Posts Tagged: forex strategy

Forex — No Comments
26
Apr 10

Demo Foreign Exchange Trading – How Helpful Is It?

Demo forex trading is recommended as the way to begin by just about everybody, including us here on this site. Trading in a demo account allows you to begin to know your broker’s platform and services, discover the strengths and weaknesses of your system and work out your own strengths and weaknesses as a trader at the same time. Let’s see what to keep an eye out for and how to avoid the traps.

We have a tendency to say that a demo account and a real money account from the same broker are going to look the same, offer the same services and work in the same way. Generally this is correct. Sadly however, in a small minority of cases, there are serious differences between the 2. Infrequently you could even find the demo accounts are managed on a totally different platform. The broker might have many incentives for doing this. Sneaky reasons would involve tricks like drawing you in with something that is user friendly and perhaps even stacked in your favor (if it doesn’t access the real market) so that they can grab your cash and then watch you lose it in the physical world. No matter what the reason, this is something to avoid.

Forex — No Comments
21
Apr 10

The Development of Foreign Exchange Trading and the Global Market

Till World War I it was always allegedly feasible to go to the central bank and ask for gold or silver in the place of your bank notes. Of course, this very infrequently occurred in serious amounts and many countrywide banks stopped keeping enough gold to cover. On occasion, however, such as in Germany after World War I, there would be a tragic run on the banks, leading to crazy inflation and the downfall of the nation’s economy. To stop an identical disaster happening in a vulnerable nation again, the Bretton Woods agreement was drawn up in 1944. Round the same time, the global monetary Fund and World Bank were made to assist in maintaining international industrial stability.

This held until the early 1970s. However, states were developing at different rates and in different directions, and in 1971 President Nixon suspended the gold standard. All of a sudden it was feasible to trade in currencies, and the fiscal establishments were fast to recognize the potential. Banks had to exchange money to supply their clients with foreign currencies for travel and importing goods, but pretty shortly they were exchanging far more than they wanted to profit from the continual rise and fall in the values of the different currencies. The development of the web meant that the market became accessible to anyone, in principle. To accommodate the gigantic numbers of potential new clients and because their costs were dropping, brokers began reducing the minimum investment amount. At about that point in forex history, daily trading turnover has reached between $3 and $4 trillion, more than the trading volume of all the world’s stock and bonds markets added together.

Forex — No Comments
14
Apr 10

Euro Currency Trading Basics

The EUR is administered by the EU Central Bank (ECB). Because of its status as a multinational regulatory bank, its remit is a little different than the US Fed, for example. The ECB is concerned solely with IRs and maintaining price stability in the Eurozone, while the Federal Reserve and most other nationwide central banking institutions also have to consider the results of their decisions on employment levels. This implies that the ECB has a rather more hawkish approach to IRs. This means that they generally tend to favor a rise in rates. They’ll put the IRs up faster than the FR would when costs rise, and are less sure to lower them when prices fall. This suggests that changes in something similar to the retail price index in Germany will not affect EUR rates and that the cost of the euro in the same way that the same situation in the States would affect the cost of the buck. Another point that is necessary to remember if you’re concerned in EUR trading is that although there are at present 27 member countries of the EU, only 16 of them are members of the EMU (the Eurozone). Another 5 use the euro but are not official EMU members. The others have opted not to join the Eurozone for their own reasons.

In particular, the UK is in the EU but does not use the EUR, while Switzerland is not a member of the EU at all . They have kept their own countrywide currencies, the British pound and the Swiss franc.

In addition, many nations in the ECU have a small GDP and aren’t great commercial forces. This suggests that the basic factors influencing the cost of the EUR depend principally on the business situation in just four western european countries. Those countries are Germany, France, Italy, and Spain in that order. Together, they produce 75% of the GDP of the Eurozone.

Hence the forex trader who is involved in euro trading wants to look out for major business announcements in those four countries while understanding the economic situation in other european countries will have a lot less of an impact on Euro trading.

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11
Apr 10

Are You Able to Use Stochastics for Forex Trading?

There are such a lot of signals available in technical charting it’s infrequently difficult to know which to use. Some traders write off certain signals eg the stochastics for day trading, simply because it is often known as a lagging indicator and therefore they assume it is too slow for their purposes.

Frequently we are accustomed to seeing stochastics given in examples of trends on daily chart, talking about the price at the close of everyday. However, there isn’t anything to prevent a day trader from simply fixing the period of time to fit with the fifteen minute, 5 minute or even the one minute chart. The stochastic indicator is then just as handy for a day trader as it’d be for a trader following long-term trends.

Stochastics measure the difference between the last final price and the price movement over a certain previous number of time periods. You can adjust the quantity of time periods in your technical charting according to your system, but fourteen is the number often used. It appears to be a magical number for oscillating indicators, giving a long range to be comparatively correct without being so long that it loses significance for the present moment.

Forex — No Comments
30
Mar 10

Pips Explained

Some brokers are now beginning to quote the other major currencies to 5 decimal places. Rationally this should mean that one pip would be 0.00001 currency units, but the potential there for confusion is massive, if a pip would be worth ten times as much with some brokers than with others. So it appears likely that the pip will stay at 0.0001 units for most currencies.

Most traders record their profit and loss in currency trading pips as well as in money. This enables easy comparison of one trade with another so that you can guage a system. It also means that traders can debate their ends up in a forex forum without unveiling the scale of their account or their profits in bucks and cents.

Forex — No Comments
23
Jan 10

Forex Powerband Dominator

Forex Powerband Dominator is a non-automated foreign exchange trading system that works on any time frame with any currency pair, and is good for scalping as well as long term trading.

The system is sold in a package of:

A comprehensive trading non-automated that teaches you everything about the Forex Powerband Dominator system.
Video modules that cover: platforming and charting, how to plot “fixed” and “dynamic” support and resistance areas, how to use price action and candle formations to give you a real edge in the markets, entry techniques, the best use of time frames, position management, and more…

You may at least take a peek, I think.

Forex — No Comments
21
Jan 10

The Best Way to Trade Forex

Many beginner traders wonder what is the best way to trade Forex. What is the easiest way to start and what is the safest way to do it. Is it using expert advisors and robots or signals? Is it scalping, or trading long-term?

I’ll try to give a definitive answer to this question. Even though there are different advantages and disadvantages to any Forex trading strategy, as well as there are proponents of each method, I’ll give my opinion about what fits best for the beginners.

Let me cover the most popular methods and how I think they fit the beginners. First of all, there are the automated trading robots. The idea is that a software trades for you. You’d think that such a software would be the best option for a beginner, but what sounds too good to be true, most likely is. All of these robots are flawed and they don’t trade that well, a lot of loss happens. That’s not exactly what a beginner would want.

Signals are very similar to robots. The only difference is that you have to open and manage the trades manually. Again, these aren’t prefect and there are just more chances for beginners to make mistakes.

That leaves us with manual trading strategies. Yes, you need to learn to trade manually, and it is a tough skill to learn. But if you want to trade, you just have to learn it. So we’re only left with different trading strategies. There are 3 main strategies – scalping, intra-day trading, and long-term trading.

Scalping is the strategy of the highest risk, even though it enables the fastest profits. The risk is really high, though, so I would not recommends it for beginners.

Intra-day trading (meaning you open and close trades within the same day) holds less risk than scalping and to most traders it is the preferred option. It enables daily profits and the losses can also only happen just a few times per day. It can be a great way to trade not only for expert traders but intermediate too.

However, I would recommend long-term trading for Forex beginners. Other faster methods are too fast. Several swings can happen on 30 minute or 1 hour charts and they require fast decisions to be made. That’s not a perfect scenario for a beginner. On the other hand, long-term trading (in Forex the term “long-term” can mean a few trades per week) allows a “slow” market and a lot of time to research and make decisions. That I think is perfect for beginners.

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