This led to the invention of the Internet, we run our lives and our colleagues so many changes. We have to pay our debt, Internet, Internet-tienda, Bank and wire signature still online!
We buy and sell shares on the network. Merchants love the opportunity to see their accounts whenever you want to use server-side cursors may orders via the Internet, by telephone.
Most brokers and brokerage shops now offer online shopping. Another great thing about online trading and prices are generally lower. Internet marketing is great, but there are some disadvantages.
If you are new investments, ability to speak with very useful kerääjää. If you haven't found the Exchange can trade networks is very dangerous for you. If this happens, make sure that the information before you start trading stocks, trading online, you can learn.
Also, be aware that you do not have a computer connected to the Internet, you can attach. It is always possible to obtain on the market via the Internet. Don't forget to call and speak with kerääjää, if you use the line kerääjää. This applies whether you're a beginner or Pro Advanced.
It is also a good idea to proceed with the online brokerage company for a long time. Look for one that was 50 years in the industry, of course, but I can't find a company that has operations for a long time and now offers online trading.
Once again, the online trade is something beautiful-but not all. You should think carefully before you decide to purchase online and make sure you know what you really want to say you can do it!
Sunday, April 29, 2012
Saturday, April 28, 2012
Forex Shocker 3.1
Forex Shocker is now version 3.1....This latest version improves upon the shocking 3.0 version. Soon there will be Forex Shocker PRO with up to 11 forex pairs. I'll get to you on this. For now, Forex Shocker 3.1 will be replacing FX Retribution on my Finfx demo which fell in the last two weeks to a new low of $2.9 mill, up to $3.2 mill and back down to $2.9 mil because of two huge losses with FX Retribution and a surprising overall losing from Million Dollar Pips. Rumor has it that some brokers are starting to take measures to limit the success of MDP since it was so highly successful. Foul Play and it leads to distrust of brokers on many platforms. I hope FinFx hasn't gone over to the dark side like others.
Friday, April 20, 2012
Forex Options Market Overview
The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large international corporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an "interbank" market. However, with the plethora of real-time financial data and forex option trading software available to most investors through the internet, today's forex option market now includes an increasingly large number of individuals and corporations who are speculating and/or hedging foreign currency exposure via telephone or online forex trading platforms.
Forex option trading has emerged as an alternative investment vehicle for many traders and investors. As an investment tool, forex option trading provides both large and small investors with greater flexibility when determining the appropriate forex trading and hedging strategies to implement.
Most forex options trading is conducted via telephone as there are only a few forex brokers offering online forex option trading platforms.
Forex Option Defined - A forex option is a financial currency contract giving the forex option buyer the right, but not the obligation, to purchase or sell a specific forex spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the forex option buyer pays to the forex option seller for the forex option contract rights is called the forex option "premium."
The Forex Option Buyer - The buyer, or holder, of a foreign currency option has the choice to either sell the foreign currency option contract prior to expiration, or he or she can choose to hold the foreign currency options contract until expiration and exercise his or her right to take a position in the underlying spot foreign currency. The act of exercising the foreign currency option and taking the subsequent underlying position in the foreign currency spot market is known as "assignment" or being "assigned" a spot position.
The only initial financial obligation of the foreign currency option buyer is to pay the premium to the seller up front when the foreign currency option is initially purchased. Once the premium is paid, the foreign currency option holder has no other financial obligation (no margin is required) until the foreign currency option is either offset or expires.
On the expiration date, the call buyer can exercise his or her right to buy the underlying foreign currency spot position at the foreign currency option's strike price, and a put holder can exercise his or her right to sell the underlying foreign currency spot position at the foreign currency option's strike price. Most foreign currency options are not exercised by the buyer, but instead are offset in the market before expiration.
Foreign currency options expires worthless if, at the time the foreign currency option expires, the strike price is "out-of-the-money." In simplest terms, a foreign currency option is "out-of-the-money" if the underlying foreign currency spot price is lower than a foreign currency call option's strike price, or the underlying foreign currency spot price is higher than a put option's strike price. Once a foreign currency option has expired worthless, the foreign currency option contract itself expires and neither the buyer nor the seller have any further obligation to the other party.
The Forex Option Seller - The foreign currency option seller may also be called the "writer" or "grantor" of a foreign currency option contract. The seller of a foreign currency option is contractually obligated to take the opposite underlying foreign currency spot position if the buyer exercises his right. In return for the premium paid by the buyer, the seller assumes the risk of taking a possible adverse position at a later point in time in the foreign currency spot market.
Initially, the foreign currency option seller collects the premium paid by the foreign currency option buyer (the buyer's funds will immediately be transferred into the seller's foreign currency trading account). The foreign currency option seller must have the funds in his or her account to cover the initial margin requirement. If the markets move in a favorable direction for the seller, the seller will not have to post any more funds for his foreign currency options other than the initial margin requirement. However, if the markets move in an unfavorable direction for the foreign currency options seller, the seller may have to post additional funds to his or her foreign currency trading account to keep the balance in the foreign currency trading account above the maintenance margin requirement.
Just like the buyer, the foreign currency option seller has the choice to either offset (buy back) the foreign currency option contract in the options market prior to expiration, or the seller can choose to hold the foreign currency option contract until expiration. If the foreign currency options seller holds the contract until expiration, one of two scenarios will occur: (1) the seller will take the opposite underlying foreign currency spot position if the buyer exercises the option or (2) the seller will simply let the foreign currency option expire worthless (keeping the entire premium) if the strike price is out-of-the-money.
Please note that "puts" and "calls" are separate foreign currency options contracts and are NOT the opposite side of the same transaction. For every put buyer there is a put seller, and for every call buyer there is a call seller. The foreign currency options buyer pays a premium to the foreign currency options seller in every option transaction.
Forex Call Option - A foreign exchange call option gives the foreign exchange options buyer the right, but not the obligation, to purchase a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
The Forex Put Option - A foreign exchange put option gives the foreign exchange options buyer the right, but not the obligation, to sell a specific foreign exchange spot contract (the underlying) at a specific price (the strike price) on or before a specific date (the expiration date). The amount the foreign exchange option buyer pays to the foreign exchange option seller for the foreign exchange option contract rights is called the option "premium."
Please note that "puts" and "calls" are separate foreign exchange options contracts and are NOT the opposite side of the same transaction. For every foreign exchange put buyer there is a foreign exchange put seller, and for every foreign exchange call buyer there is a foreign exchange call seller. The foreign exchange options buyer pays a premium to the foreign exchange options seller in every option transaction.
Plain Vanilla Forex Options - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic forex option contracts that are traded through an over-the-counter (OTC) forex options dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or a forex put option contract.
Exotic Forex Options - To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.
Intrinsic & Extrinsic Value - The price of an FX option is calculated into two separate parts, the intrinsic value and the extrinsic (time) value.
The intrinsic value of an FX option is defined as the difference between the strike price and the underlying FX spot contract rate (American Style Options) or the FX forward rate (European Style Options). The intrinsic value represents the actual value of the FX option if exercised. Please note that the intrinsic value must be zero (0) or above - if an FX option has no intrinsic value, then the FX option is simply referred to as having no (or zero) intrinsic value (the intrinsic value is never represented as a negative number). An FX option with no intrinsic value is considered "out-of-the-money," an FX option having intrinsic value is considered "in-the-money," and an FX option with a strike price at, or very close to, the underlying FX spot rate is considered "at-the-money."
The extrinsic value of an FX option is commonly referred to as the "time" value and is defined as the value of an FX option beyond the intrinsic value. A number of factors contribute to the calculation of the extrinsic value including, but not limited to, the volatility of the two spot currencies involved, the time left until expiration, the riskless interest rate of both currencies, the spot price of both currencies and the strike price of the FX option. It is important to note that the extrinsic value of FX options erodes as its expiration nears. An FX option with 60 days left to expiration will be worth more than the same FX option that has only 30 days left to expiration. Because there is more time for the underlying FX spot price to possibly move in a favorable direction, FX options sellers demand (and FX options buyers are willing to pay) a larger premium for the extra amount of time.
Volatility - Volatility is considered the most important factor when pricing forex options and it measures movements in the price of the underlying. High volatility increases the probability that the forex option could expire in-the-money and increases the risk to the forex option seller who, in turn, can demand a larger premium. An increase in volatility causes an increase in the price of both call and put options.
Delta - The delta of a forex option is defined as the change in price of a forex option relative to a change in the underlying forex spot rate. A change in a forex option's delta can be influenced by a change in the underlying forex spot rate, a change in volatility, a change in the riskless interest rate of the underlying spot currencies or simply by the passage of time (nearing of the expiration date).
The delta must always be calculated in a range of zero to one (0-1.0). Generally, the delta of a deep out-of-the-money forex option will be closer to zero, the delta of an at-the-money forex option will be near .5 (the probability of exercise is near 50%) and the delta of deep in-the-money forex options will be closer to 1.0. In simplest terms, the closer a forex option's strike price is relative to the underlying spot forex rate, the higher the delta because it is more sensitive to a change in the underlying rate.
John Nobile - Senior Account Executive
CFOS/FX - Online Forex Spot and Options Brokerage
Thursday, April 19, 2012
Forex Signals - How to Instantly Trade Like You Have Decades of Forex Trading Experience
Seriously consider forex signals if you are not yet trading profitably, have limited experience, or just don't have much time to devote to your forex trading.
From the simple one email a day variety to the forex mentor who sits with you all day holding your hand as you trade, a portfolio of forex trade alerts can be virtually free and can transform you into a profitable trader instantly.
If like us you've ever analysed a chart and placed your own trades, you will almost certainly have also sat in front of your screen wondering if you were doing the right thing.
Questions like "have I entered this trade too late ?" and "am I trading in the right direction (long when I should be short)" will certainly have entered your mind.
How many times have you wished you had an expert trader with decades of experience guiding your trades, keeping you out of dangerous trades, and pointing you towards trades with a higher probability of success ?
We were certainly in that position many times in the early days, but always imagined the cost of having an expert on hand would far outweigh any extra profits we might make. It turns out we were quite wrong.
There are numerous services available, known variously as forex signals, forex alerts, or forex tips.
Trading signals come in a variety of formats, suited to how much of your day you can devote to trading. And yes beware, there are loads of scams out there too, but we'll show you how to avoid them, and we'll direct you towards the better ones.
Forex Trading Signals - many varieties
The main characteristics of forex trading signals to be aware of are as follows;
Cost: Free OR monthly subscription
Complexity: Simple "one email a day" OR Full-Service
Control: You keep full control OR the signal provider trades your a/c for you
Trading style: e.g. frequent scalper OR low volume swing trader
A free forex signal may at first seem like a fabulous idea, but as we will reveal here, you may very well prefer to pay for a free subscription service (yes, we know that doesn't make sense - but read on)
Most forex trade signals charge a very modest subscription fee, usually in the region of USD $80 - $400 per month (although happily most are at the lower end of this range), while there are also websites which provide forex signals for no charge.
In their simplest form a forex trading signal will send you a forex alert email once a day listing trade set ups for the next 24 hours.
Some of these are purely computer generated, some are computer generated and then audited by a human expert, and some are completely researched and generated exclusively by a human expert trader who may add some market commentary to their forex forecast.
Some forex trading signals are high volume scalpers, calling many trades in a day aiming to profit a handful of pips on each. Others only call a few trades a day, aiming to profit 20 - 80 pips on each single trade.
At the more full-service end of the market is the type of forex signal service which provides you with an almost 24 hour a day live online broadcast calling forex trading tips as they occur, explaining the logic of the proposed trade and backing it up with an email or even a video clip.
Some forex trading signals will even trade their signals in your own account for you, leaving you to just sit back and watch.
This is similar to what a robot does by using forex signal software, but with the added reassurance that it's being done by an experienced intelligent human trader rather than a dumb machine following an algorithm.
Think of full-service forex trading signals like a forex TV station, which you have running in the background on your pc or internet connected laptop throughout your day. The broadcast remains quiet when there is nothing to do, freeing your time for the other priorities in your day, then calls for your attention when there is a trade to place or manage.
You may be surprised, as we were, to discover that the prices charged by full-service providers are usually very similar to those charged by the one email a day providers.
This type of service usually also includes an interactive facility, enabling you to send a message to your forex mentor if you have a question.
Many forex signal services have very loyal memberships, and some even limit the number of members they will accept.
Free forex signals (virtually)
On the basis that time is money, in our opinion the amount of time we can now devote to other activities by not slaving over our charts for hours searching for the perfect trade set up, not to mention the improvement in our trading results, has more than paid for the very modest cost of the forex signal subscriptions.
Indeed if you apply this logic, subscription based services can effectively be free when you take into account the improvement in your trading profits, and the freeing of your time for other profitable activities.
If you think about it, a subscription based forex signal service has a built-in incentive to call profitable forex trading tips, as its subscriber base would soon evaporate if it failed to provide profitable currency trading tips. "Free" non subscription signals do not have this incentive.
Manage your risk
In any aspect of forex trading your primary goal is to manage your risk. Choosing, and trading a forex trade alert should be no different.
Even the best most experienced provider of forex signals will regularly have losing trades. However taken with all of their winning currency trade signals the overall result should still be profitable, but not all systems work all of the time. Some forex alerts may even have a completely losing week or month.
However, we have found through our own experience that the best way of making consistent profits with forex signals is to subscribe to several different currency trading signals and trade all of their signals. If one of them is having a particularly bad week, the others should compensate and still net you a profitable week, or break even at worst.
Always do your due diligence before trading a provider's forex alerts. Good forex signal services will publish their last 6 - 12 months results on their website. Some will even show you details of the actual trades they took. Expect to see losses as well as winners - that's just the nature of trading. Indeed, if the results show only winners, or the provider is unwilling to show you any results, or to provide contact details of some of their clients willing to give a reference be on your guard.
Most will offer you some sort of free trial or discounted special offer. Make sure that you clearly understand the terms of this offer and know the deadline by which you need to give notice to terminate if you're not happy with the service provided.
If you compare the last 6 month's results of all the forex signal service providers you intend to use, you should find that taken as a whole they delivered a profit.
Past performance is no guarantee of future results, but we have found that if you have a good combination of trading styles in your trading signals portfolio you are in with a fighting chance of consistent profits whatever the market conditions.
Again, think about the cashflow logic of what you will be doing here - the subscription costs of each forex signals service are already very modest, and by combining them you are increasing your probability of consistent profits. They can't all get it wrong all of the time, and remember they are all incentivised by their membership to get it right as often as possible.
Even with experienced traders calling your trades, it's prudent risk management to never ever risk more than 3% of your initial capital on any one trade, preferably only 1%. So, if for example your initial capital, (or to put it another way, the maximum you can afford to lose) is let's say 5,000, the position size you take on each trade should be such that if the trade hit your stop loss, your maximum loss would be no more than 1% x 5,000 = 50.
Using forex signals as trade ideas
Even if you prefer not to follow forex tips to the letter, you can still profit from their trade idea.
For example, if you receive a forex tip trading the GBP/USD long with a 40 pip stop loss, but on analysing the charts (following your attendance on a forex training course) you feel more comfortable placing the stop loss let's say 63 pips below entry, giving the stop protection below a visible area of recent and prior support, which happens also to be below the weekly pivot point, and in doing so are happy to have a longer range target - then go right ahead and do so.
We were surprised to find that when we did exactly this with one of our forex signals' tips our trades actually performed better than theirs did. Two heads better than one maybe.
The point is though, that without the forex market forecast drawing our attention to that particular chart at that particular time we would never have seen that trade idea.
This also makes the point that while it may at first seem temping to let a signal provider trade your account for you, if you have the time you may actually prefer to control it yourself.
If you have been through a good forex training course and understand the concepts of support, resistance, pivot points, trends etc you should always use this knowledge to perform your own due diligence on forex alerts. You may well find as we did that you can enhance the overall performance of your portfolio of forex trade recommendations.
Free forex signals
This section would not be complete without mention of forex signals providers who don't charge any subscription fee.
As we mentioned above even subscription charging services should be effectively free to you by virtue of calling enough profitable trades to more than cover the subscription cost.
In addition we prefer to use subscription based forex signals as they have an incentive to consistently call profitable trades, in that their subscribers won't stay with them for very long if they don't.
Free signals by comparison have no such incentive, so be warned and trade them at your own risk.
The [http://www.profitable-fx-trading.com] website provides access to free signals providers as well as details of some of the better subscription services, along with free training videos and many other free tools, strategies and useful contacts to make your forex trading as profitable as possible.
From the simple one email a day variety to the forex mentor who sits with you all day holding your hand as you trade, a portfolio of forex trade alerts can be virtually free and can transform you into a profitable trader instantly.
If like us you've ever analysed a chart and placed your own trades, you will almost certainly have also sat in front of your screen wondering if you were doing the right thing.
Questions like "have I entered this trade too late ?" and "am I trading in the right direction (long when I should be short)" will certainly have entered your mind.
How many times have you wished you had an expert trader with decades of experience guiding your trades, keeping you out of dangerous trades, and pointing you towards trades with a higher probability of success ?
We were certainly in that position many times in the early days, but always imagined the cost of having an expert on hand would far outweigh any extra profits we might make. It turns out we were quite wrong.
There are numerous services available, known variously as forex signals, forex alerts, or forex tips.
Trading signals come in a variety of formats, suited to how much of your day you can devote to trading. And yes beware, there are loads of scams out there too, but we'll show you how to avoid them, and we'll direct you towards the better ones.
Forex Trading Signals - many varieties
The main characteristics of forex trading signals to be aware of are as follows;
Cost: Free OR monthly subscription
Complexity: Simple "one email a day" OR Full-Service
Control: You keep full control OR the signal provider trades your a/c for you
Trading style: e.g. frequent scalper OR low volume swing trader
A free forex signal may at first seem like a fabulous idea, but as we will reveal here, you may very well prefer to pay for a free subscription service (yes, we know that doesn't make sense - but read on)
Most forex trade signals charge a very modest subscription fee, usually in the region of USD $80 - $400 per month (although happily most are at the lower end of this range), while there are also websites which provide forex signals for no charge.
In their simplest form a forex trading signal will send you a forex alert email once a day listing trade set ups for the next 24 hours.
Some of these are purely computer generated, some are computer generated and then audited by a human expert, and some are completely researched and generated exclusively by a human expert trader who may add some market commentary to their forex forecast.
Some forex trading signals are high volume scalpers, calling many trades in a day aiming to profit a handful of pips on each. Others only call a few trades a day, aiming to profit 20 - 80 pips on each single trade.
At the more full-service end of the market is the type of forex signal service which provides you with an almost 24 hour a day live online broadcast calling forex trading tips as they occur, explaining the logic of the proposed trade and backing it up with an email or even a video clip.
Some forex trading signals will even trade their signals in your own account for you, leaving you to just sit back and watch.
This is similar to what a robot does by using forex signal software, but with the added reassurance that it's being done by an experienced intelligent human trader rather than a dumb machine following an algorithm.
Think of full-service forex trading signals like a forex TV station, which you have running in the background on your pc or internet connected laptop throughout your day. The broadcast remains quiet when there is nothing to do, freeing your time for the other priorities in your day, then calls for your attention when there is a trade to place or manage.
You may be surprised, as we were, to discover that the prices charged by full-service providers are usually very similar to those charged by the one email a day providers.
This type of service usually also includes an interactive facility, enabling you to send a message to your forex mentor if you have a question.
Many forex signal services have very loyal memberships, and some even limit the number of members they will accept.
Free forex signals (virtually)
On the basis that time is money, in our opinion the amount of time we can now devote to other activities by not slaving over our charts for hours searching for the perfect trade set up, not to mention the improvement in our trading results, has more than paid for the very modest cost of the forex signal subscriptions.
Indeed if you apply this logic, subscription based services can effectively be free when you take into account the improvement in your trading profits, and the freeing of your time for other profitable activities.
If you think about it, a subscription based forex signal service has a built-in incentive to call profitable forex trading tips, as its subscriber base would soon evaporate if it failed to provide profitable currency trading tips. "Free" non subscription signals do not have this incentive.
Manage your risk
In any aspect of forex trading your primary goal is to manage your risk. Choosing, and trading a forex trade alert should be no different.
Even the best most experienced provider of forex signals will regularly have losing trades. However taken with all of their winning currency trade signals the overall result should still be profitable, but not all systems work all of the time. Some forex alerts may even have a completely losing week or month.
However, we have found through our own experience that the best way of making consistent profits with forex signals is to subscribe to several different currency trading signals and trade all of their signals. If one of them is having a particularly bad week, the others should compensate and still net you a profitable week, or break even at worst.
Always do your due diligence before trading a provider's forex alerts. Good forex signal services will publish their last 6 - 12 months results on their website. Some will even show you details of the actual trades they took. Expect to see losses as well as winners - that's just the nature of trading. Indeed, if the results show only winners, or the provider is unwilling to show you any results, or to provide contact details of some of their clients willing to give a reference be on your guard.
Most will offer you some sort of free trial or discounted special offer. Make sure that you clearly understand the terms of this offer and know the deadline by which you need to give notice to terminate if you're not happy with the service provided.
If you compare the last 6 month's results of all the forex signal service providers you intend to use, you should find that taken as a whole they delivered a profit.
Past performance is no guarantee of future results, but we have found that if you have a good combination of trading styles in your trading signals portfolio you are in with a fighting chance of consistent profits whatever the market conditions.
Again, think about the cashflow logic of what you will be doing here - the subscription costs of each forex signals service are already very modest, and by combining them you are increasing your probability of consistent profits. They can't all get it wrong all of the time, and remember they are all incentivised by their membership to get it right as often as possible.
Even with experienced traders calling your trades, it's prudent risk management to never ever risk more than 3% of your initial capital on any one trade, preferably only 1%. So, if for example your initial capital, (or to put it another way, the maximum you can afford to lose) is let's say 5,000, the position size you take on each trade should be such that if the trade hit your stop loss, your maximum loss would be no more than 1% x 5,000 = 50.
Using forex signals as trade ideas
Even if you prefer not to follow forex tips to the letter, you can still profit from their trade idea.
For example, if you receive a forex tip trading the GBP/USD long with a 40 pip stop loss, but on analysing the charts (following your attendance on a forex training course) you feel more comfortable placing the stop loss let's say 63 pips below entry, giving the stop protection below a visible area of recent and prior support, which happens also to be below the weekly pivot point, and in doing so are happy to have a longer range target - then go right ahead and do so.
We were surprised to find that when we did exactly this with one of our forex signals' tips our trades actually performed better than theirs did. Two heads better than one maybe.
The point is though, that without the forex market forecast drawing our attention to that particular chart at that particular time we would never have seen that trade idea.
This also makes the point that while it may at first seem temping to let a signal provider trade your account for you, if you have the time you may actually prefer to control it yourself.
If you have been through a good forex training course and understand the concepts of support, resistance, pivot points, trends etc you should always use this knowledge to perform your own due diligence on forex alerts. You may well find as we did that you can enhance the overall performance of your portfolio of forex trade recommendations.
Free forex signals
This section would not be complete without mention of forex signals providers who don't charge any subscription fee.
As we mentioned above even subscription charging services should be effectively free to you by virtue of calling enough profitable trades to more than cover the subscription cost.
In addition we prefer to use subscription based forex signals as they have an incentive to consistently call profitable trades, in that their subscribers won't stay with them for very long if they don't.
Free signals by comparison have no such incentive, so be warned and trade them at your own risk.
The [http://www.profitable-fx-trading.com] website provides access to free signals providers as well as details of some of the better subscription services, along with free training videos and many other free tools, strategies and useful contacts to make your forex trading as profitable as possible.
Wednesday, April 18, 2012
Forex Guide: Things That Every Beginner Traders Should Know Before They Start Trading in Forex
It's a fact that forex trading became a highly preferable investment method in the last decade. Combined with the internet as a global 24/7 network forex is reachable to everyone. I'll not give you about the basic explanation of forex trading in this article. I'm sure that i don't have to tell what forex trading is. People which familiar or have an interest in an investment know forex already. Don't they?
Forex trading is basically just an investment
As any other investment, there are always benefits and risks beyond forex trading. Many people/organization, especially forex brokers, its affiliate and those who earn their income by providing some forex related services says that forex trading have so much advantages compared to other investments; Forex is easy, with its non-stop 24 hours market, its wide range adjustable leverage, its automated trading platform, its offered better opportunity for income resource, and many more -- you name it as much as you want to...
Blinded by its 'beautiful dream imagination', many small/personal traders, especially for the new ones forgot that forex trading is basically still an investment program. Traders should never have a thought that forex trading is an income resource.
Common Beginner Traders Scenario
Beginner forex traders are usually follow the trend of forex trading without preparing and providing them self with an adequate understanding about what's inside forex trading. Their common scenarios are:
1. Know about forex trading
2. Have an interest in forex trading
3. Looking for an easy and profitable forex services
(Usually by looking for some services with less margin, high leverage, automated trading platform, and less risk? - which is too good to be true)
4. Start gambling with their trades
5. Unable to achieve profits as what their imagination
6. Repeating scenarios 3, 4 and 5
7. Repeating scenarios 3, 4 and 5 again... and again...
8. Realizing that they are loosing too much or that their imagination along these days/weeks/months is wrong (i doubt that it would reach years)
9. Give up and quit their trading for good.
Where did they do wrong in above scenario? Is that wrong to always searching for a better service to back up our trade? In my point of view, there are no mistakes in that scenario at all. But it's just incomplete, and that's the most dangerous mistakes made by most beginner traders.
How to Overcome Traders Mistakes and Begin to Make Some Profits in Forex
The facts are, there are just 5% of forex traders which successes with their trading. To become as they are, we should insert step 2.5 in scenario above. This step will simplify above scenarios by eliminating the fourth and eighth and changing ninth step became TRADERS GOAL ACHIEVED.
2.5 Preparing yourself with a solid basic knowledge of forex trading
- Know about the fundamental of forex trading
- Learn about what and how forex market really is
- Train yourself to getting familiar with the technical analysis in forex trading
- Learn how psychological factor affecting in the trading and define our best trading personality
- Be aware in our risk and money management
- Develop your most effective unique trading system based on your knowledge.
We should keep in mind deeply that forex trading is an investment. There is no way that we could be a master in some investment that we've just dive in to for days or weeks. We have to do it by the right way, and don't forget to eliminate your rush in the goal achievement. You will surely find your best trading system that suits you, I guarantee that. But it would cost you some time for several trial and error system testing while you developing your experience in forex trading.
By using an analogical approach as a computer, forex broker is the application programs and operating system. We do need them to make sure that all we need its done, served and executed properly. But, how good the computerization execution speed and its performance are depends on the basic computer specification, which analogically as you.
How to Get Yourself Completely Forex Prepared
Learning and education materials are world widely spreading around us.
1. The first and the most value added a resource of forex trading is through book reading. Forex and investing categorized books are availabe in countless numbers in many bookstore and online bookstore. You should pick some of them to educate yourself with valuable knowledge of the theory beyond forex trading.
2. Try to get into some traders forum to know more about forex trading and the markets. Forex forum also a place to give you an information for forecasting the crowd psychological factor to forecast the currency price movement by examining on how do other traders react in some financial forex related world events.
3. Get a forex course. An expert forex traders or forex broker are offering this kind of forex educational method. The course are usually about the basic knowledge of forex, technical analysis technique usage and its tools, an expert trading advice or maybe in how to develop a particular tested forex trading system which profitable (if done right and backed by your forex basic knowledge).
4. Forex magazine subscription. Some forex magazines are published weekly, monthly and others might be yearly. These materials usually give you information about the updated forex market behavior overview and analysis which can be use for the input of the fundamental analysis of your forex trading.
Octa is a private investor, an online writer and the owner of a forex trading blog [http://forexocta.blogspot.com]. She owns an online bookstore with a numerous collection of investment related books. Octa also a contributor in some finance categorized blogs.
Forex trading is basically just an investment
As any other investment, there are always benefits and risks beyond forex trading. Many people/organization, especially forex brokers, its affiliate and those who earn their income by providing some forex related services says that forex trading have so much advantages compared to other investments; Forex is easy, with its non-stop 24 hours market, its wide range adjustable leverage, its automated trading platform, its offered better opportunity for income resource, and many more -- you name it as much as you want to...
Blinded by its 'beautiful dream imagination', many small/personal traders, especially for the new ones forgot that forex trading is basically still an investment program. Traders should never have a thought that forex trading is an income resource.
Common Beginner Traders Scenario
Beginner forex traders are usually follow the trend of forex trading without preparing and providing them self with an adequate understanding about what's inside forex trading. Their common scenarios are:
1. Know about forex trading
2. Have an interest in forex trading
3. Looking for an easy and profitable forex services
(Usually by looking for some services with less margin, high leverage, automated trading platform, and less risk? - which is too good to be true)
4. Start gambling with their trades
5. Unable to achieve profits as what their imagination
6. Repeating scenarios 3, 4 and 5
7. Repeating scenarios 3, 4 and 5 again... and again...
8. Realizing that they are loosing too much or that their imagination along these days/weeks/months is wrong (i doubt that it would reach years)
9. Give up and quit their trading for good.
Where did they do wrong in above scenario? Is that wrong to always searching for a better service to back up our trade? In my point of view, there are no mistakes in that scenario at all. But it's just incomplete, and that's the most dangerous mistakes made by most beginner traders.
How to Overcome Traders Mistakes and Begin to Make Some Profits in Forex
The facts are, there are just 5% of forex traders which successes with their trading. To become as they are, we should insert step 2.5 in scenario above. This step will simplify above scenarios by eliminating the fourth and eighth and changing ninth step became TRADERS GOAL ACHIEVED.
2.5 Preparing yourself with a solid basic knowledge of forex trading
- Know about the fundamental of forex trading
- Learn about what and how forex market really is
- Train yourself to getting familiar with the technical analysis in forex trading
- Learn how psychological factor affecting in the trading and define our best trading personality
- Be aware in our risk and money management
- Develop your most effective unique trading system based on your knowledge.
We should keep in mind deeply that forex trading is an investment. There is no way that we could be a master in some investment that we've just dive in to for days or weeks. We have to do it by the right way, and don't forget to eliminate your rush in the goal achievement. You will surely find your best trading system that suits you, I guarantee that. But it would cost you some time for several trial and error system testing while you developing your experience in forex trading.
By using an analogical approach as a computer, forex broker is the application programs and operating system. We do need them to make sure that all we need its done, served and executed properly. But, how good the computerization execution speed and its performance are depends on the basic computer specification, which analogically as you.
How to Get Yourself Completely Forex Prepared
Learning and education materials are world widely spreading around us.
1. The first and the most value added a resource of forex trading is through book reading. Forex and investing categorized books are availabe in countless numbers in many bookstore and online bookstore. You should pick some of them to educate yourself with valuable knowledge of the theory beyond forex trading.
2. Try to get into some traders forum to know more about forex trading and the markets. Forex forum also a place to give you an information for forecasting the crowd psychological factor to forecast the currency price movement by examining on how do other traders react in some financial forex related world events.
3. Get a forex course. An expert forex traders or forex broker are offering this kind of forex educational method. The course are usually about the basic knowledge of forex, technical analysis technique usage and its tools, an expert trading advice or maybe in how to develop a particular tested forex trading system which profitable (if done right and backed by your forex basic knowledge).
4. Forex magazine subscription. Some forex magazines are published weekly, monthly and others might be yearly. These materials usually give you information about the updated forex market behavior overview and analysis which can be use for the input of the fundamental analysis of your forex trading.
Octa is a private investor, an online writer and the owner of a forex trading blog [http://forexocta.blogspot.com]. She owns an online bookstore with a numerous collection of investment related books. Octa also a contributor in some finance categorized blogs.
Tuesday, April 17, 2012
Forex Secrets - Delusion No1 - Forex Currency Rate And Economic Factors Impact On Exchange Rate
The delusion conceptually propounds that intraweek and intraday FOREX currency quotes movement is governed by either improvement or by deterioration of the state's economic situation. But in reality, even in case the actual Forex news is superior to the estimated one, the FOREX quotes up/down movement is of 50/50 probability.
This statement is thoroughly important. Once the job of Forex trader is gambling on FOREX exchange rates differential (FOREX pairs up/down movement), the following is to be realized to obtain faultless profit:
FOREX pairs pricing mechanism (say at point X where you are completing the market analysis)
Factors imparting growth/decline to FOREX rates (up/down from point X).
Thus, having understood the FOREX rates factors effective at the extra-exchange (book-maker) FOREX market and the given currency motive factors, a trader must possess distinct knowledge of whether to buy or to sell the given currency pair.
So, what are these factors?
FOREX student suggest unambiguous interpretation of factors responsible for the price formation and the fluctuations there of:
Forex rate constitutes a demand-supply balance for a given goods (currency).
Any violation of this balance, (for instance, in case where the estimated news is in disagreement with the issued official one), results in the FOREX rates reciprocation in chase of a new demand-supply balance. Poor demand brings about decline in a certain currency rate, with a high demand leading to the growth of the latter. The situation continues as long as the currency buy/sell demand comes to balance at another level or at another point.
Referring to the B. Williams ("Trading Chaos 2" Chapter 1 "The market is what you are thinking of it"):
Each world market is dedicated to distribute or share limited amount of something... among those desirous to obtain it most of all. The market affects it by way of finding out and identifying the exact price? Underlying the buyer'/sellers' power absolute equilibrium point.
The above point is readily established by stock, futures, bonds, FOREX and options markets, be it either via an open auction or by virtue of a computerized facility. Markets spot this point prior to any misbalance being detectable by you or by me or even by traders at the exchange floor.
With this scenario holding true - and it really does - we are in position to jump at certain simple yet important conclusions as regards the information being circulated through the market and enjoying doubtless acceptance".
Thomas Demark was more laconic in "Technical analysis - an emerging science":
"Price movement is governed by demand and supply. Should demand exceed supply, there's a price rally and if visa versa, there's a price decline. All economists do share these underlying principles".
Hence, the role of fundamental analysis for FOREX market is readily apparent.
In scholar fiction one will discover roughly the following explanation, persistently wandering from book to book, from site to site and suggesting attaining successful trading at FOREX market by way of scrutinizing the country's economic fundamental data, viz. by tracking the factors reflective of the country's economy condition as below:
State economy condition dynamics indicators (GDP, trade & payments balance, current account, industrial production, etc. It is knowledge, that the higher the above indicators - the faster the economic and the currency price growth);
Stock indices, via average arithmetic index of the country's securities market condition and dynamics. E.g.: 0.3% daily DJI growth in the USA means that this certain day the shares of 30 leading US companies, being pictured by DJU, went 0.3% more expensive. By similarity, DAX30 is the major German index, incorporating the price of shares of the country's 30 leading companies.
The country's interest rate, since the higher the rate, the greater number of investors is eager to invest into the country's economy and hence into national currency strength.
Rate of inflation (the higher the rate, the quicker the National Bank will hike the interest rate). With this assumption, the CPI constitutes a key factor.
Money supply growth in domestic market, which fact brings about the inflation, leading to the interest rate hike.
The country's gold and currency reserve assets.
Variation dynamics correlation of: balances of payment, trade balance, state budget, gross domestic product (GDP), etc.
Trade and industry dynamics (industrial production, industrial orders, DGO, capacity utilization, retail sales, etc.)
Construction statistics (construction spending, new home sales, housing under construction, building permits, etc.)
Labor statistics (unemployment rate, new jobs, etc.)
Society investigations (consumer confidence, consumer sentiment, purchase managers and service managers sentiment, etc.)
To be considered additionally are the country's political stability and tranquility (clearly, any political, natural and other cataclysms are sure to turn investors nervous making them withdraw the investments from the country, thus weakening its national currency). And with the currency being the national economy derivative, changes in economic data will inevitably result in the above currency rate movement.
Conclusions:
Progress in economy results in the currency exchange rate rally.
Decrease in economic indicators leads to the national currency rate decline.
To sum it up, critical economic and political news (whose calendar is issued in advance and is familiar to any trader) constitute a standing factor giving rise to misbalance and causing the currency rate fluctuations.
In anticipation of important economic and political news FOREX pair crawl to the rates as inspired by the estimates ("rumored trade"), whereas upon actual news there occurs a pulse motion of FOREX pairs in accordance with the scheme below;
Forex rate grows if actual news are better than the estimated one;
Forex rate declines if actual news are worse than the estimated one.
ARE YOU FAMILIAR WITH THESE ABC BASICS OF STUDYING FOREX?
Do you accept that one can earn money by way of using these basics, known to every trader?
Then why, having absorbed these economic axioms, 90% of Forex traders in the world are losers rather than winners.
Where is the delusion of the above ABC truth, nudging traders towards losses? Let us perform sort of point-by-point analysis.
The currency exchange FOREX market is a book-makers one. It is gambling on rates difference without direct money delivery to the exchange market, except for hedging of traders' funds by Forex brokers, via buy-sell difference especially during strong trends). Then, http://www.forexite.com reads: "Trading is performed without actual currencies supply, which fact cuts overheads and enables Forexite to go long and short on the currency" http://www.forexite.com/forexite_advantages/forex_advantages.html.
Comment: Have you ever met any book-makers;
- whose logics was coincident with that of THEIR clients (traders),
- whose stakes were being made in accordance with THEIR technical analysts forecasts, economic laws and common sense?
And what extent of doubt and skepticism should be attached to THEIR free "recommendations", "advice", "surveys" and "forecasts", laid out at THEIR sites through THEIR analysts?
As a regular result, over 90% of the world traders are still loosing their deposits at FOREX each time they follow Thomas Demark stereotype that "All the economists share these underlying principles".
Comment No.1. In as much as the above underlying principles are 90% contradictory to practice, it gives rise to the following question. Might these "underlying principles, shared by all economists including Thomas Demark" have possibly turned into dogma, alien to life and practice?
Comment No.2. What should a trader lean on: practice or dogma even if supported by great names, provided that the trader is purported at earning money?
FOREX analysts issuing their daily bulky market reviews are not FOREX traders in the overwhelming majority (see detailed discussion below). And on bringing together pairs 1, 2 and 3 there appears certain regularity.
Please, think over A. Elder words, that: "FOREX rates and the fundamental analysis are tied together with a mile-long rope. The fundamental analysis is ultimately decisive. But anything is likely to happen prior to this eventuality". Another, yet no less renowned trader and analyst, Bill Williams underlines the same mental regularity of an experienced professional trader (level 3 of his trader's skill rating as per "Trading Chaos 2"): "On attaining level 3 you emerge as a self-provided pro trader. You are always familiar with the market's basic, usually invisible structure. You no longer need to refer to others' opinions. You needn't read "Wall Street Journal", watch market-oriented TV programs, and subscribe to information bulletins, waste money on information channels".
Comment: Logically, there is a counter-implication, that if You are eager to become a successful trader, You are to restrict the influence of various surveys and recommendations on yourself even in case they originate from the world famous "Wall Street Journal", to say nothing of crude gurus in analyst skins who use to know ahead of time where currencies will go.
Forex news is a scheduled issue of fundamental data, which as a rule impairs FOREX rates a sharp pulse of motion. But then, why the currency rates movement vector is only 50% coincident with the ABC truism logics as to where the rate should rush in case of actual news being much better or worse than the estimate. And, please, make an attempt to answer the following question, stirring for every trader: why with the new being worse than expected (say, on US economy), the USD currency would initially fall by 40 pips (news work-off) but in 5 to 10 minutes it would swivel back and would display a 200-point rally, with no account to either the issued news or to common sense.
Below are some examples:
Fig. 1. GBPUSD chart as of April 1, 2005 after the news, positive for the GBP and negative for the US economy.
See Note below
In March the CIPS manufacturing index amounted to 52.0 (with the previous data revised from 51.8 to 51.6). Oil price in NYC has grown by USD 2.40 up to USD57.70 per bbl (new record of the latest 21 years). Non-farm payrolls in the USA was minimum since last July (previous data revised towards lower values). There has been a decline in the Michigan sentiment index to 92.6 (median estimate was 92.9, with 92.9 previously).
All the US indices faced a fall down. DJI at NYSE has fallen by 99.46 pips (-0.95%) towards closing at 10404.30. NASDAQ declined by 14.42 pips (-0.72%) to 1984.81. S&P500 slipped by 7.67 pips (-0.65%) to 1172.92. 30-yr US Bonds yielded 4.729 (0.037 lower as compared to the previous close). By contrary, FTSE100 has grown by 19.60 pips (+0.40%) to 4914.00.
Now, the question is to certified economists: what will happen to the GBPUSD within one day or even several hours upon publication of these data? You are right, USD should not simply fall down, it should collapse. Powerfully, swiftly. Well, well...
And this time, the same question to experienced traders. By FOREX news headlines You might have guessed that the events are taking place at the Friday American session. Correct. Initially, anyway, the GBPUSD chart will go up by 100 pips (news wok-off), followed by a pullback. Then Forex chart starts a new rally.
It is now to be tracked whether the GBP will breach the latest rally high or not. If affirmative, it will rush up by approximately 160 pips (Elliott wave 1 was 100 pips, while EW 3 is 60% longer). But if the high is not breached? The GBP currency quote will in no way come to a standstill, moreover on Friday afternoon. Hence, - down, to the starting point! And, if breached, similar situation takes shape but the counting is performed in a "down" direction (EW1, being the same 100 pips plus 187 pips from 1.8826 to 1.8759 being EW 3).
The FOREX day trading tactics will be given scrutiny in a separate chapter. A still separate chapter will be dedicated to Friday trade at American session due to its inherent specifics and to strong seemingly inappropriate movement. The movement is, of course, appropriate. To say nothing of Friday. But it will be touched upon later.
Now, getting back to the currency chart. As apparent, the GBPUSD pair movement on Friday, April, 01, 2005 is in no way in conjunction with the US economy fundamental data. Each forex trader can provide from tens to hundreds of similar instances, where the news are of a certain vector, whereas, after a fraudulent rush along the news vector, a currency applies reverse thrust.
Thereafter, the next day, in daily currency surveys, certified economists are sure to explain all to us by way of inventing another undisguised nonsense, like: "in spite of certain data, traders decided that the currency has already worked-off this side". But! How could this occur on Apr, 01, 2005, provided that the currency has been staying flat in a narrow range in the course of the whole of the European session?
Otherwise, another explanation may emerge, that forex traders were expecting still more inferior news on the US economy... But! By how much more inferior, if according to DJ, the US non-farm payrolls MA was equivalent to 180K, with actual being +110K, estimate being +225K and prior being +243K? And in what manner do these economists count up world traders: by capita, by countries or by the funds, lost by those, who continued staying long in a holy belief in renowned academic scholars postulate of FOREX rates being tied up to countries' economy statistics.
I wonder if I'll ever chance to witness legal procedures to be instituted against any of those famous scholars, so that no one would dare claim that fundamental data trigger rate spikes.
The same pertains to economists, writing about the way, hundreds of thousands traders throughout the globe have conspired to conclude that it is time to reverse the trends with absolutely no grounds. Is it really feasible?
Such reading-matter is, but hammering a single question into one's head: is it lie or is it stupidity of those cooking daily reports for taking traders for a ride, fooling them up and keeping them from the truth, which might be of great avail to them in daily trading. Traders are not a decisive factor, thus rates movement is in no way dependent on their will. Practically in no way.
Wanna check? Negotiate with tens of traders of the trading floor and arrange for a simultaneous entry long on some exotic FOREX pair. In so doing, try to push up either the NZDHKD, or the NZDCAD, or the HKDCAD. No need? I think so. You'll certainly suffer failure with the above, to say nothing of the EUR, GBP, CHF.
Another example:
Fig.2. GBPUSD movement as of May 13, 2005.
See Note below
This is an M15 chart of the American session, where the USD pair has grown by over 100 pips from 1.8583 to 1.8481 against the news, negative for the US economy:
Most indices have dropped down: DJI at NYSE - by 49.36 pips (-0.48%) to close at 10140.12; S&P500 - by 5.31 pips (-0.46%) to 1154.05. NASDAQ has grown by 12.92 pips (+0.66%) to1976.80. 30yr US Bonds yielded 4.484 (0.047 drop from previous close)
There is a fall in Michigan sentiment index. In May UMich was 85.3 with med est 90.0 and prior 87.7. So it was worse than the estimate, reaching the low since March, 2003. The index decline was being observed for the fifth month.
The April US export price index was +0.6% with prior of +0.7%.
Below are other similar examples of that same day.
Fig. 3. EURUSD chart as of May 13, 2005.
See Note below
Hundreds of examples may be offered, where the Forex news vector is opposite to that of the currency movement. Practically, actual news may happen to be superior or inferior to the estimate. FOREX quotes up/down movement is also of 50/50 probability irrespective of the above.
Why does it happen and what is the way for a trader to pinpoint entries and exits? This is going to be discussed in ensuing chapters of this book.
Note:
Full text of this article and pictures of examples http://www.masterforex-v.su/
If you wish to be trained on Trading System Masterforex-V - one of new and most effective techniques of trade on Forex in the world visit http://www.masterforex-v.su/
Professional Trader from 2000 year.
President of Masterforex-V Trading Academy.
Author of Books:
1. Trade secrets by a professional trader or what B. Williams, A. Elder and J. Schwager not told about Forex to traders.
2. Technical analyses in Trading System MasterForex-V.
3. Entry and Exit Points at Forex Market
http://www.masterforex-v.su
http://www.masterforex-v.org
This statement is thoroughly important. Once the job of Forex trader is gambling on FOREX exchange rates differential (FOREX pairs up/down movement), the following is to be realized to obtain faultless profit:
FOREX pairs pricing mechanism (say at point X where you are completing the market analysis)
Factors imparting growth/decline to FOREX rates (up/down from point X).
Thus, having understood the FOREX rates factors effective at the extra-exchange (book-maker) FOREX market and the given currency motive factors, a trader must possess distinct knowledge of whether to buy or to sell the given currency pair.
So, what are these factors?
FOREX student suggest unambiguous interpretation of factors responsible for the price formation and the fluctuations there of:
Forex rate constitutes a demand-supply balance for a given goods (currency).
Any violation of this balance, (for instance, in case where the estimated news is in disagreement with the issued official one), results in the FOREX rates reciprocation in chase of a new demand-supply balance. Poor demand brings about decline in a certain currency rate, with a high demand leading to the growth of the latter. The situation continues as long as the currency buy/sell demand comes to balance at another level or at another point.
Referring to the B. Williams ("Trading Chaos 2" Chapter 1 "The market is what you are thinking of it"):
Each world market is dedicated to distribute or share limited amount of something... among those desirous to obtain it most of all. The market affects it by way of finding out and identifying the exact price? Underlying the buyer'/sellers' power absolute equilibrium point.
The above point is readily established by stock, futures, bonds, FOREX and options markets, be it either via an open auction or by virtue of a computerized facility. Markets spot this point prior to any misbalance being detectable by you or by me or even by traders at the exchange floor.
With this scenario holding true - and it really does - we are in position to jump at certain simple yet important conclusions as regards the information being circulated through the market and enjoying doubtless acceptance".
Thomas Demark was more laconic in "Technical analysis - an emerging science":
"Price movement is governed by demand and supply. Should demand exceed supply, there's a price rally and if visa versa, there's a price decline. All economists do share these underlying principles".
Hence, the role of fundamental analysis for FOREX market is readily apparent.
In scholar fiction one will discover roughly the following explanation, persistently wandering from book to book, from site to site and suggesting attaining successful trading at FOREX market by way of scrutinizing the country's economic fundamental data, viz. by tracking the factors reflective of the country's economy condition as below:
State economy condition dynamics indicators (GDP, trade & payments balance, current account, industrial production, etc. It is knowledge, that the higher the above indicators - the faster the economic and the currency price growth);
Stock indices, via average arithmetic index of the country's securities market condition and dynamics. E.g.: 0.3% daily DJI growth in the USA means that this certain day the shares of 30 leading US companies, being pictured by DJU, went 0.3% more expensive. By similarity, DAX30 is the major German index, incorporating the price of shares of the country's 30 leading companies.
The country's interest rate, since the higher the rate, the greater number of investors is eager to invest into the country's economy and hence into national currency strength.
Rate of inflation (the higher the rate, the quicker the National Bank will hike the interest rate). With this assumption, the CPI constitutes a key factor.
Money supply growth in domestic market, which fact brings about the inflation, leading to the interest rate hike.
The country's gold and currency reserve assets.
Variation dynamics correlation of: balances of payment, trade balance, state budget, gross domestic product (GDP), etc.
Trade and industry dynamics (industrial production, industrial orders, DGO, capacity utilization, retail sales, etc.)
Construction statistics (construction spending, new home sales, housing under construction, building permits, etc.)
Labor statistics (unemployment rate, new jobs, etc.)
Society investigations (consumer confidence, consumer sentiment, purchase managers and service managers sentiment, etc.)
To be considered additionally are the country's political stability and tranquility (clearly, any political, natural and other cataclysms are sure to turn investors nervous making them withdraw the investments from the country, thus weakening its national currency). And with the currency being the national economy derivative, changes in economic data will inevitably result in the above currency rate movement.
Conclusions:
Progress in economy results in the currency exchange rate rally.
Decrease in economic indicators leads to the national currency rate decline.
To sum it up, critical economic and political news (whose calendar is issued in advance and is familiar to any trader) constitute a standing factor giving rise to misbalance and causing the currency rate fluctuations.
In anticipation of important economic and political news FOREX pair crawl to the rates as inspired by the estimates ("rumored trade"), whereas upon actual news there occurs a pulse motion of FOREX pairs in accordance with the scheme below;
Forex rate grows if actual news are better than the estimated one;
Forex rate declines if actual news are worse than the estimated one.
ARE YOU FAMILIAR WITH THESE ABC BASICS OF STUDYING FOREX?
Do you accept that one can earn money by way of using these basics, known to every trader?
Then why, having absorbed these economic axioms, 90% of Forex traders in the world are losers rather than winners.
Where is the delusion of the above ABC truth, nudging traders towards losses? Let us perform sort of point-by-point analysis.
The currency exchange FOREX market is a book-makers one. It is gambling on rates difference without direct money delivery to the exchange market, except for hedging of traders' funds by Forex brokers, via buy-sell difference especially during strong trends). Then, http://www.forexite.com reads: "Trading is performed without actual currencies supply, which fact cuts overheads and enables Forexite to go long and short on the currency" http://www.forexite.com/forexite_advantages/forex_advantages.html.
Comment: Have you ever met any book-makers;
- whose logics was coincident with that of THEIR clients (traders),
- whose stakes were being made in accordance with THEIR technical analysts forecasts, economic laws and common sense?
And what extent of doubt and skepticism should be attached to THEIR free "recommendations", "advice", "surveys" and "forecasts", laid out at THEIR sites through THEIR analysts?
As a regular result, over 90% of the world traders are still loosing their deposits at FOREX each time they follow Thomas Demark stereotype that "All the economists share these underlying principles".
Comment No.1. In as much as the above underlying principles are 90% contradictory to practice, it gives rise to the following question. Might these "underlying principles, shared by all economists including Thomas Demark" have possibly turned into dogma, alien to life and practice?
Comment No.2. What should a trader lean on: practice or dogma even if supported by great names, provided that the trader is purported at earning money?
FOREX analysts issuing their daily bulky market reviews are not FOREX traders in the overwhelming majority (see detailed discussion below). And on bringing together pairs 1, 2 and 3 there appears certain regularity.
Please, think over A. Elder words, that: "FOREX rates and the fundamental analysis are tied together with a mile-long rope. The fundamental analysis is ultimately decisive. But anything is likely to happen prior to this eventuality". Another, yet no less renowned trader and analyst, Bill Williams underlines the same mental regularity of an experienced professional trader (level 3 of his trader's skill rating as per "Trading Chaos 2"): "On attaining level 3 you emerge as a self-provided pro trader. You are always familiar with the market's basic, usually invisible structure. You no longer need to refer to others' opinions. You needn't read "Wall Street Journal", watch market-oriented TV programs, and subscribe to information bulletins, waste money on information channels".
Comment: Logically, there is a counter-implication, that if You are eager to become a successful trader, You are to restrict the influence of various surveys and recommendations on yourself even in case they originate from the world famous "Wall Street Journal", to say nothing of crude gurus in analyst skins who use to know ahead of time where currencies will go.
Forex news is a scheduled issue of fundamental data, which as a rule impairs FOREX rates a sharp pulse of motion. But then, why the currency rates movement vector is only 50% coincident with the ABC truism logics as to where the rate should rush in case of actual news being much better or worse than the estimate. And, please, make an attempt to answer the following question, stirring for every trader: why with the new being worse than expected (say, on US economy), the USD currency would initially fall by 40 pips (news work-off) but in 5 to 10 minutes it would swivel back and would display a 200-point rally, with no account to either the issued news or to common sense.
Below are some examples:
Fig. 1. GBPUSD chart as of April 1, 2005 after the news, positive for the GBP and negative for the US economy.
See Note below
In March the CIPS manufacturing index amounted to 52.0 (with the previous data revised from 51.8 to 51.6). Oil price in NYC has grown by USD 2.40 up to USD57.70 per bbl (new record of the latest 21 years). Non-farm payrolls in the USA was minimum since last July (previous data revised towards lower values). There has been a decline in the Michigan sentiment index to 92.6 (median estimate was 92.9, with 92.9 previously).
All the US indices faced a fall down. DJI at NYSE has fallen by 99.46 pips (-0.95%) towards closing at 10404.30. NASDAQ declined by 14.42 pips (-0.72%) to 1984.81. S&P500 slipped by 7.67 pips (-0.65%) to 1172.92. 30-yr US Bonds yielded 4.729 (0.037 lower as compared to the previous close). By contrary, FTSE100 has grown by 19.60 pips (+0.40%) to 4914.00.
Now, the question is to certified economists: what will happen to the GBPUSD within one day or even several hours upon publication of these data? You are right, USD should not simply fall down, it should collapse. Powerfully, swiftly. Well, well...
And this time, the same question to experienced traders. By FOREX news headlines You might have guessed that the events are taking place at the Friday American session. Correct. Initially, anyway, the GBPUSD chart will go up by 100 pips (news wok-off), followed by a pullback. Then Forex chart starts a new rally.
It is now to be tracked whether the GBP will breach the latest rally high or not. If affirmative, it will rush up by approximately 160 pips (Elliott wave 1 was 100 pips, while EW 3 is 60% longer). But if the high is not breached? The GBP currency quote will in no way come to a standstill, moreover on Friday afternoon. Hence, - down, to the starting point! And, if breached, similar situation takes shape but the counting is performed in a "down" direction (EW1, being the same 100 pips plus 187 pips from 1.8826 to 1.8759 being EW 3).
The FOREX day trading tactics will be given scrutiny in a separate chapter. A still separate chapter will be dedicated to Friday trade at American session due to its inherent specifics and to strong seemingly inappropriate movement. The movement is, of course, appropriate. To say nothing of Friday. But it will be touched upon later.
Now, getting back to the currency chart. As apparent, the GBPUSD pair movement on Friday, April, 01, 2005 is in no way in conjunction with the US economy fundamental data. Each forex trader can provide from tens to hundreds of similar instances, where the news are of a certain vector, whereas, after a fraudulent rush along the news vector, a currency applies reverse thrust.
Thereafter, the next day, in daily currency surveys, certified economists are sure to explain all to us by way of inventing another undisguised nonsense, like: "in spite of certain data, traders decided that the currency has already worked-off this side". But! How could this occur on Apr, 01, 2005, provided that the currency has been staying flat in a narrow range in the course of the whole of the European session?
Otherwise, another explanation may emerge, that forex traders were expecting still more inferior news on the US economy... But! By how much more inferior, if according to DJ, the US non-farm payrolls MA was equivalent to 180K, with actual being +110K, estimate being +225K and prior being +243K? And in what manner do these economists count up world traders: by capita, by countries or by the funds, lost by those, who continued staying long in a holy belief in renowned academic scholars postulate of FOREX rates being tied up to countries' economy statistics.
I wonder if I'll ever chance to witness legal procedures to be instituted against any of those famous scholars, so that no one would dare claim that fundamental data trigger rate spikes.
The same pertains to economists, writing about the way, hundreds of thousands traders throughout the globe have conspired to conclude that it is time to reverse the trends with absolutely no grounds. Is it really feasible?
Such reading-matter is, but hammering a single question into one's head: is it lie or is it stupidity of those cooking daily reports for taking traders for a ride, fooling them up and keeping them from the truth, which might be of great avail to them in daily trading. Traders are not a decisive factor, thus rates movement is in no way dependent on their will. Practically in no way.
Wanna check? Negotiate with tens of traders of the trading floor and arrange for a simultaneous entry long on some exotic FOREX pair. In so doing, try to push up either the NZDHKD, or the NZDCAD, or the HKDCAD. No need? I think so. You'll certainly suffer failure with the above, to say nothing of the EUR, GBP, CHF.
Another example:
Fig.2. GBPUSD movement as of May 13, 2005.
See Note below
This is an M15 chart of the American session, where the USD pair has grown by over 100 pips from 1.8583 to 1.8481 against the news, negative for the US economy:
Most indices have dropped down: DJI at NYSE - by 49.36 pips (-0.48%) to close at 10140.12; S&P500 - by 5.31 pips (-0.46%) to 1154.05. NASDAQ has grown by 12.92 pips (+0.66%) to1976.80. 30yr US Bonds yielded 4.484 (0.047 drop from previous close)
There is a fall in Michigan sentiment index. In May UMich was 85.3 with med est 90.0 and prior 87.7. So it was worse than the estimate, reaching the low since March, 2003. The index decline was being observed for the fifth month.
The April US export price index was +0.6% with prior of +0.7%.
Below are other similar examples of that same day.
Fig. 3. EURUSD chart as of May 13, 2005.
See Note below
Hundreds of examples may be offered, where the Forex news vector is opposite to that of the currency movement. Practically, actual news may happen to be superior or inferior to the estimate. FOREX quotes up/down movement is also of 50/50 probability irrespective of the above.
Why does it happen and what is the way for a trader to pinpoint entries and exits? This is going to be discussed in ensuing chapters of this book.
Note:
Full text of this article and pictures of examples http://www.masterforex-v.su/
If you wish to be trained on Trading System Masterforex-V - one of new and most effective techniques of trade on Forex in the world visit http://www.masterforex-v.su/
Professional Trader from 2000 year.
President of Masterforex-V Trading Academy.
Author of Books:
1. Trade secrets by a professional trader or what B. Williams, A. Elder and J. Schwager not told about Forex to traders.
2. Technical analyses in Trading System MasterForex-V.
3. Entry and Exit Points at Forex Market
http://www.masterforex-v.su
http://www.masterforex-v.org
Monday, April 16, 2012
Forex Nitty Gritty - Finally, a Forex Trading Course For Beginners!
Forex trading in the trading and investing world has become what Texas Holdem is to the poker world. It has exploded, with over $3.5 trillion being traded every day. Forex is a zero sum market. That means there are winners, and an equal number of losers. Generally, retail Forex traders like you and I are on the losing side. But educated investors CAN and ARE on the winning side.
The truth is, 95% of retail traders lose money in the Forex market. They get frustrated, try system after system, and still lose money. The market is full of gimmicks and "unbeatable" robots that will trade for you making you thousands overnight while you sleep. To be successful in Forex Trading, we have to become independent traders. We can't depend on some forex robot to trade our money for us in the hopes that we make thousands of dollars. We can't depend on other people to trade our money for us, like managed broker accounts. They get paid on the number of trades they make, not whether we are profitable or not. Bottom line is that nobody cares about our forex trading success and our financial well being as much as we do ourselves. Become an educated investor and trader, and you will be more successful.
THE TRUTH ABOUT FOREX
People are flocking to Forex trading with the dream of the old California gold rush. Billions of dollars can be made, all you need to do is get your hands on some of it, right? But if it is so easy, and you can plug in a robot, or give somebody your money to trade for you, how come you are the only one to keep losing your money? You're not. Forex trading has become an industry for predators in search of prey. They sell you on gimmicks and get rich quick schemes. It all sounds great, especially for the low price of $97 - $247 on average. And you don't even have to work at it, or educate yourself, or spend any time at all on trading forex! Woooo hoooo!
One of the latest crazes to hit the Forex Market lately are these so called Forex Robots, or Automated Trading Systems. In a nutshell, you buy this program, install it, turn it on, and it makes you money without you having to know anything about forex trading at all. You can "double your account in 30 days" even while you sleep. No education. No work. You don't even need to know what Forex IS, much less how to trade it. Just buy this or that robot that will trade for you and make you thousands of dollars every month. A dream come true.
Well, robots don't work. If they did, those top banks and financial institutions certainly would be using them and not have fallen to financial woes. Beyond that, just so we can say this with authority, we have tested one of the biggest money making robots on the market today, FAP Turbo. It makes a LOT of money... for the guys selling it, not for the people buying it. Sure, some people make money with it. A blind horse is bound to find water ONCE in a WHILE, right?
However, if you want to do a little work, and educate yourself a little bit, and learn the proper way to trade Forex, then there is a new course on the market just for you. Forex Nitty Gritty is just that course.
30+ Year Trading Expert and Mentor Bill Poulos Creates Forex Nitty Gritty
Bill Poulos is a veteran trader with over 30 years of practical experience. He has helped and mentored thousands of investors make even more money in the market by teaching solid methods based on sound fundamental trading principles and methods.
All of his courses cost several hundred to several thousands of dollars, and WELL WORTH every penny. I myself have used his Forex Profit Accelerator course and obtained returns of 58% per month on average for the past 7 months. Yes, I can show you the actual broker trade data and prove it.
But he wants to help the beginning traders now. And he is mentoring Forex Nitty Gritty for only $97 at the time of this writing. In a personal phone discussion with him, he did tell me that one of the reasons was so that he can help teach people that are new to forex, or that haven't succeeded in forex, because he wanted to later sell them the more expensive advanced courses. (Hows that for honesty?). But I'll be honest here, his main goal is to keep people from making the basic mistakes that wipe out their trading account. Bill Poulos is passionate about helping people to learn and understand the Forex market, and to be able to trade it successfully. Yes, he likes the money his students give him. But he really doesn't need it. He has made a great deal of money trading, and mentoring people, and really has no need for more. He could retire this minute, very well off and never look back. But he WANTS to help people learn to trade successfully. So why does he charge so much for his courses? Because it gives the people learning them value and desire to learn. If he mentored people for free, those people just wouldn't care to learn as much. It's a fact. Scientifically proven. Not to mention that his time IS valuable, and he deserves a little something for giving 30+ years of knowledge to his students.
But Forex Nitty Gritty is different. It is an entry level course for new forex traders, or people that have been in the forex market and not been successful. People that have gotten ripped off by the gimmicks and robots and the unscrupulous "trainers" that really have no business taking peoples money. Bill knows exactly what causes failure in the markets, and he is teaching people that, and much more.
HOW TO SUCCEED IN FOREX TRADING WITH FOREX NITTY GRITTY AND BILL POULOS
There are many things you must do, and many more you must avoid, in order to succeed in Forex trading. Bill Poulos teaches you them in Forex Nitty Gritty.
One of them is that you must focus on high probability, low-risk trades. Nothing more. This means you only take the trades that have the highest probability of being profitable, and the lowest risk of losing your trading account value. Generally this will cause you to have fewer trades, but they will be quality trades and generally more profitable. You will stop trading the less desirable trades that have a higher degree of moving against you. And that means you will win trades with higher profits than the losses you sustain. And yes, you will have losses. But the wins more than make up for that, making you profitable.
With Forex Nitty Gritty, you will only have to spend about 20 minutes a day trading. You will identify any new trades, and manage current trades. You will set entry prices, stop losses, and take profit orders. You will practise good money management rules that will increase your potential profit and lower your overall risk. And yes, it will only take you about 20 minutes a night.
Forex Nitty Gritty also includes optional daily videos that show various trade setups, to help you learn the market the right way. And videos teaching you the basics of forex, and forex trading. The Forex Nitty Gritty Insiders website has a lot of core information and training to help the new traders, or those of us that want to learn how to be more profitable.
Like I said, we tested FAP Turbo, and several other robots as well. And what we found out through our testing is that it doesn't work. Go ahead and review our testing of Fap Turbo, but don't buy it or any other robot unless you want to risk losing your account balance. Forex Nitty Gritty is not some lame automated trading system. It is a solid course with a great trading method that will help you learn Forex trading and be potentially profitable.
FOREX NITTY GRITTY SUMMARY
If you are new to trading in the Forex Market, or you've had problems being profitable, or you've ever had your account wiped out by those "Holy Grail" forex robots and automated trading systems, then Forex Nitty Gritty is for YOU. Learn Forex Nitty Gritty and you too can potentially generate consistent profits while learning how to be among the 5% of retail forex traders that are successful.
Happy Trading!
The truth is, 95% of retail traders lose money in the Forex market. They get frustrated, try system after system, and still lose money. The market is full of gimmicks and "unbeatable" robots that will trade for you making you thousands overnight while you sleep. To be successful in Forex Trading, we have to become independent traders. We can't depend on some forex robot to trade our money for us in the hopes that we make thousands of dollars. We can't depend on other people to trade our money for us, like managed broker accounts. They get paid on the number of trades they make, not whether we are profitable or not. Bottom line is that nobody cares about our forex trading success and our financial well being as much as we do ourselves. Become an educated investor and trader, and you will be more successful.
THE TRUTH ABOUT FOREX
People are flocking to Forex trading with the dream of the old California gold rush. Billions of dollars can be made, all you need to do is get your hands on some of it, right? But if it is so easy, and you can plug in a robot, or give somebody your money to trade for you, how come you are the only one to keep losing your money? You're not. Forex trading has become an industry for predators in search of prey. They sell you on gimmicks and get rich quick schemes. It all sounds great, especially for the low price of $97 - $247 on average. And you don't even have to work at it, or educate yourself, or spend any time at all on trading forex! Woooo hoooo!
One of the latest crazes to hit the Forex Market lately are these so called Forex Robots, or Automated Trading Systems. In a nutshell, you buy this program, install it, turn it on, and it makes you money without you having to know anything about forex trading at all. You can "double your account in 30 days" even while you sleep. No education. No work. You don't even need to know what Forex IS, much less how to trade it. Just buy this or that robot that will trade for you and make you thousands of dollars every month. A dream come true.
Well, robots don't work. If they did, those top banks and financial institutions certainly would be using them and not have fallen to financial woes. Beyond that, just so we can say this with authority, we have tested one of the biggest money making robots on the market today, FAP Turbo. It makes a LOT of money... for the guys selling it, not for the people buying it. Sure, some people make money with it. A blind horse is bound to find water ONCE in a WHILE, right?
However, if you want to do a little work, and educate yourself a little bit, and learn the proper way to trade Forex, then there is a new course on the market just for you. Forex Nitty Gritty is just that course.
30+ Year Trading Expert and Mentor Bill Poulos Creates Forex Nitty Gritty
Bill Poulos is a veteran trader with over 30 years of practical experience. He has helped and mentored thousands of investors make even more money in the market by teaching solid methods based on sound fundamental trading principles and methods.
All of his courses cost several hundred to several thousands of dollars, and WELL WORTH every penny. I myself have used his Forex Profit Accelerator course and obtained returns of 58% per month on average for the past 7 months. Yes, I can show you the actual broker trade data and prove it.
But he wants to help the beginning traders now. And he is mentoring Forex Nitty Gritty for only $97 at the time of this writing. In a personal phone discussion with him, he did tell me that one of the reasons was so that he can help teach people that are new to forex, or that haven't succeeded in forex, because he wanted to later sell them the more expensive advanced courses. (Hows that for honesty?). But I'll be honest here, his main goal is to keep people from making the basic mistakes that wipe out their trading account. Bill Poulos is passionate about helping people to learn and understand the Forex market, and to be able to trade it successfully. Yes, he likes the money his students give him. But he really doesn't need it. He has made a great deal of money trading, and mentoring people, and really has no need for more. He could retire this minute, very well off and never look back. But he WANTS to help people learn to trade successfully. So why does he charge so much for his courses? Because it gives the people learning them value and desire to learn. If he mentored people for free, those people just wouldn't care to learn as much. It's a fact. Scientifically proven. Not to mention that his time IS valuable, and he deserves a little something for giving 30+ years of knowledge to his students.
But Forex Nitty Gritty is different. It is an entry level course for new forex traders, or people that have been in the forex market and not been successful. People that have gotten ripped off by the gimmicks and robots and the unscrupulous "trainers" that really have no business taking peoples money. Bill knows exactly what causes failure in the markets, and he is teaching people that, and much more.
HOW TO SUCCEED IN FOREX TRADING WITH FOREX NITTY GRITTY AND BILL POULOS
There are many things you must do, and many more you must avoid, in order to succeed in Forex trading. Bill Poulos teaches you them in Forex Nitty Gritty.
One of them is that you must focus on high probability, low-risk trades. Nothing more. This means you only take the trades that have the highest probability of being profitable, and the lowest risk of losing your trading account value. Generally this will cause you to have fewer trades, but they will be quality trades and generally more profitable. You will stop trading the less desirable trades that have a higher degree of moving against you. And that means you will win trades with higher profits than the losses you sustain. And yes, you will have losses. But the wins more than make up for that, making you profitable.
With Forex Nitty Gritty, you will only have to spend about 20 minutes a day trading. You will identify any new trades, and manage current trades. You will set entry prices, stop losses, and take profit orders. You will practise good money management rules that will increase your potential profit and lower your overall risk. And yes, it will only take you about 20 minutes a night.
Forex Nitty Gritty also includes optional daily videos that show various trade setups, to help you learn the market the right way. And videos teaching you the basics of forex, and forex trading. The Forex Nitty Gritty Insiders website has a lot of core information and training to help the new traders, or those of us that want to learn how to be more profitable.
Like I said, we tested FAP Turbo, and several other robots as well. And what we found out through our testing is that it doesn't work. Go ahead and review our testing of Fap Turbo, but don't buy it or any other robot unless you want to risk losing your account balance. Forex Nitty Gritty is not some lame automated trading system. It is a solid course with a great trading method that will help you learn Forex trading and be potentially profitable.
FOREX NITTY GRITTY SUMMARY
If you are new to trading in the Forex Market, or you've had problems being profitable, or you've ever had your account wiped out by those "Holy Grail" forex robots and automated trading systems, then Forex Nitty Gritty is for YOU. Learn Forex Nitty Gritty and you too can potentially generate consistent profits while learning how to be among the 5% of retail forex traders that are successful.
Happy Trading!
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