I’m going to share with you some of my advice and tips for the forex currency traders out there struggling to improve their trading. This market is very exciting because it is growing at such a high pace. There is a great potential for all people to profit in this business.

The first point I want to discuss is the exit trading. You have to block out that training we got in society that has us looking for the cheapest buys and bargains on the shelf. It doesn’t work that way. We don’t make a penny of profit until we exit the trade, therefore the exit price is what we should be looking for. Developing the necessary analysis to predict the direction of a currency overtime should be your main concern. If you can fairly confidently predict a currency will go up to a value of A, and if you buy it for B, you will make a profit of A-B. If that profit is good, you should make the trade.

The next thing we’re going to talk about is the role of a central bank on a currency. All countries have them. In the United States, it is the Federal Reserve. In Canada, it’s the Bank of Canada. In England, it’s the Bank of England. All these banks play one simple role, controlling the supply of money. Basic economics state as an economy grows, more money needs to be added to meet the amount of value created by an economy. The way money enters the economy is through the banking system. The way they do it is by changing interest rates. A cut means more money goes into the economy, causing the price of currency to go down. A raise means less money goes into the economy, causing the price of currency to go up.

Lastly, be a simple person because simple works. You don’t have to make a big complex plan to win at this game. You don’t have to reinvent the wheel. Just keep it simple and you’ll do fine.

I’m currently giving a 7 day free forex course. Newbies and experienced are all welcome. If you’re interested in participating, check out the Casual Forex Trader.

If you’ve been in the Forex trading game for any number of days, hours or minutes you’ll have realized there are a plethora of applications, strategies and methods available to get you the results you want. Mad confusion, so which are better and for what purpose? Don’t stop now, keep reading!

Let’s start with the big one, Forex trading strategies. One thing you should understand before even thinking about designing or getting help with a trading strategy is you need knowledge of the trading game. You try to develop a strategy or get one from someone else but you have little to no knowledge you’re likely to lose money. So if you don’t know the market, skip the next paragraph because they’re not for you. Come on now don’t cry; there’s something for everyone in this article (even those with no experience).

So yeah, Forex strategies are to be used by those who know what they’re doing. The idea is pretty self-explanatory from the term. You use a strategy to stop missing good Forex trades and start making a consistent and reliable income in both large numbers and a fast manner. These strategies go from basic like “fast moving averages crossover” to complex like “picking tops and bottoms”. Google those terms and you’ll be guaranteed to find those strategies and likely many more. I just want to add that strategies like those are for educational purposes only as the trading market can significantly change at any time. I am not suggesting those do or do not work I am simply saying those are common strategies. Use at your own risk.

Next come Forex trading systems. There are a ton of these bad boys out there but let’s focus on a common style, autopilot, and a common choice, Forex Tracer. The concept, again, is pretty self-explanatory by the term. It’s an autopilot application. It does it all on its own. These are the optimal choices for lazy people like me who want large amounts of cash with little effort. Worst case scenario we spend 10-15 minutes in front of the computer per-day. All that’s left is leaving the computer on and connected to the Internet 24/7 and it’ll do the trading for us. What’s not to love?

The GOOD autopilot Forex trading systems are created by expert traders/advisors along with mathematicians and in some cases, behavioral psychologists. Heavy stuff man. This combination of experts ensures you’re getting reliable information (they send updates, newsletters, have full support, etc.) from credible sources. That’s what we’re after for maximum profits. In the case of Forex Tracer there is also a “demo account” where you can play the trading market with “play money” to see how much you could potentially profit. No investment needed, it’s great.

So there you have it. Strategies are great for those who know and understand the complicated magic that we call Forex trading and Forex trading systems are for those who genuinely don’t care about the complicated business and just want the money (with little work).

Click here to check out reviews of the top three selling Forex trading systems

The carry trade is an investment strategy involving basic arbitrage between interest rates. Any Forex transaction comprises of simultaneously selling one currency and buying another. Object of the carry trade is to sell a currency with a low interest rate and purchase one with higher interest rate. Trader pays interest on the sold part of the trade and collects it on the currency that was purchased, capturing the rate differential.

This easy strategy has been a buzzword in Forex circles for many years. There are always differences in interest rates to be exploited and sometimes they are quite substantial. To make it more appealing, these imbalances can last for a long time, years even, making the carry trade a darling among the “easy money” crowd. Such was the case for JPY which had been heavily borrowed for years in order to buy NZD, AUD and GBP, until last summer. That’s when the now famous “unwind of the carry trade” took place, sinking a lot of over leveraged traders.

Since then financial press has been relatively quiet on the subject. Recently, though, new variants of the method have started to pop out. On of them involves USD being sold against a basket of other currencies. It is based on the premise that FED will continue to cut rates and the dollar will continue its weakness unabated. Since the outcome for rates of other major economies is also very uncertain, hence the basket of currencies. This makes it for a rather complicated strategy, requiring careful allocation within the basket. This particular a approach makes the carry trade a little more complicated than it needs to be.

Another option gaining attention of late is the use of emerging markets currencies, also known as exotics. Some of the relatively high yielding ones are, as of this writing, Brazilian Real, Mexican Peso, Turkish Lira and South African Rand. While they are not available on all platforms, more and more brokers are adding at least some of them to their offerings. As of late, Rand (ZAR) and Lira (TRY) seem to be leading the pack.

South African Rand has been actively traded for many years now, has accumulated a wealth of historical data and is probably most suitable for individual trader. South African Reserve Bank’s overnight rate stands 11%. Rates have been cut four times last year and this trend is expected to continue. This country has benefited enormously from the commodities boom, especially the metals. It’s not without serious problems though, very high unemployment rate, political instability, and failing infrastructure (electricity shortages) are sure to have effect on the Rand. This currency is available on most of the leading broker’s platforms.

Turkish Lira currently offers the highest interest rates in the industrial world. The benchmark overnight rate was standing at 15,25% lately. In 2001 the country started reforms, backed by International Monetary Fund, which greatly improved economic stability. This led to Turkey being one of the fasting growing economies in the world, for a few years running. Prospective European Union membership also increased the flow of foreign investment. However, country has to overcome very high level of deficit and external debt. Political instability is always possible, as well as the ever present threat of a military conflict with its Kurdish minority.

These exotics certainly offer interesting and tempting opportunities for carry trade enthusiasts. Combined with daily interest payouts and massive leverage availability, they are sure to draw attention of speculators. Let’s not forget, however, that the potential for loss is also high. During adverse times, exotic currencies will tend to move much faster than others. While worthy a second look, this carry trade is probably best suited for the most adventures traders, no matter how much hype surrounds it.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com

Forex currency trading is the next exciting opportunity available to anyone who is willing to put some effort into understanding both the basics and subtleties of simultaneously buying and selling the currency of various nations. The basic concept is simple: buy and sell so that the currency you end up with is more valuable than the currency you started with. Although the concept itself is a simple one, it is the subtleties of understanding market conditions that decide how and when you go about trading. It is paramount that you do research before investing, have knowledge of the conditions that affect the world economy, and be willing to put forth effort and money to make your investment pay off.

Of all the skills needed to win consistently wit Forex, none is more important than understanding the difference between individual trades and trends that appear over time. Just as a puzzle is made up of tiny pieces that create something larger, separate Forex trades combine to produce a larger trend. It may not be completely possible to predict the consequence of every little trade, but with careful attention to charting and plotting the trades, you can develop a line. That line is what can assist you with seeing the overall big picture - the completed puzzle, if you will - rather than focusing on each little unidentifiable piece of the jigsaw.

Above all else, Forex currency trading is a game of numbers that develop over the longer-term, rather than a get-rich-quick method of building wealth. To be a consistent winner with Forex trading, investors need to remember the big picture produced by the smaller puzzle pieces.

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Enclosed you will find a simple point to check which will help you avoid the vast majority of automated Forex trading systems which lose money. Most traders don’t look at this key point and end up losing their money, let’s take a look at it…

The key point to look for with automated Forex trading systems is:

Is the track record real money or just a simulated back test on paper?

Now you would have thought that if you see a record claiming profits it would be real money in the market but go to the bottom of most of the systems sold online and you will see the words “simulated in Hindsight” and “hypothetical” in the disclaimer.

Now it’s pretty obvious anyone can make a track record look good, when they have all the facts to hand, anyone can make money if they have tomorrows closing price today but that’s not real life. Many of the Forex trading systems have track records that are better than the world’s top fund managers and you can buy them for $100 or so!

If it looks to good to be true it is and you don’t get financial freedom for $100.00.

Most vendors simply bend there system rules to the data to show a profit backwards and of course, when the user trades forwards it’s a lot harder and you cant bend the rules and the trader swiftly loses his money.

If you want to use a Forex trading system make sure it has a track record of real gains.

When you do find a trading system you then need to check the following

1. Check the logic and make sue you agree with it and have confidence in it so you can follow your system with discipline.

2. Check the track record and assume you started trading on the worst day and see how big the peak to valley drawdown is and how long it takes to make new peak in equity. Ask yourself can I stand that loss?

3. How long does the system take to operate? Make sure you have the time and you can execute the trading signals as the vendor recommends

4. Look for unlimited support and a good way to check how good it is - is simply to ask some question before you buy and see how quick the response is and how detailed.

Buying automated Forex trading systems is really common sense and you need to cut through the hype, to get rid of the junk ones.

There are some good solid trading systems out there though with real track records and if find the right one and incorporate it in your Forex trading strategy you will enhance your long term profitability.

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If you are going to be a winner in the stock market you must have emotional maturity. I did not say you had to be smart or know how to pick stocks and mutual funds.

Once someone buys a stock or mutual fund he immediately seems to have a love affair with it. It can become a fatal attraction that can lead to disaster.

All brokers and financial planners are taught to buy and hold no matter what happens to the price of an equity. They get married to it and hope that it will treat them well while they are together. Today about 50% of all marriages end in divorce yet people will hold on to a stock forever that has gone down waiting for it to come back so they can get out “even”. In a bad marriage you never get out even.

Any time you buy a stock or mutual fund you must have an exit strategy in place or face dire consequences meaning loss of your investment. When I was a floor trader on the exchange I would buy various equities, but before I made my purchase I always knew in advance how much risk I was willing to take. My prenuptial was in place.

Here is the greatest secret to making money in the stock market. It is knowing when to sell. Always figure you will have a loss until you see it go up and from then on your primary purpose is to keep the profit you have made. Never give back profits. If you become emotionally tied to any stock or fund it will definitely come back to bite you.

In 1998 you could have bought Janus 20, one of the largest and best known mutual funds, for $40 per share and gleefully watched it go up to $93. Today it is selling for $35. That love affair has cost someone money. If the investor had looked at that mutual fund as just another piece of paper to hold as long as the principal was appreciating he would have been dollars ahead. Brokers and financial planners foster this kind of immature thinking because they know they might upset the client if they told him to sell his dearly beloved shares.

Every professional trader I know would not subscribe to the long haul theory. That is the death of a retirement account. So many people buy a stock and refuse to sell it for less than they paid for it. Would it not have been better to have taken a small loss and had that money to invest in a better situation?

The immature investor is willing to take a big loss rather than a small one. It takes fortitude to be able to sell out of a losing position. When you learn this lesson you will become wealthy.

Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy It!” has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he’s the man that Wall Street does not want you to know.

Copyright 2005

al@mutualfundstrategy.com; 1-888-345-7870

Gold and Oil have an important relationship with the Forex market. Often these two commodities are used as a leading indicator in making trading decisions in the Forex market.

Gold

Why would gold have a negative or inverse relationship with the USD if United States is the second larger producer of Gold (out-placed Australia in 2006)?

The answer is simple (or maybe not)…

The obvious reason behind this inverse relationship is that gold is always priced against the USD: naturally a strong dollar will buy more ounces of gold (and a weak dollar will buy less ounces of gold).

But there is also another less evident reason of this inverse relationship: decades ago, during periods of uncertainty investors tend to migrate away their capital from USD to gold as a safe-haven.

Ok, to check some numbers: The USD has fallen to historic lows against some currencies including: EUR, CHF and CAD while gold (XAUUSD) has reached all time highs.

Majors that have a positive or direct relationship with gold are the Canadian dollar and the Australian dollar.

AUD - Australia is the third largest producer of gold in the world and as a result, the correlation coefficient of the AUD and Gold prices is close to 80%. So the AUD always benefits from rising gold prices and it also decreases when gold prices decline.

CAD - Canada is the third world largest exporter of the commodity. This makes the CAD and Gold move in the same direction, although its correlation coefficient isn’t as large as the AUD and Gold.

What would be the case for the EUR or other major currencies where there is no relationship (at least not a clear one)?

Other majors will have a direct relationship with gold because both of them (majors and gold) are priced in USD.

Oil Prices

Generally speaking an increase in the price of oil results in increasing costs of transportation, utility and heating costs as well as the cost of practically every finished product (particularly in oil-dependent economies such as the US, China India and other developed countries).

Arguments in favor of an indirect relationship between oil and the USD:

US accounts for only 5% of the world’s population but it consumes 25% of the world’s fossil fuel-based energy.

US imports about 75% of its oil, but owns only 2 percent of world reserves.

Because of this dependency on both oil and foreign suppliers, any increases in price or supply disruptions will negatively influence the US economy (hence the USD) to a greater degree than any other nation.

Canada is one of the few developed countries who are net exporters of energy (i.e. oil). Canada has the second largest oil reserves in the world (only behind Saudi Arabia). For this reason the Canadian dollar has a very tight positive relationship with oil prices.

Where is oil heading?

According to their prediction, world oil production was to peak sometime around the second half between 2000 and 2010 (like now?). Right now the oil barrel is pretty close to US$100, but what could happen to if this prediction is true? It will probably keep going that way for a few more hundreds…

Brain Feeder 4 - Recently a few presidents from large oil producer countries have announced their concerns about the weak US dollar and have declared they would be willing to change the oil pricing in Euros instead of US dollars. What to you think could happen to the USD if they price their oil barrels in Euros instead of US dollars?

by a.anies

http://www.trade-4x.blogspot.com

Forex trading, also known as currency trading, can be a very profitable activity. It is a very hot trend right now in making money from home, and for a good reason. Trading the Forex market has never been easier or more profitable. There are so many tools for beginner traders, so even the worst ones can succeed. However, to be really successful in this business, you need to start the right way, and that means making right choices.

The first choice every currency trader must make is about the broker. In order to trade in the Forex market you need a broker, but not just any broker. You need a reliable, honest Forex broker. Without that, you are doomed to failure. A bad broker will give you bad spreads, high commissions, or just bad service. Choosing a broker is an important step, and should not be taken lightly.

After choosing the right broker, you need to get the feeling of the market, but without the risk. This is where the demo account of the broker comes in handy. After you sign up with your broker, don’t start trading with real money right away. Ask your broker for a demo account with virtual money. This way you will be able to understand how the trading platform works, and you will be able to perform trades in the Forex market without risking your money.

When you can make trades with your eyes closed, it is a good time to choose yourself a Forex trading system. Such system is supposed to give you exact rules about entering and exiting trades the most profitable way. You can either make your own system or get a pre-made one. If you are a beginner, it is better to get a system made by someone else, a system proven to work. When you gain more experience, you may want to develop your own system.

The next to last step, after you have your system, is practicing it on the demo account and seeing if it works. Never trust a system blindly, always check what you receive. Practice trading according to the system, including all technical and mental aspects of trading like this. When you do a good job following the system and the system proves profitable for you, you can make a deposit and start trading real money, making real profits.

To find all your necessities for Forex trading, visit the currency trading broker list and currency trading systems list of Great-Info-Products.com

About the author:

Nadav Snir is a stock market trader and Forex trader. You can find more information about Forex trading and Forex brokers at his site at http://Great-Info-Products.com/Forex/index.html

The Number One Forex Trading Strategy is .. actually a combination of strategies. The truth is that there a number of ways to really do well on a consistent basis in the Forex market. instead of loading you up with some non-existent “holy grail,” I would rather provide you with real, proven and reliable Forex trading strategy. Here is the plan:

First, get your trading head on straight. You would be shocked at how many traders come to the currency market with all sorts of distractions and issues in their heads. How on earth can you make a wise decision in this frame of mind. It is actually, a good idea to review some monetary current events and data along with some basic trading principles about a half-hour prior to actually trading. I know this sounds monotonous but trust me, it is what the winners do.

Second, use your technical analysis tools properly. Trade on the Forex market with proven technical indicators. I like to start off with the 200 day moving average. This is the standard by which the “big money” judges the worthiness or timeliness of currencies for trading against another. It is obviously not the end- all- be- all but it is a great place to start. I then move on to the indicators that show me if a currency is severely over bought or over sold. If this is the case and the currency lines up with the 200 day moving average then I start to become very interested. Here is an example: The dollar is trading above the 200 day moving average. It is severely over sold. Now I am very interested in confirming this. How?

Third, use a reliable Forex trading software program with proven results and a positive reputation. I need clear and reliable signals from my software program and if these line up with the aforementioned indicators than I am feeling confident and ready to gain some significant pips. By the way, I have provided a link below for an objective review of the three leading software programs, I think it will help.

This method I just laid out is not pie-in-the-sky but it is proven and will more than likely make a winner out of you on the Forex market.

Get an Objective Review of the Most Popular Forex Trading Software Programs. Number One Forex Trading Strategy is the place to visit.

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For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970’s, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.

FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.

Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.

How FOREX Works

Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.

Marginal Trading

Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term “lot” refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.

EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)

When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

Investment Strategies: Technical Analysis and Fundamental Analysis

The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency’s future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.

A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country’s economy depends on a number of quantifiable measurements such as its Central Bank’s interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.

Make Money with Currency Trading on FOREX

FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.

Rich McIver is a contributing writer for The Forex Blog: Currency Trading News ( http://www.forexblog.org ).