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Sunday, April 13, 2008

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Some Quick Forex Information

foreign exchange converter

The learning curve for Forex investing is not too steep, but you still must use dilligence when approaching the subject. There are a number of technical issues you must address, and these will take your undivided experience.

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For those interesting in being involved with Forex trading, a basic understanding of how the system works is essential. Understanding both forecasting systems and how they can predict the market trends will help Forex traders be successful with their trading. Most experienced traders and brokers involved with the Forex use a system of both technical and fundamental information when making decisions about the Forex market. When used together, they can provide the trader with invaluable information about where the currency trends are headed.
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Canada has been climbing on the list of the world's oil producers for years, and is currently the ninth largest exporter of oil worldwide. Since the year 2000, Canada has been the largest supplier of oil to the U.S., and has been getting considerable attention from the Chinese market. It's predicted that by 2010, China's import needs for oil will double, and match that of the U.S. by 2030. Currently, Canada is positioned to be the largest exporter of oil to China. This puts Canada's dollar in an excellent position from a trading perspective.

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In short, EUR/GBP and GBP/CHF are leading indicators for EUR/USD and USD/CHF, and GBP/JPY, EUR/JPY and CHF/JPY are leading indicators for USD/JPY. EUR/JPY plays a very important role in EUR/JPY direction too, while GBP/JPY plays the same role for GBP/USD. For example, yesterday?s EUR/USD weakness largely started from EUR/JPY sales keeping EUR/USD and USD/JPY downwards. As a rule of thumb, if EUR/USD does not move but EUR/GBP moves first, it is a good indicator that someone is maneuvering in EUR/USD front in the same direction later, and when EUR/USD moves but EUR/GBP does not move first or in tandem, then it is highly likely EUR/USD move is countered by its opponent and the opposite move is highly likely soon. Same applies in USD/JPY and EUR/JPY, GBP/JPY front in the same fashion. Imho. Good trades.

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European Mid Morning Update 11th April 2008

Fri, 11 Apr 2008 03:59:54 -0400
The market wiles away the hours till dawn doth cometh

Releases from Europe:

March Forecast Actual
German WPI (MoM) +0.5% +1.6%
German WPI (YoY) +6.0% +7.1%

German wholesale prices confirm no let up in inflationary pressures. This is something central bankers say are temporary but have an underlying upward trend that doesn’t look exhausted. The ECB will remain therefore between a rock and a hard place with interest rates set to remain firm for some months to come.

Europe has taken over from Europe and without too much surprise has sold into the overnight recovery in the Dollar. It doesn’t surprise but whether it makes it to yesterday’s lows is doubtful as the market awaits stronger signs from G7.

The following economic releases are due today:

March
U.S. Import Price Index (MoM) +1.9%
U.S. Import Price Index (YoY) 13.6%

April
University of Michigan Confidence 69.0

"The time has come," Paulson said,
"To talk of many things:
Of recession and growth and inflation
Of cabbages and kings
And why the credit market is boiling hot
And whether central bankers have wings."

Stagflation? Who mentioned stagflation?

And the next question is whether the “S” word will be uttered at all at the G7 meeting. To be honest it’s probably a bit early. Maybe not. Already the FOMC is conceding that H1 will see contraction. The IMF forecast the entire year to be soft.

House prices remain soft and inflation remains uncomfortably high. OPEC countries are squeezing every cent they can from dwindling oil resources and farmers are milking the benefits of growing crops to be used as alternative fuels which will keep food prices elevated for some while to come.

So do finance ministers and central bankers really have the resources to control these issues? Clearly not and this reduces their capability to cope with the global economic environment as it stands now. The risks remain high.

And what will G7 say, or perhaps do?

The chance that Juncker’s pressure on President Bush over tea and cakes on Wednesday will actually amount to anything but the usual bland statements is very high. They talk of exchange rates reflecting economic fundamentals but definitions of economic fundamentals can vary between people and institutions. For example, the IMF still feel the Dollar is over valued.

A market is all about whether people want to own something. If they don’t want to own it, then they sell it and the resultant supply and demand causes prices to move. That’s fundamental. A central banker can’t force them to own something they don’t want…

If they suddenly find out they were wrong then the market will adjust very quickly. At the moment there is nothing to suggest that anyone really wants to own Dollars…

Note important support and resistance areas:

USDJPY EURUSD USDCHF GBPUSD
Res: 102.93-25 1.5943-86 1.0125-51 1.9842-48
Res: 102.24-45 1.5860-12 1.0060-90 1.9770-90

Spt: 101.33-58 1.5755-00 0.9933-66 1.9694-04
Spt: 100.72-03 1.5693-24 0.9846-70 1.9605-46

Today's Forex News

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Let's Talk About Forex

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I have been using USD index and Eur/Gbp (or Gbp/Chf) as my guide dogs since late 70?s with reasonable accuracy for medium-term trend. Never lost money on medium-term bet relying on those guide dogs in fact. But that cross does not work when Pound is deliberately devalued.

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I always try to pyramid while position trading medium-term once I am convinced of a new medium-term trend emerging. Like in USD/JPY position trading 135-132 as an initial position, adding in 132 and 129 areas. Same for AUD/USD and EUR/USD with similar strategies. But sitting on positions and watching the counter-rallies costing truck load of money is not easy job to do and causes lots of pain all the time. Most traders even among experienced ones cannot bear that pain and give up too early. But there is no other way to make a big money and we have to bite the bullet and "sit and accumulate" as long as the medium-term trend is intact. That is why I always believe psychological aspects of trading is far more important than anything else in successful trading. A mind game like those bluffing game of poker.

forex chart

Forex charting is not just a tool but also an insight. The secret of successful trading is to take a step back from the market. Trade with the big picture in mind at all times and don't follow the day-to-day market movements that are temporary in nature. Daily market talk can misguide you and sometimes can hypnotize you if you follow it too deeply. You have to see the forest for the trees. That's why you need charting Software that shows you historical trend data as well as current intraday trend data.
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foreign exchange rates

Another thing to keep in mind is that just because you are trading with a minimum marginal deposit does not mean you should trade at levels above your portfolio. The myth that you can get away with this every time is not true. You should not over leverage yourself. By trading in small amounts, you will be able to make safe investments that will not result in huge losses. You will win some and lose some, especially when you are first starting out.
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Your Latest Global Forex News

Forex Video - US Dollar Remains Weak as Consumption Prospects Fade, What Will the G7 Say?

Fri, 11 Apr 2008 21:58:33 -0400
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Global Forex Trading | What Is Forex

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Differences between Spread Betting and Share Trading

Good Differences - Spread Betting Versus Trading

No taxes

Right now, there are no taxes on spread betting profits. No stamp duty, and no capital gains tax if you are fortunate enough to have a gain. This situation could change. The authorities in a number of jurisdictions are studying spread betting with a view to bringing it under the auspices of the same agencies that regulate mainstream investments. When this happens it is reasonable to expect that there will be some political pressure to impose taxes as well.

Going short is the same as going long

Short selling is when a trader takes the view that the market, or a particular stock, is in a downward trend, or the price is about to collapse for some reason. There are a number of mechanisms to allow this belief to be exploited. The most common are short selling of the share, and the purchase of PUT options. Of course, if you already owned the share it is open to you to simply sell it, or if you wanted to retain the stock you could sell covered CALL options.

Where short selling or the purchase of PUT options is contemplated, the trader will immediately come up against a number of obstacles. In order to sell short, the broker must be able to borrow the required number of shares to sell, until such time as the trader decides to close his or her short position and buy them back. This could prove to be difficult. In addition, certain shares will not be eligible for short selling at all. These will be securities that are already at a low price to begin with. In Europe, in particular, many brokers will not allow anyone to sell short.

As far as options are concerned, things are not always equal with regard to PUTs and CALLs. Very often, the most liquid market exists on the CALL side and, while you will not normally have great difficulty in purchasing your PUTs, there could be a problem in finding a market when you want to sell them. You could, of course, keep them to maturity, but this increases the risk.

In spread betting, all other things being equal, there is no difference between playing the long side and the short side, except that in one case you want the price to go up, while in the other you want it to go down.

Bad differences - Spread Betting Versus Trading

Transaction charges

It is often claimed that one of the advantages of spread betting is that there are no transaction charges like there would be if you were to deal with a normal stockbroker. This is true, but in many cases you would actually be better off financially to pay the broker.s charges, because spread betting effectively disguises the charge within the spread. We deal with the whole idea of the spread below.

Finite lifetime of the contract

This is a difficulty that also exists in regard to options, of course. Both spread betting contracts and option contracts will expire on a certain date. With options you get to choose the date, but for a price (of course). You can buy options with expiry dates that are more than a year away (these are known as LEAPs), or for certain months in between. The more liquid options can be purchased for expiry on almost any month of the year, while the less traded will have expiries in about three month cycles.

With spread betting there is normally only one expiry month available at any one time but, one way or another, the fact that a time will arrive, and in the near future, when your whole position could expire worthless, is something to bear very much in mind.

Limited securities where spread betting can be used

Financial spread betting companies are more interested in taking bets on the various stock market and other indexes than in the value of the shares of individual stocks. This limits the scope for their customers. One of the advantages of trading individual company stocks is that the trader can make quite informed judgments about the potential of the company.s share price performance based on its assets, cash and cash flow position, the markets it sells into and so on. Where indexes are converned, the only meaningful criteria are broad based economic indicators, such as interest rates and consumer sentiment. The individual investor.s potential for standing out from the crowd, so important for success in investing, is largely not present.

The spread betting companies make the rules

If you buy shares with the purpose of holding them for a relatively short period of time and then selling them, you will be engaging in the activity known as trading. The trader is set apart from the type of person who buys shares with the intention of holding them for a long period, perhaps forever, with the expectation of benefiting over a long period by having an income from dividends with a large capital gain in many years time.

As a trader, you will only have to worry about what the market does. There are very clear definitions of what you can expect to get when you decide to open or close your position. True, you will have a spread to contend with (the price at which you can buy from the market maker will not be the same at a given instant in time as the price at which he will buy from you) but this will be, to a large extent, transparent to the normal trader in a market with normal liquidity.

You will, in effect, be pitted against, and find yourself interacting with, the great body of other traders who are interested in the same securities as yourself. The market will dictate the outcome, for better or worse.

When you start dealing in equity or index options, the position changes. The spread then becomes a significant item, and you will be up against option contract expiry dates, as well as the market as a whole, but at least you are still dealing in a real market, unlike in spread betting.

By Andy Richardson
Financial Spread Betting
www.financial-spread-betting.com

Some Quick Forex Information

forex data

Perhaps, in terms of trading volume, the currency exchange market is the world's largest market, with daily trading volumes in excess of $1.5 trillion US dollars (although the figures may differ, but this is just an approximation to show its importance). One thing is for sure that in orders of magnitude it is much larger than the bond or stock markets. For example, the New York Stock Exchange has a daily trading volume of approximately $50 billion. So you can easily imagine its importance in the trading world of today. Moreover, contrary to earlier thoughts, currency trading is not limited to just larger organizations and other large banks and financial institutions, but open to everyone who has enough expertise and determination to hard work.
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USING CROSSES AND GOLD
EUR/GBP and GBP/JPY have a value as the leading indicators of EUR/USD and USD/JPY moves. EUR/CHF is similar to EUR/GBP in forecasting value but stopped trading and looking at it a long ago after experiencing difficulties in running good sized positions there.
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The Foreign Exchange Market (FOREX) fx is the largest financial market in the world. For the beginner forex currency trading has the highest liquidity in the financial market with daily volume in excess of $1.95 trillion. The forex currency trading market is more than three times the total of the stocks and futures markets combined.

All The Latest News From The How To Trade Forex World

Gas hits another record, oil eases

Thu, 10 Apr 2008 15:43:16 EDT
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