Investors Return to Emerging Markets

In the last few weeks, investors have waded cautiously back into emerging markets. Spurred in part by the Obama economic stimulus plan and pending US investment in Citigroup, investors have evidently been persuaded to take on more risk. The Japanese Yen, accordingly, has already begun to beat a retreat from the highs it reached earlier this year. If this trend continues, the US Dollar could become the next “victim.” On the other side of the equation are currencies such as the South African Rand, which have benefited from a renewed interest in yield, as well as increased monetary stability driven by lower inflation. Ultimately, this movement of capital can just as easily reverse itself, which it no doubt will at the next economic hiccup. Bloomberg News reports:“There is a little more risk appetite,” said..an analyst. “The rand is being driven by offshore sentiment.”

Asia Forms Forex Pool

After nearly six months of currency depreciation, the nations of Asia have finally been spurred to action. Japan, China, and South Korea have joined together with the 10 ASEAN economies to form a $120 Billion pool of foreign exchange reserves, which contributors can tap into to protect their currencies. The goal is to prevent capital flight and currency weakness from engendering the same kind of financial crisis that only 10 years ago ravaged Asia. Fortunately, this time around, the 13 countries possess a combined $3.6 Trillion in reserves, which can be deployed in forex and securities markets in order to restore investor confidence. Ironically, the bulk of these reserves belong to China and Japan (who are also funding a large portion of the forex pool), both of whose currencies remain strong in spite of the crisis. Bloomberg News reports:The fund is aimed at ensuring central banks have enough to shield their currencies from speculative attacks such as those that depleted the reserves of Indonesia, Thailand and South Korea during the 1997-1998 financial crisis.

Forex is a Zero-Sum Game

I recently stumbled across an article that argued that forex trading is not a zero-sum game. The author is (unwittingly) correct in his conclusion, although not in his reasoning that it is possible for a trade to produce two winners. The conclusion verged on truth only because after accounting for broker commissions (i.e. the bid/ask spread), forex trading is actually a negative-sum game. It is important to recognize that the nature of forex is such that all currencies cannot simultaneously appreciate, and hence, every trade involves a winning party and a losing party. Even if all parties manage to break even over the long run, the existence of spreads and commissions ensures a long-term average return that is negative. This does not mean that it is impossible to to profit in forex, but rather that the profits of the winners are underwritten by the losers. While one cannot expect to always occupy the winning side, there are steps that can be taken to minimize being on the losing side. Admittedly this is vague; the idea here is simply that it’s vitally important to be well-informed when investing in forex so as to enter and exit trades only at levels that are “fundamentally” sound.

Will Mexican Peso Crisis of 1994 repeat itself? (Forex Trading)

Having risen to a six-year high against the Dollar in late 2008, the Mexican Peso seemed to have firmly distanced itself from the devastating financial and economic crisis suffered in the early 1990’s. However, all of the factors that were blamed for the earlier crisis have since re-emerged, leading some analysts to question whether a repeat is possible. According to a report published by the Atlanta Fed shortly after the 1994 crisis:The main fly in the ointment was Mexico’s current account deficit, which ballooned from $6 billion in 1989 to $15 billion in 1991 and to more than $20 billion in 1992 and 1993. To some extent, the current account deficit was a favorable development, reflecting the capital inflow stimulated by Mexican policy reforms. However, the large size of the deficit led some observers to worry that the peso was becoming overvalued, a circumstance that could discourage exports, stimulate imports, and lead eventually to a crisis.Sound familiar? A future (hypothetical) report that follows the looming currency crisis will likely point to a similar inflow of speculative capital and a surging current account deficit, which has reached the highest level since 2000. Given that “the size of the deficit may more than double this year as industrial production, foreign direct investment and money transfers from abroad continue to fall,” the likelihood of peso devaluation is rising, regardless of how low the currency has already fallen. On the one hand, Mexico’s response to the weakened Peso is promising. With the blessing of the US (which played a prominent role in the 1994 crisis), the Central Bank of Mexico has injected Billions of Dollars directly into the forex market, so as to keep up the facade that everything is under control. At the same time, it hasn’t lowered interest rates nearly to the extent of some of its peers, in order to guard against inflation and appeal to investors with comparatively attractive yields. Unfortunately, there are a couple reasons why both prongs of this strategy will backfire. On the monetary policy side of the equation, investors would actually prefer steeper interest rate cuts. The carry trade is functionally dead, and investors are now primarily concerned with the risk of deflation, which only becomes more likely as a result of higher interest rates. In other words, the consensus is that the Central Bank should stop griping about inflation, and focus instead on stimulating aggregate demand, since the Mexican economy is especially vulnerable due its dependence on (oil) exports to the US. The Central Bank is also likely to fail in its efforts to directly prop up the Peso, because of the tide of speculators betting against it. To quote the same Atlanta Fed report:A sudden shift of funds out of a currency is called a speculative attack in the economics literature…Rather than waiting for the central bank’s reserves to run out through a gradual process of current account deficits, speculators who realize that a devaluation is inevitable will attack the currency through massive capital outflows as soon as they command enough resources to force a devaluation.Most analysts have since turned bearish on Mexico, which means the fall of the Peso has become self-fulfilling. Check out the Mexican Peso ETF (FXM), which represents a simple and effective way to bet against (or for, for all of the contrarians out there) the Peso

Spike in Eastern Europe is Short-Lived (forex)

Last week, the currencies of Eastern Europe (Hungary, Poland, Czech Republic, etc.) received a nice bump from the announcement of a $25 Billion loan from several multilateral banks, as well as from a slight pickup in risk aversion. The sense of optimism proved to be short-lived, however, as the EU recently rejected a request to provide large scale ($200 Billion+) assistance to the the region. The swift and decisive refusal to intervene injected a fresh wave of uncertainty into a region that is already among the hardest-hit from the credit crisis. The move also carried important political implications, conveying that the EU still sees a clear distinction between eastern and western Europe. Bloomberg News reports:Growth in Poland, the biggest eastern European economy, will slow to 2 percent, the slackest pace since 2002, the European Commission forecasts. Latvia, a former Soviet republic, will contract 6.9 percent.

Forex Achieves New Prominence

The credit crisis has resulted in a collapse in prices for nearly every type of investable asset class (i.e. stocks, bonds, commodities, real estate)- with the notable exception of one: currencies. Of course, this is an inherent quality of forex: a rise in one currency must necessarily be offset by a fall in another currency. While you are probably rolling your eye at the obviousness of this observation, it is still worthwhile to make because it implies that there is always a bull market in forex. Accordingly, capital from both institutions and retail investors continues to pour in, causing daily turnover to surge by 41% (according to one survey), which would imply a total of $4.5 Trillion per day!Investment banks, especially, are trying to increase their forex business in order to compensate for a decline in other divisions. Said one representative: ”We have probably made more of an aggressive leapfrog in growing our revenue base, which has virtually doubled in 2008 versus 2007. With the situation that has been developing over the past six months, where banks are clearly re-embarking on a new role leading back to basics, foreign exchange has to be one of the products that tops that list.” Based on New York data, which generally reflects global forex activity, transactions between the Dollar, Euro, and Yen (i.e. not including outside currencies) now account for more than half of the total.Contrary to popular belief, however, most foreign exchange transactions involve derivatives, rather than spot trades. In the case of swaps, it is the nominal value of the swap that is reported, which well exceeds the total amount of currency that is exchanged, and thus results in an inflated estimate of total daily turnover. One would expect that the increase in both liquidity and the role of derivatives in forex markets would result in a corresponding decrease in volatility. Of course, this is quickly belied by the turbulence of the last six months, in which many currency pairs set daily, weekly, and/or monthly records for swings and volatility. I recently read an article about so-called “predictive markets,” which use a grassroots approach to make forecasts by “by giving people virtual trading accounts that allow them to buy and sell “shares” that correspond to a particular outcome. Shares in an outcome that is considered more likely to occur then trade at a higher price than those that represent a less likely outcome.” Given that the “experts” are almost invariably wrong, I think this idea has tremendous potential to make forex markets even more transparent.

Dave Knaack Says about forex

Regarding fractional reserve lending. After spending lots of time reading about how banking systems work (including lots of really dry stuff like international settlement systems) I’ve come to the conclusion that fractional reserve practices fill critically important and likely delicate roles in highly interconnected and critical global systems and that leading the charge to change those rules would be tilting at windmills. This is not the sort of problem where we should write a new system, reinstall and reboot.We should instead address one of the major flaws of the system, the accumulation of debt in excess of the money supply (think of it as an in-memory patch).Perhaps this issue could be solved with by tasking the Treasury with issuing into circulation of non-debt dollars in a quantity equal to the interest paid for each reporting period (quarterly I’d suppose).I’m not convinced that the ‘boom and bust’ cycle is solely the result of Fed control of the monetary system (seems to me that complex social factors probably also play in important role; consider the development of CDOs and MBSs), or that it is /necessarily/ a bad thing. Booms encourage and enable new ideas (lots of money available results in funding of wild and harebrained ideas that just might work but that wouldn’t be able to pay off in an environment of higher interest rates one would expect in a completely stable economy), and busts weed out marginal or weak practices (the harebrained ideas). The cycle (provided it describes mild recessions rather than Great Depressions) may help to prevent stagnation.What is bad is that in conjunction with the current practice of creating only principle rather than principle+interest the system can be managed to (or perhaps must) cause an accumulation of debt obligation toward the entities permitted to practice fractional reserve lending.Perhaps we can greatly improve the system simply by causing to exist each quarter all the money required to pay off the interest on loans. This would begin the injection of credit money into the system with minimal impact on business.

Paul Monroe Says about Forex

The honest truth is that our banking system and money itself is a complete mystery to most Americans - myself included up until about a year ago. Although I have done a good bit of reading on the monetary issue, it is still a very confusing subject full of overlapping jargon and complex systems.I think that criticism of fractional reserve banking is certainly fair when it is practiced under a central bank on the basis of a purely “paper” currency. If I was to loan out money to others, and charge interest, by writing checks for money that I did not have, I would be charged with fraud. Even if I had $10 in the bank, I would still be committing fraud by writing checks for $100 and exchanging them with you for the promise of repayment plus interest.Yet this is precisely what banks do every day. They make loans to individuals using money they do not have. Well, how do they make the loans? They simply create the new money on the spot by typing on the computer and updating the size of your account.The unfairness is that 1) the government essentially mandates that we can only use Federal Reserve Notes as currency and 2) the government mandates that only institutions which are part of the Federal Reserve banking cartel can create this commodity. Such is not the case with gold. Gold is not valuable because the government says so, and no one has an exclusive legal right (or physical ability) to conjure gold out of nothing. Hence, fractional reserve banking - where only a portion of your liabilities are backed by reserves of currency - is immoral primarily because it rests upon a legal monopoly given to and benefiting the banks of the Federal Reserve system.On the other hand, I’m inclined to believe that fractional reserve banking - in a true free market monetary system (free banking system) - would not be immoral or even necessarily dangerous. In such a system, the currency would most likely be gold, silver, or even potentially shares of a basket of commodities… whatever consumers and producers conclude, in aggregate, is the most stable/flexible/desirable basis for a medium of exchange in trade. Banks, then, would provide the services of 1) storing money 2) providing bank notes (paper or electronic) to facilitate economic transactions and 3) issuing loans.Currently, you can go to a bank and exchange a Federal Reserve note for just another Federal Reserve note. Under a free market system, no one would accept such a currency that had no intrinsic value (unless it is an extremely well-established social norm/tradition - like pacific island cultures that used round stones with holes in the middle as money), instead they would demand something of actual value in return that they could then trade with others. Banks would have vaults of gold (or other commodities perhaps), but to facilitate transactions they would issue private notes which are essential mini-contractual obligations to exchange the note for real currency on demand.These notes, like Federal Reserve notes, would be used in trade. People would only accept them, however, if they believed the bank was sound, and that the probability that the notes would be redeemed on demand was certain. This would provide an incentive for banks to behave more cautiously and to show the public proof of their soundness. This contrasts with our current system in which default FDIC insurance discourages consumers from caring about the financial status of their bank.At the same time, such a system would allow banks to engage in fractional reserve banking. By issuing loans in their own private bank notes, they would be able to create more notes (contracts guaranteeing the exchange of the note for real currency) than actual currency in their reserves. The question is, would this be immoral? I don’t think so.First, under a free market system, anyone would be free to establish such a bank and issue notes. Membership in a central banking cartel would not be enforced by law - the system would be completely voluntary. Banks may exist which use 100% reserve ratios, and if you did not trust using a fractional reserve bank’s notes, you could turn to alternatives. Secondly, the entire system would be on the basis of contract. No one would be living under the pretense that the notes are actual money, as we do today. Although banks would be issuing contracts that they know, under certain conditions, they would not be able to deliver on (assume a huge bank run, or theft of the reserves), such contracts are made every day by businesses who know that, under rare or extreme circumstances, they will not be able to fulfill (hurricane, theft, etc).If a bank issues notes and is aware of a substantial risk that it will be unable to perform the contract, or should have been aware of that fact, or if it issues them knowing for certain that they will not fulfill it - the role of the government is to punish them for fraud. Even still, it would against the bank’s own interest to create too many notes since the danger of insolvency in a free market would not be accompanied by the subtle guarantee of a government bailout as it is today.In conclusion, as supply and demand for money changes (in both actual form and in contractual note form), only a free market monetary system would be able to react appropriately. Like all commodities such as lamps, canned soup, or iron ore, money must be left to the free market.I realize this is quite a lengthy post, but I think that the subject is absolutely fascinating. Thank you B.J. for providing a place for discussion of these important and often-ignored issues.

A Short Stack of Lies and Half-Truths from the Wall Street Journal About forex

I’m grateful that Dr. Tom DiLorenzo, professor of economics at Loyola College, took the time to write a rebuttal to an inexplicably ignorant hit-piece recently published in the Wall Street Journal entitled “A Short Banking History of the United States.”The author of this article, Mr. John Steele Gordon, makes a number of spurious claims in an attempt to discredit the economic philosophy of sound money controlled by the people, and defend Alexander Hamilton’s loyalty to banking interests in the drive to create a private central bank to own our money supply.Beneath Mr. Gordon’s flowery rhetoric, however, is a profound ignorance of a fundamental problem in our money and banking system: fractional reserve lending. As I noted in an article last August, this ignorance in the mainstream media is nothing new, and par for the Once you understand the root of the problem, namely that banks are given a monopoly on the ability to create money out of nothing based solely out of someone’s promise to pay it back with interest, the tragic absurdity of our current situation becomes clearI’m especially grateful, though, for Dr. DiLorenzo’s rebuttal that puts Mr. Gordon’s revisionist history in the proper context:The system of financial regulatory dictatorship that Gordon praises, and which is about to be forced down the throats of the American public, has been tried before in other countries. During one of its own periodic financial crises, Italian government officials complained bitterly, as Gordon does, of regulation that has been “disorganic” and “case by case, as the need arises.” The Italian regime altered its regulatory system so that it could pursue “certain fixed objectives,” just as Gordon argues for a “unified and coherent regulatory system.” This highly centralized or even dictatorial regulatory system, the Italians argued, would supposedly “introduce order in the economic field” and achieve the goal of “unity of aim” with regard to government regulation of industry.All of the words in quotation marks in the preceding paragraph, except for the last ones, are the words of Benito Mussolini. The “unity of aim” phrase was from Mussolini apologist/propagandist Fausto Pitigliani. There is, after all, a very keen similarity between Hamiltonian mercantilism — or an economy directed and controlled by government, supposedly “in the public interest” but in reality for the benefit of a privileged few — and the economic fascism of Italy (and Germany) of the 1920s and ’30s.I encourage you to read the rest of Dr. DiLorenzo’s article, and to evaluate the credentials of those who praise our Federal Reserve and banking system carefully — including my opponent. As with many corporate interests in Washington, the fox has been left guarding the henhouse.Once you’ve read the explanations of how banking works, you’ll really enjoy the below cartoon (from Sinfest) that beautifully explains the bailout in action

Forex news-What is Ulcer Index or UI?

Ulcer index or UI is a popular indicator which shows the riskiness of an investment. The indicator was developed by Peter G. Martin and Byron B. McCann and was published in 1989 in the book “The Investors Guide to Fidelity Funds”. Ulcer index is mainly used by traders to measure short-term risk associated with an instrument; stock, index, funds or commodities.Ulcer index differs from standard deviation and from other risk indicators in considering only the downside volatility. The idea is that, from a trader point of view only the downside risk is to be considered; as upside volatility usually favors the stock holder. Ulcer value for an investment is calculated by the formulaWhere R is the percentage drop of closing prices calculated asR = 100 x (Price –highest price)/ highest price.High values of ulcer index shows high risk associated with an instrument and if the instrument drops in price, it can take a long time to recover. Thus these kinds of instruments are not suitable for traders looking for short-term profits or who are trading on risk-capital. Most traders use 14-day ulcer index for technical analysis. Traders can also set a safe ulcer level (eg: at 5) for screening stocks, and can use the index for comparing two or more related stocks (same industry or section) and to trade the most suited ones. Remember ulcer level does not consider any upward movements and it drops with it

Weekly Forex Market Newsletter, 2 March 2009

The Week Ahead: The GDP slipped 6.2% last quarter. Taxpayers now own 36% of Citigroup with the government's $25 billion conversion of preferred stock to common. General Electric cut its dividend and consumer sentiment dropped again in February. An assortment of economic reports to contend with include personal income and construction spending on Monday, auto sales on Tuesday, factory orders on Thursday, and another worrisome unemployment report on Friday. Also, watch Ben Bernanke's testimony to Congress on Wednesday.Stocks to Watch: Standard & Poors cut counter party credit and financial strength ratings on life insurance companies including Lincoln Financial (LNC) Conseco (CNO), and Protective Life Corp. (PL). Shares of Republic Services (RSG) fell to a multi-month low after a Q4 loss was attributed to the cost of acquiring Allied Waste Corp. A 50% cut in the dividend of Packaging Corp. of America (PKG) was blamed for the stocks drop to 9 year lows. Shares of Petrohawk Energy (HK) were hit on news of a planned 22 million share offering.Special Note: The Dow Industrials are poised to reach the 6000's for the first time since 1997 on news the government will inject $30 billion in a revised bailout into the "too big to fail" American International Group which is now a penny stock and a former member of the DOW just last year. It seems the markets are building a head of steam to the downside in what could be a washout low later this month or April. If this occurs, the major indexes are poised for there biggest bounce since the peak in '07.Commentary provided by Barry ward, Registered Principal, NobleTrading.com, Inc.

Hedging Against Trading Portfolio Risks

Hedging is one of the most commonly used financial words which denote any practice to reduce or remove future loss associated with an investment or instrument. Hedging is like insurance; actually insurance is also a hedge. Today one can hedge against almost all type of future losses including disasters, market volatility, robbery, inflation, interest rate changes, and more. Hedging do not stop these events from happening but enables a person to reduce the effect (loss) of the events.From a trader or investor point of view, hedging is trading or investing in instruments with negative correlations; i.e. if one goes up then the other goes down. Usually, stock traders hedge their portfolio risks by using derivatives – futures and options.Futures are the most widely used hedging method; mostly practiced by institutional traders, companies and other big players of the market. Futures can be used for both short and long-term hedging. Futures allow the holder to buy or sell the underlying product at a set price at a future time. Thus if the stock that one is holding is likely to go down, he can trade a futures contract to sell the stock for a fixed price (around current market price) to hedge his loss.Options are flexible (also can be complex) instruments which are very good hedging instruments for retail traders. Options allow the trader the option to buy or sell the underlying product at a set price at future time; remember there is no obligation.Hedging includes costs and precise market timings; and it as it reduces your risks, it also reduces the return. Most retail traders in their trading life do not practice hedging. They let their investments to grow/fall with the market. But it is worthy to learn various hedging practices, its effects, and its advantages and disadvantages.

Forex Trading with Gann Fans

Gann Fans, developed by Gann, are one of the most widely used tools by Gann himself to exploit the relationship between price and time. Gann fans derive their existence from Gann angles, there are 9 major Gann angles and 1 x 1 or 45 degree angle is the single most important one. Know more about Gann Angles. Gann fans are used by traders to find support and resistance levels, trend changes and major price-time junctions.Gann fans are plotted over charts; from recent peaks or bottoms. The chart should have same unit in X and Y axis; in other words consistency of unit is important. Lines of various lines (at 82.5, 75, 71.25, 63.75, 45, 26.25, 18.75, 15 and 7.5 degrees) are plotted. When ever the price moves above a line, the instrument is in upward trend and whenever the price moves below a line, the instrument is in downward trend. The lines serve as immediate support and resistance levels. Trend changes are indicated when a line is crossed and new trends are identified when price cross another line. When one line is broken prices then fall/rise to next nearest line.In most cases Gann fans serve the function of trend lines and Fibonacci fans. Traders can enter and exit trades when the lines are broken or prices are at a strong trend (like 1 x 1 line). Price movements in higher degrees indicate swift price movements. Gann fans offer better results when used in conjunction with other trend and volume indicators.

Rising or Inclining Wedge Formation about Forex

Wedge formations are one of the difficult formations to identify. They look like symmetrical triangle formation but unlike symmetrical triangle they have strong bullish or bearish bias and have slop. Wedge formations can be trend-reversal or trend-continuation patterns which favor long-term traders, as they usually take 2 to 4 months to form. Note that wedge formations have a high failure rate than others.Rising wedge formation has a strong bearish bias. They are considered trend-continuation pattern, when formed after a strong downtrend, and trend-reversal pattern, when formed after an uptrend. Both lines of a rising wedge have upward slops, and the lower line is steeper than the upper one. The highs and lows tend to converge to a point and the break out occurs; in most cases downwards. Volume of trades tends to get lower as the pattern forms and the breakout is noticeable with a significant increase in volume.Rising wedge formations occur when there is high-uncertainty in market and the bulls continuously fail to break the resistance level. The pattern in considered true one if there are two or more reaction highs and lows touching upper resistance and lower support lines. Rising wedge formations are more reliable as trend-continuation formation and traders enter sell orders when the pattern breaks down. Remember, rising wedge formation is considered less reliable when there is no sufficient increase in volume at breakout. The trader should use other indicators to confirm trend changes.

Ease of Movement Indicator

Ease of Movement or EMV is a momentum indicator which shows the relationship between price change and trading volume. Many traders trading stocks, futures and currencies use this indicator to generate buy and sell signals. Ease of Movement indicator was developed by Richard W Arms Jr. and is closely related to Equivolume charts. The formula for calculating EMV isEase of Movement = Mid Point Move / Box RatioWhereMid-point move = Today’s mid point (high + low/2) – Yesterday’s midpointBox Ratio = Volume / (high - low)The daily values of Ease of Movement are then smoothed by using a moving average (often 10 or 14 day).Ease of the movement indicator shows both negative and positive values.High negative values show downtrends with low trading volume. i.e. low volume is required to make a movement.High positive values show uptrends with low trading volume. Again low volume is required to make a movement.Low values (around zero) show corresponding trends with high trading volume indicating accumulation or distribution. Here high volume is required to make a movement.Zero value is generated when there is very high trading volume for very small price changes.Most systems generate buying signals when ease of the movement crosses above zero from below and generate sell signals when it crosses below zero from above. With most other technicals, it is advised to use other indicators and tools to confirm price changes and buy/sell signals.

Weekly Stock Market Letter, 23 February 2009

The Week Ahead: Although the White House continues to favor a privately held banking system, nationalization seems to be gaining the upper hand as many believe this to be inevitable. President Obama will address Congress on Tuesday while Ben Bernanke begins his two day testimony on Capital Hill. The Case Shiller House Price Index is also released. Existing home sales data is out on Wednesday. Durable goods and new home sales data are due by Thursday. Lastly, a preliminary look at the nations GDP for the fourth quarter on Friday will be closely watched.Stocks to Watch: Kindred Healthcare (KND) surprised many by beating EPS estimates and lifting their 2009 target as the stock reached a 4 month high. Cabela's (CAB), the outdoor sporting goods company, also broke strongly to the upside after beating estimates for their Q4. Actuant (ATU) shares fell because preliminary Q2 sales will be off by 23%. Tim Horton's (THI), the Canadian retaurant chain, boosted its quarterly dividend by 10 cents after releasing its Q4 results. Morningstar (MORN) came in light on their Q4 EPS and the stock fell about 14%.Special Note: The Dow Industrials are leading the market lower as it reached its lowest level since October 2002 and joined the Dow Transports in breaking last November's low. It's possible that some form of nationalization of the major banks could be the catalyzing event that would produce a more lasting low in the major indexes since the peak in October 2007 but at what level? All the major indexes are currently below their 20 year MA and long term charts indicate the 30 year moving averages at 5800, 675, and 1200 on the DJIA, S&P 500, and Nasdaq respectively.Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

Forex 24 Hours Access to the World

Select the forex market, select the time, and start trading. The massive liquidity of forex, combined with a true 24-hour forex market that's traded 5.5 days a week, offers you exceptional independence and forex currency trading when you want to, not when the market wants you to. The forex market literally follows the sun around the world, moving from major banking and financial centers of the United States to Australia and New Zealand to the Far East, to Europe and finally back to the United States.During each trading day, overall foreign currency trading volume is determined by what markets are open and the times each of these markets overlap one another. With each passing second, minute and hour, forex currency trading volume remains high, but peaks highest when the British, European and U.S. markets are open at the same time - from 1 p.m. GMT to 4 p.m. GMT. The volume of the Pacific Rim markets, such as Japan and Hong Kong, subsides compared to the crest of the U.S. market, but still offer the forex trader the ability to analyze the highly traded Pacific Rim currencies.

What is Mini Forex Account

Rapid and fair trade execution. Market orders are confirmed within seconds at prices clicked on or accepted by the client. Furthermore, GCI has a "zero slippage guarantee" for all Forex Stop and Entry Stop orders that are placed at least one minute before the market reaches your specified price.Zero commissions for all accounts. Client trading performance is enhanced by eliminating all commissions.State-of-the-art trading software. The GCI trading software provides real-time prices in 23 major currencies, 5 equity indices, plus gold, silver, and crude oil. Live charts, and real-time P&L and account equity tracking are fully integrated into the free software. Windows-based and Java-based versions are available

What is Forex (Foreign Exchange)?

Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets.

Buying and Selling in Foreign Exchange Market | ForexGen

In the foreign exchaneg markets , currencies are always priced and traded in pairs. Yousimultaneously buy one currency and sell another, but you can determine whichpair of currencies you wish to trade. For example, if you believe the value ofthe euro is going to increase vis-á-vis the U.S. Dollar, then you would go longon EUR/USD instrument (curency pair). Obviously, the objective of foreign exchange currencies trading isto exchange one currency for another in the expectation that the foreign exchangemarket rate or price will change so that the currency you bought has increasedits value relative to the one you sold. If you have bought a currency and theprice appreciates in value, then you must sell the currency back in order tolock in the profit. An open trade or position is one in which a trader haseither bought / sold one curency pair and has not sold / bought back the equivalent amount to effectivelyclose the position.

Forex Economic Indicators

The execution of fundamental analysis in the Forex market is done through the use of economic indicators. These indicators point to the state of some economical factors in the country whose currency you wish to trade with.Economic indicators are published by various sections of the government and private companies. These statistics are analyzed by market investors to predict the direction of the Forex trading market. Forex economic indicators are published at fixed time intervals, and are followed by any serious online Forex trader.Since so many people are tuned to use them, Forex economic indicators have a large impact on prices of currencies of the Forex trading market. Most traders do not use fundamental analysis because economic indicators seem difficult. This however is wrong because following simple guides can help you stay updated with the important Forex economic indicators easily

Euro Forex Trading Tips

Learn to identify trends and trading opportunities with the euro. See and discuss important chart patterns and current events with a euro trader.Learn the best time to trade the euro. Learn how to anticipate movements and confirm trends in the euro. Discuss what’s happening in the euro today with a Power Course instructor.DailyFX+ Live11:00 am EST (16:00 GMT) and 7:00 pm EST (00:00 GMT)Experience the power of DailyFX+ in a live video walkthrough!Discuss current market movements. Discuss the day's price action. Identify signals for immediate trading. How to use DailyFX+ to find trades

Forex Consumer Price Index (CPI)

This Forex trading economic indicator is published by the Bureau of labor statistics in the U.S. Department of Labor, every 13th of a month. The economic index is relevant for the passing month, and measures the price of a fixed basket of goods and services that is bought by consumers. This is the most used measure of inflation, an important tool for the Forex trading market.It is important to state that this Forex economic indicator does not measure technological commodities which change in price, and this is something the CPI has been criticized for.When you use the CPI to measure Forex trading price changes, you should always remember to take into consideration the movements in the food and energy prices, because they can change and rise or drop regardless of the Forex currency or the inflation levels

Managed Forex Account Form

Fill out the managed forex account form below to receive more information about professionally managed currency accounts. If you want to participate in the world of forex trading by hiring a professional manager, this program is for you. The strategy of the managed forex fund involves the use of only the major foreign currencies. The minimum initial investment for the managed forex account program is US$10,000. Please fill out the managed forex account form below in its entirety. We will only respond to serious inquiries.

Managed Forex Account Form

Fill out the managed forex account form below to receive more information about professionally managed currency accounts. If you want to participate in the world of forex trading by hiring a professional manager, this program is for you. The strategy of the managed forex fund involves the use of only the major foreign currencies. The minimum initial investment for the managed forex account program is US$10,000. Please fill out the managed forex account form below in its entirety. We will only respond to serious inquiries.

Forex Trading The Mindset to Win

Today in there have been so most sites that will prove letter of reference on successive in the Forex marketplace as good as the small will have the small unquestionably playmate statements, how to have the billion dollars trade Forex etc. Will prove out to you that the biggest adversary you face is not the marketplace itself, yet rsther than your own emotions. Emotions have been still often the inadequacy in in between success as good as failure. One vicious statistic is that 95% of traders will go broke, as good as this has the lot to do with the regretful psychology of those traders. This is constant in usually about any arise up that involves financial risk. It is unquestionably not all that conflicting from enactment the facile diversion of poker. If you proceed out being aroused of losing thereafter it is some-more approaching you have been starting to lose. People that have the most suitable solitaire rummy face lend towards to win poker.

Forex Mini Accounts are Perfect for New Traders

With a Forex mini account you can expect low minimum deposits of as little as $100 which can usually be deposited through bank transfer or Credit Card, sometimes even Debit Cards which is obviously very advantageous.The idea of a Forex mini account is that it allows a new trader to get started in currency trading with small amounts until they gain the confidence, experience and profits to be able to tackle a professional account and make the really big money.To help you do this many mini accounts come packaged with a variety of support tools from simple charting right through to personal 1 to 1 tuition. The software of the mini account is usually very easy to use since its main user is the inexperienced trader and there are usually measures in place to help you manage your trading and avoid any significant losses.A mini Forex account will still offer you good leverages (often up to 200:1) and competitive pip spreads (3-5 is the typical) so you can still make big profits while you learn the fundamentals of trading and work on developing your own Forex strategy.

Forex Trading Using MACD

As I mentioned in one of my previous posts, MACD is one of the very powerful and widely used technical indicator. In fact it is one of the very common indicators used in most of the currency trading system. However, this indicator needs to be used very smartly. Thats because this is a lagging indicator, which means that it gives a trading confirmation after the event has already occured. However, it is more than useful. Still I have found that newbies are not able to understand how to use full advantage of this.

Forex trading at its best when technical indicators work as they shoulg

A trader of currency market gets a lot of pleasure when the technical indicator s/he has analysed works the way analysis said. So, when someone feels that the currency pair should bounce of a fibonacci level or should bounce from EMA, and if that happens, its terrific.The same happenned with AUD/USD. My analsis of this currency pair said that it should bounce from 200 EMA. Spot that happenned in forex day trading..I went in to trade as MACD also crossed up, and made 55 pips. Most of the times I use RSI as the trigger. But this time MACD turned out to be the trigerring indicator.However, still I maintain that the most volatile currency pair is GBP/USD followed by USD/CHF and EUR/USD. They respond to technical indicators very well

Getting earning through Forex Trading

All account will be using a leverage of 200:1. Although the leverage is high, we will have hedging capabilities to help reduce the loss. We can earn in range of 10% to 50% (also applicable to loss) of the account in a month as will be shown in records that will be given to interested clients. The payment is 40% of the profit for every month. If there is no profit made, no payment will be ask. For example, with a standard account of USD5 000, and in that month, we earn 50% which is USD2 500. You will then have to pay us USD1 000, and you will receive USD1 500, and so, you will have USD6 500 in the account. But, the investors should know that loss can still be incurred, and there is no guarantee of profit. So, it is only advisable for people with extra cash to spend, and not people who uses all their savings just to open an account. Trading records for February and March will be given, with a signed agreement stating us as a broker for GCI Financial Ltd. The site is gctrading All clients can monitor their account online, 24/7. The account there will be safe, and we can't withdraw the money that you have deposited there. We as the trader will be given a seperate account password to trade only, with no option to withdraw.

Huge Forex Profits even from Small Investments

Historically, traders would need several thousands of dollars to be able to trade. Thanks to the ever increasing competitive nature of currency trading online this has been reduced so far that an individual can now begin trading a mini Forex account with as little as $25. With the often huge leverages on offer even such a small amount can produce considerable returns.Forex trading is forever increasing in popularity due to the many benefits it offers and more and more trading resources becoming available online. The Internet is a wonderful thing and when you combine it with the magic of Forex trading you suddenly have an amazing and exciting hobby or profession right in front of you