30th June 2010
Foreign exchange is incredibly attractive to traders, offering a number of advantages over the stock market. Depending on your trading or investing approach the forex market may be far more suitable – and profitable – than trading stocks.
Liquidity
By far one of the biggest advantages of trading forex online is the liquidity of forex markets. The majority of currencies – with the exception of small, economically inactive countries – are incredibly liquid due to the enormous amount of transactions that take place. This gives you the benefit of being able to enter and exit a position in a currency with ease.
24 Hour Trading
Forex trading starts on Monday morning in New Zealand and stops Friday evening in New York. In between those hours there is always a market open somewhere in the world and there is considerable overlap – so you always have the opportunity to buy or sell. Your online forex platform will be ready for trading at any time of the day.
Low-cost Transactions
Transaction costs are usually incorporated into the spread you pay, which is the difference between the market forex rates and the forex rates your broker offers you. A big benefit is that you can instruct the forex robot on your forex system to automatically trade without worrying about transaction fees.
Profiting from Both Falling and Rising Prices
You can go short, or long: if you think a currency pair is on the way down you can sell it, if you think it is on the way up – you can buy. You also have the benefit of choosing from a host of currency pairs to target difference market fundamentals in your trades.
Leverage
Most brokers will offer you some degree of leverage, so you have the ability to take a position in a currency that is far bigger than your capital. This allows you to enhance your profits past what a standard trade would have allowed but on the flipside you are at risk of losing your money a lot faster.
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24th June 2010
Both the US dollar and yen rose against the euro during Thursday trading, as investors once again began to be concerned about Greece’s debt hanging over the euro zone. Reports have been coming in that the cost of protecting Greece’s government from defaulting on their debt has hit a record hit; this swayed investor to move away from the euro currency.
The dollar rose 0.2 percent against the euro ending at $1.2286, while the yen rose a stubstantial 0.7 percent against the European currency, ending the session at 109.86 yen. The dollar also fell 0.5 percent against the yen ending at 89.41 yen.
Elsewhere, sterling was up to a 19 month high against the euro after being bolstered by Tuesday’s budget announcement.
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22nd June 2010
The market in Forex trading is a global one that never closes, as the trading hours overlap between different time zones and trading can be conducted day and night, except at weekends. It closes at 9:00 pm on Fridays and reopens at 9:00 pm on Sundays GMT. Online Forex trading is obviously the most popular activity, as the days of calling your broker to make a trade are practically over.
The basic unit of Forex trading is the trading pair of currencies, the first of the pair being the base currency and the second the quote. It is the base currency that a trader buys up or sells off, using the quote. Examples of a trading pair would be the EUR/USD or the USD/YEN, and a trader would be engaged in purchasing or selling the first in the pair using the second or quote currency.
An important concept in FX trading is leverage, or a loan from the broker to the trader to maximise the trader’s results, effectively magnifying a trader’s investment to more effectively work the market. With a 100:1 leverage, for example, the broker matches the trader’s dollar with 100 dollars of his own. A trader putting in $10 with a 100:1 leverage will expect to trade $1,000.
There is plenty of Forex trading software available to assist the trader in honing his skills and predicting fluctuations in the market. Online Forex trading is big business and increasing numbers of small and large investors are attracted to this, the world’s biggest market with a multi-billion dollar daily turnover.
The Forex trading system is at its heart simple, and the liquidity of the market throws up numerous opportunities for making big profits. Trade Forex today, using a practice account, available from many service providers.
Add a Comment | Posted in Currency Trading, Forex Tips, Forex Trading by Forex News
18th June 2010
Forex rates are priced in pairs, so no pair trades completely independently of the other pairs; this is why understanding currency correlation is so important.
Let’s say currency pair one moves in the same direction as currency pair two and you have been following the movements of currency pair one very closely using your forex software, forex signals and general forex news. Expecting pair one to go up, you buy. Suddenly you notice currency pair two, which you have not followed so closely, and your forex platform’s analysis shows that this pair is on the way down, so you short. By the time you close your positions you would have made a profit on one pair, and a loss on the other. This would happen whenever you simultaneously go long and short on two pairs with the two moving in the same direction.
A correlation coefficient is statistically calculated and ranges from -1 to +1 where a correlation of +1 means that two currency pairs move in the same direction 100% of the time, 0 means that the relationship between the two currency pairs is completely random and -1 means that the two currency pairs move in opposite directions. The closer to +1 or alternatively to -1, the stronger the correlation: a correlation of -0.05 is not significant at all, whereas a certain +1 (though unlikely) could yield an enormously profitable trade.
Using correlation statistics correctly carries a bit of a learning curve, although many forex trading platforms have built-in features that let you study correlation with ease. Suffice to say that ignoring the correlation between currencies over the short term and over the long term can dampen your profits at best or at worst, be entirely disastrous.
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15th June 2010
The euro rose for the second consecutive day against the US dollar after Greece got upgraded from junk status on Monday. This eased some concerns about the euro debt crisis spreading to the wider economy.
The euro had risen to $1.2298 before losing ground and finishing the session 0.4 percent up at $1.2272. The euro also saw early losses against the yen, but recovered to finish the session 0.1 percent higher on the day at 111.98yen.
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14th June 2010
The euro rose today against a hat full of currencies after investors moved towards the euro currency as better than expected industrial output data boosted the currency. The euro moved ever further away from the four-year low hit against the dollar recently, ending the session 1.3 percent up at $1.2250.
Although the euro took a big leap in trading today it is still 15 percent down against the dollar this year. The euro also jumped 1.5 percent against the yen ending at 112.66yen.
Elsewhere, the Australian dollar rose 1.5 percent against the US dollar ending at $0.8628, and sterling also saw a 1.5 percent gain against the greenback at $1.4762.
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9th June 2010
Sterling rose to a 2-day high against the US dollar in Wednesdays trading as investors risk appetite grew after a Reuters report showed that Chinese exports in May grew 50% compared to the same period last year, outstripping market expectations.
Sterling hit $1.4545 against the dollar during the European trading session, ending at $1.4538 with a gain of 0.45% on the day. Sterling also rose against the euro ending the session at 0.8253, a 0.23% rise.
Today also saw official data showing that while Britain had posted a wider than expected trade deficit in April, March’s deficit was narrower than analysts earlier thought.
Add a Comment | Posted in Forex News, Sterling, US Dollar by Forex News
3rd June 2010
Experts use forex robots or automated forex trading for several reasons: it could simply be a matter of time constraint, a trader may want to add flexibility or a trader may want to put something in place to keep emotions at bay when the market moves unexpectedly. For new traders the benefit of using automated forex trading differs slightly, but is still not to be ignored.
Automated forex trading can potentially make trading far easier for a newcomer, even if the concept sounds daunting. Forex trading is inherently a complex activity despite the simplicity implied by the underlying idea of trading currencies and newcomers are unlikely to match the skills and broad understanding of markets and trading techniques that expert traders have. Experts, over time, develop their own successful recipes for profits and beginners simply won’t have that benefit.
Automated forex platforms can accomplish trades for beginners who are still on a learning curve. Robots can be purchased from a number of different providers and a common platform called Metatrader4 makes dealing with standardised robots quite easy. Installation and setup is usually quite simple as most providers supply thorough setup and training guides as well as detailed specifications about how the robot works.
By no means should a beginner rely purely on automated forex trading. As new traders use practice systems to build their knowledge of analysis techniques and the broader workings of the currency trading market they will eventually be in a position to trade independently. A new trader may want to start making money with automated forex trading while simultaneously trading independently using a simulation account. When profits on the simulation account become steady an amateur trader could start trading independently.
Add a Comment | Posted in Forex Tips by Forex News
18th May 2010
The euro slipped further against the US dollar during Tuesday mornings trading session, nearing a four year low as concerns over the euro zone debt crisis continues. Traders await the news from a meeting, taking place later today between euro zone finance ministers, which is likely to provide more details of the trillion dollar bailout plan to prevent Greece’s debt problems affecting other European countries.
During the session, the euro fell as low as $1.2315 hovering just above the four year low of $1.2234 hit in April 2006, before steadying and rising to $1.2400 by the end of the session. The euro was also under pressure after news that the US Senate voted for its government to oppose the IMF bailout to countries that are unlikely to be able to repay them.
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13th May 2010
The euro fell to a one week low against the US dollar and fell dramatically against the Swiss franc as investors steered away from the euro currency over concerns that fiscal tightening would lead to slower European growth.
During the New York trading session, the euro fell 0.6% against the US dollar and 0.9% against the yen, ending the session at $1.2542 and 116.53 yen respectively. The euro also hit a record low against the Swiss franc, ending a torid New York trading session at 1.3997 francs.
Elsewhere, the Australian dollar rose 0.4% against the US dollar and sterling fell by 0.9% against the US dollar after data showed that the deficit had widened more than expected during March.
Add a Comment | Posted in Euro, Forex News, Sterling, Swiss Franc by Forex News