InvestMacro FX

By James McKee

The response to America’s fiscal crisis in the private sector has been surprising; across the board manufacturing has actually increased. Large companies such as Ford have expanded their factories to include increased production and an increase in the number of people they employ. The slumping US unemployment rate can only benefit from moves such as these being made by large companies. The non-farm payrolls have a direct impact on the value of currency because when a country has good unemployment numbers and high levels of income they will spend more. This is much more attractive to investors and will increase the value of the USD.

Provided that US jobs continue to emerge from the ashes of an otherwise bleak economy the USD may yet have some legs to run on in 2011. While America is still an out of control debt machine the income necessary to pay it off may just make the difference that is necessary to boost the value of the USD. All of the jobs available will not be appealing to Americans because some of them will not pay well but it is up to the individual working to decide whether or not they should take a manufacturing job.

Much of America’s infrastructure is not set up to accommodate export but more so importing. The shift will be difficult for many Americans to adjust to and could spell out a new phase of American labor law making. Such turbulence could spell out trouble for the USD in the long run and those on the forex currency exchange should stay up to date on this situation. Failing to stay up to date on the employment situation in the United States would be foolish because it is one of the strongest indicators available for the value of the USD.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

By James Woolley

There are some investors who are only interested in capital gains. However there are lots of others who like to invest in shares that will give them a solid regular income in the form of dividends. There are many dividend strategies you can use, but today I want to discuss a very simple, but effective strategy you can use.

Basically it involves using some kind of stock screener to find those companies that have long and established records of dividend growth. The reasoning being that if they have constantly grown their dividends every single year, even in adverse market conditions, then they are likely to continue growing their dividends by a similar amount in future years as well.

You can vary the length of time and the amount of growth that you require, but a good rule of thumb is to look for dividend growth of at least 10% over this period of time. So you could look at companies that have grown their dividends by this amount every year for the last 10 years, for example, or you could drop down to the last 4 or 5 years if you want to find a few more companies.

The thing is that this is a good indication of a strong company, and it shows that they are able to withstand challenging market conditions. For example we all know that 2008 and 2009 were very tough years for many businesses, so those that still managed to grow their earnings and their dividends during these years are clearly very good well-run companies. Furthermore they should do even better during the good years.

It’s not a foolproof strategy by any means because a strong history is not necessarily an indication that a company will do just as well in the future. There may be new businesses starting up in the future who could eat into their market share, their products may fall out of fashion, or they may have some kind of crisis that negatively affects the company. However if you pick the very best companies from this shortlist and look at future analyst forecasts for the next few years, you should get a good idea of which ones are likely to continue growing.

The point is that you if are investing for income purposes, you need to find those that have secure dividend payouts, and ideally those that are likely to increase their payouts every year. A long and established history of this kind of growth is always a good thing, and the longer the better. It is no guarantee of course, but it is as good a guide as any other and a pretty good strategy overall.

About the Author

Click here to read a review of Zecco, the online stock broker that offers free trades, and to read all about Portfolio Prophet, the new course that teaches you how to successfully trade ETFs.

By Vytautas Zilenas

Market boom that preceded the most recent crisis created a lot of opportunities for an average trader to make a lot of money. Lots of people managed to do that in various markets, but they waited for too long or they got into markets too late and when there was a reverse they actually lost everything that they had made and even more. This fact saddened most traders and investors as nobody knows when we are going to have another boom where most money is made. However, I am absolutely sure that this is a flawed understanding and you can make as much money, or even more during crisis than you are able to make during economic boom.

How is that possible? It has been possible for quite a long time, but an average person does not know about this possibility. Everybody knows that if you want to sell a stock, you need to buy it first and only then you will be able to sell it. However, for over a hundred years you have been able to sell without buying first. How do you do that? You simply borrow a stock or any other security from a broker or your dealer and sell it in the market for a profit or a loss. When you close the position you simply return the amount for which you got a stock or a security and take profit or add extra which you lost from an operation.

Some small financial markets do not allow doing that, but you can do it without any problems on all major financial markets now. So, when you see a crash coming, or you know that the market is in a downtrend and is going to be in it for a long time, you should borrow securities for selling. In fact, crisis is much better for trading than a boom is. Why? Because during crisis fear and skepticism rules and securities fall very fast and you can make much bigger money selling during crisis than buying during a market boom.

So, if we talk about period which is better for a trader I would say that crisis is a much better period than a boom, because you can make much bigger money trading when economy is in bad shape than at the time when it is booming. Of course, if we do not talk about traders but people in other professions, then a boom is much better. However, I think that people should familiarize themselves with the financial markets and possibilities how to trade them, because they could profit a lot from the knowledge and who knows, maybe they would change their profession one day.

About the Author

If you are interested in causes and results of market bubbles I would recommend you reading my article about economic bubble.

By Cedric Welsch

For those who are interested in the idea of investing in the foreign exchange market but do not seem to have enough knowledge yet to pursue it, then this is going to be a good introduction to how the foreign exchange trading market works.

The foreign exchange market is considered to be a huge marketplace where several professionals such as traders, investors, and brokers transact with one another. And every transaction inside the forex market is motivated by the main purpose of making profits out of trading currencies.

The entire forex market is always busy because of all the traders who are either buying currencies or selling them. Different countries around the world and their respective currencies are involved in the trading of currencies inside the currency exchange market. Therefore, it is safe to say that foreign exchange trading is a global operation in its entirety where professionals of various nationalities are able to transact with one another.

Investing in the foreign exchange market used to be an investment medium that is only known and taken advantaged of by the elite and wealthy investors. However, this is no longer the case nowadays. Today, even the common guy who just wants to make a profit out of trading currencies can easily learn the whole trading process and make a really good profit out of it.

While there are traders who indeed make a good lump sum amount of profit out of their investment, the hard truth is that there are individuals who are known to be losing a solid amount of their investment funds. There is no real secret on how to really emerge a winner in the forex trading business, but there are some techniques and strategies that can be implemented to get a better shot at winning. In fact if you are only able to carefully operate under certain forex investing guidelines, then you will have a much bigger advantage to really making some solid amounts of profits as a trader.

One safe and really important guideline to follow is that you should never take the risk of investing all of your money in any single transaction. Always act as a smart investor and try to diversify your investments by however best way possible.

Do not base your investing decisions through just mere assumptions, but rather investigate and analyze the market real carefully. Consider only investing through well managed accounts. Do not hesitate to consult with trading experts as they have more knowledge and experience about the behavior of the forex market.

When necessary, do not be afraid to invest on some tools that can help you better analyze and study the market. Through such tools, you can better read data facts and statistics on a much accurate manner, hence you can make much more accurate decisions as well.

About the Author

Do not attempt to trade currencies without proper forex research. While reading a forex scam review will keep you away from fraudulent transactions.

By Doug West

We have taught nearly 1,000 people how to daytrade the mini-Dow or S&P emini index. Of those traders, nearly all were able to successfully trade our simple index strategy on their demo accounts (we only know of 2 exceptions that reportedly could not even get consistent on the demo. One man claimed that every single trade he made was a loss. In my mind that would be as hard to do as to make profit on every trade).

If your day trading strategy is consistently successful on your demo account, then what is the difference when you go live? Mindset! It all boils down to that in your trading (in my opinion this is true of life in general, but you see the results immediately in trading – especially day trading).

I really hate to call what we do as index traders, day trading. That is only because of the negative connotation the term brings to mind. Stock trading is what most people think of when they hear the term day trading. Regardless of what type of trader you are, you will have to come to terms with the fact that each trade depends on YOU. What frame of mind you are in at the time you place those trades will have a HUGE impact on how many of those trades are successful.

Most traders think that it all boils down to the technical and/or fundamental analysis of the markets. This is where they spend all their time and money, but they never get around to working on the mindset. They feel the real key is in becoming a great market analyst. However, the world is FULL of good market analyst (just watch CNBC or Bloomberg for examples) who are not able to trade. They too didn’t have the right mindset and had to take jobs instead.

So what is the right mindset for a trader (or day trader)? That would take volumes of articles to answer. A good start is to read Mark Douglas’ book “Trading In The Zone”. Don’t end your mindset training there, but it is a good start.

Another good exercise is to keep a traders diary. Write down what you were thinking and how you were feeling as you made your trade. Do this immediately after the trade so that you can be as accurate as possible. Do this on winning trades and on unsuccessful ones too. You should notice that on your winning trades everything felt easy and sure. Once you notice the difference, don’t enter trades unless your mind is in the correct frame!

It’s amazing how the human mind is able to pick up on the overall mood of the market. Douglas calls this being “In The Zone”. We have always referred to it as getting a “Market Feel”. Some traders have felt that it was impossible, while others gain that market feel advantage rather quickly. The difference is always in the mindset of the person. Some people are naturally much more in tune with their emotions, and they don’t let them effect their mind while trading.

Many traders get hung up in all the technical tools that are available today. They reason that if they can just add the right tools, they will become successful traders. After working with hundreds of traders over the years, I can tell you for certain that you will NEVER be successful unless you have the right mindset.

About the Author

Doug West has taught thousands how to grow wealth with simple Index Trading and online marketing of products and services. He has affiliates that have earned $100k in less than a year.

Get more tips on how to build your retirement income with Mini-Dow Index Trading Made Simple

Need Debt Relief? Get Doug’s Debt-Free Report

To become a successful Forex trader every novice has to spend a lot of time and money studying this market.  Everyone wants to achieve positive results as soon as possible, and here is the solution.

Creating a personalized trading system is no longer necessary.  Forex Collective2 lets a trader choose from a library of trading strategies, and then automatically trade those strategies in their own brokerage account.  A trader is also capable of trading a mixed portfolio of strategies in one account.

Until Forex Collective2, there has been no central authority that monitored, ranked, and audited trading strategies.  The investor/trader’s knowledge of a trading strategy’s performance has historically been dependent upon trusting the results claimed by a trading strategy developer.  This “trust” of trading strategy developers is no longer required.   When a trading strategy sends signals to “Buy” or “Sell” Forex Collective2 tracks how that trading advice actually performs in real life, then presents results for public inspection.

Traders are provided with a set of tools which make it easy to find top-performing strategies in the Forex Collective2 database.  Once a suitable strategy is found, a trader can “subscribe”, much like subscribing to a newsletter.  Each strategy subscription has a nominal monthly charge, which varies, and is determined by the trading strategy creator.  Cancellation requires just one click, at any time, with no questions asked.

When a trader becomes comfortable with the chosen strategy, they can “autotrade” it – that is, have the trades placed automatically into a brokerage account.  No software is necessary to run on the end user computer, just to provide the appropriate account details to Forex Collective2 and they will do the rest.

Autotrading does have an appeal by way of having the trading systems do all of the work, but that doesn’t mean a trader is out of control with their strategy or strategies.  Forex Collective2 lets a trader stay in the loop, and in control.  One can watch the trades being placed, as they happen, examine open positions, and watch profit-and-loss, in real time.

The trading system and strategy can be overridden at any time. For example, if a trade is in profit, and the trader would like to close it to lock in the gain, immediate closing is made easy.  Alternately, if the trader sees a losing trade that is not preferable, it can be closed easily as well.  AutoTrading can be shut down completely, and instantly, any time of day or night.

Visit Forex Collective2 official web-site http://fxco.collective2.com for more information

By James Woolley

Exchange traded funds, or ETFs for short, have become really popular in recent years. Not only are many investment managers investing in them, but many private investors are doing so as well. So what are the benefits of ETFs, and what exactly are they?

Well in simple terms they are basically funds that hold assets in certain financial instruments or track specific markets. There are exchange traded funds for pretty much everything nowadays. This includes stocks, indices, commodities, bonds, real estate and currencies.

So for example if you want to benefit from any future rise in the FTSE 100, for instance, you could buy a FTSE 100 ETF rather than invest in all 100 companies that make up this index. These instruments are easy to trade because they are listed on the stock market and can be bought and sold just like ordinary stocks.

If you invest your own money you should really consider buying these ETFs because they give you lots of options. There will often be times when the stock market and the property market are overvalued and unlikely to rise much further in the near future, but there will always be some kind of instrument that will look undervalued.

So rather than holding on to your cash waiting for a market correction, you can put your money to use investing in one of these undervalued assets through an exchange traded fund. For example if you think crude oil has to keep on rising in the long term due to it being a finite resource, then you might like to invest in a crude oil ETF.

These are great for long-term investors, but you might also like to dip in and out of them on a short-term basis as well. They can be bought and sold very easily so you could buy this same instrument whenever crude oil has a brief period of weakness and looks oversold in the short term, and sell them when it rises a few days or weeks later.

They really are flexible and give you a lot of options as an investor or trader. You can even buy leveraged ETFs if you are particularly confident about a short term price move. These are very risky but they do give you greater gains if your prediction is correct.

Anyway the point is that you should definitely consider adding a few of these ETFs to your portfolio. There are lots of ways to make money from them and they give you a great deal of flexibility. There will always be instruments that look good value in any given market so thankfully you can now profit from this by buying the corresponding exchange traded fund.

About the Author

Click here to read a review of Zecco, the online stock broker that offers free trades, and to read all about Portfolio Prophet, the new course that teaches you how to successfully trade ETFs.

By Vytautas Zilenas

Some forex traders are advocates of one trading system under all market conditions. They say it helps you to stay focused, concentrate on one thing and not to run into many different directions. If any market would be in a status quo condition forever that would be a good idea, unfortunately all financial markets change with time and what worked under previous market’s conditions may not so well work under this market conditions and when this market changes the method that you used for it will probably be no longer good.

As you have probably understood from my introductory paragraph I am not the person who would use just one trading system while trading. By the way, my favorite financial market is forex, although I try to monitor what happens in other markets as well. Why? All markets are interconnected and what happens in one market will surely affect other financial markets. So, I like watching a few markets and when I trade I try to see which trading system is best for me today and which currency pair is best to trade. Different currency pairs can be under different conditions. eur/usd might be trending while aud/jpy might be ranging. gbp/jpy might react to some economic news and eur/cad will not. So, you if you have only one system for all types of situations you’d better know what you are doing.

I know that market changes even on different time frames. When you look on a 4hour chart you might see a range, but if you check 1hour chart you might notice a swing and yet if you check 15 minute chart there might be some sort of day trend going on. This brings us to one more idea: you not only have to know which system to use, but also what type of trader you are. Even though there can be many systems for different market conditions, we should not forget that those systems would be differently applied for different time frames. Trend trading on daily charts will differ from the same kind of system on hourly charts. The same can be said about range trading, breakout trading and etc. They differ under different time frames.

Having said that, I must admit that one cannot be an expert in all possible systems and use them under all possible market conditions! However, a trader should learn to define what cycle any given market is under any given time frame. Then he can choose whether to trade the market or refrain from trading. Personally my favorite trading systems are forex news trading, trend trading and day trading within a range. I know that all traders have different preferences and their styles, so I am not trying to push my trading philosophy on other traders, but I have seen so many newbies fail and leave trading that I simply wanted to give some insights about usage of different trading systems under different market conditions. I know these are very general guidelines, but I am intending to be more specific in my next article about forex trading.

About the Author

I would recommend watching a video on trend trading, which is one of my favorite trading systems and I would encourage you to read my article about economic news trading. My video on forex news trading is a continuation of my article about economic news.

By James McKee

The American government’s policies were causing serious damage prior the Obama administration taking office; whether or not we can recover from the hole we have already dug for ourselves remains to be seen. The decline of the United States economy and its negative impact on the USD has been being felt for years now. Subsequently the purchasing power of the dollar has been hindered dramatically causing a rise in prices for Americans who buy less causing businesses to lose money. This whole vicious cycle has resulted in exponential loss of American jobs and a growing fear among foreign investors when they consider business with America.

This lack of both foreign and domestic dollars in the market place causes markets to shrink or even disappear entirely. Many American companies have folded up entirely due to the abundant problems being seen in the investment markets and a growing fear of losing absolutely everything. The USD has suffered alongside the ailing banks in America that have suffered huge losses as a result of decreased consumer activity. While the stock market has not crashed like it did in the 1920s Americans are feeling a new type of economic depression and one that relies on a lack of spending power through a lack of credit.

Instead of Americans changing their spending habits we have seen even more declaring bankruptcy causing a dramatic shift in the value of the USD causing an even deeper downtrend. The acts undertaken by the US Federal Reserve (quantitative easing especially) have sunk the value of the USD and caused serious problems for the currency and the US economy as well. Recently both Democrats and Republicans have begun measures that would trim the budget deficit over the next several years however it is just not enough. Many believe that the decline of the USD is only beginning, those on the forex currency exchange should stay tuned to the US economy for more changes.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.

By Vytautas Zilenas

Trend trading was the first strategy that I mastered when I became a forex trader. When I started trading I experienced only losses for about two years. To tell the truth, I was almost ready to give my trading career when I suddenly noticed some things that are repetitive in the market. These things were trends and I decided that I have to learn this method. When I started analyzing my charts trying to identify trends I saw that this is probably the best trading system that can be used. I also read a lot of material on the topic and I saw that practically all great traders and investors traded only at specific times in the market and those times were when markets were trending. So, when do markets trend?

I noticed that trends develop during financial booms and crises. These are not the only periods when financial markets are in a trend, but when these times come, the majority of markets do trend. These are times when money comes in and comes out of the markets. During a boom a lot of money is poured into markets as most investors invest in various market sectors. During a crisis lots of people try to get out of the markets and money leaves markets. These are also times when traders can make a lot of money, because as many positions are closed prices start collapsing very fast and if you have a sell position open, you make a lot of money and very fast.

Trends can be short term and long term. I can assure you that we have a trend in most financial markets at least once a year. Most often there are two trends a year. So, if you are trading currency market where currencies are paired you can grab even more trends, or you can trend trade multiple pairs as most often if one pair starts trending, it drags other pairs into a trend as well. If a gbp/usd starts going upwards or downwards it will most probably take gbp/jpy, gbp/cad and other pound pairs with it.

So, as I said if you want to trade a trend booms and crises are very good seasons for that. A trend also develops when a security has been for many months in a range and then suddenly some important piece of news reaches a market forcing the security to get out of the range and start trending. This creates opportunities to open multiple positions as trends usually last longer than a week. More often trends last for a few months and sometimes even longer. So, if you are able to build a line of positions, you can multiply your account in a very short period of time. I hope you now see how profitable it is to trade in a trend.

About the Author

Trend trading will always remain the best trading system and most probably a crisis will be the best period of time to use this kind of trading system.