SaneBull World Market Watch

stock market info

Great British Pound vs. Japanese Yen Morning Report

The daily double top formation is still negatively affecting the pair as seen on our provided daily chart, particularly after breaching the support areas of 149.00 , supported by the bearish structure of the four-hour candlestick as seen on the s

Domain Name For Forex Sites

If you are going to become an affiliate in the Forex world, you will have to pick a domain name. As a beginner, you might want to start with just one domain. Later on, as your experience grows, you can expand and manage couple of domains at the same time. How to pick up the right domain name? Where and how to register your domain? Is it possible to get a free domain for your Forex site?
Choosing domain requires some serious thinking and searching. First of all, decide what your Forex website will be about: Forex brokers reviews, Forex forum, Forex blog, Forex education, Forex software, Forex trading platforms etc. Once you have figured out your website theme, choose the domain name with the theme keywords. In fact, brainstorm with 5 top keywords, pair them up, add prefixes and/or suffixes to come up with a good domain ideas. For example, if you decide to make Forex education, a good domain may sound like:
LearnForex.com, or StartForexTrading.com, or ForexTradingGuide.com
Here are couple of more things you should know while choosing a domain for you Forex website:
1. Domain Endings - nothing better than .com
You have probably already noticed the variety of domain endings, such as .net, .org, .tv, however there is nothing better than com. Don't fall for cheaper domains because of the endings other then .com. It is just not worth it.
2. Amount of Words - The Less, the Better
First of all, since your website is about Forex, the domain name must have "Forex" in it somewhere, preferably in the beginning. Don't go overboard by using more than 3 words in the domain.
3. Hyphens and Numbers are Bad
If you can avoid numbers and hyphens in the domain name - perfect! Hyphens might look better for a human eye, but for Google and other search engine they are just obstacles.
4. Don't Look for Misspelling
I completely understand the need to be unique and have an image of a genius over the net; however, don't use difficult words in the domain name because it will only lead to misspelling. The words for your Forex website should be short, easy-to-spell and memorable. Avoid words, such as ecstasy, millennium, irresistible, sacrilegious etc. in your Forex domain!
Now it is time to register the domain for your Forex site. Before buying a domain name via Go Daddy or similar domain registrars, check whether your hosting provider gives away free domain with the hosting plan. Some hosting providers offer free the domain upon the purchase of the plan.
Search to see if the domain name you have come up with is available (there is a domain search with every registrar). Don't be too disappointed to find that all of the wanted domain names for your Forex sites are already taken by someone else. In the worst case scenario add hyphen between words, or try to brainstorm some more with words related to your Forex website topic.
Once you have found the available domain, click through, make the payment (unless you get a domain for free from your hosting provider), and you are all done! You are an official owner of a domain!

Ring Fences, Rustlers and a global bank insolvency

In this week which has seen so much speculation on the fate of Lehman Brothers, it seems only sensible to review how an international insolvency of a major bank works and what it might mean for international creditors. The insolvency treatment of international banks has remained one of the stubbornly difficult areas of law to harmonise and huge uncertainty and complexity remains. For excellent background, see Cross-border bank insolvency by Rosa Maria Lastra of Queen Mary, University of London.Although markets are global, and Lehman Brothers operations span the globe, all insolvency is local. The basic premise is that each jurisdiction buries its own dead and keeps whatever treasure or garbage it finds with the corpse. Local creditors get to recover their claims out of the locally available assets. If, and only if, there are any assets left over will international creditors be invited to make a claim for the rest. Europe has managed to harmonise cross-border insolvency for banks under directives and local law to embody principles of universality and unity within the EU, but that only works equitably if enough assets are in the EU when the bank fails, and local insolvency law still applies in all its divergent complexity.Claims against a bank are deemed located wherever the contract creating the claim is undertaken. If it is under US law then the claimant must look to the liquidator in the United States and assets under his control for recovery. If the claim is in Hong Kong, then the claimant looks to the Hong Kong receiver and assets.The key to having a happy insolvency, if such a thing exists, lies in ensuring that when a globalised bank goes bust, all the best assets are inside your borders and subject to seizure by your liquidators on behalf of your creditors. Everyone else outside your borders is on their own. As the US dollar is the reserve currency of banking and US Treasuries, Agencies and other assets are the highest preferred asset class, the US is almost always in a good position in an international bank failure.The principle of using local assets for local recovery is known as the “ring fence” – the idea being that insolvency drops an invisible “ring fence” around any valuable assets at the borders to meet claims arising within the borders. No country is more assiduous in weaving the ring fence than the United States of America. It is a very successful strategy for US creditors. US creditors of failed international banks tend to recover disproportionately relative to creditors anywhere else. The ring fence contains all these choicest assets for US creditors, and all the international creditors are forced to pick among the dross of foreign assets to eke out a recovery, only receiving any residual US assets remaining after US creditors get 100 percent recovery.Lehman has been deeply troubled and subject to speculation since the early spring. That was just about the time that we started to see a marked sell off in foreign markets where Lehman has long been a major player. Recently, along with intensification of that sell off, we have seen a strengthening of the US dollar and US asset markets.If one were cynical, and one believed that Lehman was going to be allowed to fail pour encouragement les autres one might wonder if Lehman was quietly bidden – or even explicitly ordered – to sell off its foreign holdings and repatriate the proceeds to asset classes within the US ring fence. This would ensure that US creditors of Lehman received a satisfactory recovery at the expense of foreign creditors. It would also contribute to a nice pre-election illusion of a “flight to quality” as US dollar and assets strengthened on the direction of flow.If one were really cynical, one might even think that a wily bank supervisor might arrange to ensure 100 percent recovery for its creditors with a bit of creative misappropriation thrown in the mix. Broker dealers normally hold securities and other assets in nominee name on behalf of their investor clients. Under modern market regulation, these nominee assets are supposed to be held separately from a firm’s own assets so that they can be protected in an insolvency and restored to the clients with minimal loss and inconvenience. Liberalisations and financial innovations have undermined the segregation principle by promoting much more intensive use of client assets for leverage (prime brokerage and margin lending) and alternative income streams (securities lending). As a result, it is often very difficult to discern in a failed broker who has the better claim to assets which were held to a client account but reused for finance and/or trading purposes. The main source of evidence is the books of the failed broker.On the wholesale side, margin and collateralisation in connection with derivatives and securities finance arrangements mean that creditors under these arrangements should have good delivery and secure legal claims to assets provided under market standard agreements. As a result, preferred wholesale creditors could have been streamed the choicest assets under arrangements that will look above suspicion on review as being consistent with market best practice.If Lehman were to go into insolvency, I will be interested to discover whether US creditors achieve a much higher proportion of recovery than their global peers in other locations where Lehman did business. If so, it will likely be because of the US ring fence and the months of repatriation of assets and funds back into the confines of the ring fence before the failure was finally orchestrated. It will also be because the choicest assets were preferentially delivered to preferred US creditors under market standard margin and collateral arrangements.Unfortunately, the pace of an international insolvency means that any retrospective evaluation will be so far down the road that I will likely be almost alone in looking backwards to see what the final distribution effects are and what they mean for equitable principles of international banking practice

Make Money with Currency Trading

For those unfamiliar with the term, Forex (Foreign Exchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
Forex is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the Forex money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How Forex Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in Forex investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in Forex are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on Forex

Forex investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on Forex means that potential profits are enormous relative to initial capital investments. Another benefit of Forex is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in Forex short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.

The best advice I can give to you is to conduct yourself like a boss interviewing a potential employee. This employee will be making major decision on your financial future (or lack there of) and therefore it is of most importance that you ask the right questions. This decision cannot be taken lightly as must be well thought out. I would interview (more like grill) at least 5 potential Brokers before picking the final two.
When choosing a forex broker there are many factors to take into account.
— Trust
— Experience
— References from past clients
— Level of success
— Amount of advice to be given
— Convenience
— Amount of margin offered
— Speed
All of the above are of course important. In any financial transaction.

 It is important to trust the broker you work with. This trust is garnered by the experience level the broker has. Of course there are some new brokers starting out who are quite trustworthy, but most people would rather work with an experienced broker. For that reason most new brokers attach themselves to a firm where they can be mentored and gain experience.
References from past clients are important. If your broker has helped someone else is successful in the past and that person is willing to speak up for him that says a lot. You can gage the level of success your broker has had by speaking with past clients and seeing how well they did working with this broker. Next, take a look at the amount of advice your broker is willing to give you. Of course, you make your own decisions and will never take another person's word for everything, but it is good to have knowledge to work with, and advice from an experienced broker is key information to factor in. Convenience is also impotent. If you live in California then an Ohio broker might not be the best choice. But in the age of the internet that factor has become less relevant. With fax and email where you and your broker live has become less important.
The amount of margin offered is important. Margin is used to leverage your money. A broker who gives you a 50 to one margin is more valuable than one who gives you 20 to one. And of course speed. Is your broker quick? Does he return phone calls and emails promptly? If so, perhaps you can work with him.
Your broker will b a trusted adviser and someone that you may be working with for years to come so choose the relationship carefully. Ask friends and acquaintances who are active in forex trading what broker they use and how they met. It is quite possible that you can get a referral from a friend or acquaintance you trust and acquire a good forex broker that way.
Another good way to find a forex broker is to go online. There are message forums, chat rooms, and email groups through portals like Yahoo, Google and MSN that contain a wealth of information. Getting onto one of these online communities and asking other people for advice is the way that many people found their broker. If a broker has several clients in an online community who are happy with what he has accomplished for them, then that is a good indication that you might be happy with him as well. Take advantage of the number of people who are on the internet and join some of these online communities. Ask question and you'll probably learn a great deal from the experiences that other people have had. Also find trade journals, magazines and ezines to subscribe to. Read as much as you can about the subject of forex trading before going into it. Become a smart shopper and smarter trader.
Finding a good forex broker is a job in itself. When you visit with a forex broker you are in essence conducting an employment interview to determine if this is the broker you wish to handle your financial affairs, so be thorough. Ask plenty of questions. Ask for references. Don't be shy. Also check with other people in the office of the broker and see if you would trust them to fill in for your broker if he were not available. And, see if the broker is willing to offer you a demo account to use to get in some practice before you actually make an investment. If the broker is able to do so and encourages you then it means that the broker wants educated clients and is not just out for the quick buck. See what kind of training and tutoring the broker is willing to offer. A good broker will offer to answer your questions and help you through the learning process.

How to Make Consistent Profits Trading Futures

One of the mistakes I consistently made in my early years as a trader was to try to make too much money in relation to my trading capital. To make £1000 a day while Futures Trading with £10,000 is absurdly ambitious; of course I have done it many times, as would anyone with this intention, but I have also gone bust on more than one occasion. To have the aspiration of taking £1000 out of the market each day, when trading with £10,000 or under is, I think, a quick route to the poor house.So what is a reasonable objective for a day / futures trader?A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.One of the reasons he has chosen to work with young futures traders is that he wants people who have minimal financial commitments. He knows it will take a while for them to start earning an income from the business. So his belief is that if his traders can regularly take small amounts of money out of the market, their knowledge, skills and confidence will grow and in time they will become bigger traders. What is critical about this approach is that his traders do not grow in size until they have achieved consistent, regular success on a small scale; and we are talking small, I mean £25 or £50 in a day.What can we learn from this low risk approach? Well first let me ask you: what is more important, to make money today, or to become a consistently profitable trader? Because if we want to become consistently successful traders we need to take a different tack than if we are just out to make as much money as we can today.So back to the question, what is a reasonable objective for a day trader? Well let’s look at bringing our daily target right down to £100, with £10,000 of trading capital, i.e. 1%. Now £100 a day, trading a market like the FTSE seems an achievable target to me. That is a net profit of 10 FTSE points a day. Can you come up with a system that trades 5 times a day and has an average net profit of 2 points? Or a system that trades 10 times a day with an average net profit of 1 point?Is that a yes I hear? Because if you can make an average of £100 a day you will double your money in 100 trading days i.e. 20 weeks or about 5 months. If you double you position size every time you double your money, your account will grow to £1,000,000 in 140 weeks, which is less than 3 years! Of course this does not take into account the impact of tax; but my point is that by taking a low risk, conservative approach to trading objectives, we give ourselves the chance to grow and develop into traders, while also availing ourselves of the possibility of a deceptively good return.If at this point you are tearing your hair out and screaming at the screen that I am a fool for suggesting that you can trade a strategy that averages a few points a trade, I assume that you are not familiar with the benefits of direct access trading. Direct access trading effectively gives everyone and their uncle the same low costs, immediate trade execution and access as was exclusively enjoyed by the floor traders before the advent of the electronic market place. To learn about the advantages of direct access trading.

Archive for the 'Chinese Yuan (RMB

fter a brief pause, China’s foreign exchange reserves have resumed their blistering pace of growth: “The reserves rose a record $178 billion in the second quarter to $2.132 trillion, the People’s Bank of China said today on its Web site. That dwarfs a $7.7 billion gain in the previous three months.” Considering that the global economy remains embroiled in the worst recession in decades, this is frankly incredible. [Chart below courtesy of WSJ].As far as currency traders are concerned, this development has two important implications, the first of which concerns the Chinese Yuan (also known as RenMinBi or RMB). A quick parsing of trade and capital flows data reveals that the majority of the $178 Billion came from unconventional sources. “The trade surplus was $34.8 billion in the second quarter and foreign direct investment was $21.2 billion.” Currency fluctuations (i.e. the depreciation in the Dollar relative to other major currencies) can explain a small portion, “leaving the bulk of the increase in the reserves unaccounted for.”In short, most of the capital now flowing into China is so-called “hot money,” chasing a piece of the action in China’s surging property and stock markets. The benchmark stock index has risen 75% this year, making it the world’s best performer. In short, China is once again “caught in a squeeze similar to the one that bedevilled policymakers earlier this century, with a flood of hot money trying to force the government’s hand on the currency.” Either it allows the RMB to resume its upward path against the Dollar, or it raises interest rates rapidly to head off inflation. With the money supply now growing at an annualized rate of 30%+, the government is running out of time on this front.The second implication concerns the composition of China’s reserves. You can recall that in recent months, Chinese officials have become more vocal about ending the Dollar’s role as the world’s reserve currency, and have even taken token steps towards achieving that goal. But the latest analysis suggests that when push comes to shove, China is still firmly behind the Dollar: “Estimates suggest around 65% of China’s official holdings are in U.S. dollar assets, and the remainder are denominated in euro, yen, sterling and other currencies. This mix has been relatively stable as the Chinese government continues to place the bulk of its reserves in U.S. Treasury securities.”In fact, “stable” is an understatement. While other Central Banks are gradually paring their holdings of US Treasuries, China is adding to its own stockpile. Already the world’s largest holder of Treasuries, China added another $38 billion in May, for a total of $800 Billion. “On the contrary, Japan, Russia and Canada were sellers of US assets in May. Japan, the second-biggest international investor, reduced its total holdings by $8.7 billion to $677.2 billion.” Meanwhile, Zhou XiaoChuan, governor of China’s Central Bank has endorsed the current composition of reserves: “Despite the $800 billion in U.S. Treasuries, it is a diversified portfolio overall.” This certainly represents a step backwards for Mr. Zhou, who only a couple months ago was leading the charge for a global reserve currency.Perhaps over the longer-term, it can begin to take steps to dislodge the Dollar, but for now, it appears that China has accepted the status quo. As one analyst observed, “We do expect China to increase its purchase of gold and other commodities over time, but these markets are just not big enough to make a meaningful dent in the structure of the overall FX holdings. For example, if China decided to hold 5 percent of its current $2 trillion reserves in gold, it would need to buy …the equivalent to about one year of world production. For other hard commodities, the cost of storage is high and prices fluctuate wildly.”China did recently appoint a new official (an economist trained in the US) to manage its reserves. “The move isn’t likely to fluster foreign-exchange markets or herald any change in China’s exchange-rate policy and reform.” Still, Chinawatchers are advised to continue to monitor the situation closely for any signs of discontinuity.

Archive for the 'Australian Dollar'

In the same vein as Monday’s and Tuesday’s posts (covering the New Zealand Dollar and Australian Dollar, respectively), I’d like to use today’s post to look at another commodity currency - the Canadian Dollar. The Loonie, it turns out, has also benefited from the a recovery in risk appetite and concomitant boom in commodity prices; it has appreciated by 7% against the USD in the last month alone, en route to a ten-month high. “All in all, with almost everything going its way these days (besides the crummy weather and the impact on tourism), a return trip to parity - last visited nearly one year ago - doesn’t seem far fetched,” chimes one optimistic analyst

China moves ‘forward’ on currency derivatives

Chinese officials recently approved a preliminary list of banks to make the market in currency forwards. Foreign banks, including HSBC and Deutsche Bank AG, were heavily represented, although the ‘Big 5’ Chinese Banks were predictably included. The move is a large step forward for China, as currency derivatives experience a surge in popularity. Currency forwards allow traders to essentially bet on the future direction of a currency, by entering into an agreement to buy or sell currency at a fixed exchange rate on a fixed date in the future. Yuan-denominated forwards are especially popular, as traders can speculate if, when, and by how much China will revalue its currency. Dow Jones News reports:Once foreign-exchange fowards trading on the interbank market becomes active, it could affect the yuan spot rate and offshore yuan forwards markets. But it’s still not clear how much freedom the People’s Bank of China is likely to give banks in trading fowards.

Hedge Funds get Burned by Dollar’s

n just the first two weeks of 2006, the Yen has already managed to appreciate 3.5% against the USD, costing some of the most prominent macro hedge funds hundreds of millions of dollars in losses. Hedge funds, with their vast pools of investment capital and proportionately large research teams, are usually ahead of the curve in financial markets. That so many of them failed to foresee the USD’s sudden slide has come as a great surprise to many analysts. Many hedge funds have interpreted the recent fall in the value of the USD as a harbinger of further depreciation. Accordingly, they have quickly and significantly cut their long positions in the USD, a fact that is born out by official statistics. Reuters reports:Long dollar positions measured against the yen, euro, sterling, Swiss franc, Canadian dollar and Australian dollar were cut to 1,241 futures contracts in the week to January 3 from 24,274 contracts the week before, according to the CFTC

Euro retreats from 2009 Highs

This notion might have some merit, considering that fundamentals arguably favor a continued Euro appreciation. “The economy of the 27-country European Union shrank 0.3 percent in the three months ended June 30, for an annual rate of roughly 1.2 percent. The 16 countries that use the euro registered a 0.1 percent decline for the second quarter, or an annual rate of roughly 0.4 percent.” While output remains well below its 2008 levels, the slight contraction represents a tremendous

Archive for the 'US Dollar

Over the last week, the markets have been abuzz with chatter about how the US recession will soon come to and end, followed by a quick and healthy recovery. According to investor logic, the result would be a rise in inflation and interest rates. This optimism was partially deflated today, as the Federal Reserve bank conducted its annual monetary policy meeting.Excluding a brief uptick in June (see chart below courtesy of the Cleveland Fed), investors had long come to expect that the Fed would leave its benchmark Federal Funds rate unchanged, at 0-.25%. At the same time, there was a strong belief that the Fed would begin to hike rates at the end of 2009, and comment accordingly in the press release that accompanied its monetary policy decision. Barron’s predicted yesterday: “The statement will acknowledge some improvement in the U.S. economy, though it will imply that this nascent growth reflected in recent gross domestic product reports is fragile and will be monitored closely. This will leave open the specter that interest rates could be increased at some point in the future

Archive for the 'Swiss Franc

When the Swiss National Bank (SNB) intervened three weeks ago in forex markets, the Swiss Franc instantly declined 2% against the Euro. Since then, the Franc has risen slowly, and it’s now in danger of touching the “line in the sand” of 1.5 EUR/CHF that analysts have ascribed to the SNB.That’s not to say that the Central Bank lacks credibility. Quite the opposite in fact. Every time a member of the SNB speaks about the possibility of intervention, the markets react. For example, “Swiss National Bank Governing Board member Thomas Jordan said the central bank remains willing to intervene in currency markets to prevent a further appreciation of the Swiss franc..The franc declined against the euro after the remarks.” Also, “The Swiss National Bank is sticking decidedly to its policy to prevent an appreciation of the Swiss franc, SNB Chairman Jean-Pierre Roth said in an interview published on Friday…The Swiss franc dipped after Roth’s comments.”In addition, given that the SNB premised its intervention on deflation fighting, its credibility is now higher than ever, since the latest figures imply an inflation rate that is well into negative territory: “Swiss consumer prices dropped 1 percent year-on-year in June, the same rate as in May when prices fell at their fastest rate in 50 years, underscoring deflation dangers although most of the drop was due to oil.” Despite a fiscal stimulus, coupled with an easing of monetary policy and quantitative easing, the Swiss money supply is barely growing. At this point, the only thing the SNB can do is (threaten to) manipulate its exchange rate.Perhaps this is why traders are willing to push back against the SNB, backed by “foreign-exchange analysts [that] argue that the SNB won’t have an appetite to continue buying foreign currencies in large amounts much longer.” The SNB is also fighting against the perception that Switzerland is one of a handful of financial safe havens. The fact that the Swiss Franc is probably undervalued is also contributing to the steady inflow of capital into Switzerland.Still, investors are afraid to step across the line. Futures prices for the EUR/CHF are all hovering slightly above 1.50, for the next 18 months. Prior to the latest round of intervention, the expectation was for a steady rise in the Swiss Franc.

CURRENCIES TO TRADE IN THE FOREX MARKET

WHAT CURRENCIES TO TRADE IN THE FOREX MARKETYou can trade any country’s currency by exchanging it to another country’s currency, however the list below are the ones that are the most popular and are usually made available by most online brokers for you to trade.Read More With ForexGen0 Comments PermalinkAug 31, 2008 at 15:11 o\clockFOREX Trading Strategy ForexGenby: forexgenpivot Keywords: forexgen, client, easily, manage, mostly, orders, quotes, trader, within, forex, types, using, mode, news, user, whom, cfd, forex, forexI ventured into the FOREX market a little more than 1 year ago. I have tried and tested many different types of trading techniques and styles. Most were failures and some were successful. From my experience, traders making money in FOREX will not reveal their trading system, simply because somebody has to lose money in order for you to make money.Currently I have two strategies working for me. I started with a demo account a little more than one year ago and used the obvious techniques such as technical analysis and fundamentals. Technical analysis seemed to be the easiest method for an inexperienced trader since it only required looking at charts as opposed to watching the news. I used indicators such as MACD, Fibonacci, and RSI to help assess the market and make a prediction on price movement. Needless to say I was successful in my demo account, however when I went live, fear set in and I could not trade using the same techniques I had developed over 4 months of trading with a demo account.The stress was too much and like a lot of people, I started looking for a FOREX signals provider to minimize the time spent and stress. After some due diligence on quite a few FOREX signals providers, I did find a reliable FOREX charting software package that provided excellent signals. To my surprise, the signals worked. The only difficult part was to discipline myself to take each signal whether I agreed with it or not. After all, the company I chose had a winning track record for 3 consecutive years.Now that I had a positive flow of income from a FOREX signals provider, I decided to open a second account using my own trading system. This is where I discovered what I feel is a full proof system when it comes to making a fast 30 to 50 pips in FOREX.Trading now for a little more than 1 year, I noticed that the market moved on speculation. Speculation based on fear and news events, such as the CPI and retail sales. I noticed that between the times of 4:30 am eastern and 8:30 am there was a lot of critical news in majors such as the Euro and the British Pound. The market would move at the exact moment these major news events were released. If a news event was due out at 4:30 am on the British Pound, more than likely the market spiked at that exact moment 30 to sometimes 50 pips up or down. What I started to do was trade on these news events. I would wait until that exact moment the news was due out and execute a trade when the market moved more than 7 pips from its current price 15 seconds before the news is released. A stop-loss should be set at 10 pips above or below the current price.The trick to this method is executing the trade at the right time and discipline yourself to keep your stop-loss very tight, setting it to no more than 10 pips after you got into the trade. The reason being, this works all of the time, but if you click too soon or too late you could fail to predict the direction of the market. However, when you are right, your winning trades will outweigh your losing traders significantly since you are looking to make a gain of 30-50 pips and if you a wrong a loss of only 10 pips. I have used this method for 5 months and it works.Read More With ForexGen

simple breakout system

it’s a very simple breakout system and it’s a fact that most major trends start from breaks to new market highs or lows.2. By its very nature its long term and if you look at a Forex chart, you will see the big trends can last many months or longer.3. This system as it is always in the market so is guaranteed to put you on the side of every big trend.It’s also got some other great advantages, it’s quick to implement about 15 minutes a day max and gives you a set trading signal with no subjective judgement needed.Despite the fact it works and will continue to work most traders won’t bother with it and here are the reasons why.1. They think its to simple despite the fact it works2. They want to buy tops and bottoms exactly, despite the fact you can’t do this3. Its to long term and traders always like action and lack the discipline to hold long term trends4. It’s not complex - traders think this increases chances of success but of course the opposite is true - simple systems are more robust.5. It’s not based on fancy theories chaos, neural networks, artificial intelligence etc - these theories don’t work in Forex but again traders love them.6. There is no fancy packaging or a ridiculous name that insinuates taking on and beating the market.Most traders pick junk robots with simulated track records and fall for the hype. This automated Forex trading system has no hype but plenty of profits and I know which system I would rather have!The system works and will continue to work and if you are interested in long term profits take a look at it and it can increase your chances of forex trading success.Can FAP Turbo Really Automate Your Internet TradingThis is especially the case if you are talking about trading on the Forex market as there are some automated systems which are actually quite good. There are literally dozens of theseAll Information About Forex The Best Converting And BestThe best automated system I have come across so far has been the FAPTURBO IT does what it says on the tin… Fapturbo Is The Only Automated Forex Income Solution.Forex Trading System Review How Can You Find the Best TradingBy simply installing the system, customizing your settings including level of risk, the amount of times you would like the system to trade your account in a given week and other options,The Forex Autopilot System in 2009 Is it Still the MostAutomated Forex Trading Software - 5 Simple Tips to Select the Most Profitable Forex Robot System Are you looking for the best automated forex trading software to double

Economic Indicators

n forex, timing is everything. If I had written this post a couple weeks ago, the headline would read “Euro Touches 2009 High.” Perhaps if I had waited another week, it would have read, “Euro Approaching 2009 High.” But alas, I chose today to write about the Euro, and the headline I chose is probably the most appropriate under the circumstances.On August 5, “The euro hit a high for the year against the dollar as stocks trimmed their losses in afternoon trading Wednesday despite a generally cautious tone in currency markets.” Analysts were careful to point out that the markets remained cautious and the Euro eased past - rather than smashed through - its previous high. Technical analysts would and have argued that this paved the way for the subsequently rapid decline: “The euro is testing the base of an ascending channel with daily momentum charts showing a ‘double top in overbought territory.’ ”This notion might have some merit, considering that fundamentals arguably favor a continued Euro appreciation. “The economy of the 27-country European Union shrank 0.3 percent in the three months ended June 30, for an annual rate of roughly 1.2 percent. The 16 countries that use the euro registered a 0.1 percent decline for the second quarter, or an annual rate of roughly 0.4 percent.” While output remains well below its 2008 levels, the slight contraction represents a tremendous improvement from the first quarter, when GDP shrank by 2.5%.

3 Rules to Make serious earnings

If you want to catch the serious profit in forex dealing you need to trend watch forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior forex trend and lead you to long-term term currency dealing success.

Most beginner traders don't bother trying to trend following forex lengthier term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.

The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.

Breakouts

By far the best way of catching the serious moves is to use a forex dealing strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.

It's a fact that most leading moves start from new highs or lows.

While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.

Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.

The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.

Confirmation

Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.

These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI

Stops and Targets

Stop points are easy with breakouts - Simply behind the breakout point.

If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.

You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.

It's ok to give a serious back, as that's the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.

The above is a simple way to trend watch forex and catch the high odds moves that yield the serious profit. If you are learning forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.

Now that you have all the winning strategies, you now need to have a winning broker, recently.

Make Money Online Trading Forex

The forex market is filled with scam offers and pie in the sky promises. On the other hand, it is the largest, most liquid market that trades twenty four hours a day. So how to find your way through the maze of offers that are out there, well here are four steps to becoming a successful trader.

Becoming a successful Forex trader basically comes down to four things:

1) Learning about the markets and your appitite for risk
How the markets work, what moves them, etc is a simple matter as these markets are not that complicated. Determining how well you are suited to trading is a difficult process however. Finding out how you react to stress and perform when real money is on the line can be a life long process

2) Finding and learning a system that fits your personality and life style
There are as many different systems as there are traders, many have been proven over time, so really the only question is which one suits me.I know many will dispute this point, however it really is not as complicated as some try to make it. Most of those making it hard are really just trying to sell you something. There are many free systems that once learned and traded can make you wealthy

3) Testing that system until you have an edge.
Testing is the heart of becoming a good trader. Most people don't do this. If you test something until you can prove and edge, no matter how small it may seem, you just need to trade it over and over to make money.

4) Trading that system exactly how you tested it, until you are wealthy.
Many traders are always looking for that magic system that will make money fast. The secret to wealth is to stick to the system you have tested and proved and do it until you acumulate wealth. Not chase the latest trading software or system.

When you are ready to trade this market, keep these four simple steps in mind and then do not let anything stand in your way of becoming the trader you want to be.

Triple Your Forex Trading Profits

Do you have a good money management rule in your forex trading? Many traders think that money management in forex trading is just by putting a stop loss and a target profit, that's all. This is far from true because that is only part of a forex trading system. Let's look at some forex tips on how you can triple your forex trading profits.

1. Always prepare for the worst, think how to protect your trade first!

Almost all the traders will think how much money or profits they are going to make when they trade. This is a wrong mindset. If you are a beginner in forex trading, then you should assume the worst first and not thinking about profits in the first place. You should be very eager to protect your trade from losses by shifting it to break even after your trade has around more than 40 pips in profits. The trade is also considered won even it has broke even.

2. Don't take high leverage for granted.

Many forex brokers offer a high leverage of 100:1 to 400:1. True it is very tempting, but you should not use very high leverage for a beginning and for a small forex account, it is not advisable to use more than 50:1 or 100:1, so as to prevent your account from going bust. Traders thought they can win big using high leverage, but what if they loose? Their trading capital goes into the drain too.

3. Not risking more than 1% to 5% of your trading account.

This is a very important money management rule. How much do you risk for every trade? Forex trading is all about high probability and calculated risk. If you think you can't take risk at all, then you shouldn't be learning to trade forex at all. For a small $1000 account, it may seems by risking 1%, the gains are very small too, but that's the right way to build your capital. For me, I'm a conservative trader and I risk only 2% of my trading account per trade.

4. The Other Neglected Factor

Many traders only focus on the technicals and money management. But they forget another important factor for success and that's emotion. When you've a good system and money management, you've to use them without emotions. After you entered a trade, do not keep checking on it now and then. Just have confidence with your forex trading system and leave it to the market to hit stop loss or profit target.

Futures And Commodity Trading

The futures markets are described as continuous auction markets and exchanges providing the latest information about supply and demand with respect to individual commodities, financial instruments, and currencies. Futures exchanges are where buyers and sellers of an expanding list of commodities, financial instruments, and currencies, come together to trade. Trading has also been initiated in options on futures contracts. Thus, option buyers participate in futures markets with different risk. The exact risk is known to the option buyer. It is unknown to the futures trader.

Crude Oil Trading

Understanding crude oil trading can be greatly aided by learning about the various elements that go into setting the price of this valuable natural resource. These elements can include the OPEC Basket Price, the West Texas Intermediate price, and the Brent Blend. The OPEC Basket Price is basically an average of prices in a variety of countries including Mexico, Dubai, Nigeria, Saudi Arabia, Venezuela, Indonesia, and Algeria. The prices in this category are frequently lower. This may be due to the fact that oil from these countries may have a higher sulfur content, resulting in a lower yield when refined. West Texas Intermediate prices can be among the highest since the quality of the product tends to be higher as well. The weight of the product as well as the sulfur content are two factors that can determine quality. Higher quality products will generally turn out a better grade of gasoline. Brent Blend represents crude oil that comes from several fields in the North Sea. While product in this category will not usually be of as high a quality as that of West Texas Intermediate product, it is still a relatively high quality product. Other factors that are used to establish the price of gasoline can include the demand for the product, currency strength, and distribution and processing expenses. All of these factors can have an impact on crude oil trading.

The subject of crude oil trading is an important one since the price of this valuable natural resource can have a major impact on the economy of the United States as well as other countries. Oil is one of the most important commodities that are traded on the New York Mercantile Exchange, or NYMEX. Prices of light sweet crude oil are monitored on a daily basis. Any changes in these prices can have a major impact on the United States economy as well as the economies of other countries across the globe. Commodity traders will look at factors such as political conditions and supply and demand to try to predict what the price of various commodities will be in the future. When prices rise to high, inflation on the cost of other goods and services can be the result. Since most goods will need to be transported from the location where they were created, higher gas prices can mean that consumers will pay more for these goods at a future time. Conversely, lower gas prices can mean that a manufacturer will need to spend less money to ship goods to customers and will realize a larger profit. Hopefully, these increased profits will mean that a manufacturer will be able to offer the product at a lower price to consumers. While supply and demand and other factors can influence crude oil trading, the actions of futures and hedge fund traders have been also blamed for wide fluctuations in price.

Long before the days of crude oil trading, this natural resource played a major role. Petroleum as an important natural resource has been used for centuries for a variety of purposes. Many civilizations used it to fuel fires. Other uses included the creation of tar, which was widely used to pave streets in the Arab world. Distilled petroleum could be turned into important products such as kerosene for lamps. In some cases, the fuel was used as a means of waging war. The need for energy increased with the Industrial Revolution, although coal was the resource of choice at this time. In addition to coal, wood was also a popular fuel for home heating. In the nineteenth century, Russia became a major producer of oil and crude oil trading took on a new dimension. By the time that the twentieth century rolled around, Russia was producing nearly one half of the world's petroleum supply. Drilling for this valuable natural resource began in the United States at around the middle of the nineteenth century in Pennsylvania. With the passage of time, the oil producing giants in the United States began to emerge with wells in Louisiana, Texas, and a variety of other locations. Today, not only are gasoline and home heating fuel supplies dependent upon these industry giants, but a wide variety of modern products are derived from petrochemicals. Most plastics and a large number of cosmetics and paint products require petroleum for production.

The impact of crude oil trading on gas prices is offset in some countries by subsidized gas prices. While such actions can reduce the cost of transporting goods and be generally helpful to the country's economy, there can be drawbacks. Consumers are far less likely to conserve fuel when prices are low. As prices fluctuate, the need for subsidizing gas prices will most likely decrease. The Bible encourages believers to always be mindful that God is the creator of the universe. "Remember now thy Creator in the days of thy youth, while the evil days come not, nor the years draw nigh, when thou shalt say, I have no pleasure in them." (Ecclesiastes 12:1)

No discussion of crude oil trading would be complete without looking at the impact that this industry can have on the environment. Fossil fuel combustion has been known to send pollutants and green house gases into the atmosphere. Water sources have faced pollution as well through spills and refinery by products. While the need for this valuable resource cannot be disputed, methods for reducing negative environmental impacts are important. Alternative sources of energy are also being explored and may hold crucial answers to this dilemma.

oil trading market

Oil trading is an opportunity for people to make money behind the computer screen. Investing in oil takes place through one of the oil brokers, who provide the trader with trading software and market analyses. Although the oil market may look like a very complex market, there are ways for you to learn the market by heart. We will explain some simple ways to look at the market, so you get a better understanding of the basics.
You trade against the USD.  Oil Trading is buying or selling oil contract with US dollars. In fact you are doing the same when standing at a gas station, and you trade fuel for money. But in order to buy barrels of crude oil, you need mediation from oil brokers. They will supply you with the virtual oil contracts so you can make a trade.
You want to become a profitable trader. Winning traders know what they are doing and always have a trading plan in mind. The most important thing is that you can forecast market highs and lows. Oil brokers can help you analyze the market and make probability estimations of the future direction of the market. In general it is wise to follow the trend, and gain profits from movements in the market.
You will be paying commissions for every trade. Even winning traders have to pay a price for their trading, you have to pay a premium on every trade executed. Oil brokers will offer a slightly different price between buying and selling, which is their profit margin. This is one of the facts you will have to except as these brokers are not established to make you money. They are their to make a little money themselves and they do it by trading commissions.
You will have loosing trades. Oil trading is by some considered gambling. This is for the simple reason that you can never be a hundred percent sure which way the market will be heading. For this reason you will have to accept that there will be loosing trades, but this is not a problem as long as your winning trades offset the loosing trades. Financial management is important, and you can ask your oil broker to help you manage your funds.
Remember that this is a global market. The oil trading market involves a large number of countries worldwide, if not all. Lower oil prices will lead to cheaper production prices, thus cheaper selling prices. For this reason every trader influences the global economy, but you should especially keep an eye on the bigger ones out there who can influence markets significantly. Ask your oil broker who the bigger players in the market are, and ask them for up to date economic releases.

The U.S. Session Trader's Daily Forex

The U.S. session, trader's daily 09:45 EDT question; "Oh dear, do we now want to take a U.S. based trade and run the risk of a price move stranding things with no momentum, as 80% of U.S. sessions do?"
The law of probability says that U.S. trade will not follow through with sustainable breaks on new positions, and with what came before the Wall Street open, we already have seen that the bullish S&P start could literally go anywhere. TheLFB equity tracking system shows that the main components that we use to gauge S&P momentum has only four out of thirty companies trading in the green.
If this move is to hold, and by default the Usd is to get weaker, a huge raft of volume needs to hit that lifts all stock indices, as well as oil and gold trade. Not to say that could not happen, but it is questionable as to whether it will hit and hold before the European markets go into their close at 10:30 EDT.
The fact that gold moved $10, or 1% in five minutes at the open, and the S&P managed to tag on 0.3%, leaves another question as to why oil has not moved too far, and further enforces the feeling that the Wednesday move could hold. The majors are so far from their previous session highs or lows, that actually breaking new ground and holding for a ride on the dollar is very unlikely; unless a volume tsunami hits.
There is nothing at all clear-cut about the picture we have on the major pairs, and the global market Usd drivers. All are overbought in the near-term, and the major pairs are all dealing with daily chart Simple Moving Average areas that really are creating massive support and resistance areas to work through.
Volume and speculative interest is very light, creating an environment that offers plenty of volatility, but also failed breaks, in the same measure. Global equity trade is flat, and commodity markets are also flat-lining after efforts to hold support this week. In all, not an easy environment to issue high probability signals.

Forex - Order Types

a) Market Order
An order to buy or sell which is to be done at the price immediately available: the 'spot' rate, the current ratres at which the market is dealing.
b) Limit Order
An instruction to deal if a market moves to a more favorable level (i.e. an instruction to buy if a market goes down to a specified level or to sell if a market goes up to a specified level) is called a Limit Order. A Limit Order is often used to take profit on an existing position but can also be used to establish a new one.
c) Stop Order
An instruction nto deal if a market moves to a less favorable level (i.e. an instruction nto buy if a market goes up to a specified level, or to sell if a market goes down to a specified level) is called a Stop Order. A Stop Order is often placed to put a cap on the potential loss on an existing position; which is why Stop Orders are sometimes called Stop-loss Orders. But can be used to entere into a new position if the market breaks a certain level.
d) Once Cancels the Other (OCO)
An 'OCO' (One Cancels the Other) Order is a special type of Order where a Stop Order and a Limit Order in the same market are linked together. With an OCO Order, the execution of one of the two linked Orders results in the automatic cancellation of the other Order.
e) IF DONE Order
An IF DONE Order is a two-legged order in which the execution of the second leg can occur only after the conditions of the first leg have been satisfied. The first leg, either a Stop or a Limit, is created in an active state and the second, which can be a Stop, a Limit, or an OCO, is created in a dormant state. When the desired price is reached for the first leg, it is executed and the second leg is then activated.

Forex - Concepts and Terminologies

 Here are some important concepts/terminologies of Forex.
a) Spot rate
A spot transaction is a straightforward (or outright) exchange of one currency for another. The spot rate is the current market price or 'cash' rate. Spot transactions do not require immediate settlement, or payment 'on the spot'. By convention, the settlement date, or value date, is the second business day after the deal date on which the transaction is made by the two parties.
b) Bid & ask
In the foreign exchange market (and essentially in all markets) there is a buying and selling price. It is important to perceive these prices as a reflection of market condition.
A market maker is expected to quote simultaneously for his customers both a price at which he is willing to buy (the bid) and a price at which he is willing to sell (the ask) standard amounts of any currency for which he is making a market.
Generally speaking the difference between the bid and ask rates reflect the level of liquidity in a certain instrument. On a normal trading day, the major currency pairs EURUSD, USDJPY, USDCHF and GBPUSD are traded by a multitude of market participant every few seconds. High liquidity means that there is always a seller for your buy and a buyer for your sell at actual prices.
c) Base currency and counter currency
Every foreign exchange transaction involves two currencies. It is important to keep straight which is the base currency and which is the counter currency. The counter currency is the numerator and the base currency is the denominator. When the counter currency increases, the base currency strengthens and becomes more expensive. When the counter currency decreases, the base currency weakens and becomes cheaper. In telephone trading communications, the base currency is always stated first. For example, a quotation for USDJPY means the US dollar is the base and the yen is the counter currency. In the case of GBPUSD (usually called 'cable') the British pound is the base and the US dollar is the counter currency.

d) Quotes in terms of base currency
Traders always think in terms of how much it costs to buy or sell the base currency. When a quote of 1.1750 / 53 is given that means that a trader can buy EUR against USD at 1.1753. If he is buying EURUSD for 1'000'000 at that rate he would have USD 1,175,300 in exchange for his million Euro. Of course traders are not actually interested in exchanging large amounts of different currency, their main focus is to buy at a low rate and sell at higher one.
e) Basis points or 'pips'
For most currencies, bid and offer quotes are carried down to the fourth decimal place. That represents one-hundredth of one percent, or 1/10,000th of the counter currency unit, usually called a 'pip'. However, for a few currency units that are relatively small in absolute value, such as the Japanese yen, quotes may be carried down to two decimal places and a 'pip' is 1/100th of the terms currency unit. In foreign exchange, a 'pip' is the smallest amount by which a price may fluctuate in that market.
f) Euro cross & cross rates
Euro cross rates are currency pairs that involve the Euro currency versus another currency. Examples of Euro crosses are EURJPY, EURCHF and GBPEUR. Currency pairs that involve neither the Euro nor the US dollar are called cross rates. Examples of cross rates are GBPJPY and CHFJPY. Of course hundreds of cross rates exist involving exotic currency pairs but they are often plagued by low liquidity. Ever since the Euro the number of liquid cross rates have decreased and have been replaced (to a certain extent) by Euro crosses.

The Swiss Franc.

The Swiss franc is the only currency of a major European country that belongs neither to the European Monetary Union nor to the G-7 countries. Although the Swiss economy is relatively small, the Swiss franc is one of the four major currencies, closely resembling the strength and quality of the Swiss economy and finance. Switzerland has a very close economic relationship with Germany, and thus to the euro zone. Therefore, in terms of political uncertainty in the East, the Swiss franc is favored generally over the euro. Typically, it is believed that the Swiss franc is a stable currency. Actually, from a foreign exchange point of view, the Swiss franc closely resembles the patterns of the euro, but lacks its liquidity. As the demand for it exceeds supply, the Swiss franc can be more volatile than the euro.

The British Pound.

Until the end of World War II, the pound was the currency of reference. The currency is heavily traded against the euro and the U.S. dollar, but has a spotty presence against other currencies. Prior to the introduction of the euro, both the pound benefited from any doubts about the currency convergence. After the introduction of the euro, Bank of England is attempting to bring the high U.K. rates closer to the lower rates in the euro zone. The pound could join the euro in the early 2000s, provided that the U.K. referendum is positive.

The Japanese Yen.

The Japanese yen is the third most traded currency in the world; it has a much smaller international presence than the U.S. dollar or the euro. The yen is very liquid around the world, practically around the clock. The natural demand to trade the yen concentrated mostly among the Japanese keiretsu, the economic and financial conglomerates. The yen is much more sensitive to the fortunes of the Nikkei index, the Japanese stock market, and the real estate market.

The Euro.

The euro was designed to become the premier currency in trading by simply being quoted in American terms. Like the U.S. dollar, the euro has a strong international presence stemming from members of the European Monetary Union. The currency remains lagued by unequal growth, high unemployment, and government resistance to structural changes. The pair was also weighed in 1999 and 2000 by outflows from foreign investors, particularly Japanese, who were forced to liquidate their losing investments in euro-denominated assets. Moreover, European money managers rebalanced their portfolios and reduced their euro exposure as their needs for hedging currency risk in Europe declined.

The U.S. Dollar.

The United States dollar is the world's main currency – an universal measure to evaluate any other currency traded on Forex. All currencies are generally quoted in U.S. dollar terms. Under conditions of international economic and political unrest, the U.S. dollar is the main safe-haven currency, which was proven particularly well during the Southeast Asian crisis of 1997-1998.
As it was indicated, the U.S. dollar became the leading currency toward the end of the Second World War along the Breton Woods Accord, as the other currencies were virtually pegged against it. The introduction of the euro in 1999 reduced the dollar's importance only marginally.
The other major currencies traded against the U.S. dollar are the euro, Japanese yen, British pound, and Swiss franc.

Kuwaiti Dinar (KWD)

The Kuwaiti Dinar, denoted by KWD, is the official currency of Kuwait. The KWD, which is divided into 100 units, was introduced to Kuwait in 1960 as a replacement for the Indian Rupee. The currency has maintained a very high exchange rate, making it one of the highest valued currencies in the world. Moody's Rating A2 S&P Rating A+ Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets. What does it look like? Political Structure The chief of state in Kuwait is the Emir, a semi-hereditary title. The emir appoints the prime minister, who, in the past, was also the crown prince. A council of ministers aids the prime minister in his task as head of government. The parliament known as the Majlis Al-Umma, consists of 50 members who are chosen in elections held every four years. Government ministers, according to the Constitution of the State, are given automatic membership in the parliament. Prominent Figures Emir of Kuwait: Jabir al Sabah Crown Prince of Kuwait: Saad al Sabah Prime Minister: Sabah al-Ahmad al-Jabir al-Sabah Unique Characteristics Kuwait is a small, rich, relatively open economy with proved crude oil reserves of about 98 billion barrels - 10% of world reserves. Kuwait's economy is heavily dependent on oil export revenues. Kuwait has the third largest oil reserves in the world after Saudi Arabia and Iraq. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income. Key Economic Factors Economic Overview: Kuwait is a small, rich and relatively open economy with crude oil constituting 10% of the world's oil reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and over 75% of the government's income. The climate in Kuwait is a large obstacle in agricultural development, causing the nation to depend almost wholly on food imports (with the exception of fish). Additionally, approximately 75% of water must be distilled or imported. Kuwait continues its discussions with foreign oil companies to develop fields in the northern part of the country. Industries: Petroleum, petrochemicals, desalination, food processing and construction materials. Main Export Trading Partners: Japan, South Korea, US, Singapore, Taiwan and Pakistan. Exports Commodities: Oil, refined products and fertilizers. Imports Commodities: Food, construction materials, vehicles and parts and clothing. Main Import Trading Partners: US , Japan, Germany, China, UK, Saudi Arabia, Italy and France.

Basics of Currency Trading

Investors and traders around the world are looking to the Forex market as a new speculation opportunity. But, how are transactions conducted in the Forex market? Or, what are the basics of Forex Trading? Before adventuring in the Forex market we need to make sure we understand the it, otherwise we will find ourselves lost where we less expected. This is what this article is aimed to, to understand the basics of currency trading.

What is traded in the Forex market?

The instrument traded by Forex traders and investors are currency pairs. A currency pair is the exchange rate of one currency over another. The most traded currency pairs are:

USD/CHF: Swiss franc

GBP/USD: Pound

USD/CAD: Canadian dollar

USD/JPY: Yen

EUR/USD: Euro

AUD/USD: Aussie

These six currency pairs generate up to 85% of the overall volume in the Forex market. So, for instance, if a trader goes long on the Euro, she or he is simultaneously buying the EUR and selling the USD. If the same trader goes short or sells the Aussie, she or he is simultaneously selling the AUD and buying the USD.

The first currency of each currency pair is referred as the base currency, while second currency is referred as the counter or quote currency. Each currency pair is expressed in units of the counter currency needed to get one unit of the base currency. If the price or quote of the EUR/USD is 1.2545, it means that 1.2545 US dollars are needed to get one EUR.

Bid/Ask Spread

All currency pairs are commonly quoted with a bid and ask price. The bid (always lower than the ask) is the price your broker is willing to buy at, thus the trader should sell at this price. The ask is the price your broker is willing to sell at, thus the trader should buy at this price.

EUR/USD 1.2645/48 or 1.2645/8

The bid price is 1.2645

The ask price is 1.2648

A Pip

A pip is the minimum incremental move a currency pair can make. A pip stands for price interest point. A move in the EUR/USD from 1.2545 to 1.2560 equals 15 pips. And a move in the USD/JPY from 112.35 to 113.40 equals 105 pips.

Margin Trading (leverage)

In contrast with other financial markets where you require the full deposit of the amount traded, in the Forex market you require only a margin deposit. The rest will be granted by your broker.

The leverage provided by some brokers goes up to 400:1. This means that you require only 1/400 or .25% in balance to open a position (plus the floating gains/losses.) Most brokers offer 100:1, where every trader requires 1% in balance to open a position.

The standard lot size in the Forex market is $100,000 USD.

For instance, a trader wants to get long one lot in EUR/USD and he or she is using 100:1 leverage.

To open such position, he or she requires 1% in balance or $1,000 USD.

Of course it is not advisable to open a position with such limited funds in our trading balance. If the trade goes against our trader, the position is to be closed by the broker. This takes us to our next important term.

Margin Call

A margin call occurs when the balance of the trading account falls below the maintenance margin (capital required to open one position, 1% when the leverage used is 100:1, 2% when leverage used is 50:1, and so on.) At this moment, the broker sells off (or buys back in the case of short positions) all your trades, leaving the trader "theoretically" with the maintenance margin.

Most of the time margin calls occur when money management is not properly applied.

How are the mechanics of a Forex trade?

The trader, after an extensive analysis, decides there is a higher probability of the British pound to go up. He or she decides to go long risking 30 pips and having a target (reward) of 60 pips. If the market goes against our trader he/she will lose 30 pips, on the other hand, if the market goes in the intended way, he or she will gain 60 pips. The actual quote for the pound is 1.8524/27, 4 pips spread. Our trader gets long at 1.8530 (ask). By the time the market gets to either our target (called take profit order) or our risk point (called stop loss level) we will have to sell it at the bid price (the price our broker is willing to buy our position back.) In order to make 40 pips, our take profit level should be placed at 1.8590 (bid price.) If our target gets hit, the market ran 64 pips (60 pips plus the 4 pip spread.) If our stop loss level is hit, the market ran 30 pips against us.

It’s very important to understand every aspect of forex trading. Start first from the very basic concepts, then move on to more complex issues such as Forex trading systems, trading psychology, trade and risk management, and so on. And make sure you master every single aspect before adventuring in a live trading account.

Day Trading Indicators and Indicator Trading

Now that you have all the day trading tools that are necessary, the book for education AND the free charting program with those ’best’ day trading indicators, you now need a day trading plan so you can decide which ones of those ’magic’ day trading indicators you are supposed to use. This really is a great book, besides telling you how to day trade using indicators to ’predict’ price - it also said that you need a trading plan to day trade.

So what should this plan be? The book told you about trend following using an indicator called macd, and it also told you how it was possible to pick the top or bottoms using an indicator called stochastic; my guess is that you picked the stochastic indicator to start your day trading - this must be the ’best of the best’ since this indicator was going to ensure you of entering your trades with the ’best’ price. Amazing, simply amazing how easy this day trading stuff really is. In fact, why even bother taking the trades, each time your indicators give a signal - just call up your broker and tell him to stick $100 in your account.

My book was Technical Analysis of the Futures Markets. My charting program was TradeStation with an eSignal fm receiver; that was the one that if you hung the antennae wires just right, and you put enough foil on the tips, you might even get quotes. I had sold a business before I started trading so I did have some capital - isn’t that how everyone gets into trading, you either sell a business or you lose your job? My indicator was the macd as I had decided that I was going to be a ’trend follower’ instead of a ’top-bottom picker’. I also decided that I was going to be ’extra’ clever, if one indicator was good than two indicators must be better, so I added a 20 period moving average. My first trade was a winner, then after many months of extensive therapy, I was finally able to forget the next twelve months - ahhh the memories ƒ؛

Learning To Day Trading - The Learning Progression

Beginning to day trade, or learning to day trade, as an indicator trader is very typical. This is also logical when you consider - HOW are you supposed to initially learn how to trade? Trading indicators are available to anyone who has a charting program, and simply using line crosses, or histogram color changes, provide ’easy’ signals to understand. If you will also take the time to learn the arithmetic behind your indicators, as well as learning what each indicator is specifically intended to do, not only is this a logical way to begin, it is also a good ’step’ in your learning progression - understanding the WHAT you are doing, instead of attempting to create ’canned’ indicator only trading systems, without any regard as to WHY you are trading this way.

This does become one of the ’sticking’ points in your learning progression, as you come to find out that you are unable to profitably trade indicators as signals only - now what? Now what - you ’can’t’ develop your own indicators, so you start doing google searches for day trading indicators and start buying your ’collection’ - they don’t ’work’ either. Now what - you buy a mechanical trading system - what does hypothetical results may not be indicative of real trading or future results mean? Now what - you start subscribing to signal services OR you start joining the ’latest and greatest’ chat room - am I really the only person using the signals who isn’t profitable?

Now what - you never learn how to trade.

I began trading as an indicator trader, and I did try to learn everything that I could about the various indicators, as well as trying to combine indicators that were consistent with how I wanted to trade - I just could never develop a mechanical day trading system from what was available to me. I read a couple more books that didn’t really help me, so I then started looking for someone who could teach me. From what I now know about gurus -vs- teachers, I am very lucky that I got involved with a money manager-trader who taught me a tremendous amount, but I still couldn’t get profitable, in part because there was also ’pressure’ to learn how to trade using real money. As well, any discussions or thoughts about trading psychology and the issues involved, especially to beginning traders, was non-existent.

Now what - learning but losing - I stopped trading. Learning to trading using real money, and ’scoffing’ at trading psychology as simply individual weakness, really was something that I now regard as misinformation. I always mention this as I now feel that this cost me as much as a year of time, and was very close to costing me my trading future, as stopped trading was VERY close to quitting trading. How can’t trading psychology be real to a beginner, when you consider that you are risking losing money at a very fast pace as a day trader, and when you further consider that you are also doing this when you really don’t know what you are doing - this is NOT by definition being weak. And if trading psychology is real, how are you going to learn to make ’good’ trading habits with real money while you are fighting the implications?

Now what - not trading and not ready [quite] to quit - still studying and searching.

Probably the single most important ’thing’ that got me to a next step in learning how to trade, was the concept of a trading setup, and that a setup and a signal were not the same. This was extremely meaningful to me, as it also led to an understanding of how to better use trading indicators for the information that they can provide, but not to use them as trading signals - in essence I began learning about trading method where discretion could be consistently applied -vs- trading system that was mechanical and arithmetic rules.

Traders who are indicator only traders, are also what I refer to right side only traders, that is they are always looking at the right side of their charts for an indicator signal. BUT what about the left side of the chart, what about price and patterns, what about market conditions - WHAT about the relevant ’things’ that are ’moving’ price, instead of indicators only as an arithmetic derivative of price, and thus, one that is dependant on the time frame that you have chosen to trade from? These ’thoughts’, along with the concept of trade setup, became instrumental in the development of a trading method, and how I came to turning my trading around.

When I think about the steps in my learning progression - I would list them as follows:

2/95 - 6/96 indicators only teaching service that included signals learning to trading with real money and trading psychology issues stop trading

6/96 - 3/97 understanding of trading psychology issues learning about trading setups concept trading method -vs- trading system trade setup - trade trigger are not the same method development understand the importance of the left side of the chart and what is happening ’across’ the chart related trading setups and how/when they triggered indicators + pattern indicators + pattern + price indicators + pattern + price + market conditions

3/97 - 11/97 able to paper trade profitably able to real money trade profitably able to trade for a living

Indicator Only Day Trader - Setup Including Indicators Method Day Trader

I have attempted to discuss the way I started day trading, and the way I think many-most traders typically begin. Along with this, I have pointed various issues and problems that I had - those regarding how to learn to trade, and then progressing into a profitable trader. My experiences have been both personal, as well as those of many traders that I have worked with over the last 8-9 years through Tactical Trading - that a very large number of these problems are due to day trading only with indicators, the specific indicators used, along with trying to turn these indicators into a mechanical trading system. This is not to say that this can’t be done - I simply couldn’t do it. However, I would strongly suggest that anyone who is in the early stages of day trading, or struggling with their day trading, consider these things that have been discussed.