forex

When it comes to trading systems that you can use to trade on the Forex market you have plenty of options but it’s very important to choose the right Forex trading system for you.
Some may find fundamental factors easier to take while others will do better with technical indicators. Everyone is different and which system isn’t important – what is important is matching individual to system. So how do you find the right system?
Well it starts with you understanding the methods of analysis that are used when you are trading on the Forex currency market. When you know what the tools are and how to use them you can analyze what is best for you.
Some of the most popular technical analysis tools include pivot points, Fibonacci retraces, chart patterns, candlestick patterns, trade balances, interest rates, and GDP which stands for gross domestic product.
You will need to determine the profitability of the Forex trading system you are considering choosing. Use a real time demo to determine how profitable a trading system is. This lets you begin to understand what the system’s capabilities are and it also let’s you become familiar with the trading platform.
Next you need to have a look at the expectancy which tells you what type of profits you expect to make over a period of time. You calculate expectancy using this simple formula:(Probability of winning × average win) – (Probability of losing × average loss) = the average profit per trade. If this number is a negative number you need to look at a different Forex trading system. Of course the higher the number the better the profits you can expect.
You should also examine the opportunity factor which is just how often you can expect to trade using the trading system. You multiply your expectancy figure with the opportunity factor and it tells you how much you can expect to profit during a specific time period. The more opportunity the more profit you can expect to put in your pocket.
Now that you know how to choose the right Forex trading system for you to reap the most profitability.

When it comes to trading systems that you can use ...

You’ve decided to become a trader on the Forex market but since you’ve never played on the currency market you aren’t sure where to start. Not to worry – we’ve got some great tips for global Forex trading,
Forex is the foreign exchange market where currencies are bought and sold. It began back in the 1970’s with the introduction of free exchange rates and floating currencies. Thanks to the internet more and more people are able to reap the profits of the currency market with global Forex trading.
This is a market that trades as over US$1 trillion a day. It trades more than any other market. There are some distinct differences in the currency market compared to the stock market. Money moves much faster so no single investor has the ability to actually affect market price and trades are able to open and close within seconds which is not possible on the stock market.
To start your global Forex trading you need to open a Forex account. Just fill in the application and the sign the margin agreement which let’s the broker intervene at any time. That makes sense since it’s the broker’s money that just makes sense.
You need to choose a trading strategy that works for you. Different strategies work for different traders to don’t try to makes something work, instead find the right trading strategy for you.
It’s important to understand that trends move prices so a smart investor will make trends their friend and even go so far as to examine historical trends.
The top five currency pairs are USD/Yen, Euro/Yen, Swiss franc/USD, Pound USD/ and the Euro/USD. Make sure you know and understand them.
Examine the charts at 1 hour, 4 hour, and daily. This will give you the daily trends and plenty of opportunity to trade. Sure you can trade every 15 minutes if you like but that’s not really practical.
Now that you’ve got all your global Forex trading tips you’re ready to see some profits.

History of the Foreign Exchange

Until the mid-seventies, major industrial economies were governed by the Bretton Woods agreement of 1944. The Bretton Woods agreement—which was named after the location of the international conference establishing this new monetary order—obliged participating international economies to peg their currencies to the dollar, which itself remained within a 1% standard deviation from the prevailing gold rate.The architects of the Bretton Woods agreement hoped to prevent countries from artificially devaluating currencies, in order to make goods more attractive in the international marketplace, which led, in part, to a disastrous shrinking of the world economy in the 30s.The system they established lasted for the next three decades. Shrinking confidence in the dollar, however, lead to a new international monetary system of floating rates, meaning that regular market forces, rather than governmental intervention, would determine the value of currencies. It was from this new system that the modern Forex market arose.In a floating exchange rate system, market demand determines the relative value of currencies. Such a system is thought of as self-correcting, as any inefficiency is hammered out in the market. If, for instance, global demand for a particular currency falls, goods will become cheaper, and thus the value will begin to rise with the newly created demand.In a floating exchange system, traders can exploit inefficiencies before the market corrects itself. These traders are called arbitrageurs, and they are able to utilize online brokers to execute their trades. If you are interested in beginning to trade in the Foreign Exchange, please visit our broker’s page to find a broker suitable for you.

Until the mid-seventies, major industrial economie...

Forex scalping is a trading strategy in which the trader makes dozens or even hundreds of trades daily, looking to capture a few pips per trade. Generally, scalpers stay in trades for less than a minute, bolting as soon as their position captures a few pips.Brokers do not look kindly upon scalpers, as many times scalpers will exit a position before the dealing desk has time to deal your order. This means that the brokerage has to eat the position—a successful scalper will consistently earn money—money that comes directly from the brokerage’s pocket.To avoid this conflict of interest between scalpers and the brokerages, scalpers often trade with electronic communication network (ECN) brokerages, which circumvent the dealing desk allowing online traders to trade directly with one another. ECN brokerages usually have less liquidity than traditional dealing desk brokerages and charge a per trade commission, but their pip spreads are narrower.To be a successful online Forex scalper, traders must follow strict risk management rules. Because the scalper grabs only a couple of pips at a time, one big loss can wipe out dozens and dozens of careful, meticulous trading. Traders should be sure to use stop loss orders, ensuring that the profit/loss margin on each trade is very small.Forex scalping is a trading strategy in which the trader makes dozens or even hundreds of trades daily, looking to capture a few pips per trade. Generally, scalpers stay in trades for less than a minute, bolting as soon as their position captures a few pips.Brokers do not look kindly upon scalpers, as many times scalpers will exit a position before the dealing desk has time to deal your order. This means that the brokerage has to eat the position—a successful scalper will consistently earn money—money that comes directly from the brokerage’s pocket.To avoid this conflict of interest between scalpers and the brokerages, scalpers often trade with electronic communication network (ECN) brokerages, which circumvent the dealing desk allowing online traders to trade directly with one another. ECN brokerages usually have less liquidity than traditional dealing desk brokerages and charge a per trade commission, but their pip spreads are narrower.To be a successful online Forex scalper, traders must follow strict risk management rules. Because the scalper grabs only a couple of pips at a time, one big loss can wipe out dozens and dozens of careful, meticulous trading. Traders should be sure to use stop loss orders, ensuring that the profit/loss margin on each trade is very small.

Carry Trading

The carry trade is a popular online Forex strategy which takes advantage of the different interest rates between two currencies. If one currency has a relatively low interest rate it can be sold against a currency with a high interest rate and the trader may pocket the interest rate differential. Speculators are guaranteed rollover interest deposits in their account at the end of each trading day. This can provide a significant boost to trader’s profit. If, for instance, an investor buys the NZD against the JPY, which have interest rates of 7.25 and .25 respectively, the trader can make a profit of 7% provided the market doesn’t move.However, even when exploiting interest rate differentials, there are still significant risks to a trader. Obviously, the market can still move against the trader’s position, though the rollover interest adjustments do help mitigate potential losses. Considering that most carryover traders use exceptionally high leverages to exploit interest rate differentials, even a small move against a position can lead to very high losses.

The Foreign Exchange

The Foreign Exchange is the largest financial market in the world, with trillions of dollars traded each and every day. Initially utilized just by large banks, multinational corporations and extremely wealthy currency speculators, the influx of online brokerages tailored to the retail market has created a vibrant retail foreign exchange market! Now, with a relatively small initial investment, anyone with an internet connection can take advantage of the online Forex market.While banks and large multinational corporations generally execute foreign exchange transactions simply as a function of doing international business or to hedge their base currency to protect against devaluation, currency speculators exploit fluctuations in the foreign exchange market exclusively for profit. While trading currencies is a bit riskier than trading other instruments, like stocks and commodities, the potential for profit is unparalleled. For example George Soros, perhaps the most successful Forex trader, made $1 billion in a single day when he sold the pound against the dollar in 1992.The major currencies traded on the foreign exchange are the US dollar, the Eurodollar, the Japanese Yen, the Swiss Franc, and the British Pound. These different currencies are expressed as pairs. When these pairs are traded, one of the currencies is bought and the other currency is sold concurrently. Today, anyone with an internet connection can trade these pairs under the same conditions once reserved for high value individuals and corporations. Most retail brokerages offer real time currency prices, instant execution, advanced charting features and extensive real time news and analysis feeds.If you are interested in trying out the foreign exchange, we have assembled a list of quality brokerages that offer free “fake money” accounts where one may trade in real market conditions. Not only is their immense profit potential in the Foreign Exchange market, it is quite exhilarating as well. Why not give it a shot?

How do I get started in Forex?

Do you see the profit potential in trading currencies, but learning to trade just seems too daunting? Have you watched with excitement the recent crashing of the value of the USD, but simply don’t know how to get started trading?
While it is simple to begin trading Forex online, maintaining profitability in the long term is no easy task. You have probably heard that 90% of Forex traders lose their money in the long term. If indeed this is true, it is the result of a couple of different factors.
Overtrading: Each trade costs you a couple of pips—Consider your trades well before you make them. Each faulty trade, even if exited quickly, drains equity.
Bad money management: One bad trade can wipe out a year of patient, smart trading. Manage your risk using stop loss orders, so that you never risk too high a percentage of your equity on any one single trade.
Lack of knowledge: If you have never traded Forex before, educate yourself! Successful traders are not born that way. The difference between success and failure in the Forex market depends in no small part on the knowledge and education of a trader. For the beginning trader, a proper education is essential before investing in the Foreign Exchange. Find a program you are comfortable with, and begin practicing on a demo account.
Trading on the foreign exchange offers unparalleled opportunities for profit, but it is also extremely risky. Make sure you know what you are getting into before you start trading, and start trading only when you are comfortable in your knowledge and ability.

Whither the dollar?

Filed Under Currency Exchange
Strong U.S. consumer price data led to a lower than expected federal reserve interest rate cut, causing the strongest one-day dollar rally against the Euro since May, 2005. By the end of the day Friday the 14th, the Euro fell 1.5 percent to 1.4412, the lowest it has been since October. This is the third week in a row that the dollar has rallied against major currencies.Strong consumer spending reports have served to partially abate worries that the mortgage crisis would force the US economy into a recession, and widespread inflationary concerns would seem to point to a continued conservative approach to interest rate cuts by the feds, which is more good news for the greenback.Many analysts are now predicting the dollar rally will continue in the short term, fingering 1.43—or even 1.40—as reasonable support levels. Moreover, there has been a rising chorus of voices saying that the dollar will rebound in 2008, due to shrinking budget and trade deficits. If we are correct in assuming that the Fed will be conservative in cutting interest rates, this will lead to an increased international appetite for investment in the US market, creating greater demand for the dollar.On the other hand, we are wary that the dollar rally is simply a correction, rather than a trend reversal. Furthermore, we would not be surprised to see another test of the $1.50 level in the short term, even if prospects for the dollar are good in 2008.w