Archive for November, 2009
Some vital details about FOREX trading
I hope you all know that trading is a kind of thing that is present in the lives of all of us. We make trades each and every day. It has actually become a part of our lives. It’s been quite a long time now that we heard this key word ‘trading’.
Firstly trading was supposed to be the exchange of goods and services. But in today’s era it’s not so any more, trading has reached far beyond than exchange of products and services. Now a day trading has actually developed into some thing that is much more than all this.
Now trading is being carried out between the currencies of two different regions or nations.
You all must be thinking that what’s the relation of one currency with other or why we make a trade between two different currencies.
So the answer to your entire set of questions is that we make a trade between the currency of one region and the currency of some other region because we all know that the relative values of these currencies can actually vary. Many a times the value of these currencies varies really very significantly.
In today’ era of trading this wide whole process of FOREX trading has already been developed into a very new industry of trading which is known as Foreign Exchange or popularly known as FOREX market. This FOREX market is the one that is being able to attract quite a big section of people.
FOREX market is the only market in the world that makes a trading of around $3 trillion and that too in a single day. This is the amount of money that is being transacted in the market daily.
FOREX trading is the one that simply involves the purchasing and/or selling out of various international currencies in the globally oriented market of trading.
The strongest point of action about the FOREX market is its door that is open for 24-hour in a day. On the trading front of the clock, a process of trading begins in Sydney, Australia and after that it steps from one zone of time to other time zone, moving in a circular direction reaching each and every corner of this world until and unless it reaches to its final destination that is New York City, it is the last trading market to be opened up each and every day. This particular process of trading is carried out for five days in a single week. It’s only on the weekends that this market is not operational.
It is the market that trades with the help of currencies. Currencies that are being traded in FOREX trading are of two types. The first one is major currencies and the other one is known as the minor currencies.
The importance of a Forex demo
Currency trading in the Forex trading market can be aptly compared to anything dangerous such as flying. The pilot or the astronaut who takes a leap in the air can be compared to the trader who takes a giant leap by investing in the Forex trading market. Similar to the way these pilots practice on simulators, a Forex demo is also available. For a beginner it is essential that he opens a Forex demo account. Just learning the methods through books or online guidance will make the learner efficient in basics. But the only way to learn anything is to do it yourself actually.
The major advantage in this is that without using any money, one can gain hands-on experience. The demo is available through different brokers as well as various firms. They provide this facility as they harbor an interest in granting your favor. It is expected that after one gains experience in the Forex demo, he should be able to do it in the real market with his real account. Helpful and professional guidelines are offered by the demo to beginners. The new investors should make good use of it to be successful in the markets. The services offered by the demo are automated training, Forex signals, managed accounts, etc. The demo is provided for free to beginners. But it is expected by the firms that the beginner would return and invest in them.
That is the reason why we should be aware of such facts. There are many sites available which claim to give the demo, but they charge us for it. They are all duds. The initiating of any account is very easy. A username and password is provided to us. Then they guide us how to use the account and how to practice. Usually specific soft wares are required in the computer. This is to help the computer to display the Forex demo. The most common software required is the macromedia flash player. Many computers have it by default. If not, then one should download the latest version. It is available on the internet. Then we decide the amount of money we want to invest. The money is fictional. After doing so, one is ready to start off.
As soon as we are logged in, we can star acting as we would in reality. For example checking the markets, keeping a close watch on the high-level companies, trading currencies and so on. As this is just a demo i.e. artificial, no records of us visiting the company are made. The Forex demo account records these visits and trades. The demo decides your profits and losses based on the fluctuation in the artificial market. This is very helpful in understanding how the real market works. After getting the hang of it, one can then move on to the real market and earn or lose money while trading.
Some of the vital factors that you need to know before you jump in to the trade
In the FOREX market, trading with the help of FOREX options has actually become a bit of a craze for people who are seeking to decrease the level of their associated risk. Especially since trading options are now something that is available to each and everyone who owns a computer and an internet connection.
FOREX options are believed to be a great way to put limits on the associated risks, but they must be used with a big sign of caution. If you don’t follow this, then you will be amongst the one joining the league of 90% of option traders who make a loss.
Now days, FOREX options are the ones that are also available as an exchange-traded securities, which means that you will be needing an options broker in order to trade them.
Options’ trading is actually believed to be a kind of trading vehicle for experienced investors and for those people who wish to put a hedge on their risks.
Now I am going to discuss some of the vital facts that are associated with the field of option trading.
Options are actually a sort of contracts that provide its owner all the relevant rights but not the obligation to purchase or sell out any sort of underlying currency for a price that is already been set. The contract that is signed between the two parties must be exercised on or before the date of expiry. Even the date of expiration is decided at the time of signing a contract. But all this is done for a specific amount of premium that must be paid regardless of the fact that whether the option of trading is actually ever exercised or not.
Option trading is actually a sort of market that is very much challenging in its own way. Even all the traders who are very much experienced avoid trading with option trading because of the major difficulty that is associated with it. There are large numbers of difficulties that come your way while doing option trading, because it is really very difficult to master al the skill of trading. You need to be really very careful with this type of trading as there is a large amount of risk that is being involved in these kinds of transactions.
Trading with FOREX market, which is also known as the market of foreign exchange and even trading with the market dealing with commodity futures and options is not at all made for everyone. It is a very much complex as well as a risky kind of business that sometimes experiences volatility in the value of price and also faces swings in the value of commodity or currency.
GoLearn Forex Analysis 30/11/2009
Moving Averages Are Not So Average by GoLearn Forex
Moving Averages – they are not so average
EUR/USD and USD/CHF
On Thursday of last week we saw the EUR and CHF finally break near term resistance. The EUR cleanly sliced through 1.50 and took out near term resistance around the 1.5055 handle. The CHF finally broke parity with the Dollar after struggling for weeks.
The very next day the Dollar was saved by the news coming out of Dubai. Risk aversion was on as traders unwound short Dollar positions to cover themselves. We discuss Moving Averages a fair amount especially since the 50 SMA has acted as support for such an extended period of time and for a number of currencies such as the EUR and CHF.
The CHF touched .9918 on Wednesday only to give back its gains on Thursday. In the Chart below notice the CHF low on Friday as fear penetrated the market place. As a sense of calm returned the CHF was again bouncing off the 50 SMA, as support held again.
INSERT CHART CHF
The EUR easily breached resistance last Wednesday when the DXY hit new lows for the year. As you can see on the Chart below it closed just below the Fibonacci Retrace level of 76.4%. The very next day the EUR gave back all its gains as the market was reeling from the news of the day.
As details emerged and fear stirred recent wounds in the market the EUR plummeted again. Notice the level the EUR hit before retracing its losses on Friday. The 50 SMA again held support for the EUR.
INSERT CHART EUR
The moral here: Do not discount these as just “average” lines. Even if you question the indicative validity of a moving average the very fact that institutional traders monitor these levels makes them exceptionally important if for no other reason.
Mixed Day for Global Equity Markets After Dubai’s Announcement by GoLearn Forex
It was a mixed day for the Global Equity Markets on Friday following Dubai’s debt default announcement the day before. The markets in Asia continued to sell off while in Europe they apparently felt the exposure was sufficiently contained. In the U.S on Friday after returning from Holiday the day prior, it was the DJIA’s turn to take some risk off the table as it closed lower by 154.48 points to 10,309.92 Opening session futures are pointing positive in premarket hours.
The United Arab Emirates (UAE) Central Bank issued a statement indicating they would offer financing to the local and foreign banks at 50bp over the 3month local benchmark rate. This facility offered by the U.A.E C.B will ensure liquidity and restore some confidence in the market.
On the economic data docket for Monday we have a number items set to print out of the U.K. However, forex traders will be analyzing Black Friday sales numbers as well as the ensuing weekend figures. Currently, net sales figures look to be on par with last year. Additionally for Monday, Euro-zone CPI will hit the wire as will Canadian GDP.
Upcoming Forex Events for November 30, 2009
EUR CPI (YoY) Forecast 0.40% Previous -0.10%
CAD GDP (MoM) Forecast 0.40% Previous -0.10%
USD Chicago PMI Forecast 53.00 Previous 54.20
AUD Interest Rate Decision Forecast 3.75% Previous 3.50%
Daily Review 30/11/2009
USD Dollar (USD)
The Dollar lowered versus most majors on Friday as Dubai debt concerns were reduced due to UAE’s pledge to back foreign and domestic banks in Dubai. NASDAQ and Dow Jones dropped by -1.73% and -1.48% after being closed on Thursday due to Thanksgiving. Crude fell by -2.45% closing at 76.05$ a barrel and Gold (XAU) fell for the first time in 9 days with -1.08% change closing at 1174.2$ an ounce. Today, Chicago PMI is expected weaker with 53.1 versus 54.2 prior.
EURO (EUR)
The Euro gained slightly versus the Dollar on Friday’s session as liquidity was lower and stocks declined as a result of Dubai’s financial crisis. The Euro paired its losses as rumors of the UAE backing Dubai’s bank leaked to the market. EUR/USD traded with a low of 1.4828 and with a high of 1.50. Today, CPI Flash Estimate is expected with 0.5% versus -0.1% prior.
EUR/USD – Last: 1.5025
|
Resistance |
1.5055 |
1.5100 |
|
|
Support |
1.4950 |
1.4870 |
1.4825 |
British Pound (GBP)
The Pound gained versus the Dollar after UAE’s pledge to back Dubai raised risk appetite again lifting the Pound from its monthly lows. Overall, GBP/USD traded with a low of 1.6271 and a high of 1.6510. Today, Net Lending to Individuals is expected with 0.8B versus 0.6B prior, stronger result will lead to less need to expend Britain’s QE program. Mortgage Approvals are expected stronger with 59K versus 56K prior.
GBP/USD – Last: 1.6540
|
Resistance |
1.6590 |
1.6650 |
|
|
Support |
1.6450 |
1.6375 |
1.6325 |
Japanese Yen (JPY)
The Yen weakened versus the Dollar as uncertainty about the Dubai crisis lowered following UAE’s announcement. Investors shifted back from the safety of the Yen to higher yielding currencies. Overall, USD/JPY traded with a low of 85.08 and a high of 87.01 and EUR/JPY traded with a low of 127.38 and a high of 130.14. No economic data expected today.
USD/JPY-Last: 86.80
|
Resistance |
87.05 |
87.50 |
88.00 |
|
Support |
86.30 |
85.75 |
85.25 |
Canadian dollar (CAD)
The Canadian Dollar remained unchanged versus the Dollar as commodities prices dropped but Dubai’s financial crisis uncertainty lowered. Current Account came out weaker than expected with -13.1B versus -12.9B forecast and -11.9B prior. Overall, USD/CAD traded with a low of 1.0585 and a high of 1.0748. Today, GDP is expected stronger with 0.4% versus -0.1% prior. RMPI is expected stronger with 3.1% versus -1.1% prior.
CAD/USD – Last: 1.0585
|
Resistance |
1.0650 |
1.0700 |
1.0750 |
|
Support |
1.0570 |
1.0540 |
1.0505 |
Research by http://www.ufxbank.com
How to Make Money With Forex Robots
Forex robots are proving to be a revolutionary product in America as most of the traders are using one of the many forex robots to increase their chances of earning huge profits. Forex robots will help you to plan out your strategies, studying the market trend and help you to take decision about when to buy or when to sell. Forex robots are very fast. Forex robots monitor the ongoing Forex Market 24 hours a day and 7 days a week.
The traders who trade only part time are making great use of the forex robots. As we know, many people have lost their jobs due to the economic recession and they are force to enter the Forex market to earn their living. Forex robot can help you to monitor the market all the time even if the computer is off. You will get a lot of time to venture into other money making opportunity.
With the ease of continuous monitoring, you have the advantage of entering into the market at the correct time and exit quickly. The momentum based indicator and the moving average are among the most popular online tools. You can cross check whenever you want to and make transactions in a split second when you are using a forex robot. This is very important because forex market is the most volatile market in the world.
The standard indicator consists of moving averages and momentum indicators. They can be very valuable while trading if you have thorough knowledge about these tools. With the help of the moving averages, you can identify the currency trend in the market. Average price is based on the closing price of a currency for a period of 30 days.
The average price is indicated on a graph. If the price is above the line then it shows that traders are buying. If it is below the price is below the line then it shows that the traders are selling.
Momentum indicators are used to measure the market momentum and we can get an idea about the future progress of prices. High momentum indicates that price changes will take place in currencies. The autopilot feature has benefited many traders as it takes care of your trade automatically without your intervention. It is better to open a demo account and then test the market using the forex robot.
The forex autopilot feature is very useful for new traders. Some of the forex robots come with money back guarantee. So you can easily use them to study the market. If it doesn’t work properly you can always return it and have your money back. Constant use of forex robots improve your decision making skills and also enhance your trading skills.
Forex market is a very challenging market but the involvement of forex robots have made it a lot simpler.
How to make money using Online Forex Trading
People are heading toward forex trading because of the opportunity of easy money with the ease of online forex trading. As compared to other markets, forex systems provide you with a number of ways of making money using the currency pair of your own choice. It is not necessary to learn the pros and cons of the forex market if you want to start trading in the forex market.
Just sign up with a broker and open a demo account. This is all you need to practice trading in the forex market. A number of forex softwares are available which will provide all the information that you need and help you in making the right decision. This is the reason why many people are turning towards forex trading.
On the basis of technical or fundamental inputs or a combination of both, you can make profits very easily depending upon your trading strategy and the currency pair that you are using. There are various backup tools available by which you can keep an eye on the market. These tools include the rate movements, forex quotes, currency price history. All this information is available on a mouse click. This enables you to take a decision instantly. No other market offers such easy ways to earn money.
You can become an expert in forex trading once you master all the skills and that too from the comfort of your home. Even when the computer is switched off, the software takes care of your trade. As you are having the resistance and the support levels of the currency prices, it is very easy to make a decision. Moving averages are available online. You can look at it and learn the market trend. This way you can get into the market and face the action. You can make huge amount of money with the slightest movements.
With the evolution of the forex trade software, you are in a position to achieve much more than you could have in any other market. Depending upon the movement of the currency, there are 100% chances of making profits. You can multiply your investment by 10 times when there is a shift of 0.1. Moreover, you don’t have to invest big amount of cash when you are trading in large volumes. Forex currency market is very volatile as compared to other markets. Because of this reason you have very good chances of earning large amount of profits.
With the use of margin trading, you can begin with small capital and then face the real action later. But proper training is very important. Depositing small amount with the broker, you have the liberty of trading 100 to 200 times the amount in the market. You can earn huge money with slightest of movement.
Daily Review 27/11/2009
USD Dollar (USD)
The Dollar climbed against all majors after Dubai’s attempt to reschedule its debt by 6 month caused Europe Stocks to drop heavily and spurred investors to seek the safety of assets perceived as lower risk. Stocks market in U.S were close due to the Thanksgiving holiday. Crude oil fell by 3% closing at 76.2$ a barrel. Gold (XAU) closed almost unchanged at 1191.85 $ an ounce but dropped during Asia session falling back to 1170$ levels. No economic data expected today.
EURO (EUR)
The Euro fell against the Dollar following the collapse of stock markets in Europe as a result of Dubai’s debt rescheduling. EUR/USD pair traded with a low of 1.4959 and with a high of 1.5141. Loans to Euro zone households and firms fell in October for the second month in a row, coming at 0.3% vs. 0.7% forecast. No important data expected today.
EUR/USD – Last: 1.4945
|
Resistance |
1.5020 |
1.5100 |
1.5144 |
|
Support |
1.4913 |
1.4830 |
1.4800 |
British Pound (GBP)
The Pound fell versus the Dollar as stocks declined and a proposal by Dubai to delay debt payments prompted investors to seek what they perceive to be safer securities. Overall, GBP/USD traded with a low of 1.6466 and with a high of 1.6725. CBI Realized Sales came out at 13 vs. 12 forecast.
GBP/USD – Last: 1.6406
|
Resistance |
1.6530 |
1.6648 |
1.6720 |
|
Support |
1.6376 |
|
|
Japanese Yen (JPY)
The Yen rallied to a 14-year high against the Dollar, climbing past the 85.00 level, on speculation Japanese monetary authorities will tolerate further appreciation of the currency. Overall, USD/JPY traded with a low of 84.81 and with a high of 87.48. Tokyo Core CPI came out better than expected at -1.9% vs. -2% forecast.
USD/JPY-Last: 86.37
|
Resistance |
87.00 |
87.70 |
88.62 |
|
Support |
85.80 |
85.00 |
|
Canadian dollar (CAD)
The Canadian Dollar weakened against its U.S. counterpart by the most in almost four weeks as Dubai’s plan to reschedule its debt spurred a sell-off in crude oil, gold and equities. Overall, USD/CAD traded with a low of 1.0450 and with a high of 1.0620.Today, Current Account is expected at -12.9B vs. -11.2B prior.
CAD/USD – Last: 1.0626
|
Resistance |
1.0641 |
1.0719 |
|
|
Support |
1.0587 |
1.0530 |
1.0450 |
Research by http://www.ufxbank.com
The Basics Of Forex Trading
If you are interested in stock markets or any other such markets then you must have heard about the forex market. You must have thought about trading in the forex market, how the forex market operates and all such queries about the forex market. Forex is a shortened version for Foreign Exchange. In the stock market, traders are concerned about the values of different companies. But, the forex market is something different. In this, you will be dealing with currencies of different countries of the world.
The working of forex market is quite similar to stock market. In the forex market also, you will be eager to buy a currency when its price is low and will wait for the prices to rise in order to sell your currency and earn some profit. The forex market is a very volatile market. The prices of the currencies can change in a fraction of time and this is the reason why you have increased chances of earning profit. The three most active locations where the forex market is very busy are Tokyo, London and New York. But, in other parts of the world, you can find the existence of the forex market.
The popular currencies involved in the forex market include Euro, Dollar, Franc, Pound Sterling, Yen and Australian Dollar. As forex market is a global market, the timings of opening and closing of the market depends purely on the geographical location. It is also possible that the prices of currencies differ from one location to another as the other location may not know that the price has changed in the prior market. As you grow in experience, you will understand the working of the market and will be able to take advantage of this difference in price.
The stock market basically works on the company’s value or perception. Therefore, it is very possible that someone can have an inside news about a company before that information goes public. He can take advantage of it and use it in making money for himself. Don’t you think, he is cheating on you? This is not the case when we are dealing with Forex trading. Here, everyone is having a general idea about the situation and standing of the currency price and therefore no one is having an edge. So you can say that Forex market is a very fair. As we know, forex trading market deals in currencies. The different currencies are represented by a three letter code. For example, EURO is called EUR; US Dollar is called USD and etc. You have the options of taking help and advice form a broker. Each broker will take a reasonable amount as his fees.
Before you choose a broker, collect all information about him so that you are not in the wrong hands. So, Forex trading market has many opportunities, for you to exploit. But before entering it, prepare yourself and gain as much knowledge as you can about the market.