Monday, August 10, 2009
|Indian Rupee (INR)||12.90(Dh 77.51/ Rs 1000)||12.95(Dh 77.22/ Rs 1000)|
|Pakistani Rupee (PKR)||22.40||22.30|
|Bangladesh Taka (BDT)||18.68||18.68|
|Sri Lankan Rupee (LKR)||31.15||31.15|
|Nepalese Rupee (NPR)||20.85||20.84|
|Philippines Peso (PHP)||12.88(Dh 77.63/ Peso 1000)||12.90(Dh 77.51/ Peso 1000)|
Saturday, August 8, 2009
There are many markets: markets for stocks, futures, options and currencies. These are probably the most accessible markets for everyday traders like you and I. People easily understand the basics of trading shares, so I will occasionally use examples from that market.
I began trading shares first and then I moved on to trading currencies; therefore, most of the examples I will be using in this book are derived from trading currencies.
If you do not know a lot about currency trading, allow me to introduce it to you. It is what I trade and I believe that it is one of the best markets to trade because of its efficiency. The transaction costs to execute a trade are minimal and most brokers provide you with the tools and data you need to make your trading decisions, they usually provide them for free. The market is open 24 hours a day which allows you to design your trading hours around your daily commitments. It is very volatile, which is great for those people who are looking for day-trading opportunities.
The foreign exchange market is the market in which currencies are bought and sold against one another. People may loosely refer to this market under different labels, including foreign exchange market, forex market, fx market or the currency market.
The foreign exchange market is the largest market in the world, with daily trading volumes in excess of $1.5 trillion US dollars. All transactions involving international trade and investment must go through this market because these transactions involve the exchange of currencies.
It is the most perfect market that exists because it has a large number of buyers and sellers all selling the same products. There is a free flow of information and there are little barriers to participate.
The currency exchange market is an over-the-counter (OTC) market which means that there is not one specific location where buyers and sellers can actually meet to exchange currencies. Instead, transactions are conducted by phone, fax, e-mail or through the websites of brokers who specialize in currency trading.
The major dealing centres at the time of writing are: London , with about 30% of the market, New York , with 20%, Tokyo , with 12%, Zurich , Frankfurt, Hong Kong and Singapore , with about 7% each, followed by Paris and Sydney with 3% each. Because of the fact that these centres are all over the world, foreign exchange traders can execute transactions 24 hours a day. The market only closes on the weekends.
THE MAIN ‘PLAYERS' IN THE FOREX MARKET
The five broad categories of participants are: consumers, businesses, investors, speculators, commercial banks, investment banks and central banks.
Consumers, including visitors of countries, tourists and immigrants, do need to exchange currencies when they travel so that they can buy local goods and services. These participants do not have the power to set prices. They just buy and sell according to the prevailing exchange rate. They make up a significant proportion of the volume being traded in the market.
Businesses that import and export goods and services need to exchange currencies to receive or make payments for goods they may have bought or services they may have rendered.
Investors and speculators require currencies to buy and sell investment instruments such as shares, bonds, bank deposits or real estate.
Large commercial and investment banks are the ‘price makers'. They are the ones who buy and sell currencies at the bid-and-offer exchange rates that they declare through their foreign exchange dealers.
Commercial banks deal with customers on one hand, and with the Interbank or other banks, on the other hand. They profit by utilizing the bid-and-offer spread. The bid price is the exchange rate that the buyer is willing to buy and the offer price is the exchange rate at which the seller is willing to sell. The difference is called the bid-offer spread. They also make profits from speculating about whether the exchange rate will rise or fall.
Central banks participate in the foreign exchange market in their effective duty as banks for their particular government. They trade currencies not for the intention of making profits but rather to facilitate government monetary policies and to help smoothen out the fluctuation of the value of their economy's currency.
Using the videos created by FXDD, we will try to provide you with weekly videos of future events as well as provide you with the daily events when necessary. This will give you, the trader more information to help you. Each video will represent a week or day depending on which is available. At least this way you can come back to one spot for all your Forex video needs. Continue to Weekly Forex News.
Whether you are a beginner or a seasoned trader, we have a service to fit your needs. Do you have a hard time understanding when to get in the market, or is your exit points that need help? There are hundreds of forex signals services on the market, but most are not worth a dime. We only work with the best. We screen them with the strictest parameters - ensuring their performance is real.
These signal providers may send signals by e-mail, voice, cell phone, or a live trading room. We will provide you with a list of the best Forex services available to best suit your trading needs.
Some traders prefer an auto trade type of system which does the trading for you, like FX-System Center, an excellent way to go. We work with a number of providers of auto-trade services which include state of the art software that will execute trades in the Forex market for you. You can learn to trade many different styles throughout the trading day. You can join live chat sessions with live calls in voice chat rooms with professional traders and learn how to trade the Forex market yourself. The options are all available, and now you know where to look.
When I see this I usually recommend to the trader to become more price aware in their trading. After all, how many technical indicators do you need to see that the market is overbought or oversold? Besides, I have a secret for you. Almost all technical indicators are just fancy moving averages. So if you use four or five indicators, you are basically using the same information over and over again.
You should not confirm signals generated from indicators with other indicators. Since they are based on moving averages, the only real difference will be the timing of the signal. Typically Stochastics will become more extreme than RSI and both will signal an entry before MACD…..just about every time.
So if you have five indicators showing a sell, this does not mean that the trade is better than one where only four indicators show a sell. What you should be using to confirm these signals is other forms of analysis. I think that the best is simple support and resistance with previous highs and lows or trendlines being the best examples.
My favorite setups are when the market is in an uptrend and pulls back to support at the same time the indicator is giving a buy signal. The opposite is also true in that I like to sell in a downtrend when the market has rallied up to a resistance point as the indicator is showing a sell signal. Many successful traders do not even use indicators as trend analysis and use of support and resistance is enough for them. They do not need an indicator to tell them when the market is oversold or overbought. They use the movement of the market itself and consider that the best indicator of them all.
If you prefer to use indicators, pick the one or two that you are most comfortable with and use those. But you should also incorporate more of the market movement in your analysis for a better point of view.
Like many people I am sure you are interested to know more about Forex trading. To put it bluntly Forex trading can be either one the best ways to make or lose LOTS of money. Only those who take the Forex market seriously will be able to make money with it in the long term.
The Forex trading market is beyond a doubt the world’s largest market where all exchanges happen instantaneously. Thus, trades are a key challenge for even the most knowledgeable Forex bankers and traders. They have to learn and consider many factors before performing even a single trade.
At first when currencies began to be traded openly, only large banks were allowed to perform trades. These days, due to the advent of internet trading and margin accounts almost anybody can begin Forex trading. This in turn, has added to the liquidity of the Forex market, and has resulted in a huge increase in the number of individuals who are now active in the market.
So, does this mean it is easy to earn money through Forex trading? To answer this we must consider a few things.
Some data by Forex brokers seems to suggest that 90 percent of traders end up of losing their capital, 5 percent of traders have been able to break even and only 5 percent of them attain steady beneficial results. Thus, it seems that trading successfully is no simple task.
However, if you can learn to be among the 5 percent who make consistent money you can do extremely well by using Forex trading. To help you in this end I have listed five key ways to improve your odds dramatically of making money in the Forex market.
Successful traders are knowledgeable about the Forex market. They have chosen to educate themselves about every single vital detail of Forex trading. The best traders know that every trade that they perform is an opportunity to learn something new.
2. Forex Trading System
All of the profitable traders have a Forex trading system or strategy. Furthermore, they have the will power to stick strictly to that system, because the best traders know that by sticking with their system they stand a far greater chance of earning money.
3. Price Behavior
Knowledgeable and successful traders also include price behavior in their systems. They have learned that prices can change quickly and suddenly but are prepared to deal with those situations when they arrive.
4. Trading Psychology
First-rate traders are aware of psychological issues that affect the choices of other traders make when Forex trading. They know that people do not always act rationally, and as a result this can alter the expected outcome of a trade. This can help them both when deciding to enter into a trade or when to exit.
5. Money Management
This is far and away the most important factor that will determine whether or not you become a successful trader. Averting the hazard of financial ruin is the main concern of all top traders. This means both adequately funding your trading account (only with money you can afford to live without of course) and never entering into trades that can potentially wipe out all of your assets. Better to start trading small and always use stop-loss orders to guarantee that your first trades are not also your last.
This is by no means an exhaustive list of everything you need to know but it outlines some of the areas you need to consider before making even that first trade. Now you know that it is not easy to earn money in the Forex market, however it is achievable.
However, success does not happen overnight and anyone promising you that it can is trying to sell you snake oil. It is an ongoing processes not something you pick up in a weekend. Trading success depends on the trader, and how hard you are willing to work to achieve your Forex trading goals.
Also, remember to try to have some fun. The clearest sign that Forex trading is not for you is if you find the prospect of learning about how the Forex market works boring or dull. If this is the case you won’t stick with it long enough to make money and you will be among the 90 percent who fail. Just remember these three important things: be disciplined in your trading habits, manager your money wisely and enjoy the experience of Forex trading.
Forex Currency pairs in Forex trading have been standardized by the IMF. The pairs most commonly traded are:
• EUR/USD, the Euro and the U.S. dollar
• USD/CHF, the U.S. dollar and the Swiss franc (sometimes called “the Swissie”)
• GBP/USD, the pound sterling of Great Britain and the U.S. dollar (sometimes called “the cable”)
• USD/JPY, the U.S. dollar and the Japanese yen
• USD/CAD, the U.S. dollar and the Canadian dollar
• AUD/USD, the Australian dollar and the U.S. dollar
These pairs account for 80% of all trades in the Forex market. They all involve the U.S. dollar, because it’s still the biggest economy in the world and one of the most inviting to trade. But this is also a holdover from the Bretton Woods Accord of 1944, which pegged all currencies to the U.S. dollar as a benchmark. Although the Accord was abandoned in the early 1970s, some of its effects are still evident in the market.
The first currency in the pair is known as the base currency, and it’s the important one. Its value is always one in the exchange rate, and it controls the direction of the trade and the chart. The second currency is called the cross.
For example, in the GBP/USD, the British pound is the base currency and the U.S. dollar is the cross. If the price on this pair is 1.7609, that means that one pound is worth 1.7609 U.S. dollars. If the chart goes up, that means the pound is strengthening against the dollar; if it goes down, the dollar is strengthening against the pound.
Because a purchase automatically includes two currencies, one being traded against the other, it’s just as possible to make a profit in a bear market as a bull market. For the same reason, there’s no prohibition against selling short in Forex trading as there is in the stock market; it’s built into the system.
Prices are measured in pips, which is an acronym for Price Interest Point, and it’s the smallest digit in the price. This is an important point, because not all pips are created equally; they reflect the base currency of the pair. If the U.S. dollar is the base currency, then one pip equals one dollar in a mini account or ten dollars in a standard account. If you place a trade with one of these currencies and earn fifty pips, that would be a profit of $50 in a mini account or $500 in a standard one.
But if the base currency is not the U.S. dollar, then the value of one pip is equal to one unit of the base currency. In the GBP/USD, because the pound sterling is the base currency, one pip is equal to one pound; in the AUD/USD, one pip equals one Australian dollar. Therefore, when you take profits in these currencies, you’re taking them in the base currency, which then must be exchanged into the U.S. dollar at the current exchange rate.
If the exchange rate is one or more, then this works in favor of U.S. traders; but if the value is below one, it’s not such a good thing. For example, a gain of fifty pips in the GBP/USD equals not U.S. $50, but £50. If the exchange rate was still 1.7609, then the profit after conversion would be around U.S. $88.
But a gain of fifty pips in the AUD/USD equals AU $50, and the exchange rate is more likely to be around 0.7467. So the profit would be closer to U.S. $37.
The first thing to notice about currency prices in the Forex market is that there are two of them, called the bid price and the ask price. The second thing to notice is that they don’t favor you, the trader; they favor the broker, because that’s how he makes his money.
The ask price is what you pay should you wish to purchase that currency pair. Using the GBP/USD as an example, let’s say you believe the pound is going to strengthen against the U.S. dollar, meaning that the chart of the two currencies is going to go up on the graph.
In such a trade you would be purchasing the pound now at a lower rate (and by definition, selling the dollar) so that you can sell it later at its (hopefully) higher rate. And, since the pound is the base currency and it controls the direction of the trade, to purchase the pound means to purchase the currency pair. Such a trade is called opening a long position.
The bid price is the exact opposite: it’s what you pay should you wish to sell, or short, that currency pair. To continue the example of the GBP/USD, let’s say you believe the U.S. dollar is going to strengthen against the pound, rather than the other way around. In this trade, you would be purchasing the dollar now (and selling the pound) in order to sell it later.
But remember, it’s the base currency that controls the direction of the trade. When you purchase the cross currency, by definition you’re selling the base; in other words, you’re selling the currency pair rather than buying it. So all the signals are reversed: the chart will go down on the graph and the price of the currency pair will decrease.
But because you sold or shorted the currency pair rather than purchased it, you want the price to decrease, because it’s the price of the base currency that’s going down while the price of the cross is going up. In our example, if you shorted the GBP/USD, you would earn a profit if the price of the pair went down.
Calculating the number of pips you earn in a short trade is the same as for a long trade. Just ignore which was the purchase or the sale price, and subtract the lower number from the higher one. The difference is the amount of your gain.
Forex News Trader was developed to give traders the edge they need to learn how to trade based on economic news events from around the world. The same edge the institutions use to make hundreds of millions and even billions of dollars in profit each year.
Forex News Trading will provide you with the information you need to give you a true insider’s understanding of the Forex markets. You will feel confident in your trading, and never doubt your trades again.