InvestMacro FX

By James McKee

There can be no doubt we are living in the scariest economic conditions of 2 generations, and the central banks representing every major currency (US, Japan, England, etc…) are attempting to cope with the situation. The methods they use to cope have a direct effect on the value of the currency moving within the economy they are acting on behalf of. Our own Ben Bernanke was a divisive influence in Japan’s response to its own economic meltdown, which began in the 90s. His advice was the same to Japan as it has been towards us, lower interest rates, purchase our own bonds, and so on. The funny thing about this strategy is that Japan’s economy is just as bad as it was when Bernanke began advising them; in fact it is worse.

What this means to traders is that we have an idea of how Bernanke’s solutions will impact the United States in the near future, the long and short of it is this: The future of United States currency is certainly not good. While this is certainly an area in which politics could be applied I am going to go ahead and avoid this aspect of the topic in question and focus specifically on the economics. By lowering interest rates and purchasing its own bonds the United States Federal Reserve bank is inevitably encouraging deflation of the same type we have seen in Japan for years now. This is a critical fact for all traders because the dollar has been doing much more falling than rising against other major currencies but deflation is definitely on the horizon.

Bearing this in mind we have to make some critical distinctions between the US and Japan, Japan is primarily a country of export while the United States is the world’s largest importer of foreign goods. These factors are huge when considering Bernanke’s effect on the US economy with regard to his chosen strategies. Unstable is not the word for what is coming, meltdown maybe? In any event if you ask me the dollar is going to do a breakaway surge sometime in the near future once America realizes the need to produce domestically again is not just idle speculation.

The greater the risk the greater the reward has been the credo of all business people for hundreds of years. The risk (and potential reward) are about to go through the roof if Japan is any indication of what is to come. The USD|CAD would be a particularly appetizing pair for me if deflation does happen to come upon America in droves. This is all speculation on my part, please do with it what you will but remember to keep your wits about you and never act without properly considering your position and the possibilities. Happy Trading!

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado with 5 years of experience in trading with an attitude of cooperation through education. It is vital to remain in the loop where new technologies are concerned, make sure to stay up to date on the latest developments and always make the most of your ability to utilize the best forex exchange rates as much as possible when trading!

By Cheapfares.com

Friday, October 15th, 2010

Cheap airplane tickets and discount hotel rooms or discount travel packages can contribute to an inexpensive trip abroad. However, first time overseas travelers need to know in advance how to best convert US dollars into their destinations’ currency.

The following are suggestions as to how to most effectively deal with foreign currency:

* Determine before you depart which currency you will need at your destination. Many assume that if going to Europe the currency of choice is the Euro. In the United Kingdom and Switzerland local currencies not the Euro are used.

* Get a sense of the exchange rate for dollars you should expect at your destination, by visiting a currency website like XE.com Although currency rates vary daily, by checking in advance you will at least have an idea of a reasonable exchange rate.

* Purchase enough foreign currency in advance of your trip to cover initial transportation costs, tips and a meal upon your arrival. Thomas Cook and Travelex are a couple of companies that will mail foreign currency to your home. Never buy all of your foreign currency in advance of travel since usually better exchange rates and lower fees can be found once at your destination.

* Avoid airport exchange kiosks which normally offer very poor exchange rates. Most banks in city centers have much better exchange rates. It is wise to compare rates from at least a couple of locations prior to buying.

* Travelers’ checks are no longer recommended on overseas trips. Consider, after first checking the fees, using your ATM card to withdraw money from at ATM at your destination.

* If you do not want to become a target for thieves who are attracted to tourists unfamiliar with foreign money, familiarize yourself with foreign coins and bills before using them in public.

* Remember foreign coins are not exchangeable back into U.S. currency at the end of your trip. If you find yourself with coins at the airport either use them to purchase snacks or see if donation boxes are available. www.cheapfares.com

About the Author

Cheapfares.com employees enjoy sharing their travel points of view and information with others who might share similar interests.

By Daniel Shaw

The working day of a currency trader in commercial banks in Europe, America and Asia begins at 7:30 am local time. Half an hour is spent on study of the events that took place since the end of the last working day. Traders read the economic reviews and newspapers, analyze the impact of published fundamental indicators and make forecasts for the expected data. They also take few minutes to explore the technical picture of the market for the near future. Traders exchange information, discuss the predictions for the coming day as well as gather information and rumors from their colleagues from other financial institutions. When all the information is gathered and analyzed they have a more or less clear picture of the likely changes in exchange rates and financial market for the next day with various scenarios of further movements. At 8:00, traders begin their job by actively enter the first transaction.

Independent day traders also start their trading day early in the morning by analyzing the market and determine their tactics for the coming day. When they enter the market and start open trades it has its influence on the changes in exchange rates and market’s movements.

During the day you can watch how the activity of different territorial markets change. As day traders usually start their trading activity from the morning and finish in the evening disregarding the zone of their location.

Far East.

This market is active from the deep night according to GMT. This is where the trading day starts. The greatest number of transactions accounted for the currency pairs associated with the Japanese yen, Australian and New Zealand dollars. Currency fluctuations are usually small, about 50 points. Before noon Tokyo works very actively Tokyo, before lunch – Singapore. Trading in Singapore is often concentrated on SGD as well as JPY, AUD and NZD. Being a big financial center in Asia Singapore trading has a big influence on the market during these hours

Europe.

The European market such as Paris, Zurich, Luxembourg, Frankfurt am Main, opens at 7:00 am GMT time. But the real active European trading starts at about 8:00 am GMT when London Stock Exchange joins the market. Usually the market is very active for the next 2-3 hours before the lunch. During lunch in Europe, currency fluctuations calm down a little to about 10-20 points. Such market is called boring, or even more than that – dead (boring or dead market). This is the time when it is almost impossible to trade and the movements are vey small. But sometimes, you can watch very strong movements and trends during the lunch break that may reach big figures (up to 100 points). Such market is called occupied or busy market. If you have cautch such a trend, it is a good opportunity to make nice profits.

North America. At about 14:00 GMT, after dinner, European dealers resume their work. That is exactly the time when American traders start their work. When they join the European traders, the market experience a big flow of funds. But the volumes and forces of American and European financial institutions are about the same, so currency fluctuations usually show small vibrations of a purely European session. But the opening of the New York Stock Exchange is extremely interesting for traders, because the American market determines the further movement of the courses. In the evening, after 17:00 GMT when the European stock exchanges are closed and U.S. banks remain alone in the “thin” market, this is the time when strong movements take place associated with the American dollar. Changes in rates can reach several percent and held for 400-500 points. This is a the time when the market experienced the biggest movements and many traders take their chance to make profits.

About the Author

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By Warren Seah

Partial Close method allows forex traders to scale out of their positions at pre-set take profit levels. When a market price hit the pre-determined level, a certain percentage of contract will exit taking first profits. Next, the trader will shift his stop loss to entry price so that the remaining positions will not result in a loss if market decides to reverse and head in another direction.

It is flexible because it extract profits out and allow the remaining positions to ride the trends. The worst case that will happen is that trend exhaustion in which the market reverse and hit your stop loss level at break- even price resulting in a no loss no win scenario. Hence, this method is usually called ‘Pip Protection Mechanism.’

Using Partial Close for Day Trading

When we are short-term trading or day trading, we try to go with multiple contracts that give us the freedom to take a portion of our positions off at a profit that is based on market structure and short-term behaviour, letting us allow the balance to run on the basis of longer-term market behaviour. Partial close method allows for short term trading and also the benefits of riding on longer term trends and profiting from them.

There is a tendency for traders to take on excessive risk while trading multiple contracts. It is very important to only trade which 1-2% risk per trade or 5% maximum risk per day. Sound money management is what keeps the professional traders from making money consistently in the long term. Protect your investment equity like you would protect yourself from hazards.

Partial Close strategies is a trading exit plan – a definitive document that spells out everything you will do as a forex trader. It specifies the predefined price at which you will exit portion of contract sizes; partial close methods and trailing stop strategies you will use while managing opened trades. More important, it is a road map you can consult at any time before entering a trade, during the management of trade, and after a trade.

Applying partial close method should put you in higher percentage of winning trades and improve your forex profits while leveraging from short-term and longer-term market behaviour. The key is to plan your trade exits in advance so you can better manage trade decisions while keeping emotions trading at bay.

Quoting Sun Tzu said in the Art of War:

“Planning is a great matter to a general [trader]; it is the ground of death and of life; it is the way of survival and of destruction, and must be examined… Before doing battle, one calculates and will win, because many calculations were made.”

Proper exit strategies will optimise forex trading profits, having sound exit plans removes a lot of trading stress. It stands to follow that having a clear head and solid plan, your trading has a better chance of surviving and thriving.

About the Author

Warren Seah

“Introducing 11 Exit Strategies, What Every Disciplined Traders Need … Go Without It You Could End Up Being A PIP VICTIM Just Like Thousands Of Traders Out There.”

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By Jon Jacoba

The foreign exchange market is also known as FX or it is also found to be the FOREX. These terms all have the same meaning are one and the same, that is the exchange between various governments, institutions, corporations that are located in different countries. This financial market is in a state of constant flux having a wide range of trades to be executed. There are many fraudulent sites that hve bee launched too. Orgnaizations as well as individuals are setting up online to take advantage of people who don’t realize that foreign trade must take place through a broker.

Cash, stocks, and mony is traded thru the foreign-exchange markets. The currency market will be present and exist when one currency is traded for another. Think about a trip you will take to a different nation. The place or situation you are going to be able to ‘trade your cash ‘ for the value of the money that’s in that other country? This is currency trading basis, and it’s not found in all financial exchange institutions, and it’s unavailable in all money centres. Foreign exchange is a specialized circumstance.

Foreign Exchange, a. K. A foreign exchange, is conditional on a number of factors like the current economic and bilateral relationship between two countries, natural disasters, elections, and so on. Currency exchange can be defined as the calculation of rate of exchange between the currencies of a few nations. This is simpler with auto trading software.The calculation needs to be accurate and prompt to have an error free exchange. There is a big majority of people that are impacted by forex

Emerging business and people often hoping to make serious coin, are the sufferers of scams when it comes to finding out about foreign exchange and the foreign trade markets. As forex is seen as the easiest way to make a fast buck or two, folk don’t question their participation in such an event, but if you’re not investing money thru an agent in the currency market, you might easily end up parting with all that you have put in the transaction.

Like any other industry that flourishes, the online forex industry has also had to cope with the bad boys. A currency exchange sting is one that involves trading but will turn out to be a fraud ; you’ve no possibility of getting your money back when you have invested it. If you were to invest money with a company saying they’re involved in forex trading you need read closely to learn if they’re allowed to do business in your country. Many companies aren’t permitted in the currency market, as they have deceived speculators in the past.

Over the last five years, with the help of the Net, currency trading and the awareness of forex trading has become all the rage. Banks are the number 1 source for foreign exchange trading to take place, where a trained and licensed broker is going to complete transactions and necessities you set forth. Commissions are given out on the exchange and this is the usual.

Another sort of scam that’s plentiful in the foreign exchange markets is software which will aid you in making trades, in finding out about the foreign markets and in practicing so you can ready yourself for following and making trades. You wish to be in a position to depend on a programme or software that is truly intending to make a difference. Consult with your fiscal broker or your bank to discover more about foreign exchange trading, the foreign exchange markets and how it’s possible for you to avoid being the victim while investing in these circumstances.

About the Author

Where can you find valuable references to currency trading on the web? You can read more articles and get quality information about forex trade from forexbud.com and its associated web2.0 artifacts.

By Jim Mathew – Recent developments in the value of the currencies are exciting and significantly varying from its historic performances. Recent economic crisis generated a movement to risk that overvalued US dollar against almost all of its trade partners. This process has started to reverse as trade flows picks-up and GDP growth trend becomes positive globally. But a jobless recovery in the United States, with global growth generated mainly by emerging markets had resulted in drastic variations in the values of the currency. Countries endowed with natural resources and raw materials have benefited from the rise of China, the booming demand for these materials from developing countries lead by China, Inda and Brasil.

In comparison with period of March – June 2009 with June- July 2010, the New Zealand Dollar and the Australian Dollar have done well respectively 32% and 30% versus the Euro. Agriculture and Mineral was 37.6% and 4.6% of export from Australia. In 2009 Australia exported $42.5B to the Chinese, resulting in China becoming their largest export market.

Among the developing nations there are many other currencies that have shown appreciation in value. These include – South African Rand, Colombian Peso, Canadian Dollar, as well as the Brazilian Real. Canada is known for having the second most oil reserves of oil and gas globally – 179 billion of barrels, and is the number 1 exporter of crude to America (satisfying 22% of the US demand) and the safer, least volatile maker in the list of the other top producers (Mexico, Saudi Arabia and Venezuela). Not only do they provide oil , but Canada is also a leading provider of farming fertilizers to the developing countries. The Canadian dollar has appreciated 21% versus the Euro in the mentioned period.

Brazil for its part has recently found an sea reserve of oil with 3-5 billion barrels, the largest oil find since the 2000 12 billion discovery in Kazakhstan. Brazil is also a leader in green energy – predominantly bio-fuel. Farming has also caught up in growth with production in soya using advanced genetic engineering showing good results. They are giving the developed nations a real run for their money and even winning some of the battles. Naturally, the overall value of the Agriculture sector has more than double over the last 10 years. Brazil is now the biggest exporter of Beef, poultry, sugar cane and ethanol.

About the Author

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By Warren Seah

Using fixed stop loss is one way traders try to control their potential losses for a given trade. The other way to do that is position sizing – the decision of how large or small a position is taken. Trading forex market at a higher time frames will require that a forex trader set a greater stop loss level.

However a greater stop loss level will mean that the trader take on a greater amount of risk. With proper position sizing, the forex trader will be able to trade on higher time frame like he used to do in smaller time frames.

Position sizing helps a trader to limit the amount of loses made in trading. It forms part of an investment strategy which helps the trader decides how much contract size to enter in each trade.

Usage of this forex investment concept is what differentiates the professional forex traders from average traders. This article will explained position sizing in simple terms, the benefits and the ways in which to incorporate into your forex trading.

Getting the right position size to enter a trade isn’t as complicated as you would imagine. You will first need to decide how much money as a percentage of the account you are willing to lose on a single trade.

The amount varies for every trader, depending on the amount of risk the trader is willing to take on, but generally speaking, 2 to 5 percent is a typical number. The more money you risk on each trade, the faster your account will be damaged if you lose more than one trade consecutively.

Second, you will need to calculate how many pips is your stop loss away from your presumed entry price. Using the following position sizing formula which only applies for the forex market):

(Account balance X Acceptable risk per trade %) / (Number of Pips stop loss away from presumed entry price) = ( value denominated in mini lot )

($20,000 X 3%) / (75) = 8 mini lots

Using this calculation, we have determined the proper position size for this trade to be eight mini lots. It is important to note the leverage ratio and the margin required for trading 8 mini lots.

Position sizing to keep risk around 2 percent per trade may work well with a $25,000 account, but what if you only have $1,000 is only $20, it doesn’t leave you much risk capital to work with. With micro accounts, a $20 risk will usually fit your position into a 100 pip stop loss, which is sufficient for almost any trade.

The problem with micro accounts is that your gains will be less than exciting. The reality is trading require money, it will take small money to make small returns and big money to make big returns. Without proper money management, a trader is doomed for failure regardless of how much is his trading capital.

The rule is to take proper money risk money management by controlling risk with with position sizing. Practise and keep practising. Think in terms of percentage you made and not on the dollar terms you made. Investors think in percent while employees think in monetary terms. Be an investor, think percentage and forex will be a market you can extract profits in the long term.

About the Author

Warren Seah

“Introducing 11 Exit Strategies, What Every Disciplined Traders Need … Go Without It You Could End Up Being A PIP VICTIM Just Like Thousands Of Traders Out There.”

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Happy weekend stock market enthusiasts! The US market or at least the NASDAQ ended this week with a bang after a magnificent performance by Google. In case you missed it, the shares of Google (GOOG) soared by 11.19% following a jump in the company’s net income. Net profit expanded by 32% to $2.17 billion, which translates to $6.72 per share, from $1.64 billion during the previous year. Given this figure, the web search giant is proved to be benefiting very well from its advertising channels which now includes display and mobile. Internet advertising, by the way, has risen by $6.15 billion or 11.8%  in the US alone from a year earlier.

Technically, GOOG made a bullish gap soon after the company’s third quarter income result hit the news. In the process, the stock broke above its previous high near $600.00, converting this level to support. But given its present overbought condition, it may move sideways for awhile before resuming its journey towards its next target around $630.00. If it ranges, the support at $600.00 should keep it from falling. A break below, however, could send it back to the bottom of the gap. Nonetheless, the momentum in a breakaway gap is usually strong that the stock will most likely continue its move north.

More on LaidTrades.com …

Expert explains how to choose the best forex trading system when you are a novice. Beginners should start with long-term forex trading system and keep learning not only the system by itself, but also the trading fundamentals. Doing otherwise would be like learning about cars and driving with no interest in road conditions or other driver’s behavior.

There is one very important issue about finding really good forex trading system. As the majority of e-books and training approaches this subject in a very mechanical way, the result of trading is a usually severe loss.

“Very few materials put emphasis on comprehensive mastering of a particular forex trading system, practically none analyzes more than 50 trades. Good forex trading book should analyze over 50 trades, ideally close to 100 in different market conditions. In effect traders try to use a forex trading system they don’t understand. In addition, beginners are being told that their losses are caused by emotions. It is not the whole truth.” says Dariusz Swierk, Ph.D., the author of groundbreaking book “Conversations With Forex Market Masters” from www.ForexInstitute.eu.

“Having examined dozens of forex trading systems, we found several that are suitable for beginners. One of them really stands out, and I would recommend it.”

Read more in a new report issued by ForexInstitute:

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By James McKee

The AUD is now twenty percent overvalued against the dollar, many speculate that this has to do with the rising value of gold and the fact that Australia is the world’s third largest producer of it. This twenty percent over value is something that will correct itself in the near future and is therefore definitely something to keep your eye on. This is not an overnight development but definitely something, which will come up in the near future in one way or another. Does this mean I’m telling you to bet against the Australian dollar in the short term? Certainly not, you really need to consider every angle on this pair and for now I would still bet against the dollar.

This would be a good time to utilize the tools of the trade by maintaining whatever system you currently have in place alongside quality software such as MT4. Currency values may change in a heartbeat but you don’t necessarily need to maintain that pace, instead watch this pair for trends. The lesson here is to be cautious with your money and don’t place all your eggs in one basket on this one without testing the waters, thoroughly.

I’ve been noticing a good deal of economic upheaval in Europe, America and Japan, any currency paired with the currency of these countries (from the majors anyway) is going to be showing some healthy pip spreads over the next couple weeks (I’m guessing 50 pips or so). Make sure to use every tool at your disposal to keep a handle on what’s going on in the Forex Currency Market and please whatever you do don’t jump the gun, this is not a time to be a cowboy. For all the new traders out there this is definitely a time when you need to develop your “sixth sense” when it comes to Forex and not just rely on charts and data alone. Sometimes all you are going to have is your intuition and if your trade does not perform the way you had hoped just remember that the market is not going anywhere.

That being said it is truly crucial that those of you out there who have not already learned the basics of Forex need to do so immediately. My earlier articles outline the basics but there is so much more to it. If this is truly your chosen career YOU need to make the effort and read until your eyes hurt, and then read some more. If nothing else always remember that there is a whole community of people on Forex forums and message boards who are there to give you a helping hand. Happy trading.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado with 5 years of experience in trading with an attitude of cooperation through education. It is vital to remain in the loop where new technologies are concerned, make sure to stay up to date on the latest developments and always make the most of your ability to utilize the best forex exchange rates as much as possible when trading!