hold positions until one of three criteria is met:
1. A sufficient profit has been realized from the position.
2. A pre-set stop-loss order is triggered.
3. A better potential position emerges and the trader needs to liquidate funds to take advantage of it.
How do margin calls work?
A margin call is generated when the equity balance in an account drops below the margin requirement for that size account. If the maximum allowable leverage has been exceeded, any open positions are immediately liquidated, regardless of the nature or size of the positions
Is there a central location for the Forex Market?
Forex trading is not managed through an exchange. Since transactions are conducted between two counterparts, the FX market is an “inter-bank,” or over the counter (OTC) market.
Who participates in the FX market?
Central, commercial and investment banks have traditionally dominated the Forex market. Other market participation is rapidly increasing, and now includes international money managers and brokers, multinational corporations, registered dealers, options and futures traders, and private investors.
When is the FX market open for trading?
Forex is a true global 24-hour marketplace. The trading day begins in Sydney, and moves around the globe as each financial center comes to life. Tokyo follows, then London, and finally New York. Investors can respond in real time to any fluctuations caused by current economic, social and political events.
What are the most common currencies in the Forex markets?
The most “liquid” currencies in the Forex market are those of countries with low inflation, stable governments, and respected central banks. Nearly 85% of daily transactions involve the major currencies, including the U.S. Dollar, Japanese Yen, the European Union Euro, British Pound, Swiss Franc, and the Canadian and Australian Dollars.
Is is capital intensive to trade forex?
Forex Capital Management requires a minimum deposit of $300 to open a Mini Account and $2000 for a regular account. Your relationship with Forex Capital Management enables you to conduct highly leveraged trades (as much as a 200 to 1 leverage ration in the Mini Account.) You set the degree of leverage that you wish to deploy. Unless otherwise specified, your leverage level is set at the most lenient level required by your account size. Please remember that while this degree of leverage enables you to maximize your profit potential, there is an equally great potential for loss.
What is Margin?
Margin is a performance bond that insures against trading losses. Margin requirements in the FX marketplace allow you to hold positions much larger than the asset value of your account. Trading with Forex Capital Management includes a pre-trade check for margin availability, the trade is executed only if there are sufficient margin funds in your account. The Forex Capital Management trading system calculates cash on hand necessary to cover current positions, and provides this information to you in real time. If funds in your account fall below margin requirements, the system will close all open positions. This prevents your account from falling below your available equity, which is a key protection in this volatile, fast moving marketplace.
What are “short” and “long” positions?
Short positions are taken when a trader sells currency in anticipation of a downturn in price. Making this move allows the investor to benefit from a decline. Long positions are taken when a trader buys a currency at a low price in anticipation of selling it later for more. Making these moves allows the investor to benefit from changing market prices. Remember! Since currencies are traded in pairs, every forex position inevitably requires the investor to go short in one currency and long in the other.
What is the difference between an "intraday" and "overnight position"?
Intraday positions are all positions opened anytime during the 24 hour period AFTER the close of Forex Capital’s normal trading hours at 5:00pm EST. Overnight positions are positions that are still on at the end of normal trading hours (5:00pm EST), which are automatically rolled by Forex Capital Management.
How is pricing determined for certain currencies?
The full range of economic and political conditions impact currency pricing. It is generally held that interest rates, inflation rates and political stability are top among important factors. At times, governments participate in the forex market in order to influence the traded value of their currencies. These and other market factors such as very large orders can cause extreme relative volatility in currency prices. The sheer size of the forex market prevents any single factor from dominating the market for any length of time.
How can I manage risk?
The most common risk management tools in Forex trading are the stop-loss order and the limit order. The stop-loss order directs that a position be automatically liquidated at a certain price in order to guard against dramatic changes against the position. A limit order sets the maximum price that the investor is willing to pay in a transaction, as well as a minimum price to be received in exchange. The foreign exchange marketplace is so liquid that it is easy to execute stop-loss and limit orders. Forex Capital Management guarantees execution of stop-loss and limit orders at the specified price on orders up to US$1 million.
What trading strategy should I use?
Both economic fundamentals and technical factors influence the decisions of currency traders. Those who follow economic fundamentals use government issued reports, current news, and broad economic trends to anticipate movements in price. Technical traders rely on trend lines, support and resistance levels, and a variety of charts and mathematical analysis to identify trading opportunities. Over time, the most significant price movements occur in close association with unexpected events. Perhaps the central bank changes rates without warning, or an election puts an unexpected candidate in power. News from conflicts certainly impacts currency pricing. More often than not, it is the expectation of a certain event rather than the actual event that drives price pressures.
How often can trades be made?
As one might expect, trading activity on any particular day is dictated by current market conditions. Some small to medium size traders might make as many as 10 transactions in a day. By not charging commission and offering tight spreads, Forex Capital Management investors can take positions as often as is necessary without concern for excessive transaction costs.
How long should a position be maintained?
Forex traders generally hold positions until one of three criteria is met:
1. A sufficient profit has been realized from the position.
2. A pre-set stop-loss order is triggered.
3. A better potential position emerges and the trader needs to liquidate funds to take advantage of it.
How do margin calls work?
A margin call is generated when the equity balance in an account drops below the margin requirement for that size account. If the maximum allowable leverage has been exceeded, any open positions are immediately liquidated, regardless of the nature or size of the positions
What is Forex?
The largest financial market in the world, Foreign Exchange market, Forex or FX market, all the terms are used to describe the business of trading of the world's various currencies, with more than $2 trillion changing hands every day. Being an international foreign exchange market, Forex is a market where money is sold and bought freely. FOREX was launched in the 1970s, to become the biggest liquid financial market today, dealing in more than hundred times the daily trading on the New York Stock Exchange.
FOREX is a perfect market to invest in, as it is free from any external control and free competition. Mostly, all Forex trading are tentative and unlike the stock market trading, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. The trading takes place between the two dealers, either over the telephone or through Internet, all over the world. The major trading centers are the ones at Sydney, London, Frankfurt, Tokyo and New York, making Forex a 24-hour market.
Forex Trading requires the employing fundamental as well as technical analyses. These analysis help a trader to foresee and determine the development in the price trends of currencies, based on which, he attempts to predict market changes and make profits. Fundamental analysis can be said to use techniques to analyze the value of a state’s currency with the help of its economic indicators, quality markets and political events and associations. Political stability also influences the exchange rate at Forex. Its not just that Forex Trading is intutive, rather its technical
While Technical analysis engages the study of patterns of price trends and movements, making it easier for the trader to predict the path of the future developments in the Forex market. The primary data for a technical analysis are values, be it the highest or the lowest values, the price of opening and closing in a definite period of time, and the amount of transactions taking place. Any factor, be it economic, political or psychological, having little or some influence on the value or the price, has already been measured by the market to be included in the price. We offer some very useful Tips for New Forex Traders.
FOREX is a perfect market to invest in, as it is free from any external control and free competition. Mostly, all Forex trading are tentative and unlike the stock market trading, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. The trading takes place between the two dealers, either over the telephone or through Internet, all over the world. The major trading centers are the ones at Sydney, London, Frankfurt, Tokyo and New York, making Forex a 24-hour market.
Forex Trading requires the employing fundamental as well as technical analyses. These analysis help a trader to foresee and determine the development in the price trends of currencies, based on which, he attempts to predict market changes and make profits. Fundamental analysis can be said to use techniques to analyze the value of a state’s currency with the help of its economic indicators, quality markets and political events and associations. Political stability also influences the exchange rate at Forex. Its not just that Forex Trading is intutive, rather its technical
While Technical analysis engages the study of patterns of price trends and movements, making it easier for the trader to predict the path of the future developments in the Forex market. The primary data for a technical analysis are values, be it the highest or the lowest values, the price of opening and closing in a definite period of time, and the amount of transactions taking place. Any factor, be it economic, political or psychological, having little or some influence on the value or the price, has already been measured by the market to be included in the price. We offer some very useful Tips for New Forex Traders.
What is Forex?
The largest financial market in the world, Foreign Exchange market, Forex or FX market, all the terms are used to describe the business of trading of the world's various currencies, with more than $2 trillion changing hands every day. Being an international foreign exchange market, Forex is a market where money is sold and bought freely. FOREX was launched in the 1970s, to become the biggest liquid financial market today, dealing in more than hundred times the daily trading on the New York Stock Exchange.
FOREX is a perfect market to invest in, as it is free from any external control and free competition. Mostly, all Forex trading are tentative and unlike the stock market trading, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. The trading takes place between the two dealers, either over the telephone or through Internet, all over the world. The major trading centers are the ones at Sydney, London, Frankfurt, Tokyo and New York, making Forex a 24-hour market.
Forex Trading requires the employing fundamental as well as technical analyses. These analysis help a trader to foresee and determine the development in the price trends of currencies, based on which, he attempts to predict market changes and make profits. Fundamental analysis can be said to use techniques to analyze the value of a state’s currency with the help of its economic indicators, quality markets and political events and associations. Political stability also influences the exchange rate at Forex. Its not just that Forex Trading is intutive, rather its technical
While Technical analysis engages the study of patterns of price trends and movements, making it easier for the trader to predict the path of the future developments in the Forex market. The primary data for a technical analysis are values, be it the highest or the lowest values, the price of opening and closing in a definite period of time, and the amount of transactions taking place. Any factor, be it economic, political or psychological, having little or some influence on the value or the price, has already been measured by the market to be included in the price. We offer some very useful Tips for New Forex Traders.
FOREX is a perfect market to invest in, as it is free from any external control and free competition. Mostly, all Forex trading are tentative and unlike the stock market trading, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. The trading takes place between the two dealers, either over the telephone or through Internet, all over the world. The major trading centers are the ones at Sydney, London, Frankfurt, Tokyo and New York, making Forex a 24-hour market.
Forex Trading requires the employing fundamental as well as technical analyses. These analysis help a trader to foresee and determine the development in the price trends of currencies, based on which, he attempts to predict market changes and make profits. Fundamental analysis can be said to use techniques to analyze the value of a state’s currency with the help of its economic indicators, quality markets and political events and associations. Political stability also influences the exchange rate at Forex. Its not just that Forex Trading is intutive, rather its technical
While Technical analysis engages the study of patterns of price trends and movements, making it easier for the trader to predict the path of the future developments in the Forex market. The primary data for a technical analysis are values, be it the highest or the lowest values, the price of opening and closing in a definite period of time, and the amount of transactions taking place. Any factor, be it economic, political or psychological, having little or some influence on the value or the price, has already been measured by the market to be included in the price. We offer some very useful Tips for New Forex Traders.
Forex Trading History :
The FOREX trading system was originated centuries ago. Since the era of Babylonians, the need to own and exchange different countries for trading purposes existed. Although, during that time, it was more known as the Barter System, which we call Trading, today!
More like a give and take situation, Barter system involved weighing the worth of one good in terms of the other. But with time and extensive use of this Barter system, lots of apparent limitations also came on the surface slowly, hence convincing the people to seriously think on the lines of establishing some more well-known and recognized mediums of exchange.When extensive trading started happening between the people of various countries like Africa and Asia with the help of this system, another main issue of concern came into existence. Where in some economies, goods such as feathers, stones and teeth provided as base economies, in others, other goods were given more importance. Soon, it became very important for all the people to demand for a establishing a common base of value. And shortly, assorted metals like gold, silver and bronze began to ascertain themselves as the established payment methods. Further more, they also established themselves as a consistent storage of value. With the invention of the Coins in the Middle Ages, which were originally cast in the chosen metal, the creation of a papered structure of governmental I.O.U. also achieved approval and recognition under the steady political administration. Though earlier when introduced, it was not easily accepted by people, and so establishing it through force had proved more effective than through advising. And today, this papered form is the basis of our modern day currencies.
Along with being credited with the first use of paper notes, they also initiated the use of papered receipts. During that time, speculation in trade was hardly experienced by people, and if we compare that market situation to the one we have today, the huge speculative movement in the exchange markets nowadays, would not have been appreciated at all.
The elimination of the gold standard in the year 1931 along with a big decline in the market created some severe stillness in the Forex trading activities. From 1931 to 1973, the Forex market underwent a lot many modifications and alterations. So, with the aim of guarding the nationwide interests, improved foreign exchange controls were set up to stop market forces from demanding economic inconsistency.
The Bretton Woods contract was achieved on the proposal of USA in July 1944, nearing the conclusion of World War II. The conference being held in Bretton Woods, New Hampshire for this agreement discarded John Maynard Keynes proposal for a new world reserve exchange in support of a structure built on the US Dollar.
As a result to the Bretton Woods agreement, a method of fixed exchange rates was decided upon, which partially re-established the Gold Standard, setting up the USD price at $35.00 per ounce of Gold. While this was how a USD was priced, other main currencies were set up against the dollar.
During the early 1980’s, London became the main hub of the Euro-dollar market. What contributed to this situation were the British banks, which began loaning dollars as an option to pounds. They took this step just to retain and continue their primary position in worldwide economics, and till today, London successfully remains the key offshore market
More like a give and take situation, Barter system involved weighing the worth of one good in terms of the other. But with time and extensive use of this Barter system, lots of apparent limitations also came on the surface slowly, hence convincing the people to seriously think on the lines of establishing some more well-known and recognized mediums of exchange.When extensive trading started happening between the people of various countries like Africa and Asia with the help of this system, another main issue of concern came into existence. Where in some economies, goods such as feathers, stones and teeth provided as base economies, in others, other goods were given more importance. Soon, it became very important for all the people to demand for a establishing a common base of value. And shortly, assorted metals like gold, silver and bronze began to ascertain themselves as the established payment methods. Further more, they also established themselves as a consistent storage of value. With the invention of the Coins in the Middle Ages, which were originally cast in the chosen metal, the creation of a papered structure of governmental I.O.U. also achieved approval and recognition under the steady political administration. Though earlier when introduced, it was not easily accepted by people, and so establishing it through force had proved more effective than through advising. And today, this papered form is the basis of our modern day currencies.
Along with being credited with the first use of paper notes, they also initiated the use of papered receipts. During that time, speculation in trade was hardly experienced by people, and if we compare that market situation to the one we have today, the huge speculative movement in the exchange markets nowadays, would not have been appreciated at all.
The elimination of the gold standard in the year 1931 along with a big decline in the market created some severe stillness in the Forex trading activities. From 1931 to 1973, the Forex market underwent a lot many modifications and alterations. So, with the aim of guarding the nationwide interests, improved foreign exchange controls were set up to stop market forces from demanding economic inconsistency.
The Bretton Woods contract was achieved on the proposal of USA in July 1944, nearing the conclusion of World War II. The conference being held in Bretton Woods, New Hampshire for this agreement discarded John Maynard Keynes proposal for a new world reserve exchange in support of a structure built on the US Dollar.
As a result to the Bretton Woods agreement, a method of fixed exchange rates was decided upon, which partially re-established the Gold Standard, setting up the USD price at $35.00 per ounce of Gold. While this was how a USD was priced, other main currencies were set up against the dollar.
During the early 1980’s, London became the main hub of the Euro-dollar market. What contributed to this situation were the British banks, which began loaning dollars as an option to pounds. They took this step just to retain and continue their primary position in worldwide economics, and till today, London successfully remains the key offshore market
Sunday, April 19, 2009
Denmark FOREX News
Denmark FOREX News is an EIN News Service for FOREX trading professionals. Constantly updated news and information about Denmark.forex.einnews.com/denmark/
Thursday, April 9, 2009
How You Make Money Trading Forex
In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.
The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
Example of making money by buying euros
Trader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 +10,000 -11,800*
Two weeks later, you exchange your 10,000 euros back into US dollars at the exchange rate of 1.2500. -10,000 +12,500**
You earn a profit of $700. 0 +700
*EUR 10,000 x 1.18 = US $11,800
** EUR 10,000 x 1.25 = US $12,500
An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
How to Read an FX Quote
Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
GBP/USD = 1.7500
The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).
When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.
When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.
The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.
You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.
Long/Short
First, you should determine whether you want to buy or sell.
If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.
If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.
Bid/Ask Spread
All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.
The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell.
The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy.
The difference between the bid and the ask price is popularly known as the spread.
Let's take a look at an example of a price quote taken from a trading platform:
On this GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449. Look at how this broker makes it so easy for you to trade away your money.
If you want to sell GBP, you click "Sell" and you will sell pounds at 1.7445. If you want to buy GBP, you click "Buy" and you will buy pounds at 1.7449.
In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. For right now, try to pretend you know what’s going on…
EUR/USD
In this example Euro is the base currency and thus the “basis” for the buy/sell.
If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.
If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.
USD/JPY
In this example the US dollar is the base currency and thus the “basis” for the buy/sell.
If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen.
If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.
GBP/USD
In this example the GBP is the base currency and thus the “basis” for the buy/sell.
If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar.
If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.
USD/CHF
In this example the USD is the base currency and thus the “basis” for the buy/sell.
If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc.
If you believe that the US housing market bubble burst will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc.
I don't have enough money to buy 10,000 euros. Can I still trade?
You can with margin trading! Margin trading is simply the term used for trading with borrowed capital. This is how you're able to open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital.
Margin trading in the foreign exchange market is quantified in “lots”. We will be discussing these in depth in our next lesson. For now, just think of the term "lot" as the minimum amount of currency you have to buy. When you go to the grocery store and want to buy an egg, you can't just buy a single egg; they come in dozens or "lots" of 12. In Forex, it would be just as foolish to buy or sell 1 euro, so they usually come in "lots" of 10,000 (Mini) or 100,000 (Standard) depending on the type of account you have.
For Example:
You believe that signals in the market are indicating that the British Pound will go up against the US dollar.
You open one lot (100,000), buying with the British pound at 1% margin and wait for the exchange rate to climb. When you buy one lot (100,000) of GBP/USD at a price of 1.5000, you are buying 100,000 pounds, which is worth US$150,000 (100,000 units of GBP * 1.50 (exchange rate with USD)). If the margin requirement was 1%, then US$1500 would be set aside in your account to open up the trade (US$150,000 * 1%). You now control 100,000 pounds with US$1500. Your predictions come true and you decide to sell.
You close the position at 1.5050. You earn 50 pips or about $500. (A pip is the smallest price movement available in a currency).
Your Actions GBP USD
You buy 100,000 pounds at the GBP/USD exchange rate of 1.5000 +100,000 -150,000
You blink for two seconds and the GBP/USD exchange rate rises to 1.5050 and you sell. -100,000 +150,500**
You have earned a profit of $500. 0 +500
When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
We will also be discussing margin more in-depth in the next lesson, but hopefully you're able to get a basic idea of how margin works.
Rollover
No, this is not the same as rollover minutes from your cell phone carrier! For positions open at your broker's "cut-off time" usually 5pm EST, there is a daily rollover interest rate that a trader either pays or earns, depending on your established margin and position in the market. If you do not want to earn or pay interest on your positions, simply make sure they are all closed before 5pm EST, the established end of the market day.
Since every currency trade involves borrowing one currency to buy another, interest rollover charges are part of forex trading. Interest is paid on the currency that is borrowed, and earned on the one that is bought. If a client is buying a currency with a higher interest rate than the one he/she is borrowing, the net differential will be positive (i.e. USD/JPY) - and the client will earn funds as a result. Ask your broker or dealer about specific details regarding rollover.
Also note that many retail brokers do adjust their rollover rates based on different factors (e.g., account leverage, interbank lending rates). Please check with your broker for more information on rollover rates and crediting/debiting procedures.
Don't know what the interest rates are for each currency? Here is a chart to help you out. Accurate as of 01/23/09.
Demo Trading
You can open a demo account for free with most Forex brokers. This account has the full capabilities of a "real" account. Why is it free? It's because the broker wants you to learn the ins and outs of their trading platform, and have a good time trading without risk, so you'll fall in love with them and deposit real money. The demo account allows you to learn about the Forex markets and test your trading skills with ZERO risk.
YOU SHOULD DEMO TRADE FOR AT LEAST 6 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
I REPEAT - YOU SHOULD DEMO TRADE FOR AT LEAST 6 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
"Don't Lose Your Money" Declaration
Place your hand on your heart and say...
"I will demo trade for at least 6 months before I trade with real money."
Now touch your head with your index finger and say...
"I am a smart and patient Forex trader!"
The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
Example of making money by buying euros
Trader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 +10,000 -11,800*
Two weeks later, you exchange your 10,000 euros back into US dollars at the exchange rate of 1.2500. -10,000 +12,500**
You earn a profit of $700. 0 +700
*EUR 10,000 x 1.18 = US $11,800
** EUR 10,000 x 1.25 = US $12,500
An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
How to Read an FX Quote
Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
GBP/USD = 1.7500
The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).
When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.
When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.
The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.
You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.
Long/Short
First, you should determine whether you want to buy or sell.
If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.
If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.
Bid/Ask Spread
All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.
The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell.
The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy.
The difference between the bid and the ask price is popularly known as the spread.
Let's take a look at an example of a price quote taken from a trading platform:
On this GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449. Look at how this broker makes it so easy for you to trade away your money.
If you want to sell GBP, you click "Sell" and you will sell pounds at 1.7445. If you want to buy GBP, you click "Buy" and you will buy pounds at 1.7449.
In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. For right now, try to pretend you know what’s going on…
EUR/USD
In this example Euro is the base currency and thus the “basis” for the buy/sell.
If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.
If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.
USD/JPY
In this example the US dollar is the base currency and thus the “basis” for the buy/sell.
If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen.
If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.
GBP/USD
In this example the GBP is the base currency and thus the “basis” for the buy/sell.
If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar.
If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.
USD/CHF
In this example the USD is the base currency and thus the “basis” for the buy/sell.
If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc.
If you believe that the US housing market bubble burst will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc.
I don't have enough money to buy 10,000 euros. Can I still trade?
You can with margin trading! Margin trading is simply the term used for trading with borrowed capital. This is how you're able to open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital.
Margin trading in the foreign exchange market is quantified in “lots”. We will be discussing these in depth in our next lesson. For now, just think of the term "lot" as the minimum amount of currency you have to buy. When you go to the grocery store and want to buy an egg, you can't just buy a single egg; they come in dozens or "lots" of 12. In Forex, it would be just as foolish to buy or sell 1 euro, so they usually come in "lots" of 10,000 (Mini) or 100,000 (Standard) depending on the type of account you have.
For Example:
You believe that signals in the market are indicating that the British Pound will go up against the US dollar.
You open one lot (100,000), buying with the British pound at 1% margin and wait for the exchange rate to climb. When you buy one lot (100,000) of GBP/USD at a price of 1.5000, you are buying 100,000 pounds, which is worth US$150,000 (100,000 units of GBP * 1.50 (exchange rate with USD)). If the margin requirement was 1%, then US$1500 would be set aside in your account to open up the trade (US$150,000 * 1%). You now control 100,000 pounds with US$1500. Your predictions come true and you decide to sell.
You close the position at 1.5050. You earn 50 pips or about $500. (A pip is the smallest price movement available in a currency).
Your Actions GBP USD
You buy 100,000 pounds at the GBP/USD exchange rate of 1.5000 +100,000 -150,000
You blink for two seconds and the GBP/USD exchange rate rises to 1.5050 and you sell. -100,000 +150,500**
You have earned a profit of $500. 0 +500
When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
We will also be discussing margin more in-depth in the next lesson, but hopefully you're able to get a basic idea of how margin works.
Rollover
No, this is not the same as rollover minutes from your cell phone carrier! For positions open at your broker's "cut-off time" usually 5pm EST, there is a daily rollover interest rate that a trader either pays or earns, depending on your established margin and position in the market. If you do not want to earn or pay interest on your positions, simply make sure they are all closed before 5pm EST, the established end of the market day.
Since every currency trade involves borrowing one currency to buy another, interest rollover charges are part of forex trading. Interest is paid on the currency that is borrowed, and earned on the one that is bought. If a client is buying a currency with a higher interest rate than the one he/she is borrowing, the net differential will be positive (i.e. USD/JPY) - and the client will earn funds as a result. Ask your broker or dealer about specific details regarding rollover.
Also note that many retail brokers do adjust their rollover rates based on different factors (e.g., account leverage, interbank lending rates). Please check with your broker for more information on rollover rates and crediting/debiting procedures.
Don't know what the interest rates are for each currency? Here is a chart to help you out. Accurate as of 01/23/09.
Demo Trading
You can open a demo account for free with most Forex brokers. This account has the full capabilities of a "real" account. Why is it free? It's because the broker wants you to learn the ins and outs of their trading platform, and have a good time trading without risk, so you'll fall in love with them and deposit real money. The demo account allows you to learn about the Forex markets and test your trading skills with ZERO risk.
YOU SHOULD DEMO TRADE FOR AT LEAST 6 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
I REPEAT - YOU SHOULD DEMO TRADE FOR AT LEAST 6 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
"Don't Lose Your Money" Declaration
Place your hand on your heart and say...
"I will demo trade for at least 6 months before I trade with real money."
Now touch your head with your index finger and say...
"I am a smart and patient Forex trader!"
Monday, April 6, 2009
Forex Make Money
For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
Sunday, April 5, 2009
EUR/USD on Non-Farm Payrolls
In my non-farm payrolls preview yesterday, I talked about how the initial reaction in the EUR/USD post payrolls is fade-able. In each of the last 3 times that payrolls was released, the EUR/USD’s knee jerk reaction was quickly erased as a new trend emerged for the trading day. This is the chart that I showed on how the EUR/USD traded after the non-farm payrolls release on January, February and March.
This is how the EUR/USD has traded so far since the non-farm payrolls release - see the resemblance?
source: eSignal
This is how the EUR/USD has traded so far since the non-farm payrolls release - see the resemblance?
source: eSignal
Forex: Start Investing with Only $100?
Richard Jenkins over at MS Money thinks people can Start Investing With Just $100. He suggests starting out by buying the Vanguard Total Market Viper (VTI). He also says that the only brokerage he found with no minimums and relatively low fees is
ShareBuilder.com.
Their cheapest plan allows for $4 trades but they ARE NOT real time trades. These trades take place on Tuesdays and you do not get to pick the price they buy at, which means you probably aren’t getting the best price. However, with a relatively small amount to invest, it probably doesn’t make much difference.
Your first $100 is only the beginning. Your next goal should be to save up additional amounts to invest. The best solution is to get on some sort of automatic investment program (Sharebuilder can set something up for you) and invest a regular amount once a month or quarter. As Richard suggests, you could even spread your investments around to build a diversified portfolio.
Keep in mind that Sharebuilder isn’t a good long-term solution. Once you build up an account of $2,500 - $5,000, you can avoid those $4 commissions by moving to Vanguard and investing in index mutual funds, which do not have commissions.
The other thing you can do is simply save your money until you have at least $2,500 and then go the mutual fund route. However, there is something about investing that empowers you to invest more and could be just the thing to get you on the road to building wealth.
ShareBuilder.com.
Their cheapest plan allows for $4 trades but they ARE NOT real time trades. These trades take place on Tuesdays and you do not get to pick the price they buy at, which means you probably aren’t getting the best price. However, with a relatively small amount to invest, it probably doesn’t make much difference.
Your first $100 is only the beginning. Your next goal should be to save up additional amounts to invest. The best solution is to get on some sort of automatic investment program (Sharebuilder can set something up for you) and invest a regular amount once a month or quarter. As Richard suggests, you could even spread your investments around to build a diversified portfolio.
Keep in mind that Sharebuilder isn’t a good long-term solution. Once you build up an account of $2,500 - $5,000, you can avoid those $4 commissions by moving to Vanguard and investing in index mutual funds, which do not have commissions.
The other thing you can do is simply save your money until you have at least $2,500 and then go the mutual fund route. However, there is something about investing that empowers you to invest more and could be just the thing to get you on the road to building wealth.
Friday, April 3, 2009
5 Steps to Pay Per Click Advertising That Works
Compared with the ineffective crapshoot that is traditional advertising, there’s no better way to get targeted traffic than through pay-for-performance keyword advertising in search engines. If you’re not clear on what pay per click ads are, those are the sponsored links that show up when you perform a web search in Google, Yahoo and other search engines.
While more targeted than offline advertising or banner ads, it’s certainly possible to throw away a lot of cash with pay per click. The way to do that is to fail to think strategically about where you send people who click on your ads.
The goal of pay per click advertising is to get in front of searchers who are looking specifically for what you have to offer. This takes careful keyword research, strategic bidding, and compelling ad copy just to get the click.
The problem is, that’s where most people stop.
They make the mistake of sending that targeted traffic to the home page of their website or blog. Even worse, they make no attempt to establish a relationship with those that don’t buy, so as to boost conversion rates for every dollar spent.
So, if you’re selling products or services, it makes sense to make sales and build your fan club at the same time. Here’s how to boost your conversion rates from any pay per click campaign while also boosting your subscriber numbers.
The first thing to do is build a ultra-specific page to send the search traffic to, called a landing page. Depending on the variety of key words you are bidding on, you may even build several landing pages that each narrowly address the specific needs of that searcher.
When I say “searchers,” I mean searchers. Do not participate in contextual advertising programs on publisher sites. I think we’ve all seen enough AdSense spam to understand part of the reasoning here. But even on reputable sites, contextual advertising brings too many “curiosity clicks” that kill your return on investment. You want people who are actively looking for what you are offering. You can choose to opt-out of non-search traffic with both Google and Yahoo.
The landing page does not sell your product or service. This is key. You instead offer a quality free resource –- a mini-course, ebook, teleseminar, or other type of tutorial that is directly related to what you are ultimately selling. By teaching people about the subject matter of your product or service, you are actually engaging in a highly effective form of selling, all while establishing a relationship.
Whatever your free offer, it must be delivered by an email or RSS autoresponder that allows you to stay in contact with the prospect.
You should explicitly inform your prospects that in addition to the free resource you are offering, they will also be receiving your email newsletter / blog updates. Make sure you make this part of your offer as enticing as possible. You’re delivering valuable, relevant content on a regular basis, right?
And there you have it. You’ll likely make some sales right away, but your real profits will come from the people who warm up to your offer thanks to the ongoing value you provide with your blog content.
This technique is by no means new. But it’s shocking how many people still don’t use it, as they waste good money sending targeted traffic to a home page that is not laser-focused, and also fail to offer true value to the searcher that results in a relationship.
You don’t propose marriage before you get a first date. And you likewise shouldn’t expect people to just automatically jump at the chance to give you money upon arriving at your home page.
Of course, each of the five steps above could use some elaboration, and I’ll be offering tips in the future that can help boost landing page conversions even for those who have been using this method for years. Also, the key word research and bidding process in Google AdWords (the largest pay per click program) is a topic in itself that requires mastery to be effective.
For help with that part of the process, check out Perry Marshall’s free 5 Days to Success With Goggle AdWords mini-course. I own Perry’s AdWords book and it is an invaluable resource. He’s the real deal when it comes to strategies that drive traffic from Google.
And that free mini-course sign-up page is an excellent example of a landing page that works
While more targeted than offline advertising or banner ads, it’s certainly possible to throw away a lot of cash with pay per click. The way to do that is to fail to think strategically about where you send people who click on your ads.
The goal of pay per click advertising is to get in front of searchers who are looking specifically for what you have to offer. This takes careful keyword research, strategic bidding, and compelling ad copy just to get the click.
The problem is, that’s where most people stop.
They make the mistake of sending that targeted traffic to the home page of their website or blog. Even worse, they make no attempt to establish a relationship with those that don’t buy, so as to boost conversion rates for every dollar spent.
So, if you’re selling products or services, it makes sense to make sales and build your fan club at the same time. Here’s how to boost your conversion rates from any pay per click campaign while also boosting your subscriber numbers.
The first thing to do is build a ultra-specific page to send the search traffic to, called a landing page. Depending on the variety of key words you are bidding on, you may even build several landing pages that each narrowly address the specific needs of that searcher.
When I say “searchers,” I mean searchers. Do not participate in contextual advertising programs on publisher sites. I think we’ve all seen enough AdSense spam to understand part of the reasoning here. But even on reputable sites, contextual advertising brings too many “curiosity clicks” that kill your return on investment. You want people who are actively looking for what you are offering. You can choose to opt-out of non-search traffic with both Google and Yahoo.
The landing page does not sell your product or service. This is key. You instead offer a quality free resource –- a mini-course, ebook, teleseminar, or other type of tutorial that is directly related to what you are ultimately selling. By teaching people about the subject matter of your product or service, you are actually engaging in a highly effective form of selling, all while establishing a relationship.
Whatever your free offer, it must be delivered by an email or RSS autoresponder that allows you to stay in contact with the prospect.
You should explicitly inform your prospects that in addition to the free resource you are offering, they will also be receiving your email newsletter / blog updates. Make sure you make this part of your offer as enticing as possible. You’re delivering valuable, relevant content on a regular basis, right?
And there you have it. You’ll likely make some sales right away, but your real profits will come from the people who warm up to your offer thanks to the ongoing value you provide with your blog content.
This technique is by no means new. But it’s shocking how many people still don’t use it, as they waste good money sending targeted traffic to a home page that is not laser-focused, and also fail to offer true value to the searcher that results in a relationship.
You don’t propose marriage before you get a first date. And you likewise shouldn’t expect people to just automatically jump at the chance to give you money upon arriving at your home page.
Of course, each of the five steps above could use some elaboration, and I’ll be offering tips in the future that can help boost landing page conversions even for those who have been using this method for years. Also, the key word research and bidding process in Google AdWords (the largest pay per click program) is a topic in itself that requires mastery to be effective.
For help with that part of the process, check out Perry Marshall’s free 5 Days to Success With Goggle AdWords mini-course. I own Perry’s AdWords book and it is an invaluable resource. He’s the real deal when it comes to strategies that drive traffic from Google.
And that free mini-course sign-up page is an excellent example of a landing page that works
Trouble picking a new domain name
Working from home can give you amazing freedom to spend time with your family, it can also give you more free quality time to spend as you please, but the one thing that working from home doesn’t give you is a work based support network.
What is a work based support network? And why do I need one?
When your working for someone else and you’re having a bad day there would usually be someone that you can turn to either for help or to blow off a little steam, but when your working from home, alone, who do you turn to?
Again, working from home, alone is, as the name suggests lonely - there is no social interaction with other co-workers, no leaving parties, Christmas parties etc.. - so if this website is here to promote working from home, why am I being so negative??
The answer is that I’m not, I’m here to try to help anyone who feels that way from time to time. I’m sure that we’ve all felt a little lonely or frustrated occasionally and the answer is as simple as if you were working in an office with 100 other people. Whether people are sat at the next cubicle or at the opposite end of the planet they can still make a big difference to your day and there’s plenty of ways to find them as well.
The first obvious choice would be to find a forum specific to your niche, i.e. if your a webdesigner then somewhere like DesignersTalk would be perfect, if you make scale models to resell then somewhere like Scale-Models might be a good place to start, you get the idea! Failing niche forums you could find yourself a nice general Work From Home Forum!
Also don’t overlook local support - almost every part of every developed nation now has business clubs, Chambers of Commerce, small business assistance groups all of which are excellent places to make new industry friends and contacts, go to as many events as you can - be sure to have loads of high quality business cards to give out and make sure to get as many back in return as you can - you never know where that next big sale will come from!
What is a work based support network? And why do I need one?
When your working for someone else and you’re having a bad day there would usually be someone that you can turn to either for help or to blow off a little steam, but when your working from home, alone, who do you turn to?
Again, working from home, alone is, as the name suggests lonely - there is no social interaction with other co-workers, no leaving parties, Christmas parties etc.. - so if this website is here to promote working from home, why am I being so negative??
The answer is that I’m not, I’m here to try to help anyone who feels that way from time to time. I’m sure that we’ve all felt a little lonely or frustrated occasionally and the answer is as simple as if you were working in an office with 100 other people. Whether people are sat at the next cubicle or at the opposite end of the planet they can still make a big difference to your day and there’s plenty of ways to find them as well.
The first obvious choice would be to find a forum specific to your niche, i.e. if your a webdesigner then somewhere like DesignersTalk would be perfect, if you make scale models to resell then somewhere like Scale-Models might be a good place to start, you get the idea! Failing niche forums you could find yourself a nice general Work From Home Forum!
Also don’t overlook local support - almost every part of every developed nation now has business clubs, Chambers of Commerce, small business assistance groups all of which are excellent places to make new industry friends and contacts, go to as many events as you can - be sure to have loads of high quality business cards to give out and make sure to get as many back in return as you can - you never know where that next big sale will come from!
Having a Support Network
Working from home can give you amazing freedom to spend time with your family, it can also give you more free quality time to spend as you please, but the one thing that working from home doesn’t give you is a work based support network.
What is a work based support network? And why do I need one?
When your working for someone else and you’re having a bad day there would usually be someone that you can turn to either for help or to blow off a little steam, but when your working from home, alone, who do you turn to?
Again, working from home, alone is, as the name suggests lonely - there is no social interaction with other co-workers, no leaving parties, Christmas parties etc.. - so if this website is here to promote working from home, why am I being so negative??
The answer is that I’m not, I’m here to try to help anyone who feels that way from time to time. I’m sure that we’ve all felt a little lonely or frustrated occasionally and the answer is as simple as if you were working in an office with 100 other people. Whether people are sat at the next cubicle or at the opposite end of the planet they can still make a big difference to your day and there’s plenty of ways to find them as well.
The first obvious choice would be to find a forum specific to your niche, i.e. if your a webdesigner then somewhere like DesignersTalk would be perfect, if you make scale models to resell then somewhere like Scale-Models might be a good place to start, you get the idea! Failing niche forums you could find yourself a nice general Work From Home Forum!
Also don’t overlook local support - almost every part of every developed nation now has business clubs, Chambers of Commerce, small business assistance groups all of which are excellent places to make new industry friends and contacts, go to as many events as you can - be sure to have loads of high quality business cards to give out and make sure to get as many back in return as you can - you never know where that next big sale will come from!
What is a work based support network? And why do I need one?
When your working for someone else and you’re having a bad day there would usually be someone that you can turn to either for help or to blow off a little steam, but when your working from home, alone, who do you turn to?
Again, working from home, alone is, as the name suggests lonely - there is no social interaction with other co-workers, no leaving parties, Christmas parties etc.. - so if this website is here to promote working from home, why am I being so negative??
The answer is that I’m not, I’m here to try to help anyone who feels that way from time to time. I’m sure that we’ve all felt a little lonely or frustrated occasionally and the answer is as simple as if you were working in an office with 100 other people. Whether people are sat at the next cubicle or at the opposite end of the planet they can still make a big difference to your day and there’s plenty of ways to find them as well.
The first obvious choice would be to find a forum specific to your niche, i.e. if your a webdesigner then somewhere like DesignersTalk would be perfect, if you make scale models to resell then somewhere like Scale-Models might be a good place to start, you get the idea! Failing niche forums you could find yourself a nice general Work From Home Forum!
Also don’t overlook local support - almost every part of every developed nation now has business clubs, Chambers of Commerce, small business assistance groups all of which are excellent places to make new industry friends and contacts, go to as many events as you can - be sure to have loads of high quality business cards to give out and make sure to get as many back in return as you can - you never know where that next big sale will come from!
The Big Work from Home Divide
If you were looking to break out of the 9-5 job which of these work from home blogs might you be tempted to look at? I’d probably take a look at the first two or three but to be honest Mommy Enterprises wouldn’t really interest me, where as my wife would probably ignore the first three chose and plough ahead with Mommy Enterprises.
These blogs all have different target markets and demographics and that’s a good thing as far as getting relevant information is concerned for the reader, but in the case of the “Working at Home” niche there is more of a cross-over than perhaps any other industry. They have information relevant to their niche, but much of the content could be interchangeable.
So, whichever niche you put yourself into, why not take ten minutes to take a look to see what the other half is doing, you never know what you might learn
These blogs all have different target markets and demographics and that’s a good thing as far as getting relevant information is concerned for the reader, but in the case of the “Working at Home” niche there is more of a cross-over than perhaps any other industry. They have information relevant to their niche, but much of the content could be interchangeable.
So, whichever niche you put yourself into, why not take ten minutes to take a look to see what the other half is doing, you never know what you might learn
Work at home
Great topic to post about when the last post was a lifetime ago!
But that is exactly my point… Why has it been so long since my last post? Because my motivation for blogging was non-existent. It came second place to everything else going on in my life. I can honestly say that everthing else was more important than this blog - it must have been otherwise I would have posted more often.
In my last blog post I stated that I was working on a series of posts. This was totally true and they are still partially completed and saved here as drafts to remind me of what I should have done!
Thinking about why this became a big blog FAIL for me, I realise that these “series of posts” was too big a milestone for a baby blog like this (and a newb blogger like me) - I was trying to be too formal in my approach to writing and this simply didn’t suit me - so I just buried my head in the sand and just wrote it off as another failed project. I also work full-time and have three wonderful children so making the time for blogging appeared difficult and the income from my day job removed some of the urgency from my goal of working from home for myself.
As I have said, these draft series of posts are still around and will remain in their draft status for for some time. The articles will be re-written and published, just not as part of a regimented series.
But back to the title of the post - Keeping Motivated! I’ve a new personal motivation for blogging, this isn’t to say that I wasn’t motivated before (initially anyway), but in laying down what I want and how, in small steps, I want to achieve this has helped me find new motivation for blogging and in turn, making money from working from home.
Just because you fail the first time, doesn’t mean you shouldn’t try again - just take a good long hard look at why you failed the first time and work towards making sure that it doesn’t happen again!
But that is exactly my point… Why has it been so long since my last post? Because my motivation for blogging was non-existent. It came second place to everything else going on in my life. I can honestly say that everthing else was more important than this blog - it must have been otherwise I would have posted more often.
In my last blog post I stated that I was working on a series of posts. This was totally true and they are still partially completed and saved here as drafts to remind me of what I should have done!
Thinking about why this became a big blog FAIL for me, I realise that these “series of posts” was too big a milestone for a baby blog like this (and a newb blogger like me) - I was trying to be too formal in my approach to writing and this simply didn’t suit me - so I just buried my head in the sand and just wrote it off as another failed project. I also work full-time and have three wonderful children so making the time for blogging appeared difficult and the income from my day job removed some of the urgency from my goal of working from home for myself.
As I have said, these draft series of posts are still around and will remain in their draft status for for some time. The articles will be re-written and published, just not as part of a regimented series.
But back to the title of the post - Keeping Motivated! I’ve a new personal motivation for blogging, this isn’t to say that I wasn’t motivated before (initially anyway), but in laying down what I want and how, in small steps, I want to achieve this has helped me find new motivation for blogging and in turn, making money from working from home.
Just because you fail the first time, doesn’t mean you shouldn’t try again - just take a good long hard look at why you failed the first time and work towards making sure that it doesn’t happen again!
Tamley Global Markets — Forex Broker with Advanced Custom Trading Platform
Tamley Global Markets is a Forex broker that was added to my site today. It’s an Irish broker with the custom advanced trading platform that is capable of running several types of expert advisors and can easily automate your trading systems. It went on-line in 2007 and is regulated by Financial Services Authority of United Kingdom. TGM’s highlights:
Advanced trading platform
Extensive expert advisors capabilities
$500 minimum account size
Leverage from 1:100 to 1:400
Regulation by FSA
Tags
Advanced trading platform
Extensive expert advisors capabilities
$500 minimum account size
Leverage from 1:100 to 1:400
Regulation by FSA
Tags
Dollar Loses to Euro Moderately after Good Fundamental News
EUR/USD rose today for the first time in four days as the U.S. fundamental news came out better than expected and spurred optimism in the Forex and stocks traders. At this moment EUR/USD is trading near 1.3549 after reaching as low as 1.3417 earlier today.
Durable goods orders increased by 3.4% in February after the revised decline by 7.3% in January (revised down from -5.2%). The market analysts expected this indicator to continue going down at 2.4% last month.
New home sales rose for the first month since June 2008 this February in United States — from 322k to 337k seasonally-adjusted annual rate. They were estimated to go down to 300k.
Durable goods orders increased by 3.4% in February after the revised decline by 7.3% in January (revised down from -5.2%). The market analysts expected this indicator to continue going down at 2.4% last month.
New home sales rose for the first month since June 2008 this February in United States — from 322k to 337k seasonally-adjusted annual rate. They were estimated to go down to 300k.
Forex Technical Analysis for 03/30—04/03 Week
EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: sell.
EUR/JPY trend: sell.
Floor Pivot Points
Pair 3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
EUR/USD 1.2638 1.2947 1.3117 1.3426 1.3596 1.3905 1.4075
GBP/USD 1.3620 1.3943 1.4130 1.4453 1.4640 1.4963 1.5150
USD/JPY 92.82 94.23 96.04 97.45 99.26 100.67 102.48
EUR/JPY 123.00 126.19 128.11 131.30 133.22 136.41 138.33
Woodie’s Pivot Points
Pair 2nd Sup 1st Sup Pivot 1st Res 2nd Res
EUR/USD 1.2912 1.3048 1.3391 1.3527 1.3870
GBP/USD 1.3943 1.4130 1.4453 1.4640 1.4963
USD/JPY 94.23 96.04 97.45 99.26 100.67
EUR/JPY 126.19 128.11 131.30 133.22 136.41
Camarilla Pivot Points
Pair 4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
EUR/USD 1.3024 1.3155 1.3199 1.3243 1.3331 1.3375 1.3419 1.3550
GBP/USD 1.4038 1.4178 1.4225 1.4271 1.4365 1.4412 1.4458 1.4599
USD/JPY 96.08 96.96 97.26 97.55 98.15 98.44 98.74 99.62
EUR/JPY 127.22 128.62 129.09 129.56 130.50 130.97 131.44 132.84
Tom DeMark’s Pivot Points
Pair EUR/USD GBP/USD USD/JPY EUR/JPY
Resistance 1.3751 1.4802 98.36 134.82
Support 1.3272 1.4292 95.14 129.71
Fibonacci Retracement Levels
Pairs EUR/USD GBP/USD USD/JPY EUR/JPY
100.0% 1.3735 1.4775 98.86 134.49
61.8% 1.3552 1.4580 97.63 132.54
50.0% 1.3496 1.4520 97.25 131.94
38.2% 1.3439 1.4460 96.87 131.33
23.6% 1.3369 1.4385 96.40 130.59
0.0% 1.3256 1.4265 95.64 129.38
GBP/USD trend: sell.
USD/JPY trend: sell.
EUR/JPY trend: sell.
Floor Pivot Points
Pair 3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
EUR/USD 1.2638 1.2947 1.3117 1.3426 1.3596 1.3905 1.4075
GBP/USD 1.3620 1.3943 1.4130 1.4453 1.4640 1.4963 1.5150
USD/JPY 92.82 94.23 96.04 97.45 99.26 100.67 102.48
EUR/JPY 123.00 126.19 128.11 131.30 133.22 136.41 138.33
Woodie’s Pivot Points
Pair 2nd Sup 1st Sup Pivot 1st Res 2nd Res
EUR/USD 1.2912 1.3048 1.3391 1.3527 1.3870
GBP/USD 1.3943 1.4130 1.4453 1.4640 1.4963
USD/JPY 94.23 96.04 97.45 99.26 100.67
EUR/JPY 126.19 128.11 131.30 133.22 136.41
Camarilla Pivot Points
Pair 4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
EUR/USD 1.3024 1.3155 1.3199 1.3243 1.3331 1.3375 1.3419 1.3550
GBP/USD 1.4038 1.4178 1.4225 1.4271 1.4365 1.4412 1.4458 1.4599
USD/JPY 96.08 96.96 97.26 97.55 98.15 98.44 98.74 99.62
EUR/JPY 127.22 128.62 129.09 129.56 130.50 130.97 131.44 132.84
Tom DeMark’s Pivot Points
Pair EUR/USD GBP/USD USD/JPY EUR/JPY
Resistance 1.3751 1.4802 98.36 134.82
Support 1.3272 1.4292 95.14 129.71
Fibonacci Retracement Levels
Pairs EUR/USD GBP/USD USD/JPY EUR/JPY
100.0% 1.3735 1.4775 98.86 134.49
61.8% 1.3552 1.4580 97.63 132.54
50.0% 1.3496 1.4520 97.25 131.94
38.2% 1.3439 1.4460 96.87 131.33
23.6% 1.3369 1.4385 96.40 130.59
0.0% 1.3256 1.4265 95.64 129.38
Forex Market is Closing Down
Some people predicted it long ago, but no one really believed it until today. It was announced by the BIS (Bank for International Settlements), IMF (International Monetary Fund) and the world’s leading private banking institutions that the traditional Forex market is going to be closed very soon. The retail Forex market attracted to much attention from the general public, creating riches for some and making others poor. It was decided that all on-line Forex brokers should be closed during the next 4 weeks, with all currently remaining traders’ funds donated to the various charities throughout the world. The governments of the G20 countries will discuss the creation of a single super-national Forex broker that will offer just a single currency pair for retail trading purposes — OCD/ZRP (Oceanian Dollar/Zeldian Rupee), with the daily trading volume of about 15,000 units. The registration with the new broker will be limited only to all currently existing Forex traders, so that no new traders will be appearing
EUR/USD Falls Deeper to Nonfarm Payrolls Decline
Euro was trading in the red zone against the dollar for the major part of the today’s trading session but immediately after the report on the U.S. employment sector was released, the EUR/USD currency pair hastened down considerably. Currently it’s trading near 1.3400.
Nonfarm payrolls fell by 663k in March, following February’s drop by 651k. The payrolls were expected to fall by 658k. Unemployment rate rose as expected — from 8.1% to 8.5%.
ISM services index went down from 41.6% to 40.8% in March — a bad signal for the U.S. economy, considering the forecasts that showed a gain to 42%.
Tags: ISM services, nonfarm payrolls
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Euro Peaks High against Dollar as Rate Cut is Slow
Thursday, April 2nd, 2009
EUR/USD rose at a very fast pace today, posting the biggest daily gain since March 18 so far. Mixed news on the U.S. fundamental indicators didn’t affect the trading much as the Forex traders looked at the ECB’s rate cutting action. EUR/USD is currently trading near 1.3413.
Last week initial jobless claims were reported at 669k, which is 12k above than 657k (revised up from 652k). Traders expected a small decline to 650k, but the employment sector is still in its worse state in U.S.
Factory orders increased by 1.8% in February — for the first time after six months of decline (in January they decreased by 3.5%). The forecasts showed 1.5% growth for February.
European Central Bank cut the Eurozone interest rate from 1.5% to 1.25% today, while the markets were almost sure that the rate will be slashed to 1%. This caused a lot of optimism for euro bulls and the currency is dominating the market at this moment.
Nonfarm payrolls fell by 663k in March, following February’s drop by 651k. The payrolls were expected to fall by 658k. Unemployment rate rose as expected — from 8.1% to 8.5%.
ISM services index went down from 41.6% to 40.8% in March — a bad signal for the U.S. economy, considering the forecasts that showed a gain to 42%.
Tags: ISM services, nonfarm payrolls
No Comments »
Euro Peaks High against Dollar as Rate Cut is Slow
Thursday, April 2nd, 2009
EUR/USD rose at a very fast pace today, posting the biggest daily gain since March 18 so far. Mixed news on the U.S. fundamental indicators didn’t affect the trading much as the Forex traders looked at the ECB’s rate cutting action. EUR/USD is currently trading near 1.3413.
Last week initial jobless claims were reported at 669k, which is 12k above than 657k (revised up from 652k). Traders expected a small decline to 650k, but the employment sector is still in its worse state in U.S.
Factory orders increased by 1.8% in February — for the first time after six months of decline (in January they decreased by 3.5%). The forecasts showed 1.5% growth for February.
European Central Bank cut the Eurozone interest rate from 1.5% to 1.25% today, while the markets were almost sure that the rate will be slashed to 1%. This caused a lot of optimism for euro bulls and the currency is dominating the market at this moment.
Choosing Between Credit and Debit Cards
Knowing the principle differences between credit and debit cards can help you make wiser financial decisions, thus saving you money. Unfortunately, too many consumers seem to mix up these two types of payment tools, especially when it comes to using credit cards and meeting payment obligations on them. Both, credit and debit cards have their advantages and drawbacks. If you want to avoid common pitfalls and stay away from financial troubles that strip most vulnerable Americans of their homes and happiness, it is time to get some education.
Trying to understand what you really need, a credit or a debit card, you should look into your priorities, spending habits and special needs. The basic and crucial difference between the two lies in the”working mechanism”. For example, when you pay with a debit card, it is the same as if you were paying with your own hard cash. Except that the cash is in the form of a small plastic and is actually kept in a special checking account with your bank.
How do you get the money in your checking account? There are several ways you can do it. You can make direct cash deposits, arrange transfers from other bank accounts or have your employer transfer your paycheck to the account. You can load the account any time and each time you need more funds available. Remember, using a debit card, you spend your own money without owing anything like interest to your bank. There are some fees though associated with debit card servicing but they are not significant.
A credit card works as a loan. You don’t own the money on the card – you borrow it from a bank. Hence, there come all these APRs (the price for using a credit line), fees and other charges that cover card service, as well as your borrowing risk. As it is kind of a loan, you do not have to pay the purchase price back immediately. Usually, you have up to 30 days before your first minimum payment is due. At this point cardholders begin to abuse the basic credit card rule – the rule to pay each monthly bill before the due date with more than the minimum required.
The different “working mechanisms” of credit and debit cards determine their pricing and risk. Those who do not make timely payments on credit cards are likely to dig a hole of debt that’s impossible to get out of. And people do make late payments and even miss them. When default APRs and penalty fees apply to already great balances, your financial wellbeing becomes dependent on external factors such as consumer debt counseling services and various debt management programs.
With all this, the advantages of credit cards are evident. You can easily purchase an item or a service which you were not able to afford before. Plus, you can benefit from various kinds of rewards which accumulate with each card purchase and build up into a value redeemable for brand name merchandize and free services.
Trying to understand what you really need, a credit or a debit card, you should look into your priorities, spending habits and special needs. The basic and crucial difference between the two lies in the”working mechanism”. For example, when you pay with a debit card, it is the same as if you were paying with your own hard cash. Except that the cash is in the form of a small plastic and is actually kept in a special checking account with your bank.
How do you get the money in your checking account? There are several ways you can do it. You can make direct cash deposits, arrange transfers from other bank accounts or have your employer transfer your paycheck to the account. You can load the account any time and each time you need more funds available. Remember, using a debit card, you spend your own money without owing anything like interest to your bank. There are some fees though associated with debit card servicing but they are not significant.
A credit card works as a loan. You don’t own the money on the card – you borrow it from a bank. Hence, there come all these APRs (the price for using a credit line), fees and other charges that cover card service, as well as your borrowing risk. As it is kind of a loan, you do not have to pay the purchase price back immediately. Usually, you have up to 30 days before your first minimum payment is due. At this point cardholders begin to abuse the basic credit card rule – the rule to pay each monthly bill before the due date with more than the minimum required.
The different “working mechanisms” of credit and debit cards determine their pricing and risk. Those who do not make timely payments on credit cards are likely to dig a hole of debt that’s impossible to get out of. And people do make late payments and even miss them. When default APRs and penalty fees apply to already great balances, your financial wellbeing becomes dependent on external factors such as consumer debt counseling services and various debt management programs.
With all this, the advantages of credit cards are evident. You can easily purchase an item or a service which you were not able to afford before. Plus, you can benefit from various kinds of rewards which accumulate with each card purchase and build up into a value redeemable for brand name merchandize and free services.
Credit Card Fees and How You Can Avoid Them
Whether you are planning to get your first credit card or just switch to a new one, be ready to face loads of fees. Just like interest rates, credit card fees come in a variety of types and are charged for the card usage, as well as for all common operations with your account. Knowing all types of fees and cases when they typically apply can help you choose a better credit card or avoid unnecessary fees on it.
Let’s start with the type of fee that should be the first to look at when applying for a credit card. Annual fee, or card maintenance fee, is charged for using a credit card on a yearly basis. Depending on whether or not your bank requires the fee, you may save or overpay up to $300 a year. The majority of cards for good and excellent credit, as well as a number of subprime card offers require no annual fees.
So, if you’re looking for a less expensive bank card, it’s worth your time to search for what fee free cards are currently available. If you find a really tempting offer but it has an annual fee, you may ask the bank to waive it. If it does not work, just get one of the numerous cards without a fee.
Then there is an application fee that may be charged on any card regardless of its type and credit requirement. Most often, however, an application fee, also called set up fee, is found on prepaid and secured card types.
As you start using your card account, the number of fees charged triples. Most common of them are cash advance fees, finance charges, balance transfer fees, as well as a whole range of penalty fees that you pay for being delinquent on your account. While these fees are obligatory, it does not mean you cannot avoid them.
For example, a cash advance fee is charged when you withdraw cash from your credit account. What you need is to create a cash fund which you could use in emergencies instead of making a cash advance.
As to a finance charge, it is impossible to avoid as long as you carry a balance beyond a 0% introductory rate and a grace period. A finance charge applies once a billing cycle and depends on your card’s APR, the balance you’re carrying and the method of calculating the charge. One simple way to avoid it is pay your balance in full before the end of the grace period.
Making a balance transfer from your current card, it’s very likely you’ll pay a transfer fee. The fee is a percentage of the money amount transferred and is charged by almost all balance transfer cards available on the market.
The highest and most painful fees to beware of are charged as a penalty when you are late on your monthly payment or exceed your spending limit. Whether or not you pay these fees depends on how responsible and disciplined you are using your credit card.
Obviously, most of the fees mentioned can be avoided by simply following the rules of rationalism and principles of wise credit card use.
Let’s start with the type of fee that should be the first to look at when applying for a credit card. Annual fee, or card maintenance fee, is charged for using a credit card on a yearly basis. Depending on whether or not your bank requires the fee, you may save or overpay up to $300 a year. The majority of cards for good and excellent credit, as well as a number of subprime card offers require no annual fees.
So, if you’re looking for a less expensive bank card, it’s worth your time to search for what fee free cards are currently available. If you find a really tempting offer but it has an annual fee, you may ask the bank to waive it. If it does not work, just get one of the numerous cards without a fee.
Then there is an application fee that may be charged on any card regardless of its type and credit requirement. Most often, however, an application fee, also called set up fee, is found on prepaid and secured card types.
As you start using your card account, the number of fees charged triples. Most common of them are cash advance fees, finance charges, balance transfer fees, as well as a whole range of penalty fees that you pay for being delinquent on your account. While these fees are obligatory, it does not mean you cannot avoid them.
For example, a cash advance fee is charged when you withdraw cash from your credit account. What you need is to create a cash fund which you could use in emergencies instead of making a cash advance.
As to a finance charge, it is impossible to avoid as long as you carry a balance beyond a 0% introductory rate and a grace period. A finance charge applies once a billing cycle and depends on your card’s APR, the balance you’re carrying and the method of calculating the charge. One simple way to avoid it is pay your balance in full before the end of the grace period.
Making a balance transfer from your current card, it’s very likely you’ll pay a transfer fee. The fee is a percentage of the money amount transferred and is charged by almost all balance transfer cards available on the market.
The highest and most painful fees to beware of are charged as a penalty when you are late on your monthly payment or exceed your spending limit. Whether or not you pay these fees depends on how responsible and disciplined you are using your credit card.
Obviously, most of the fees mentioned can be avoided by simply following the rules of rationalism and principles of wise credit card use.
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