Archive for October, 2009
Use Simple Approach to make Mega Gains
Have you heard about the currency options? Currency options, if brought provide you with unlimited potentials to make profits along with limited risks. This is definitely good news, however your odds of making success may not be good because almost ninety percent of these currency options expire valueless. On the contrary, if these options are sold, you again have ninety percent chances to make profits and if this is done precisely, you will be able to build up cast profits in a period of time.
Now let us consider the strategy that has the probabilities in your favor and increases your odds of making success when you are selling the premium. Hence, if the probabilities are so great, then why will a number of people not consider selling these currency options? The answer to all above can be summed up in a single word and that is the RISK factor.
While trading actually, it won’t be feasible indeed to take unlimited risks that will render only limited amount of gains, but however, if you sum of smaller gains by gathering the premium along with the currency options, then you can indeed make up for heavy gains. Let us have a look on how this can be done and the risk factor can be kept to its minimum.
If you wish to make use of a currency trading method that is based on option selling, always remember the two important points to get the odds on your side.
- Purchase fear and sell greed- the option premium does raise in amount if the forex market is drived with fear and greed. These setups offer you an opportunity to trade and make consistent profits for your forex trading indicators. Hence whenever the forex market goes away a long way from their precise value, you should sell.
- Bring time on your side- whenever you purchase an option premium, you need a lot of time as such on your side, if you are selling then go the opposite condition. Time decay by the end of the option life kills it instantly; hence one should utilize it for your benefits and sell away the options with shorter life span to expiry.
However, this game is not considered for the amateur traders.
If you want to indulge in the forex trading approach including selling of the currency options, then remember. The above mentioned is a quite simple approach and it will function and it will require courage for doing so. Selling of the options is a game and task of the bigger boys and you should be capitalized properly, have a proper money management system and be ready to execute traded against the consensus and majority of the traders.
Some Myths about Forex Day Trading
There are some myths associated with the forex day trading. Actually one needs to understand the system carefully before getting involved in it. Prior to you start trading in any kind of market, it is important that you have a thorough knowledge and understand of the different terms and functions of that market. Day trading in forex is such a profitable business, but many people are getting away from it just because of misconceptions. Let us have a look on these myths.
Forex Day Traders cannot make money- it is seen that some traders do announce that one can indeed make no money from the day trading forex. There are about two trillion dollars along with the changing hands regularly in the forex market. The actual fact is that in the forex market there exist two parties who make an exchange and out of these two, one is left behind with some profits. Hence, it is crucial to consider the daily volume of the trades taking place in the forex market. This is indeed just a matter of taste again and whatever your definition of risk vs. rewards is limited only up to yourself as well as your financial conditions.
Another biggest myth in forex day trading is that holly grain forex methods do function every day. They say that one can trade a currency each day and make profits out of it consistently. However, this is not true. The reason for the same is that assume you are a part of the commercial office and one day you are supposed to go in to visit your boss or head. You instantly observe that he has spilled tea on his shirt and the person you saw coming in before you have marked him off. You also come to know that someone else took away his parking place in the passing interaction. Nevertheless, you are still reading a great book with the title ‘how to get in and ask for appraisal and get it all the time’.
It is assured that if the suggestions provided in the book are followed the same day and you implement it to the letter, it will not possibly give you the expected results. This is the situation of the day trading lie regarding a system that one uses regularly in the forex market to gain profits consistently. Here the point is that each day is a different one as with this thing in mind you require a system that contains different sub systems that can be utilized for a number of days and that would call you about 80% of the time as many a times a better defense is just not being exposed however.
The tricks to gain great profits with trading system
If you are aware about the fact that how the stock works then you are also aware about what a Forex option trading is. But, stocks, as well as Forex have much dissimilarity so you must not get confused one for the other. At the international market, people are able to apply for Forex option trading. This is one of the popular alternative trading methods that involves low risks but with great profit potential. Now let us have a look at how Forex option trading works. Fundamentally Forex option trading involves purchasing as well as selling currencies. But rather than being tied to the variation of the trading market, an option has a set purchase or selling amount with set expiration date. For instance if any trader purchase an option, he or she will just pay a set price for the transaction.
When the trading market moves in your favor and the ending strike price is very high than the buying amount, then you obtain immediate gains from the trade. Whereas when the market moves in opposition to your position and the ending strike price is very low than the unique purchase price, then Forex option becomes worthless. The significant thing is that you lose more as you already opted for a set price for the deal. Basically people can only lose that they invested in the option therefore, effectively defending your whole Forex trading account from insolvency.
This is generally how Forex trading option works. Forex option trading is one of the good trading methods though you do not wish to rake big risk in the Forex trading market. The potential to gain profits with this kind of trading is also great as you are able to wisely select that would be profitable. The key factor to win big making use of Forex option is to make use of Forex trading software, which can offer right analysis of the trading market. Many Forex trading brokers also provide you analysis tools like charts, graphs so that you can study about new market trends as well as developments.
But if you are a beginner, all the figures, charts are very difficult to understand. If you wish to totally eradicate your headache in analyzing Forex charts, you require using automated Forex trading software, which can rightly forecast trading market movements. An automated Forex trading system is used for usual trading also. Using automated Forex trading software has many advantages for trading business. this trading system works on auto pilot therefore assuring that you will always trade for twenty four hours a day. The ability of accurately forecasting market movement is quite critical to the success of option trading. If you use this software you can ensure that your Forex trading option will surely become successful.
Daily Review 30/10/2009
USD Dollar (USD)
The Dollar fell against most of its counterparts after better than expected GDP increased investor\’s appetite for risk. The Gross Domestic Product was released at 3.5% vs. the 3.1% expected. Initial Jobless Claims came out slightly worse than expected at 530K. After 4 straight days of drops Wall Street headed for a steep rise after the GDP showed that the U.S. economy expanded at a 3.5% annual pace in the 3Q and fueled stocks. Dow Jones jumped by 2.05% to 9,963 and the NASDAQ rose by 1.84%. Crude oil jumped by 3.19% closing at 79.93$ a barrel as the surprising US economy expansion signaled for a potential increase in oil demand. Gold (XAU) trades at $1,047. Today, Personal Spending is expected at -0.4% vs. 1.3% previously and Employment Cost Index is expected unchanged at 0.4%.
EURO (EUR)
The Euro continued towards its fourth monthly rise against the Dollar as the U.S.’s return to growth renewed optimism a global recovery will quicken, aiding demand for higher-yielding assets. German Unemployment Change came out better than expected at -26K vs. expected 15K. European markets rose more than 1%. Commodities recovered from previous losses and posted important gains. Overall, EUR/USD traded with a low of 1.4682 and with a high of 1.4857. Today, European CPI Index is expected at -0.1% vs. -0.3% previously.
EUR/USD – Last: 1.4830
|
Resistance |
1.4880 |
1.4925 |
1.4970 |
|
Support |
1.4770 |
1.4720 |
1.4680 |
British Pound (GBP)
The Pound climbed against the Dollar for a fourth day after reports showed U.K. mortgage approvals increased more than forecast last month and the U.S. returned to growth in the third quarter. Overall, GBP/USD traded with a low of 1.6337 and with a high of 1.6602. Today, Nationwide Housing Price Index is expected at 0.7% vs. 0.9% previously.
GBP/USD – Last: 1.6560
|
Resistance |
1.6640 |
1.6700 |
1.6765 |
|
Support |
1.6475 |
1.6410 |
1.6350 |
Japanese Yen (JPY)
The Japanese currency fell during the European session and continued its plunge after the release of a government report that showed Japan’s jobless rate unexpectedly dropped for a second month, reducing demand for the relative safety of the Japanese currency. Overall, USD/JPY traded with a low of 90.24 and with a high of 91.60. Today, The Bank of Japan (BOJ) Press Conference is expected. The interest rate is expected unchanged at 0.1%.
USD/JPY-Last: 91.30
|
Resistance |
91.80 |
92.20 |
92.30 |
|
Support |
91.05 |
90.83 |
90.50 |
Canadian dollar (CAD)
The Canadian Dollar climbed from a 3 week low against the Dollar as stocks and commodities rallied after the US GDP report showed the American economy grew in the third quarter for the first time in a year. Overall, USD/CAD traded with a low of 1.0654 and with a high of 1.0820. Today, Canada\’s The Gross Domestic Product (GDP) is expected at 0.1% vs. 0% previously.
USD/CAD – Last: 1.0670
|
Resistance |
1.0750 |
1.0820 |
1.0865 |
|
Support |
1.0630 |
1.0585 |
1.0545 |
Research by http://www.ufxbank.com
FOREX currency trading system
The actual FOREX trading system which deals with FOREX currency is the kind of trading system, which lets all its FOREX traders to buy one specific currency and to sell out the other one simultaneously. This is a real good platform which is available for trading. It is actually that are of trading where you can always participate in the great game of currency trading and you can even make lucrative amount of profits just by purchasing and selling various pairs of currency.
According to some of the very basic rules of trading systems which deals with FOREX currency, when the monetary value of a specific currency falls down then that particular currency should always be purchased and when its price rises up, then the currency should always be sold off. However in order to be a successful trader, you must know details about some of the basics of FOREX trading. You need to have full fledged information about the trading system before you start using the trading system of FOREX currency. The trading system which is used for dealing with FOREX currency is relatively the new venture into the big financial world. Trading in the FOREX market with the help of FOREX currency trading system, is so big that near about three trillion dollars of transactions take place here and that too on everyday basis in the
Different pairs of currency are used while using the trading system of FOREX currency and these currencies are usually traded and quoted with a very specific price of ‘bid’ and ‘ask’. The ‘bid’ is defined as the price at which the broker is very much willing to buy a pair of currency and in the same way ‘ask’ is defined as the price at which he or she is willing to sell.
There are actually more than 60 pairs of currency that are available in a FOREX currency trading system in order to trade on. However, there are only four pairs of currency that usually dominate the trading system of FOREX currency. These are as follows:
EUR/USD: European dollar vs. U.S. Dollar
GBP/USD: British Pound vs. U.S. Dollar
USD/JPY: U.S. Dollar vs. Japanese YEN
USD/CHF: U.S. Dollar vs. Swiss franc
These are the pairs of currency which are used to generate around 85% of the overall volume that is generated in the FOREX market.
The concept of base/counter currency helps in illustrating that what is actually happening in a FOREX transaction. This gives you an opportunity to short-sell the specific currency with no restrictions. In the trading system where traders are dealing with FOREX currency, short-selling is the thing which happens you sell a stock or currency at first and then you try to buy it back at a much lower price later.
GoLearnForex Daily Technical Analysis
AUD/USD:
The AUD continues its recent retrace. Many traders use different time frames for different currency pairs. The longer the time frame the more valid the pattern you are charting is. Moving Averages are basic tool that even the most sophisticated trader needs to always be cognizant of. The markets tend follow the moving averages generated off of the daily charts.
In Chart below I use a moving average from an 8 hour chart. I strongly encourage traders to be vigilant of at least checking a weekly, daily, 8 and or 4 hour chart and then any time frame less than 4 hours that you may want to look at.
INSERT CHART
You can see that the yellow line representing the SMA 50 was breeched and prices continued a steady fall (The Red line is the 100 SMA). There are also a number of near candle formations that support this price depreciation.
Circled in blue is a near Falling Three Candle pattern. Typically you have a red candle followed by 3 or so small green candles that are contained by the original red candle. Following the last green candle is another red candle with price closing below the original red. The Falling Three pattern is nearly followed by Three Black Crows. This candle pattern forms when you have the candles each open in the midsection of the proceeding candle but also close lower than the proceeding candle. This pattern nearly forms between the 2 white lines.
GBP/USD:
This pair has been range bound since May. When a pair trades in a range, price is confined to a narrow margin of highs and lows. In the Chart below the 2 red lines represent the range support and resistance lines.
The 2 red boxes indicate when minor breakouts have occurred. The tops and bottoms of the boxes would be your absolute stops depending on the handle you entered the trade at. Another point of consideration is the 50 SMA and 100 SMA. You can see that the SMA’s are also moving sideways. Price typically pops when it passes above/below a significant SMA. With SMA moving into a sideways march we are approaching congestion on this pair and that should signal another breakout. Obviously if the dollar continues to strengthen as it has GBP should be headed south.
INSERT CHART
Analysis by http://www.golearnforex.net
FOREX advisory services
There are certain things that are always provided by the various advisory services that claim to help you in a great way. Forecasts of various Currencies, giving consultations on personal basis, and large number of really good advice for many individual investors, managers of fund, and for great number of corporations these are among some of those that are always being provided to you, when you chose the option of FOREX advisory services. Most of the times it also makes a speculation about the various trends of market and about the large number of swings that come in between the way of FOREX trading in order to provide all its traders or investors a big time advantage. The trading information which is always being generated from the option of FOREX advisory services can be used at any point of time in order to either validate or invalidate some of the trading strategies.
The service of FOREX advisory which is typically very normal contains all the relevant updates, all the updates on technical analysis, and various trading charts of some of the major or main currencies, which are traded in the FOREX market. Most of the web sites that are already dealing in the aspect of FOREX trading will definitely be providing an additional commentary market for some of the situations of emergency. These are some of the various types of advisory services that provide you analyses on the futures of different currency, characteristics of inter-market graphics, and relation between the two as well.
Most of these above mentioned FOREX advisory services consist of various facilities in order to send short- term and intermediate-term FOREX spot as well as recommendations for the futures of various currencies. These FOREX advisory services usually consist of the six major pairs of currency and that too against the US dollar. This is the actual type of vital or crucial information or data that can easily be retrieved with the help of your email or even you can avail this data via the technology of instant messaging, which you will be receiving on your mobile phone.
Many of the FOREX advisory services are always being powered or designed by a selected group of really very successful traders and technology experts who in fact are more than capable of determining and reading the various movements of the trading market, and the major function of this technology is to alert all its clients in such a way that it can act in an efficient and a personalized way.
In the year of early 90’s the great inception of online web sites on FOREX trading has actually brought about two of the most essential elements of online trading.
Daily Review
USD Dollar (USD)
The Dollar rose across the board. A rise in risk aversion following an unexpectedly drop in New Home Sales sent stocks lower worldwide. The Dow Jones fell for the 4th consecutive session and ended at 9,763.The Standard & Poor’s 500 Index dropped 2% on concern a rally in equities this year outpaced the prospects for economic growth. New-home sales unexpectedly fell last month to an annual rate of 402K, from a revised 417K pace in August. Crude oil fell from $79 a barrel to $77.20 on stronger Dollar. Gold (XAU) continues to move away from the highs of the year and fell to test levels below $1,030 an ounce. Today, The Gross Domestic Product (GDP) is expected at 3.1% vs. -0.7% previously. The Initial Jobless Claims are expected at 520K vs. 531K previously.
EURO (EUR)
The Euro kept weakening versus the Dollar for the 4th day in a row. The currency slumped against Dollar and Yen, reaching a 2 week low against both safe havens. The German Consumer Price Index (CPI) came out as expected at 0.1%. Overall, EUR/USD traded with a low of 1.4690 and with a high of 1.4840. Today, The German Unemployment Change is expected with 15K vs. -12K previously. The German Unemployment Rate is expected at 8.3% vs. 8.2% previously.
EUR/USD – Last: 1.4700
|
Resistance |
1.48 |
1.4842 |
1.489 |
|
Support |
1.471 |
1.4675 |
1.465 |
British Pound (GBP)
The Pound failed to hold above 1.6400 versus the Dollar finding support only at 1.6360 following economic data in the U.S and Dollar\’s strength. GBP/USD peaked at the highest price for the current week but it was unable to hold versus the strengthening Dollar. Overall, GBP/USD traded with a low of 1.6285 and with a high of 1.6466. Today, Net Lending to individuals is expected unchanged at 0.7B. The Mortgage Approvals also expected unchanged at 52K.
GBP/USD – Last: 1.6368
|
Resistance |
1.651 |
1.6575 |
1.6640 |
|
Support |
1.6355 |
1.6285 |
1.6240 |
Japanese Yen (JPY)
The Yen rose sharply versus most majors as weak economic data sent world stocks lower fueling risk aversion. The Yen reached the highest in 2 weeks against the Euro amid signs the global economic recovery is losing steam, damping demand for higher-yielding assets. Industrial Production came out 1.4%better than 1.1% expected. Overall, USD/JPY traded with a low of 90.54 and with a high of 91.80. Today, Household Spending is expected lower with 1.2% versus 2.6% and Tokyo Core CPI is expected with -2.0% versus -2.1% prior.
USD/JPY-Last: 90.42
|
Resistance |
91.3 |
91.75 |
92.1 |
|
Support |
90.5 |
90.1 |
89.9 |
Canadian dollar (CAD)
Canada’s currency depreciated against its U.S. counterpart to the lowest level in more than three weeks as declines in crude oil, the nation’s largest export, and stocks damped demand for higher-yielding assets. Overall, USDCAD traded with a low of 1.0636 and with a high of 1.0810. Today, The Raw Materials Price Index (RMPI) is expected at 1% vs. 3.7% previously.
CAD/USD – Last: 1.0790
|
Resistance |
1.08 |
1.0855 |
1.0898 |
|
Support |
1.068 |
1.063 |
1.0587 |
Research by http://www.ufxbank.com
Forex trading systems
Forex trading is a potential business looked by the people. It is a way to increase the wealth by playing wisely. For this Forex trading, some people prefer Forex trading systems and go for it with hard work and patience. As there is nothing assured in the world, same is applicable to Forex trading as well. The success depends upon the trader’s strategy, Forex market scenario, as well as then circumstances.
Forex trading can be started with a small amount of investment unlike other businesses. Last five to ten years, Forex traders have started using Forex trading systems for their business. These systems are becoming popular. But though it has fewer investments initially, it does not imply that a novice trader shall make the profits right from the beginning. The trader has to get acquainted with the concepts of this business. And he should also understand the risks associated with it. Thus the novice Forex traders or beginners should start with simple and small trades initially. The help of automated Forex trading systems is always recommended to them.
As like Stock exchange, Forex exchange is also a popular business. But here in forex trading, international currencies are traded in pairs. And Forex traders are attracted towards this business as unlike stock exchange, the currency market never goes to zero. Though it lowers down but never becomes zero. This is the reason why people get attracted to this trading. The help of automated Forex trading systems is very crucial. There are promising softwares available in the Forex market. The systems provide Forex indicators as well as they provide the Forex market analysis. They even place trades for the trader. These systems concentrate on the currency pairs which are traded. Ultimately the success in the trade depends upon the trader who is going to use the system. The Forex trading system finally works upon the inputs provided to it.
Forex traders are required to understand the facts about the market. They should be well versed with the concepts of this trading. One should start analyzing the Forex market especially the trends with the help of the information retrieved.
While trading in Forex, a trader can buy or sell the currency pairs or he can go for an option. Accordingly call options are for rising stocks where as put options are for declining one. One has to be thorough with all the conceptual facts of this Forex trading. Beyond call and put options, the important part is that the Forex traders should understand the signals and place the trade accordingly. Good Forex trading systems not only assist one but provide good strategies for managing the profits. And it is very significant to note that because of the Forex trading systems, the Forex traders are not required to spend 24 hours a day at the Forex trading.
Daily Review
USD Dollar (USD)
The Dollar strengthen during yesterday trading session as Confidence among U.S. consumers unexpectedly fell in October for a second month. The Conference Board’s confidence index dropped to 47.7 from a revised 53.4 in September. NASDAQ decreased by 1.2% and Dow Jones slightly rose by 0.14%. Crude oil rose by 1% closing at 79.55$ a barrel after a volatile trading session as investors wait for the oil inventories today. Gold (XAU) weakened by 0.7% closed at 1035.4$ an ounce. Today, Core Durable Goods Orders are expected at 0.6% vs. -0.3% prior, New Home Sales are expected to rise from 429K to 443K.
EURO (EUR)
The Euro weakened versus the Dollar for the third day in a row on concern a rally in stocks and commodities can’t be sustained. M3 Money Supply came out worse than expected at 1.8% vs. 2.1% forecast. Overall, EUR/USD traded with a low of 1.4770 and with a high of 1.4926. Today, German Prelim CPI is expected at 0.1% vs.-0.4% previously.
EUR/USD – Last: 1.4811
|
Resistance |
1.4824 |
1.4927 |
1.5046 |
|
Support |
1.4770 |
|
|
British Pound (GBP)
The Pound strengthened against the Dollar after the Confederation of British Industry\’s distributive trade\’s survey reported sales balance rose to +8 in October from +3 in September, better than economists\’ forecasts of a rise to +5. This is the fastest pace of growth since December 2007. Overall, GBP/USD traded with a low of 1.6285 and with a high of 1.6438. No economic data expected today.
GBP/USD – Last: 1.6358
|
Resistance |
1.6438 |
1.6636 |
1.6693 |
|
Support |
1.6286 |
1.6250 |
|
Japanese Yen (JPY)
The Yen rose against the Dollar for the first time in 6 days as a plunge in Treasury yields after the record $44 billion auction in two-year notes made the Dollar less attractive to Japanese investors. USD/JPY traded with a low of 91.70 and with a high of 92.32. Retail sales came out at -1.4% vs. -1.5% forecast. No economic data expected today.
USD/JPY-Last: 91.18
|
Resistance |
91.57 |
92.19 |
92.32 |
|
Support |
90.77 |
90.48 |
|
Canadian dollar (CAD)
The Canadian Dollar appreciated from a three-week low, gaining for the first time in four days amid speculation its decline was too big to be sustained after it reached a key technical level. Overall, USDCAD traded with a low of 1.0626 and with a high of 1.0716. Today, BOC Gov Carney Speaks.
USD/CAD – Last: 1.0664
|
Resistance |
1.0696 |
1.0717 |
|
|
Support |
1.0630 |
1.0500 |
1.0450 |
Research by http://www.ufxbank.com