Monday, March 23, 2009
Forex account activation and confirmation
Because we are dealing with real money accounts, you are required to verify your details and your email, through various needed steps. Before you sign the terms and conditions of the Forex trading account, make sure you understand what the site is offering. You should make sure you understand about the various conditions that include:- The Forex site's hours of operation and the availability of live support.- The bid/ask spread that the site offers for major currencies, in relation to what other sites offer.- Make sure that proper leverage is available through the margin per trade.- Find out about The minimum account size and lot size.- Check that there are no small print or hidden commissions that the site's operators prefer you don’t know about.- If you can, try out the Forex trading platform, as well as the charting and technical analysis options beforehand.- Check the general contract and make sure you save it along with the requoting policy on your computer
Forex
Don't have the time to trade your own account? We believe a managed forex account can give an investor who cannot watch the market 24 hours a day an opportunity to participate in the exciting world of forex trading. A forex managed account is also ideal for those investors who prefer to have their capital managed by professionals. This is a viable solution for individuals or companies looking to diversify into Forex without hands-on involvement. It is an effective way for retail investors to benefit from the knowledge, resources and experience of an investment manager without 
DOUBLING STOCKS
Just in case you did not already know, it is the first commercially available stock trading robot made by the same guy in this case michael who made a similar stock trading picking robot for Goldman-Sachs which is now responsible for the over $4 billion in profits which they make. So why should you try Doubling Stocks?1. it is so easy to use to make money, all you have to do is to wait for the newsletter to come and it usually comes on the sunday of each week it might come late if there are not able to come up with any trades2. you have a 56 day guarantee, so you are free to try it out for almost 2months and if you still do not like it you are free to return it
Consumer Price Index (CPI)
This Forex trading economic indicator is published by the Bureau of labor statistics in the U.S. Department of Labor, every 13th of a month. The economic index is relevant for the passing month, and measures the price of a fixed basket of goods and services that is bought by consumers. This is the most used measure of inflation, an important tool for the Forex trading market.It is important to state that this Forex economic indicator does not measure technological commodities which change in price, and this is something the CPI has been criticized for.When you use the CPI to measure Forex trading price changes, you should always remember to take into consideration the movements in the food and energy prices, because they can change and rise or drop regardless of the Forex currency or the inflation levels
Free Daily Forecast Forex
The Forex system is a relatively easy one to understand at its basic level but it can also be as intricate as you can possibly imagine. What the system actually is, is a way of trading currency from various parts of the world. These currencies are always traded in pairs and you need to purchase one currency with another in the hopes of making a profit whenever the difference between the two moves in your favor. A good example of this is that people will buy euros with dollars or perhaps the yen with the American dollar as well.People who have done Forex successfully in the past, often caution individuals from jumping on board too quickly because the entire system can be a little bit unpredictable. Currency prices tend to change on a whim according to news stories or perhaps world events that happen which can affect the part of the world in which the currency is operative. This can either work in your favor or against you so it is definitely something that is not for those who are unwilling to take a risk. That being said, there are also some indicators that will give you a good idea of how well something will do, barring any unforeseen circumstances 
Forex Economic Indicators
The execution of fundamental analysis in the Forex market is done through the use of economic indicators. These indicators point to the state of some economical factors in the country whose currency you wish to trade with.Economic indicators are published by various sections of the government and private companies. These statistics are analyzed by market investors to predict the direction of the Forex trading market. Forex economic indicators are published at fixed time intervals, and are followed by any serious online Forex trader.Since so many people are tuned to use them, Forex economic indicators have a large impact on prices of currencies of the Forex trading market. Most traders do not use fundamental analysis because economic indicators seem difficult. This however is wrong because following simple guides can help you stay updated with the important Forex economic indicators easily 
Starting to use Forex economic indicators
To get started, you should first keep a log of all the important Forex economic indicators' release dates. Keep a log or make a subscription to one of the economic journals, so you'll know the most important factors of that time. If you are trading in JPY, the Forex economic indicators need to be relevant to the currency type, of course.Each economic indicator tells you about a different aspect of the economy, and this should be translated in turn into the predicted movement of the currency price. Make sure you understand which aspect the indicator is about. For example, know that the GDP measures the growth of the economy while the PPI measures inflation. Don't worry, with some experience this will come naturally 
FOREX-KILLER
Forex-killer software package is very intuitive and easy to use and understand. Forex Killer provides you the exact information you need to buy sell or hold like no other software or trading system currently available.The package and the learning videos really set the standards.Anyone into trading will find this package a great tool and have a lot of success with it. Highly Recommended 
The Big Ben strategy
Big Ben is a currency-specific trading strategy designed to capture the first directional intraday move that often occurs within the first few hours after the Frankfurt/London market openings, which begin at approximately 1 a.m. ET. The strategy works best with the British pound/U.S. dollar (GBP/USD) rate.Because this currency rate trades lightly outside of London trading hours, the surge in trading every morning in the U.K. gives it a “Å“real” market opening, which the strategy looks to exploit. Figure 1 shows pound/dollar trading is virtually nonexistent during Asian trading hours. When London opens, however, the pound/dollar accounts for nearly one-quarter of all forex trading. Currency rates with more continuous, 24-hour trading will have less of a distinct open/close as they pass through the different money 
Forex trading account registration
When you open a Forex trading account, you will be asked to give various personal details, including your credit card details, so you will be able to make real cash trades. Some sites offer Forex trading free training wherein you are not required to give out your credit details in order to open and use the demo account.In most cases Forex trading registration is done online, even though sometimes you are required to register by fax. This is uncommon though and only occurs for the smaller Forex trading sites.Forex 
Difference between the forex market and the stock market
When trading is done in the forex market, it requires at least two or more than two countries and it can take place anywhere in the world. In this market, one country is the investor and the other country is where the money is invested. In the majority of the cases, the transactions are done through the broker, such as a bank.Importance of the forex marketThe forex market involves a variety of transactions and countries. The countries that are involved in the forex market do trading in large volumes and invest a huge amount of money. It takes money to make
Cut Your Losses and Let Your Profits
Did you know that many successful traders win less than 50% of their trades? Yes, top traders know that they can be VERY successful winning only 40% of the time.
How can that be?¡± you ask. Simple, really. They are truly following the old adage of ¡°Cut Your Losses and Let Your Profits Run. Let's see how this might actually work.
Suppose you had a stock pick, and it hit your stop loss at 98% of your entry price, which gives you a loss. You pick another stock, and again, it hits your stop loss, for another 2% ding to your account. Third time¡¯s the charm, and your stock pick gains 15% before falling back and triggering your trailing stop at 10% above your entry price. In other words, you made 10%.
In this example, you had two losers and one winner for a win/loss percentage of 33%, yet you are ahead by about 6%. You let your profits run and cut your losses short.
It is not easy having more losers than winners, because you can easily find yourself with 5, 10 or even a string of 20 losses in a row. But those numbers are deceptive, because each loss will be fairly small.
Think of it in terms of baseball. A player can have only a fair lifetime batting average and still be a great player if he hits a home run when he finally does connect with the ball.
It takes confidence in yourself as a trader to work a stock trading system that only wins less than half the time. It¡¯s not easy to be wrong most of the time. But that is why the market rewards such a strategy so highly, if it is done right.
In other words, don¡¯t dismiss a system out of hand because it has more losers than winners. As long as the average win is significantly larger than the average loss, you can be very successful with such a system in the long run.
So keep this in mind as you are searching around for the right strategy for you. Many small losses and a few big winners can be much more profitable then a lot of little winners and a few large losses that take it all back and then some.
How can that be?¡± you ask. Simple, really. They are truly following the old adage of ¡°Cut Your Losses and Let Your Profits Run. Let's see how this might actually work.
Suppose you had a stock pick, and it hit your stop loss at 98% of your entry price, which gives you a loss. You pick another stock, and again, it hits your stop loss, for another 2% ding to your account. Third time¡¯s the charm, and your stock pick gains 15% before falling back and triggering your trailing stop at 10% above your entry price. In other words, you made 10%.
In this example, you had two losers and one winner for a win/loss percentage of 33%, yet you are ahead by about 6%. You let your profits run and cut your losses short.
It is not easy having more losers than winners, because you can easily find yourself with 5, 10 or even a string of 20 losses in a row. But those numbers are deceptive, because each loss will be fairly small.
Think of it in terms of baseball. A player can have only a fair lifetime batting average and still be a great player if he hits a home run when he finally does connect with the ball.
It takes confidence in yourself as a trader to work a stock trading system that only wins less than half the time. It¡¯s not easy to be wrong most of the time. But that is why the market rewards such a strategy so highly, if it is done right.
In other words, don¡¯t dismiss a system out of hand because it has more losers than winners. As long as the average win is significantly larger than the average loss, you can be very successful with such a system in the long run.
So keep this in mind as you are searching around for the right strategy for you. Many small losses and a few big winners can be much more profitable then a lot of little winners and a few large losses that take it all back and then some.
Bollinger Bands Can Give You a Huge Trading Edge
One of the critical pieces of forex education for any Forex trader is to understand the concept of standard deviation of price and how to use volatility to their advantage.
If you understand the concept you can easily apply it with Bollinger bands which are an essential tool for all forex traders.
Let's look at why Bollinger Bands are so useful and profitable, when incorporated in your Forex Strategy.
If you don't know what standard deviation is simply check our article on the concept , right, let's take a look at Bollinger bands.
Bollinger Bands Defined:
Bollinger bands are simply volatility bands drawn either side of a moving average.
You calculate Bollinger bands using the standard deviation of price over the same period as moving averages the mean price, then the volatility bands are plotted above and below the moving average.
Moving averages are used to identify the underlying trend of currencies and Bollinger bands take this one step further by:
Combining the moving average of the currency with the volatility of the individual market (or the standard deviation) ¨C this then creates a trading envelope ¨C with a middle mean price (moving average and 2 x bands (expanding or contracting) either side that reflect volatility or standard deviation.
As prices move away from the longer-term average, the standard deviation rises - and thus the bands will fluctuate in varying amounts, away from the average.
Why they work:
In any market, the value of a currency traded tends to rise slowly over the longer term.
Prices can and do spike quickly in the short term, but will normally return to the longer term moving average - which represents fair value.
The standard deviation of the outer bands (how far they are from the mean) shows how far prices are from longer-term value.
Most price spikes are caused by trader psychology with greed and fear to the fore and this can be graphically seen with Bollinger bands.
So how should you use Bollinger bands?
There are 3 main ways to use them:
1. Spotting price spikes: When the bands are a long way from the mean you can use Bollinger bands as profit taking signal on existing trades or use them to spot contrary trades.
2. Enter exisiting trends: If you have a good trend in the forex markets then you can use dips to the middle band to buy at fair value.
3. Entering new trends: When prices are trading in tight range and start to breakout with a change in volatility a great new trend could be emerging.
Bollinger bands can certainly give you a new dimension to your forex trading strategy and any currency trading system can benefit from the extra insight that they can give you.
A word of warning:
Like all technical indicators you should not use Bollinger bands in isolation to enter trades, however combined with timing indicators such as, the stochastic or RSI, then you have a powerful combination for greater FX profits.
With regard to forex education, knowing what standard deviation is and how to apply the concept through Bollinger Bands, will give you a huge trading edge, so make sure you use them.
If you understand the concept you can easily apply it with Bollinger bands which are an essential tool for all forex traders.
Let's look at why Bollinger Bands are so useful and profitable, when incorporated in your Forex Strategy.
If you don't know what standard deviation is simply check our article on the concept , right, let's take a look at Bollinger bands.
Bollinger Bands Defined:
Bollinger bands are simply volatility bands drawn either side of a moving average.
You calculate Bollinger bands using the standard deviation of price over the same period as moving averages the mean price, then the volatility bands are plotted above and below the moving average.
Moving averages are used to identify the underlying trend of currencies and Bollinger bands take this one step further by:
Combining the moving average of the currency with the volatility of the individual market (or the standard deviation) ¨C this then creates a trading envelope ¨C with a middle mean price (moving average and 2 x bands (expanding or contracting) either side that reflect volatility or standard deviation.
As prices move away from the longer-term average, the standard deviation rises - and thus the bands will fluctuate in varying amounts, away from the average.
Why they work:
In any market, the value of a currency traded tends to rise slowly over the longer term.
Prices can and do spike quickly in the short term, but will normally return to the longer term moving average - which represents fair value.
The standard deviation of the outer bands (how far they are from the mean) shows how far prices are from longer-term value.
Most price spikes are caused by trader psychology with greed and fear to the fore and this can be graphically seen with Bollinger bands.
So how should you use Bollinger bands?
There are 3 main ways to use them:
1. Spotting price spikes: When the bands are a long way from the mean you can use Bollinger bands as profit taking signal on existing trades or use them to spot contrary trades.
2. Enter exisiting trends: If you have a good trend in the forex markets then you can use dips to the middle band to buy at fair value.
3. Entering new trends: When prices are trading in tight range and start to breakout with a change in volatility a great new trend could be emerging.
Bollinger bands can certainly give you a new dimension to your forex trading strategy and any currency trading system can benefit from the extra insight that they can give you.
A word of warning:
Like all technical indicators you should not use Bollinger bands in isolation to enter trades, however combined with timing indicators such as, the stochastic or RSI, then you have a powerful combination for greater FX profits.
With regard to forex education, knowing what standard deviation is and how to apply the concept through Bollinger Bands, will give you a huge trading edge, so make sure you use them.
Learn Forex Trading, Which Forex Strategy Is Right For Me
Learning to trade Forex is not an easy task, but by no means is it difficult either. Learning to trade Forex does not require a great intellect or a college degree. Doctors have failed as traders and construction workers have become millionaires. Trading is all about discipline, determination and perseverance.
The key is to understand who you are as a trader and trade to your strength. Leveraging your strength can be magnified by deploying the appropriate Forex trading strategy. There are hundreds, if not thousands of Forex trading strategies out there. Logic will tell us that there is a currency strategy out there which leverages our strengths. It is not a one-size-fits-all world. To immediately cut to the chase and take away the magic, it all comes down to two basic Forex strategies; trend-following and range-bound. All Forex trading strategies use a variety of indicators and combinations, MACD, Moving Averages, Stochastic, Chart Patterns, Candlesticks, Pivot Points, Fibonacci ratios, Elliott Wave analysis, Bollinger Bands and the list goes on and on. Let's take away the magic again. These indicators and studies are merely measuring support and resistance and trend in the Forex market.
But which strategy really works? This is the age old question?
First, we must understand who we are as traders. Does our personality fit the pip sniper mode or does our disposition attract us more towards swing trading. Finding your trading personality will mean studying and experiencing the different time frames and associated Forex trading strategies. Over time you will notice a higher level of success and/or comfort trading one style over others. Pay attention! The market is telling you where your skill is more capable of extract consistent profits for the market. This is why journaling is so important to your Forex trading routine.
Secondly, if you are using someone else¡¯s strategy, a most of us are, deploy this strategy without change until you fully and completely understand all aspect of the strategy through back-testing and actual experience. As I was told; dance the dance you have been taught until you learn a dance of your own!
Don¡¯t fall into the trap of jumping from strategy to strategy or combining different strategies when the one you are using doesn¡¯t yield immediate success. This is only a recipe for disaster. Take the time to really understand the trading strategy. Study the components individually so a deeper understanding of the strategic mechanisms is mastered.
Above all, know when and when not to deploy this strategy. You will not find consistent success implementing a trend following system in a range-bound currency market.
So what¡¯s the right strategy for you? It is simple, the one that works. It doesn¡¯t matter if it is complicated or simple, trend-following or range-bound, uses Fibonacci studies, pivot points or both. If you understand the components, internalize its use, and drive consistent profits into your trading account, then you have your Forex trading strategy.
It doesn¡¯t matter what the experts say, your account balance is the ultimate judge and jury for your Forex trading strategy
The key is to understand who you are as a trader and trade to your strength. Leveraging your strength can be magnified by deploying the appropriate Forex trading strategy. There are hundreds, if not thousands of Forex trading strategies out there. Logic will tell us that there is a currency strategy out there which leverages our strengths. It is not a one-size-fits-all world. To immediately cut to the chase and take away the magic, it all comes down to two basic Forex strategies; trend-following and range-bound. All Forex trading strategies use a variety of indicators and combinations, MACD, Moving Averages, Stochastic, Chart Patterns, Candlesticks, Pivot Points, Fibonacci ratios, Elliott Wave analysis, Bollinger Bands and the list goes on and on. Let's take away the magic again. These indicators and studies are merely measuring support and resistance and trend in the Forex market.
But which strategy really works? This is the age old question?
First, we must understand who we are as traders. Does our personality fit the pip sniper mode or does our disposition attract us more towards swing trading. Finding your trading personality will mean studying and experiencing the different time frames and associated Forex trading strategies. Over time you will notice a higher level of success and/or comfort trading one style over others. Pay attention! The market is telling you where your skill is more capable of extract consistent profits for the market. This is why journaling is so important to your Forex trading routine.
Secondly, if you are using someone else¡¯s strategy, a most of us are, deploy this strategy without change until you fully and completely understand all aspect of the strategy through back-testing and actual experience. As I was told; dance the dance you have been taught until you learn a dance of your own!
Don¡¯t fall into the trap of jumping from strategy to strategy or combining different strategies when the one you are using doesn¡¯t yield immediate success. This is only a recipe for disaster. Take the time to really understand the trading strategy. Study the components individually so a deeper understanding of the strategic mechanisms is mastered.
Above all, know when and when not to deploy this strategy. You will not find consistent success implementing a trend following system in a range-bound currency market.
So what¡¯s the right strategy for you? It is simple, the one that works. It doesn¡¯t matter if it is complicated or simple, trend-following or range-bound, uses Fibonacci studies, pivot points or both. If you understand the components, internalize its use, and drive consistent profits into your trading account, then you have your Forex trading strategy.
It doesn¡¯t matter what the experts say, your account balance is the ultimate judge and jury for your Forex trading strategy
What is Forex
We had heard a lot of forex trading, but we don't have enough time to know what is forex exactly, because it have a very big books and courses to read.
Forex (Foreign exchange market) is an international money market where free purchase and sale of national currencies are conducted. Forex as we know it today was formed in 1970s after the world's leading countries switched from fixed to floating rates. Forex is a worldwide market for buying and selling currencies. Forex is short for foreign exchange, so when you mention "forex market", you are referring to the foreign exchange market.
Forex traders are represented by thousands of trading institutions such as international banks, central banks of different countries and commercial brokers for all types of foreign currencies. Forex trading or currency trading is always done in currency pairs. Forex advantages 24 hour trading, 5 days a week with non-stop access to global forex dealers.
Forex currency trading for beginners should always include a discussion of the effects of trade imbalances on the price of currencies in foreign exchange trading. The average of forex day trading sales is $ 4 trillion, with constantly increasing volumes of funds for forex conversion operations. As at any stock exchange market, a trade on forex occurs according to the demand and the proposal of a certain instrument. Trading the forex allows the trader to profit from both rising and falling currency prices and this market is not subject to recessions.
In the Forex Market, the money is bought and sold freely; this is the exchange of one currency over another. Foreign exchange trading views a budget surplus as a favorable factor in the worth of a currency while a deficit can lower the value of a currency when trading forex. As mentioned above, the advancement of technology has made forex trading available through the web. The forex market gives traders the ability to leverage their returns by up to 400:1 times the capital in their trading account. The Foreign Exchange Market, also referred as Forex market or FX market, was established between 1971 and 1973, when various central banks around the world introduced a free exchange rate regime, letting the currencies fluctuate driven by the market. Unlike other financial markets, the Forex market has no physical location, no central exchange.
Trading was done by phone orders almost exclusively at one time and they still are today but not as extensively. This is called "trading in pairs", for example: the US dollar against the Japanese yen, or the English pound against the yen, and so on. Forex traders are represented by thousands of trading institutions such as international banks, central banks of different countries and commercial brokers for all types of foreign currencies. One great advantage of trading currencies is you can profit in up and down markets, it is just acceptable to trade to the down side “Short” as it is to the upside “Long”.
Basically, it is a very large market where only currencies are exchanged each time transactions are carried out in Forex, a currency is bought and one is sold at the same time.
When quoting currency pairs, the first currency is known as the base currency and the second as the quote, if you think the US Dollar is going to be stronger than the Japanese Yen, you would buy the base (USD) Hoping that it would rise and sell the USD when you wanted to exit the trade. On the market, a buyer of any particular currency pair is basically indicating their confidence in the economy of that particular country
Forex (Foreign exchange market) is an international money market where free purchase and sale of national currencies are conducted. Forex as we know it today was formed in 1970s after the world's leading countries switched from fixed to floating rates. Forex is a worldwide market for buying and selling currencies. Forex is short for foreign exchange, so when you mention "forex market", you are referring to the foreign exchange market.
Forex traders are represented by thousands of trading institutions such as international banks, central banks of different countries and commercial brokers for all types of foreign currencies. Forex trading or currency trading is always done in currency pairs. Forex advantages 24 hour trading, 5 days a week with non-stop access to global forex dealers.
Forex currency trading for beginners should always include a discussion of the effects of trade imbalances on the price of currencies in foreign exchange trading. The average of forex day trading sales is $ 4 trillion, with constantly increasing volumes of funds for forex conversion operations. As at any stock exchange market, a trade on forex occurs according to the demand and the proposal of a certain instrument. Trading the forex allows the trader to profit from both rising and falling currency prices and this market is not subject to recessions.
In the Forex Market, the money is bought and sold freely; this is the exchange of one currency over another. Foreign exchange trading views a budget surplus as a favorable factor in the worth of a currency while a deficit can lower the value of a currency when trading forex. As mentioned above, the advancement of technology has made forex trading available through the web. The forex market gives traders the ability to leverage their returns by up to 400:1 times the capital in their trading account. The Foreign Exchange Market, also referred as Forex market or FX market, was established between 1971 and 1973, when various central banks around the world introduced a free exchange rate regime, letting the currencies fluctuate driven by the market. Unlike other financial markets, the Forex market has no physical location, no central exchange.
Trading was done by phone orders almost exclusively at one time and they still are today but not as extensively. This is called "trading in pairs", for example: the US dollar against the Japanese yen, or the English pound against the yen, and so on. Forex traders are represented by thousands of trading institutions such as international banks, central banks of different countries and commercial brokers for all types of foreign currencies. One great advantage of trading currencies is you can profit in up and down markets, it is just acceptable to trade to the down side “Short” as it is to the upside “Long”.
Basically, it is a very large market where only currencies are exchanged each time transactions are carried out in Forex, a currency is bought and one is sold at the same time.
When quoting currency pairs, the first currency is known as the base currency and the second as the quote, if you think the US Dollar is going to be stronger than the Japanese Yen, you would buy the base (USD) Hoping that it would rise and sell the USD when you wanted to exit the trade. On the market, a buyer of any particular currency pair is basically indicating their confidence in the economy of that particular country
Stock Trading
Stocks are shares of ownership in companies. People who buy a company’s stock may receive dividends (a portion of any profits). Stockholders are entitled to any capital gains that arise through their trading activity—that is, to any gain obtained when the price at which the stock is sold is greater than the purchase price. But stockholders also face risks. One risk is that the firm may experience losses and not be able to continue the payment of dividends. Another risk involves capital losses when the stockholder sells shares at a price below the purchase price.A company can list its stock on only one major stock exchange. However, options on its stock may be traded on another exchange. Where a stock is traded depends on both the requirements of the exchange and the decision of the corporation. Each exchange establishes requirements that a company must meet to have its stock listed. For example, to be listed on the New York Stock Exchange, a company, among other things, must have a minimum of 1.1 million shares outstanding with a market value of at least $100 million. But not all companies that satisfy NYSE requirements apply to have their stock traded on this exchange. Intel and Dell Computer, two very large and well-known corporations, satisfy NYSE requirements but choose instead to have their shares traded on the over-the-counter Nasdaq.The different exchanges tend to attract different kinds of companies. Smaller exchanges, such as the Nasdaq, typically trade the stock of small, emerging businesses, such as high-tech companies. In the United States, the AMEX lists small to medium-sized businesses, including many oil and gas companies. The NYSE primarily lists large, established companies.Most security trading is accomplished through brokerage firms. Persons and organizations that wish to purchase securities will call upon the brokerage firm to execute their transaction. To actually conduct the transaction on the stock exchange, the brokerage firm must have a membership, called a seat, on the exchange. Stock exchanges limit the number of available seats, and the cost of a seat on an exchange is high. During 2002 the price of a seat on the NYSE ranged from $2 million to $2.6 million. Brokerage firms that have seats not only can complete trades on the floor of the exchange but also have the right to vote on exchange policy.Brokerage firms are willing to pay high prices for exchange seats because of the profit opportunities available from membership in an exchange. Profits can be generated from the fees charged for the execution of trades as well as from trading on the firm’s own account. There are, however, risks associated with brokerage firm activity. For example, brokerage firms can lose money if their clients default on margin loans (loans obtained to purchase securities).
Forex Analysis
While some analyze their portfolios based on profit or loss; in the world of the FOREX Exchange, FOREX Analysis is one of the most important Keystones to successful investing. FOREX Analysis helps both large corporations, central banks, and private investors make the crucial choices to guide them to successful speculation and investment. FOREX Analysis sifts the reams of data, mountains of new articles, and miles of charts and reports to determine the most successful strategy to capitalize in the rates of exchange that are the means of transaction in the FOREX Market.FOREX Analysis takes a comprehensive look at both statistical and non-statistical information and weighs these factors with an eye towards seeking profit in the currency transactions between two countries. For instance let's say we are seeking to make a profit off the movement and conversion of Russian Rubles into British Pounds.Using FOREX Analysis we can determine who, or rather which end of the deal, can provide the most profit return to the eager investor. FOREX Analysis determines the cost and benefit of these investment strategies, and as we all know, this is crucial to determining the extent of investment and the potential for profit; otherwise why commit any funds, if not to reap the return on a much larger amount?FOREX Analysis is made much easier to the average investor if he has access to a brokerage, or a statistical information gathering service. The sheer volume makes collection on the most narrow of invest opportunities almost beyond the scope of the private individual. So having access to the best FOREX Analysis available can make the difference, and for that mater should be the rule of thumb, in considering any investing decision within the FOREX Market.The future of your money is going to be determined either by you or by the erosion of time. Using FOREX Analysis you can place safeguards not only to hedge the amount of your fortune, but also to increase the size and growth potential of your money. In short FOREX Analysis is a key essential to strategic successful investing.
Forex Rates
Foreign currency exchange rates are what it costs to exchange one country’s currency for another country’s currency. For example, if you go to England on vacation, you will have to pay for your hotel, meals, admissions fees, souvenirs and other expenses in British pounds. Since your money is all in US dollars, you will have to use (sell) some of your dollars to buy British pounds.
Assume you go to your bank before you leave and buy $1,000 worth of British pounds. If you get 565.83 British pounds (£565.83) for your $1,000, each dollar is worth .56583 British pounds. This is the exchange rate for converting dollars to pounds.
If £565.83 isn’t enough cash for your trip, you will have to exchange more US dollars for pounds while in England. Assume you buy another $1,000 worth of British pounds from a bank in England and get only £557.02 for your $1,000. The exchange rate for converting dollars to pounds has dropped from .56583 to .55702. This means that US dollars are worth less compared to the British pound than they were before you left on vacation.
Assume that you have £100 left when you return home. You go to your bank and use the pounds to buy US dollars. If the bank gives you $179.31, each British pound is worth 1.7931 dollars. This is the exchange rate for converting pounds to dollars.
Theoretically, you can convert the exchange rate for buying a currency to the exchange rate for selling a currency, and vice versa, by dividing 1 by the known rate. For example, if the exchange rate for buying British pounds with US dollars is .56011, the exchange rate for buying US dollars with British pounds is 1.78536 (1 ÷ .56011 = 1.78536). Similarly, if the exchange rate for buying US dollars with British pounds is 1.78536, the exchange rate for buying British pounds with US dollars is .56011 (1÷ 1.78536 = .56011). This is how newspapers often report currency exchange rates.
As a practical matter, however, you will not be able to buy and sell the currency at the same price, and you will not receive the price quoted in the newspaper. This is because banks and other market participants make money by selling the currency to customers for more than they paid to buy it and by buying the currency from customers for less than they will receive when they sell it. The difference is called a spread and is discussed later in this booklet.
Assume you go to your bank before you leave and buy $1,000 worth of British pounds. If you get 565.83 British pounds (£565.83) for your $1,000, each dollar is worth .56583 British pounds. This is the exchange rate for converting dollars to pounds.
If £565.83 isn’t enough cash for your trip, you will have to exchange more US dollars for pounds while in England. Assume you buy another $1,000 worth of British pounds from a bank in England and get only £557.02 for your $1,000. The exchange rate for converting dollars to pounds has dropped from .56583 to .55702. This means that US dollars are worth less compared to the British pound than they were before you left on vacation.
Assume that you have £100 left when you return home. You go to your bank and use the pounds to buy US dollars. If the bank gives you $179.31, each British pound is worth 1.7931 dollars. This is the exchange rate for converting pounds to dollars.
Theoretically, you can convert the exchange rate for buying a currency to the exchange rate for selling a currency, and vice versa, by dividing 1 by the known rate. For example, if the exchange rate for buying British pounds with US dollars is .56011, the exchange rate for buying US dollars with British pounds is 1.78536 (1 ÷ .56011 = 1.78536). Similarly, if the exchange rate for buying US dollars with British pounds is 1.78536, the exchange rate for buying British pounds with US dollars is .56011 (1÷ 1.78536 = .56011). This is how newspapers often report currency exchange rates.
As a practical matter, however, you will not be able to buy and sell the currency at the same price, and you will not receive the price quoted in the newspaper. This is because banks and other market participants make money by selling the currency to customers for more than they paid to buy it and by buying the currency from customers for less than they will receive when they sell it. The difference is called a spread and is discussed later in this booklet.
Forex Options Market Overview
The forex options market started as an over-the-counter (OTC) financial vehicle for large banks, financial institutions and large internationalcorporations to hedge against foreign currency exposure. Like the forex spot market, the forex options market is considered an "interbank" market.However, with the plethora of real-time financial data and forex option trading software available to most investors through the internet, today's forexoption market now includes an increasingly large number of individuals and corporations who are speculating and/or hedging foreign currencyexposure via telephone or online forex trading platforms.
UPDATE 2-S.Korea state agency cuts 2009 growth forecast
South Korea's economy will grow
just 0.7 percent this year, the slowest since the Asian financial
crisis a decade ago, hit by the deepening global downturn, the
country's top government research agency said on Wednesday.
just 0.7 percent this year, the slowest since the Asian financial
crisis a decade ago, hit by the deepening global downturn, the
country's top government research agency said on Wednesday.
The Korea Development Institute's (KDI) latest forecast, the
lowest among the big government agencies, was a sharp downgrade
from its previous projection for 3.3 percent growth set in
November and stood below the central bank's 2 percent growth
forecast made in December.
Separate data showed exports shrank about 30 percent in the
first 20 days of January, more evidence that the worldwide
downturn is battering the country.
The forecast and the export indicator deepened fears Asia's
fourth-largest economy was heading for its first contraction
since the 1997/98 Asian financial crisis, analysts said.
"The KDI's figures seem too optimistic as the economy
definitely appeared to contract in the fourth quarter, and given
other economic data," said Park Sang-hyun, chief economist at HI
Investment & Securities.
definitely appeared to contract in the fourth quarter, and given
other economic data," said Park Sang-hyun, chief economist at HI
Investment & Securities.
"Stimulus packages at home and abroad may take effect from
the second half, but they are expected to be a just short-term
pain killer, not a fundamental solution," he added.
the second half, but they are expected to be a just short-term
pain killer, not a fundamental solution," he added.
A rising number of private-sector experts expect South
Korea's economy to contract by as much as 3 percent this year,
with ratings agency Standard & Poor's on Wednesday setting its
growth forecast at zero.
The government has introduced fiscal stimulus and tax cuts
worth around a combined $100 billion, some 15 percent of the
country's annual gross domestic product. The central bank has
also cut the policy interest rate to a record-low 2.5 percent
from 5.25 percent where it was at the beginning of October. For a
chronology of South Korean rate.
The Bank of Korea is expected to lower rates further,
probably to as low as 1.5 percent in the first quarter, and it
may cut them more in the second half, analysts said.
After the KDI forecasts, the March treasury bond futures rose as much as 30 ticks.
"The economy is seen entering a recession phase on weaker
domestic demand and as the impact of a sharp slowdown in the
global economy bites into exports," the KDI said in a statement.
JOBS AT RISK
The slowing economy, along with corporate restructuring, is
expected to hit the job market hard as the economy needs to grow
about 5 percent to prevent further job loss, economists said.
"The employment environment will get much worse until next
year as job markets usually lag the overall economy. We may see a
jobs recovery in 2011 at the earliest," said Oh Suk-tae, an
economist at Citigroup.
South Korea's economy was estimated to grow 3.7 percent in
2008, the central bank said in December, after expanding an
average of 4.4 percent a year between 1998 and 2007.
The economy has expanded for the past 10 successive years
after shrinking a some 7 percent in 1998 in the aftermath of the
Asian financial crisis, which had pushed the country to the brink
of economic collapse.
Underscoring the impact of global recession in Asia,
Singapore's government slashed its economic growth forecast for
2009 to as low as minus 5 percent on Wednesday from the previous
projection for as low as minus 2 percent.
The KDI's revised forecasts came a day before the Bank of
Korea is due to release its first official GDP growth estimate
for the fourth quarter of 2008 on Thursday.
Economists polled by Reuters estimated South Korea's GDP to
have contracted a seasonally adjusted 2.7 percent in the
October-December period from the third quarter, which would mark
the biggest quarterly loss since early 1998.
($1=1373.4 Won)
Thai economy unlikey to contract this year- c bank
Thailand's economy is unlikely to shrink this year following interest rate cuts, the Bank of Thailand said on Wednesday.
Central bank Chief Economist Amara Sriphayak said recent interest rate cuts by the central bank and commercial banks should help reduce funding costs and boost spending.
"After the policy rate cuts, major commercial banks have also cut rates. That should help reduce costs and make consumers confident to spend. So the economy this year should not be negative," she said.
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Fed Turns on Printing Presses, Dollar Crashes
Having already lowered interest rates essentially to zero, the Fed has announced that it will now focus on ‘quantitative easing,’ a fancy way of saying that it intends to turn on the printing presses. It will purchase over $1 Trillion in credit instruments, split between Treasury securities and Mortgage-backed debt, expanding its balance sheet to $3 Trillion. This should (temporarily) put an end to speculation over whether foreign Central Banks are still willing to finance the US debt, as this question is now moot, since the Fed has demonstrated its willingness to fulfill that role. “The Fed is basically financing our deficit by buying the debt issued by the Treasury. If the Obama administration pushes through another stimulus package, the dollar is done.”
When the news was announced, the Dollar plummeted by 2.7%, the highest daily margin since 1971, as traders mulled the inflationary implications of printing over $1 Trillion and injecting it directly into the money supply, with the potential of more to come. Wrote one analyst, “Interest rates now are effectively negative across the board. The dollar is selling off because this may contribute to long-term weakness in the currency.”
China Maintains “Stable” Yuan, at Least Against USD
China seems to have fulfilled its promise of a stable currency, given that the Yuan/Dollar exchange rate is one of the few bastions of stability in forex markets. One Dollar trades for approximately 6.83 CNY, about the same as it did last summer. Futures prices, meanwhile, reflect a mean expectation that one year from now, the exchange rate will dip only slightly, to 6.86 CNY/USD. [The inverse is depicted in the chart below].
China seems to have fulfilled its promise of a stable currency, given that the Yuan/Dollar exchange rate is one of the few bastions of stability in forex markets. One Dollar trades for approximately 6.83 CNY, about the same as it did last summer. Futures prices, meanwhile, reflect a mean expectation that one year from now, the exchange rate will dip only slightly, to 6.86 CNY/USD. [The inverse is depicted in the chart below].
In fact, there is even evidence that China is fighting market forces by trying to prop up the value of the Yuan. “‘ If this were a market-determined exchange rate, it would now be weakening, because the overall balance of payments looks to be in deficit, but it is not weakening,’ said [one economist]. ‘The implication is that authorities must be selling their dollar reserves in order to stabilise the USD-CNY exchange rate.’ ” Of course, it’s difficult to determine for sure, since the decline in China’s forex reserves that constitutes the basis for this claim could also have been caused by paper-losses on depreciating investments.
Within China, there is a core group of academics that continues to insist that China should depreciate its currency in response to deteriorating economic conditions. After all, China’s trade “surplus narrowed in February to $4.8 billion from about $40 billion in each of the previous three months, and in all likelihood will fall for the first time in five years in 2009.” Meanwhile, economists estimate that GDP growth could slow to 6%, a far cry from the 13% chalked up in 2007, and well below the government’s goal of 8%.
Some Chinese analysts also take issue with the notion of a ’stable’ currency. ” ‘The stability we expect is not only stability against the USD, but against all currencies,’ said MoC researcher Li Jian. ‘What is stability? Now the RMB is stable against the USD, but is appreciating against the euro, Australian dollar and the yen, so RMB’s exchange rates against these currencies are not stable.’ ” This is an important distinction, since China’s trade rivals are mostly nearby Asian countries- not the US. “Since July, the yuan is up 33% against the Korean won and up 12% against the Singapore dollar, for example. This has made Chinese exports relatively less competitive while spurring more imports and thereby providing somewhat of a boost to other economies.”
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