Secret To Trading Success

While everyone is virtually welcome to join the Forex market, profiting from it cannot be accomplished by all traders. There are a number of ingredients that contribute to the success of a trader in the Forex industry. Effort and time must be devoted to Forex trading - and strategies must be employed.
Below is some opinion to be a success Trader on Forex Market.
1) Forex trader’s understanding of support and resistance, two of the most common concepts in the Forex market.
2) Choose currency pairs involving U.S. dollar (has volume to produce the price fluctuations necessary for big profits and the liquidity to enter/exit positions at will).
3) Find currency pair through backtesting that has most profit potential (pip movement) and least volatility through use of technical analysis.
4) After determining trends, set stops and exit points for both protection and maximum profitability.

New Forex Trader

However, what the sad statistics bear out is that over half of all new Forex traders lose their money within a year. The foreign exchange market is seeing a lot of hype right now, and too many people are signing on in the hopes of making a quick buck. Forex is simply not that easy, though, and it is certainly not a get rich quick scheme for the average person

Investment for Retirement

Retirement may be a long way off for you – or it might be right around the corner. No matter how near or far it is, you’ve absolutely got to start saving for it now. However, saving for retirement isn’t what it used to be with the increase in cost of living and the instability of social security. You have to invest for your retirement, as opposed to saving for it!
Let’s start by taking a look at the retirement plan offered by your company. Once upon a time, these plans were quite sound. However, after the Enron upset and all that followed, people aren’t as secure in their company retirement plans anymore. If you choose not to invest in your company’s retirement plan, you do have other options.
First, you can invest in stocks, bonds, mutual funds, certificates of deposit, and money market accounts. You do not have to state to anybody that the returns on these investments are to be used for retirement. Just simply let your money grow overtime, and when certain investments reach their maturity, reinvest them and continue to let your money grow.

About the Citi Announcement

From IBD:But Citi has an operating profit so far in 2009 — excluding likely write-downs and loan loss provisions — CEO Vikram Pandit said in an internal memo to staff Monday."I am most encouraged with the strength of our business so far in 2009," he wrote. "We are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007."They forgot to add the phrase "sucker" to the internal memo. For the last few weeks markets have been dying to hear good news -- any good news. However, trusting anyone involved with a financial firm is stupid beyond belief.But Wall Street has learned to distrust claims of financial health. The CEOs of mortgage finance giants Freddie Mac (FRE) and Fannie Mae (FNM) expressed confidence in their firms' viability before they were taken into receivership. Lehman Bros.' CEO gave similar assurances before the investment bank went bankrupt last year."One of the questions investors have is transparency. How much information are they telling me and what's the validity of the information," said Kris Niswander, associate director at SNL Financial.Let's just say I'll believe it when I see it.

Bernanke Calls For Sweeping Changes

From Bloomberg:Federal Reserve Chairman Ben S. Bernanke urged a sweeping overhaul of U.S. financial regulations in an effort to smooth out the boom-and-bust cycles in financial markets.“We should review regulatory policies and accounting rules to ensure that they do not induce excessive” swings in the financial system and economy, the central bank chief said today in remarks prepared for an address to the Council on Foreign Relations in Washington.Bernanke recommended that lawmakers and supervisors rethink everything from the amounts firms set aside against potential trading losses and deposit-insurance fees to protections for money-market funds. His remarks reflect a judgment that the U.S., just like emerging-market nations in the past, failed to properly manage a flood of capital over the past decade and a half.Bernanke also reiterated his call for an agency to take on overarching responsibility for financial stability. While he didn’t specify which regulator should take that job, he noted that the Fed was first formed to address banking panics and said the initiative would “require” some role for the central bank.Congress and the Obama administration are embarking on the broadest revamp of the oversight of U.S. finance since the Great Depression. Bernanke’s speech marks the Fed’s contribution to the policy debate.Gee -- y think?

CHINESE BOUGHT MORE CARS THAN AMERICANS. TNR.v, CZX.v, FXI, CDNX, WLC.v, AUY,

As worldwide car sales drop like a rock, interesting things are now showing up in the statistics. It is not what you are but where you stand, relative to others. This month, China just passed a new road sign: more cars were sold in China than in the US. This is very important: we no longer control world consumer markets. It is moving East. Japan refused to be a world market and looked only to enrich the top 10% so Japanese car sales have been declining for a decade or more. But with the massive Chinese population indulging in this, it means the fall of world oil prices will cease and the US will begin seriously competing with the Chinese for gasoline.Bloomberg.com: WorldwideGM’s 53% U.S. Sales Decline Leads Industry’s February PlungeGeneral Motors Corp., surviving with federal loans, said its February U.S. sales plummeted 53 percent as the recession pushed industrywide purchases toward the lowest in almost three decades.Sales tumbled 48 percent for Ford Motor Co., 40 percent for Toyota Motor Corp., 38 percent for Honda Motor Co. and 37 percent for Nissan Motor Co. GM said it plans to build 34 percent

Anecdotal Job Market Information

Mr$. Bonddad is the HR director and an architectural firm in Houston.1.) Last Friday she went to a recruiter event at an architectural school. Last year there were 26 firms; this year there were 6. And none of them were hiring.2.) Her firm recently placed an advertisement from an administrative assistance. Last year she would have received between 50 and 100 resumes. This year she received 700.This is one person's experience in a large city. But

How to Profit From Volatility in the Forex Market?

Most retail forex traders only know how to place directional trades, and miss the chance to profit on volatility.Everyday there are economic data from US, UK or Europe, namely Non-farm payroll, New Homes Sales, Unemployment, Personal Income, CPI, PPI etc; some of these datas can move the forex market rather wildly. So to trade volatility is the best strategy for days like that.Two ways you can profit from volatility:1. Long strangleLong strangle involves going long (buying) both a call option and a put option of the same underlying security. The owner of a long strangle makes a profit if the underlying price moves a long way from the current price, either above or below.2. Buy Out in binary option tradingBuy Out in binary option trading is similar to long strangle. In the binary trading platform, traders can choose to bet that a particular currency pair is going to close of the range by the expiration time of the contract. Sounds complicated?

Forex Glossary

• Appreciation

An increase in the value of a currency.
• Ask

The price requested by the trader. This usually indicates the lowest price a seller will accept.
• Base currency

The currency that the investor buys or sells (i.e. EUR in EURUSD).
• Bear
Someone who believes prices are heading down. A bear market is one in which there has been a sustained fall in prices and which does not look like it will recover quickly.
• Bid
The price offered by the trader. This usually indicates the highest price a purchaser will pay.
• Bid/Ask
The Bid rate is the rate at which you can sell. The Ask (or offer) rate is the rate at which you can buy.
• Bull
Someone who is optimistic about the market. A bull market is characterised by enthusiastic and sustained buying.
• cross
When trading with currencies, the investor buys one currency with another. These two currencies form the cross: for example, EURUSD.
• Cross rate
An exchange rate that is calculated from two other exchange rates.
• Depreciation/decline
A fall in the value of a currency.
• Exchange rate
What one currency is worth in terms of another, for example the Australian dollar might be worth 58 US cents or 70 yen.Currencies traded freely on foreign-exchange markets have a spot rate (applying to trades settled “spot”, i.e., two working days hence) and a forward rate. Countries can determine their exchange rates in a variety of ways.1. A floating exchange rate system where the currency finds its own level in the market.2. A crawling or flexible peg system which is a combination of an officially fixed rate and frequent small adjustments which in theory work against a build-up of speculation about a revaluation or devaluation.3. A fixed exchange-rate system where the value of the currency is set by the government and/or the central bank.
• EURUSD
Means that you trade EUR against dollars. If you buy euro you pay in dollars and if you sell euro you receive dollars.
• FX, Forex, Foreign Exchange
All names for the transaction of one currency for another, e.g. you buy GBP 100.00 with USD 150.25 or sell USD 150.25 for GBP 100.00.
• Interbank
Short-term (often overnight) borrowing and lending between banks, as distinct from a banks business with their corporate clients or other financial institutions.
• Interest rate differential
The yield spread between two otherwise comparable debt instruments denominated in different currencies.
• Leverage (gearing)
The investor only funds part of the amount traded.
• Long

To buy.
• Long position

A position that increases its value if market prices increase.
• Liquid (-ity)

The capacity to be converted easily and with minimum loss into cash. A liquid market is one in which there is enough activity to satisfy both buyers and sellers. Ultra-short-dated treasury notes are an example of a liquid investment.
• Margin

The deposit required when entering into a position as well as to hold an open position. Your margin status can be monitored in the Account Summary.
• NYSE

The New York Stock Exchange.
• Open position

A position in a currency that has not yet been offset. For example, if you have bought 100,000 USDJPY, you have an open position in USDJPY until you offset it by selling 100,000 USDJPY, thus “closing” the position.
• Over the counter

When trading takes place directly between two parties, rather than on an exchange. Over the counter trades can be customised whereas exchange-traded products are often standardised.
• Pips

A pip is the smallest unit by which a Forex cross price quote changes. So if EURUSD bid is now quoted at 0.9767 and it moves up 2 pips, it will be quoted at 0.9769.
• Position

Traders talk of “taking a position” which simply means buying or selling currency cross. “Position” can also refer to a trader's cash/securities/currencies balance, whether he or she is short of cash, has money to lend, is overbought or oversold in a currency, etc.
• Risk

Trying to control outcomes to a known or predictable range of gains or losses. Risk management involves several steps which begin with a sound understanding of one's business and the exposures or risks that have to be covered to protect the value of that business. Then an assessment should be made of the types of variables that can affect the business and how best to protect against unwelcome outcomes. Consideration must also be given to the preferred risk profile – whether one is risk – averse or fairly aggressive in approach. This also involves deciding which instruments to use to manage risk and whether a natural hedge exists that can be used. Once undertaken, a risk-management strategy should be continually assessed for effectiveness and cost.
• Secondary currency (variable currency or counter currency)

The currency that the investor trades the base currency against (i.e. USD in EURUSD).
• Short position

A position that benefits from a decline in market prices.
• Short

To sell.
• Speculative

Buying and selling in the hope of making a profit, rather than doing so for some fundamental business-related need.
• Spot

A Spot rate is the current market price of an asset.
• Spot market

The part of the market calling for spot settlement of transactions. The precise meaning of “spot” will depend on local custom for a commodity, security or currency. In the UK, US and Australian foreign-exchange markets, “spot” means delivery two working days hence.
• Spread

The difference between the bid and the ask rate.

Trading Scenario – Trading Falling Prices

If, on the other hand, you believe that the euro will weaken against the dollar, you'll want to sell EURUSD.
• You sell euro

We quote EURUSD at a Bid price of 0.9875 and Ask price of 0.9880 and you decide to sell euro 100,000 at a Bid price of 0.9875.
• The market moves in your favour

The euro weakens against the dollar and the EURUSD is now quoted at bid 0.9744 and ask 0.9749.
• Now you buy back your euro

You buy EUR at an ask price of 0.9749.
• Your profit/loss is then

Sell price-buy price x size of trade (0.9875 minus 0.9749) multiplied by 100.000 = USD 1260 Profit
Remember that trading EUR 100,000 as we have done in our examples, does not mean that you have to put up euro 100,000 yourself. On a 2% margin means that you have to deposit 2.0% of euro 100,000, which is euro 2,000 on margin as a guarantee for the future performance of your position.

Trading Scenario – Trading Rising Prices

If you believe that the euro will strengthen against the dollar you'll want to buy euro now and sell it back later at a higher price.• You buy euro We quote EURUSD at Bid 0.9875 and Ask 0.9878, which means that you can sell 1 euro for 0.9875 USD or buy 1 euro for 0.9878 USD.In this example you buy euro 100,000, at the quote price of 0.9878 (ask price) per euro.• The market moves in your favor Later the market turns in favour of the euro and the EURUSD is now quoted at Bid 0.9894 and Ask 0.9896.• Now you sell your euro and get the profit You sell euro at a Bid price of 0.9894.• The profit is calculated as follows Sell price-buy price x size of trade(0.9894 minus 0.9878) multiplied by 100.000 = USD 140 Profit(Note that the profit or loss is always expressed in the secondary currency)

Important Forex Trading Terms

·Spread
The spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.

.Pips
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”. On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.

Australian Dollar

The Swiss Franc is in the same boat as the US Dollar and Japanese Yen, benefiting from an increase in risk aversion and an unwinding of carry trade positions. In other words, the currency rising on the back of the sound monetary policy of the National Bank of Switzerland, with its low rate of inflation and proportionately low interest rate. Despite the fact that the Swiss economy is poised to contract in 2009, its economy is in better shape than its rivals, and its current account balance is still in surplus. As a result, the consensus among analysts is that investors will continue to flock to the Franc, as Switzerland is sill perceived as a relatively low-risk place to invest. Especially compared to the Euro, which has risen against the Dollar of late, the Swiss Franc remains undervalued. Bloomberg News reports:
Investors are drawn to the franc in times of international tension and economic upheaval because of the country’s history of neutrality and political stability

British Pound

Since touching a fresh 24-year low in the beginning of March, the British Pound has recovered strongly, rising 5% against the USD in a matter of days. Analysts are at a loss to explain the sudden strength of the Pound, outside the confines of the safe-haven hypothesis: “The risk premium that sterling has taken on works both ways, and you can see sterling outperforming whenever risk appetite picks up

Canadian Dollar

Having fallen well below parity with the USD, the Canadian Loonie is now being attacked on two fronts. First, there is the deteriorating economic situation. Prices for virtually all commodities, namely oil, have declined significantly this year, dealing a harsh blow to the natural resource-dependent Canadian economy. In addition, its largest trade partner, the US, is suffering from economic woes of its own and is in no position to support the Canadian export sector. The result is surging unemployment and the most precipitous decline in factory production in 25 years. The most optimistic economists are forecasting GDP growth of 0.0% in 2009. The second prong of the attack against the Loonie is being waged unintentionally by the country's Prime Minister, who recently suspended Parliament in order to avoid a no-confidence vote in his leadership. In short, bulls for the Canadian Dollar (not to mention democracy) don't have much to be excited about these days. Bloomberg News reports:
"The global backdrop is bearish for the Canadian dollar and domestic numbers are merely piling on,"said a senior currency strategist. "No one is looking for reasons to buy the Canadian dollar right now. They want reasons to sell."

Central Banks

“China is a hostage. China is America’s bank and America basically says there’s nothing you can do to me. If I go down you don’t get paid.”
While the Obama administration has pledged the kind of fiscal responsibility that would secure its government obligations, its actions haven’t been so responsible. The Fed recently announced purchases of $1 Trillion in government debt, while the government is set to rack up Trillion-Dollar deficits over the next decade, even by the most conservative estimates.
In other words, China is in a quandary; stop lending to the US, and you might see the value of your existing reserves plummet. Continue lending, and you risk the same result. Tired of participating in this apparent no-win situation, China is finally taking action.
First, it will petition the G20 at its upcoming meeting for some level of protection on its $1 Trillion+ “investment” in the US. Meanwhile, Zhou XiaoChuan, governor of the Central Bank of China, has authored a paper calling for a decline in the role that individual currencies play in international trade and finance. According to Mr. Zhou, “Most nations concentrate their assets in those reserve currencies [Dollar, Euro, Yen], which exaggerates the size of flows and makes financial systems overall more volatile.” His point is well-taken, since of the $4.5 Trillion in global foreign exchange reserves that can be identified, perhaps 85% are accounted for by Euros and Dollars alone. When crises occur, everyone flocks to these currencies.

Chinese Yuan (RMB)

Since Chinese Premier Wen Jiabao (as the ForexBlog reported here) expressed doubts about China’s US loans and investments two weeks ago, the markets have been awash in speculation. In hindsight, it seems that the announcement was a political ploy, rather than a harbinger for a policy change. With a few qualifications, therefore, it seems to safe to conclude that China’s foreign exchange reserves will not undergo any serious changes in the near-term.
Motivated both by politics and pragmatism, “China’s top foreign-exchange official said the nation will keep buying Treasuries and endorsed the dollar’s global role. Treasuries form ‘an important element of China’s investment strategy for its foreign-currency reserves,’ she said at a briefing in Beijing today. ‘We will continue this practice.’ ” The economic fortunes of China and the US have become increasingly intertwined over the last decade, such that China has come to depend on exports to the US to drive economic growth, while the US simultaneously depends on China to fund its fiscal and current account deficits. As a result, “about two-thirds of China’s nearly $2 trillion in reserves is parked in dollar assets, primarily U.S. government and other bonds.”

Commentary

Yesterday, both the European Central Bank (ECB) and the Bank of the UK cut their benchmark interest rates to record lows. This is especially incredible in the case of the UK, whose Central Bank over 300 years old! You can see from the following chart that both Central Banks have more than made up for their respectively slow starts in easing monetary policy by effecting several dramatic rate cuts, following the example of the Federal Reserve. The baseline UK rate now stands at .5%, only slightly higher than the Federal Funds rate, and slightly lower than the 1.5% ECB rate.

Economic Indicators

If you read analysts’ coverage of the Dollar decline (and consequent Euro rally), there is an even divide over whether it is sustainable. Economic data and technical indicators paint a nuanced picture, such that this kind of uncertainty is understandable

Emerging Currencies

The Korean Won is among the biggest losers of the credit crisis, excluding Iceland of course. The currency has fallen 40% against the Dollar over the last year, even adjusting for a 10% rise in the last week. South Korean Finance Minister Yoon Jeung-hyun blames currency speculators, pledging that “The government will not sit idle when the foreign exchange rate is excessively tilted toward one direction or when there arePerhaps understanding that it cannot possibly hope to defend its currency against such a broad tide of determined speculators, the Central Bank of Korea has all but given up on intervening in forex markets. “South Korea was the catalyst for the shift away from defensive intervention. After spending 22 percent of foreign reserves from August to November to stem won losses, Yoon…said Feb. 25 that its weakness may be an ‘engine for export growth.’ ” There is some plausibility to this argument, since South Korean economic fundamentals (as bleak as they are) probably don’t support such a precipitous decline in the Won. In fact some South Korean exporters have benefited from the weak currency, with companies such as Hyundai and Samsung growing revenues and increasing market share. Still, the global recession has impelled

foreign consumers to cut back on spending, with the end result that “A double-digit fall in exports in the last three months of 2008 seriously undermined industrial production, [and] a 16% plunge in facility investment was an equally important factor in the 5.6% contraction in Korea’s GDP from the previous quarter.”
Ultimately, the Won’s decline is being driven by an acute shortage of Dollars. A relatively large portion of Korean public and private debt is denominated in foreign currency. The collapse in liquidity spurred by the credit crisis and consequent decline in bank lending have made it very difficult for South Korean borrowers to procure the requisite Dollars to repay their loans, causing a large imbalance in the supply and demand for the Dollar within Korea. Even more alarming is that $150 Billion of such debt will come due in the immediate future. “The government stresses that foreign debt maturing within a year amounts to 77% of its foreign exchange holdings, meaning Korea can cover its obligations. However, no other Asian nation that investors care about has such a high ratio of short-term external debt (on a remaining maturity basis) to foreign exchange reserves.”
South Korea recently extended a swap agreement with the US, which enables it to exchange up to $30 Billion in Won for Dollars. Investors are evidently hopeful that this represents a step towards easing the Dollar shortage, as the news caused the Won to appreciate by the largest margin in months. Borrowing costs for Korean firms remain high, and the odds remain tilted against them. Unless the US financial system stabilizes and/or Korea is able to run a current account surplus (as a result of increased foreign investment), liquidity will remain a problem

Us dollar

China is a hostage. China is America’s bank and America basically says there’s nothing you can do to me. If I go down you don’t get paid.”
While the Obama administration has pledged the kind of fiscal responsibility that would secure its government obligations, its actions haven’t been so responsible. The Fed recently announced purchases of $1 Trillion in government debt, while the government is set to rack up Trillion-Dollar deficits over the next decade, even by the most conservative estimates.
In other words, China is in a quandary; stop lending to the US, and you might see the value of your existing reserves plummet. Continue lending, and you risk the same result. Tired of participating in this apparent no-win situation, China is finally taking action.
First, it will petition the G20 at its upcoming meeting for some level of protection on its $1 Trillion+ “investment” in the US. Meanwhile, Zhou XiaoChuan, governor of the Central Bank of China, has authored a paper calling for a decline in the role that individual currencies play in international trade and finance. According to Mr. Zhou, “Most nations concentrate their assets in those reserve currencies [Dollar, Euro, Yen], which exaggerates the size of flows and makes financial systems overall more volatile.” His point is well-taken, since of the $4.5 Trillion in global foreign exchange reserves that can be identified, perhaps 85% are accounted for by Euros and Dollars alone. When crises occur, everyone flocks to these currencies.

Introduction to Trading Forex

This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as a bull market to better acquaint you with some of the risks and opportunities of the largest and most liquid market in the world

Overview

Foreign exchange, Forex or just FX are all terms used to describe the trading of the world's many currencies. The Forex market is the largest market in the world, with trades amounting to more than USD 3 trillion every day. Most Forex trading is speculative, with only a low percentage of market activity representing governments' and companies' fundamental currency conversion needs.Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the Forex market is a 24-hour market.

Trading Forex

A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD.The most important Forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.

No commissions

The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis. Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.