LOWEST PIP SPEARD IN MARKET: January 2009

Thursday, January 8, 2009

Develop A Forex Trading Strategy To Become A Master Trader

If you are interested in becoming an amazing trader in the forex market,

you definitely need a powerful forex trading strategy to guide you in your trades. Those individuals who are expert forex traders have learned this early and are now the elite that make a lot of money. There are four simple steps that you can take to develop your forex trading strategy. Follow them and immediately see success in the forex market.

First, you must realize that your success falls only on you. You need to accept responsibility for your own success and each trade. Only you can make yourself successful! This means that you have to take the necessary steps to develop your own trading strategy. The good news for you is that everything you need to know about forex can be found online for free, or very cheap.
Second, you need to focus on learn how to find the right information and increase your knowledge the right way. To be successful in the forex market, you need to learn the right things. This is important because many traders think that knowing more is better. This is simply not true!

You see, in the forex market, you get rewarded heavily for your results and the accuracy for your trades, not the effort you make in your trades. You should also make sure that the forex trading system that you chose to use integrate into your trading strategy is simple and easy to use. Simple systems are much easier to use for a long period of time and work much better than the complicated ones. This will give you confidence and an advantage over those who choose to use complicated systems.
Third, you need to decide right now if you feel comfortable taking a risk and if you have good money management skills. If you don't like taking risks, you probably shouldn't trade forex. Most traders don't realize how big the actual risk is so they enter the market and lose a lot of money and get out quick. Then there are those who are so frightened by risk, that they end up being too conservative in their trades and lose a lot of money. If you want to make a ton of money in the forex money, you need to take risks that are calculated, I mean risk at the right times.

[Why ForexGen]

1. Lowest spreads in the market with 0-1 pip spread in 10 pairs, no commissions, no swaps and instant account Activation.
2. Scandinavian quality with Swiss precision, funds secured and local agents in 18+ countries.
3. ForexGen offers Forex trading in the major currency pairs and crosses.
4. Low capital start, with $250 as a minimum account size.
5. Liquidity and 24/5 availability are the characteristic factors of the Forex market compared with other financial markets.
6. [ForexGen] offers a free trial Forex [demo account] that allows you to test your skills and practice without risking real money.

Hub and Spoke Trading

This is used in multicounterparty portals.

Each participant in the network posts bids and offers, making a real market. Hub and Spoke trading allows the traders to see other bids and offers from. An order entry ticket with follow-up trade confirmation. Other traders on the platform and allows the trader to choose the counterparty. This provides excellent transparency a market depth and tighter, more competitive pricing, because there is no trading desk and no price manipulation.
The disadvantage of this type of platform is that a liquidity crisis can occur if all the participants decide to trade on one side and there is no one to take the other side of the trade. This can happen if some damaging news hits the market, prompting traders to sell a particular currency. If no one is buying, that currency will drop until a buyer steps in.

Hub and Spoke trading is similar to the process used on the NASDAQ level II with multiple market makers posting bids and offers. Its mechanism gives the trader the closest view of a whole market available today. You will find this forex trading mechanism in institutional platforms such as Fxall, Currenex, and State Streets FX Connect.
Three retail platforms offer a version of hub and spoke trading Hotspotfx, CoesFX, and GFTs Inter Trader Exchange, which allows traders to trade directly with each other. This trading mechanism is the future of retail Forex trading.

[ForexGen Money Manager]

An individual who is responsible for the entire financial portfolio of another individual or another entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client.

Benefits of being a Money Manager with [ForexGen]:

* Providing three different commission sources.
* Weekly commission plan.
* Easy & fast commission withdrawals.
* Fixed percentage of the profits.
* P = k * D “P=Profit, k=Variable Parameter, D=Deposits”

The money manager gets a fixed percentage of the profit previously agreed upon with the client for managing the client funds as a bonus feature.

The most competitive trading conditions:

* 2 pips spread on six currency pairs.
* Providing online trading services without maintenance margin, margin call and no automatic closing of positions below the initial margin on weekdays for accounts with initial equity of up to $1 million US. The margin level have to be recognized Fridays at 23:00 CET and before public holidays.
* Leverages up to 1:200 for accounts up to $1 million US.
* Liquidity and 24/5 availability are the characteristic factors of the Forex market compared with other financial markets.

Spread Betting Advice

According to the London Business School over one million British people will have a spread betting account open by 2011. It is an area of the market that is growing rapidly, and – unusually for British gambling – more often than not features bets on subjects that aren’t sport. It is viewed by some as an easy way of playing and making money off the stock market.

Financial spread betting is actually a very easy concept. It is a way of making money from fluctuations in various markets, though it doesn’t have to be in regards to the FTSE 100 as a whole (it can be single companies, commodities, currencies – you name it). If you put a £1 bet on the stock market to rise, and the FTSE accordingly rises by 50 points, you’ve made £50, however, if it drops by 50 points, you lose £50. Accordingly, if you bet on the market to fall, you can make money on a loss.

The most simple advice is never bet more than you can afford to lose. Whilst for some spread betting is a career, for many it is a hobby and one that is an incredibly imprecise art, even the most experienced stock traders cannot always predict what will happen to the FTSE, and there is no reason why you should be any better placed to know than these experts are.

If you are going to start spread betting expect to lose before you start to win. Make sure that you start as small as you can until you actually begin to get some knowledge of the market. If you’re approaching spread betting as a hobby it’s best to make sure that you do actually enjoy it before you start wagering significant sums of money on it.

Another idea is to specialise, make sure that you play a few markets well, rather than playing all across the board. Most markets tend to fluctuate with their own sort of life and rhythm, and all are interconnected in some way – just see how the U.S sub-prime mortgage crisis is linked to the price of gold! If you get to know how one particular market works, you have a better chance of not making enormous rookie errors that could potentially cost you a lot of money.

Spread betting has quite a lure, there is an assumption that it is quite possible to get rich easy from spread betting. This is, of course, a complete myth. It is possible to make large sums of money and to do so quickly – but it is not easy, and unlikely to be quick. There are specialist companies who deal with spread betting, such as City Link, who will make you aware of the risks when you open an account but there is nothing like being prepared yourself, so before you begin make sure you do your homework.

[ForexGen Live Accounts Contest]

Trade, Compete, and Win - Begins the 1st of Every Month!

ForexGen has the pleasure to announce the launching of its first monthly Live Accounts contest,
This is NOT a demo contest

this is a live trading [competition] open for all live mini account holders. At the beginning of each month, the slate is wiped clean and traders have a new opportunity to win the monthly prizes.

What makes this contest unique?

All prizes are CASH prizes with no restrictions on withdrawing the prize money! How Do I Enter?
You don't have to pay any fee to enter this contest, all [ForexGen] mini Accounts with a balance of "$1000" and a default leverage of 1:200 are entitled to participate in this contest upon their account holder request by sending an e-mail request on live.contest@forexgen.com

For more information about our current and future promotions, kindly contact one of our customers support agents at promotions@forexgen.com

Forex Exchange Rates - Learn To Watch Currency Trading Rates

The Forex exchange rates of the currencies being traded in a Foreign Exchange Market, or Forex, is the backbone of any of this type of market. Traders make their living or make their profits through the rise and fall of the forex exchange rates of the currencies that they buy and sell or as more aptly called, exchanged.

That is because in the Forex, there is really no buying and selling of currencies (it was just a concept for easier understanding), but in reality, currencies are just exchanged.

It is through this exchange of currencies that traders make their actual profits. For example, a trader buys a currency that is worth 1 US dollar. When the Forex exchange rates move and it moves almost by the hour because it is one of the most volatile markets in the world, then that currency may then now be worth 2 US dollars. When the trader sells or exchanges his currency, the difference between the original Forex exchange rate of the currency and its rate at the time of the exchange is the amount of profit that the trader gained.

Since Forex exchange rates are the most important information that a trader must know, a number of systems have been put up and offered to keep traders regularly updated. There are now websites or companies who provide this kind of service to traders. They keep the trader informed of the current Forex exchange rates of their currencies. Some firms even add extra service of advising the trader on when to exchange his currency.

[ForexGen Demo Accounts Contest]

Win Cash Prizes

[ForexGen] has the pleasure to announce the launching of the Demo Account contest on the first of every month.

Interested clients who wish to participate in this event shall send an e-mail request on demo.contest@forexgen.com including the following information:
- Full name: - Phone number

Also provide us with the following identification document:
" Certified copy of the information pages of account holder current valid passport or government issued photo ID"
After we receive your request we will provide you with further details and with your [demo account] login information which will be used in the trading contest.

By the end of each contest:

1. All participants that manages to open at least 20 lots will be awarded a Live Account with $50 credit 2. All participants that manages to open at least 20 lots and keep their demo account initial balance will be awarded a Live Account with $100 credit 3. The highest 5 accounts with the highest profits (including the floating P/L) will be awarded a Live Account with $250 credit.

The contest starts on the first Sunday of each month at 10 pm GMT and ends on the last Friday of that month at 10 pm GMT.

For more information about our current and future promotions, kindly contact one of our customers support agents at promotions@forexgen.com

Trade Currencies From Home - Currency Trading Success

If you want to trade currencies from home, then this article will point you in the right direction. Anyone can win with the right education and mindset so let's give you your 4 steps to success... Do not be fooled by thinking online forex trading is easy - its not that's why 95% of traders accounts get turned to dust. It's not because these traders couldn't learn to trade but they chose to get the wrong education. Let's start with a fatal error.

1. Forget Expert Advisors

Forex robots and sure fire trading systems, there all over the internet offering you financial freedom for 100 dollars or so and they don't work. You dont get financial freedom for 100 bucks, its common sense but loads of traders buy into this myth and lose. If you think you can make money with no effort in Forex, then save your money and do something else. Just as in all areas of life to succeed you need to learn some skills and know what you're doing.

2. Focus on Simple System Only

The good news is you don't have to work hard in Forex trading you need to work smart and to learn to trade currencies from home should take you just a couple of weeks. Then you can trade in around 30 minutes a day. Getting a trading method that works together is easy. In Forex trading, as simple systems work best. So keep it simple and if you want an easy to learn way of trading, try trading breakouts. We have written frequently on breakout currency trading systems, so look up our other articles.

Now we need to move to the hard part of Forex trading!

3. Dealing with Losses Cheerfully

At some point you are going to start losing and lose for weeks. Don't let anyone tell you otherwise. Sure the Forex robot vendors and sure fire systems say you won't - but you will. This doesn't mean you can't win long term but you must take your losses and keep them small in the short term. Dealing with a losing period is not easy, as the market takes your money and you feel a fool. It's in this period you must keep going until you hit a home run and for this you need the next trait.

4. Discipline and the Road to Success

Many traders have heard the word but very few people realize how hard it can be to maintain discipline in the face of losses. Discipline comes from confidence, the right education and the courage to keep going. Trading success comes from within, as you rely on your rules to take you through the chaos that is Forex trading.

[Claim Your Bonus In ForexGen]

Special Promotion for New Clients

Free cash bonus when you open your new live account withen the next 30 days. You will recieve a FREE cash bonus which will be added to your trading account. The cash bonus depends on the account type you open.

Account Type
Mini Account
Free Cash Bonus
10% of your deposit maximum $250

Account Type
Standard Account
Free Cash Bonus
10% of your deposit maximum $500

To be able to withdraw your free cash bonus, you need at least to open 20 trading lots in period not exceeds 3 months.For more information about our current and future promotions, contact one of our [customers support] agents at promotions@forexgen.com

Wednesday, January 7, 2009

E Currency Exchange Scam

Are you sick and tired of those HYIP programs that claim you will get rich or make millions fast?

I know I just had enough of them that is why I did my homework and researched the best work at home programs on the internet.
E currency was the business that everyone referred me to. So I found a book that taught me how the e currency exchange system works. Because without any help or someone to guide you thru the steps to set it up, it is very confusing and hard to understand. I invested $400 and within one week my money shot up to $500. Now this is an investment program so you know you are not going to get scammed out of your money. E currency trading is done every day throughout the world.

Now let me tell how the e currency exchange network can put money into your pocket. First you are going to open a portfolio and the second is with a console. When opening an e currency account, you will be asked to create a portfolio and fund your portfolio. This investment can be anywhere from $25 to $100,000. I would recommend a small amount until you become familiar with e currency trading system. Your portfolio is compounded daily and receives gains anywhere from .3% to .5% each day. For example, if you funded your portfolio with a $10,000 investment, each day your portfolio would net $30 of profit. Over the course of one month a $10,000 portfolio would make $900. With these profits you can either reinvest into your portfolio to maximize your profits, or out-exchange the money to your bank account.

Learn how the e currency exchange system helped me turn a $400 investment into a $4,1000 investment in under 3 months. To find out more information visit E currency Online

[ForexGen Academy]

If you are an experienced ‘FOREX’ Trader or just a beginner looking for the opportunities offered in the ‘FOREX’ market, [Forexgen] has created ForexGen Academy to give you the chance to get a ‘FOREX’ education and improve your trading skills. No hard expressions, no buzz words, and no rocket science language are used throughout these lessons.
How to Get Started?

People are introduced to the exciting world of foreign exchange in many ways: friends, current events, newspapers, television, and many others. For those of you who are new to forex, the following guidelines cover the basics of currency trading.

also do you Know ForexGen Lowest spreads in the market with 0-1 pip spread in 10 pairs, no commissions, no swaps and instant account Activation.

Financial Crises Global Capital Flows And The International Financial Architecture

The recent upheavals in the world financial markets were quelled by the immediate intervention of both international financial institutions such as the IMF and of domestic ones in the developed countries, such as the Federal Reserve in the USA. The danger seems to have passed, though recent tremors in South Korea, Brazil and Taiwan do not augur well. We may face yet another crisis of the same or a larger magnitude momentarily.

[ForexGen Promotions]

As ForexGen believes that its success depends totally on its client's satisfaction and success, ForexGen is sharing its growth and new site release with wonderful promotion packages.

*[Claim Your Bonus]
* [Live Account Contest]
*[ Demo Account Contest]
* [Refer A Client]
* [Scalping enabled Account]

Discover The Hidden Online Trading Costs That No One Tells You About

One of the most commonly asked questions that I receive is this, How much do I need to actually start my online trading business and make a full-time income from it?
This is a good question, but there are more costs to starting trading than simply setting your online trading float. (By an online trading float, I mean the amount of capital that you have to trade with.) When you first begin your online trading business, you're going to have to pay a sort of tuition.

You'll encounter a learning curve when you start your new online trading career. Don't try and skip this, just make sure you prepare for it in advance. The best way to do this is to treat your online trading as if you would any other business. Any business, including online trading, requires start-up capital.
First, look carefully at where you're getting your money from. Maybe you've been considering online trading for a while and built up some savings. That's good planning. Maybe you're considering borrowing money. This is generally a bad idea. Maxing out your credit cards is a quick and easy way to get cash, but the effects can be devastating. It's hard enough to worry about making online trading profits without worrying about the debt servicing on your credit cards as well. You will be too concerned with making payments to be concerned about good trading.

Don Miller talks about this in Trading Markets World Meet the Traders, when he tells new traders to worry about making money in your new online trading business. One of the best ways to learn about online trading is to begin on a part-time basis. This allows you to hone your skills while you still have an income stream.

Unless you're doing your online trading from an office, computers, data-feeds and software are all a part of start-up costs. Of course, the costs for a trader don't end there. You also have drawdowns, which are a part of your new online trading business. There are going to be times when you lose money for long periods, count on it and make sure you plan for it.
In terms of growth, would you expect to purchase a business for five thousand dollars, and see it turn over one million dollars in the next financial year? Yes, this is achievable. But, it's not very likely. The same can be said with online trading, particularly when you are starting out. Don't come to the online trading market with five thousand dollars and expect to turn it over to one million dollars by the end of the year. Don't base your financial decisions on this idea.
However, the return you achieve does depend on what products you decide to trade. If you are trading leverage products, you'll have a greater chance for reward, but there is more risk involved with trading these types of instruments. Though there is no perfect amount of capital to start trading with, generally the bigger the online trading float you begin with, the easier it is to trade.

The key here is to simply define how much online trading capital you're going to trade with and have it set up as a separate business. That way you're not drawing on the profits all the time and losing your focus. Remember, your online trading is a business now. With your online trading float defined, and your online trading system and money management rules in place, you will be able to run a profitable online trading business.

[Why ForexGen]

Stop-Loss Orders

Even the most knowledgeable traders, however, can't predict with absolute certainty how the market will behave.

For this reason, every FOREX transaction should take advantage of available tools designed to minimize loss.
Stop-loss orders are the most common way to minimizing risk. A stop-loss order contains instructions to exit your position if the price reaches a certain point. If you take a long position (expecting the price to rise) you would place a stop loss order below the current market price. If you take a short position (expecting the price to fall) you would place a stop loss order above the current market price.
Stop loss orders can be used in conjunction with limit orders to automate FOREX trading. Limit orders specify that an open position should be closed at a specified profit target.

[ForexGen Money Manager]

The Risks

Assuming you are dealing with a reputable broker, there are still risks to FOREX trading. Transactions are subject to unexpected rate changes, volatile markets and political events.

Exchange Rate Risk: refers to the fluctuations in currency prices over a trading period. Prices can fall rapidly, resulting in substantial losses unless stop loss orders are used (see below).

Interest Rate Risk: can result from discrepancies between the interest rates in the 2 countries represented by the currency pair in a FOREX quote. This discrepancy can result in variations from the expected profit or loss of a particular FOREX transaction.

Credit Risk: is the possibility that 1 party in a FOREX transaction may not honor their debt when the deal is closed. This may happen when a bank or financial institution declares insolvency. Credit risk can be minimized by dealing on regulated exchanges, which require members to be monitored for credit worthiness.

Country Risk: is associated with governments that may become involved in foreign exchange markets by limiting the flow of currency. There is more country risk associated with "exotic" currencies than with major countries that allow the free trading of their currency.

Limiting Your Risk
FOREX trading can be risky, but there are ways to limit risk and financial exposure. Every trader should have a trading strategy; i.e., knowing when to enter and exit the market, and what kind of movements to expect. Developing strategies requires education, which is the key to limiting risk. At all times follow the basic rule: Never use money that you cannot afford to lose.
Every FOREX trader needs to know at least the basics about technical analysis and how to read financial charts. He should study chart movements and indicators and understand how charts are interpreted. There is a vast amount of information on FOREX trading available both on the Internet and in print. If you want to be successful at FOREX, then educate yourself.

[ForexGen Live Accounts Contest]

Trade, Compete, and Win - Begins the 1st of Every Month!

Sunday, January 4, 2009

The Key to Forex Profits

While there are many different opinions between various Forex traders about which methods and strategies are best,

there is one singular point that every Forex trader will agree on: you absolutely must have a great trading system to profit consistently.

A great Forex trading system is the difference between profiting consistently from Forex trading and from finding yourself busted. There isn't a lot of middle ground, either. The right system will make you a lot of money. The wrong one will strip you of your entire investment.
A great Forex trading system is one that first off will be successful at trading the market. If it doesn't make money, it's not any good. That part is obvious, but another part of that equation is how often the Forex trading system can actually be applied to the real and constantly moving currency market.
Is it only when the market is trending? Counter-trending? Breakout? Is the system a combination of two of these, or some combination of all of these? How often the trading system can be used and how restricted the system is by market conditions.

The market does not breakout often, but the best opportunities to get massive profits are during the breakout market. So a Forex trading system that is designed to be able to trade effectively no matter what state the market was in is obviously going to be far superior to any system that only trades with one market movement or in any other limited situation.

Every successful Forex trader has a solid, tested, and proven Forex trading system. The same is true with any actual company that can consistently make money trading the Forex. This point can't be emphasized enough.

Any company or individual trader that can consistently make money trading the Forex, and teach others how to do so as well, must be using a time proven Forex trading system.
If you are only going to take one piece of advice from this article, then make sure it's this one: find a successful and time tested Forex trading system.
Find a Forex trading system that has been used and tested for at least a couple of years, if not longer. The longer a company has been profiting from the Forex, and the longer that system has been tested, the better the chances of you coming out of trading the Forex grinning ear to ear about your new fortune.

[ForexGen Demo Accounts Contest]

Forex in Your Investment Mix

It’s an exciting time for Forex trading—volatile, fast-paced, with historic shifts in the international currency markets happening weekly or daily and fortunes being made every hour. And, of course, with fortunes being lost every hour. In these challenging times, what is the place of Forex in your investment mix?

The most important consideration is the risk. Forex investments are extremely risky, with all that implies, both the good and the bad: While you can make a substantial profit in Forex trading, you can also have a substantial loss. Anyone who plans to invest in the Forex market should first build a sound foundation of mid-risk and low-risk investments to cushion themselves against loss.

The second most important consideration is the time and effort it takes to do well in the Forex market. There are brokers and automated traders galore, but real success takes research, trendwatching, a sensitivity to world affairs, and occasionally the willingness to stay up at odd hours to take advantage of fluctuations. Unlike most investment types, Forex trading doesn’t reward buying low and sitting on an investment for the next year or ten—investors buy low and sell fast, making most of their profits in short-term trading. Because of the research and constant attention Forex investments require, the best Forex traders are the ones who can spend the most time on their portfolios. If this sounds like you, then Forex may be your game. On the other hand, if you prefer not to make investment into your hobby or a second job, you should invest in Forex more cautiously and experiment, looking for the ideal balance between effort and profit.

In short, Forex trading can be an excellent addition to your portfolio, especially if you relish high risk. As with any high-risk investment, it’s important not to overextend yourself, but it’s also important not to be so timid that you make only a fraction of the gains more daring investors see. On the other hand, people whose portfolios cannot bear much risk, or who prefer more passive investment types, should give Forex investments a smaller place in their portfolios while they explore what trading in the Forex market can do for them.

[Claim Your Bonus In ForexGen]

Special Promotion for New Clients

what is fundmental analysis

A kind of market analysis that involves studying the economic condition of different countries in order to make the process of currency trade more efficient is known as Fundamental Analysis.

It provides information about economic and political events and their impact, which influence the currency market. Fundamental analysis is one of the most well recognized approaches to the analysis of exchange markets.
Fundamental analysis describes the different techniques of present as well as future valuation. These valuations are made using economic, political and social variables. The fundamental analysis approach is best suited for forecasting the long term changes that take place in the Forex market.
The statements and figures which are a part of the speeches of economists and politicians are called economic announcements by traders and have an immense impact on the moves of currency market. The announcements related to the politics and economy of United States are most important. Certain people such as the Secretary of Treasury, Chairman of U.S. Federal Reserve Bank and the like are some people who are often closely watched by the traders.
Employing strategies of fundamental analysis

In order to employ the various strategies of fundamental analysis, one needs to have basic understanding of demand and supply, which is undoubtedly the principal force behind the financial markets. In case of Forex market, the products that are exchanged are different currencies. The global macroeconomics variations can perpetually have a strong impact on the value of currency as their value depend on the economic wellbeing of the particular country.

As a part of the process of fundamental analysis, economists create economic calendars to predict the different types of economic values and figures in accordance with those of previous months. When the forecast obtained from economic calendars improves from the previous months, the value of US dollars strengthens in comparison to other currencies. On the flip side, when the forecast shows depreciated values, the value of US Dollar goes down. Take for example, the price of oil keeps fluctuating in the global market. If the cost of oil increases, the currencies of countries that are depended on huge amounts of oil import, such as Japan and America, are depreciated in value.

[ForexGen Academy]

Fundamental Analysis: Market Indicators (Drivers)

The practice of evaluating the stocks of a company through the comparison of base elements in the balance sheets of a company and the general market factors is known as fundamental analysis.

The most important principle of fundamental analysis is finding profitable companies in which it would be profitable to invest after comparing the management, sales and revenues.
There are basically two kinds of drivers in fundamental analysis. They are:

1. Internal Drivers: The factors which are related directly to the business in question are known as internal drivers. They include assets, liabilities, income, revenue, management, products and the like. The internal drivers help in obtaining a general understanding of the position of the company in comparison to others. The internal driver analysis can be further classified into:
• Management: Companies having a weak management cannot last for a long time. News, Internet, Analyst reports etc. can help one in making an informed judgment about the management of a company.
• Profit: Profit is one of the most important factors for fundamental analysis. This is because companies earning most profit have larger potential for price growth as well as dividends.
• Production: Production is an extremely important factor when we talk about companied producing wood, gas, oil, metal or power. This is because their value depends complete on the production output and the value of the product.
• Share Volume: One needs to check whether the company is question has enough share volume to sell the shares of its stockholders at a later stage.

2. External Drivers: The factors that are outside the influence of a company but can affect its profit margin are known as external drivers. These include inflation, economy, politics, interest rates, bond markets and the like.
• Inflation: Inflation exerts a direct influence on stock market. Though observing inflation rate can prove to be subjective for the trade, knowledge of history can explain the effect of inflation on stock markets in the past. The inflation is ever increasing as individuals and businesses are borrowing rapidly from the market. In this situation, the Federal Reserve intervenes in order to find a solution to the problem. When these control activates, the direction of inflation trend changes. Having control is most important for success on the bull market. Besides this, inflation also has a direct impact on the rate of interest.
• Interest Rates: Interest is of two types namely, short term and long term interest. When the economic growth is strong, the short term rates rise. On the other hand, long term rates ascend depending on the inflation and difference in the currencies of foreign countries.

The federal rate and discount rate are controlled by the Federal Reserve. They are used to manage the trend of inflation as well as the trend of rate of interest. Thus, there rates have an immense impact on all kinds of investors. Also, the ‘real’ interest rate, which is the average of federal funds rate after subtracting the inflation rate from it, are used to determine the future of interest rates as well as the overall market.

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Scalping in Forex trading

When trading in Forex, one needs to adapt various strategies based on the expected profits and the involved risks. Traders, for quick profits, adapt Forex day trading. Yet, we have another trading strategy, the Forex scalping strategy, through which more money can be earned than day trading. It is based on the short-term changes in the rates of the currency pairs often traded by scalpers.

Scalping strategy means buy and sell within just few seconds or at the most couple of minutes. The positions are not maintained for long and have to be closed in not more than 1-2 minutes. The strategy uses a lot of market leverage and more leverage can reap more profits. The leverage risk involved is high, yet the scalper can benefit out of the low exposure risk. The position is not held for long. Hence, the market exposure risk is lower as compared to the other strategies. If a scalper knows to properly scalp trades, he can reap benefits those are not present in the “day trading” too.
In scalping, scalpers usually benefit from the small pip movements. Scalpers generally make around 1-5 pips behind each trade. And in a business day, a scalper can do 100-200 such trades. For a standard lot of trade, each pip is valued at $10. So if trade gives scalper 5 pips, he can easily get $50 behind one trade! And imagine he does 100 such trades; his per day earning can be $5000! Each trade doesn’t take more a minute or two. So isn’t $50 great money for a work of 1-2 minutes?

Scalper’s way of trading doesn’t go down too well with the dealers or brokers. The main trigger for the hatred is the time behind each trade a scalper takes to exit. Scalpers exit the trade even before the dealing desk captures and executes the same. The issue arises in the case of brokerage the scalper needs to pay. The solution is the ECN brokerage system where the scalpers evade the dealing desk and trade directly with each other. Scalpers benefit because the brokerage costs are less in ECN than dealing desk. But in turn, the pips spread is also constricted.
Hence, a scalper should plan his strategies focusing on the risk management behind the short trades. The losses matter more than the profits. Hence scalpers should implicate stop loss orders, whenever required. It is an accepted fact that scalpers mint more dollars than day traders, though they attract higher degree of risk too. It also is stressful considering the time behind each trade that a scalper stays in.

Forex scalping is considered as an effective and quick way to earn money in short time span. This strategy has gained the likes of many, yet turns out to be a controversial one. Many get into this because it demands lesser initial investment. Many factors have made scalping popular as day trading. Concerns really are sidelined, when one thinks of the profits that scalping can give anyone.

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Thursday, January 1, 2009

Forex Trading Strategies Are The Key To Successful Trading

Before venturing into the world of Forex trading it is vitally important that you stop and think carefully about the trading strategy that you are going to adopt, because forex trading strategies are the key to success in currency trading. There is no single strategy when it comes to trading in the foreign currency markets and every Forex trader has to develop his own strategy. It is important however to have a clearly defined plan from the very outset.
Some Forex traders choose to use a technical approach when it comes to trading while others are more at home with a fundamental approach. Both approaches are of course sound, but in reality most successful traders use a combination of the two to give them both an overview of the foreign exchange market and to permit them to plot specific entry and exit points for each currency trade.

The idea behind technical analysis is simply that prices rise and fall according to well established trends and that the currency market possesses clearly identifiable patterns which can be seen as long as you know what to look for. Knowledge and experience come into play here, but it is also a question of using the numerous analytical tools that are available and this means having a sound working knowledge not just the patterns of price movement but also of the tools at your disposal.
Many traders also rely on what are known as support and resistance levels. Here 'support' refers to a low price which is repeatedly seen as being the bottom of the market and from which there is a tendency for prices to rise. A 'resistance level is a high price beyond which a currency is rarely traded.

The principle here is that, should a currency break through either its support or resistance level, its price is likely to continue in that direction. So, if the price of a currency rises above its resistance level it is considered to be bullish and the price can frequently be expected continue to rise.
Another commonly used tool in foreign currency trading is that of moving averages. A simple moving average (SMA) shows the average price in a given time period (say 7 or 10 days) when the price is plotted out over a longer time period. Forex traders use moving averages to eliminate short term fluctuations in price and to provide a clearer picture of the movements in currency prices. A SMA can be plotted to indicate when prices are displaying a tendency to rise or fall. Prices which rise above the average will frequently continue to rise and, similarly, prices which fall below the average will often continue to fall.

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The Most Commonly Seen Forex Trading Mistake

Successful Forex traders know that their success comes from establishing a set of trading rules and then following these to the letter.

It is perhaps not surprising therefore to find that the most commonly seen Forex trading mistake is that of traders breaking their own trading rules.
The greatest danger any foreign currency trader faces is that of emotion and trading rules are established quite simply remove emotion from the trading equation.
Another danger for most traders is that posed by greed. None of us like to think of ourselves as being greedy but this is particular deadly sins that is always close by and has a habit of creeping up on us when we are not paying attention.

A successful trader can quite easily find himself in a winning run of trades earning perhaps $2,000 a day and think to himself that, if he can get this sort of profit day in and day out, it has to be possible to earn $2,500 or $3,000 every day. However, in order to test this theory the trader needs to push himself by relaxing his trading rules so that they can make up a few extra trades each day.

With a bit of luck profits may well increase over the following days, but how long is this going to last? The answer in most cases is not long and time and again traders find that any short term gains disappear. The result is all too often that they move from being one of the truly successful traders to being one of the 90% of traders who regularly lose money.
It is very easy to allow greed to tempt you into breaking your own trading rules and once in a while this strategy will prove successful. However, you are now beginning to trade on emotion and, as with many things in life, having done it once it is much easier to do it again and again.

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