You should pay more attention to many different factors when you are considering to use the Forex currency trading system. Fortunately, today there are many different simulation games that can be played that use the real quotes in them, but allow people to practice making the trades without risking their own money. Since there are so many different features to learn and tools to learn how to use, such as the Forex currency converters, it is a great idea to try the system out and get familiar with it before risking a lot of money on the market. The benefit of using the Forex currency trading system is that the people can use the system without having to use a broker or other professional that takes a cut of the profit. The bad thing about using the system is that the person has to learn on his own and it takes time to learn the ins and outs of the system.
Things to Learn
One of the first things that the people have to learn about the Forex currency trading system is how to read the quotes. There are pairings that are used in the quotes and the first one is the base currency and the other one is the quote currency. There is a spread between them which is indicative of whether that trade is one that should be done at that point in time.
Most of the time, when using the Forex currency trading system, a person will buy a pairing at a certain time because they think that the market in a certain economy is going to go up or down depending on the current political situation there. They then have to wait for a period of time to see what the market does and then they can decide if it is time to cut their losses or to sell and make their profit.
The second thing to learn is just that – they need to learn when it is profitable to buy and sell and what all of the numbers mean. They need to learn the exchange rates and spreads that happen in the Forex currency trading system so that they can make wise decisions with their money. They need to learn how to place orders in the system and what it means that an order is still open. They also need to learn when it is wise to close an order and how to calculate profit or loss.
There is also the need to learn margin calculations as well as interest rate calculations. They will need to learn what currency hedging is and how it is beneficial to them in the Forex currency trading system.
Want to get the meaningful information on the buy property and the great mortgage brokers can do much for you.
Thursday, November 11, 2010
Forex Trading, Where Do Customers Go.
Forex trading makes use of forex and stock markets from quite a lot of countries to create a trading market where tens of millions and thousands and thousands are traded and exchanged daily. This market is just like the stock market, as people purchase and sell, but the market and the over all volumes are a lot much larger. Those concerned in the forex trading markets embody the Deutsche bank, UBS, Citigroup, and others branches of HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and nonetheless others like to Goldman Sachs, ABN Amro, Morgan Stanley, and so on.
To get involved in the forex trading markets, contacting any of these large broker assistance firms is going to be in your best interest. Sure, anyone can get involved in the forex market, but it does take time to learn about what is hot, what is not, and just where you should place your money at this time.
International banks are the biggest users on the forex markets, as they’ve thousands and thousands of dollars to speculate day by day, to earn money and this is just one methodology of how banks make cash on the cash you invest in their bank. Take into consideration the financial institution that you deal with all the time. Have you learnt if you can go there, and get money from other nation’s currency if you’re heading out on trip? If not, that bank is almost definitely not involved in forex trading. If you need to know in case your financial institution is involved in foreign currency trading, you may ask any manager or you’ll be able to look at the financial information sheets that banks report to the general public on a quarterly baiss.
In case you are new to the foreign exchange market, it is very important that there isn’t a one individual or one bank that controls all the trades that occur in the forex markets. Various currencies are traded, and will originate from everywhere in the world. The currencies that are most often traded in the forex markets embrace those of the US dollar, the Eurozone euro, the Japanese yen, the British pound sterling and the Swiss franc as well as the Australian dollar.
These are just a few of the currencies that are traded on the forex markets, with many other countie’s currencies to be included as well. The main trading centers for the forex trading markets are located in Tokyo, New York and in London but with other smaller trading centers located thought out the world as well.
Looking to find the best deal on forex, then visit www.forexservicenet.com to find the best advice on forex trading for you.
To get involved in the forex trading markets, contacting any of these large broker assistance firms is going to be in your best interest. Sure, anyone can get involved in the forex market, but it does take time to learn about what is hot, what is not, and just where you should place your money at this time.
International banks are the biggest users on the forex markets, as they’ve thousands and thousands of dollars to speculate day by day, to earn money and this is just one methodology of how banks make cash on the cash you invest in their bank. Take into consideration the financial institution that you deal with all the time. Have you learnt if you can go there, and get money from other nation’s currency if you’re heading out on trip? If not, that bank is almost definitely not involved in forex trading. If you need to know in case your financial institution is involved in foreign currency trading, you may ask any manager or you’ll be able to look at the financial information sheets that banks report to the general public on a quarterly baiss.
In case you are new to the foreign exchange market, it is very important that there isn’t a one individual or one bank that controls all the trades that occur in the forex markets. Various currencies are traded, and will originate from everywhere in the world. The currencies that are most often traded in the forex markets embrace those of the US dollar, the Eurozone euro, the Japanese yen, the British pound sterling and the Swiss franc as well as the Australian dollar.
These are just a few of the currencies that are traded on the forex markets, with many other countie’s currencies to be included as well. The main trading centers for the forex trading markets are located in Tokyo, New York and in London but with other smaller trading centers located thought out the world as well.
Looking to find the best deal on forex, then visit www.forexservicenet.com to find the best advice on forex trading for you.
Forex Robots
Historical evidences available can witness the fact of money trading followed for many centuries. Business of trading currencies
has become very popular. Foreign exchange market, in simple words is called forex. Exchanging of one foreign currency with another is forex trading. The average business turnover is approximately 4 trillion and operated round the clock. Trading volume reflected as market liquidity is the remarkable feature of forex trading. Trade and investment all over the world require the assistance of forex for businesses. The modernized usage of foreign exchange was started from the year 1970. In foreign exchange the operation will be available continuously for 24 hours, except weekends. Many people are earning billions of dollars from Forex trading. Forex robots help was started to get availed by the foreign exchange agencies around the world. To fetch handsome profits forex robot can be installed. To attain performance and reliability many agencies in the city started to prefer best forex robots. FAP turbo, which is considered as one of the leading forex robot is providing successful and profitable trades. 60 days money back guarantee is provided for most of the forex robots. forex robots like FAP turbo is one of the country’s highest selling. Forex robots like Megadroid and ivybot are the other best selling. Forex robot will make the owner to stay cool while updating algorithm constantly which is its excellent performance. The worth and usage is clearly admitted with the record number of sales of the product
has become very popular. Foreign exchange market, in simple words is called forex. Exchanging of one foreign currency with another is forex trading. The average business turnover is approximately 4 trillion and operated round the clock. Trading volume reflected as market liquidity is the remarkable feature of forex trading. Trade and investment all over the world require the assistance of forex for businesses. The modernized usage of foreign exchange was started from the year 1970. In foreign exchange the operation will be available continuously for 24 hours, except weekends. Many people are earning billions of dollars from Forex trading. Forex robots help was started to get availed by the foreign exchange agencies around the world. To fetch handsome profits forex robot can be installed. To attain performance and reliability many agencies in the city started to prefer best forex robots. FAP turbo, which is considered as one of the leading forex robot is providing successful and profitable trades. 60 days money back guarantee is provided for most of the forex robots. forex robots like FAP turbo is one of the country’s highest selling. Forex robots like Megadroid and ivybot are the other best selling. Forex robot will make the owner to stay cool while updating algorithm constantly which is its excellent performance. The worth and usage is clearly admitted with the record number of sales of the product
How to Learn Currency Trading in Easy Steps
Currency Trading
is becoming popular day by day. More peoples are investing their money in forex market as you can invest very small amount of your earning in this market. You can get alternative source of income with this business. It is also a good alternative to Stock Trading. But to trade currencies online, you need to have knowledge of forex trading in some extent. You can find a lot of information about currency trading on internet itself or you can use following methods to learn forex trading.
Different Ways to Learn Currency Trading
1. Find books related to basics of forex trading in book store near you and read at least one or 2 books.
2. Another good alternative to learn currency trading is download e-books related to forex trading by searching the web. It it also a good method and it costs nothing.
3. Subscribe to online forex trading course which are offered by different forex related website. Some of them charge you while others are free. This is most preferable way for learning.
4. By watching online videos.
5. By reading articles and blog entries related to forex.
After this you should start watching the forex market daily. You should try to analyze the market how currency trading
rates are going up and down to get an idea. Many portals show live currency market on their website itself. So try to watch the currency rates for some days.
After getting sufficient idea about this market you can open a free demo account of online forex trading with a forex broker. It is a demo account and you can trade currencies virtually. With a demo account you will be able to get comfortable with the trading platform provided by broker.
Remember that forex brokers also provide forex trading signals to trade currencies. So with your own knowledge and with the help of broker’s advice you can become a successful forex trader
is becoming popular day by day. More peoples are investing their money in forex market as you can invest very small amount of your earning in this market. You can get alternative source of income with this business. It is also a good alternative to Stock Trading. But to trade currencies online, you need to have knowledge of forex trading in some extent. You can find a lot of information about currency trading on internet itself or you can use following methods to learn forex trading.
Different Ways to Learn Currency Trading
1. Find books related to basics of forex trading in book store near you and read at least one or 2 books.
2. Another good alternative to learn currency trading is download e-books related to forex trading by searching the web. It it also a good method and it costs nothing.
3. Subscribe to online forex trading course which are offered by different forex related website. Some of them charge you while others are free. This is most preferable way for learning.
4. By watching online videos.
5. By reading articles and blog entries related to forex.
After this you should start watching the forex market daily. You should try to analyze the market how currency trading
rates are going up and down to get an idea. Many portals show live currency market on their website itself. So try to watch the currency rates for some days.
After getting sufficient idea about this market you can open a free demo account of online forex trading with a forex broker. It is a demo account and you can trade currencies virtually. With a demo account you will be able to get comfortable with the trading platform provided by broker.
Remember that forex brokers also provide forex trading signals to trade currencies. So with your own knowledge and with the help of broker’s advice you can become a successful forex trader
How To Learn Forex Trading Online
If you want to learn forex trading online
, there are several helpful websites that can teach you the ropes, provide demo accounts for practicing, and offer tips for more experienced traders. To learn forex trading online can potentially earn you a lot of money very quickly, but it can also be a very high risk form of trading. Therefore, it is important to know exactly what you are doing before you start to learn forex trading online.
So what exactly is forex trading? The process involves buying and selling currencies on the international currency exchange market. This is a highly volatile market and currency rates can fluctuate significantly within just a few minutes so most trades are completed within a 24 hour time frame. It has become very popular to learn forex trading online, as it is accessible to anyone with a fast internet connection via a number of websites that provide software and instructions for beginners.
It is important before you start trading to research and thoroughly learn forex trading online, including comparing it to trading on the stock market and other options. If you still want to learn forex trading online and think it is a good option for you, then you can sign up to one of the many websites who offer a trading platform and brokerage service. It is a good idea to open a forex demo account first – this lets you practice trading with dummy funds so you can get a feel for how the system works before you risk any real money when you first begin to learn forex trading online.
Currency exchange rates
are subject to many factors and can be very difficult to predict. The main skill to master when you learn forex trading online is how to interpret currency charts and use them to predict trends in future currency exchange rates. This skill usually comes from experience and often just luck, although there are many articles, which can help you explain the basic process when you are just start to learn forex trading online.
In order to learn forex trading online you need to make sure you have a fast internet connection – as the market is so fast moving even delays of a few seconds can cause inconsistencies in listed prices when you are trading. You should also make sure that the software offered by the website you choose is fast and does not suffer from frequent down time. It is a good idea to read reviews of several different systems before you commit to using one to learn forex trading online.
Before you invest real money, you should open a forex demo account. It is definitively the best way to learn forex trading online
, there are several helpful websites that can teach you the ropes, provide demo accounts for practicing, and offer tips for more experienced traders. To learn forex trading online can potentially earn you a lot of money very quickly, but it can also be a very high risk form of trading. Therefore, it is important to know exactly what you are doing before you start to learn forex trading online.
So what exactly is forex trading? The process involves buying and selling currencies on the international currency exchange market. This is a highly volatile market and currency rates can fluctuate significantly within just a few minutes so most trades are completed within a 24 hour time frame. It has become very popular to learn forex trading online, as it is accessible to anyone with a fast internet connection via a number of websites that provide software and instructions for beginners.
It is important before you start trading to research and thoroughly learn forex trading online, including comparing it to trading on the stock market and other options. If you still want to learn forex trading online and think it is a good option for you, then you can sign up to one of the many websites who offer a trading platform and brokerage service. It is a good idea to open a forex demo account first – this lets you practice trading with dummy funds so you can get a feel for how the system works before you risk any real money when you first begin to learn forex trading online.
Currency exchange rates
are subject to many factors and can be very difficult to predict. The main skill to master when you learn forex trading online is how to interpret currency charts and use them to predict trends in future currency exchange rates. This skill usually comes from experience and often just luck, although there are many articles, which can help you explain the basic process when you are just start to learn forex trading online.
In order to learn forex trading online you need to make sure you have a fast internet connection – as the market is so fast moving even delays of a few seconds can cause inconsistencies in listed prices when you are trading. You should also make sure that the software offered by the website you choose is fast and does not suffer from frequent down time. It is a good idea to read reviews of several different systems before you commit to using one to learn forex trading online.
Before you invest real money, you should open a forex demo account. It is definitively the best way to learn forex trading online
Monday, November 8, 2010
Currency Pairs
Tailoring Your Technical Approach to Currency "Personalities"
by: Brian Dolan
Every currency pair has qualities unique to it. Find out what those qualities are.
Much has been written about the suitability of technical analysis for trading in the currency markets. While this is undoubtedly true, it can leave traders, particularly those new to the currency markets, with the impression that all technical tools are equally applicable to all major currency pairs. Perhaps most dangerous from the standpoint of profitability, it can also seduce traders into searching for the proverbial silver bullet: that magic technical tool or study that works for all currency pairs, all the time. However, anyone who has traded forex for any length of time will recognize that, for example, dollar/Yen (USD/JPY) and dollar/Swiss (USD/CHF) trade in distinctly different fashions.
Why, then, should a one-size-fits-all technical approach be expected to produce steady trading results? Instead, traders are more likely to experience improved results if they recognize the differences between the major currency pairs and employ different technical strategies to them. This article will explore some of the differences between the major currency pairs and suggest technical approaches that are best suited to each pair's behavioral tendencies.
The Biggie
By far the most actively traded currency pair is euro/dollar (EUR/USD), accounting for 28 percent of daily global volume in the most recent Bank for International Settlements (BIS) survey of currency market activity. EUR/USD receives further interest from volume generated by the Euro-crosses (e.g. euro/British pound (EUR/GBP), EUR/CHF and EUR/JPY, and this interest tends to be contrary to the underlying U.S. dollar direction. For example, in a U.S. dollar-negative environment, the Euro will have an underlying bid stemming from overall U.S. dollar selling. However, less liquid dollar pairs (e.g. USD/CHF) will be sold through the more liquid Euro crosses, in this case resulting in EUR/CHF selling, which introduces a Euro offer into the EUR/USD market.
This two-way interest tends to slow Euro movements relative to other major dollar pairs and makes it an attractive market for short-term traders, who can exploit "backing and filling." On the other hand, this depth of liquidity also means EUR/USD tends to experience prolonged, seemingly inconclusive tests of technical levels, whether generated by trendline analysis or Fibonacci/Elliott wave calculations. This suggests breakout traders need to allow for a greater margin of error: 20-30 pips. (A pip is the smallest increment in which a foreign currency can trade with respect to identifying breaks of technical levels.) Another way to gauge whether EUR/USD is breaking out is to look to the less liquid USD/CHF and GBP/USD. If these pairs have broken equivalent technical levels, for example recent daily highs, then EUR/USD is likely to do the same after a lag. If "Swissy" and "Cable" (popular name for British pound) are stalling at those levels, then EUR/USD will likely fail as well.
Customize Your Settings
In terms of technical studies, the overwhelming depth of EUR/USD suggests that momentum oscillators are well-suited to trading the euro, but traders should consider adjusting the studies' parameters (increase time periods) to account for the relatively plodding, back-and-fill movements of EUR/USD. See Figure 1. In this sense, reliance on very short-term indicators (less than 30 minutes) exposes traders to an increased likelihood of "whipsaw" movements. Moving average convergence divergence (MACD) as a momentum study is well-suited to EUR/USD, particularly because it utilizes exponential moving averages (greater weight to more recent prices, less to old prices) in conjunction with a third moving average, resulting in in fewer false crossovers. Short-term (hourly) momentum divergences routinely occur in EUR/USD, but they need to be confirmed by breaks of price levels identified though trendline analysis to suggest an actionable trade. When larger moves are underway, traders are also likely to find the directional movement indicator (DMI) system useful for confirming whether a trend is in place, in which case momentum readings should be discounted, and might choose to rely on DI+/DI- crossovers for additional trade entry signals.
Second Place
The next most actively traded currency pair is USD/JPY, which accounted for 17 percent of daily global volume in the 2004 BIS survey of currency market turnover. USD/JPY has traditionally been the most politically sensitive currency pair, with successive U.S. governments using the exchange rate as a lever in trade negotiations with Japan. While China has recently replaced Japan as the Asian market evoking U.S. trade tensions, USD/JPY still acts as a regional currency proxy for China and other less-liquid, highly regulated Asian currencies. In this sense, USD/JPY is frequently prone to extended trending periods as trade or regional political themes (e.g. yuan revaluation) play out.
For day-to-day trading, however, the most significant feature of USD/JPY is the heavy influence exerted by Japanese institutional investors and asset managers. Due to a culture of intra-Japanese collegiality, including extensive position and strategy information-sharing, Japanese asset managers frequently act in the same direction on the yen in the currency market. In concrete terms, this frequently manifests itself in clusters of orders at similar price or technical levels, which then reinforce those levels as points of support or resistance. Once these levels are breached, similar clusters of stop loss orders are frequently just behind, which in turn fuel the breakout. Also, as the Japanese investment community moves en masse into a particular trade, they tend to drive the market away from themselves for periods of time, all the while adjusting their orders to the new price levels, for instance raising limit buy orders as the price rises.
An alternate tactic frequently employed by Japanese asset managers is to stagger orders to take advantage of any short-term reversals in the direction of the larger trend. For example, if USD/JPY is at 115.00 and trending higher, USD/JPY buying orders would be placed at arbitrary price points, such as 114.75, 114.50, 114.25 and 114.00, to take advantage of any pullback in the broader trend. This also helps explain why USD/JPY frequently encounters support or resistance at numerically round levels, even though there may be no other corresponding technical significance.
Take A Look at Trendlines
Turning to the technical side of USD/JPY, the foregoing discussion suggests trendline analysis as perhaps the most significant technical tool for trading USD/JPY. Because of the clustering of Japanese institutional orders around technical or price levels, USD/JPY tends to experience fewer false breaks of trendlines. For example, large-scale selling interest at technical resistance will need to be absorbed if the technical level is to be broken. This is likely to happen only if a larger market move is unfolding, and this suggests any break will be sustained. This makes USD/JPY attractive for breakout traders who employ stop-loss entry orders on breaks of trendline support or resistance. Short-term trendlines, such as hourly or 15 minutes, can be used effectively, but traders need to operate on a similarly short-term basis; daily closing levels hold the most meaning in USD/JPY. In terms of chart analysis, Japanese institutional asset managers rely heavily on candlestick charts (which depend heavily on daily close levels) and traders would be well-advised to learn to recognize major candlestick patterns, such as doji, hanging man, tweezer tops/bottoms and the like. See Figure 2. When it comes to significant trend reversals or pauses, daily close (5 p.m. EST), candlesticks can be highly reliable leading indicators.
The yen discussion above also highlighted the factors behind the propensity of USD/JPY to trend over the medium-term (multiweek). This facet suggests traders should look to trend following tools such as moving averages (21- and 55-day perio ds are heavily used), DMI, and Parabolic SAR. (This refers to J. Welles Wilder Jr.'s Parabolic System. SAR stands for stop and reverse.) Momentum oscillators such as the relative strength index (RSI), MACD or stochastics should generally be avoided, especially intraday, due to the trending and institutional nature driving USD/JPY. While a momentum indicator may reverse course, typically suggesting a potential trade, price action often fails to reverse enough to make the trade worthwhile due to underlying institutional interest. Instead of reversing along with momentum, USD/JPY price action will frequently settle into a sideways range, allowing momentum studies to continue to unwind, until the underlying trend resumes. Finally, Ichimoku analysis (roughly translated as one-glance cloud chart) is another largely Japanese-specific trend identification system that highlights trends and major reversals.
A Look At Some Illiquid Currencies
Having looked at the two most heavily traded currency pairs, let's now examine two of the least liquid major currency pairs, USD/CHF and GBP/USD, which pose special challenges to technically oriented traders. The so-called Swissy holds a place among the major currency pairs due to Switzerland's unique status as a global investment haven; estimates are that nearly one-third of the world's private assets are held in Switzerland. The Swiss franc has also acted historically as a so-called "safe-haven" currency alternative to the U.S. dollar in times of geo-political uncertainty, but this dimension has largely faded since the end of the Cold War. Today, USD/CHF trades mostly based on overall U.S. dollar sentiment, as opposed to Swiss-based economic fundamentals. The Swiss National Bank (SNB) is primarily concerned with the franc's value relative to the euro, since the vast majority of Swiss trade is with the European Union, and Swiss fundamental developments are primarily reflected in the EUR/CHF cross rate.
Liquidity in USD/CHF is never very good, and this makes it a favorite "whipping horse" for hedge funds and other speculative interests looking to maximize the bang for their buck. The lower liquidity and higher volatility of Swissy also makes it a significant leading indicator for major U.S. dollar movements. Figure 3 illustrates an example of a recent break of major daily trendline support in USD/CHF that took place a full day before EUR/USD and USD/JPY broke equivalent levels. Swissy will also lead the way in shorter-term movements, but the overall volatility and general jitteriness of USD/CHF price action makes false breaks of technical levels common. These false breaks are frequently stop-loss driven and it is not unusual for prices to trade 15-25 points through a support/resistance level before reversing after the stop losses have been triggered. In strong directional moves, USD/CHF price action tends toward extreme one-way traffic, with minimal backing and filling in comparison to EUR/USD.
Cable (GBP/USD), or sterling, also suffers from relatively poor liquidity and this is in part due to its higher pip value (U.S. dollars) and the relatively Euro-centric basis of U.K. trade. Sterling shares many of the same trading characteristics of Swissy outlined just above, but Cable will also react sharply to U.K. fundamental data as well as to U.S. news. Sterling's price action will also display extreme one-way tendencies during larger moves, as traders caught on the wrong side chase the illiquid market to the extremes.
Focus On Risk Management
The volatility and illiquidity of Swissy and sterling suggests traders need to use a more proactive overall approach to trading these pairs, particularly concerning risk management (i.e. position size in relation to stop levels). With regard to technical tools, the tendency for both pairs to make short-term false breaks of chart levels suggests breakout traders need to be particularly disciplined concerning stop entry levels and should consider a greater margin of error on the order of 30-35 points. In this sense, trendline analysis of periods less than an hour tends to generate more noise than tradable break points, so a focus on longer time periods (four hours-daily) is likely to be more successful in identifying meaningful breaks. By the same token, once a breakout occurs, surpassing the margin of error, the ensuing one-way price action favors traders who are quick on the trigger, and this suggests employing resting stop-loss entry orders to reduce slippage. For those positioned with a move, trailing stops with an acceleration factor, such as parabolic SAR, are well suited to riding out directional volatility until a price reversal signals an exit. Of course, placing contigent orders may not necessarily limit your losses.
The volatility inherent in Cable and Swissy makes the use of short-term (hourly and shorter) momentum oscillators problematic, due to both false crossovers and divergences between price/momentum that frequently occur in these time frames. Longer-period oscillators (four hours and more) are best used to highlight potential reversals or divergent price action, but volatility discourages initiating trades based on these alone. Instead, momentum signals need to be confirmed by other indicators, such as breaks of trendlines, Fibonacci retracements or parabolic levels, before a trade is initiated.
Try A Larger Retracement
With regard to Fibonacci retracement levels, the greater volatility of Cable and Swissy frequently sees them exceed 61.8-percent retracements, only to stall later at the 76.4-percent level, by which time most short-term Elliott wave followers have been stopped out. Short-term spike reversals of greater than 30 points also serve as a reliable way to identify when a directional surge, especially intraday, is completed, and these can be used as both profit taking and counter-trend trading signals. For counter-trend, corrective trades based on spike reversals, stops should be placed slightly beyond the extreme of the spike low/high. A final technical study that is well suited to the explosiveness of Swissy and sterling is the Williams %R, an overbought/oversold momentum indicator, which frequently acts as a leading indicator of price reversals. The overbought/oversold bands should be adjusted to -10/-90 to fit the higher volatility of Cable and Swissy. As with all overbought/oversold studies, however, price action needs to reverse course first before trades are initiated.
It's Not One Size Fits All
Traders who seek to apply technical trading approaches to the currency market should be aware of the differences in the trading characteristics of the major currency pairs. Just because the euro and the pound are both traded against the dollar does not mean they will trade identically to each other. A more thorough understanding of the various market traits of currencies suggests that certain technical tools are better suited to some currency pairs than others. A currency-specific approach to applying technical analysis is more likely to produce successful results than a one-size-fits-all application across all currency pairs.
by: Brian Dolan
Every currency pair has qualities unique to it. Find out what those qualities are.
Much has been written about the suitability of technical analysis for trading in the currency markets. While this is undoubtedly true, it can leave traders, particularly those new to the currency markets, with the impression that all technical tools are equally applicable to all major currency pairs. Perhaps most dangerous from the standpoint of profitability, it can also seduce traders into searching for the proverbial silver bullet: that magic technical tool or study that works for all currency pairs, all the time. However, anyone who has traded forex for any length of time will recognize that, for example, dollar/Yen (USD/JPY) and dollar/Swiss (USD/CHF) trade in distinctly different fashions.
Why, then, should a one-size-fits-all technical approach be expected to produce steady trading results? Instead, traders are more likely to experience improved results if they recognize the differences between the major currency pairs and employ different technical strategies to them. This article will explore some of the differences between the major currency pairs and suggest technical approaches that are best suited to each pair's behavioral tendencies.
The Biggie
By far the most actively traded currency pair is euro/dollar (EUR/USD), accounting for 28 percent of daily global volume in the most recent Bank for International Settlements (BIS) survey of currency market activity. EUR/USD receives further interest from volume generated by the Euro-crosses (e.g. euro/British pound (EUR/GBP), EUR/CHF and EUR/JPY, and this interest tends to be contrary to the underlying U.S. dollar direction. For example, in a U.S. dollar-negative environment, the Euro will have an underlying bid stemming from overall U.S. dollar selling. However, less liquid dollar pairs (e.g. USD/CHF) will be sold through the more liquid Euro crosses, in this case resulting in EUR/CHF selling, which introduces a Euro offer into the EUR/USD market.
This two-way interest tends to slow Euro movements relative to other major dollar pairs and makes it an attractive market for short-term traders, who can exploit "backing and filling." On the other hand, this depth of liquidity also means EUR/USD tends to experience prolonged, seemingly inconclusive tests of technical levels, whether generated by trendline analysis or Fibonacci/Elliott wave calculations. This suggests breakout traders need to allow for a greater margin of error: 20-30 pips. (A pip is the smallest increment in which a foreign currency can trade with respect to identifying breaks of technical levels.) Another way to gauge whether EUR/USD is breaking out is to look to the less liquid USD/CHF and GBP/USD. If these pairs have broken equivalent technical levels, for example recent daily highs, then EUR/USD is likely to do the same after a lag. If "Swissy" and "Cable" (popular name for British pound) are stalling at those levels, then EUR/USD will likely fail as well.
Customize Your Settings
In terms of technical studies, the overwhelming depth of EUR/USD suggests that momentum oscillators are well-suited to trading the euro, but traders should consider adjusting the studies' parameters (increase time periods) to account for the relatively plodding, back-and-fill movements of EUR/USD. See Figure 1. In this sense, reliance on very short-term indicators (less than 30 minutes) exposes traders to an increased likelihood of "whipsaw" movements. Moving average convergence divergence (MACD) as a momentum study is well-suited to EUR/USD, particularly because it utilizes exponential moving averages (greater weight to more recent prices, less to old prices) in conjunction with a third moving average, resulting in in fewer false crossovers. Short-term (hourly) momentum divergences routinely occur in EUR/USD, but they need to be confirmed by breaks of price levels identified though trendline analysis to suggest an actionable trade. When larger moves are underway, traders are also likely to find the directional movement indicator (DMI) system useful for confirming whether a trend is in place, in which case momentum readings should be discounted, and might choose to rely on DI+/DI- crossovers for additional trade entry signals.
Second Place
The next most actively traded currency pair is USD/JPY, which accounted for 17 percent of daily global volume in the 2004 BIS survey of currency market turnover. USD/JPY has traditionally been the most politically sensitive currency pair, with successive U.S. governments using the exchange rate as a lever in trade negotiations with Japan. While China has recently replaced Japan as the Asian market evoking U.S. trade tensions, USD/JPY still acts as a regional currency proxy for China and other less-liquid, highly regulated Asian currencies. In this sense, USD/JPY is frequently prone to extended trending periods as trade or regional political themes (e.g. yuan revaluation) play out.
For day-to-day trading, however, the most significant feature of USD/JPY is the heavy influence exerted by Japanese institutional investors and asset managers. Due to a culture of intra-Japanese collegiality, including extensive position and strategy information-sharing, Japanese asset managers frequently act in the same direction on the yen in the currency market. In concrete terms, this frequently manifests itself in clusters of orders at similar price or technical levels, which then reinforce those levels as points of support or resistance. Once these levels are breached, similar clusters of stop loss orders are frequently just behind, which in turn fuel the breakout. Also, as the Japanese investment community moves en masse into a particular trade, they tend to drive the market away from themselves for periods of time, all the while adjusting their orders to the new price levels, for instance raising limit buy orders as the price rises.
An alternate tactic frequently employed by Japanese asset managers is to stagger orders to take advantage of any short-term reversals in the direction of the larger trend. For example, if USD/JPY is at 115.00 and trending higher, USD/JPY buying orders would be placed at arbitrary price points, such as 114.75, 114.50, 114.25 and 114.00, to take advantage of any pullback in the broader trend. This also helps explain why USD/JPY frequently encounters support or resistance at numerically round levels, even though there may be no other corresponding technical significance.
Take A Look at Trendlines
Turning to the technical side of USD/JPY, the foregoing discussion suggests trendline analysis as perhaps the most significant technical tool for trading USD/JPY. Because of the clustering of Japanese institutional orders around technical or price levels, USD/JPY tends to experience fewer false breaks of trendlines. For example, large-scale selling interest at technical resistance will need to be absorbed if the technical level is to be broken. This is likely to happen only if a larger market move is unfolding, and this suggests any break will be sustained. This makes USD/JPY attractive for breakout traders who employ stop-loss entry orders on breaks of trendline support or resistance. Short-term trendlines, such as hourly or 15 minutes, can be used effectively, but traders need to operate on a similarly short-term basis; daily closing levels hold the most meaning in USD/JPY. In terms of chart analysis, Japanese institutional asset managers rely heavily on candlestick charts (which depend heavily on daily close levels) and traders would be well-advised to learn to recognize major candlestick patterns, such as doji, hanging man, tweezer tops/bottoms and the like. See Figure 2. When it comes to significant trend reversals or pauses, daily close (5 p.m. EST), candlesticks can be highly reliable leading indicators.
The yen discussion above also highlighted the factors behind the propensity of USD/JPY to trend over the medium-term (multiweek). This facet suggests traders should look to trend following tools such as moving averages (21- and 55-day perio ds are heavily used), DMI, and Parabolic SAR. (This refers to J. Welles Wilder Jr.'s Parabolic System. SAR stands for stop and reverse.) Momentum oscillators such as the relative strength index (RSI), MACD or stochastics should generally be avoided, especially intraday, due to the trending and institutional nature driving USD/JPY. While a momentum indicator may reverse course, typically suggesting a potential trade, price action often fails to reverse enough to make the trade worthwhile due to underlying institutional interest. Instead of reversing along with momentum, USD/JPY price action will frequently settle into a sideways range, allowing momentum studies to continue to unwind, until the underlying trend resumes. Finally, Ichimoku analysis (roughly translated as one-glance cloud chart) is another largely Japanese-specific trend identification system that highlights trends and major reversals.
A Look At Some Illiquid Currencies
Having looked at the two most heavily traded currency pairs, let's now examine two of the least liquid major currency pairs, USD/CHF and GBP/USD, which pose special challenges to technically oriented traders. The so-called Swissy holds a place among the major currency pairs due to Switzerland's unique status as a global investment haven; estimates are that nearly one-third of the world's private assets are held in Switzerland. The Swiss franc has also acted historically as a so-called "safe-haven" currency alternative to the U.S. dollar in times of geo-political uncertainty, but this dimension has largely faded since the end of the Cold War. Today, USD/CHF trades mostly based on overall U.S. dollar sentiment, as opposed to Swiss-based economic fundamentals. The Swiss National Bank (SNB) is primarily concerned with the franc's value relative to the euro, since the vast majority of Swiss trade is with the European Union, and Swiss fundamental developments are primarily reflected in the EUR/CHF cross rate.
Liquidity in USD/CHF is never very good, and this makes it a favorite "whipping horse" for hedge funds and other speculative interests looking to maximize the bang for their buck. The lower liquidity and higher volatility of Swissy also makes it a significant leading indicator for major U.S. dollar movements. Figure 3 illustrates an example of a recent break of major daily trendline support in USD/CHF that took place a full day before EUR/USD and USD/JPY broke equivalent levels. Swissy will also lead the way in shorter-term movements, but the overall volatility and general jitteriness of USD/CHF price action makes false breaks of technical levels common. These false breaks are frequently stop-loss driven and it is not unusual for prices to trade 15-25 points through a support/resistance level before reversing after the stop losses have been triggered. In strong directional moves, USD/CHF price action tends toward extreme one-way traffic, with minimal backing and filling in comparison to EUR/USD.
Cable (GBP/USD), or sterling, also suffers from relatively poor liquidity and this is in part due to its higher pip value (U.S. dollars) and the relatively Euro-centric basis of U.K. trade. Sterling shares many of the same trading characteristics of Swissy outlined just above, but Cable will also react sharply to U.K. fundamental data as well as to U.S. news. Sterling's price action will also display extreme one-way tendencies during larger moves, as traders caught on the wrong side chase the illiquid market to the extremes.
Focus On Risk Management
The volatility and illiquidity of Swissy and sterling suggests traders need to use a more proactive overall approach to trading these pairs, particularly concerning risk management (i.e. position size in relation to stop levels). With regard to technical tools, the tendency for both pairs to make short-term false breaks of chart levels suggests breakout traders need to be particularly disciplined concerning stop entry levels and should consider a greater margin of error on the order of 30-35 points. In this sense, trendline analysis of periods less than an hour tends to generate more noise than tradable break points, so a focus on longer time periods (four hours-daily) is likely to be more successful in identifying meaningful breaks. By the same token, once a breakout occurs, surpassing the margin of error, the ensuing one-way price action favors traders who are quick on the trigger, and this suggests employing resting stop-loss entry orders to reduce slippage. For those positioned with a move, trailing stops with an acceleration factor, such as parabolic SAR, are well suited to riding out directional volatility until a price reversal signals an exit. Of course, placing contigent orders may not necessarily limit your losses.
The volatility inherent in Cable and Swissy makes the use of short-term (hourly and shorter) momentum oscillators problematic, due to both false crossovers and divergences between price/momentum that frequently occur in these time frames. Longer-period oscillators (four hours and more) are best used to highlight potential reversals or divergent price action, but volatility discourages initiating trades based on these alone. Instead, momentum signals need to be confirmed by other indicators, such as breaks of trendlines, Fibonacci retracements or parabolic levels, before a trade is initiated.
Try A Larger Retracement
With regard to Fibonacci retracement levels, the greater volatility of Cable and Swissy frequently sees them exceed 61.8-percent retracements, only to stall later at the 76.4-percent level, by which time most short-term Elliott wave followers have been stopped out. Short-term spike reversals of greater than 30 points also serve as a reliable way to identify when a directional surge, especially intraday, is completed, and these can be used as both profit taking and counter-trend trading signals. For counter-trend, corrective trades based on spike reversals, stops should be placed slightly beyond the extreme of the spike low/high. A final technical study that is well suited to the explosiveness of Swissy and sterling is the Williams %R, an overbought/oversold momentum indicator, which frequently acts as a leading indicator of price reversals. The overbought/oversold bands should be adjusted to -10/-90 to fit the higher volatility of Cable and Swissy. As with all overbought/oversold studies, however, price action needs to reverse course first before trades are initiated.
It's Not One Size Fits All
Traders who seek to apply technical trading approaches to the currency market should be aware of the differences in the trading characteristics of the major currency pairs. Just because the euro and the pound are both traded against the dollar does not mean they will trade identically to each other. A more thorough understanding of the various market traits of currencies suggests that certain technical tools are better suited to some currency pairs than others. A currency-specific approach to applying technical analysis is more likely to produce successful results than a one-size-fits-all application across all currency pairs.
Economic Indicators
What are Economic Indicators?
Economic indicators are snippets of financial and economic data published regularly by governmental agencies and the private sector. These statistics help market observers monitor the economy's pulse - so it's no surprise that they're religiously followed by almost everyone in the financial markets.
With so many people poised to react to the same information, economic indicators have tremendous potential to generate volume and to move prices. It might seem like you need an advanced economics degree to parse all this data accurately - but in fact traders need only keep a few simple guidelines in mind to making trading decisions based on this data.
Mark your economic calendars
Know exactly when each economic indicator will be released. You can find these calendars at the New York Federal Reserve Bank's site; FOREX.com clients can simply login to MyAccount and click on Economic Calendars.
Watching the economic calendar not only helps you consider trades around these events, it helps explain otherwise unanticipated price actions during those periods. Consider this scenario: it's Monday morning and the USD has been in a tailspin for 3 weeks, with many traders short USD positions as a result. On Friday, however, U.S. employment data is scheduled to be released. If that report looks promising, traders may start unwinding their short positions before Friday, leading to a short-term rally in USD through the week.
What does this data mean for the economy?
You need not understand every nuance of each data release, but you should try to grasp key, large-scale relationships between reports and what they measure in the economy. For example, you should know which indicators measure the economy's growth (gross domestic product, or GDP) versus those that measure inflation (PPI, CPI) or employment strength (non-farm payrolls).
Not all economic indicators can move markets
The market often pays more attention to certain indicators under certain conditions - and that focus can change over time. For example, if prices (inflation) are not a crucial issue for a given country, but its economic growth is problematic, traders may pay less attention to inflation data and focus on employment data or GDP reports.
Watch for the unexpected
Often the data itself may not be as important as whether or not it falls within market expectations. If a given report differs widely and unexpectedly from what economists and market pundits were anticipating, market volatility and potential trading opportunities may result.
At the same time, be careful of pulling the trigger too quickly when an indicator falls outside expectations. Each new economic indicator release contains revisions to previously released data. Here's an example:
Don't get caught up in details
While your macroeconomics professor may appreciate all the nuances of an economic report, traders need to filter data judiciously for their own purposes: making intelligent trading decisions.
For example, many new traders watch the headlineNew line of the employment report, for example, assuming that new jobs are key to economic growth. That may be true generally, but in trading terms non-farm payrolls is the figure traders watch most closely and therefore has the biggest impact on markets.
Similarly, PPI measures changes in producer prices generally - but traders tend to watch PPI excluding food and energy as a market driver. Food and energy data tend to be much too volatilve and subject to revisions to provide an accurate reading on producer price changes.
There are two sides to every trade
Hopefully this has helped you realize the importance of watching economic indicators - and knowing which data are most likely to move markets and impact currency traders.
Just remember that no trader's knowledge can be complete all the time. You might have a great handle on economic data published in the U.S. - but there are times when data published in Europe or Australia might have surprising impact on your currency market. Doing your homework before trading any currency will help you stay on guard.
Economic indicators: a currency's vital signs
Traders can measure the economic health of a given country (and its currency) through its economic indicators - but, just like a doctor monitoring a patient's vital signs, not all stats count equally. Here's a primer of the key economic indicators that often impact currency traders.
Economic indicators divide into leading and lagging indicators:
•Leading indicators are economic factors that change BEFORE the economy starts to follow a particular trend. They're used to predict changes in the economy.
•Lagging indicators are economic factors that change AFTER the economy has already begun to follow a particular trend. They're used to confirm changes in the economy.
Major Economic Indicators
Gross Domestic Product (GDP)
The sum of all goods and services produced either by domestic or foreign companies. GDP indicates the pace at which a country's economy is growing (or shrinking) and is considered the broadest indicator of economic output and growth.
Industrial Production
A chain-weighted measure of the change in the production of the nation's factories, mines and utilities, industrial production also measures the country's industrial capacity and how fully it's being used (capacity utilization).
The manufacturing sector accounts for one-quarter of the major currencies' economies, so it's critical to watch the health of factories and whether their capacity is being maximized.
Purchasing Managers Index (PMI)
The National Association of Purchasing Managers (NAPM), now called the Institute for Supply Management, releases a monthly composite index of national manufacturing conditions. The index includes data on new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export and import orders. It is divided into manufacturing and non-manufacturing sub-indices.
Producer Price Index (PPI)
Measures average changes in selling prices received by domestic producers in the manufacturing, mining, agriculture, and electric utility industries.
The PPIs most often used for economic analysis are those for finished goods, intermediate goods, and crude goods.
Consumer Price Index (CPI)
Measures the average price level paid by urban consumers (80% of the population in major currency countries) for a fixed basket of goods and services. It reports price changes in over 200 categories.
The CPI also includes various user fees and taxes directly associated with the prices of specific goods and services.
Durable Goods
Durable Goods Orders measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. A durable good is a product that lasts over three years, during which its services are extended.
Companies and consumers sometimes put off purchases of durable goods during tough economic times - so this figure is a useful measure of certain kinds of customer demand.
Employment Cost Index (ECI)
Payroll employment is a measure of the number of jobs at larger companies in more than 500 industries in all 50 U.S. states and 255 metropolitan areas. ECI counts the number of paid employees working part-time or full-time in the nation's business and government establishments.
Housing Starts
Measures the number of residential units on which construction is begun each month. A "start" refers to excavation of the foundation of a residential home.
Housing is usually one of the first sectors to react to interest rate changes. Significant reaction of start/permits to changing interest rates signals interest rates are nearing trough or peak. To analyze, focus on the percentage change in levels from the previous month. Report is released around the middle of the following month
Economic indicators are snippets of financial and economic data published regularly by governmental agencies and the private sector. These statistics help market observers monitor the economy's pulse - so it's no surprise that they're religiously followed by almost everyone in the financial markets.
With so many people poised to react to the same information, economic indicators have tremendous potential to generate volume and to move prices. It might seem like you need an advanced economics degree to parse all this data accurately - but in fact traders need only keep a few simple guidelines in mind to making trading decisions based on this data.
Mark your economic calendars
Know exactly when each economic indicator will be released. You can find these calendars at the New York Federal Reserve Bank's site; FOREX.com clients can simply login to MyAccount and click on Economic Calendars.
Watching the economic calendar not only helps you consider trades around these events, it helps explain otherwise unanticipated price actions during those periods. Consider this scenario: it's Monday morning and the USD has been in a tailspin for 3 weeks, with many traders short USD positions as a result. On Friday, however, U.S. employment data is scheduled to be released. If that report looks promising, traders may start unwinding their short positions before Friday, leading to a short-term rally in USD through the week.
What does this data mean for the economy?
You need not understand every nuance of each data release, but you should try to grasp key, large-scale relationships between reports and what they measure in the economy. For example, you should know which indicators measure the economy's growth (gross domestic product, or GDP) versus those that measure inflation (PPI, CPI) or employment strength (non-farm payrolls).
Not all economic indicators can move markets
The market often pays more attention to certain indicators under certain conditions - and that focus can change over time. For example, if prices (inflation) are not a crucial issue for a given country, but its economic growth is problematic, traders may pay less attention to inflation data and focus on employment data or GDP reports.
Watch for the unexpected
Often the data itself may not be as important as whether or not it falls within market expectations. If a given report differs widely and unexpectedly from what economists and market pundits were anticipating, market volatility and potential trading opportunities may result.
At the same time, be careful of pulling the trigger too quickly when an indicator falls outside expectations. Each new economic indicator release contains revisions to previously released data. Here's an example:
Don't get caught up in details
While your macroeconomics professor may appreciate all the nuances of an economic report, traders need to filter data judiciously for their own purposes: making intelligent trading decisions.
For example, many new traders watch the headlineNew line of the employment report, for example, assuming that new jobs are key to economic growth. That may be true generally, but in trading terms non-farm payrolls is the figure traders watch most closely and therefore has the biggest impact on markets.
Similarly, PPI measures changes in producer prices generally - but traders tend to watch PPI excluding food and energy as a market driver. Food and energy data tend to be much too volatilve and subject to revisions to provide an accurate reading on producer price changes.
There are two sides to every trade
Hopefully this has helped you realize the importance of watching economic indicators - and knowing which data are most likely to move markets and impact currency traders.
Just remember that no trader's knowledge can be complete all the time. You might have a great handle on economic data published in the U.S. - but there are times when data published in Europe or Australia might have surprising impact on your currency market. Doing your homework before trading any currency will help you stay on guard.
Economic indicators: a currency's vital signs
Traders can measure the economic health of a given country (and its currency) through its economic indicators - but, just like a doctor monitoring a patient's vital signs, not all stats count equally. Here's a primer of the key economic indicators that often impact currency traders.
Economic indicators divide into leading and lagging indicators:
•Leading indicators are economic factors that change BEFORE the economy starts to follow a particular trend. They're used to predict changes in the economy.
•Lagging indicators are economic factors that change AFTER the economy has already begun to follow a particular trend. They're used to confirm changes in the economy.
Major Economic Indicators
Gross Domestic Product (GDP)
The sum of all goods and services produced either by domestic or foreign companies. GDP indicates the pace at which a country's economy is growing (or shrinking) and is considered the broadest indicator of economic output and growth.
Industrial Production
A chain-weighted measure of the change in the production of the nation's factories, mines and utilities, industrial production also measures the country's industrial capacity and how fully it's being used (capacity utilization).
The manufacturing sector accounts for one-quarter of the major currencies' economies, so it's critical to watch the health of factories and whether their capacity is being maximized.
Purchasing Managers Index (PMI)
The National Association of Purchasing Managers (NAPM), now called the Institute for Supply Management, releases a monthly composite index of national manufacturing conditions. The index includes data on new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export and import orders. It is divided into manufacturing and non-manufacturing sub-indices.
Producer Price Index (PPI)
Measures average changes in selling prices received by domestic producers in the manufacturing, mining, agriculture, and electric utility industries.
The PPIs most often used for economic analysis are those for finished goods, intermediate goods, and crude goods.
Consumer Price Index (CPI)
Measures the average price level paid by urban consumers (80% of the population in major currency countries) for a fixed basket of goods and services. It reports price changes in over 200 categories.
The CPI also includes various user fees and taxes directly associated with the prices of specific goods and services.
Durable Goods
Durable Goods Orders measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. A durable good is a product that lasts over three years, during which its services are extended.
Companies and consumers sometimes put off purchases of durable goods during tough economic times - so this figure is a useful measure of certain kinds of customer demand.
Employment Cost Index (ECI)
Payroll employment is a measure of the number of jobs at larger companies in more than 500 industries in all 50 U.S. states and 255 metropolitan areas. ECI counts the number of paid employees working part-time or full-time in the nation's business and government establishments.
Housing Starts
Measures the number of residential units on which construction is begun each month. A "start" refers to excavation of the foundation of a residential home.
Housing is usually one of the first sectors to react to interest rate changes. Significant reaction of start/permits to changing interest rates signals interest rates are nearing trough or peak. To analyze, focus on the percentage change in levels from the previous month. Report is released around the middle of the following month
Forex Market Drivers
Rising interest rates strength that country's currency
A common way to think about interest rates is how much it's going to cost to borrow money, whether for our mortgages or how much we'll earn on our bond and money market investments. Interest rate policy is a key driver of currency prices and typically a strategy for new currency traders.
Fundamentally, if a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors.
For example, higher rates in the Eurozone may prompt U.S. investors to sell U.S. dollars and buy bonds in Euros. Similarly, if interest rates increase in Switzerland, those investors may decide to sell their Euro-bonds and move into bonds in Swiss francs (CHF), driving Euros down and Swiss francs up.
When gold goes up, the USD goes down (and vice versa)
Historically, gold is a "safe haven", a country-neutral investment and an alternative to the world's other reserve currency, the U.S. dollar. That means gold prices have an inverse relationship to the USD, offering several ways for currency traders to take advantage of that relationship.
For example, if gold breaks an important price level, you'd expect gold to move higher. With this in mind, you might sell dollars and buy Euros, for example, as a proxy for higher gold prices.
Rising gold prices help major gold producers
Australia is the world's third largest exporter of gold, and Canada is the third largest producer worldwide. These two major currencies tend to strengthen as gold prices rise. You might consider going long these currencies when gold is increasing in value, or trade your GBP or JPY for these currencies when gold is on the rise.
Oil-dependent countries weaken as oil prices rise
Just as airlines and other oil-dependent industries are hurt by rising oil prices, so are the currencies of oil-dependent countries like the U.S. or Japan, both of which are massively dependent on foreign oil.
If you believe oil prices will continue to rise, you can consider buying commodity-based economies like Australia or Canada or selling oil-dependent currencies.
A common way to think about interest rates is how much it's going to cost to borrow money, whether for our mortgages or how much we'll earn on our bond and money market investments. Interest rate policy is a key driver of currency prices and typically a strategy for new currency traders.
Fundamentally, if a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors.
For example, higher rates in the Eurozone may prompt U.S. investors to sell U.S. dollars and buy bonds in Euros. Similarly, if interest rates increase in Switzerland, those investors may decide to sell their Euro-bonds and move into bonds in Swiss francs (CHF), driving Euros down and Swiss francs up.
When gold goes up, the USD goes down (and vice versa)
Historically, gold is a "safe haven", a country-neutral investment and an alternative to the world's other reserve currency, the U.S. dollar. That means gold prices have an inverse relationship to the USD, offering several ways for currency traders to take advantage of that relationship.
For example, if gold breaks an important price level, you'd expect gold to move higher. With this in mind, you might sell dollars and buy Euros, for example, as a proxy for higher gold prices.
Rising gold prices help major gold producers
Australia is the world's third largest exporter of gold, and Canada is the third largest producer worldwide. These two major currencies tend to strengthen as gold prices rise. You might consider going long these currencies when gold is increasing in value, or trade your GBP or JPY for these currencies when gold is on the rise.
Oil-dependent countries weaken as oil prices rise
Just as airlines and other oil-dependent industries are hurt by rising oil prices, so are the currencies of oil-dependent countries like the U.S. or Japan, both of which are massively dependent on foreign oil.
If you believe oil prices will continue to rise, you can consider buying commodity-based economies like Australia or Canada or selling oil-dependent currencies.
Using Technical Indicators
Price charts help traders identify trade-able market trends - while technical indicators help them judge a trend's strength and sustainability.
If an indicator suggests a reversal, confirm the shift before you act. That might mean waiting for another period to confirm the same indicator's signal, or checking out another indicator. Patience will help you read the signals accurately and respond accordingly.
Types of Moving Averages
One of the most widely used indicators, moving averages help traders verify existing trends, identify emerging trends, and view overextended trends about to reverse. As the name suggests, these are lines overlaid on a chart that "average out" short-term price fluctuations, so you can see the long-term price trend.
A simple moving average weighs each price point over the specified period equally. The trader defines whether the high, low, or close is used, and these price points are added together and averaged, forming a line.
A weighted moving average gives more emphasis to the latest data. It smoothes out a price curve, while making the average more responsive to recent price changes.
An exponential moving average weighs more recent price data in a different way. An exponential moving average multiplies a percentage of the most recent price by the previous period's average price.
Finding the best moving averages and period for your pair
It can take a while to find the best combination of moving average and period length for your currency pair. The right combo will make the trend you're looking for clearly visible, as it develops. Finding that optimal fit is called curve fitting.
Usually traders start by comparing a few timeframes for their moving averages over a historical chart. Then you can compare how well and how early each timeframe signaled changes in the price data as they developed, then adjust accordingly.
When you've found a moving average that works well for your currency pair, you can consider this as a line of support for long positions or resistance for short positions. If prices cross this line, that often signals a currency is reversing course. Here's an example:
Longer-term moving averages define a trend, but shorter-term MAs can signal its shift faster. That's why many traders watch moving averages with different timeframes at once. If a short-term MA crosses your longer-term MA, it can signal your trend is ending - and time to pare back your position.
Stochastics
Stochastic studies, or oscillators, help monitor a trend's sustainability and signal reversals in prices. Stochastics come in two types, %K and %D, measured on a scale from 0 to 100. %K is the "fast", more sensitive indicator, while %D is "slow" and takes more time to turn.
Stochastic studies aren't useful in choppy, sideways markets. In these conditions %K and %D lines might cross too frequently to signal anything.
Relative Strength Index (RSI)
Like stochastics, RSI measures momentum of price movements on a scale of 0 to 100.
Always confirm RSI signals with other indicators. RSI can remain at lofty or sunken levels for a long time, without prices reversing course. All that means is that a market is quite strong or weak - and likely to stay so for a while.
Adjust your RSI to the right timeframe for you. A short-term RSI will be very sensitive and give out many signals, not all of them sustainable; a longer-term RSI will be less choppy. Try to match your RSI timeframe to your own trading style: short-term for day traders, longer-term for position traders.
Divergences between prices and RSI may suggest a trend reversal. Of course, make sure you confirm your signals before acting.
Bollinger Bands
Bollinger Bands are volatility curves used to identify extreme highs or lows in price. Bollinger Bands establish "bands" around a currency's moving average, using a set number of standard deviations around the moving average. Creator Jon Bollinger recommends the following:
Touching a high or low band doesn't necessarily mean an immediate trend reversal. Bollinger Bands adjust dynamically as volatility changes, so touching the band just means prices are extremely volatile. Use Bollinger Bands with other indicators to determine the trend's strength.
Fibonacci Retracements
Fibonacci retracement levels are a sequence of numbers discovered by the noted mathematician Leonardo da Pisa in the 12th century. These numbers describe cycles found throughout nature; technical analysts use them to find pullbacks in the currency market.
After a significant price move, up or down, prices often "retrace" most or all of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels. For currencies, that means retracements usually happen at 23.6%, 38.2%, 50% or 61.8% of the previous move.
If an indicator suggests a reversal, confirm the shift before you act. That might mean waiting for another period to confirm the same indicator's signal, or checking out another indicator. Patience will help you read the signals accurately and respond accordingly.
Types of Moving Averages
One of the most widely used indicators, moving averages help traders verify existing trends, identify emerging trends, and view overextended trends about to reverse. As the name suggests, these are lines overlaid on a chart that "average out" short-term price fluctuations, so you can see the long-term price trend.
A simple moving average weighs each price point over the specified period equally. The trader defines whether the high, low, or close is used, and these price points are added together and averaged, forming a line.
A weighted moving average gives more emphasis to the latest data. It smoothes out a price curve, while making the average more responsive to recent price changes.
An exponential moving average weighs more recent price data in a different way. An exponential moving average multiplies a percentage of the most recent price by the previous period's average price.
Finding the best moving averages and period for your pair
It can take a while to find the best combination of moving average and period length for your currency pair. The right combo will make the trend you're looking for clearly visible, as it develops. Finding that optimal fit is called curve fitting.
Usually traders start by comparing a few timeframes for their moving averages over a historical chart. Then you can compare how well and how early each timeframe signaled changes in the price data as they developed, then adjust accordingly.
When you've found a moving average that works well for your currency pair, you can consider this as a line of support for long positions or resistance for short positions. If prices cross this line, that often signals a currency is reversing course. Here's an example:
Longer-term moving averages define a trend, but shorter-term MAs can signal its shift faster. That's why many traders watch moving averages with different timeframes at once. If a short-term MA crosses your longer-term MA, it can signal your trend is ending - and time to pare back your position.
Stochastics
Stochastic studies, or oscillators, help monitor a trend's sustainability and signal reversals in prices. Stochastics come in two types, %K and %D, measured on a scale from 0 to 100. %K is the "fast", more sensitive indicator, while %D is "slow" and takes more time to turn.
Stochastic studies aren't useful in choppy, sideways markets. In these conditions %K and %D lines might cross too frequently to signal anything.
Relative Strength Index (RSI)
Like stochastics, RSI measures momentum of price movements on a scale of 0 to 100.
Always confirm RSI signals with other indicators. RSI can remain at lofty or sunken levels for a long time, without prices reversing course. All that means is that a market is quite strong or weak - and likely to stay so for a while.
Adjust your RSI to the right timeframe for you. A short-term RSI will be very sensitive and give out many signals, not all of them sustainable; a longer-term RSI will be less choppy. Try to match your RSI timeframe to your own trading style: short-term for day traders, longer-term for position traders.
Divergences between prices and RSI may suggest a trend reversal. Of course, make sure you confirm your signals before acting.
Bollinger Bands
Bollinger Bands are volatility curves used to identify extreme highs or lows in price. Bollinger Bands establish "bands" around a currency's moving average, using a set number of standard deviations around the moving average. Creator Jon Bollinger recommends the following:
Touching a high or low band doesn't necessarily mean an immediate trend reversal. Bollinger Bands adjust dynamically as volatility changes, so touching the band just means prices are extremely volatile. Use Bollinger Bands with other indicators to determine the trend's strength.
Fibonacci Retracements
Fibonacci retracement levels are a sequence of numbers discovered by the noted mathematician Leonardo da Pisa in the 12th century. These numbers describe cycles found throughout nature; technical analysts use them to find pullbacks in the currency market.
After a significant price move, up or down, prices often "retrace" most or all of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels. For currencies, that means retracements usually happen at 23.6%, 38.2%, 50% or 61.8% of the previous move.
What is Technical Analysis?
Technical analysis attempts to forecast future price movements by examining past market data.
Most traders use technical analysis to get a "big picture" on an investment's price history. Even fundamental traders will glance at a chart to see if they're buying at a fair price, selling at a cyclical top or entering a choppy, sideways market.
Technical analysts make a few key assumptions:
* All market fundamentals are reflected in price data. Moods, differing opinions, and other market fundamentals need not be studied.
* History repeats itself in regular, fairly predictable patterns. These patterns, generated by price movements, are called signals. A technical analyst's goal is to uncover a current market's signals by examining past market signals.
* Prices move in trends. Technical analysts believe price fluctuations are not random and unpredictable. Once an up, down or sideways trend has been established, it usually will continue for a period.
Get in and get out - at the right time
Traders rely on price charts, volume charts and other mathematical representations of market data (called studies) to find the ideal entry and exit points for a trade. Some studies help identify a trend, while others help determine the strength and sustainability of that trend over time.
Technical analysis can add discipline and minimize emotion in your trading plan. It can be hard to screen out fundamental impressions and stick with your entry and exit points as planned. While no system is perfect, technical analysis helps you see your trading plan through more objectively and dispassionately.
Price chart types
Bar charts
The most common type of chart showing price action. Each bar represents a period of time - a "period" as short as 1 minute or as long as several years. Over time, bar charts show distinct price patterns.
Candlestick Charts
Instead of a simple bar, each candlestick shows the high, low, opening and closing price for that period of time it represents. Candlestick patterns provide greater visual detail as they develop.
Point & Figure Charts
Point & figure patterns resemble bar chart patterns, except Xs and Os are used to mark changes in price direction. Point & figure charts make no use of time scale to associate a certain day with a certain price action.
Technical Indicator Types
Trend
Trend indicators smooth price data out, so that a persistent up, down or sideways trend can be easily seen. (Examples: moving averages, trend lines)
Strength
Strength indicators describe the intensity of market opinion on a certain price by examining the market positions taken by various market participants. Volume or open interest are the basic ingredients of strength indicators.
Volatility
"Volatility" refers to the magnitude of day-to-day price fluctuations, whatever their directional trend. Changes in volatility tend to anticipate changes in prices. (Example: Bollinger Bands)
Cycle
Cycle indicators indicate repeating market patterns from recurrent events such as seasons or elections. Cycle indicators determine the timing of a particular market pattern. (Example: Elliott Wave)
Support/Resistance
Support and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon is attributed to basic supply and demand. (Example: Trend Lines)
Momentum
Momentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is highest when a trend starts and lowest when the trend changes.
When price and momentum diverge, it suggests weakness. If price extremes occur with weak momentum, it signals an end of movement in that direction. If momentum is trending strongly and prices are flat, it signals a potential change in price direction. (Example: Stochastic, MACD, RSI)
Most traders use technical analysis to get a "big picture" on an investment's price history. Even fundamental traders will glance at a chart to see if they're buying at a fair price, selling at a cyclical top or entering a choppy, sideways market.
Technical analysts make a few key assumptions:
* All market fundamentals are reflected in price data. Moods, differing opinions, and other market fundamentals need not be studied.
* History repeats itself in regular, fairly predictable patterns. These patterns, generated by price movements, are called signals. A technical analyst's goal is to uncover a current market's signals by examining past market signals.
* Prices move in trends. Technical analysts believe price fluctuations are not random and unpredictable. Once an up, down or sideways trend has been established, it usually will continue for a period.
Get in and get out - at the right time
Traders rely on price charts, volume charts and other mathematical representations of market data (called studies) to find the ideal entry and exit points for a trade. Some studies help identify a trend, while others help determine the strength and sustainability of that trend over time.
Technical analysis can add discipline and minimize emotion in your trading plan. It can be hard to screen out fundamental impressions and stick with your entry and exit points as planned. While no system is perfect, technical analysis helps you see your trading plan through more objectively and dispassionately.
Price chart types
Bar charts
The most common type of chart showing price action. Each bar represents a period of time - a "period" as short as 1 minute or as long as several years. Over time, bar charts show distinct price patterns.
Candlestick Charts
Instead of a simple bar, each candlestick shows the high, low, opening and closing price for that period of time it represents. Candlestick patterns provide greater visual detail as they develop.
Point & Figure Charts
Point & figure patterns resemble bar chart patterns, except Xs and Os are used to mark changes in price direction. Point & figure charts make no use of time scale to associate a certain day with a certain price action.
Technical Indicator Types
Trend
Trend indicators smooth price data out, so that a persistent up, down or sideways trend can be easily seen. (Examples: moving averages, trend lines)
Strength
Strength indicators describe the intensity of market opinion on a certain price by examining the market positions taken by various market participants. Volume or open interest are the basic ingredients of strength indicators.
Volatility
"Volatility" refers to the magnitude of day-to-day price fluctuations, whatever their directional trend. Changes in volatility tend to anticipate changes in prices. (Example: Bollinger Bands)
Cycle
Cycle indicators indicate repeating market patterns from recurrent events such as seasons or elections. Cycle indicators determine the timing of a particular market pattern. (Example: Elliott Wave)
Support/Resistance
Support and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon is attributed to basic supply and demand. (Example: Trend Lines)
Momentum
Momentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is highest when a trend starts and lowest when the trend changes.
When price and momentum diverge, it suggests weakness. If price extremes occur with weak momentum, it signals an end of movement in that direction. If momentum is trending strongly and prices are flat, it signals a potential change in price direction. (Example: Stochastic, MACD, RSI)
Calculating Profit and Loss
For ease of use, most online trading platforms automatically calculate the P&L of a traders' open positions. However, it is useful to understand how this calculation is formulated:
To illustrate an FX trade, consider the following two examples.
Let's say that the current bid/ask for EUR/USD is 1.4616/19, meaning you can buy 1 euro for 1.4619 or sell 1 euro for 1.4616.
Suppose you decide that the Euro is undervalued against the US dollar. To execute this strategy, you would buy Euros (simultaneously selling dollars), and then wait for the exchange rate to rise.
So you make the trade: to buy 100,000 Euros you pay 146,190 dollars (100,000 x 1.4619). Remember, at 5% margin, your initial margin deposit would be approximately $2,923 for this trade.
As you expected, Euro strengthens to 1.4623/26. Now, to realize your profits, you sell 100,000 Euros at the current rate of 1.4623, and receive $146,230
You bought 100k Euros at 1.4619, paying $146,190. Then you sold 100k Euros at 1.4623, receiving $146,230. That's a difference of 4 pips, or in dollar terms ($146,190 - 146,230 = $40).
Total profit = US $40.
Now in the example, let's say that we once again buy EUR/USD when trading at 1.4616/19. You buy 100,000 Euros you pay 146,190 dollars (100,000 x 1.4619).
However, Euro weakens to 1.4611/14. Now, to minimize your loses to sell 100,000 Euros at 1.4611 and receive $146,110.
You bought 100k Euros at 1.4619, paying $146,190. You sold 100k Euros at 1.4611, receiving $146,110. That's a difference of 8 pips, or in dollar terms ($146,190 - $146,110 = $80)
Total loss = US $80.
To illustrate an FX trade, consider the following two examples.
Let's say that the current bid/ask for EUR/USD is 1.4616/19, meaning you can buy 1 euro for 1.4619 or sell 1 euro for 1.4616.
Suppose you decide that the Euro is undervalued against the US dollar. To execute this strategy, you would buy Euros (simultaneously selling dollars), and then wait for the exchange rate to rise.
So you make the trade: to buy 100,000 Euros you pay 146,190 dollars (100,000 x 1.4619). Remember, at 5% margin, your initial margin deposit would be approximately $2,923 for this trade.
As you expected, Euro strengthens to 1.4623/26. Now, to realize your profits, you sell 100,000 Euros at the current rate of 1.4623, and receive $146,230
You bought 100k Euros at 1.4619, paying $146,190. Then you sold 100k Euros at 1.4623, receiving $146,230. That's a difference of 4 pips, or in dollar terms ($146,190 - 146,230 = $40).
Total profit = US $40.
Now in the example, let's say that we once again buy EUR/USD when trading at 1.4616/19. You buy 100,000 Euros you pay 146,190 dollars (100,000 x 1.4619).
However, Euro weakens to 1.4611/14. Now, to minimize your loses to sell 100,000 Euros at 1.4611 and receive $146,110.
You bought 100k Euros at 1.4619, paying $146,190. You sold 100k Euros at 1.4611, receiving $146,110. That's a difference of 8 pips, or in dollar terms ($146,190 - $146,110 = $80)
Total loss = US $80.
Leverage & Margin - Trading on Margin
Leverage trading, or trading on margin, means you aren't required to put up the full value of the position.
Forex trading offers more leverage than stocks or futures - up to 100 times the value of your account. Of course keep in mind that increased leverage also increases your risk.
FOREX.com: No debit balances, no margin calls
At FOREX.com, your risk is only limited to funds on deposit. There are no margin calls in forex trading, so if your account falls below required levels, for your protection we will close out all positions. You'll never lose more money than you have in your account.
More leverage means more opportunity - and more risk
It's crucial to remember: increasing leverage increases risk. To limit downside risk, monitor your account regularly and use stop-loss orders on every open position. Keep in mind that placing contingent orders may not necessarily limit your losses.
Forex trading offers more leverage than stocks or futures - up to 100 times the value of your account. Of course keep in mind that increased leverage also increases your risk.
FOREX.com: No debit balances, no margin calls
At FOREX.com, your risk is only limited to funds on deposit. There are no margin calls in forex trading, so if your account falls below required levels, for your protection we will close out all positions. You'll never lose more money than you have in your account.
More leverage means more opportunity - and more risk
It's crucial to remember: increasing leverage increases risk. To limit downside risk, monitor your account regularly and use stop-loss orders on every open position. Keep in mind that placing contingent orders may not necessarily limit your losses.
Understanding Forex Quotes
Reading a foreign exchange quote is simple if you remember two things:
1. The first currency listed is the base currency
2. The value of the base currency is always 1.
As the centerpiece of the forex market, the US dollar is usually considered the base currency for quotes. When the base currency is USD, think of the quote as telling you what a US dollar is worth in that other currency.
When USD is the base currency and the quote goes up, that means USD has strengthened in value and the other currency has weakened. Rising quotes mean a US dollar can now buy more of the other currency than before.
Majors not based on the US dollar
The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). For these pairs, where USD is not the base currency, a rising quote means the US dollar is weakening and buys less of the other currency than before.
In other words, if a currency quote goes higher, the base currency is getting stronger. A lower quote means the base currency is weakening.
Cross currencies
Currency pairs that don't involve USD at all are called cross currencies, but the premise is the same.
Bids, asks and the spread
Just like other markets, forex quotes consist of two sides, the bid and the ask:
The BID is the price at which you can SELL base currency.
The ASK is the price at which you can BUY base currency.
What's a pip?
Forex prices are often so liquid, they're quoted in tiny increments called pips, or "percentage in point". A pip refers to the fourth decimal point out, or 1/100th of 1%.
For Japanese yen, pips refer to the second decimal point. This is the only exception among the major currencies
1. The first currency listed is the base currency
2. The value of the base currency is always 1.
As the centerpiece of the forex market, the US dollar is usually considered the base currency for quotes. When the base currency is USD, think of the quote as telling you what a US dollar is worth in that other currency.
When USD is the base currency and the quote goes up, that means USD has strengthened in value and the other currency has weakened. Rising quotes mean a US dollar can now buy more of the other currency than before.
Majors not based on the US dollar
The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). For these pairs, where USD is not the base currency, a rising quote means the US dollar is weakening and buys less of the other currency than before.
In other words, if a currency quote goes higher, the base currency is getting stronger. A lower quote means the base currency is weakening.
Cross currencies
Currency pairs that don't involve USD at all are called cross currencies, but the premise is the same.
Bids, asks and the spread
Just like other markets, forex quotes consist of two sides, the bid and the ask:
The BID is the price at which you can SELL base currency.
The ASK is the price at which you can BUY base currency.
What's a pip?
Forex prices are often so liquid, they're quoted in tiny increments called pips, or "percentage in point". A pip refers to the fourth decimal point out, or 1/100th of 1%.
For Japanese yen, pips refer to the second decimal point. This is the only exception among the major currencies
What's Forex?
"Forex" stands for foreign exchange; it's also known as FX. In a forex trade, you buy one currency while simultaneously selling another - that is, you're exchanging the sold currency for the one you're buying. The foreign exchange market is an over-the-counter market.
Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network.
Who trades currencies, and why?
Daily turnover in the world's currencies comes from two sources:
* Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
* Speculation for profit (95%).
Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.
The world's most traded market, trading 24 hours a day
With average daily turnover of US$3.2 trillion, forex is the most traded market in the world.
A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.
Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur - day or night.
More Info
"All About the Foreign Exchange Markets in the United States", from the Federal Reserve Bank of New York.
Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network.
Who trades currencies, and why?
Daily turnover in the world's currencies comes from two sources:
* Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
* Speculation for profit (95%).
Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.
The world's most traded market, trading 24 hours a day
With average daily turnover of US$3.2 trillion, forex is the most traded market in the world.
A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.
Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur - day or night.
More Info
"All About the Foreign Exchange Markets in the United States", from the Federal Reserve Bank of New York.
Using Meditation to Remain Focused in the Heat of Battle
Written by article default Tuesday, 02 November 2010 12:42
Marvin stirred slightly as the unobtrusive ring of the alarm went off to let him know that his time was up. It was still very early in the morning as he was finishing another one of his important components of his morning routine. He had been meditating for a few months now and he already noticed a difference in his ability to hold his focus more intently even through the incessant noise of his random thoughts. Why, just yesterday, he remembered the good trade that almost went sour, but he was able to remain in the "zone" and keep his attention on what mattered most in the trade. As a result, he kept his commitment to his plan, followed his rules and avoided an urge to move his stop. He had experienced another private victory. He also noticed that he felt more relaxed and calm these days, which was new for him, as he had always thought of himself as a "type A" person, that is, keyed up, very intense and easily prone to frustration and fragmentation. Additionally, he also felt more centered and grounded as he approached his trading platform, which was also different; usually, as soon as he sat down to begin his trading session, he would feel fragmented and indecisive, which didn't serve his trades at all. To top it off, he felt quite resistant to the idea of meditation. He remembered thinking to himself that, "...this is woo woo and mumbo jumbo!" But, he finally gave in and tried it because he was tired of sabotaging his efforts by being, as he put it, "a basket case" as soon as he opened a trade. In other words, he had to do something differently in order to get different results. Now, Marvin also realized that he still had challenges with his trading, but he was glad that he had chosen to get outside of his comfort zone to try something that initially looked foreign to him, but turned out to be just what the Doctor ordered.
Meditation is not a panacea, it won't cure all of your ills; but, it is one of the most powerful documented tools that exists for centering the system, reducing stress, improving immune responses, sharpening focus, relaxing and gaining greater piece of mind. Furthermore, every corner of the globe from Asia to the Middle East to Europe to the Western Hemisphere to the deepest parts of Africa all have nurtured in their history some form of deep meditation. And, although meditation takes many forms, from walking, to sitting in a chair, to singing, to chanting, to dancing, etc, most forms at their core have in common a focus not on the doing but on "being." This aspect is very important to the process. To be more specific, Dr. Jon Kabat-Zinn, Ph.D Professor of Medicine Emeritus and founding director of the Stress Reduction Clinic and the Center for Mindfulness in Medicine, Health Care, and Society at the University of Massachusetts Medical School who wrote "Full Catastrophe Living," talks about the importance of "mindful meditation." Mindful Meditation essentially is sitting in quiet serenity and while following your breathing, you are doing nothing. Dr. Kabat-Zinn's major research pursuits lie in the emerging field of mind / body medicine, with the focus on the clinical, social, and human performance effects of mindfulness meditation training in various populations. These include people with chronic pain, stress related disorders, and / or a wide range of chronic diseases with a particular focus on breast cancer; multi-ethnic and multi-racial inner city communities experiencing high psychosocial stress due to poverty and associated social conditions; and inmates and corrections personnel in the prison system.
In order to meditate you need nothing more than yourself and an intention of just "being." Here is a simple guideline to follow:
1. Find a quiet and comfortable place. Sit in a chair or on the floor with your head, neck and back straight, but not stiff.
2. Try to put aside all thoughts of the past and the future and stay in the present.
3. Become aware of your breathing, focusing on the sensation of air moving in and out of your body as you breathe. Feel your belly rise and fall, the air enter your nostrils and leave your mouth. Pay attention to the way each breath changes and is different.
4. Watch every thought come and go, whether it be a worry, fear, anxiety or hope. When thoughts come up in your mind, don't ignore or suppress them, but simply note them, remain calm and use your breathing as an anchor.
5. If you find yourself getting carried away in your thoughts, observe where your mind went off to, without judging, and simply return to your breathing. Remember not to be hard on yourself if this happens.
6. As the time comes to a close, sit for a minute or two, becoming aware of where you are. Get up gradually.
Marvin stirred slightly as the unobtrusive ring of the alarm went off to let him know that his time was up. It was still very early in the morning as he was finishing another one of his important components of his morning routine. He had been meditating for a few months now and he already noticed a difference in his ability to hold his focus more intently even through the incessant noise of his random thoughts. Why, just yesterday, he remembered the good trade that almost went sour, but he was able to remain in the "zone" and keep his attention on what mattered most in the trade. As a result, he kept his commitment to his plan, followed his rules and avoided an urge to move his stop. He had experienced another private victory. He also noticed that he felt more relaxed and calm these days, which was new for him, as he had always thought of himself as a "type A" person, that is, keyed up, very intense and easily prone to frustration and fragmentation. Additionally, he also felt more centered and grounded as he approached his trading platform, which was also different; usually, as soon as he sat down to begin his trading session, he would feel fragmented and indecisive, which didn't serve his trades at all. To top it off, he felt quite resistant to the idea of meditation. He remembered thinking to himself that, "...this is woo woo and mumbo jumbo!" But, he finally gave in and tried it because he was tired of sabotaging his efforts by being, as he put it, "a basket case" as soon as he opened a trade. In other words, he had to do something differently in order to get different results. Now, Marvin also realized that he still had challenges with his trading, but he was glad that he had chosen to get outside of his comfort zone to try something that initially looked foreign to him, but turned out to be just what the Doctor ordered.
Meditation is not a panacea, it won't cure all of your ills; but, it is one of the most powerful documented tools that exists for centering the system, reducing stress, improving immune responses, sharpening focus, relaxing and gaining greater piece of mind. Furthermore, every corner of the globe from Asia to the Middle East to Europe to the Western Hemisphere to the deepest parts of Africa all have nurtured in their history some form of deep meditation. And, although meditation takes many forms, from walking, to sitting in a chair, to singing, to chanting, to dancing, etc, most forms at their core have in common a focus not on the doing but on "being." This aspect is very important to the process. To be more specific, Dr. Jon Kabat-Zinn, Ph.D Professor of Medicine Emeritus and founding director of the Stress Reduction Clinic and the Center for Mindfulness in Medicine, Health Care, and Society at the University of Massachusetts Medical School who wrote "Full Catastrophe Living," talks about the importance of "mindful meditation." Mindful Meditation essentially is sitting in quiet serenity and while following your breathing, you are doing nothing. Dr. Kabat-Zinn's major research pursuits lie in the emerging field of mind / body medicine, with the focus on the clinical, social, and human performance effects of mindfulness meditation training in various populations. These include people with chronic pain, stress related disorders, and / or a wide range of chronic diseases with a particular focus on breast cancer; multi-ethnic and multi-racial inner city communities experiencing high psychosocial stress due to poverty and associated social conditions; and inmates and corrections personnel in the prison system.
In order to meditate you need nothing more than yourself and an intention of just "being." Here is a simple guideline to follow:
1. Find a quiet and comfortable place. Sit in a chair or on the floor with your head, neck and back straight, but not stiff.
2. Try to put aside all thoughts of the past and the future and stay in the present.
3. Become aware of your breathing, focusing on the sensation of air moving in and out of your body as you breathe. Feel your belly rise and fall, the air enter your nostrils and leave your mouth. Pay attention to the way each breath changes and is different.
4. Watch every thought come and go, whether it be a worry, fear, anxiety or hope. When thoughts come up in your mind, don't ignore or suppress them, but simply note them, remain calm and use your breathing as an anchor.
5. If you find yourself getting carried away in your thoughts, observe where your mind went off to, without judging, and simply return to your breathing. Remember not to be hard on yourself if this happens.
6. As the time comes to a close, sit for a minute or two, becoming aware of where you are. Get up gradually.
Get Adobe Flash player Members login Username Password Remember me Forgot login? No account yet? Register What is the Best Website for Real Estate Data?
Written by article default Tuesday, 02 November 2010 12:41
First, let me start with a couple of updates on the real estate market and the leading indicators.
A freeze on foreclosures for all 50 states by Bank of America (B of A) was announced about three weeks ago. They just announced that foreclosures will resume in about 23 states. B of A says, it has not found a single occasion where a foreclosure proceeded in error. "We voluntarily paused our process in the 23 judicial states, not because there was evidence of problems – there was not- but because we wanted to ensure our customers they are being treated fairly," said Dan Frahm, a bank spokesman.
"This draws a line in the sand that the banks expect their problems will be over in relatively short order and it will be back to business as usual. If B of A can do it, certainly the smaller ones will follow suit," said Guy Cecala of Inside Mortgage Finance.
Existing Home sales jumped 10% to a seasonally adjusted annual rate of 4.53 million in September from 4.12 million in August. However, this still remains 19.1% below the 5.6 million pace of September 2009 (when the first time buyers were ramping up in advance of the initial deadline for the tax credit).
Housing Starts moved up 0.3%. This is a minor gain, but a move in the right direction. Bob Jones, NAHB (National Association Home Builders) chairman, reports that "builders are cautiously responding to the small improvement they are seeing in the interest among potential home buyers. However, as consumer demand for new homes rises, a major limiting factor for a housing recovery continues to be builder's inability to access credit for new construction."
Now on to our topic – Real Estate information data services.
As a consumer, you have many choices for websites that provide access to real estate listings. They are not all created equal by any stretch of the imagination.
I hear my husband have this conversation on a regular basis with clients –"No, I can't tell you why on (fill in the blank third party website – i.e. Trulia, Zillow, Redfin) it says that property is still available for sale, but the MLS and the listing agent both say it's sold." He'll get off the phone and say to me, "Why don't they just use the service I've provided them that has the current info?"
In the Professional Real Estate Investor class, I introduce you to the sites that get you the most accurate data.
Let me explain what the differences are and why. There are three primary categories of property search websites:
1. Third Party Websites
2. Franchise Websites/Broker Websites
3. MLS Feed Websites
Third party sites have attracted a wide consumer audience because these sites are very "sexy" with a lot of bells and whistles. Many of these sites have listing data that is inaccurate a great deal of the time, yet consumers continue to visit these sites because they create a fun, engaging experience for consumers, while the professional sites simply have the best data.
Third party sites are defined by WAV Group (a professional real estate consulting firm) as: Consumer facing websites that are not operated or owned by real estate agents, brokers, associations or MLS's. Some of these sites include Zillow, Trulia, Homegain, Cyberhomes and many more. They have a significant voice if you look at how many consumers use them. Unfortunately, they also have the lowest accuracy and completeness of listing information. A study done by WAV Group showed that data accuracy and completeness of listing information that is published to these third party websites have a range of being inaccurate somewhere between 20% to 92% of the time. They get their data from a variety of sources and, unlike the MLS, which is controlled by strict rules and regulations, this data has very limited controls and therefore, higher rates of errors.
Third party sites can have errors with the initial data. The bigger problem is the update of that data, changes made to the listing, such as price changes, listings that expire, or listings that have sold. What this means is that websites managed by the MLS and Real Estate companies will always have the most reliable local listing information for a given market.
There are a couple of very positive things these sites do. Their interface is very simple, which creates very little frustration for the consumer. They also add the sizzle we talked about earlier – like Zillow's "Zestimates" for comps. They also add neighborhood information and other important data when looking at purchasing real estate
First, let me start with a couple of updates on the real estate market and the leading indicators.
A freeze on foreclosures for all 50 states by Bank of America (B of A) was announced about three weeks ago. They just announced that foreclosures will resume in about 23 states. B of A says, it has not found a single occasion where a foreclosure proceeded in error. "We voluntarily paused our process in the 23 judicial states, not because there was evidence of problems – there was not- but because we wanted to ensure our customers they are being treated fairly," said Dan Frahm, a bank spokesman.
"This draws a line in the sand that the banks expect their problems will be over in relatively short order and it will be back to business as usual. If B of A can do it, certainly the smaller ones will follow suit," said Guy Cecala of Inside Mortgage Finance.
Existing Home sales jumped 10% to a seasonally adjusted annual rate of 4.53 million in September from 4.12 million in August. However, this still remains 19.1% below the 5.6 million pace of September 2009 (when the first time buyers were ramping up in advance of the initial deadline for the tax credit).
Housing Starts moved up 0.3%. This is a minor gain, but a move in the right direction. Bob Jones, NAHB (National Association Home Builders) chairman, reports that "builders are cautiously responding to the small improvement they are seeing in the interest among potential home buyers. However, as consumer demand for new homes rises, a major limiting factor for a housing recovery continues to be builder's inability to access credit for new construction."
Now on to our topic – Real Estate information data services.
As a consumer, you have many choices for websites that provide access to real estate listings. They are not all created equal by any stretch of the imagination.
I hear my husband have this conversation on a regular basis with clients –"No, I can't tell you why on (fill in the blank third party website – i.e. Trulia, Zillow, Redfin) it says that property is still available for sale, but the MLS and the listing agent both say it's sold." He'll get off the phone and say to me, "Why don't they just use the service I've provided them that has the current info?"
In the Professional Real Estate Investor class, I introduce you to the sites that get you the most accurate data.
Let me explain what the differences are and why. There are three primary categories of property search websites:
1. Third Party Websites
2. Franchise Websites/Broker Websites
3. MLS Feed Websites
Third party sites have attracted a wide consumer audience because these sites are very "sexy" with a lot of bells and whistles. Many of these sites have listing data that is inaccurate a great deal of the time, yet consumers continue to visit these sites because they create a fun, engaging experience for consumers, while the professional sites simply have the best data.
Third party sites are defined by WAV Group (a professional real estate consulting firm) as: Consumer facing websites that are not operated or owned by real estate agents, brokers, associations or MLS's. Some of these sites include Zillow, Trulia, Homegain, Cyberhomes and many more. They have a significant voice if you look at how many consumers use them. Unfortunately, they also have the lowest accuracy and completeness of listing information. A study done by WAV Group showed that data accuracy and completeness of listing information that is published to these third party websites have a range of being inaccurate somewhere between 20% to 92% of the time. They get their data from a variety of sources and, unlike the MLS, which is controlled by strict rules and regulations, this data has very limited controls and therefore, higher rates of errors.
Third party sites can have errors with the initial data. The bigger problem is the update of that data, changes made to the listing, such as price changes, listings that expire, or listings that have sold. What this means is that websites managed by the MLS and Real Estate companies will always have the most reliable local listing information for a given market.
There are a couple of very positive things these sites do. Their interface is very simple, which creates very little frustration for the consumer. They also add the sizzle we talked about earlier – like Zillow's "Zestimates" for comps. They also add neighborhood information and other important data when looking at purchasing real estate
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What you might not know though, is that 7 out of 10 traders keep on losing money in the Forex market! That's right, 70% of individual FX traders keep losing their hard-earned money in the market; while the other 30% work freely at home and make a solid living out of Forex.
So what is the major difference between the losing 70% and the winning 30%?
Forex trading knowledge and a sound trading system! If you want to have financial freedom by trading Forex and confidence in your trades; you need to get educated in Forex before you start trading it. Those who trade the Forex market with some knowledge and practice are taking advantage of one of the most lucrative markets anywhere in the world.
This site gives you all the resources and education materials you need to become a successful Forex trader. It's time to GoLearnForex!
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