The US dollar is the currency of the United States of America and is abbreviated as $, USD or US$. It is also known as the “greenback.” The US currency is an important international reserve currency, along with the Euro. Its accumulation exceeds twice that of the Euro, comprising over 60% of the world’s foreign exchange reserves.
The US coins in circulation are:
1¢ (one cent) – also referred to as a penny
5¢ - nickel
10¢ - dime
25¢ - quarter
50¢ - half dollar or fifty-cent piece
$1 - dollar or dollar coin
Friday, October 23, 2009
Euro, Euros, Currency Euro, EU Currency, Euro Exchange Rate
Euro, Euros, Currency Euro, EU Currency, Euro Exchange Rate
The Euro is the official currency of 16 of the 27 member states of the European Union (EU). These 16 states include some of the most technologically advanced countries of the European continent and are collectively known as the Eurozone. The Euro is an important international reservecurrency. Euros have surpassed the US dollar with the highest combined value of cash in circulation in the world.
Benefits of the Euro
The most important implications of having a common currency, the Euro, are:
# Exchange rate certainty while traveling across Europe
# No exchange risk and, therefore, no cost of hedging against it
# No transaction costs
# Increased transparency and fewer transactions for importers and exporters
# Increased liquidity in the ‘United Euro’ financial market
Euro: Fact File
The Euro is an abbreviation for “European Operational Research Societies.” The association is a non-profit organization established in Brussels, Belgium. The Euro is administered by the European Central Bank (ECB) based in Frankfurt, and the Eurosystem, comprising of the various central banks of the Eurozone nations. The Euro was recognized in the Maastricht Treaty in 1992. Thecurrency was introduced initially in non-physical forms, such as travelers' checks and electronic banking, in 1999. The currency was officially introduced in the form of notes and coins on January 1, 2002.
Euro Exchange Rate: US Dollar vs. Euro
After the Euro was introduced as a cash currency in 2002, the US dollar began to steadily depreciate in value. This was due to a persistent increase in the US trade and budget deficit. By December 2004, the US dollar started falling against all major currencies and the Euro rose above $1.36/€ for the first time. An interest rate reduction by the US Federal Reserve on September 18, 2007 caused the US dollar to decline to new record lows of below $1.43 by October. In 2008, the Euro strengthened further to around $1.60. At the end of March 2009, the Euro stood at $1.3308.
Effect of the Euro on Other Currencies
A number of currencies are pegged to the Euro. Those are the B&H konvertibilna marka, Lithuanian litas, Bulgarian lev, Moroccan dirham, Cape Verdean escudo, Pacific franc, Danish krone, Slovak koruna, Estonian kroon, Central African CFA franc, Hungarian forint, West African CFA and the Comorian franc. This implies that the value of these currencies would depend significantly on the performance of the Euro. If the Euro exchange rate goes up, the value of these currencies would appreciate as well and if the Euro falls, the values of these currencies are sure to come down as well. Hence, the Euro exchange rate occupies a critical position in the context of world finance.
The Euro is the official currency of 16 of the 27 member states of the European Union (EU). These 16 states include some of the most technologically advanced countries of the European continent and are collectively known as the Eurozone. The Euro is an important international reservecurrency. Euros have surpassed the US dollar with the highest combined value of cash in circulation in the world.
Benefits of the Euro
The most important implications of having a common currency, the Euro, are:
# Exchange rate certainty while traveling across Europe
# No exchange risk and, therefore, no cost of hedging against it
# No transaction costs
# Increased transparency and fewer transactions for importers and exporters
# Increased liquidity in the ‘United Euro’ financial market
Euro: Fact File
The Euro is an abbreviation for “European Operational Research Societies.” The association is a non-profit organization established in Brussels, Belgium. The Euro is administered by the European Central Bank (ECB) based in Frankfurt, and the Eurosystem, comprising of the various central banks of the Eurozone nations. The Euro was recognized in the Maastricht Treaty in 1992. Thecurrency was introduced initially in non-physical forms, such as travelers' checks and electronic banking, in 1999. The currency was officially introduced in the form of notes and coins on January 1, 2002.
Euro Exchange Rate: US Dollar vs. Euro
After the Euro was introduced as a cash currency in 2002, the US dollar began to steadily depreciate in value. This was due to a persistent increase in the US trade and budget deficit. By December 2004, the US dollar started falling against all major currencies and the Euro rose above $1.36/€ for the first time. An interest rate reduction by the US Federal Reserve on September 18, 2007 caused the US dollar to decline to new record lows of below $1.43 by October. In 2008, the Euro strengthened further to around $1.60. At the end of March 2009, the Euro stood at $1.3308.
Effect of the Euro on Other Currencies
A number of currencies are pegged to the Euro. Those are the B&H konvertibilna marka, Lithuanian litas, Bulgarian lev, Moroccan dirham, Cape Verdean escudo, Pacific franc, Danish krone, Slovak koruna, Estonian kroon, Central African CFA franc, Hungarian forint, West African CFA and the Comorian franc. This implies that the value of these currencies would depend significantly on the performance of the Euro. If the Euro exchange rate goes up, the value of these currencies would appreciate as well and if the Euro falls, the values of these currencies are sure to come down as well. Hence, the Euro exchange rate occupies a critical position in the context of world finance.
Exchange Rate Forecast, Exchange Rate Forecasts
Exchange rate forecasts are drawn up through the computation of a currency’s value vis-à-vis other currencies over a period of time. While there are various theories that can be used to predict exchange rates, all of them have limitations. No model has been able to establish a monopoly in the forecasting process.
Exchange Rate Forecast: Approaches Employed
The two most commonly used methods for forecasting exchange rates are:
* Fundamental Approach: It forecasts exchange rates after considering the factors that give rise to long term cycles. Elementary data related to a country, such as GDP, inflation rates, productivity indices, balance of trade and unemployment rate, are taken into account. This approach is based on the premise that the ‘true worth’ of a currency will eventually be realized. Hence, this approach is suitable for long term investments.
* Technical Approach: This approach is based on the premise that it is investor sentiment that determines changes in the exchange rate and makes predictions by charting out patterns. Other tools used in this approach are positioning surveys, moving-average trend-following trading rules and FX dealer customer-flow data. Fund managers use these patterns to take informed decisions for short term investments.
Exchange Rate Forecast: Models
Some important exchange rate forecast models are:
* Purchasing Power Parity (PPP) Model: This method involves studying exchange rate movements based on the price level changes in each country.
* Uncovered Interest Rate Parity (UIP) Model: This model forecasts exchange rate movements in accordance with returns from investment in the two curencies. The UIP creates an arbitrage mechanism that sets an exchange rate which equalizes returns from domestic and foreign assets.
* Random Walk Model: This approach assumes that all available information on exchange rate movements in the future is reflected in the current exchange rate. Also, any future event leading to a change inexchange rates is purely random from today’s perspective. Thus, the best possible forecast of a currency’s value is its value today. This is the simplest approach for exchange rate forecasting.
A 1983 study by Meese and Rogoff depicted the superiority of the Random-Walk Model. However, exchange rate forecast models such as the PPP and UIP have also given successful predictions over longer timeframes. Exchange rate forecasts works best if there is a combined effort using these models.
Exchange Rate Forecast: Approaches Employed
The two most commonly used methods for forecasting exchange rates are:
* Fundamental Approach: It forecasts exchange rates after considering the factors that give rise to long term cycles. Elementary data related to a country, such as GDP, inflation rates, productivity indices, balance of trade and unemployment rate, are taken into account. This approach is based on the premise that the ‘true worth’ of a currency will eventually be realized. Hence, this approach is suitable for long term investments.
* Technical Approach: This approach is based on the premise that it is investor sentiment that determines changes in the exchange rate and makes predictions by charting out patterns. Other tools used in this approach are positioning surveys, moving-average trend-following trading rules and FX dealer customer-flow data. Fund managers use these patterns to take informed decisions for short term investments.
Exchange Rate Forecast: Models
Some important exchange rate forecast models are:
* Purchasing Power Parity (PPP) Model: This method involves studying exchange rate movements based on the price level changes in each country.
* Uncovered Interest Rate Parity (UIP) Model: This model forecasts exchange rate movements in accordance with returns from investment in the two curencies. The UIP creates an arbitrage mechanism that sets an exchange rate which equalizes returns from domestic and foreign assets.
* Random Walk Model: This approach assumes that all available information on exchange rate movements in the future is reflected in the current exchange rate. Also, any future event leading to a change inexchange rates is purely random from today’s perspective. Thus, the best possible forecast of a currency’s value is its value today. This is the simplest approach for exchange rate forecasting.
A 1983 study by Meese and Rogoff depicted the superiority of the Random-Walk Model. However, exchange rate forecast models such as the PPP and UIP have also given successful predictions over longer timeframes. Exchange rate forecasts works best if there is a combined effort using these models.
Currency Options, Forex Options, Fx Options, Currency Options Trading
Currency options are derivatives contracts in which foreign currency is the underlying asset. Currency options are also known as forex options or Fx options. The contract is between a buyer and a seller and gives the buyer the right (but not the obligation) to buy or sell the underlyingforeign currency at a specified price on an agreed upon date in the future.
Currency options are of two types: call options and put options. The buyer of a call option has the right to buy the underlying currency at an agreed upon price at a future date. A put option provides the buyer the right to sell the underlying currency.
How are Currency Options Traded?
While currency options give the buyer the right to buy or sell the underlying currency, there is no obligation to do so. However, the seller of the currency options is obligated to buy or sell the underlying currency in case the buyer decides to exercise the option.
For exercising the right to trade the underlying asset, the seller of the option is paid a price, known as premium. The price that is specified for either buying or selling at the future date is known as the strike price.
When an investor believes that the US dollar will appreciate against the Euro, he purchases a currency call option on USD/EUR. If the value of the US dollar actually increases against the Euro, the buyer can exercise his right to earn a profit.
Benefits of Currency Options
The benefits of currency options are:
* Currency options are extremely useful for hedging against the adverse movements of exchange rates.
* Currency options are the only option contracts that are traded 24 hours a day.
Risks of Currency Options
The risks associated with currency options are:
* Currency options change in value very frequently, since they are tied to the volatile forex market.
* The small outlay that is paid as the initial margin may prevent an investor from estimating the actual losses that he may suffer due to adverse market conditions
Currency options are of two types: call options and put options. The buyer of a call option has the right to buy the underlying currency at an agreed upon price at a future date. A put option provides the buyer the right to sell the underlying currency.
How are Currency Options Traded?
While currency options give the buyer the right to buy or sell the underlying currency, there is no obligation to do so. However, the seller of the currency options is obligated to buy or sell the underlying currency in case the buyer decides to exercise the option.
For exercising the right to trade the underlying asset, the seller of the option is paid a price, known as premium. The price that is specified for either buying or selling at the future date is known as the strike price.
When an investor believes that the US dollar will appreciate against the Euro, he purchases a currency call option on USD/EUR. If the value of the US dollar actually increases against the Euro, the buyer can exercise his right to earn a profit.
Benefits of Currency Options
The benefits of currency options are:
* Currency options are extremely useful for hedging against the adverse movements of exchange rates.
* Currency options are the only option contracts that are traded 24 hours a day.
Risks of Currency Options
The risks associated with currency options are:
* Currency options change in value very frequently, since they are tied to the volatile forex market.
* The small outlay that is paid as the initial margin may prevent an investor from estimating the actual losses that he may suffer due to adverse market conditions
Forex Signals, Forex Trading Signal
Forex signals are buy and sell indicators that alert investors of profit-making opportunities. These signals also enable a trader to determine the best time to enter or exit a trade. These signals are generated after a thorough technical analysis and review of charting tools and news-based events. An investor can acquire these forex trading signals for free or for a fee from professionals. This service is also offered by brokerage firms as part of their forex trading software.
Working of Forex Signals
Forex signals are produced by the constant monitoring of multiple factors, of which the economic indicators are most important, as well as analysis, including technical analysis, moving averages and market trend analysis. Traders who subscribe to these signals receive them through emails, pagers, cell phones or even as 'pop-up' messages. These forex signals are indicators to traders of attractive entry and exit points for a currency pair. A trader then needs to sign into his/her account and place the appropriate orders to book profits.
Meanwhile, an experienced trader can also automate his/her trading system to look for specific signals, interpret them and take appropriate action. With the help of automated trading signals, one can eliminate the psychological element that is sometimes known to result in losses.
Benefits of Forex Signals
The benefits of forex signals are:
1. There is no need for traders to learn trading systems or methods.
2. Traders can stop worrying about learning a complicated system that might not work well for them.
3. Effectively remove the guesswork from your financial investments.
4. Enable traders to start earning from day one.
5. Remove the psychological element, which can adversely affect trading.
6. Enable traders who do not have sufficient time to study the intricacies of the forex market to participate in the market.
7. Allow traders to utilize even those profit-making opportunities that come up when they are not actively studying the market.
Drawbacks of Forex Signals
Forex signals do not guarantee profits, since gains are dependent on the way a trader handles his/her resources. Forex signals cannot act as a substitute for knowledge of forex market fundamentals for earning long-term profits.
Working of Forex Signals
Forex signals are produced by the constant monitoring of multiple factors, of which the economic indicators are most important, as well as analysis, including technical analysis, moving averages and market trend analysis. Traders who subscribe to these signals receive them through emails, pagers, cell phones or even as 'pop-up' messages. These forex signals are indicators to traders of attractive entry and exit points for a currency pair. A trader then needs to sign into his/her account and place the appropriate orders to book profits.
Meanwhile, an experienced trader can also automate his/her trading system to look for specific signals, interpret them and take appropriate action. With the help of automated trading signals, one can eliminate the psychological element that is sometimes known to result in losses.
Benefits of Forex Signals
The benefits of forex signals are:
1. There is no need for traders to learn trading systems or methods.
2. Traders can stop worrying about learning a complicated system that might not work well for them.
3. Effectively remove the guesswork from your financial investments.
4. Enable traders to start earning from day one.
5. Remove the psychological element, which can adversely affect trading.
6. Enable traders who do not have sufficient time to study the intricacies of the forex market to participate in the market.
7. Allow traders to utilize even those profit-making opportunities that come up when they are not actively studying the market.
Drawbacks of Forex Signals
Forex signals do not guarantee profits, since gains are dependent on the way a trader handles his/her resources. Forex signals cannot act as a substitute for knowledge of forex market fundamentals for earning long-term profits.
Forex System, Forex Trading System
A forex system, or forex trading system, is a strategy or method devised by an experienced forex trader/broker to generate maximum profits. These systems help investors identify trading opportunities in the forex market, resulting in huge profits. Novice investors can buy these forex systems from brokers and use them till they gain ample expertise to formulate their own strategies.
How a Forex Trading System Works
A forex trading system uses a mix of mechanical methods and computations to calculate the right entry and exit values. While numerous forex trading systems are available in the market, none can be touted as perfect for allinvestors. In fact, selecting more than one forex trading system can help you identify entry and exit points more effectively.
Some of the popular forex systems accessible to investors are:
1. Simple Moving Average (SMA). This system helps one gauge simple averages of the exchange price of every currency from data charts. If, at any given time, the price of a currency is above the SMA, it indicates a time to buy the currency. The opposite is true in case the price dips below the SMA.
2. Support and Resistance. These levels reflect the exchange rates a currency pair tends to reach repeatedly, but fails to cross. You can recognize these levels by studying past data of a currency pair.
3. Leverage. Leverage enables traders to invest a much higher amount than they possess. However, it also exposes them to substantial risks.
4. Stop Loss Order. This forex strategy helps you generate a pre-specified price level beyond which you should neither keep your position open nor place a new buy order. This system helps you reduce your trading losses.
Benefits of a Forex System
A forex trading system helps investors:
1. Trade with greater confidence
2. Identify entry and exit points much earlier than other investors
3. Implement strategies without subscribing to expensive services
4. Learn the intricacies of forex trading faster
Drawbacks of a Forex System
Forex systems:
1. Do not work well for trades at the time of an important news release.
2. May not necessarily continue to perform well in future.
How a Forex Trading System Works
A forex trading system uses a mix of mechanical methods and computations to calculate the right entry and exit values. While numerous forex trading systems are available in the market, none can be touted as perfect for allinvestors. In fact, selecting more than one forex trading system can help you identify entry and exit points more effectively.
Some of the popular forex systems accessible to investors are:
1. Simple Moving Average (SMA). This system helps one gauge simple averages of the exchange price of every currency from data charts. If, at any given time, the price of a currency is above the SMA, it indicates a time to buy the currency. The opposite is true in case the price dips below the SMA.
2. Support and Resistance. These levels reflect the exchange rates a currency pair tends to reach repeatedly, but fails to cross. You can recognize these levels by studying past data of a currency pair.
3. Leverage. Leverage enables traders to invest a much higher amount than they possess. However, it also exposes them to substantial risks.
4. Stop Loss Order. This forex strategy helps you generate a pre-specified price level beyond which you should neither keep your position open nor place a new buy order. This system helps you reduce your trading losses.
Benefits of a Forex System
A forex trading system helps investors:
1. Trade with greater confidence
2. Identify entry and exit points much earlier than other investors
3. Implement strategies without subscribing to expensive services
4. Learn the intricacies of forex trading faster
Drawbacks of a Forex System
Forex systems:
1. Do not work well for trades at the time of an important news release.
2. May not necessarily continue to perform well in future.
Currency Converter
Overview of Currency Converters
A currency converter is a tool to calculate the value of one currency in another currency.
This content is part of the extensive resources on Insurance featured in
A currency converter is a tool to calculate the value of one currency in another currency.
This content is part of the extensive resources on Insurance featured in
Forex Trading: Online Forex Trading
Forex trading, also known as FX trading, involves the buying and selling of currencies of various nations. In the forex trade, currencies are exchanged continuously in the forex market that spans the globe. People are presented with profit-making opportunities in forex trading when the value of one currency fluctuates against that of another.
People conduct Forex Trade to:
1. Make direct foreign investments
2. Earn profits from short-term fluctuations in the value of a currency pair
3. Manage their existing positions in the market
4. Fulfill their import and export requirements
As the forex market does not have any centralized exchange, trading is conducted either through the Electronic Broking System (EBS) or on the Internet. Online forex trading is most popular among individual investors. High leverage, liquidity and flexibility are the three factors that attract people toforex trading.
People conduct Forex Trade to:
1. Make direct foreign investments
2. Earn profits from short-term fluctuations in the value of a currency pair
3. Manage their existing positions in the market
4. Fulfill their import and export requirements
As the forex market does not have any centralized exchange, trading is conducted either through the Electronic Broking System (EBS) or on the Internet. Online forex trading is most popular among individual investors. High leverage, liquidity and flexibility are the three factors that attract people toforex trading.
How is Forex Trading Conducted?
As with other transactions, forex trading involves buyers, sellers and intermediaries.While buyers and sellers in this market could be banks, hedge funds, investment management firms, commercial companies and retail investors, the intermediaries are brokers. Forex brokers act as market makers and place bid and ask prices for a currency pair on behalf of a buyer or a seller.
Buyers make money by purchasing a currency at a lower price and selling it later at a higher price. All transactions by individual traders in theforex market occur through brokers. However, most of the forex trade is conducted between banks.
Buyers make money by purchasing a currency at a lower price and selling it later at a higher price. All transactions by individual traders in theforex market occur through brokers. However, most of the forex trade is conducted between banks.
Benefits of Forex Trading
The benefits of forex trading are:
1. It is conducted in an extremely liquid market. Thus, you are unlikely to get stuck in a trade. You can open and close any position at your desired level.
2. Traders can benefit in both rising and falling markets. You can take a short position (selling the currency pair and buying it back at a lower price) or long position (buying the currency pair and selling it later at a higher price).
3. Provides traders the option of trading in small lots. If you are a novice trader, you can opt to open small accounts and start trading with small lots. This allows you to begin with little capital and limit your risks.
4. Traders do not have to pay commissions to brokers. The cost of the transactions is built into the currency price and is known as the spread, which is the difference between thebuying and selling price at any given time.
1. It is conducted in an extremely liquid market. Thus, you are unlikely to get stuck in a trade. You can open and close any position at your desired level.
2. Traders can benefit in both rising and falling markets. You can take a short position (selling the currency pair and buying it back at a lower price) or long position (buying the currency pair and selling it later at a higher price).
3. Provides traders the option of trading in small lots. If you are a novice trader, you can opt to open small accounts and start trading with small lots. This allows you to begin with little capital and limit your risks.
4. Traders do not have to pay commissions to brokers. The cost of the transactions is built into the currency price and is known as the spread, which is the difference between thebuying and selling price at any given time.
Drawbacks of Forex Trading
Forex trading can lead to huge losses if the trader is a novice. The lack of prompt action can also lead to substantial losses.
Forex Brokers
There are two types of retail brokers offering the opportunity for speculative trading. Retail forex brokers or Market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail forex brokers, while largely controlled and regulated by the CFTC and NFA might be subject to forex scams. At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.
Here are some of the best Forex brokers:
Interbank FX
Ikon Royal
MB Trading
FXDD
GFT Forex
Oanda
Software
Tradestation
MetaTrader 4
Forums
Forex Factory
Money Tec
Oanda Forex Forum
Elite Trader
Here are some of the best Forex brokers:
Interbank FX
Ikon Royal
MB Trading
FXDD
GFT Forex
Oanda
Software
Tradestation
MetaTrader 4
Forums
Forex Factory
Money Tec
Oanda Forex Forum
Elite Trader
technical indicators
One of the first things that a beginner to Forex must do is studying and understanding technical indicators. Technical tools are very popular among both professionals and amateur traders, and no study of Forex trading can be complete without taking a look at them. In this brief article well examine the basic principles behind technical trading, and how technical indicators can be used, in general, for profitable strategies.
In most basic terms, technical tools are used to create trade signals from the price action. From the raw price data it is not possible to determine which price is high, and which is low, because prices dont have an upper limit to them, and they almost never reach zero. As a result, we need tools that will tell us, in relative terms, that a low price is low enough to constitute a buy or sell signal depending on the trading style used and the conditions of the market. Technical tools are mostly used for this purpose.
Not all indicators perform equally well in all markets. For example, the RSI is mostly used in arranging market. Trending markets dont ever take its overbought or oversold signals seriously, and consequently the indicator will generate many false signals in such environments. Moving averages are best used in trending markets. In ranging markets they will zigzag too much, and wont offer clear signals. The Fibonacci indicators, on the other hand, can be used in many different conditions and in many different ways. Knowing which indicator is most productive and reliable in terms of trade signals is an important part of technical analysis.
Another important point to keep in mind while using these indicators is that technical indicators never give perfect signals. They only alert us to conditions that might be appropriate for the opening of a position, but the choice is always ours. Any number of indicators can fail at the same time, and a single indicator can make a correct statement about the future of price action while being contradicted by everything else. Successful use of technical indicators requires that the trader always keeps in mind the possibility of failure. And as such, technical tools should always be coupled to a sound money management plan which can be used in case events dont progress as expected.
In conclusion, Forex strategies can depend on any kind of analytical approach. One can use fundamental or technical analysis, or a combination of the two, for profit. Common sense, and a conservative approach to arising opportunities are what distinguish the frantic speculators from seasoned investors, and the key to success lies in patience and discipline, not in genius or special talents.
In most basic terms, technical tools are used to create trade signals from the price action. From the raw price data it is not possible to determine which price is high, and which is low, because prices dont have an upper limit to them, and they almost never reach zero. As a result, we need tools that will tell us, in relative terms, that a low price is low enough to constitute a buy or sell signal depending on the trading style used and the conditions of the market. Technical tools are mostly used for this purpose.
Not all indicators perform equally well in all markets. For example, the RSI is mostly used in arranging market. Trending markets dont ever take its overbought or oversold signals seriously, and consequently the indicator will generate many false signals in such environments. Moving averages are best used in trending markets. In ranging markets they will zigzag too much, and wont offer clear signals. The Fibonacci indicators, on the other hand, can be used in many different conditions and in many different ways. Knowing which indicator is most productive and reliable in terms of trade signals is an important part of technical analysis.
Another important point to keep in mind while using these indicators is that technical indicators never give perfect signals. They only alert us to conditions that might be appropriate for the opening of a position, but the choice is always ours. Any number of indicators can fail at the same time, and a single indicator can make a correct statement about the future of price action while being contradicted by everything else. Successful use of technical indicators requires that the trader always keeps in mind the possibility of failure. And as such, technical tools should always be coupled to a sound money management plan which can be used in case events dont progress as expected.
In conclusion, Forex strategies can depend on any kind of analytical approach. One can use fundamental or technical analysis, or a combination of the two, for profit. Common sense, and a conservative approach to arising opportunities are what distinguish the frantic speculators from seasoned investors, and the key to success lies in patience and discipline, not in genius or special talents.
Forex strategies
After many heretofore unsuccessful attempts to create a software system that takes the guesswork out of trading, finally there is the Forex Autopilot System. However take care not to look this supposed gift horse in the mouth.
Traders believe that software that could expertly predict trends and market fluctuations will help them tide over most of their troubles. This system will enable you to act according to your discretion when you can perceive market trends beforehand! This is what actually constitutes the essence of currency trading, and is based on the concept of the Fibonacci formula.
The forex robot is known for reaping maximum profits usually coincides with shortest time bracket possible. Not only does this little gadget predict market trends, it conveniently makes trading decisions for you. Sweet!
For maximum profits you are looking at investing in an enhanced automated forex trading system. Using a system of algorithms they calculate the most optimum entry and exit points for your trading decisions. They may even boast cash supervision tools that minimize your financial losses.
There are a variety of forex robots on the market so you need to investigate before you buy. A $65.00 a month program-usage fee is standard but the enhanced Forex Autopilot Systems will run you up a heftier fee than that.
Bear in mind key factors when purchasing the Forex Autopilot System:
1. Ensure that you use and experience the free trial that usually extends for about eight weeks. This enables you to see whether you can really benefit from it or not.
2. Inquire about using the demo account that the forex robot includes in order to “invest” without using actual currency.
3. Self-educate! The forex robot comes with training tutorials or videos that provide valuable tips on getting your money’s worth from your new investment in a way that trial and error never will.
4. Three crucial words: Meta Trader 4. Your forex robot has got to work in the current trading platforms and the Meta Trader 4 is certainly the most popular and profitable.
5. Money-back guarantees make a lot of “cents” in the event that your forex robot isn’t quite right for you.
Purchasing your very own forex robot is an exciting venture in the trading world. Armed with a little knowledge you can make a sensible and profitable investment.
Traders believe that software that could expertly predict trends and market fluctuations will help them tide over most of their troubles. This system will enable you to act according to your discretion when you can perceive market trends beforehand! This is what actually constitutes the essence of currency trading, and is based on the concept of the Fibonacci formula.
The forex robot is known for reaping maximum profits usually coincides with shortest time bracket possible. Not only does this little gadget predict market trends, it conveniently makes trading decisions for you. Sweet!
For maximum profits you are looking at investing in an enhanced automated forex trading system. Using a system of algorithms they calculate the most optimum entry and exit points for your trading decisions. They may even boast cash supervision tools that minimize your financial losses.
There are a variety of forex robots on the market so you need to investigate before you buy. A $65.00 a month program-usage fee is standard but the enhanced Forex Autopilot Systems will run you up a heftier fee than that.
Bear in mind key factors when purchasing the Forex Autopilot System:
1. Ensure that you use and experience the free trial that usually extends for about eight weeks. This enables you to see whether you can really benefit from it or not.
2. Inquire about using the demo account that the forex robot includes in order to “invest” without using actual currency.
3. Self-educate! The forex robot comes with training tutorials or videos that provide valuable tips on getting your money’s worth from your new investment in a way that trial and error never will.
4. Three crucial words: Meta Trader 4. Your forex robot has got to work in the current trading platforms and the Meta Trader 4 is certainly the most popular and profitable.
5. Money-back guarantees make a lot of “cents” in the event that your forex robot isn’t quite right for you.
Purchasing your very own forex robot is an exciting venture in the trading world. Armed with a little knowledge you can make a sensible and profitable investment.
Margin Calls and Currency Trading
Here’s some common mistakes forex traders make to get margin calls.
1. Not paying attention to the news
Die hard technical trading followers can get their account balance lowered to dangerous level if not wiped out totally during big fundamental changes that happen in the political and economic news. It is a must that you understand what is happening, also keep an eye on the economic calendar even if your trading is not based on it.
2. Trading too much
Many new traders trade too much: placing more trades than they can afford, not understanding when too much is too much. First master trading only one position at the time, then after you are more experienced add more positions.
3. Not trading systematically
To be a successful currency trader you need a systematic approach, you can back test your trading system first before committing any real money in to the market. Once you have a winning plan start small, and do not let your emotions get the best of you. A systematic trading approach gives you the tools to make you money. Without a great system, you will surely start loosing money.
4. Not using stops
Always you stops, not just mentally but also put them in the market, you do not know what’s going happen to your broker or your Internet connection. It takes many loosing trades before you can understand just where to place stop orders, hopefully you do now have to learn the hard way.
5, Poor or no money management
There are many great books written on this subject, money management is as important as your trading system. You will have to know when to take profits and when to cut your losses or your trading account could be wiped out too soon.
6. Trading against the trend
Unless you have millions of Dollars you can not afford to trade against the trend, sure the market is going to stop and reverse at some point in time but it is too risky to bet on it. Your trading system should identify the underlying market trend and trade in the direction of the prevailing market trend.
7. Not getting out of losing trade
Learning to get out of losing trade is one of the hardest things to master. Wishful thinking and dreaming will not help you in this matter. Big losing trades make it hard if not impossible to regain the money that was lost. Take your losses early and place some better trades next time.
Good luck with your FX!
1. Not paying attention to the news
Die hard technical trading followers can get their account balance lowered to dangerous level if not wiped out totally during big fundamental changes that happen in the political and economic news. It is a must that you understand what is happening, also keep an eye on the economic calendar even if your trading is not based on it.
2. Trading too much
Many new traders trade too much: placing more trades than they can afford, not understanding when too much is too much. First master trading only one position at the time, then after you are more experienced add more positions.
3. Not trading systematically
To be a successful currency trader you need a systematic approach, you can back test your trading system first before committing any real money in to the market. Once you have a winning plan start small, and do not let your emotions get the best of you. A systematic trading approach gives you the tools to make you money. Without a great system, you will surely start loosing money.
4. Not using stops
Always you stops, not just mentally but also put them in the market, you do not know what’s going happen to your broker or your Internet connection. It takes many loosing trades before you can understand just where to place stop orders, hopefully you do now have to learn the hard way.
5, Poor or no money management
There are many great books written on this subject, money management is as important as your trading system. You will have to know when to take profits and when to cut your losses or your trading account could be wiped out too soon.
6. Trading against the trend
Unless you have millions of Dollars you can not afford to trade against the trend, sure the market is going to stop and reverse at some point in time but it is too risky to bet on it. Your trading system should identify the underlying market trend and trade in the direction of the prevailing market trend.
7. Not getting out of losing trade
Learning to get out of losing trade is one of the hardest things to master. Wishful thinking and dreaming will not help you in this matter. Big losing trades make it hard if not impossible to regain the money that was lost. Take your losses early and place some better trades next time.
Good luck with your FX!
Forex Strategy
Forex Strategy
Despite what you might have heard or thought, there is not a one simple system that will easily give you large profits in currency trading. By implementing a systematic Forex trading plan you can increase the amount of winning trades while protecting yourself from your account being wiped out by loosing trades.
When you start getting into the FX trading strategies there are three basic time frames (systems) in which you can trade Forex. These foreign exchange trading plans are basically short, medium and long term trading approaches. All of these systems have their own advantages and disadvantages when it comes to putting it all to work to make money.
- Short Term Forex trading is called scalping as trading is very quick. Trading all the time in both long and short positions, trades sometimes only lasting seconds or minutes. This requires a lot more skill and experience than it looks like, it can also be very stressful.
- Medium term currency trading is about holding an open position from one day to one week. The major plus of the medium term trading is that money can be made without spending all day in front of the trading screen.
- Long term foreign exchange trading is more about investing as it can mean to hold an open position from weeks to months or even years if there is an opportunity to make money while protecting the investment capital.
The big mistake that the new traders often make is that they start as a short term trader but when the market goes against their trade they then decide to hold on and become a medium term trader or even long term investor. Most often the market will not turn before it is too late for under capitalized novice Forex trader and they will have to throw in a towel and get out with big losses. So whichever strategy you decide to follow – stick to it. Good Luck!
Despite what you might have heard or thought, there is not a one simple system that will easily give you large profits in currency trading. By implementing a systematic Forex trading plan you can increase the amount of winning trades while protecting yourself from your account being wiped out by loosing trades.
When you start getting into the FX trading strategies there are three basic time frames (systems) in which you can trade Forex. These foreign exchange trading plans are basically short, medium and long term trading approaches. All of these systems have their own advantages and disadvantages when it comes to putting it all to work to make money.
- Short Term Forex trading is called scalping as trading is very quick. Trading all the time in both long and short positions, trades sometimes only lasting seconds or minutes. This requires a lot more skill and experience than it looks like, it can also be very stressful.
- Medium term currency trading is about holding an open position from one day to one week. The major plus of the medium term trading is that money can be made without spending all day in front of the trading screen.
- Long term foreign exchange trading is more about investing as it can mean to hold an open position from weeks to months or even years if there is an opportunity to make money while protecting the investment capital.
The big mistake that the new traders often make is that they start as a short term trader but when the market goes against their trade they then decide to hold on and become a medium term trader or even long term investor. Most often the market will not turn before it is too late for under capitalized novice Forex trader and they will have to throw in a towel and get out with big losses. So whichever strategy you decide to follow – stick to it. Good Luck!
Forex Fundamental Analysis
Fundamental analysis in Forex trading has been almost totally forgotten along with simple understanding of charts in favor of all the exotic indicators and automatic systems that most speculators use in their day to day trading.
Traders today somehow feel that the best currency trading strategy has to be in these maze of indicators,colors, noises,systems and whatever else is “hot” nowadays. Its really quite sad that it has gotten to this point. Foreign exchange traders used to pride themselves on how they were able to truly understand the market, but in the present time we live in, they are more worried about understanding what their indicators are telling them.
Traders today somehow feel that the best currency trading strategy has to be in these maze of indicators,colors, noises,systems and whatever else is “hot” nowadays. Its really quite sad that it has gotten to this point. Foreign exchange traders used to pride themselves on how they were able to truly understand the market, but in the present time we live in, they are more worried about understanding what their indicators are telling them.
EURUSD Trading
Forex Trading update: We just went long EURUSD at 1.4620, stop at 1.4575. Break even stop used if given a change after 3-4 hours. Targeting 1.47 area where we may put in shorts or raise break even stop to 1.4670 area. Short position also considered at 1.4750 + area depending on the market action.
Trading currencies on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade forex you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXLine are those of the individual authors and do not necessarily represent the opinion of FXLine or its management. FXLine has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXLine, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXLine will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
Trading currencies on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade forex you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXLine are those of the individual authors and do not necessarily represent the opinion of FXLine or its management. FXLine has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXLine, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXLine will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
Day Trading Forex
orex is very well suited for day trading, here’s some pointers:
Study the fundamentals of the currency market like the various economic market conditions. Schedule your trading times according to market volatility and which way you expect that Forex rates are likely to be moving. Avoid the frustation of making losses let you to stop trading. Use strategies like stop loss orders to minimize your losses. Do not get discouraged, If you have some loosing trades, as it is a part of the speculation that you cannot avoid. Stop trading for the day, once you have made your expected profit. Do not run after more money and give back your earned profits. Assuming that the foreign exchange market does not meet your expectations, do not day trade. When your experience in day trading increases, you gain the ability to foreknow the direction in which the FX rates are moving. If you find it too difficult to decide in which way the market is going, do not trade, just wait or paper trade. Get some knowledge about buying and selling tactics of successful Forex traders. These currency traders commonly sell when there is good news and buy when there is bad news. Being alert and professional are the main characteristics of successful traders so don’t be emotional. Have confidence on your instincts also as relying only upon on the system means skipping some good trading chances. Be educated and use most important strategies to trade. Study new trading strategies daily and use them to your benefit.
Let’s make some money!
Study the fundamentals of the currency market like the various economic market conditions. Schedule your trading times according to market volatility and which way you expect that Forex rates are likely to be moving. Avoid the frustation of making losses let you to stop trading. Use strategies like stop loss orders to minimize your losses. Do not get discouraged, If you have some loosing trades, as it is a part of the speculation that you cannot avoid. Stop trading for the day, once you have made your expected profit. Do not run after more money and give back your earned profits. Assuming that the foreign exchange market does not meet your expectations, do not day trade. When your experience in day trading increases, you gain the ability to foreknow the direction in which the FX rates are moving. If you find it too difficult to decide in which way the market is going, do not trade, just wait or paper trade. Get some knowledge about buying and selling tactics of successful Forex traders. These currency traders commonly sell when there is good news and buy when there is bad news. Being alert and professional are the main characteristics of successful traders so don’t be emotional. Have confidence on your instincts also as relying only upon on the system means skipping some good trading chances. Be educated and use most important strategies to trade. Study new trading strategies daily and use them to your benefit.
Let’s make some money!
Forex Tip
Trading Forex without knowing about the economic fundamentals is very risky. You might be lucky with few trades but not over the long haul, the market will get back at you and take away your profits a lot sooner and harder than what you might expect.
For currency traders, the fundamental analysis is a very important factor to consider before entering into a large position, even if you are mainly a technical trader. From interest rates and central bank policies to natural disasters, fundamentals consists of many different factors that are moving the foreign exchange market. Needless to say, it is vital to have an understanding of fundamental analysis and always use it along with technical analysis.
Pure FX fundamental analysis focuses on money policy, government policy and economic indicators such as GDP, exports, imports etc within a business cycles. Forecasting models are as numerous and varied as the speculators and market participants that use them. Traders can look at the exact same economic information and come up with many totally different conclusions about how the market will react long or short term.
Just don’t confuse yourself by information overload, this is easy nowadays with all the financial news available on TV and over the Internet. Keeping it simple is the best approach even in fundamental analysis just as it is also on technical analysis trading. You will need to come up with a precise method as to how best to translate economic information into entry and exit points for your Forex strategy or system.
Good luck!
For currency traders, the fundamental analysis is a very important factor to consider before entering into a large position, even if you are mainly a technical trader. From interest rates and central bank policies to natural disasters, fundamentals consists of many different factors that are moving the foreign exchange market. Needless to say, it is vital to have an understanding of fundamental analysis and always use it along with technical analysis.
Pure FX fundamental analysis focuses on money policy, government policy and economic indicators such as GDP, exports, imports etc within a business cycles. Forecasting models are as numerous and varied as the speculators and market participants that use them. Traders can look at the exact same economic information and come up with many totally different conclusions about how the market will react long or short term.
Just don’t confuse yourself by information overload, this is easy nowadays with all the financial news available on TV and over the Internet. Keeping it simple is the best approach even in fundamental analysis just as it is also on technical analysis trading. You will need to come up with a precise method as to how best to translate economic information into entry and exit points for your Forex strategy or system.
Good luck!
Currency Markets Trend
Currency markets often are trending long term, instead of short term speculation you should consider building a robust trend following system, it’s a smart way to speculate in foreign exchange markets.
Most profitable trend following systems are pretty simple, these basic systems work better than more complicated ones because they have less variable factors to break than the complex ones.
A great trend following system can be built on using a few indicators and support and resistance points. If you are thinking about building a trend following system you should look into breakouts in your trading strategy. Breakouts happen when the currency pair breaks out of the prevailing trend or sideways moving market, this is a good place to place your buy and sell orders.
Traders that use trend following systems trade infrequently, only when the odds are in their favor. The only thing that matters in Forex is that are you making money or not, if you are patient and wait for the system to tell you to trade you will be making profitable trades most of the time. There is a lot of short term noise in the FX markets which may make you want to trade against your system, this will surely result in losses over the long term.
Trends in Forex last for weeks. months or sometimes even years, so do not worry about picking tops or bottoms, this is not necessary. Trend following requires patience and discipline that you do not jump in and out the market. With properly built and managed system you should be able to make profit of 50-60% of the prevailing market trend, and any Forex trader would tell you that this is a great result. Good luck!
Most profitable trend following systems are pretty simple, these basic systems work better than more complicated ones because they have less variable factors to break than the complex ones.
A great trend following system can be built on using a few indicators and support and resistance points. If you are thinking about building a trend following system you should look into breakouts in your trading strategy. Breakouts happen when the currency pair breaks out of the prevailing trend or sideways moving market, this is a good place to place your buy and sell orders.
Traders that use trend following systems trade infrequently, only when the odds are in their favor. The only thing that matters in Forex is that are you making money or not, if you are patient and wait for the system to tell you to trade you will be making profitable trades most of the time. There is a lot of short term noise in the FX markets which may make you want to trade against your system, this will surely result in losses over the long term.
Trends in Forex last for weeks. months or sometimes even years, so do not worry about picking tops or bottoms, this is not necessary. Trend following requires patience and discipline that you do not jump in and out the market. With properly built and managed system you should be able to make profit of 50-60% of the prevailing market trend, and any Forex trader would tell you that this is a great result. Good luck!
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