Reasons to Choose Forex over Stocks

Reasons to Choose Forex over Stocks

No Middlemen

Centralized exchanges provide many advantages to the trader. However, one of the problems with any centralized exchange is the involvement of middlemen. Any party located in between the trader and the buyer or seller of the security or instrument traded will cost them money. The cost can be either in time or in fees. Spot currency trading does away with the middlemen and allows clients to interact directly with the market-maker responsible for the pricing on a particular currency pair.

Forex traders get quicker access and cheaper costs. Buy/Sell programs do not control the market How many times have you heard that "fund A" was selling "X" or buying "Z" ? Rumor had it that the funds were taking profits because of the end of the financial year or because today is "triple witching day", all as an explanation of why this stock is up or the market in general is down or positive on the session.

The stock market is very susceptible to large fund buying and selling. In spot trading, the liquidity of the Forex market makes the likelihood of any one fund or bank to control a particular currency very slim. Banks, hedge funds, governments, retail currency conversion houses and large net-worth individuals are just some of the participants in the spot currency markets where the liquidity is unprecedented.

Analysts and brokerage firms are less likely to influence the market Have you watched TV lately ? Heard about a certain Internet stock and an analyst of a prestigious brokerage firm accused of keeping its recommendations, such as "buy" when the stock was rapidly declining? It is the nature of these relationships.

No matter what the government does to step in and discourage this type of activity, we have not heard the last of it. IPO's are big business for both the companies going public and the brokerage houses. Relationships are mutually beneficial and analysts work for the brokerage houses that need the companies as clients. That catch-22 will never disappear.

Foreign exchange, as the prime market, generates billions in revenue for the world's banks and is a necessity of the global markets. Analysts in foreign exchange don't drive the deal flow, they just analyze the forex market. 8,000 stocks versus 4 major currency pairs. There are approximately 4,500 stocks listed on the New York Stock exchange. Another 3,500 are listed on the NASDAQ.

Which one will you trade ?

Got the time to stay on top of so many companies ? In spot currency trading, there are dozens of currencies traded, but the majority of the market trades the 4 major pairs. Are'nt four pairs much easier to keep an eye on than thousands of stocks ?

I'd say so. Thats why you should dive in now and get your copy of the forex killer software. It will help you to open up this great money machine called Forex for you !

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

Order Types in Forex

Order Types in Forex

There are some basic order types that all brokers provide and some others that sound weird. The basic ones are :

Market Order

A market order is an order to buy or sell at the current market price. For example, EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon.com, it's ( kinda ) like using their 1-Click ordering. You like the current price, you click once and it's yours ! The only difference is you are buying or selling one currency against another currency instead of buying Britney Spears CDs.

Limit Order

A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070. You can either sit in front of your monitor and wait for it to hit 1.2070 ( at which point you would click a buy market order ), or you can set a buy limit order at 1.2070 ( then you could walk away from your computer to attend your ballroom dancing class ).

If the price goes up to 1.2070, your trading platform will automatically execute a buy order at that exact price. You specify the price at which you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active ( GTC or GFD ).

Stop-Loss Order

A stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order. For example, you went long ( buy ) EUR/USD at 1.2230.

To limit your maximum loss, you set a stop-loss order at 1.2200. This means if you were dead wrong and EUR/USD drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position for a 30 pip loss ( eww ! ).

Stop-losses are extremely useful if you don't want to sit in front of your monitor all day worried that you will lose all your money. You can simply set a stop-loss order on any open positions so you won't miss your basket weaving class.

When using the Forex Killer Software, we will always place stop loss orders ... To close a potentially loosing position early, while we let the profits ride. Download Forex Killer Software from here now.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

Trading in Foreign Exchange Market

Trading in Foreign Exchange Market

In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple : the mechanics of a trade are very similar to those found in other markets ( like the stock market ), so if you have any experience in trading, you should be able to pick it up pretty quickly.

The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold. An exchange rate is simply the ratio of one currency valued against another currency.

For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar. How to Read an FX Quote Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another.

Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar : GBP/USD = 1.7500 The first listed currency to the left of the slash ( "/" ) is known as the base currency ( in this example, the British pound ), while the second one on the right is called the counter or quote currency ( in this example, the U.S. dollar ). When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.

When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound. The base currency is the basis for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency. You would buy the pair if you believe the base currency will appreciate ( go up ) relative to the quote currency. You would sell the pair if you think the base currency will depreciate ( go down ) relative to the quote currency.

Sounds complicated ? It really is easier than you think. When you decide to go for the forex-killer software you will get an exact step by step instruction pdf manual.

The software tells you what to buy and when to buy it. Basically you would not even need any information at all but its always good if you actually know what you are doing Download the software here and start making money today.

Let`s move on ...

Long/Short First, you should determine whether you want to buy or sell. If you want to buy ( which actually means buy the base currency and sell the quote currency ), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position".

Just remember : long = buy. If you want to sell ( which actually means sell the base currency and buy the quote currency) , you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.

Bid/Ask Spread All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price. The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you ( as the trader ) will sell. The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy. The difference between the bid and the ask price is popularly known as the spread.

Let's take a look at an example of a price quote taken from a trading platform : Forex Spread On this GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449. Look at how this broker makes it so easy for you to trade away your money. If you want to sell GBP, you click "Sell" and you will sell pounds at 1.7445. If you want to buy GBP, you click "Buy" and you will buy pounds at 1.7449.

In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don t worry !

We will cover fundamental analysis next. For right now, try to pretend you know what s going on EUR/USD In this example Euro is the base currency and thus the basis for the buy/sell. If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.

If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar. USD/JPY In this example the US dollar is the base currency and thus the basis for the buy/sell. If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order.

By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen. If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

The Advantages of Forex Over Other Finanical Instrument

The Advantages of Forex Over Other Finanical Instrument

Why Trade Foreign Currencies ?

There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market :

No commissions
No clearing fees
No exchange fees
No government fees
No brokerage fees

Brokers are compensated for their services through something called the bid-ask spread.

No Middlemen

Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.

No Fixed Lot Size

In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250.

Low Transaction Costs

The retail transaction cost ( the bid/ask spread ) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.

No Waiting for Opening Bell

A 24-hour market. There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps.

This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade - morning, noon or night. No one can corner the market. The foreign exchange market is so huge and has so many participants that no single entity ( not even a central bank ) can control the market price for an extended period of time.

Leverage

In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies.

Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.

High Liquidity

Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level ( a limit order ), and/or close a trade if a trade is going against you ( a stop loss order ).

Free Demo Accounts, News, Charts, and Analysis

Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for poor and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.

Mini and Micro Trading

You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and micro trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average ( poorer ) individual who doesn't have a lot of start-up trading capital.

With the Forex Killer Software at your fingertips you can start trading with 1000 usd or even less. Just keep in mind that more capital will minimize the risk of loosing + give you greater profits.

Best wishes my friend and make it a wonderful day !

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

What is Technical Analysis ?

What is Technical Analysis ?

Technical analysis attempts to forecast future price movements by examining past market data. Most traders use technical analysis to get a "big picture" on an investment's price history. Even fundamental traders will glance at a chart to see if they're buying at a fair price, selling at a cyclical top or entering a choppy, sideways market.

Technical analysts make a few key assumptions :

All market fundamentals are reflected in price data. Moods, differing opinions, and other market fundamentals need not be studied.

History repeats itself in regular, fairly predictable patterns. These patterns, generated by price movements, are called signals. A technical analyst's goal is to uncover a current market's signals by examining past market signals.

Prices move in trends. Technical analysts believe price fluctuations are not random and unpredictable. Once an up, down or sideways trend has been established, it usually will continue for a period.

Get In and Get Out - at the Right Time

Traders rely on price charts, volume charts and other mathematical representations of market data ( called studies ) to find the ideal entry and exit points for a trade. Some studies help identify a trend, while others help determine the strength and sustainability of that trend over time.

Technical analysis can add discipline and minimize emotion in your trading plan. It can be hard to screen out fundamental impressions and stick with your entry and exit points as planned. While no system is perfect, technical analysis helps you see your trading plan through more objectively and dispassionately.

Price Chart Types

Bar Charts
The most common type of chart showing price action. Each bar represents a period of time - a "period" as short as 1 minute or as long as several years. Over time, bar charts show distinct price patterns.

Candlestick Charts
Instead of a simple bar, each candlestick shows the high, low, opening and closing price for that period of time it represents. Candlestick patterns provide greater visual detail as they develop.

Point & Figure Charts
Point & figure patterns resemble bar chart patterns, except Xs and Os are used to mark changes in price direction. Point & figure charts make no use of time scale to associate a certain day with a certain price action.

Technical Indicator Types

Trend
Trend indicators smooth price data out, so that a persistent up, down or sideways trend can be easily seen. ( Examples : moving averages, trend lines )

Strength
Strength indicators describe the intensity of market opinion on a certain price by examining the market positions taken by various market participants. Volume or open interest are the basic ingredients of strength indicators.

Volatility
"Volatility" refers to the magnitude of day-to-day price fluctuations, whatever their directional trend. Changes in volatility tend to anticipate changes in prices. ( Example : Bollinger Bands )

Cycle
Cycle indicators indicate repeating market patterns from recurrent events such as seasons or elections. Cycle indicators determine the timing of a particular market pattern. ( Example : Elliott Wave )

Support/Resistance
Support and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon is attributed to basic supply and demand. ( Example : Trend Lines )

Momentum
Momentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is highest when a trend starts and lowest when the trend changes.

When price and momentum diverge, it suggests weakness. If price extremes occur with weak momentum, it signals an end of movement in that direction. If momentum is trending strongly and prices are flat, it signals a potential change in price direction. ( Example : Stochastic, MACD, RSI )

Using Technical Indicators

Price charts help traders identify trade-able market trends - while technical indicators help them judge a trend's strength and sustainability.

If an indicator suggests a reversal, confirm the shift before you act. That might mean waiting for another period to confirm the same indicator's signal, or checking out another indicator. Patience will help you read the signals accurately and respond accordingly.

Types of Moving Averages

One of the most widely used indicators, moving averages help traders verify existing trends, identify emerging trends, and view overextended trends about to reverse. As the name suggests, these are lines overlaid on a chart that "average out" short-term price fluctuations, so you can see the long-term price trend.

A simple moving average weighs each price point over the specified period equally. The trader defines whether the high, low, or close is used, and these price points are added together and averaged, forming a line.

A weighted moving average gives more emphasis to the latest data. It smoothes out a price curve, while making the average more responsive to recent price changes.

An exponential moving average weighs more recent price data in a different way. An exponential moving average multiplies a percentage of the most recent price by the previous period's average price.

Finding the best moving averages and period for your pair

It can take a while to find the best combination of moving average and period length for your currency pair. The right combo will make the trend you're looking for clearly visible, as it develops. Finding that optimal fit is called curve fitting.

Usually traders start by comparing a few timeframes for their moving averages over a historical chart. Then you can compare how well and how early each timeframe signaled changes in the price data as they developed, then adjust accordingly.

When you've found a moving average that works well for your currency pair, you can consider this as a line of support for long positions or resistance for short positions. If prices cross this line, that often signals a currency is reversing course. Here's an example:

Longer-term moving averages define a trend, but shorter-term MAs can signal its shift faster. That's why many traders watch moving averages with different timeframes at once. If a short-term MA crosses your longer-term MA, it can signal your trend is ending - and time to pare back your position.

Stochastics

Stochastic studies, or oscillators, help monitor a trend's sustainability and signal reversals in prices. Stochastics come in two types, %K and %D, measured on a scale from 0 to 100. %K is the "fast", more sensitive indicator, while %D is "slow" and takes more time to turn.

Stochastic studies aren't useful in choppy, sideways markets. In these conditions %K and %D lines might cross too frequently to signal anything.

Relative Strength Index ( RSI )

Like stochastics, RSI measures momentum of price movements on a scale of 0 to 100.

Always confirm RSI signals with other indicators. RSI can remain at lofty or sunken levels for a long time, without prices reversing course. All that means is that a market is quite strong or weak - and likely to stay so for a while.

Adjust your RSI to the right timeframe for you. A short-term RSI will be very sensitive and give out many signals, not all of them sustainable; a longer-term RSI will be less choppy. Try to match your RSI timeframe to your own trading style: short-term for day traders, longer-term for position traders.

Divergences between prices and RSI may suggest a trend reversal. Of course, make sure you confirm your signals before acting.

Bollinger Bands

Bollinger Bands are volatility curves used to identify extreme highs or lows in price. Bollinger Bands establish "bands" around a currency's moving average, using a set number of standard deviations around the moving average. Creator Jon Bollinger recommends the following:

Touching a high or low band doesn't necessarily mean an immediate trend reversal. Bollinger Bands adjust dynamically as volatility changes, so touching the band just means prices are extremely volatile. Use Bollinger Bands with other indicators to determine the trend's strength.

MACD - Moving Average Convergence Divergence

Developed by Gerald Appel, MACD (pronounced "Mac-Dee") plots the difference between 26-day and 12-day exponential MAs.

A 9-day MA serves as a trigger line: when MACD crosses below the trigger, it's a bearish signal; when MACD crosses above the trigger, it's a bullish signal.

If MACD turns positive and makes higher lows while prices are still tanking, this could be a strong buy signal. Conversely, if MACD makes lower highs while prices are making new highs, this could be a strong bearish divergence and a sell signal.

Fibonacci Retracements

Fibonacci retracement levels are a sequence of numbers discovered by the noted mathematician Leonardo da Pisa in the 12th century. These numbers describe cycles found throughout nature; technical analysts use them to find pullbacks in the currency market.

After a significant price move, up or down, prices often "retrace" most or all of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels. For currencies, that means retracements usually happen at 23.6%, 38.2%, 50% or 61.8% of the previous move.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

Introduction to Fundamental Analysis

Introduction to Fundamental Analysis

Fundamental analysis studies the core underlying elements that influence the economy of a particular entity, like a stock or currency. It attempts to predict price action and trends by analyzing economic indicators, government policy, societal and other factors within a business cycle framework.

If you think of the markets as a big clock, fundamentals are the gears and springs that move the hands around the face. Anyone can tell you what time it is now, but the fundamentalist knows about the inner workings that move the clock's hands towards times ( or prices ) in the future.

Are you a Technician or Fundamentalist ?

There's a tendency to pigeonhole traders into two distinct schools : fundamental or technical. In fact, most smart traders favor a blended approach versus being a purist of either type.
Fundamentalists need to keep an eye on signals derived from price charts, while few technicians can afford to completely ignore impending economic data, critical political decisions or pressing societal issues that influence price action.

Forecasting Economic conditions using Models

Fundamental analysis is very effective at forecasting economic conditions, but not necessarily exact market prices. Studying GDP forecasts or employment reports can give you a fairly clear picture of an economy's health and the forces at work behind it. But you still need a method to translate that into specific trade entry and exit points.

The bridge between fundamental data and a specific trading strategy usually comes from a trader model. These models use current and historical empirical data to estimate future prices and translate those into specific trades.

Beware of "Analysis Paralysis"

Forecasting models are both art and science, with so many different approaches that traders can get overloaded. It can be tough to decide when you know enough to pull the trigger on a trade with confidence.

Many traders switch to technical analysis at this point to test their hunches and see when price patterns suggest an entry.

Look for Fundamental Drivers first

The fundamentals include everything that makes a country and its currency tick. From interest rates and central bank policy to natural disasters, the fundamentals are a dynamic mix of distinct plans, erratic behaviors and unforeseen events.

That said, not every development will move a country's currency. Try to start by identifying the most influential contributors to this mix versus following every fundamental out there.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

Forex Market Drivers

Forex Market Drivers

Rising interest rates strength that country's currency

A common way to think about interest rates is how much it's going to cost to borrow money, whether for our mortgages or how much we'll earn on our bond and money market investments. Interest rate policy is a key driver of currency prices and typically a strategy for new currency traders.

Fundamentally, if a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors.

For example, higher rates in the Eurozone may prompt U.S. investors to sell U.S. dollars and buy bonds in Euros. Similarly, if interest rates increase in Switzerland, those investors may decide to sell their Euro-bonds and move into bonds in Swiss francs ( CHF ), driving Euros down and Swiss francs up.

When gold goes up, the USD goes down ( and vice versa )

Historically, gold is a "safe haven", a country-neutral investment and an alternative to the world's other reserve currency, the U.S. dollar. That means gold prices have an inverse relationship to the USD, offering several ways for currency traders to take advantage of that relationship.

For example, if gold breaks an important price level, you'd expect gold to move higher. With this in mind, you might sell dollars and buy Euros, for example, as a proxy for higher gold prices.

Rising gold prices help major gold producers

Australia is the world's third largest exporter of gold, and Canada is the third largest producer worldwide. These two major currencies tend to strengthen as gold prices rise. You might consider going long these currencies when gold is increasing in value, or trade your GBP or JPY for these currencies when gold is on the rise.

Oil-dependent countries weaken as oil prices rise

Just as airlines and other oil-dependent industries are hurt by rising oil prices, so are the currencies of oil-dependent countries like the U.S. or Japan, both of which are massively dependent on foreign oil.

If you believe oil prices will continue to rise, you can consider buying commodity-based economies like Australia or Canada or selling oil-dependent currencies.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

What are Economic Indicators ?

What are Economic Indicators ?

Economic indicators are snippets of financial and economic data published regularly by governmental agencies and the private sector. These statistics help market observers monitor the economy's pulse - so it's no surprise that they're religiously followed by almost everyone in the financial markets.

With so many people poised to react to the same information, economic indicators have tremendous potential to generate volume and to move prices. It might seem like you need an advanced economics degree to parse all this data accurately - but in fact traders need only keep a few simple guidelines in mind to making trading decisions based on this data.

Mark your economic calendars

Know exactly when each economic indicator will be released. You can find these calendars at the New York Federal Reserve Bank's site ; FOREX.com clients can simply login to MyAccount and click on Economic Calendars.

Watching the economic calendar not only helps you consider trades around these events, it helps explain otherwise unanticipated price actions during those periods. Consider this scenario :

Monday morning and the USD has been in a tailspin for 3 weeks, with many traders short USD positions as a result.

On Friday, however, U.S. employment data is scheduled to be released. If that report looks promising, traders may start unwinding their short positions before Friday, leading to a short-term rally in USD through the week.

What does this data mean for the economy ?

You need not understand every nuance of each data release, but you should try to grasp key, large-scale relationships between reports and what they measure in the economy. For example, you should know which indicators measure the economy's growth ( gross domestic product, or GDP ) versus those that measure inflation ( PPI, CPI ) or employment strength ( non-farm payrolls ).

Not all economic indicators can move markets

The market often pays more attention to certain indicators under certain conditions - and that focus can change over time.

For example, if prices ( inflation ) are not a crucial issue for a given country, but its economic growth is problematic, traders may pay less attention to inflation data and focus on employment data or GDP reports.

Watch for the unexpected

Often the data itself may not be as important as whether or not it falls within market expectations. If a given report differs widely and unexpectedly from what economists and market pundits were anticipating, market volatility and potential trading opportunities may result.

At the same time, be careful of pulling the trigger too quickly when an indicator falls outside expectations. Each new economic indicator release contains revisions to previously released data. Here's an example :

Don't get caught up in details

While your macroeconomics professor may appreciate all the nuances of an economic report, traders need to filter data judiciously for their own purposes: making intelligent trading decisions.

For example, many new traders watch the headlineNew line of the employment report, for example, assuming that new jobs are key to economic growth. That may be true generally, but in trading terms non-farm payrolls is the figure traders watch most closely and therefore has the biggest impact on markets.

Similarly, PPI measures changes in producer prices generally - but traders tend to watch PPI excluding food and energy as a market driver. Food and energy data tend to be much too volatilve and subject to revisions to provide an accurate reading on producer price changes.

There are two sides to every trade

Hopefully this has helped you realize the importance of watching economic indicators - and knowing which data are most likely to move markets and impact currency traders.

Just remember that no trader's knowledge can be complete all the time. You might have a great handle on economic data published in the U.S. - but there are times when data published in Europe or Australia might have surprising impact on your currency market. Doing your homework before trading any currency will help you stay on guard.

Economic indicators : a currency's vital signs

Traders can measure the economic health of a given country ( and its currency ) through its economic indicators - but, just like a doctor monitoring a patient's vital signs, not all stats count equally. Here's a primer of the key economic indicators that often impact currency traders.

Economic indicators divide into leading and lagging indicators :

Leading indicators are economic factors that change BEFORE the economy starts to follow a particular trend. They're used to predict changes in the economy.

Lagging indicators are economic factors that change AFTER the economy has already begun to follow a particular trend. They're used to confirm changes in the economy.

Major economic indicators

Gross Domestic Product ( GDP )

The sum of all goods and services produced either by domestic or foreign companies. GDP indicates the pace at which a country's economy is growing ( or shrinking ) and is considered the broadest indicator of economic output and growth.

Industrial Production

A chain-weighted measure of the change in the production of the nation's factories, mines and utilities, industrial production also measures the country's industrial capacity and how fully it's being used ( capacity utilization ).

The manufacturing sector accounts for one-quarter of the major currencies' economies, so it's critical to watch the health of factories and whether their capacity is being maximized. Purchasing Managers Index ( PMI )

The National Association of Purchasing Managers ( NAPM )
( now called the Institute for Supply )

Management, releases a monthly composite index of national manufacturing conditions. The index includes data on new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export and import orders. It is divided into manufacturing and non-manufacturing sub-indices.

Producer Price Index ( PPI )

Measures average changes in selling prices received by domestic producers in the manufacturing, mining, agriculture, and electric utility industries.

The PPIs most often used for economic analysis are those for finished goods, intermediate goods, and crude goods.

Consumer Price Index ( CPI )

Measures the average price level paid by urban consumers ( 80% of the population in major currency countries ) for a fixed basket of goods and services. It reports price changes in over 200 categories.

The CPI also includes various user fees and taxes directly associated with the prices of specific goods and services.

Durable Goods

Durable Goods Orders measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. A durable good is a product that lasts over three years, during which its services are extended.

Companies and consumers sometimes put off purchases of durable goods during tough economic times - so this figure is a useful measure of certain kinds of customer demand.

Employment Cost Index ( ECI )

Payroll employment is a measure of the number of jobs at larger companies in more than 500 industries in all 50 U.S. states and 255 metropolitan areas. ECI counts the number of paid employees working part-time or full-time in the nation's business and government establishments.

Retail Sales

Measures total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the timeliest indicator of broad consumer spending patterns and is adjusted for normal seasonal variation, holidays, and trading-day differences.

Retail sales include durable and nondurable merchandise sold, and services and excise taxes incidental to the sale of merchandise. It doesn't include sales taxes collected directly from the customer.

Housing Starts

Measures the number of residential units on which construction is begun each month. A "start" refers to excavation of the foundation of a residential home.

Housing is usually one of the first sectors to react to interest rate changes. Significant reaction of start/permits to changing interest rates signals interest rates are nearing trough or peak. To analyze, focus on the percentage change in levels from the previous month. Report is released around the middle of the following month.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

8 Trading Tips to Your Success

8 Trading Tips to Your Success

You can never have too many tips when you are trading !
Read on ...

Tip A. )
Trading strategies that work well in an up-market may not work in a down-market. Same as : systems that work well in a good trending market may not be applicable at all to a ranging market. The solution is either to have a system for each type of the market or make sure that one solid system will work well under all market conditions — extensive testing is the way to know the truth.

Tip B. )
Do not try to pick tops and bottoms of the price. It is a very wrong approach that unfortunately many traders have adopted. Searching for bargains is a good thing when you go shopping, but will put you in troubles if applied to Forex trading. Simply spot the trend and join it like other traders who are serious about trading do.

Tip C. )
Always remind yourself that the first and the last market bars/ticks are the most expensive. Delay entering the market on the first ticks and be out of the market early. On the open, never trade in the direction of a gap.

Tip D. )
Never worry about missing out on a trading opportunity. Do not provoke yourself to take a trade that does not meet all entry rules. Just because it seems to be too good to pass up is not an excuse for trading. You are never going to run out of trades, so be firm and stick to your rules.

Tip E. )
By using knowledge about currency correlation traders can easily avoid opening positions that cancel each other ( e.g. +10 pips on one pair and -10 on another = 0 ). Find out which currency pairs move simultaneously and which — in opposite direction. Currency correlation information.

Tip F. )
Did we say : "Have your stop loss order in place" ? Yes we did. Anyway, we will repeat it one more time. Even if your trading system needs no stops, still have it. Not that you are going to use it, but just for the safety of your capital. A sudden huge move in the market may cost you a big portion of your trading account especially if margin call is triggered.

We use insurance for many things in our life, why don't have one for your trading account ? For trading systems without a stop loss orders — put one on a decent distance, for example 100+ pips. Also do not use too tight stop orders as they will most likely be hit more often then you need to.

Tip G. )
Spend less time trading Forex but make it quality time. Trade only when you can be 100% focused. Time spent in front of the monitor does not assume profitability, so don't fool yourself and do not trade half-ready.

Tip H. )
And finally, it is wrong to trade with the money that you cannot allow to lose. That is also why traders switching from Demo to real account often may find themselves losing a trade after trade with a system that used to be profitable. This is because with a real account they've got fear to lose money, while on Demo account their minds were free.

Do not trade if you cannot afford to lose your money. Moreover, do not trade if you must make X amount of money per month to pay your bills in order to avoid financial trouble. Trading scared is the best way to mess up all trading rules, discipline and get additional stress.

Trading smart is what we wish you to achieve, and believe us, being focused and serious about the job you do will make you successful !

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

What is Fundamental Analysis ?

What is Fundamental Analysis ?

Fundamental Analysis in Forex is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively.

It gives information on how the big political and economical events influence currency market. Figures and statements given in speeches by important politicians and economists are known among the traders as economical announcements that have great impact on currency market moves. In particular, announcements related to United States economy and politics are the primary to keep an eye on.

What is economic calendar ?

Economic calendar is created by economists where they predict different economics figures and values according to previous months. It contains next data : Date — Time — Currency — Data Released — Actual — Forecast — Previous

For example : If the forecast is better than the previous figure, then US dollar usually is going to strengthen against other currencies. But when news are due, traders have to check the actual data.

If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e.g. America, Japan. A good example of detailed economic calendar can be found here : Forex Economic Calendar

Whose speeches to keep an eye on ?

Chairman of the Federal Reserve Bank of USA, Secretary of the Treasury, President of the Federal Reserve Bank of San Francisco and so on. Speeches of those prominent people are watched closely by traders.

What are the most powerful figures that move Forex market ?

Interest Rate

Traditionally, if a country raises its interest rates, its currency will strengthen because investors will shift their assets to that country to gain higher returns.

Employment Situation

Decreases in the payroll employment are considered as signs of a weak economic activity that could eventually lead to lower interest rates, which has negative impact on the currency.

Trade balance, budget and treasury budget

A country that has a significant Trade Balance deficit will generally have a weak currency as there will be continuous commercial sellings of its currency.

Gross Domestic Product ( GDP )

GDP is reported quarterly and is followed very closely as it is a primary indicator of the strength of economic activity. A high GDP figure is usually followed by expectations of higher interest rates, which is mostly positive for the currency.

Less powefull economic indicators are :

Retail sales

It is the first real indicator of the strength of consumer expenditure.

Durable goods

Rising Durable Goods Orders are normally associated with stronger economic activity and can therefore lead to higher short-term interest rates, which is usually supportive for a currency.

How do traders use all this ?

There are few useful tips that can be followed :

1. ) Keep an economic calendar on hand. Watch for the events when data are due to be released.

2. ) Know what indicator is gaining the most of attention at any given time as it becomes a catalyst for future price moves. For example, when the U.S. dollar is weak traders will watch closely the inflation indicator.

3. ) When the difference between the expectations and real results occur, watch for corrections in the market price moves.

4. ) Pay attention to news revisions if any, the situation on the market can change quickly.

Another important thing to consider — your Broker !

Because of the high volume of trades made at the time of important economic announcements some brokers may block new orders from being conducted.

For traders it means they should enter the trade before the "major action" begins and, what is more important, they must always have their protective stops placed. Being not able to access the trade desk to close your losing position in time is the most frustrating thing traders should always try to avoid.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

Forex Chart Trend Lines

Forex Chart Trend Lines

Plotting a trend line on a Forex chart gives very valuable information. Not only the trend line will show a current trend ( direction ) of the price move, it will also depict points of support and resistance levels for market price.

In addition, it will also help to determine good entry and exit points, best positioning for profit taking and placing protective stops. This very simple, but yet quite powerful tool will be one of the crucial indicators of possible trend reversal ( when market price starts move in the opposite direction ).

So, shall we learn how to draw trend line to make it our good friend in profitable forex trading ?

In the uptrend market trend line is drawn below the pattern formation ; in the downtrend — above. ( That is why when the trend is going to change our trend line will be crossed, which therefore will give us a signal that the price can start moving in another direction. )

In the uptrend, Forex trend line is drawn through the lowest swing-points of the price move. Connecting at least two «lowest lows» will create a trend line.

In the down trend, trend line is drawn through the highest swing-points of the price move. Connecting at least two «highest highs» will create a trend line.

A trend line confirms its validity when the price respects this line. The more «lowest lows» / «highest highs» the trend line contains, the stronger it becomes.

Another sample of drawing trend lines : main and inner downtrend lines.

Good Luck !

To Your Trading Success

Wingcent Ning

Success-Biz Marketing

wingcent@gmail.com

http://mysignatureforex.blogspot.com

Singapore

Forex Market Hours

Forex Market Hours

When to trade and when not to.

Forex market is open 24 hours a day. It provides a great opportunity for traders to trade any time of the day or at night. However, although it seems to be not very important at the beginning, the right time to trade is one of the most crucial points to be successful in trading at the forex market.

So, when should one consider trading and why ?

The best time to trade is when the market is the most active and therefore has the biggest volume of trades. More active currency moves will create a good chance to catch the trade and make some profit. A calm, slow market is literally wasting of time — turn off your computer and don't even bother !

Forex trading hours, trading time :

New York opens 8:00 am to 5:00 pm EST
Tokyo opens 7:00 pm to 4:00 am EST
Sydney opens 5:00 pm to 2:00 am EST
London opens 3:00 am to 12:00 noon EST

And so, there are hours when two sessions are overlapped :

New York and London — 8:00 am — 12:00 noon EST
Sydney / Tokyo — 7:00 pm — 2:00 am EST
London / Tokyo — 3:00 am — 4:00am EST

For example :

Trading EUR/USD, GBP/USD currency pairs would give good results between 8:00 am and 12:00 noon EST when two markets for those currencies are active.

At those overlapping trading hours you'll find the highest volume of trades and therefore more chances to win in the foreign currency exchange market.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore

What Is Forex ?

What Is Forex ?

The Term

The term “FOREX” stands for Foreign Exchange FOREX ( or FX as a short abbreviation ) is a global currency exchange market where foreign currencies from all over the world are bought and sold for profit.

Forex is the largest and most liquid market in the world

Forex is the largest and most liquid market in the world where trillions of dollars exchanges take place every day. That’s an enormous money flow. No stock market exchange in the world come close to these numbers.

Currencies in the Forex market are traded 24 hours a day 7 days a week. Market literally follows the sun around the world. Trading moves from major banking centers of the United States to Australia and New Zealand, then to the Far East, gets to Europe and finally returns back to the States.

Trading Forex is all about exchanging currencies

Trading on Foreign exchange market simply means buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for currency of another country at the current exchange rates.

Foreign currencies are always traded in pairs - EUR/USD, GBP/USD, EUR/JPY etc ... Around 70% of all transactions made with major currencies like U.S. dollar, Australian Dollar, British Pound, Swiss Franc and Japanese Yen.

Nowadays Forex is available to small investors

While in the past Forex market was not available to small investors ( individuals ) due to large minimum transaction sizes, today Forex brokers are able to break those large sizes into a smaller unit lots and thus offer small investors an opportunity to buy or sell currencies side by side with regular core Forex market investors such as large banks, central banks, multinational corporations, hedge funds and other financial institutions.

Being incompetent in Forex can be expensive

Forex market is huge and plunging into trading without knowing its rules, without knowing "what is Forex" will be equal to swimming in the pool with ocean sharks. The dominant Forex players such as banks and hedge funds have a power to influence market moves and currencies exchange rates. For inexperienced traders investing own money in such game is as risky and uncertain as gambling. It could turn into a million fortune only in a couple of weeks or become a disaster for those who was ignorant in learning.

Forex brokers offer very big leverage to individual investors. A trader can trade at huge leverage as much as 300 to 1, meaning that for every dollar trader puts in for trading he can trade $300.

For example, having an account equal to $1,000 trader can trade as much as $300,000.It is a huge opportunity, but it also is very dangerous. No experienced trader will ever trade with such big leverage unless he has a really strong argument for a particular trade, and even after that it is an enormous risk.

Is trading Forex profitable ?

Trading in the Forex market is profitable, but only for 5% out of all beginner traders who start trading Forex. New traders need to learn the basics of trading well, and practice a lot on demo accounts before going real.

Like in every business, when trading money in Forex, trader gets paid depending on his knowledge and trading experience.

Good Luck !
To Your Trading Success

Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore