Online Forex Trading

BOJ Kept the Rate at 0.5% as Expected.

2007-08-23T08:07:00.003-07:00

Economic News

USD

There was no real currency-market moving news released yesterday from the U.S markets as the greenback lost some ground against the EUR and the GBP, while strengthening slightly versus the JPY touching the 115.95 level.

Markets began stabilizing on Tuesday after Fed Chairman Ben Bernanke assured he would use all available tools to break the fallout from the U.S. mortgage crisis, after the sub-prime situation continues to be problematic. Yesterday, Lehman Global Investment Bank backed by mortgages became the first company on Wall Street to close its sub-prime lending unit causing its 1,200 employees to lose their jobs. In addition, according to data from the Mortgage Bankers Association, home loan applications fell 5.5% last week, the biggest decline in almost three months. As the sub-prime situation continues to deteriorate, the likelihood of a Federal Reserve rate cut of 0.5% is increasing, and may occur even before the September 18'th FOMC meeting.

Today will be very light on market moving news from the U.S markets as the only news coming out of the US will be the Unemployment Claims index. The figure is expected to be released at 315K which is a slight improvement from last month's figure of 322K. It looks as if the USD should continue to trade in a tight range, as no significant move is expected to occur.

EUR

Yesterday, the EUR gained some strength against the USD but also had its best day against the JPY in nearly four years. The EUR\JPY climbed 1.2% to the 157.00 level, where against the USD; the EUR extended gains and climbed up $1.3534. According to ECB president Jean-Claude Trichet, the European Central Bank remains devoted to the "strong vigilance on inflation" policy. In fact, that phrase has signaled each of the eight rate increases since late 2005. It looks like a rate hike in the September ECB meeting is very probable. Due to the ongoing liquidity shortage, the ECB stated that it would add 40 billion EUR in 91-day funds to the European money market today and added that the operation was a "technical measure". Yesterday, there was no significant news coming out of Europe except for the British CBI Industrial Trends Orders. The indicator was released at 9 points, beating expectations of -4, hence supporting a currently ongoing bullish trend of the GBP. There'll be no significant economic news released in the EUR today apart from the GBP Business Investment. The expectations for that indicator release are currently standing at 2.0%, which is significantly higher than last month's figure of -0.6%. If the economic news from the GBP will release inline with market expectations, we should see the GBP resurrection continue, thus pushing the EUR up.

JPY

Last week, the JPY posted its biggest increase against the EUR since March 2000 as the sub-prime mortgage crisis spread through global credit markets. The JPY trades at 156.91 against the EUR, after dropping 1.4% yesterday, the most significant drop since June 2004. The JPY traded at 115.33 against the USD after falling 0.8% yesterday, the highest in two months. Today the BoJ kept rates unchanged at 0.50% as expected. The markets are showing some tentative signs of a return to normality after the release and the market may return to carry trades, with equities stabilizing after the aggressive carry trade unwinding in the last 2 weeks. Bottom line is that the JPY seems to be getting back to normal as traders and hedge funds inject carry trades positions into the market which strengthen the high yielding currencies against the JPY.

Technical News

EUR/USD

The pair is trading at 1.3540 which is the 38.5% Fibonacci level of the 1.3850/1.3370 move and the level is established as a key resistance level. If a breach through this level will occur we might see a bullish move that will take the pair to the 1.3640 level.

GBP/USD

The cable is trading in a bullish channel as the slow stochastic on the 1 Hour chart indicates that there is still room for more. On the 4 Hour and the daily charts the oscillators show that some kind of a correction might be imminent. The overbought short range status indicates that it would be preferable to wait for a stronger signal on the dailies before taking a position

USD/JPY

There is a bearish cross forming on the 4 Hour chart, which could indicate that a small correction move might occur before the bullish trend continues. The daily charts are bullish, with more room to run. A preferable strategy for position traders might be to go long, as for day traders it might be to go short

USD/CHF

There is a stable consolidation at the 1.2060 level for the fifth consecutive day. The daily charts are showing a triple doji formation, and are now in neutral territory. The 4 Hour chart support the neutral signals. The extremely neutral status of the pair indicates that a violent move is imminent, and could be in any direction. A recommended strategy might be to wait for a clear signal before entering the market.

The Wild Card

Crude Oil

The bearish trend continues with full steam and Oil is now traded at 69.50. The daily chart and the hourly studies show that there is still more room to run. The 4 Hour RSI is floating at 50 which provides Forex traders with a great opportunity to get in the trend at a high bearish momentum.

CBI Industrial Trends Orders (GBP)

2007-08-23T08:07:00.001-07:00

Economic News

USD

Yesterday was void of significant US economic releases, however there was a very important meeting comprising of US banking official to discuss the ever-growing credit crisis. U.S Treasury Secretary Paulson reaffirmed his opinion that the US economy will manage to deal with the growing credit concerns hinting that an imminent rate cut by the Fed may not be necessary. On the other hand US Senator Dodd that met with Paulson and Fed Chairman Bernanke urged the Fed to use all its available resources to put the brakes on the spreading credit crisis. Also yesterday the Fed injected another $3.75 B into the financial markets in an attempt to provide additional stability, the Fed has injected over $100 B last week. This action by the Fed coupled with Dodd's and Paulson's opposing rhetoric caused volatility all across the board and the USD had a mixed performance yesterday, as it continued on its bullish path against the EUR and the Sterling but lost ground against the JPY. The current market sentiment seems to be that the Fed will lower its benchmark rate in September and this was further reaffirmed by a reference in yesterday's meeting that Bernanke is unsatisfied with the way the stock market reacted to Friday's discount rate cut by the Fed. However the Fed will be able to avoid lowering its key interest rate if the market begins to experience signs of increased liquidity as a result of it dropping the discount rate from 6.25 % to 5.75 %.

Today there is also no market moving news expected from the US so greenback volatility will arise from factors that will affect the Feds descision on future monetary policy, namely the spreading credit concerns and the performance of the equity markets. The expectations of a rate cut from the Fed in September should provide stability to the equity markets and it will ease the credit crisis, therefore we should see the greenback maintain its bullish momentum in the near future.

EUR

The most significant news to be released from the Eurozone yesterday was the German and European ZEW Economic Sentiment, which measure institutional investor sentiment, both released in negative territory and well below expectations at -6.9 and -6.1 respectively. This negative data strengthened the markets sentiment that the ECB will be forced to leave interest rates unchanged in September. The unrelenting problems in the US subprime housing sector coupled with the spreading credit concerns and reeling global markets will leave little room for the ECB to consider a rate hike in September and it is very possible that may even leave rates on hold in October and November as well. Future ECB monetary policy will very much depend on to what extent the US subprime mortgage crisis continues to negatively impact the financial markets. However in the meantime the fact that the majority of investors feel that the ECB will keep interest rates on hold in its next meeting is putting significant pressure on the EUR and it continued on its bearish path against the greenback yesterday. There was some positive news for the European economy yesterday as the Eurozone Trade Balance released at 5.2 B beating the expected figure of 3.2 B, but this news did not manage to provide the EUR with some much needed reprieve.

Today the only news to be released from the Eurozone will be the Current Account and the Industrial New Orders figures. Both of these indicators are not expected to have much influence on the EUR's direction whose movement today will be mostly dollar centric as investors will also pay close attention to the financial markets which are expected to have a significant impact on future ECB monetary policy.

JPY

The JPY range traded yesterday against the greenback and the EUR, consolidating on its recent gains that have resulted from a sharp rise in volatility which is making carry trades less appealing due to increased risk. The JPY has risen sharply against the EUR in the last few days as a result of the spreading credit concerns and its strength against the greenback has been mainly driven by the market sentiment that the Fed will lower its interest rate in September whilst the BoJ is expected to leave its key benchmark rate unchanged at 0.5 %. The Japanese interest rate announcement will be released later on today and there should be no surprises. The JPY could launch another bullish surge if the credit concerns persist and the equity market start reeling again. However the Feds descision to lower the discount rate has acted as a temporary safety net for the stock market and we could see increased liquidity, so this will slowdown the recent carry trade unwind thus causing the JPY to jump onto its all too familiar bear wagon.

Technical News

EUR/USD

The Pair was range trading yesterday between a support level of 1.3460 and a resistance level of 1.3510. Should the pair trade today above the pivot level of 1.3483 we could see a break through the resistance level and then the bullish trend for the EUR/USD could continue up to the 50% Fibonacci Level. An outbreak through the resistance level instead could indicate a drop down to 1.3400, the 0% Fibonacci level.

The traders have to wait for either breakthrough to occur in order to enter in the appropriate position.

GBP/USD

The 4 hour chart indicates on an upcoming bullish trend when the long term Moving Average (Weighted 21) crossed by a bullish bar. Additionally the ADX (Average Directional Movement) also strengthens our opinion while the DI+ is on its way crossing the DI- from below which is considered a bullish signal. Going long seems to be preferable .

USD/JPY

The pair moved yesterday with a slightly bearish trend between the upper level of 115.10 and the lower level of 114.10, slow stochastic on the hourlies indicates that it won't become a reversal soon and that the pair might instead continue range trading today. Also MACD and RSI reside in neutral territory and thus point to an uneventful day for the USD/JPY.

USD/CHF

The 4 hour chart implies on an upcoming bearish trend as the Slow Stochastic is crossed at 78 and has a negative slope ,however we need to pay attention to the current 4 hour bar ,when a positive bar may indicate an upcoming bullish trend and negative bar will imply on a range trading. Traders need to be aware during the next 4 hours where the market is headed and to take action .

The Wild Card

Gold

The 4 hour chart implies on an upcoming bearish trend as the Slow Stochastic is crossed at 78 and has a negative slope ,however we need to pay attention to the current 4 hour bar ,when a positive bar may indicate an upcoming bullish trend and negative bar will imply on a range trading. Those trading forex online need to be aware during the next 4 hours where the market is headed and to take action .

Canadian Core Retail Sales.

2007-08-23T08:06:00.003-07:00

Economic News

USD

Yesterday, USD Trading was flat against most currencies as equity markets seem to be stabilized. Analysts have cautioned investors with views that the credit crisis is far from ending and ensured that the USD will remain in a tight range against a number of currencies. In other news, US short- term rate futures were strongly higher yesterday as the cash federal funds rate dropped below the Federal Reserve's target rate and short-dated yields for U.S government debt fell sharply. Today the USD will be affected by other currencies when no special news is due to be released, we however offer to watch carefully the Canadian Core Retail Sales and CPI which are mixed in their forecasts and a significant movement is expected to occur if figures surprise the market . Crude oil fell by $1.30 a barrel to $70.68; however, tomorrow Crude Oil Inventories is due to be out we might see a bit of a movement in this commodity instrument .

There is an interesting situation going on as Fed credibility is in focus. The U.S. senator Kent Conrad, who chairs the Senate's budget panel, called for the resignation of voting Fed member Poole. Conrad said that Poole's comment last week that only a 'calamity' would justify a Fed interest rate cut before a scheduled Sept. 18 meeting was 'reckless' and 'irresponsible.' Conrad's comments come at a time when markets worry that the Fed discount rate cut on Friday may signal that their outlook has been flawed all along. The markets echoed Conrad's concerns when reacting in mixed and indecisive movements. Treasury bills rallied on Monday, with the three-month yield posting its biggest one-day drop since the stock market crash of 1987, and some suggest that today's movements in yields show that the Fed has failed to convince investors that sub prime losses will be contained and for now the sub prime crisis seems to pervade and threaten all of the US economy. Bottom line ,in spite of last week's Greenback strengthening, traders still have the feeling that the US economy has a long way to go until this current crisis will vanish ,which means that in the long term the USD is expected to remain depreciated among the majors ,especially against the EUR.

EUR

The Euro ended the day unchanged against the US dollar as the currency trading market tries to figure out whether the European Central Bank will continue to press forward with raising interest rates next month. The guessing game will be helped by today's German ZEW report, which tends to be one of the more market moving reports for the EUR. Given the turmoil in the financial markets, we expect analyst sentiment to be significantly deteriorates. As we mentioned earlier, due to lack of data today in the US calendar, the German ZEW is expected to be a bigger than usual market mover. Meanwhile over in Switzerland, producer and import prices were weaker than expected however no significant movements were observed on the CHF charts. The GBP traded on the back of currencies, while also benefiting from a return to risky carry trades and seems to have recovered after it's last week sharp reduction.

Yesterdays' GBP strengthening both against the USD and the EUR, was caused thanks to stronger economic data, when house prices, money supply, BBA mortgage approvals and public finances all came out stronger than expected.

This suggests that domestic demand remains robust while the housing market remains stable. This stability may be one of the main reasons why the Bank of England has not felt pressured to add liquidity into the financial markets. However the main discussion recently has been about the possibility that a mortgage crisis will take place also in Great Britain, since there is a similar mortgage policy as in the US and if the real estate market will experience a crisis or even just a revaluation we may see the same market reactions that took place in US, that may bode severely on the England economy and on the GBP currency. In addition, after the recent credit problems which occurred it may cause even a deeper crisis in England, however from our experience the BoE will react instantly if those kinds of signs will suddenly be seen .

JPY

The US dollar has begun to correct against the Japanese Yen. Still, the JPY remains firm and stable in its consistency against most of the majors. Yesterday, the Japanese Yen fell to 154.93 against the Euro from as high as 154.34 and 154.94 late yesterday. It also dropped to 115 against the dollar from as strong as 114.61 and 114.88.As we expect, the Japanese currency may give up early gains and drift lower against the dollar to 115.50 and 157 per Euro. Yesterday, the All Industries Activity Index was published in Japan. This index covers a broad range of economic activity including the tertiary index. Production in all sectors of the Japanese economy rose 0.2 % in June from May. The increase in the all industry activity index, only the fourth in the past 10 months, was spurred by the rise in the tertiary index as well as industrial output. Construction activity was the lone component that showed a contraction, -1.7% in June. The Bank of Japan added one trillion yen to its money markets today. This additional liquidity indicates that the BOJ will not have any intentions to raise interest rates during this week. In the meantime, the Yen crosses are driven less by interest rate expectations for Japan and more by the market's overall risk appetite. As we can expect the further decrease in JPY crosses depends upon the Nikkei. On Sunday night the Nikkei respond very slowly to the recovery in the Dow, but after all, the Japanese stock market ended much lower than its intraday high. This situation shows that many traders still don't believe that the worst is behind us and the consensus opinion is that the central banks will keep attempting to normalize the markets.

Technical News

EUR/USD

The pair is going through a choppy session in the past few days, and gives mixed signal on the hourly level. The daily chart is still showing a bullish formation and it looks as if the pair is heading 1.3600 again. A preferable strategy might be to wait for the hourlies to unwind before going long. Going short seems risky at this point.

GBP/USD

The daily chart implies that this pair still has room on the bullish side, while Slow Stochastic shows a positive slope and points to bullish territory. We may expect the pair to test 2.0100 in the short term; therefore going long may be preferable.

USD/JPY

The daily chart is clearly bullish with still much room left ahead. Slow Stochastic has a positive divergence which should carry this pair to test the 118.00 level in upcoming days. Hourlies also support the bullish notion; therefore buying on dips might be a preferable here.

USD/CHF

The USD/CHF is still in a bullish configuration. The volatility has increased. Hourlies are showing that the pair moves without a clear trend and swings around exponential moving average (EMA 50 and 100). 4H Elliott pattern implies a continuation of the bearish pressure.

The Wild Card

Silver

There is still a bearish configuration on the 4 Hour chart, indicating that the momentum is still down. The RSI is floating around 50, which supports the notion that there is still plenty of room to run. This provides Forex traders with a great opportunity to go short on a very solid downtrend.

DAILY TECHNICAL OUTLOOK ON EUR/USD

2007-08-23T08:06:00.001-07:00

Updating time : 20/08/2007 23:58 GMT

EUR/USD - 1.3473...The single currency took a 'breather' y'day after Friday's rally to 1.3548 n although further consolidation is envisaged in Asia today (21-hr n 55-hr emas are horizontal), as long as minor res at 1.3508
(y'day's high in Europe) holds, downside bias remains for a retracement of the rise fm last week's low at 1.3360 to 1.3432 (61.8% r of 1.3360-1.3548) but hourly oscillators are likely to be in o/sold territory on such move, reckon 1.3400 wud limit weakness n yield choppy trading.

Looking ahead, only below sup area at 1.3360/70 wud confirm recent decline fm 1.3853 ('07 top) has resumed n yield further fall to 1.3319 (38.2% r of 1.2456-1.3853) n 1.3302 (50% proj. of 1.3853-1.3360 measured fm 1.3548) but daily chart sup at 1.3264 (June 13) shud hold.

Abv 1.3508 wud defer this near term bearish scenario but only a breach of 1.3548 wud indicate a stronger correction of aforesaid fall fm 1.3854 is under way n further headway twds 1.3607/09 (50% r of 1.3853-1.3360 n prev. sup on the daily chart) wud follow...

How Will The Currencies React Post The

2007-08-23T08:05:00.001-07:00

USD

Last week's news releases were mixed with positive outcomes like the better than expected Core Retail Sales at 0.4%, a PPI which grew from 0.1% to 0.6%, a decrease in the Trade Balance (-58.1B), and an increase of TIC Net Long-Term Transactions (120.9B), and on the other hand negative results such as an unchanged Core CPI at 0.2% and a CPI which decreased to 0.1%, Housing Stats as well as building permits also decreased while unemployment claims rose. Then on Friday the news showed an erosion of consumer sentiment from the previous value of 88.5 to 83.3 and could therewith indicate a reduction of consumer spending that could potentially weaken the USD. This week will be relatively on news releases with only the Unemployment Claims on Thursday and Durable Good Orders and New Home Sales on Friday. A release of Core Durable Goods has an expected value of 0.6%, and a positive surprise on the site of Home Sales Value (above 826K) could strengthen the dollar.

To get hold on the liquidity shortage on the financial markets the Fed surprisingly cut the discount rate - the rate it charges banks for direct loans - on Friday in order to improve liquidity, it also issued a statement accrediting that besides inflation concerns the situation on the financial markets is posing a possible threat for the US economy. With this turnaround of the Feds perspective on the US economy, the discussion about an interest rate cut is newly ignited and we could probably see the beginning of smoothening monetary policy with a cut in the interest rate.

As for today the greenback is expected to float low post the negative releases of last weeks end and growing concerns about inflation.

EUR

Last week's German GDP was released below expectations at 0.3% (previous 0.5%) and the French Nonfarm Employment was released with a disappointing 0.0% compared to the previous 0.8% and the expected 0.5%. This week will be very light on market moving news from the Euro-zone with only German ZEW Economic sentiment on Tuesday, expected to come out at -1.0. This negative value indicates that the majority of investors have a negative outlook on the economical situation in Europe during the upcoming 6 months; an upward surprise could have an important psychological influence on investors who are still shaken by the dimensions of the US credit crisis.

After the announcement of the discount rate cut by the Feds on Friday, financial markets worldwide rallied and the EUR to strengthen against the USD for the first time in the last week. If investors' fears recede and European financial markets will see a recovery, the bullish trend that was set off on Friday could continue today.

Other news expected to come from Europe this week are the Swiss PPI on Monday (expected 0.3%), UK's CBI Industrial Trends Orders on Wednesday (expected -4), and the UK GDP (expected 0.8%) on Friday.

JPY

Last week ended the impressive JPY rally that showed an unbelievable dip from 123.77 to 112.72, a stunning 1105 pip increase against the USD, during the last 4 weeks. The JPY rally went on fairly independent from any Japanese News releases last week and was pushed by an intense unwinding of the carry trades which climaxed on Thursday and Friday last week. With carry trades unwinding, we should see JPY fluctuations being dollar centered today.

This week's interest announcement followed by a speech of BOJ Governor Fukui is expected to stay unchanged, as the BOJ is not able to justify such a move by underlying economical reasons.

Even with an approximation of Japan's interest rate to 1.0%, differences between the JPY and high yielding currencies like the AUD and NZD as well as most of the majors stays significant, and with a return of risk seeking in the global markets we will see carry trades returning in the medium-term.

Technical News

EUR/USD

The pair is in the midst of a correction move initiated at 1.3400 and is now consolidating around 1.3500. the slow stochastic together with the RSI on the 4 Hour chart indicate that there is still more momentum in that move, and the next target price now stands at 1.3550.

GBP/USD

There is a bullish cross forming on the slow stochastic of the daily chart, and a breach thought the 20 level on the RSI. Both indicators are showing a positive reversal with great momentum that might take the pair back to the 2.0000 levels.

USD/JPY

The incredible unwinding move seems to have bottomed at 111.60 and is going up since Friday. The daily studies are bullish, and the hourlies support the bullish notion. A breach through 115.60 will validate the move, and create a great opportunity for a long run buying position.

USD/CHF

The pair is in consolidation at the 38.2 level of the 1.2450/1.1820 move, after a touch at the 61.8 level and a bounce back to 1.2060. The daily studies show strong bullish momentum, as the hourlies support. The next target price might be 1.2200.

The Wild Card

Crude Oil

There is a bullish cross forming on the 4 Hour chart, and together with a breach beyond the 20 level on the RSI a strong bullish notion is created. This provides those trading forex online with a great opportunity to enter a long position with good momentum and a very low entry point.

DAILY TECHNICAL OUTLOOK ON USD/JPY

2007-08-23T08:04:00.000-07:00

USD/JPY - 113.70...Dlr nose-dived fm 116.74 (Asian high) to 112.01 (NY low), its lowest since the beginning of June on active cross buying in yen due to the selloff in global markets, however, price then rebounded strongly in NY afternoon n Australia this morning to 114.65 as the yen pared its gains across the board on the back of the Dow which erased most of its intra-day losses.

Although the rebound fm 112.01 to 114.65 (price touched the 21-hr ema b4 retreating) signals recent decline has formed a temporary low y'day, dlr's subsequent retreat suggests 'choppy' trading is in store (due to the increased
volatility in yen crosses n commodity currencies such as aud/usd) n a pullback to 113.02 (61.8% r of 112.01-114.65) cannot be ruled out but minor sup at 112.50 shud contain downside n yield another corrective rise later.

Abv 114.65 wud bring retracement to 115.00 (38.2% r of 119.84-112.01) n then 115.38 (50% r of 118.75-112.01) but reckon 115.71 (y'day's low in Asia) shud cap upside n risk has increased for a retreat. Readers shud keep an eye out for any special updates to our daily outlook...

Will the US housing market recover?

2007-08-23T08:03:00.000-07:00

Economic News

USD

Yesterday, the USD extended its gains across the board after a string of positive US economic data. The US Core CPI data released inline with expectations at 0.2% and overall remained unchanged since last month. The Empire State Business Conditions Index released at 25.1, surprisingly beating the expected figure of 18,which gives a strong indication that future reports on manufacturing in the US are also likely to support the USD's rise. Housing and credit concerns are still here and the crisis hasn't been resolved yet. In order to make cash available, central banks worldwide have pumped billions in funds to banks over the past week, but along with this, Federal Reserve officials are insisting that there are no signs that the subprime issue is harming the broader economy and an interest-rate cut is not yet needed despite the fact that the fund injection could be compared to an interest rate cut from the perspective of the market. On the back of these positive sentiments, the US currency hiked to 1.3400 against the EUR. There is no real market moving news to be released from the US markets today. The news coming out of the US will be the Housing Starts and Building Permits figures and since there are no particular expectations, these indicators will likely generate little interest. Consumer Sentiment Index is the only news release expected from USD for the rest of the week. The core figure is expected to release at 88.5 which is a slight drop from last month's figure 90.4. Therefore, it will be crucial for those trading forex to identify how the preceding economic indicators from Europe and the UK will affect the greenback.

EUR

Yesterday, the majority of news releases from the Euro zone came out quite negative. The GBP Average Earnings Index figure released at 3.3%, slightly lower than the expected figure of 3.5%. This negative momentum was further exacerbated by the weaker than expected GBP Claimant Count Change. This index measures the change in the number of people claiming unemployment related benefits over the previous month. A falling trend has a positive effect on the nation's currency. The figure released in negative territory at -8.5K. This number didn't beat the expected figure of -9.8K, it was still significantly lower than last month's figure of -14.1K. Analysts continue to assert that a EUR interest rate hike is expected despite the fund injections that occurred in the Euro zone.

Today the most significant news coming out of the Euro zone will be the England's Retail Sales. The figure is expected to release at 0.1%, which is 50% below the previous month's figure which might strengthen the negative momentum which the GBP is suffering from.

JPY

Yesterday, the JPY rose to a 4 month high against the EUR and the USD. The Japanese Yen has enjoyed a sustained bullish run as results of the carry trade unwind which was driven by increased risk aversion. The Yen rose 0.8% to 154.99 per EUR and gained to 115.68 per USD. Yesterday's U.S stock losses sparked speculations that the biggest mortgage lender in the U.S. may be forced into bankruptcy. Rising risk aversion caused investors to liquidate risky positions and triggered carry trades to unwind, thus the yen gained some momentum. The persistent problems in the US sub-prime mortgage market, coupled with further reports of hedge fund worries are fuelling the risk aversion sentiment, therefore we may expect the JPY to strengthen all across the board in the coming days.

Technical News

EUR/USD

The 4 hour chart implies an upcoming bullish trend with Momentum (98.6285) having a positive slope and a slow stochastic which crossed at 13. The correction will try to test the 1.3483 Fibonacci 38.2% retracement level. Going long seems like the preferable strategy today.

GBP/USD

The 4 hour chart notes that a tight bearish channel is forming and traders should seek the breakout to get into the market at a good entry point for a long position. However the daily chart indicates a breakout of the bullish channel, supporting the fact that the GBP depreciation would be maintained in the long term.

USD/JPY

The 4 hour chart implies that a tight channel is about to form which has an extreme negative slope, and a breakout is expected. A breakout will probably send this pair to test the 117.04 Fibonacci 23.6%. If a breach of the upper barrier will take place we expect a mild bullish channel and therefore going long seems preferable.

USD/CHF

A reversal is forming on the 4 hour chart as the slow stochastic crossed already twice above 80 and this notion is also supported by the RSI which is clearly in the overbought area for a couple of days already. If this development is also supported by a cross of the MACD it seems like a preferable strategy is to enter into a short position.

The Wild Card

Crude Oil

On the 4 hour chart we can see that a channel with positive slope has been formed with an upper level which could be breached at the 74.32 (50%) Fibonacci level. If this break out takes place we could expect an incline up to the 75.22 Fibonacci level (61.8%). On the 15 minutes chart the formation of a negative wedge is about to be completed, increasing the possibility of an upcoming breakout at 74.32. Forex traders may prefer to enter into a long position when the right signal will be shown.

Success In Forex Trading Markets

2007-08-22T11:31:00.000-07:00

By: Eric Long

The more you know about foreign exchange markets, the more data you have to analyze to spot the trends, which will increase your chances of success.

The foreign currency market is one of the most exciting attractive and lucrative markets in the world, but it is also extremely fast moving and volatile. While you can make tremendous profits, you can also make substantial losses if you do not have a very clearly defined game plan. At the heart of Forex trading is a wealth of information which has to be not only constantly updated but which also has to be accurate.

The principle behind technical analysis is simply that, while political, economic and social factors do drive the forex market, it is not necessary to study them in depth because history repeats itself and these factors in whatever combination you choose have occurred time and again in the past so their affect can be seen by simply studying the historical pattern of currency movements. Fundamental analysis thus looks at political events and economic data such as inflation, interest rates and trade figures, as well as social data such as employment rates.

Too often you will see sites that are promoting ways in which you can get rich through Forex trading as long as you purchase their book for $100. The prices vary but one thing is certain the beginner must study the market before investing any significant money. Technical analysis holds that prices follow trends and that markets possess clearly identifiable patterns which can be recognized if you know what you are looking for.

Perhaps one area of general agreement however is that analysis of a country's balance of payments is crucial to the success of fundamental analysis. The balance of payments is important because it reflects the flow of currency in and out of a country and a situation in which money is flowing into a country faster than it is flowing out, or vice versa, will clearly affect currency prices. For this reason the very first thing that any novice forex trader needs to do is to sit down, study the foreign exchange markets carefully and learn the ins and outs of trading before putting any money at risk.

Both knowledge and experience play an important role in technical analysis but here it is a case of knowledge and experience of not just the patterns in the market but of working with the barrage of tools which are know available to the technical analyst. In other words an analysis of, for example, the effect that rising or falling interest rates have had on currency prices in the past is used to predict the effect that a rise or fall in rates today will have.

Today’s forex traders have the option to abandon fundamental analysis in favour of technical analysis. Perhaps one area of general agreement however is that analysis of a country's balance of payments is crucial to the success of fundamental analysis. Historical data is then used as the basis for predicting movements in the light of current figures. Analyzing just how forex prices will be affected is of course something which is hotly debated by fundamental analysts.

Accordingly, the main tool of the technical analyst is the chart, or more accurately a series of charts, which provides a graphical representation of the market over time. Your broker will make his profit from the 'spread' on each trade, which is the difference between the buying and selling price of a currency pair and is a subject all of its own. Both technical and fundamental analyses are of course not in themselves trading strategies but are the foundation on which you will need to build your trading strategy.

Unfortunately a lot of people starting out in Forex trading have often heard that you can make good money through day trading. Look at the various tools and systems that are available and soon you will discover that you are able to trade on the markets much more easily after just a couple of weeks. So if you do not want to end up in the same situation as many before you, here are some tips in relation to Forex currency trading online that can help you gain more and lose less.

The more you know about them, the more data you have to analyze and spot trends, which will increase your chances of success. Although this is easier said than done, you can't get greedy or nervous and ignore what it tells you. Simple Forex trading systems work much better than the more complicated types. As like many before you, when you first start trading on the Forex market you will soon realize that a lot of the traders lose money rather than gain. If you include these few tips to any plan you are devising for your Forex currency online trading then you should soon be on your way to making some decent money.

Article Source: http://www.thearticlenet.com

Forex - Trading Terminology Explained

2007-08-17T10:41:00.001-07:00

Whenever a new discipline is undertaken, one of the most basic factors for success is familiarity with the terms utilized by those practicing in that area. Trading in the foreign exchange (FOREX) market is no exception. This article will help new traders understand some of the terminology common in the FOREX market.

While this is not intended to serve as a complete glossary for all the various terms to be encountered in the world of FOREX, the selected terms below commonly recur in the trading sector. In the process of studying them, one should commit the concepts and their meaning to memory so that efficiency will increase as trading activities increase. Although not difficult to comprehend, the terms must become thoroughly familiar so as to help developed a strong foundation for a never-ending education in trading the FOREX.

Pips
In a previous article, this author explained in depth the term “pip”. Without reiterating here the full explanation, suffice it to say that a pip is the unit of measurement representing the smallest movement in the price of a currency. Gaining pips is the goal of every FOREX traders, as these units inherently indicate value.

Spike
Important news releases, such as the U.S. Non-farm Payroll Report (NFP), typically cause the price in the affected currency pairs to suddenly increase or decrease. Referred to as a “spike”, this rapid price movement can take place in a split second and span a range of 50 to 100 pips in one direction. The occurrence of the spike gives traders a quick and rather unique opportunity to make substantial investment returns in a very short period of time when properly approached.

Retracement
There is a tremendous tendency for volatility in the FOREX. Retracement is the change in the direction of currency price against an established trend. It is often, but not necessarily, associated with rapid movements in the price, such as that which occurs during a news release, where the price first spikes in one direction and then retreats. This change can occur without even a moment’s notice. Conversely, the reversal could be gradual, taking place over minutes or even hours.

Stopped Out
As a matter of proper risk management, a trader will utilize a stop loss to limit losses in the event the price moves unfavorably against the trader’s position. The position is said to be “stopped out” and, consequently, closed down if the stop loss trigger is hit, as previously determined by the trader.

Slippage
After submitting a limit order to be filled at a future price level, a trader may experience “slippage”, which occurs when the broker cannot fill the order at the requested price, but instead at the first available price. Most of the time, this works to the trader’s disadvantage by reducing the number of potential pips a trader might gain if the order had been filled at the price requested. Slippage is most likely to occur during a news trading event where the market tends to move rapidly. A few brokers will allow the trader to limit or avoid slippage by manipulating certain user preferences in the controls of the trading platform prior to attempting the trade.

If you are ready to change your future by stepping into the exciting world of trading FOREX, go to http://www.winningtradersassociation.com for more information. Author Sandy Robinson, J.D. is part of the Winning Traders Association, an educational organization founded by John Beiler, President. The organization consists of a network of committed trainers and motivated traders willing to provide support to those interested in trading foreign exchange. Many of the members work from home. Sandy Robinson, J.D., Copyright 2007

Forex Profits

2007-08-17T10:40:00.002-07:00

As a trading advisor in the markets for almost half a decade, I have come to realize a few things about taking the profits. The first thing is to find a low risk trading opportunity then make sure your risk is lower than your potential gain and executing the trade with discipline. In the beginning the best thing is to do this on a demo account or on a single contract basis.

The good thing is that the most of the Commodity Trading Advisors say that you only need one type of strategy or pattern to trade the markets successfully. Become an expert in your form of market pattern or strategy. By this what I mean is that your form of entry and exit has to be low risk and high yielding. Ask yourself the following questions while developing a trading system. What do I want from the markets? How much is my risk when I am entering the trade?

What is my potential gain (make sure that it is bigger than your potential loss) and then trade this whole game with discipline. I have been teaching traders for a few years and the only one's who succeed have patience and discipline to trade my strategies on a demo account till they are comfortable without paying any money to the markets while gaining experience. I call it free experience! and then starting small accounts. Once you memorize the game, it is much easier to play. Happy trading and a prosperous life.

Adnan Kaleemi is a Registered Commodity Trading Advisor and has been advising Forex traders all over the world in more than 60 countries for the last five years. He is currently registered with the commodity and futures trading commission in the US. He reaches global forex traders where he provides daily forex signals and forecasts in the major currency pairs EURUSD, GBPUSD, USDJPY and USDCHF along with profitable forex strategies At http://www.forexforecasting.com you will find informative articles, newsletters and other tools which will help transform your Forex Trading.

FX Currency Trading

2007-08-17T10:40:00.001-07:00

Foreign currency trading or FX currency trading is the new age buzzword for the smart investors. In the global market of foreign currencies, prices fluctuate against one another and change value over time. This creates the opportunity for investment by trading one currency against the other. The dramatic evolution of communication technologies in recent years made it possible for millions of small individual investors to trade forex which was not open to them earlier.

According to a recent study, currencies worth more than $1 trillion are traded daily in the global forex market. Global political and economic events influence forex currency trading. The rates of currencies are determined by the investors’ attitude influencing the market. So if you were capable of foreseeing these developments, you can make profits in FX currency trading. On the other hand, if your assumptions are not correct, you may suffer huge losses. So the key to successful forex currency trading is knowledge.

Forex trading involves currency transactions between banks, investment funds, forex brokers and traders. The demand and supply of a particular currency and investors' expectations determine the market price of that currency. There is no physical location of the market and it is a virtual market.

Four “currency pairs” dominate the global forex currency trading market. These are Euro versus U.S. Dollar, US Dollar versus Japanese Yen, US Dollar versus Swiss Franc, and US Dollar versus British Pound. So for any investor, it will be wise to hold a currency that appreciates in value in relation to the other currencies. For example, you may buy 50 British Pounds for US$100 and hold the Pounds for a while. When the value of Pounds increases in relation to US Dollars, you may sell those Pounds to earn $120.

Analyzing forex currency trading market is also equally important. There are two types of analysis: “fundamental” and “technical”. Fundamental analysis takes into account the economic conditions, political events, situation of emergency, etc. to derive the trend. Technical analysis, on the other hand predicts the future trend on the basis of past prices and trends. Fundamental analysis explains the reasons behind price movements and attempts to predict changes in price and market trends. Traders and investors adopt a hybrid method of analysis based on both technical and fundamental analysis for their Fx currency trading.

Forex currency trading is sometimes described as one of the riskiest financial markets. However, by choosing the reasonable leverage size, traders can minimize their risks. The Forex market is a highly speculative in nature and the ability to analyze price behavior becomes an invaluable asset for any trader or investor.

Since every country is involved in forex currency trading, the market is open round the clock. Irrespective of geographical location, any investor can open an account and buy and sell in any quantity of forex currencies from anywhere in the world. The FX currency trading offers fantastic opportunity for wealth provided you know the basic rules and regulations of the market. Therefore, before starting FX currency trading, do your homework and read as much as to maximize your knowledge hence profits.

Forex Enterprise

2007-08-17T10:39:00.002-07:00

It is common knowledge that the internet is the best place to make money - but can you make money with the Forex Enterprise package? or is Forex Enterprise just another money making scam.

“Who Else Wants To Earn Thousands Of Dollars Per Month With A System That Virtually Runs 100% On Autopilot!?”

This statement on the Forex Enterprise home page instantly made me think that it was a scam. So I decided to do some digging and see what I could find out about Nick Marks and his Forex Enterprise package.

Here's what I found:

Forex Enterprise is a huge, profitable company. They are best known for teaching people to make money with foreign currency exchange (hence the name ForEx). Doing this can be very profitable, although it takes a significant amount of money to start.

Once you enroll in the Forex Enterprise program, they will give you a plug for their currency exchange program, which costs thousands. This is a major turnoff. I prefer companies that allow you to make money without buying anything additional.

The Forex Enterprise makes some ridiculous claims on its website, and that's a red flag. Any company that claims that you can make $100,000 in your first month should be avoided. While you may be able to make some money with Forex Enterprise, it won't be near the amounts that they claim.

Many internet gurus give Forex Enterprise their stamp of approval. I do not recommend it but if you're set on giving it a look the Forex Enterprise does come with a thirty day money back guarantee.

I believe that there are better wealth programs on the internet than Forex Enterprise. If you're looking to do currency exchange, Forex Enterprise might be worth giving a look. If you're looking to make money online, there are better places to learn than from Forex Enterprise.

I recommend taking a look at the Ultimate Wealth Package Unlike Forex Enterprise it's great for beginner's, reasonably priced and their are no strings attached.

Click here to visit Ultimate Wealth Package.

Forex Mini Trading

2007-08-17T10:39:00.001-07:00

Trading the forex market using a mini account is a great way to get you started in forex trading. Below are 7 things you really ought to know when opening a forex mini trading account.

1. Minimum Amount
Mini forex accounts are usually opened by traders who are new to the forex market and do not have the funds to open a regular account. A forex mini account can be opened with as little as $50 to about $300, whereas a regular account usually requires $2,500 or more.

2. Mini Account Contract Sizes
In a mini account, the minimum trading lot size or contract size is 10,000 per contract, whereas for a regular forex account, the lot sizes are 100,000. This means that the mini forex contract is 1/10th the size of the standard contracts. The smaller trade size gives traders the opportunity to trade live with less overall risk or exposure to the market

3. No. of Currency Pairs Offered
Most brokers offer the same number of currency pairs that you can trade whether you are using a mini account or a regular account. Just make sure the 6 major currency pairs are there: EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/CAD. These currency pairs account for 90% of the total daily FX trading volume.

4. Leverage
Leverage allows you to trade more of a currency that you have money in your account. This means that if you have $200 in your mini account and your broker gives you 100:1 leverage, you can trade up to $20,000 in forex. Use leverage carefully. It can magnify your gains but also your losses as well.

Fortunately, with a forex mini trading account, because the lot sizes are 1/10th of the regular contract, your potential losses are also 1/10th the size. For example, if you are trading with a regular account and incur a 30 pip loss, this is equivalent to a loss of $300. With a mini account, this translate to about $30 only.

5. Same Features as Regular Accounts
Forex mini trading accounts are great for traders with less than $10,000 to start. You have all the same features and tools as the regular accounts. That means you will enjoy the same trading platform, charting, market analysis, spreads, customer service, etc. Although the standard trade size is 10,000 units – you are not limited to trading one lot! For instance, you can trade 10,000 units, 20,000 units or 80,000 units. This means as you become more seasoned, you can slowly increase the size of your trades to maximize your potential.

6. Develop a Disciplined Trading Strategy
When trading a mini forex account, a 20 pip floating loss is approximately $20. That same 20 pip movement against you on the regular account now becomes a $200 floating loss. By starting with a mini account, a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Education and discipline trading are key to your success in forex trading.

7. Build Confidence With a Mini Account
Opening a mini account with a broker lets you test out their trade execution time, services and spread movement. Although a broker may advertise narrow spreads, these spread can change during releases of economic data and other important news. It also allows you to test out different trading strategies while minimizing your risk exposure. As your trading confidence grows, you can then upgrade to a regular account.

Disclaimer: Please note that forex trading involves substantial risk of loss, and may not be suitable for everyone.

Christabelle Chiam is an avid forex trader and writer. Did you know only 25% of forex professionals use technical analysis as their primary decision making tool? Learn how to trade the forex market like a pro. Visit http://www.forexsecretweapon.com

Currency Market Daily Interest Rollover

2007-08-17T10:36:00.000-07:00

In the spot currency market, trades settle in two business days and open trading positions held at time of rollover are automatically rolled over by the forex broker to the next settlement date, the open trade position is swapped for a new position expiring the following settlement date at 5pm EST rollover. This is also known as "tomorrow, next day" or simply "tom next."

For example, if you buy 500,000 Dollars on Monday, you must deliver 500,000 Dollars on Wednesday. Be aware that on Wednesday, the amount added or subtracted to an account as a result of rolling over a position tends to be around three times the usual amount. This "3-Day" rollover accounts for settlement of trades through the weekend period.

How may this affect your forex trading account?

If you are long the currency bearing the higher interest rate then you should earn interest, automatically credited to your trading account. Conversely, if you are short the currency bearing the higher interest rate then you should experience a small debit to your account.

Be aware that most forex brokers require a 2% margin set for your account in order to receive interest. If not, you will have to pay for the rollover, it doesn't matter whether you are long or short the currency bearing the higher interest rate

Day Traders

For day traders, who almost never hold any overnight positions, the rollover is not applicable because there are no positions to roll, and therefore no interest is earned or paid.

Swing Traders

If you are a swing, position or long term trader, the rollover will affect your account since you'll earn or pay interest on a daily basis. Therefore, it is recommend to set your account at 2% margin and only try to long the currency bearing the higher interest rate.

A strategy for the longer term trader is the carry trade, which relies on a big interest rate differential between the two traded currencies.

For example the NZD/JPY currency cross pair.

Currently, traders earn a $13 daily rollover interest, credited to their accounts at 5PM EST while holding a long position in this pair for each standard lot(1 standard lot equals 100,000 units) traded; BUT, if you are short NDZ/JPY, your account will be debited $14/day for each standard lot traded!

Daily rollover in the forex market example

If you are long 300,000 EUR/USD at rollover (5PM est) and EUR/USD at rollover is trading at 1.3200, the EUR short-term interest rate is 3.50% and the USD short-term interest rate is 5.25%, the rollover debit or credit to your account would be as follows:

Rollover Formula

Number of lots (Units) x (base currency interest rate - quote currency interest rate) / 365 days per year x current base currency rate = daily rollover interest debit/credit

Calculation*

Therefore: 300,000 x (3.50% - 5.25%) / 365 x 1.3200 = -$16,98 daily rollover interest debit

-$16,98 rollover debit will be subtracted to your trading account at 5PM EST as a result of rolling over since you are long the currency bearing the lower interest rate.

* The above calculation is an example only and is to be used for educational and informative purposes only since the amount actually debited or credited to your account will vary depending on the forex broker and the actual currency rate. Most brokers display the daily rollover interest fees on their online trading platform.

Thanks for your time,

http://Aboutcurrency.com

For more free tutorials, forex tools, free system downloads, news, forex calendar, forex product reviews and articles about forex trading, please visit us at Aboutcurrency.com | Forex. Aboutcurrency.com

Forex Trading Prices REALLY Move

2007-08-17T10:35:00.002-07:00

How and why do forex prices move? The answer may sound obvious but most traders get the reasons wrong and lose. If you understand the following 3 points, then you will understand more above currency movement and get a head start in your quest for currency trading success.

So how do prices move?

Well of course they move in reaction to all the supply and demand political factors such as: interest rates, government policy, economic health and a whole host of others and these are facts but prices are also influenced by people.

Now all the people who look at the facts see them and have opinions that differ and take positions.

The important point is:

They all draw different conclusions from the facts they see and this causes prices to go in a different direction to where the bulk of traders think they will!

A simple equation is:

Supply and demand factors + Human opinion (investor psychology) = market movement.

So you need not only to take into account the supply and demand fundamentals but also make a judgment on how other people are going to judge the facts and how they see them and then work out which way prices are going to.

This is why forex trading is hard and 95% of traders fail to win.

So how do you do it and make your forex trading strategy a success?

Here are some tips.

1. Use forex technical analysis as a basis for your forex trading strategy.

Technical analysis and looking at forex charts gives you a distinct edge in that it takes into account both the fundamentals and investor psychology.

Technical analysis simply assumes that all known fundamentals will immediately show up in the market price (and in today’s world of instant communications this is truer than ever before) but it also takes into account human psychology which always pushes prices to far in either direction.

These price spikes are easy to spot on forex charts and repeat ( as human nature is constant ) and can be traded for profit.

If you are trading forex NEVER do the following:

1. Trade fundamental news stories volatility is high and your playing catch up as the news is instantly discounted.

2. Never mix fundamentals and technical analysis as there separate disciplines.

3. While technical analysis is a great way to trade, be aware its an odds game and NOT a science.

Humans are unpredictable and while you can get the odds in your favour nothing is certain.

Ignore people who try and sell you scientific theories or tools such as cycles, Elliot wave or Fibonacci based systems – they don’t work.

If prices could be predicted with scientific accuracy we would all know the price in advance and there would be no market. Its different opinions that cause prices to move.

Trading The Odds For Big Profits

So you are playing the odds and with a simple forex trading system based upon technical analysis you can make a lot of money. One final point:

If trading via forex technical analysis and using forex charts, keep in mind you need to use valid data – this means trading the longer term trends.

Avoid day trading as the time period is to short and the data is meaningless and you will lose.

If you understand the above points you will know how and why prices move and be able to trade them for profit and avoid the mistakes of the losing majority.

How to devise a forex trading system for profit based upon technical analysis will be covered in part 2 of this article series.

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On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html

How to Use a Forex Trading Signal

2007-08-17T10:35:00.001-07:00

Forex trading signals are triggered when technical conditions signal a good trading opportunity. Email and SMS (text message) are popular delivery methods for forex trading signal alerts, but Web-based option can often be best if you're at your PC when the signal emerges.

For example, some forex trading signal services have automatic pop-up software to indicate the perfect entry (or exit) point of a trade. These will often include candlestick currency charts that may flash or blink so long as the entry (or exit) point remains valid. If you trust the service provider and you don't have any conflicting information telling you the trade is bad, right then is the perfect time to execute the trade.

But other forex trading services specialize in catering to traders who have medium- or long-term strategies, rather than short-term. A medium- or long-term trade may have a forex trading signal that remains valid for an entire day (or longer), so for traders specializing in longer-duration trades, these forex trading signals services can be delivered via email or SMS at no detriment.

Another way to use signals is to pair them with a service that automatically executes your trades. This can be a risky prospect for traders who prefer to use forex trading signals as mere recommendations and like to do their own homework before making their trades, and such services are better for short-term traders who don't have time to do their own analysis before pulling the trigger on a trade, anyway. The good news is that, thanks to modern technology, forex traders have the option to choose which style of trading -- and which style of corresponding forex trading signals -- works best for them.

Some forex trading signal services allow you to sign up for a free trial; usually consisting of ten or fourteen days. Take advantage of these free trials to make sure your style of trading is compatible with their forex trading signals. If you are new to the forex market, then you can sign up for a free trial and use the signals with a free "practice" account in which you trade "demo money". This way you can learn how to use signals without undue risk.

But ultimately, if you want to make money in the forex market, you're going to have to risk money in a real account, and unless you are incredibly good (or lucky), you're probably also going to have to spend money on a good forex trading signal service. The forex market is not for passive investors -- it is for active traders who wish to rely solely on their wits... And a little help from forex trading signals, of course!

For more information visit at http://www.tradefxplus.com and get free EUR/USD Forex trading signals trading recommendations and email alerts. TradeFXplus Forex signals service gives the novice or professional currency trader the tools to trade currencies profitably.

Forex Trading Systems - 95% Lose

2007-08-17T10:34:00.000-07:00

Forex trading systems are hot, you will see them everywhere - all promising you big gains. The vast majority fail to deliver and the reason is “curve fitting”. If you don’t know what it is read on.

Definition

Curve fitting is using past data and bends the rules of the system, to fit the data and make it profitable.

Because the rules of the system have been bent on a snapshot of past data (keep in mind markets never repeat themselves exactly) it is curve fitted and chances are it will lose in real time trading.

This is really like shooting at a barn door with a gun and then drawing a bulls-eye around the shots AFTERWARDS, making them all bulls-eyes!

Hypothetical Illusions

The fact is most forex trading systems don’t have a real time track record, they only have one done in hindsight.

Now making money in hindsight is easy, especially if you curve fit it, but of course trading without knowing the closing prices is much more difficult!

Most forex system vendors know there systems don’t work and rely on curve fitting and hyped advertising copy to sell their systems – then the forex trader wipes himself out and wonders why!

You take a loss and the vendor makes a guaranteed return selling you a junk system they dont even trade themselves!

So How Do You Spot Curve Fitting?

Well when you see a hypothetical track record, be on your guard straight away and look for the following:

1. Lots of indicators and lots of different rules (often with different rules and parameters per currency)

2. Look for a track record with extraordinary growth and absence of drawdown.

A system that exhibits the above will be curve fitted.

Don’t Fall For The Hype

Really you shouldn’t bother trading forex trading systems which use hypothetical track records but if you want to examine the logic, rules and parameters closely.

Many vendors also keep their rules and parameters secret and don’t even tell you what they are - don’t even consider these “black box” systems. most of the time they just make the track records up.

For some reason forex traders take hypothetical records seriously, but there not really worth anything unless you can study them and see their not curve fitted and believe me most of them are!

Play Safe

Vendors who have to use hyped advertising copy and a hypothetical track record generally don’t have a product worth considering – ONLY deal with vendors of forex trading systems who can back their claims up with a real audited track record over 2 years or more.

After all – If they don’t have the guts to trade their own system and prove it's worth why should you?

Would you take driving lessons from someone who couldn't prove they could drive? Exactly.

Next time you think of buying a forex trading system, check it out and the chances are its curve fitted and this makes you odds on to lose if you use it.

Play safe – only use a system that has a real time track record.

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Forex Trading - Tips

2007-08-17T10:16:00.000-07:00

Forex trading is lucrative because you can use leverage and most brokers will allow you to leverage your deposit by 200:1, while it can make you big money it can also see you wiped out quickly.

So how do you use leverage to seek big gains, while at the same time avoiding big losses?

Let’s take a look.

Risk per Trade

Most traders simply think their risk per trade is their expected return – their stop protection but this is rubbish. This is simply a mental guess and what may look on paper like a good risk to reward trade is not.

The fact is traders make calculations that lull them into a false sense of security.

When trading FX start by looking at the volatility of the market and how to deal with it.

Placing Stops

For example there is absolutely no point in placing a stop close when it's within normal volatility for the currency.

Who does this?

Day traders are prime culprits.

They think that if they place a stop just outside the daily range it gives them a good chance of winning, in fact the reverse is true – as volatility can and does take prices anywhere in a day, the risk of them losing is guaranteed over the longer term.

If you are trading you need to have a stop behind a key resistance or support level and if possible on stop close only basis. Daily volatility often carries trades through support and resistance takes out stops and then closes below the level.

Trailing stops

Never be tempted to move them up to quickly to lock in profits.

You need to understand the volatility of the market and keep stops back - way outside of short term normal market pullbacks. Accept that if you are trend following, that you will have to give a big, chunk of your gains back the market when the trend ends.

This won’t matter if your trend following you can’t predict the end of a trend and if you got 70% of every major trend you would make a lot of money.

Cut Your Trading Down

You don’t get rewarded for how often you trade you get rewarded for making money.

The really good trades only come around a few times a year in each currency, so be very selective and when you see these trends - risk as much as you can.

I know traders who make 100% or more on an annulized basis and they trade around six to ten times a year! They do so well becuase they are only interested in the big high odds trades and these only occur ocassionally.

The fact is most traders, trade low odds opportunties to often and lose - don’t fall into this trap.

Leverage can make you a Lot of money but it needs to be handled wisely.

Accept that you have to take calculated risks, trade only when the time is right, follow the trend until it reverses and don’t try and predict when it might end - let the market tell you that.

If you do the above you can use leverage to your advantage.

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Forex trading - Online Forex Trading Course

2007-08-17T10:14:00.000-07:00

The Forex trading market is an around-the-clock cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. Forex trading market conditions can change at any moment in response to real-time events, such as political unrest or the rate of inflation. The purpose of this article is to give you an introduction to common Forex trading terms and their definitions.

Ask Price: The ask price is the price you can buy at.

Base Currency: The currency to the left of the / in a Forex quote is the base currency. Its value is always 1. In the Forex quote, EUR/USD = 1.3489, EUR is the base currency.

Bid/Ask Spread: The bid/ask spread or simply spread is the "distance" between the bid and ask prices. This spread is usually expressed in pips.

Bid Price: The bid price is the price you can sell at.

Counter Currency: The currency to the right of the / in a Forex quote is the counter currency. In the Forex quote, EUR/USD = 1.3489, USD is the counter currency.

Forex Deal: The purchase or sale of a currency.

Forex Quote: Forex quotes are always expressed in pairs. In the following example, your "pair" of currencies are the U.S. Dollar (USD) and the Euro (EUR). The Forex quote, EUR/USD = 1.3489, means that one Euro is equal to 1.3489 U.S. dollars.

Fundamental Analysis: A fundamental analysis uses economic and political factors, such as housing starts, the unemployment rate, or inflation, as a means of predicting currency movements. Fundamental analysis is concerned with the reasons for currency movements.

Long Position: A long position is a market position that appreciates in value if the market price increases.

Lot: 1 lot is equal to 100,000 units of the base. Likewise, 2 lots are equal to 200,000 units of the base, 3 lots are equal to 300,000 units of the base, and so on.

Margin: Margin is referred to as the collateral needed to facilitate A Forex deal. Usually, this is a very small portion of the entire deal, say 1% or 1:100. However, margin is a "double-edged sword." Without the proper use of risk management tools (that is, stop-loss and take-profit orders), you can experience substantial losses as well as gains.

Open Position: When your Forex deal is running, you hold an "open position."

Pip: The spread between the bid and ask prices.

Short Position: A short position is a market position that appreciates in value if the market price decreases.

Stop Loss Order: A market order to close a Forex position if or when losses reach a pre-set threshold.

Take Profit Order: A market order to close a Forex position if or when profits reach a pre-set threshold.

Technical Analysis: A technical analysis uses historical data as a means of predicting currency movements. The technical analyst believes that history repeats itself over and over again. Technical analysis is not concerned with the reasons for currency movements (for example, interest rates or inflation). Instead, it believes that historical currency movements are a clear indication of future ones.

As with stocks and mutual funds, there is risk in Forex trading. The risk results from fluctuations in the currency exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you.

Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can learn how to profit trading Forex and how to set yourself apart from 95% of all Forex traders at: http://www.forex-trading-system.name/forex_trading_courses_online.htm

Forex Trading - Making , online investments

2007-08-17T10:11:00.004-07:00

As human nature repeats itself over time so do market movements and a number of scientific theories have been developed to help traders make big gains consistently and here we will look at them and how they can help you.

Let’s start with a fact

If markets were scientific then we would all know the price in advance and there would be no market – it is the unpredictability of market behaviour that makes a market move.

So if markets are not moving to a scientific theory its pretty obvious that no scientific theory will work but its not all bad news you can make money which we will return to in a moment.

Popular Scientific Theories

The king of the scientific theories is Elliot Wave (and we will ignore the fact he died poor and never made any money with it) its not scientific you have to decide what to do! This means its subjective and not a scientific theory at all.

You do however get objective advice with the Fibonacci number sequence.

This says markets retrace by certain percentages and you can trade off these levels – Try it and see how quickly you get wiped out.

This theory always amuses me as it was not designed to be applied to financial markets it was devised to solve a theory to do with the copulation of rabbits in the 12th century!

There are many more but apart from the fact they don’t work you have to wonder if anyone had found the key to market prediction with science, why they would sell it for a few hundred bucks on the internet!

HOW TO MAKE MONEY IN FOREX

Ok so forex markets cannot be predicted with scientific accuracy but they can be traded for profit you just have to see them for what they are an odds game.

Like the successful blackjack or poker player you simply increase your bet size when the cards are in your favour and decrease betting or don’t bet at all, when their not.

Of course, just like the card player doesn’t win every hand, you wont win every trade but over time you will win more than you lose and that’s what trading is about.

It is no coincidence that some of the top traders ever came from the blackjack and poker tables and many made huge profits.

If you want to win do what they do play the odds and in part 2 of this article series we will show how to do this and build big profits over time.

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Forex Trading - Making , online investments

2007-08-17T10:11:00.002-07:00

Let’s start with a fact

If markets were scientific then we would all know the price in advance and there would be no market – it is the unpredictability of market behaviour that makes a market move.

So if markets are not moving to a scientific theory its pretty obvious that no scientific theory will work but its not all bad news you can make money which we will return to in a moment.

Popular Scientific Theories

You do however get objective advice with the Fibonacci number sequence.

This says markets retrace by certain percentages and you can trade off these levels – Try it and see how quickly you get wiped out.

This theory always amuses me as it was not designed to be applied to financial markets it was devised to solve a theory to do with the copulation of rabbits in the 12th century!

HOW TO MAKE MONEY IN FOREX

Ok so forex markets cannot be predicted with scientific accuracy but they can be traded for profit you just have to see them for what they are an odds game.

Like the successful blackjack or poker player you simply increase your bet size when the cards are in your favour and decrease betting or don’t bet at all, when their not.

Of course, just like the card player doesn’t win every hand, you wont win every trade but over time you will win more than you lose and that’s what trading is about.

It is no coincidence that some of the top traders ever came from the blackjack and poker tables and many made huge profits.

If you want to win do what they do play the odds and in part 2 of this article series we will show how to do this and build big profits over time.

NEW! 5 X Critical Trader PDF's & Much More

Forex Trading System 2

2007-08-17T10:11:00.001-07:00

If you want a simple forex trading system that makes money then we are going to give you one that you can get off the net for free. Best of all its easy to understand easy to apply and makes big profits so let’s look at it.

This system works on the following basis it buys “high and sells higher” while most traders look to “buy low and sell high”

Lets look at the theory and then how you can execute your trading signals.

1. The Logic & the Theory OF the System

Why buy low sell high doesn’t work

Its an accepted market wisdom and it doesn’t work. If you try and buy the low of a market you are guessing or hoping and the market will kill you.

However if you look for important breaks of resistance and an acceleration in price momentum, odds are the trend will continue and you can follow it for huge profits.

So why doesn’t every trader do this?

Because they want to buy the pullback and think they have missed a bit of the move (this is true but you needn’t worry about that if the price trend continues) they then wait, prices don’t pull back and they miss the move.

Its hard mentally to miss the start of the move, but if you grit your teeth and enter you will see a lot more profits come your way and be in on all the big moves.

Furthermore most of the big currency trends of the year start from new market highs NOT market lows.

So that’s the theory, this forex trading system is based upon.

Now lets see how to construct a system to trade breakouts.

You need to look for important resistance levels and this is normally a level that has been tested 4 times or more and repelled – in at least two separate time frames.

When this level is broken the odds favour the trend to continue your aim is to look at your forex charts and separate out the ones that are likely to continue.

You don’t need to guess or predict you look for confirmation.

2. Confirming Entry

What confirmation do you need?

You need to have confirmation that price momentum is accelerating and need some indicators to help you do this.

There are many momentum indicators but the best two are the stochastic and Relative Strength Index (RSI) and they discussed in our other articles.

Use these and make sure they BOTH confirm accelerating price momentum then enter your trade.

They will take a bit of practice but its well worth the effort and you will soon see how effective this combo is in confirming trade entry and exit levels.

3. Stop Loss Protection

Is simply below the breakout point once the level of resistance is broken it will then act as support.

Other Important Points of This Forex Strategy

Only trade breaks of resistance that are considered valid by the market - we have said four tests in two different time frames – but keep in mind, the more tests and the more time frames the better.

So you need to be patient – you can make 100% gains with this forex trading system trading just a few times a year.

If you like the action of forex trading this system is not for you – if you like profits it will give you them.

Also don’t trail the stop up to quickly LEAVE it as breakouts very often get re tested so you don’t want to be clipped out by volatility

That Seems Simple!

It’s a very simple system and that’s why it works.

Simple systems work best as they have few elements to break, also using breakouts is great because most traders can’t buy breaks as they want to buy low and sell high – don’t let that worry you though 95% of forex traders lose!

You can learn this system in under a week easily and test it.

Try trading this forex trading system for yourself in a free demo account and see the profit potential for yourself and target those triple annual digit gains you have always wanted!

I have given it to you free all you have to do is look it up on the net see the logic and try it and you will be surprised at how effective it is.

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The Best Forex Trading System

2007-08-17T10:10:00.000-07:00

Finding the best forex trading system is no easy task, many people have spent thousands of dollars looking for a good forex trading system. You may be one of them but do not despair I will now show you a easy stress free way to trade the forex market.

The first thing I want you to do is get all those ideas about making millions quickly out of your head. This is a business like any other and it takes time to build up to a point where you will be making a decent income. It is a fact that in the forex market it is very hard to trade on the intraday charts. The Higher the time frame you choose to trade then the easier it will be fore you to make consistent profits. The majority of my profits come from trading the daily charts or higher, why? Because it's easier! I am going to explain a profitable way to trade daily charts that anyone with a little patience can put to use straight away. Let's get started.

Choose a daily candle/bar chart for your favourite currency pair and plot the key support/resistance areas with horizontal lines and trend lines. When price approaches these areas we are looking for a certain candle formation that will give us the opportunity to get a very high probability trade.

The formation we are looking for are pin bar's (also know as shooting stars) , for it to pass as a reliable pin bar it must have a nice long body that touches or gets very close to the support/resistance area. This formation is a very strong signal that price may change direction. I have manually tested hundreds of pin bars back over past data on 11 pairs and I found that when a pin bar is formed at one of these key levels then price retraces the pin bar by 50% at least 75% of the time before taking off in the direction of the trade. This gives us a great low risk high reward trade.

Once you spot a good pin bar at a key support/resistance level and everything looks in place you entry order at the 50% retrace level of the pin bar. To find this measure the total size of the pin bar for example 70 pips, then divide it by two. You may often notice that the previous bar to the pin bar also stopped at the 50% mark of the pin bar, this gives us even more confidence in your trade. Once you have placed your order make sure you set your stop 5 pips above the pin bar, if price ever breaks the pin bar then the probability of the trade being profitable is low.

During the next days trading price will generally come back to the 50% level of the pin bar and open your position, usually not long later price will take off in the direction of your trade. Sometimes I have pinpointed the entry to the pip! It is important that you move your stop to break even once you are in profit by the same amount that you risked.

These trades can easily catch 500 pip moves as you are trading on the daily charts. Each pair will have around 2 good setups a month so if you want to trade more simply add more pairs. This is the best forex trading system for those who have a full time job, all you have to do is check the charts once every evening for possible trade setups and enter your orders with stop losses and take profits. Take a look over your charts I think you will be pleasantly surprised how affective this simple system is.

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Forex Trading - 10 Common Errors That Cause Equity Wipe Out

2007-08-17T10:09:00.000-07:00

Here are ten common errors in forex trading tat cause equity wipe out. 95% of traders lose and they make some or all of these errors. If you do then you will wipe yourself out so learn them and avoid them.

1. Trying to Predict

Most traders try and predict where prices will go but this is simply relying on hope and you will see your equity disappear quickly!

You need to trade on the reality and that means waiting for price momentum to confirm the trend is going your way.

If you don’t know how to use price momentum indicators learn or lose.

2. Following a Scientific Theory

Follows on from the above – markets are not scientific so avoid theories such as Elliot Wave or Fibonacci numbers.

Its pretty obvious markets are not scientific, because if they were we would all know the price in advance and there would be no market – PERIOD.

When you learn forex trading the most important part of your forex education is seeing forex trading as an odds game.

If you trade the odds you will make a lot of money.

3. Trading To Much

Most traders like to trade all the time in case they miss a move and end up trading signals that have poor odds.

Keep this fact in mind you get your reward for being RIGHT not for effort or how often you trade so trade only high odds trades and they don’t dome around often

4. Buying From a Vendor

There are numerous sharks out there who say they will make you rich for a few hundred dollars!

Really?

If the forex trading systems were as good as they claim they would be to busy making money to bother you.

Avoid them and don’t fall for the hype, they never have a track record to back up their claims

5. Poor Money Management

If you don’t know how to place stops then you will lose also over leveraging will kill you. Play great defence first and the profits will take care of themselves

6. Not having The courage to Hold Profits

Most traders get so excited they have a profit they take it early! If you do this you will lose – have the courage of your conviction to run trends for weeks or months if there going your way.

7. Chasing your Tail

Be patient with any forex trading strategy or system.

At some point you can expect to lose for weeks or months (that’s not the systems fault it’s the markets) judge your gains over years not months.

8. Trading The News

Trading news stories is dumb – you have huge volatility and as the news is discounted in a split second, its a lottery and you wont win - you will simply get murdered by volatility.

9. Mixing Fundamentals and Technical's

There two separate disciplines you cant mix them – choose one and stick with it. In our view the best way to trade is with forex technical analysis.

10. Day Trading

You can make money day trading!

Why are some trades so stupid?

Its 100% guaranteed way to wipe out your equity as the data is to short and you cant use it to get the odds in your favour. If you can’t get the odds in your favour, you will lose – PERIOD.

This lead on from our point about vendors selling junk systems that have no chance of making money and day trading ones are the most popular – try and find a real time track record and you will look for a long time!

Finally!

There you have it 10 errors to avoid and if you do you will have a great chance of making big gains - fall for any of them and you will lose your equity and join the 95% of losers.

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by : Monica Hendrix