Wednesday, 30 Sep 2009 The USD Remains Pressured on U.S Interest Rate Prospects

Wednesday, 30 Sep 2009

The USD Remains Pressured on U.S Interest Rate Prospects

The U.S. currency may be headed for a quarterly decline against 14 of 16 major counterparts before report this week forecast to show American employers cut fewer jobs, boosting demand for higher-yielding assets. Although the greenback posted small gains against major rivals Tuesday, edging higher on the Japanese currency, the currency may reverse its earlier gains on speculation a Federal Reserve official will reiterate today that record-low Interest Rates will be unchanged for an extended period. 

Economic News

USD - Lower U.S. Consumer Confidence Figures Boost the Dollar

The Dollar soared yesterday on lower U.S. Consumer Confidence figures of 53.1, rather than the forecasted 57.0. The Dollar rose to a near 2-and-a-half-week high vs. the EUR to 1.4526 at its highest point yesterday. It should be pointed out that the data from the U.S. seemed to lead to a decrease in demand for riskier assets that are funded by borrowing the U.S. Dollar.

The EUR/USD cross fell by nearly 70 pips on Tuesday to finish trading at the 1.4592 level. The EUR fell, despite positive economic news from the Euro-Zone. The Dollar fell for the second day against the GBP, as the pair finished trading at 1.5969. The USD went volatile vs. the Pound, due to the British currency rising as the Bank of England (BoE) announced that it had no plans for lowering bank reserve rates. With regards to the JPY, the USD to make some inroads as the cross closed at 90.15. This may be partially owed to Japan's government wanting to abandon a strong Yen.

Looking ahead to today's trading, there is plenty of economic news that is expected to be published from the U.S. economy. The most important of these is expected to be the ADP Non-Farm Employment Change at 12:15 GMT. Also, amongst the other important data releases from the U.S. are the Final GDP figures at 12:30 GMT and the Chicago PMI at 13:45 GMT. As you forex traders can see, there is no break expected from trading today. In addition, due to the high volatility expected, it is encouraged that you buy-up large USD positions now, as today's trading takes off.

EUR - EUR Tumbles to 2-Week Low against the Dollar

On Tuesday, the EUR tumbled to a near 2-and-half-week low against the Dollar. This came about even though the EUR experienced a day of positive data publications. The bearish EUR occurred as demand for riskier assets dropped. This was initiated by U.S. Consumer Confidence falling significantly yesterday. On the other hand, the British Pound actually rose vs. its key currency pairs, as the Bank of England (BoE) revealed to economists that it doesn't intend to lower the rates on the reserves of banks.

The EUR fell by about 70 pips vs. the USD on Tuesday to the 1.4592 level. The GBP/USD cross finished trading notably higher at 1.5969. The news in Britain helped the EUR/GBP fall for a second day in a row to the 0.9132 level. The news in Britain also led support to the GBP in regards to the GBP/JPY cross, as the pair rose by over 100 pips to the 144.40 level. It seems that on all fronts that the cable was unaffected by the pessimistic news in the U.S. With regards to the European currency, many traders were surprised by the pace of its decline in yesterday's trading.

Today's trading offers promising opportunities for forex traders. There is much data that is expected to be released from Britain, the Euro-Zone and Switzerland. The German Unemployment Change figures are expected to be published at 07:55 GMT and the CPI Flash Estimate at 09:00 GMT. From Britain, the Index of Services results are set to be released at 08:30 GMT. The KOF Economic Barometer is scheduled to be released from Switzerland at 09:30 GMT.

JPY - Strong Yen under Downward Pressure

The strong Yen has recently come under a lot of pressure lately, as the Japanese economy gets hit by deflation. For example, the Core Inflation tumbled by nearly 2.5% in September. This is the largest drop in the past decade. This comes as we have seen the JPY rise significantly vs. the GBP, USD and EUR since the start of the financial crisis. Due to the deflation problem, the new Democrats party has u-turned on Japan's policy of upholding a strong Yen.

The news seemed to put some downward pressure on the Japanese currency. The USD/JPY cross rose by about 20 pips to the 90.15 level. The GBP/JPY cross rose over 100 pips to the 144.40 level. The JPY's downward trend may continue if investors continue to lose confidence on an extremely battered economy. Market players should be paying a close attention to the upcoming releases: Tankan Manufacturing Index, Japanese Retail Sales and the Tankan Non-Manufacturing Index at 23:50 GMT.

OIL - Crude Oil Hits the $67 Mark

Crude Oil prices rose to over $67 to the $67.26 level, before falling to $66.75. This behavior was owed to a weak Dollar in early trading. However, the U.S. currency gained significantly on Tuesday ever since the negative U.S. Consumer Confidence figures were released. In turn, this put downward pressure on Crude prices. Thus as the USD strengthened, Crude Oil prices went lower.

Oil prices are set to encounter another exciting day of trading. The most important release today is the publication of Crude Oil Inventories at 14:30 GMT. The other important release that is set to impact the value of Crude today is the U.S. ADP Non-Farm Employment Change, as Crude is priced in U.S. Dollars. If you want to make profits from Oil today, then you should open your trades as soon as possible.

Technical News

EUR/USD

The sustained upward movement of this pair has begun to push the long-term oscillators, such as the daily chart's RSI, into the over-bought territory. This appears to be putting downward pressure on the price of this pair as it has begun to level off. As momentum shifts into a downward posture, going short with tight stops might be a good strategy.

GBP/USD

This pair's recent drop in value continues to hold the price in the over-sold territory on the RSI of the daily chart, signaling upward pressure. While the momentum appears to remain downward, we may likely see a number of upward corrections throughout the day. Buying on the lows and selling on the highs of these fluctuations will be a good strategy today

USD/JPY

There is a very accurate bearish channel forming on the 30 min. chart as the pair is now floating in the bottom of it. Currently, as all oscillators on the daily chart are pointing down, it seems that the downtrend will extend. Going short might be a good strategy today

USD/CHF

An imminent bullish cross on the hourly Slow Stochastic suggests that an upward movement is on the way. As the price recently exited the over-sold territory on the hourly RSI, there may be only a small amount of momentum for this impending bullish movement. Going long with tight stops may be the safest bet for today

The Wild Card

AUD/USD

The price of this pair currently floats in the over-bought territory of the 30 min. chart's RSI, indicating a downward pressure. The impending bearish crosses on the hourly MACD and Slow Stochastic both support the notion of a downward move. Those participating in the forex market today would be wise to pay attention to this pair as the downward pressure appears to be getting stronger and a bearish move may be impending

Tuesday, 29 Sep 2009 US Consumer Confidence Falls before Holiday Season

Tuesday, 29 Sep 2009

US Consumer Confidence Falls before Holiday Season

It appears as if another bleak report has dampened the recent surge in market optimism regarding the potential for an economic recovery. The Conference Board's report on consumer confidence actually shrank to a reading of 53.1, lower than last month's 54.5, and well beneath the expected rise towards 57.0. Coming just before the onset of the holiday season in the United States, this information does not bode well for the prospects of a speedy recovery.
As a result of this consumer confidence report, safe-haven assets such as the US Dollar made modest gains throughout today's trading. A slump in the stock market also indicted a flight away from riskier assets. The Japanese Yen was also expected to continue strengthening following Japanese Finance Minister Fujii's comments about not intervening in the JPY's recent movements, yet the island currency traded slightly lower against a number of its rivals throughout the day regardless of this sentiment. Traders are still anticipating this Friday's US Non-Farm Payrolls data, which always carries a deep and lasting impact on the USD's trends for the week which follows.

forex news -US Dollar cling to recent Gains

forex news -US Dollar cling to recent Gains

The US dollar has achieved a bit but combines its gains from December 18 and 19 from the beginning of the week, and this is probable to remain the topic throughout Friday as trading volumes are supposed to stay low. This has been the topic for the stock markets too, as the Dow Jones Industrial Average has hardly moved from a channel formation by a present range of about 8,370 to 9,000. All of this submissive price movement came in spite of a sequence of releases that might have been market-activity under diverse situations. First, US Q3 GDP was verified at -0.5 %, but the shocking parts were descending alterations to consumer spending and core PCE, as the alterations indicate that the largest driver of increase and inflation pressures slowed more than expected before.

forex news - EURUSD

forex news - EURUSD

The Euro-Zone current account shortfall dropped to 6.4B from an improved reading of 8.8B consequently of cheaper energy prices. The breakdown of the report indicated that the services balance marked a 2.8B excess, whilst the revenue and transfer balance shortfall heaved to 9.7B from 6.6B in September. In spite of the minor advance in the recent account, trade situations are probable to worsen more as requirement from home and abroad weaken

forex news - British Pound position depending on the Bank of England

forex news - British Pound position depending on the Bank of England

Throughout November, the UK consumer price index (CPI) dropped less than anticipated at a rate of -0.1 %, whilst the yearly rate calmed to 4.1 % from 4.5 %. Whilst this is still way over the Bank of England’s 2.0 % objective, BOE Governor Mervyn King stated this morning that CPI is going to probably reach it throughout the beginning of 2009, but will drop significantly low toward the end of the year, and maybe even lower than 1 %. Mr. King as well stated that the Monetary Policy Committee (MPC) is going to keep on taking any actions are necessary to make sure that the viewpoint for inflation stays in the same level with the Government's 2 % objective.

forex news - Dollar might be demoted during Holiday Trading

forex news - Dollar might be demoted during Holiday Trading

There are plenty of reasons for US dollar to pull back, such as the White House’s auto aid that might help to increase risk sentiment, the Federal Reserve’s rate cut last week, and the outlook of quantitative calming that could direct long-term interest rates lower. But throughout the next week, we must ask what kind of price movement will be there. With the holidays coming, a lot of the world’s monetary markets are going to close and trading volumes are going to drop significantly

forex news - Will the Euro be as stable as suggested?

forex news - Will the Euro be as stable as suggested?

The euro had a rally during recent week, but it’s hard to judge that if it was an indication of optimism in European expansion and interest rates or a sheer retracement from the need to swiftly branch out away from the US dollar. This is going to be an essential concern for the FX market’s 2nd most liquid currency when fundamental traders return in full power at the start of 2009. In addition, reforming the estimate for the euro might in fact clarify the dollar’s course throughout the coming weeks. Tightening the figures, the euro’s rally last week was the largest since the currency started trading almost 10 years ago. But this tough momentum was mainly reflected against the dollar and pound

Dollar: no more status as safe heaven currency

Dollar: no more status as safe heaven currency

The basic question which the dollar traders have been asking for is obviously about whether the risk sentiment has taken a major turn for the improvement or if the dollar is dropping its position as a safe haven currency. This past week, month-long congestion patterns behind the major pairs went down in conclusion. Breakouts were predictable, but taking into consideration that the low levels of sentiment and the severe position for the worldwide financial system, the primary bend was towards a recovery of the bearish trend that has found deleveraging favoring the world’s most liquid currency. The Japanese yen in fact rallied in opposition to its liquid counterparts following the US Congress struck down greatly debated rescue for the ailing auto industry.

forex news - US Dollar vs. Aggressive Rate Cut

forex news - US Dollar vs. Aggressive Rate Cut

The US dollar dropped throughout the majors on Tuesday since the Federal Reserve cut the fed funds rate more than anticipated. It seems that interest rates are going to remain low for a while. Previous to the statement, the markets was expecting a 50bp cut, but the Fed brought a 75bp decrease to get the fed funds rate downward to a objective range of 0.0 % - 0.25 %. This exceptional move led the US dollar to go through its largest five-day fall since the start of the euro in 1999, as said by Bloomberg News, particularly as the Fed explained they might be thinking about introducing quantitative loosening by acquiring longer-term Treasury securities.

forex news - Capital Markets development

forex news - Capital Markets development

Capital markets have seen measurable developments throughout the past week; but price movement for the past several months indicates the true health of trader and shareholder confidence. Congestion has seized equities, commodities, commercial bonds and other risk-correlated assets since the panic selling throughout October was at last restrained by the increasing attempts of the central bank and Congress. But with the Fed in a little while to hit the lowest point of the barrel on economic policy and lawmakers in short of money for all the businesses that are asking for beneficence, apparently additional pain is predictable.

forex news - Dropping of Swiss Producer and Import Prices

forex news - Dropping of Swiss Producer and Import Prices

Switzerland producer and import prices have marked the biggest back-down since 1975 in November on the back of dropping raw material prices. The headline reading indicates prices fall 1.4% in November, for 4th following month, a sudden drop of 0.6% in preceding month. On yearly base, the index dropped to 1.1% from 2.9% in October. The dropping price weight is similar to the SNB price-increases estimate for 2009, which is changed down to 0.9% from first estimation of 1.9%. The rising expansion concerns with the dovish position indicates that the SNB is going to keep on relieving the policy next year and might increase their attempts as officials conduct their double consent to ensure price

Professional Tutor by Forex Worldwide Training and Support

Professional Tutor by Forex Worldwide Training and Support

There are plenty of self-selected experts online promoting their secret method to succeeding in the world of investing. A careful look at this market, however, reveals a tragic truth: These are the same old stories retold by hucksters looking to earn a buck. They jump on a particular stock that did well, they “reverse engineer” the trend line, they have their system ghostwritten, and then they promote “a forex training system like you’ve never seen before”.
The problem is we’ve seen it before. Again and again. It’s not a training system; it’s a focus on one part of technical analysis or another (often by people who don’t know the definition of technical analysis). They throw around words like “Fibonacci” or “Bollinger Bands” as if they themselves invented the term.
The tragedy is that “newbie” investors can get sucked in to the promises of huge earnings. They shell out for the ebook. And they’re left confused or overly-confident. Either way, they lose.
How does one succeed in the market? The truth of the matter is, one can succeed with solid, foundational forex training, and then back up that training with support and advice from real trading professionals, and then back up that training and that support with experience.
__________________________________________
That’s where VIRT® Professional Tutor by Forex Worldwide Training and Support comes in. In a world of “me-too” content, VIRT® Professional Tutor is real forex training. This organization ignores the hype and instead focuses on doing one thing really, really well. They offer comprehensive, competent training delivered in a compelling way.
_________________________________________
Their forex training is comprehensive and competent because it gives every level of investor a place to start. Are you brand new to forex investments? There’s a novice section. Are you experience in forex investments? There’s an advance section. Each section covers a wealth of material that truly takes the learner on a journey from basic introductions, step-by-step through the concepts.
_____________________________________
Forex training for novices at VIRT® Professional Tutor is made up of 6 modules covering such diverse but fundamental topics as Market Terminology, Business Environment, Predictability, Capital Management, Probability Study, and Application of Entry Point System. Each module contains 5 to 9 lessons that look at that topic in-depth. Each lesson ends in a quiz to help the student uncover the effectiveness of their learning.
__________________________________________________________
Forex training for advanced investors at VIRT® Professional Tutor is made up of 4 modules covering expert topics like Advanced Fibonacci, the Rule of 8, Fundamentals, and System Development. Again, each module contains several lessons and finishes with a quiz.
_____________________________________________________
This material is compelling in its delivery. There’s text, of course, and interspersed throughout the text are videos and interactive content – including graphics and graphical stories – to explain the concepts and illustrate with real world examples. The text talks about a concept and then a graph is shown to demonstrate an example in real life and to drive home the point.This level of training enables investors of all backgrounds and investing experiences to enter markets confidently and to exit investments profitably. But to back up their training, a support forum is also available where investors can interact and where expert traders can offer advice, guidance, and mentorship to participants.
___________________________________________________

Read more...

forex news - The Federal Reserve Open Market Committee

forex news - The Federal Reserve Open Market Committee

The Federal Reserve Open Market Committee (FOMC) is planned to reveal its ultimate financial guidelines conclusion for the year and almost positively this series next Tuesday. Fed Funds futures are pricing in a 94% possibility that Chairman Ben Bernanke and his associate rate setters are going to cut the benchmark lending rate an additional 75 basis points to a sheer 0.25 %. This can be the lowest level for the overnight lending rate in over 35 years and can push the policy weight to locate an another means to support lending and revitalize financial expansion. And they are going to surely have to find substitute. With the central bank assuring loans and supplying almost limitless liquidity to the market, monetary associations are uncertain to take counterparty risk and lend to each other.

Euro Profitability chance against 1.4672

Euro Profitability chance against 1.4672

As long as price is above 1.4672 (ideally, price remains above 1.4744), we still suggest bullish and expecting even a minor rally to at least 1.4980 if you don't count the Fibonacci zone, which does not begin until 1.5168.Support line is at 1.4770 coming much below there would begin to put in doubt the bullish outlook, if so, still a risky game unless support line will reach and be stable for a while

USD Vulnerabilities

USD Vulnerabilities

Some questions will be discussed here, is the EUR headed Back to 1.60? and can the GBP remain in the levels of 1.97-1.98 and higher?
------------------------------------------------------------
The Vulnerabilities of the US DollarsThe US Dollars weakened significantly this past week as rising oil prices revealed the vulnerabilities of the United States economy. Companies are beginning to struggle and have been forced to come up with more creative ways to deal with the energy crisis. With crude oil prices hitting $135 a barrel and gasoline in many states topping $4 a gallon, US companies are making cuts across the board. Ford Motors Co for example plans on reducing production while American Airlines will be lowering capacity by 15 percent and adding bag charges. According to the futures market, some traders even expect gas prices to hit $7 to $8 a gallon. However the US is not alone in having to deal with the oil crisis which is one of the major reasons why the dollar has weakened. Over the past few weeks, the market had been slowly pricing in a pause from the Federal Reserve. At the same time, there was a growing consensus that other central banks may need to begin or continue to cut interest rates. The surge in oil prices and hawkish comments from the European Central Bank, the Bank of England and the Reserve Bank of Australia dramatically altered the outlook for these central banks. With strict inflation targets, traders came to realize that interest rates for these 3 countries will remain unchanged for the foreseeable future and as a result, currency rates adjusted for these expectations. In the coming week, the vulnerabilities of the US economy may become even more apparent. The US markets are closed for Memorial Day on Monday, but we still have a busy week ahead of us with consumer confidence, new home sales, durable goods, first quarter GDP, personal income, personal spending and Chicago PMI due for release. We expect most of these numbers to be dollar bearish as US consumers continue to struggle under the weight of deteriorating personal finances.
----------------------------------------
EUR: Going Back to 1.60 and slightly more?The EUR staged a dramatic recovery against the US dollar this past week as hawkish comments from the European Central Bank fueled speculation that a rate hike may be around the corner. Although we think that a rate hike would be a dramatic move, the stability of recent Eurozone economic data is certainly encouraging as the market's focus shifts from fears for growth to inflation. Earlier this week, German business confidence for the month of May showed a surprising improvement. Today, the PMI numbers explain why German businesses are not worried. Service and manufacturing PMI numbers both deteriorated from the prior month, but remain in expansionary territory. Next week, it may be US rather than Eurozone economic data that help the Euro / USD Pair inch towards 1.60. The only significant reports from the Eurozone are German employment, Retail PMI and German retail sales. We expect the labor market in Germany to continue to improve because the employment component of the manufacturing PMI report actually accelerated this month. Meanwhile it will also be a busy week for Switzerland who will be releasing their trade balance, UBS Consumption and KoF leading indicator reports. The currency has performed very well against the Japanese Yen this past week and it remains to be seen whether this strength can continue.
----------------------------------------
Can the British Pound Hold Onto its Gains?It has been a great week for the British pound, which rallied more than 300 pips against the US dollar. Upside surprises in economic data as well as hawkish minutes from their latest monetary policy meeting confirmed that it will be months before we see another rate cut from the Bank of England. In fact, for all intents and purposes, the next move from the BoE may have to be a rate hike. Unlike the United States, the Bank of England has a strict inflation target and if inflation is more than 3 percent, the central bank governor is forced to write a special letter to the Chancellor to explain why inflation has increased and to outline the time frame for bringing inflation back to target. Earlier this month, consumer prices hit 3 percent on a yearly basis, and now, the BoE must do all that they can to rein in inflation. The recent stability in economic data has helped their cause as long as the economy does not fall back into a downward spiral. With no major economic data due for release next week, the British pound stands a chance at holding onto its gains as long as there isn’t surprisingly strong United States data.
----------------------------------------------
Great Week for the Australian, New Zealand and Canadian DollarsRising commodity has been the story of the week, helping to take the Australian, New Zealand and Canadian dollars higher. The Aussie rose to a 24 year high, putting itself within an arm’s reach of hitting parity against the USD. Rising inflation pressures and stronger economic data leaves the RBA far closer to a rate hike than any of the other major central banks. We do not believe that they are ready to raise rates, but tighter monetary policy could be a final option. The lack of meaningful economic data next week leaves the action for the CAD and NZD. Canada will be releasing its Current Account balance and GDP while New Zealand will be reporting its trade balance.
Read more...

USD Countertrend Decline Should Last a Few Days

USD Countertrend Decline Should Last a Few Days

A countertrend USD decline should be underway reaching EURUSD 1.5083, GBPUSD 1.5250, and USDJPY 107.90.The EURUSD reached 1.4815 this morning. The drop from 1.5701 is in five waves and is most likely wave three within a five wave drop from 1.6039. A corrective forth wave advance is expected to unfold over the next several days. forth wave usually reach at least the forth wave of one less degree (1.5083 in this case). The 38.2% of three is also a common terminal pointer for forth waves (1.5155 in this case).

CAD High Reward to Risk Trade

CAD High Reward to Risk Trade

Currently, there is a high reward / risk short USDCAD opportunity. The EURUSD remains in a range, but the recent rally is corrective. This corrective advance could very well be part of a larger corrective advance however.
-----------------------------------------------
Not much has changed regarding the EURUSD this morning. We wrote yesterday that "the drop from 1.5701 is in 5 waves and is most likely wave 3 within a 5 wave drop from 1.6039. A corrective 4th wave advance is expected to unfold over the next several days. 4th wave usually reach at least the 4th wave of one less degree (1.5083 in this case). The 38.2% of 3 is also a common terminal point for 4th waves (1.5153 in this case)." Although a larger correction to the mentioned levels is preferred, the advance from 1.4815 is clearly in 3 waves and therefore corrective; leaving the EURUSD vulnerable to additional weakness as long as price is below 1.4981.
-----------------------------------------------
Things are playing out as expected with the USDJPY. "Bigger picture, we maintain that wave Y (the third wave in a 3 wave advance from 95.72) is underway from 103.76 and will end in the 113.25-116.65 zone (Fibo levels from the 124.13-95.72 drop) and give way to a long term reversal. The rally from 103.76 is probably the first zigzag in a double zigzag (as wave Y), so expectations are for a drop to reach the 38.2% of 103.76-110.40 (107.86)." The USDJPY fell to 108.36 this morning but we favor additional weakness with the first objective being 107.86 and the second 107.10.
----------------------------------------------
The GBPUSD has plunged and is nearing the longer term support levels that we have mentioned in recent months near 1.85. The short term trend remains bearish as long as price is below 1.9034. It is worth mentioning that 13 day rate of change is at its lowest level since August 1997. When we do get an upward correction, it will probably be sharp.
----------------------------------------------
The USDCHF has nearly reached the initial objective (already) of 1.0986 (the 100% extension of .9647-1.0624/1.0010. A reaction lower is expected to occur off of this line. There is potential support near 1.0740
---------------------------------------------
The AUDUSD decline is nothing has continued and counting short term waves is an exercise in futility right now. The pair may test the January (and 2008) low of .8512 before we see a rebound. Longer term expectations are for the drop to reach .6770 but there will be corrections along the way. It is not safe to enter short at this level since the risk of a large and sharp correction are simply too high.The NZDUSD spiked lower this morning, touching the 161.8% extension of .8215-.7536/.7921. Short term channel support should lead to a larger advance from near current price. Resistance begins at .7082.
--------------------------------------------
Read more...

AVAFX Trading Platform review

AVAFX Trading Platform review

A quick overview of the services by AVAFX Trading Platform
AVA FX (AVA Financial LTD) is a forex broker based in Nicosia, Cyprus and was founded in 2006. AVAFX offers a money maker option.
AVA FX SPECIFICATIONSSpread on Majors


EUR/USD: 3 pips
GBP/USD: 4 pips
AUD/USD: 4 pips
USD/CHF: 4 pips
USD/JPY: 3 pips
USD/CAD: 5 pips
Spreads during normal market conditions
AVAILABLE TYPE OF ACCOUNTS & LEVERAGEDemo Account: Yes, 20 days free trialMini Account: Yes, US$100 to open and up to 200:1 leverageStandard Account: Yes, US$500 to open and up to 200:1 leverage
OTHER INFORMATIONPlatform: AVA TraderSupported Languages: English, French, Spanish, Arabic and ChineseAccepted Deposits: Credit Card, PayPal, Western Union, Web Money and Bank wire

Oil crisis affect the USD. how exactly? find out.

Oil crisis affect the USD. how exactly? find out.

Oil prices are rising and the US dollar is falling, but is this the natural relationship between these two assets? Taking a look back at the two prominent oil shocks of the past four decades (1973 and 1979), we see that this is not necessarily the case.
-------------------------------------
1973 Oil Crisis: Initially Dollar Bullish, Eventually Dollar Bearish
In 1973, oil prices jumped 134% when the members of the OAPEC, which is OPEC plus Egypt and Syria, announced that they were no longer shipping oil to nations that supported Israel in its conflict with Syria and Egypt. This effectively shut down exports to the US, Western Europe and Japan. As a result, prices rose significantly to account for the sharp reduction in supply. At the same time, Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait, and Qatar unilaterally raised prices by 17 percent and announced production cuts after negotiations with major oil companies
Read more...

Selecting the Right Forex Broker

Selecting the Right Forex Broker

1) Is the broker I want to use regulated? This is the first question you should be asking yourself and there should be no doubt that they are. All regulated brokers are required to submit financial reports to regulatory authorities. Failing to do so can cause authorities to fine brokers or even end their membership. These rules force Forex brokers to keep financial reports.

Each broker is regulated by local regulatory authorities. For instance, if a broker is based in the United States, they're regulated by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC). Swiss brokers, however, are regulated by the Swiss Federal Department of Finance (FDF). Using a regulated broker also protects investors because they're able to dispute resolutions.

2) What are the trading conditions like? This question refers to the trading conditions and special features of the trading platform with a Forex broker. Some of the most important factors include:

-Spread - The smaller the spread on currency pairs, the more favorable the conditions are for both traders and investors.

-Platform Execution - This term refers to how quickly and consistently the trades are executed. Many brokers promise fast, transparent executions during normal market conditions

- Fractional Trading - Some brokers may allow investors and traders to trade on a fractional basis. For example, rather than allowing you to trade full lots of "100,000 units," they let you trade "163,345 units," which is helpful when you're making trades that risk a certain percentage of the balance on each trade.

Safety of Funds - It's important to make sure that your trading funds are placed in a segregated account or, at the very least, insured for safety.
Read more...

USD: Selectivity Remains the Key

USD: Selectivity Remains the Key

The USD has satisfied the bulls and bears in this week the question is in which pair as the bull and in which is the bear.
ForexCult.com mentioned that "although we expect a continual rally in the USD, traders need to be careful of what they buy." having that said because we had indicated that the USD could rally against the Eur and GBP but was turning resistance very close against the JP Yen.
Those moves that we were looking have already happened and are now becoming a bit over extended. However and for the most, the downtrend in the USD against the JP Yen and its up trends against the Euro currency and GBP should remain intact but being more precise will continue to be the key to trading currencies in the near future.
The marquee event of the week will be the United States retail sales report and even though it seems that consumer spending will falter, it may be a bit better and not such a bad report as market and speculator might have suggested.
The drop in consumer confidence and non-farm payrolls point to weakness, but the coming rise in food and the energy prices along with the stronger earnings from local companies such as Wal-Mart and Costco probably suggest otherwise.
The main reason why the market got a huge response to this report is because of its affect on a central bank's monetary policy decision. However with the Fed, a pause in Jun has already been discounted by the market.
The United States economy has been weakened massively in the past few months and will probably or shall we say quite surely to weaken in the coming months as well considering the next coming report, but after having cut interest rates by 325bp since August, the Fed has decided that it is time to shift their focus to inflation.
Oil (on $126 pick) and corn prices hit a new record high, making price pressures a growing concern and making harder for the proletarians to live peacefully.
Unfortunately for the Fed, they have no room to raise interest rates, leaving the USD as one of their only tools to curb inflationary pressures. By hinting that they will be taking a break from cutting interest rates, they have already gained some stability and control in the USD and in addition to the retail sales report, we shall also expect consumer prices, the Philly Fed survey, industrial production, and housing starts in next week.
Read more...

Forex Trading Systems Scam

Forex Trading Systems Scam

Have you ever encountered an online promotion for a forex system, strategy or software? If so, I bet that the promoter promises great wealth in no time, something like " this incredible system makes $3, 000 a day " or " I am making money in my sleep using this automated trading software " and so on. Very tempting for some of us. And as this " Forex Systems " hype is relatively new, even veteran traders ask themselves whether these systems are for real.The exactness is that some of these forex merchandise are indeed total scams. But absolute is again not logical to foresee that ALL of them worth nobody. Luckily, we live in the hot poop ticks, locality a scam cannot hold office close for spun out. So if you encounter a forex system, strategy or software for sale, conclude not carry lazy and search the net for relevant blogs, forex forums and reviews. If the product is a scam, you will familiar conceive physical quite delicate. However, lease ' s spiel that you treasure a decent, reliable Forex System - what rap you assume from sound? Will positive well deliver? Fine, flying start by commercial the following questions:Am I disciplined?Most traders purchase a first-rate trading system or software but operate not have the discipline to trade according to the system ' s rules. Some traders achieve not credence the system they have tried bought and endeavor to chicken feed the rules from day one. Others certainty the system prime, but next a few bad trades source losing confidence and contract apprehensiveness and attraction genie their decisions. I itch admit - substantial was very insolvable for me to faith a system that was created by someone too many. Solitary when I tacit the logic late the system I began to fashion confidence, traded stow away discipline and somewhere made profits.Are my expectations fitting my ration?The size of your trading invoice will halt your lifelike profit expectations. If you have a mini account ( a keep of between 500 to 10, 000 US dollars ), irrefutable means that for trading the EUR / USD, a 1 pip movement in your favor equals 1 US dollar in profit. So if you are a very rad trader stifle a very superb trading system, a stupendous trading point veil a total of 500 pips hike, equals US$ 500 in profit. I guess you cannot quit your job yet. But if you have a one million dollar account, you can definitely earn US$ 1, 000 per pip. So it takes only 3 pips to make US$3, 000 a day. I hope you get the point.Do I have enough knowledge?Even the best system is operated by a real person. And each trader is a unique individual. Consequently, if you ask a group of traders to trade the same system, under the same conditions, you will probably get totally different results. Yes, some traders do make money in their sleep using profitable forex systems, but the human factor will always be there. So get yourself a good trading system, but do not stop there. Be ready to acquire a sound knowledge in forex trading and keep expending your knowledge over time.
Read more...

Tips For Choosing a Reputable Forex Broker

4 Tips For Choosing a Reputable Forex Broker
Finding a Forex broker is a tough process to navigate through and for most people, the necessity of outside assistance is needed. Trying to trade in the Forex market without a broker could lead to devastating results for the normal trader. Similarly, hiring the wrong Forex broker can lead to the same result as trying to muddle through it alone. It is highly important that you be diligent in researching any prospective brokerage firms to handle your financial portfolio.

A good Forex broker will supply you with clients that were successful and can attest to the specific broker's qualifications and success history. Put yourself in that position, would you testify to someone's strengths if they did a poor job for you? Client history testimony should be present in any prospective Forex broker and plentiful to indicate a solid background with trading. You can tentatively assess a lot from a Forex broker with a list of clients that will speak up for the brokerage firm or individual broker. It should be noted that all word of mouth testimony should be taken with a grain of salt and dissected to collect the pertinent information. Testimony should be used in your research to find a Forex broker but should not be the deciding factor.A good Forex broker will supply you with clients that were successful and can attest to the specific broker's qualifications and success history. Put yourself in that position, would you testify to someone's strengths if they did a poor job for you? Client history testimony should be present in any prospective Forex broker and plentiful to indicate a solid background with trading. You can tentatively assess a lot from a Forex broker with a list of clients that will speak up for the brokerage firm or individual broker. It should be noted that all word of mouth testimony should be taken with a grain of salt and dissected to collect the pertinent information. Testimony should be used in your research to find a Forex broker but should not be the deciding factor.

Another good morsel to test the reliability of any potential Forex broker is the amount of information, literature and lessons that they are willing to give to you. Most Forex brokers are of a high reputation and a solid background however, there are many out there that don't have a good history or no history and it is wise to steer clear of these brokers. You are trying to find a trusted financial advisor and settling for second best, just won't do. The more a potential Forex broker is willing to do for you in the area of helping you understand the Forex trading system, the better quality trader they will be for you.

A good avenue to travel down when seeking a good Forex broker is to ask your acquaintances about Forex brokers and how they met. This can not only give you prospective referrals to great Forex brokers but will also equip you with ideas and resources that you may not have located. If you get a referral from friends, be sure to still research that specific broker and his qualifications before committing to any formal agreement.

The other factor in finding a good Forex broker is the margin of return that is offered. A Forex trading margin used to influence your money and many Forex brokers offer different margins. Finding a Forex broker, who gives a margin of ten to one isn't a very good find so it's worth the time to reinvest in research. Remember that this industry is all about customer service and catering to the clients so if your prospective Forex broker doesn't return your calls within a reasonable time frame it would be advisable to keep searching

The Forex Market and Understanding Foreign Exchange Rates

The Forex Market and Understanding Foreign Exchange Rates

Unlike the stock exchange, the Forex Market (foreign exchange market) is a relatively new player to the investment world. Today's current Forex market model started in the early 1970's, and today it represents the biggest financial market around, even surpassing the stock market. With trading surpassing $2 trillion dollars per day, the Forex market attracts more and more investors all the time. Before an investor starts trading on the Forex market, he should grasp the fundamentals of how exchange rates work.
Exchange rates
Basically, the exchange rate represents the rate of exchange between two currencies. Most currencies are traded, or paired up against the dollar. The five most common currencies traded on the market are the dollar (USD), euro (EUR), the yen (JPY), the British pound (GBP), and the Swiss franc (CHF). Some other currencies that are traded are the Australian dollar, the Canadian dollar, and the Hong Kong dollar.
In the exchange rate or ratio, the numerator represents the quote currency and the denominator the base currency, which always equals one
Let's say that an investor wants to exchange euros for dollars. In this case, the euro currency is the quote currency, or how much currency you have to exchange. The base currency is the dollar. The investor researches the current exchange rate (euros converted into dollars) either on the Internet, through the bank, broker, etc., and then multiplies that amount by the number of euros to exchange. Let's say that the exchange rate is 1.57959. That means that 1.57959 euros must be paid to receive one dollar. If he has 1000 euros to exchange, then he can receive $1,579.59 (1000 x 1.57959).
On the flip side, the exchange rate can also tell the investor how much he'll receive if he converts dollars back into euros. If he has $1000, he can either divide that amount by the same euro to dollar exchange rate ($1000/1.57959 = 633.07 euros), or look up the conversation rate for dollars to euros on the Internet, etc. (i.e. .633072) and multiply it by the amount of dollars to exchange ($1000 x .633072 = 633.07 euros).
Once the exchange rate concept is understood, the investor can feel more confident in investing in the Forex market.
Read more...

Learn Forex Trading

Learn Forex Trading

Gone are the days, when people with small bundles of notes surely would draw your attention at the airports/ international bus terminus/ important office areas, who are ready to exchange your currency to your desired foreign exchange at a commission. The literacy, the spread, the entrants of various professionals, automated software, revolutionary online forex trading companies have been able to put a control over the entire unorganized sector to pave the way for complete professionalism and to offer a much more convenient and systematic way of Forex trading.At the inception phase, people, mainly the large corporations used to perform their Forex trading through various banks or major financial institutes, who used to operate at the international level. The overwhelming popularity of Forex of today's modern world due to the liberalization and global economic polices is empowered by the telecom boom, the immense reach of Internet and the unimaginable advantage of advanced technology. The instantaneous effect and up-to-date news provided by the Online Forex Software exchange trading platform in the regime of online Forex, have given you the classical opportunity of taking decisions and immediate implementation. Online Forex trading has been standardized over the years after the initial teething problems, and today's Forex participants get an almost secured access through various online Forex trading companies, which is free from all encumbrances. The technology, its application in case of online Forex has been drastically improved with the increasing awareness of people at large. The success lies in bringing a wider gamut of people into Forex trading platform and in turn the entire Forex Software exchange trading platform has become commercially viable. If we want to look into the current Foreign Exchange market, we can find a reasonable number of stakeholders beyond the predominated traditional Multi National Companies or MNCs, banks, brokers and the final impetus has given by the wide acceptance of a large number of commoners, who get engaged in Forex trading due to various reasons including even as a mere hobby. The latest encryption methodologies and plenty of guide and trend analysis will make you secured and comfortable even if you are a first timer dabbling into online Forex trading.The concept of margin trading, implying the traded on margin, saves you for a huge amount of deposit in the Forex. The margin deposit varies between banks and it is always in percentile terms of the original amount, which the bank allows you to play. A simple example will show you the actual potential. Suppose a bank has kept the margin deposit as 2%, which implies that you need to deposit only $20000 USD to trade two million dollars and also you may gear up your profit by 200%. As the coin has got two sides, the 2% margin deposit in Forex may also take you to the road of losses by 200%. The rule remains same, when the offline Forex trading changes it face to online Forex trading.As every investment carries the potential risk of both profit and loss, the luck of an aggressive online Forex trader may sway anywhere between 2 to 25% on a daily basis on an average. Just for the knowledge base, the beginner in Forex trading must be aware of that the interest rates on your deposit varies greatly depending upon the currencies and the prevailing practice is to play in multiple currencies, popularly known as Base currency and variable currency in the world of Forex both in traditional platform and in online Forex platform. Your awareness level, your analytic power, your intuition are the key driven forces to transform you to an informed Forex trader and to optimize your Return on Investment (ROI) in the most prospective financial market of today's economic world.

Risks of Trading in Forex Market

Risks of Trading in Forex Market

Although every investment involves some risk, the risk of loss in trading off-exchange forex contracts can be substantial. Therefore, if you are considering participating in this market, you should understand some of the risks associated with this product so you can make an informed decision before investing.As stated in the introduction to this booklet, off-exchange foreign currency trading carries a high level of risk and may not be suitable for all customers. The only funds that should ever be used to speculate in foreign currency trading, or any type of highly speculative investment, are funds that represent risk capital i.e., funds you can afford to lose without affecting your financial situation. There are other reasons why forex trading may or may not be an appropriate investment for you, and they are highlighted below.The market could move against youNo one can predict with certainty which way exchange rates will go, and the forex market is volatile. Fluctuations in the foreign exchange rate between the time you place the trade and the time you close it out will affect the price of your forex contract and the potential profit and losses relating to it.You could lose your entire investmentYou will be required to deposit an amount of money (often referred to as a security deposit or margin) with your forex dealer in order to buy or sell an off-exchange forex contract. As discussed earlier, a relatively small amount of money can enable you to hold a forex position worth many times the account value. This is referred to as leverage or gearing. The smaller the deposits in relation to the underlying value of the contract, the greater the leverage. If the price moves in an unfavorable direction, high leverage can produce large losses in relation to your initial deposit. In fact, even a small move against your position may result in a large loss, including the loss of your entire deposit. Depending on your agreement with your dealer, you may also be required to pay additional losses.Overtrading is another ordinary money management mistake in the forex market. This trading does not have clearly defined trading objectives; the sole reason is to make more money. To avoid this mistake, make sure that every trade is broken into ultimate goals, and that these goals are achieved before other positions are added. Very few traders can successfully manage multiple positions in a variety of currency trading markets.Overconfidence is a big mistake when it comes to money management and the forex market. This is caused when a trader has or thinks they have particular or inside information. These hot tips are sometimes wrong, and when this happens large amounts of money may be lost because of this. The way to avoid this is to avoid being confident in any rumors or special information you may have. Managing your money means taking measures to preserve it as well.Preferential bias can exist among forex market traders. This happens when they only see or hear what they want in relative to the favored trade. This can cause a trader to ignore the real activity of the forex market in favorite of what they want to happen. It is important to look at each trade impartially and do not become set in cement with your opinion. Do not ask friends or family for their opinions; just go with what you know
Read more...

Forex Market Scam

Forex Market Scam

The Forex market is the biggest financial market in the world. But this doesn ' t make it easier; on the contrary. You have a lot of big advantages but Forex is also very challenging. Almost all advantages, when observed carefully, transform not is disadvantages but in challenges. It is the case of the Forex market being open 24 hours a day. When someone begins trading the Forex or reads about this particular market, this characteristic is taken as an advantage. Traders tend to think " Great! Finally I can trade whenever I want! ". Well, this is, in part, true. But, when you start trading the Forex, you ' ll see that volatility only appears during certain times and that if you are day trading, you can ' t be in front of your computer 24 hours a day. This is a challenge for most Forex traders who are looking for day trading the currency pairs. If you want to day trade, you will have to develop a decent strategy in order to concise it to a few hours a day, probably when the volatility is more likely to urge. Other big advantage that is always quoted related to the Forex market is the brim requirements. Well, smooth tuck away a pygmy invoice coextensive $300 you can advantage 100, 200 or rolled 400x your wad. You may think this is a great advantage but, in my opinion, this is more a challenge than an advantage. If you have a petite balance and pop to practice a steep side, you can avoid your entire balance in a single trade.
Also, Forex is admitted as the scam market. You have trading systems, courses and common brokers that are constantly rated by traders as scams. In the case of the systems and courses in that they promise a lot of profits stash no elbow grease at all, and in the case of the brokers that donate you all the resources but inasmuch as trade lambaste you, don ' t agreement you withdraw your property or neatly disappear salt away it.When you start trading the Forex market, or if you present are, you demand to avoid the scams.
Here are some tips of how to avoid Forex scams:
1 - Exercise your shipshape sense. This is the primary phenomenon you compulsion to arrange. Evaluate carefully the product or the broker you are election. If you think they are offering you utterly much, be careful. It may be a scam.
2 - When you are looking for a forex trading system or a course, you ' ll probably see things same " make $100, 000 in a epoch ". Forex is a challenging market and not everyone can make long green obscure it. Don ' t dispose fooled by stir gilded fast conspiracies.
3 - One commendable tip when buying a trading system or course is to viewing if they have riches back guarantee or a unpaid trial spell. This journey, if you don ' t relating what you bought, you can always request for a decrease.
4 - If you are looking for a forex trading system, course or broker, scan reviews untrue by others traders. Scrutinize what they think about the product, the abutment party, how they handle their clients and therefrom on. Construe all that you can.
5 - Before buying a product or signing up veil a broker, always read their webpages. Feel costless to needle them your doubts. If they reckon on in their products and services, they will answer your questions.
6 - If you buy a forex trading system or course, test it first on a demo account. Don ' t start with your real account because you don ' t know how it will actually work. It may need some adjustments on your part to make the strategy good for you.
As I said, the Forex market is challenging. Unless you are able to spend some time with it, not only trading but also reading and learning, you won ' t make it. But, without a doubt, it ' s a very profitable market.

Timing is Everything With Forex Trading

Timing is Everything With Forex Trading

The most challenging part of getting started with Forex trading is to learn this innovative way of trading. Many potential investors that try to navigate the Forex system unaided end up being frustrated and financially intimidated. There are very simple strategies to becoming successful using the foreign exchange trading system but the first step is gathering all of the necessary information surrounding this type of trading specialty. Securing a reliable Forex trading broker is likely the first and most pivotal step after learning the initial principles.

Unlike many types of trading and futures, foreign exchange trading is not designed to make the client rich quickly. Many people are frightened off by the word that Forex trading is a get rich quick scheme that in large part, doesn't work. This is a financial myth despite all the hype surrounding the foreign exchange trading system. There are steps and gains to be taken in order to secure a future in successful trading. Expect to dedicate a large portion of time to researching and understanding the market in general before setting out with your pocket book ready to invest. Learn all you can about the Forex market in the beginning in order to make the Forex trading path a smooth and triumphant one.
There is no doubt that there are numerous types of orders that can be utilized in order to open and close trades and becoming familiar with them is a must. In the foreign exchange trading business there are charts, graphs and other visuals to help you effectively analyze trends in currency trading. These charts and graphs will assist in making well-informed decisions on what currency to sell. Timing is everything and it goes without saying that when experiencing with the Forex trading system, knowing when to trade can be the pivotal difference between success and failure. Understanding the analysis tools and how to use them efficiently will put any investor on the right track.

As well as proficient trading tools, it is an absolute necessity when using the foreign exchange trading system to understand how to use the software to perform actual trades. The only way to become comfortable with using Forex trading software is to use it and learn how to plot a course through the process. Selecting a good trader is the most imperative tip at this stage because an established trader can help you with the services required as well as giving you in depth tutorials using the foreign exchange trading system.

The most critical tool that will be utilized in the Forex trading system is patience and discipline. As mentioned earlier, foreign exchange trading is not a get rich quick proposal so learning patience and discipline can help you to become profitable in a timely fashion without losing money. Most brokers offer a demo account that can be used to practice and learn the foreign exchange trading system that mimics the real account with the exception of real money being traded. This gives a client insight into the market and its behaviors before actual money is invested. Learn how to make a profit using paper trading on a regular basis before risking your capital with Forex trading.
Read more...

Forex Swing Trading with Elliott Wave

Forex Swing Trading with Elliott Wave

When evaluating the forex market for swing trade opportunities the focus is placed on predicting directional changes or continuations for a given currency pair. For this we rely on technical analysis.

In technical analysis, just as in fundamental analysis, there are lagging indicators and leading indicators. One of the most reliable tools used to predict forex market swings is Elliott Wave analysis. Elliott Wave analysis can be used to identify trends and countertrends, trend continuation or exhaustion and to evaluate the potential price targets of a trend.

You can apply Elliott Wave analysis to both long and short position swing trade set ups for your currency pairs.

Elliott Wave theory is named after Ralph Nelson Elliott, who concluded that the markets moved in a repetitive pattern of waves. He attributed this action to the mass psychology of the market.

Elliott concluded that the market،¯s movement was a direct result of the mass psychology of the time and that the stock market is a fractal. A fractal is an object that is similar in shape, but at different scales. A great example of a fractal in nature is a stalk of broccoli. The stalk and the individual branches look exactly the same; just the branches are smaller in scale.

Fractals just happen to form in accordance with Fibonacci ratios. Is this a coincidence?

Elliott attributes this mass psychological move to the human trait of herding. Even though Elliott،¯s theories were based on stock market price movements, it has been applied to evaluating Presidential approval ratings and fashion trends changes as well.

The conclusion, the market price actions are not the cause of economic growth or slow down, but the reflection of the mass psychology of investors. If the mood of the investing public is upbeat then a bull market ensues. This is counter to what most individual perceive, that because there is a bull market the mood of the investing public is upbeat.

Elliott Wave patterns follow a sequence that the markets move up in a series of 3 waves and down in a series of 2 waves. This 3 wave impulse and 2 wave corrective sequence form the foundation of the 5 Wave impulse pattern (the opposite is true in a downtrend).

The Elliott Wave Counts are as follows;

Wave
-1 Short CoveringWave
2 - Pullback from Short CoveringWave
3 - Major Rally PhaseWave
4 - Institution Pause in the RallyWave
5 - Retail Buying

Wave 1 is usually the weakest of the impulse waves. It is a brief rally based on short covering of the bears from a previous move down. When Wave 1 is complete, the currency pair sells off, creating Wave 2.

Wave 2 ends when the market fails to make new lows. You often see dominant reversals patterns form at the end of this wave signaling the being of the rally phase or Wave 3.

Wave 3 is the longest and strongest of the impulse waves. This signals strong currency buying or selling in the direction of the trend. This trend usually starts of slowly, but tends to accelerate as it breaks to new highs above the top of Wave 1.

Like any trend, especially a strong trend a correction will occur. Traders will begin to take profits and the currency pair will retrace. This signals the beginning of Wave 4.
Again the currency pair will rally ushering in the Wave 5 rally. Wave 5 is typically supported by the retail traders and not institutional buyers (the herd) and tends to lack the momentum generated in the Wave 3 rally. This creates divergence that can be easily measured on any technical oscillator. After the currency pair breaks to new highs above the previous Wave 3 high, the rally loses steam and changes trend.

This trend change can result in either a new 5 Wave impulse pattern or a corrective in nature.
Now that we know what the Elliott Wave analysis is, how would a currency trade using this analysis look like, just as an example?

Look to Wave 5 as the most reliably tradable impulse wave. The trade sets up as follows. Look for the Elliott Oscillator to pull back between 90% and 140% of the Wave 3 high on a daily chart. This pullback should correspond to a 38%-62% Fibonacci retracement from the Wave 2 extension. This signal is the strongest when the Fibonacci retracement is between 38% - 50%.
Like any technical analysis tool you never want to employ an indicator as a stand alone analysis tool. A trigger and a confirming indicator are required as well.

Look for a trigger in candle patterns, such as Harami, Tweezers or Harami cross. There are a variety of software packages on the market that perform Elliott Wave counts and have other entry signal indicators as well.

Draw a regression channel on the Wave 4 retracement and look for a break above or below the channel as confirmation to enter the trade.

Place stops at the high of the Wave 1 advance, just below the 38% Fibonacci retracement level or where your individual trading plan dictates. Trail your stops once the currency pair has advanced past the Wave 3 high. Look for reversal candle patterns like doji, hammers, shooting stars or hanging mans for signals that the wave is about to end or stall. A typical price target is 127% retracement of the Wave 4 low.

This is just a glimpse of how Elliott Wave analysis can be deployed to enhance your forex swing trade evaluations. Look more into the Elliott Wave theory and other strategies as tools for increasing your forex swing trade opportunities.

Why Hedge Foreign Currency Risk

Why Hedge Foreign Currency Risk

International commerce has rapidly increased as the internet has provided a new and more transparent marketplace for individuals and entities alike to conduct international business and trading activities. Significant changes in the international economic and political landscape have led to uncertainty regarding the direction of foreign exchange rates. This uncertainty leads to volatility and the need for an effective vehicle to hedge foreign exchange rate risk and/or interest rate changes while, at the same time, effectively ensuring a future financial position.
Each entity and/or individual that has exposure to foreign exchange rate risk will have specific foreign exchange hedging needs and this website can not possibly cover every existing foreign exchange hedging situation. Therefore, we will cover the more common reasons that a foreign exchange hedge is placed and show you how to properly hedge foreign exchange rate risk.

Foreign Exchange Rate Risk Exposure - Foreign exchange rate risk exposure is common to virtually all who conduct international business and/or trading. Buying and/or selling of goods or services denominated in foreign currencies can immediately expose you to foreign exchange rate risk. If a firm price is quoted ahead of time for a contract using a foreign exchange rate that is deemed appropriate at the time the quote is given, the foreign exchange rate quote may not necessarily be appropriate at the time of the actual agreement or performance of the contract. Placing a foreign exchange hedge can help to manage this foreign exchange rate risk.

Interest Rate Risk Exposure - Interest rate exposure refers to the interest rate differential between the two countries' currencies in a foreign exchange contract. The interest rate differential is also roughly equal to the "carry" cost paid to hedge a forward or futures contract. As a side note, arbitragers are investors that take advantage when interest rate differentials between the foreign exchange spot rate and either the forward or futures contract are either to high or too low. In simplest terms, an arbitrager may sell when the carry cost he or she can collect is at a premium to the actual carry cost of the contract sold. Conversely, an arbitrager may buy when the carry cost he or she may pay is less than the actual carry cost of the contract bought. Either way, the arbitrager is looking to profit from a small price discrepancy due to interest rate differentials.

Foreign Investment / Stock Exposure - Foreign investing is considered by many investors as a way to either diversify an investment portfolio or seek a larger return on investment(s) in an economy believed to be growing at a faster pace than investment(s) in the respective domestic economy. Investing in foreign stocks automatically exposes the investor to foreign exchange rate risk and speculative risk. For example, an investor buys a particular amount of foreign currency (in exchange for domestic currency) in order to purchase shares of a foreign stock. The investor is now automatically exposed to two separate risks. First, the stock price may go either up or down and the investor is exposed to the speculative stock price risk. Second, the investor is exposed to foreign exchange rate risk because the foreign exchange rate may either appreciate or depreciate from the time the investor first purchased the foreign stock and the time the investor decides to exit the position and repatriates the currency (exchanges the foreign currency back to domestic currency). Therefore, even if a speculative profit is achieved because the foreign stock price rose, the investor could actually net lose money if devaluation of the foreign currency occurred while the investor was holding the foreign stock (and the devaluation amount was greater than the speculative profit). Placing a foreign exchange hedge can help to manage this foreign exchange rate risk.

Hedging Speculative Positions - Foreign currency traders utilize foreign exchange hedging to protect open positions against adverse moves in foreign exchange rates, and placing a foreign exchange hedge can help to manage foreign exchange rate risk. Speculative positions can be hedged via a number of foreign exchange hedging vehicles that can be used either alone or in combination to create entirely new foreign exchange hedging strategies.
Read more...

How to trade the foreign exchange markets for business and profit.

How to trade the foreign exchange markets for business and profit.

Trillions of dollars trade round the clock on foreign currency exchange markets - forex trading, for short. The forex trading system is conservative and dominated by governments, banks and large companies looking to hedge against potential losses. However, ordinary people also trade foreign exchange, often attempting to ride the differences as currency values rise and fall. Getting into forex trading requires nerve and some technical skill, as well as an understanding of how global events affect the value of money. In this guide, you'll learn:1. Which foreign exchange currencies are most commonly traded and why2. How to do forex trading online through forex trading system Web sites3. Hedging foreign currency exchange and other risk-abatement concepts4. Using a managed forex trading accountAction Steps The best contacts and resources to help you get it done Learning about major foreign exchange currenciesCurrencies trade in pairs, expressed as two currencies in relation to each other. You are buying one and selling the other simultaneously during forex trading. The U.S. dollar is the most widely traded currency. A huge percentage, 65%, of foreign country reserves are held in dollars, making it extraordinarily stable. The euro is 25% of foreign reserves, making that currency a strong second choice. Also popular are the Australian dollar, Japanese yen, British pound and Hong Kong dollar. Forex trading online via forex trading system sitesThe most common way individuals trade currencies is through foreign exchange brokers who operate online. They typically offer access to real-time data, moving price charts and free practice accounts. While legit, they also often promote trading on margin, which can be highly risky for a beginner. Read the fine print and always trade with money you can lose. Hedging foreign currency exchange and other risk-abatement conceptsForex trading system scams are legion, and no amount of fine print can protect you if you are bent on losing money. However, it does pay to educate one's self on the proper ways to manage forex trading risk, including how big companies hedge against risk in the foreign exchange market. Managed forex trading for passive investorsThe newest wrinkle in forex trading is managed forex, where investors place money into an account for professional traders to manage on their behalf. It works a little like a mutual fund, but buyer beware -- like in any investment, foreign currency exchange losses can mount quickly if a trader bets big and wrong in your name. Tips & TacticsHelpful advice for making the most of this Guide Absolutely begin with a free practice account. If you're going to lose thousands in a few minutes of forex trading, it might as well be funny money. Do not ever put your retirement fund at risk. Unlike bank accounts, there is no federal insurance to bail you out if you lose big on the foreign currency exchange markets. Be a student of global news. Real foreign-exchange traders working on behalf of corporations live for headlines from real-time news services like Bloomberg and Reuters. Beware companies shilling expensive foreign currency exchange lessons. They often claim astounding result that cannot be proven. If it sounds too good to be true, it probably is. Forex Trading Made EasyTry trading in a forex trading practice account before trading with any real money.Learn the best practices of forex trading system providers. Consider foreign currency exchange through a managed forex trading account if time is a concern
Read more...

Online Currency Trading Tutorials

Online Currency Trading Tutorials

Whether are learning to drive a car or trade in the Forex market you benefit from the experience and knowledge of others. None of us ever really believe that we are an expert at something as soon as we try it for the first time. For this reason, unless you are already maintaining a healthy bank balance trading Forex then you can benefit from a tutorial in Forex trading.
A tutorial in currency trading will help to teach you the basics, and even if you have been trading currencies for a while then you may still learn something new. You see, the Forex market is pretty complex and therefore it can take years to master it. For this reason taking the time to learn as much as possible will save you money in the long run.
Not too long ago it was almost impossible to find anyone offering any kind of training or tutoring in Forex. This was mainly because trading was only open to large corporations and businesses. The situation is completely different nowadays as the Internet boom has opened the doors to individual traders and that has led to a massive increase in the number of courses and tutorials available.
Training can be done online or in a classroom depending on your location and preference. There are so many ،®learn at home،courses available now that if you think that is the way to go then all you have to do is pick one. Classroom learning is a little different since you may find yourself having to travel fair distances to get to your nearest course.
Another advantage of an online tutorial is that not only do you get to learn from the comfort of your own home or office but you can also take things at your own pace. The downside however is that there is no teacher for the one to one discussions and explanation (the DVDs or online videos are your teacher) that you may sometime need.
Some online currency trading tutorials come with a money-back guarantee, that is if you do not like their course you can return it for a refund. However, you should look out for those courses which claim to be able to guarantee you a profit. These kind of claims are hard to achieve and should be treated with sketiscm as some courses are no more than scams.
Forex trading requires very quick thinking and decision making. Tutorials cannot teach you that. They can tell you the principles of trading and make you a much better trader for it. However, what it takes is for you to use the knowledge they give you and incorporate it in to your daily trading habits.
Through the help of a course you decision making and speed can definitely be improved but they cannot tell you exactly when to enter or exit a trade. That said, if you take the time to learn everything you can then it will be much easier to call the next market move correctly. You can also look to the help of Forex signal service providers for further security.

Currency trading tutorials can never teach you everything you will ever need to know. No-one can. However, they can help you to make decisions more quickly and with more success, it،¯s all about how you take the knowledge they give you and what you do with it

Currency Trading Training - 7 Favorite Tips

Currency Trading Training - 7 Favorite Tips

Currency trading training is not over when a trader finally sees the equity increasing in their account.

The Forex market is a very demanding environment and for a trader to maintain a success level, constant currency trading training is necessary.

The following 7 favorite tips can be used as timely reminders and need to be read and absorbed on a regular basis:
1 - Take Responsibility
"The buck stops here." Don't blame the markets, or a host of other factors for a losing trade. You entered it for whatever reasons you had at the time. Take responsibility for it.
2 - Use Each Losing Trade As A Stepping Stone
You lost a trade? Good. It will help you focus on a potential problem in your trading method. If after careful analysis you are satisfied you worked according to your plan, fine. Move on.
3 - Never BeNew traders in the early stages of their currency trading training can be eaten alive by the market. During periods of consolidation with little liquidity the anxious impatient trader will force trading opportunities where there none.come Impatient With The Market
Learn to accept the fact that around 70% of the time price will be in a consolidation channel.
4 - Focus Daily On Improving Your Trading Skills
Currency trading training is an ongoing process. Day by day, step by step the trader improves. So rather than be preoccupied with profits and losses, concentrate on developing the skills. Your account will start to reflect your focus in time
5 - Be Pleased With Well Executed Trades Whatever The Outcome
Is this possible? Yes. You can feel well pleased even with a losing trade if you stuck to your methodology and executed the trade well. It is dangerous to feel good about a winning trade when you went against your trading method to achieve it. Your elation is likely to be short lived. Learn to execute the plan!
6 - If In Doubt Stay Out
The feeling of regret can drain a person mentally and emotionally from entering a poorly considered trade. Once the trigger has been pulled and the trade starts going wrong, the agony of watching it inch towards your stop should renew in the trader the determination to stay out when in doubt!
7 - Always Have A Good Reason
Currency trading training involves careful analysis of reasons for entering a trade. Just because price is high is not a reason to go short or long if price is low. Price will do what price wants to do so rather than trading from gut reaction, e.g. "Price can't go any higher (or lower)" learn to detach emotions and use pure technical analysis to establish a number of reasons why you should take a trade.
As currency trading training is a long term commitment, skills and disciplines learned can sometimes be forgotten as bad habits creep in.It is necessary to constantly renew the thinking processes by repeating over and over the habits of successful traders.These 7 favorite tips will keep the newer trader out of a lot of trouble!
Read more...

The History of Forex Trading

The History of Forex Trading

Many centuries ago, the value of goods were expressed in terms of other goods. This sort of economics was based on the barter system between individuals. The obvious limitations of such a system encouraged establishing more generally accepted mediums of exchange. It was important that a common base of value could be established. In some economies, items such as teeth, feathers even stones served this purpose, but soon various metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value.Coins were initially minted from the preferred metal and in stable political regimes, the introduction of a paper form of governmental I.O.U. during the Middle Ages also gained acceptance. This type of I.O.U. was introduced more successfully through force than through persuasion and is now the basis of today’s modern currencies.Before the first World war, most Central banks supported their currencies with convertibility to gold. Paper money could always be exchanged for gold. However, for this type of gold exchange, there was not necessarily a Centrals bank need for full coverage of the government's currency reserves. This did not occur very often, however when a group mindset fostered this disastrous notion of converting back to gold in mass, panic resulted in so-called "Run on banks " The combination of a greater supply of paper money without the gold to cover led to devastating inflation and resulting political instability.In order to protect local national interests, increased foreign exchange controls were introduced to prevent market forces from punishing monetary irresponsibility.Near the end of WWII, The Bretton Woods agreement was reached on the initiative of the USA in July 1944. The conference held in Bretton Woods, New Hampshire rejected John Maynard Keynes suggestion for a new world reserve currency in favor of a system built on the US Dollar. International institutions such as the IMF, The World Bank and GATT were created in the same period as the emerging victors of WWII searched for a way to avoid the destabilizing monetary crises leading to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that reinstated The Gold Standard partly, fixing the USD at $35.00 per ounce of Gold and fixing the other main currencies to the dollar, initially intended to be on a permanent basis.The Bretton Woods system came under increasing pressure as national economies moved in different directions during the 1960’s. A number of realignments held the system alive for a long time but eventually Bretton Woods collapsed in the early 1970’s following president Nixon's suspension of the gold convertibility in August 1971. The dollar was not any longer suited as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits.The last few decades have seen foreign exchange trading develop into the worlds largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjust foreign exchange rates according to their perceived values.In Europe, the idea of fixed exchange rates had by no means died. The European Economic Community introduced a new system of fixed exchange rates in 1979, the European Monetary System. This attempt to fix exchange rates met with near extinction in 1992-93, when built-up economic pressures forced devaluations of a number of weak European currencies. The quest continued in Europe for currency stability with the 1991 signing of The Maastricht treaty. This was to not only fix exchange rates but also actually replace many of them with the Euro in 2002.Today, Europe has embraced the Euro in 12 participating countries. The physical introduction of the Euro on January 1, 2002 saw the old countries currencies made obsolete on July 1, 2002.In Asia, the lack of sustainability of fixed foreign exchange rates has gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates in particular in South America also looking very vulnerable.While commercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The size of the FOREX market now dwarfs any other investment market.It is estimated that more than USD 1,200 Billion are traded every day, that is the same amount as almost 40 times the daily USD volume on the American NASDAQ market

Advantages To Foreign Currency Trading

Advantages To Foreign Currency Trading

Do you want to get into foreign currency trading, but aren’t sure how it can benefit you? There are many advantages to foreign currency trading. First, in the last few years, the spread rates have tightened a lot. Most of the online FOREX brokers today will offer you a five pips spread on EUR/USD. This is the most widely traded currency pair.Another wonderful advantage is that the currency trading market is open 24 hours a day. There is no limit up or down on how many transactions a trader can make. This allows the currency trader to implement his trading strategy to the fullest. Also, the trader can control the volatility of the market by protecting his position with stop-loss orders.The next advantage is that you can sell before you buy when you are trading currencies. A trader doesn’t have the liquidity to sell currency before he buys it. This means that when you are selling one currency, you are also buying another.One good thing in the currency trading market, unlike stock trading, there is no restrictions on short selling. Regardless if a trader is long or short or which way the market moves, there is a potential for profit. This means that there is an equal opportunity to profit during a rising or falling market.All of these advantages make investing in currency trading a very lucrative investment. With all of these advantages, how can you not invest in foreign currency trading? What are you waiting for? Begin trading currency today.
Read more...

Forex Currency Trading System

Forex Currency Trading System

Finding the Right Forex Currency Trading SystemWhen it comes to choosing our Forex currency trading system we want to ask the question of ”how much is it going to cost?”. This is in reference to the cost of getting set up with the right software and information. The cost of getting started can range depending on your trading system set up, but you need to be ready to make an investment of around $300. If you stop to think about it, a few hundred dollars is a tiny investment for something that can very fast be brining you profits in the $50,000 mark or even more.Bad Currency Trading SystemsJust a word of warning. There are many companies out there charging thousands of dollars for their Forex courses. They also try to trap you into on going billing systems with their software and Forex Trade notification services. This is not necessary and in my opinion a total waste of your money. A reasonable Forex Trading System course should never cost more than $500.

Trade Currency and Price Currency

Trade Currency and Price Currency

When you trade, you will always trade a combination of two currencies. For example, you will buy US dollars and sell Japanese Yen or buy Euros and sell Japanese Yen. There are many combinations of the dozens of widely traded currencies. There is always a long (bought) and a short (sold) side to each trade. This means that you are speculating in the prospect of one of the currencies strengthening and one of them weakening.
The trade currency or dealt currency is normally, but not always, the currency with the highest value. When for example trading US dollars against Japanese Yen, the normal way to trade is buying or selling a fixed amount of US dollars, USD 100,000. When closing the position, the opposite trade is done, again USD 100,000. The profit or loss based on price change will be apparent in the amount of Yen credited and debited for the two transactions. In other words, your profit or loss will be denominated in Japanese Yen that are known as the price currency

Margin Trading

Margin Trading

Foreign exchange trading is normally undertaken on the basis of margin trading or gearing. A relatively small deposit is required in order to control much larger positions in the market. This is possible because when you buy one currency you sell another. Margin requirements are set by your Customer broker and vary from as little as 1% to 10% margin. This means that in order to trade 1,000,000 USD on 1 % margin, you need to place just 10,000 USD by way of security. That same security of 10,000 USD, traded on a 10% margin could control up to 100,000 USD worth of one currency against another currency.
As you can see, with gearing your capital from 10 to 100 times calls for a very disciplined approach to trading as both profit opportunities and potential loss are equal and opposite

What is the FOREX Market

What is the FOREX Market

The Foreign Exchange (FOREX) market is by far the largest market in the world. The $1.3 trillion average daily turnover dwarfs the daily turnover of the American stock and bond markets combined. There are many reasons for the popularity of foreign exchange trading, but among the most important is the available margin trading, the 24-hour a day 5 day a week liquidity, and low if any commissions.
Of course many commercial organizations are participating purely due to the currency exposures created by their financial institutions accounts on their import and export activities. Investing in foreign exchange remains predominantly a domain of the big professional players in the market such as hedge funds, banks and brokers. Nevertheless, any investor with the necessary knowledge is and complete understanding of this market can benefit from this exciting arena

Stop-Loss discipline

Stop-Loss discipline

There are significant opportunities and of course risks in the foreign exchange markets. Aggressive traders might experience profit/loss swings of 20-30% daily. This calls for strict self-disciplined stop-loss policies in positions that are moving against you.
Luckily, there are no daily limits on foreign exchange trading and no restrictions on trading hours other than the weekends. This means that there will nearly always be a possibility to react to moves in the main currency markets and low risk of getting caught without possibility of getting out. This market can move very fast and a stop-loss order is by no means a guarantee of getting out at the desired level. The main risk is really an event over the weekend, where all markets are closed. This happens from time to time as many important political events such as G10 meetings are normally scheduled for week The main risk is really an event over the weekend, where all markets are closed. This happens from time to time as many important political events such as G-20 meetings are normally scheduled during the weekend

Spot and forward trading-Swaps

Spot and forward trading-Swaps

When you trade foreign exchange you are always quoted a spot price valued 2 business days in advance. This is under normal conditions where there are no bank holidays in the traded currencies countries or is not over a weekend. If you trade on Monday it is valued Wednesday. If you trade on Friday it is valued Tuesday.
Forward trading is making the opposite trade of a spot trade in a given period of time. Often investors will swap their trades forward for anywhere from a week or two up to several months depending on the time frame of the investment. Most common is one-day rollovers, keeping a spot position overnight. These overnight positions are technically one-day forwards. It is very important to know what interest you paying if short and what interest you are receiving if long when keeping an overnight position. Even though a forward trade is on a future date, the position can be closed out at any time. The closing part of the position is then swapped forward to the same future value date.
Read more...

Spreads not Commissions

Spreads not Commissions

When trading foreign exchange, you are always quoted a 2-sided dealing price where you can buy or sell the trade currency. The difference between the buy and sell price is the spread
The dealing spread is typically around 5 basis points or pips under normal market conditions, e.g. EUR/USD 1.2250-55. This means that you can sell Euros against US Dollars at 1.2250 and buy Euros at 1.2255. There are no more costs, no commissions or exchange fees because so called commissions are built into the spreads. The wider the spread the bigger the commission

24/5 and No Central Location

24/5 and No Central Location

The FOREX Market has no fixed location. It is a market based on the vast network of hundreds of major banks and their branch offices across the globe. The liquidity is always there because someone, somewhere can make a price. From Monday morning in New Zealand to Friday afternoon on the California Coast the FOREX Market is basically a 24 hour 5 day a week market that does not stop. Australasia starts a day then comes the Asian market, then Europe, followed by the American and Canadian markets then Australasia again and the cycle continues with the markets closed only on the weekends or in countries with bank or national Holidays

Successful Forex Trading

Successful Forex Trading

Forex trading is fast becoming one of the easiest ways to earn large amounts of money on your investment. Then again, it can also be the easiest way to lose all of your money in a short period of time. That is, if you do not know what you are doing. The fact is that even seasoned traders make mistakes and only through the understanding of basic principles and the application of sound strategies can you be assured of earning money in the long run.One of the most basic things that you have to understand about Forex trading is that there will always be losing streaks along with the winning ones. Having this fact in mind will keep you going during those times that you do not get a good deal. The best way to handle Forex trading is to have a reliable trading system coupled with a rigid money management system.There are many different strategies employed in Forex trading today. What you should do is either adopt one of them or come up with your own. No matter which path you choose to take, the important thing is that your trading system has been proven or can be proven to be reliable. How would you know that your trading system is reliable?It is quite simple, really. A reliable trading system is one which gives you more winning trades than losing ones. More than this, your winning trades should be – in general – of greater value than your losing trades. You do not need to be a rocket scientist to figure this one out. More wins with greater value equals profits. No matter how you come up with your trading system, the bottom line is that you get consistent results.Once you have come up with your trading strategy, try it out first. You can do this by using a demo account before trading live. Using a demo account is advantageous as you will be doing exactly the same thing as live trading – without real money. This way, you can test your strategy and pick out the flaws f there are any.If, after you have tested your strategy, you are confident that you are getting consistent results, you could go live. Your strategy should not stop there, though. Once you engage in live trading, you must take care to instill strict discipline when it comes to money management. Do not deviate from your strategy once it is put in place. This is perhaps the foremost reason for traders to suddenly lose everything. Always remember that you cannot win all the time and that losses are part of trading. If you have a strategy in place, do not scramble to recoup your losses outside the boundaries of your strategy. The trend is that winning will come soon after your losses.One rule you should stick to is never trading with more than 2% of your account at risk on a single trade. Whether you win or lose, this percentage is going to get you the long term results that you are aiming for.
Read more...