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Forex Articles |
Written by TheLFB-Forex.com |
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Usually, when a bank wants to make a loan for liquidity needs it has two options: either borrow money from the central-bank, through the open market operations, or call another bank to lend money at the LIBOR rate. The London Inter-bank Offered Rate or LIBOR is the reference rate at which banks lend money each other. A major distinction between those two would be that banks need collateral in order to access money from the central bank, while there is no such need when accessing funds from a fellow bank. This would imply that money accessed through the LIBOR rate, would be more expensive (a higher interest rate) because the loans are not secured. |
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Forex Articles |
Written by TheLFB-Forex.com |
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The U.S. economy is now in the Trough phase of the business cycle, after it experienced a steep decline in the last quarter of 2007 and in the first quarter of 2008. The economy was helped in finding a bottom in the second quarter of 2008 by the rebate checks and the strong exports, but the outlook is not too great either. The economy is expected to crawl into the second half of 2008 and find a decent pace of growth only somewhere later in 2009. In the first months of the contraction phase the global economy seemed resilient to the U.S. slowdown. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Central banks are at the heart of the financial system of any given country in that they are the authorities controlling the supply of money, and therefore control how a regions economy functions. They evolved from the lack of stability in financial market that ruined a lot of economies during the 19th century. The first central bank was the Swedish Riksbank, which was created in the 17th century, with many following in the 18th and 19 century. The U.S. Federal Reserve appeared at the beginning of the 20th century. Over time, the roles of central banks in different countries have developed differently. |
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Forex Articles |
Written by TheLFB-Forex.com |
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There have been a lot of headlines recently in regard to Treasury debt and how it will be financed over the coming years. The Federal Reserve has a mandate of full employment and inflation control, and they use Treasury notes as their tool to deliver that mandate. In this article Jack Jones, a founding member of TheLFB-Forex.com and senior commodity analyst gives an introduction to the bond market, and Treasury Note, mechanics. |
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Forex Articles |
Written by Thomas Long |
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One of the best technical tools we can use in our analysis is the status other currency pairs. If you are of the opinion that because of fundamental reasons the US Dollar will weaken, your next step would be to find the currency pair that gives you the best chance for a profitable trade. |
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Forex Articles |
Written by IFTC Financial Studies |
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Last week I was reviewing a website which has a trading signal program for those investors who prefer to not being involved in confusing market analysis and I respect them because such services normally will bring them more time to do other important things in their daily life. But the interesting thing was the most of signalers did not actually place a stop loss point on their recommendations. Is that so because they know they are right all the time? Or that's because they did not lose half of their trading account in an unexpected slump of 200 hundred points and a single trade. |
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Forex Articles |
Written by David Rodriguez |
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Did you know that the Canadian dollar has a very unique trading characteristic at the end of every month? According to our statistical analysis, we found that over the past 10 years, USD/CAD tends to fall in the last week of the month with a 95 percent confidence level. A more granular look at the data reveals that this drop is predominately concentrated around the 24th and 25th day of every month. Interested in knowing why this happens? |
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Forex Articles |
Written by Cornelius Luca |
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The universe of foreign exchange has expanded dramatically since entering the new millennium and its future remains golden. Fresh from the pruning dictated by the introduction of the euro, the wave of banks mergers, and the emerging market crisis of 1998, currency trading benefited greatly from the equity crisis in the aftermath of overinvestment in tech stocks in the late 1990s and the Y2K brouhaha. |
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Forex Articles |
Written by Adam Rosen |
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The FX-market will develop distinctive trends from time to time, as a result of the underlying fundamental factors which make up each currency within the pair traded. Often times these trends occur as one currency offers a significant higher interest rate, which continues to draw investment capital out of another other currency with significantly lower rates. In the midst of these long term trends, the market may establish a number of consolidation patterns. |
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Forex Articles |
Written by Adam Rosen |
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The (FX) market follows a steady cycle of oscillating between a range bound and trending environment, on a long and short term basis. During range bound markets, the buying and selling forces remain more or less equal, and therefore compress the market into a sideways trading pattern such as the triangle consolidation pattern shown below. Once the market reaches a critical point, either the buyers or sellers overtake the opposing side, and force the market into a new trend; to the upside or downside. |
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Forex Articles |
Written by Adam Rosen |
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When the basic applications of technical indicator fail to explain the current market climate, we can experiment with a new and fresh look at the charts. The following (1-hour) chart shows a steady downtrend, with its expected support and resistance levels. Since the trend is to the downside, we should place more emphasize on our current resistance level; which is drawn by connecting the two most significant high prices. |
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Forex Articles |
Written by Jim Wyckoff |
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The largest traded "market" in the world is not the U.S., Japanese or European stock markets. It's the foreign exchange market. It's also called FOREX for short, or called the cash currency or spot currency market. Speculators can and do trade this huge market, in which over 1 trillion dollars (and other currencies) can change hands every day. |
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Forex Articles |
Written by Adam Rosen |
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From time to time, the FX-market will create a trending market environment, perhaps as the result of a disparity in interest rates among the two currencies within the pair traded. When this trend occurs, it may be in our best interest to simply align our own trading account in the same direction, and take advantage of this trend for as long as it takes us. |
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Forex Articles |
Written by Adam Rosen |
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Many traders, from the individual speculator to the large fund will focus on the large round figures or round numbers when applying their analysis to the FX-market for a number of reasons. Option traders tend to select these price levels whether their exercising American, European, or Exotic options, as well as the placement of protective stop orders. |
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Forex Articles |
Written by Ian Copsey |
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In general Candlestick charting developed in the futures and stock markets and thus many of the patterns or techniques are suited more to these markets. Many still claim that Candlestick charting can be applied to the Forex market but there are limitations when the technique is used in Forex charts. |
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Forex Articles |
Written by Ian Copsey |
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Let's get this straight. Technical analysis is a wide ranging group of techniques which obtain information from price action or derivatives of price action and provide indications to the analyst on the expected direction of price. The basic concept that is often said is that it is based on the assumption that market participants will react in the same way to certain events in the market and since these form patterns, once a pattern is recognized it can be projected forward to predict the next move. In a way this is correct but apart from simple pattern recognition it doesn't really explain the concept sufficiently well enough to make it believable. |
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Forex Articles |
Written by Ian Copsey |
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I often hear traders claim that it is impossible to forecast price movement. I can categorically claim that it is possible, and have considerable success and good accuracy in the process utilizing technical analysis in 100% of my forecasting. Economists of course laugh at the idea that there can be any other method than applying economic theory. |
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Forex Articles |
Written by Boris Schlossberg |
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Typically, when multi-strategy hedge funds head to the currency markets to raise funds they will liquidate their most profitable positions first. Over the past six months this has inevitable meant carry trades. For example since its short term bottom on May 17th, USD/JPY with its 500 basis point positive interest rate spread, has appreciated more than 8% rising from 109 to 118. GBP/CHF - another large carry trade pair with a 300 basis point positive spread - has risen more than 1000 points or better than 4% over the past 3 months. |
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Forex Articles |
Written by Jimmy Young |
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This simple exercise will increase Forex profits 100% and works for 99% of all short-term FX traders - stop trading so much - widen out your stops - widen out your profit targets - and only trade in the direction of the trend indicated by 4 hour chart. |
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Forex Articles |
Written by K Ronald |
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What moves Forex? Conventional thinking would imply economic fundamentals or factors such as the strength of a country's economy, which contributes to currency flows. Therefore, one would assume that everyone else would buy the US dollar against the British pound. Why not? The US economy is the largest in the world while that of Great Britain has fallen to fifth, behind the US, Japan, Germany and China. |
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Forex Articles |
Written by John Forman |
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This particular article focuses on observable trading patterns in European currencies, ones based on the calendar. There is some hesitancy to refer to them as "seasonal" patterns, as one would with commodities, for the simple reason that they are not based on some kind of easily discernable pattern of supply creation. |
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Forex Articles |
Written by Shawn-Elyse Tulac |
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If one first takes a look at the market from a monthly perspective, it can be seen that USD/JPY and the JPY-based crosses have months in which they demonstrate clear tendencies. Figure 1 outlines this. The graph takes a month-by-month look at USD/JPY since 1999 (seven years total), which encapsulates the time since the launch of the year, an important watershed moment in the forex market. |
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Forex Articles |
Written by Abe Cofnas |
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The price action in Gold has been the focus of deserving attention, yet further insight can be gained from an inter-market perspective. The usual historical inverse relationship between the USDX, US Dollar Index, and Gold has been out of sync. Both Gold and the dollar have been strengthening. We can see this in the chart below. But this inverse relationship is not likely to last. Is this an omen for a dollar retracement and a Gold sell off? |
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Forex Articles |
Written by Abe Cofnas |
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The market rewards those on the side of surprise. Traders, particularly in Forex, try to avoid surprises. This is not in itself surprising because joining the crowd, is a defensive action that occurs everywhere in nature. A swarm of bees, a flock of birds, and a herd of sheep, provide individual members protection by being part of the larger group. As we enter the last month of 2005 the Forex crowd around the US Dollar is large- but is it stable? Perhaps its time to look beyond the comfort of the crowd. |
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Forex Articles |
Written by Abe Cofnas |
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We are arriving at a convergence of Technical and Fundamental factors pointing to greater trading opportunities in the EUR/USD pair. From a technical point of view the Daily EUR/USD has been descending from the high of 1.25 to recent two year lows near 1.16. Are we at a bottom? While we can't predict a bottom we can see that opportunities to buy the EUR are providing over 100 pip daily ranges. It's getting easier to go counter trend. |
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Forex Articles |
Written by Abe Cofnas |
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When markets move, particularly in Forex, they move fast. We all have witnessed breakouts and have had the occasion to lament a trade that got away. The beginning trader sees breakouts as a way of riding a strong wave of volatility and providing a quick profit. The problem with the strategy of playing a breakout is that breakouts are technically unstable. They present difficult questions to answer, such as: How long will it last? Especially when there is an absence of news, the question of what caused it is difficult to determine. The better way to trade a breakout is letting the breakout occur and waiting for a subsequent pattern to emerge. Often a Fibonacci retracement pattern emerges, providing trading set-ups. Let's look at some patterns. |
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Forex Articles |
Written by Abe Cofnas |
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Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns. If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EURUSD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report. |
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Forex Articles |
Written by Darrell Jobman |
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Tired of the vagaries of stocks or the volatility of futures such as energy or gold? Then you might be a candidate for the largest traded "market" in the world. It's not the U.S., Japanese or European stock markets but the foreign exchange ? or forex or just FX ? market, also called the cash currency market. |
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Forex Articles |
Written by Abe Cofnas |
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Until recent years, the opportunity to put on a trade was governed by the cycle of day and night. But a unique characteristic of Forex trading is its round the clock sequence of trading. Starting Sunday when the sun rises in Asia, until Friday late afternoon, when the New York markets close, Forex trading is available. So the question arises, what is a Day trade in Forex, if technically Forex is a continuous week of trading? To answer that question we do not need to delve into the nature of human circadian biorhythms. |
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Forex Articles |
Written by Abe Cofnas |
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A recently published book- The Psychology of the Foreign Exchange Market, Thomas Oberlechner (John Wiley and Sons Ltd) provides the results of research on how professional traders view the markets. In Chapter 7, Professor Oberlechner focuses on how Forex markets are characterized with different metaphors. Metaphors are an important way people organize information, as well as form their own expectations of the market. Professor Oberlechner cites the main metaphors used by Forex traders. Forex is like the following: a Bazaar, Machine, Living Beast, Gambling, Sports, War, and the Ocean. Many of us have probably used one or more of these concepts to characterize the Forex market. |
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Forex Articles |
Written by Abe Cofnas |
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While most Forex traders concentrate on the big 4 Major, which include theEUR/USD, USD/CHF, GBP/USD, and USD/JPY, the opportunities presented by other currency pairs should not be overlooked. An emerging example is the USD/CAD. The "loonie" as it is called, is a classic case where a currency pair reflects theunderlying fundamentals of the economy of that currency. In particular, the recentincrease in prices in the crude oil and the general upward trend in commodity prices has contributed to a strengthening of the Canadian economy. |
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Forex Articles |
Written by AC-Markets |
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Trading successfully is by no means a simple matter. It requires time, market knowledge and market understanding and a large amount of self restraint. ACM does not manage accounts, nor does it give market advice, that is the job of money managers and introducing brokers. As market professionals, we can however point the novice in the right direction and indicate what are correct trading tactics and considerations and what is total nonsense. |
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Forex Articles |
Written by RefcoFX |
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Trading currency crosses opens a whole new side of the currency markets, as different crosses possess different qualities that can suit any style of trading. Some crosses move fast and are extremely volatile with daily ranges that may exceed over 100 pips. While other crosses move relatively slow and exhibit low volatility, which is more suited for novice traders. Another added dimension to trading crosses is the ability to collect substantial amounts of interest (i.e. GBP/JPY, NZD/JPY and other high yielding crosses) as the positive carry created by the interest rate differentials can add to a trader's bottom line P/L. Discover the world beyond the majors where traders can expand their trading horizons. |
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Forex Articles |
Written by RefcoFX |
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Trading the US dollar opens a whole new market to the potential trader, a market where one can participate in the cyclical nature of the global economies. Wish to diversify away from the US dollar... buy the Euro. Wish for movement in the market... trade the British Pound. Believe that Japanese economy is going to grow... buy Japanese Yen. Geopolitical tensions... buy the Swiss Franc. Trading majors gives you choices. |
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Forex Articles |
Written by RefcoFX |
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Alone, none of these indicators yield great results. However, when combined and used in unison, they can give traders the extra edge needed to better understand short term trading dynamics. Therefore it is important for traders to look for relationships between the different indicators as multiple signals can provide the most accurate trading predictions. |
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Forex Articles |
Written by RefcoFX |
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Using Multiple Time Frames - Another key time frame consideration has to do with a time screen. Here, the trader will refer to a triple or double screen. Considering the former, the trader will rely on the daily for the longer term perspective, while establishing a similar pattern in the intermediate (hourly chart) and short term (10 minutes). If all three frames line up for a short opportunity, the trader will more than likely attempt to capture the shortfall and place a sell. In the event of the double screen, the trader is simply considering one time frame, daily, in establishing the entry in the short term, hourly. |
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Forex Articles |
Written by RefcoFX |
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Currencies do not become weaker or stronger randomly. A large portion of a currency's value is based on confidence in the economic strength of the country.?Economic strength is judged by certain key indicators that are closely watched in FX trading. When these economic indicators change, the value of a currency will fluctuate.?A currency is a proxy for the country it represents and the economic health of that country is priced into the currency. |
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Forex Articles |
Written by RefcoFX |
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A currency is a proxy for the country it represents, therefore the economic health of that country is priced into the currency. Economic indicators measure the health of an economy. The challenge is keeping track of each particular country's economic health. Know when indicators are due to be released. It is important to keep an eye on the future and knowing which news releases the market deems most important. |
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Forex Articles |
Written by RefcoFX |
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In the currency market, traders buy and sell currencies with the hope of making a profit when the value of the currencies changes in their favor, whether from market news or events that take place around the world. Currencies, just like any other commodity that can be bought or sold, are subject to the laws of supply and demand. When more people want a particular currency, the cost of the currency in terms of other currencies will go up. When demand decreases or people do not want to hold a country?s currency, the value will go down. What factors affect supply and demand for a currency? |
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Forex Articles |
Written by Jay Lakhani |
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Trading in Forex is a $3.5 trillion-a-day market. It's amazing when you find out how easy it is to make consistent profit, if you have a good trading system with a good plan. Every day, $3.5 trillion float through the hands of people who aren't any smarter than you or I are. It doesn't make any difference what is your profession, if you're a fireman, a housewife, a graduate, working professional, and college student or business owner. If you're willing to follow simple rules and strategies, you deserve a piece of the pie. |
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Forex Articles |
Written by Robert Prechter |
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Elliott Wave analysis paints big pictures that often give traders and investors the information they need to benefit from contrarian positions. Anyone who followed EWI's forecasts for the U.S. dollar at the end of 2004 learned a lot about what can happen when the world is unanimous about the trend, and you have the discipline to disagree. Bob Prechter describes what it's like to stand strong against bullish sentiment for stocks in this excerpt about stocks and currencies?from his most recent?Elliott Wave Theorist. |
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Forex Articles |
Written by Scott Owens |
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Automated trading gives most traders their best chance for success in forex, but it?s not the only element of a successful trading record. Traders must know how to apply automated trading techniques and be willing to manually manipulate trades when possible. Combining these two methods ? mechanization and discretion ? is the path to profitable trading. |
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Forex Articles |
Written by Scott Owens |
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The debate rages on: what?s the best way to capture profits in forex ? hard work or automated trading? For someone who wants to trade their own systems, the answer is clear: both. Hard work is the foundation of all profitable automated trading systems. |
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Forex Articles |
Written by Scott Owens |
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Go to a dinner party and mention your involvement with forex and you?re likely to get a few baffled looks. Most people don?t have a clue what forex is or how it works. Worst of all, neither do most beginning forex traders. Understanding what makes these markets tick is a good step towards a successful trading record. |
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Forex Articles |
Written by Scott Owens with Omer Lizotte |
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One of the key elements of any trading system is market timing. Many traders fail to account for timing when making trading decisions, and those who do often rely on their instinct of market timing rather than empirical data. The sophisticated investor uses advanced timing techniques to optimize market entry and exit. |
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Forex Articles |
Written by Scott Owens |
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Few traders ever stop to consider the context that defines the foreign exchange marketplace, but all of them should. As forex matures in its role as a retail investment environment the rules ? and the stakes ? will only multiply. |
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Forex Articles |
Written by Jimmy Young |
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Why do on-line FX brokers guarantee stops at all? The answer is simple; they make a lot of money from it. Only the on-line FX brokers handle stop loss orders such that a customer?s stop loss order is executed when the level is reached and not breached. In fact, in FX banking the etiquette is to not fill a stop until 3 points or so breaches the level...... |
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Forex Articles |
Written by Jimmy Young |
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This is a guide that tells you, in simple understandable language, how to choose the right charts, read them correctly, and act effectively in the market from what you see on them. Probably most of you have taken a course or studied the use of charts in the past. This should add to that knowledge. |
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Forex Articles |
Written by Forex.com |
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Trading currencies on margin lets you increase your buying power. Here's a simplified example: If you have $2,000 cash in a margin account that allows 100:1 leverage, you could purchase up to $200,000 worth of currency-because you only have to post 1% of the purchase price as collateral. Another way of saying this is that you have $200,000 in buying power. |
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Forex Articles |
Written by Forex.com |
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The Foreign Exchange market, also referred to as the "Forex" or "FX" market is the largest financial market in the world, with a daily average turnover of well over US$1 trillion -- 30 times larger than the combined volume of all U.S. equity markets. |
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