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Friday, March 14, 2008

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Learn Forex

How do I begin? Please give it to me SIMPLY.

1. The best advice on how to learn to trade profitably is to learn from experts with proven track records. Many learning styles are available to beginners at all levels: books, CDs, online courses, group seminars, even one-on-one mentors who will come right your home for a few days. We outline our Forex-Trader picks in Learning Forex Trading. Learning to trade from experts is worth every penny and has saved us untold thousands in mistakes.We would not recommend starting forex trading without any training. It is not hard to learn, nor difficult to trade successfully, but you must first provide yourself with a basic functioning knowledge of �the game you�re in�.

2. While you are learning you will need charting software to practice reading the Market. Charting is an indispensable tool that shows you in real-time data what the market is doing moment by moment and also what the market has done in the past. As you learn to analyze these charts you can determine what trades to enter and exit, where to set your stop losses, limits etc. There are several good charting software services that you can subscribe to online monthly. See our Forex-Trader tested Charting Software picks in Tools of The Trade.

3. Then, to perform your actual trades online you need a real-time �trading platform� to execute your �buys� and �sells� directly in the Foreign Currency Market. You obtain a trading platform from a Forex Clearinghouse that is connected real-time to the interbank market. There are many good Clearinghouses (also confusingly called Brokerage Firms, Market Makers, etc.) that provide you with the trading platform to trade the funds in the account you have opened with them. Before you begin trading your �real� money, while you are learning, you will practice on your own �demo account� with play-money in it, which will be provided to you by the clearinghouse you plan to trade through. The contractual relationship you enter into with your Clearinghouse is a very important one because the Clearinghouse you choose determines many trading features and financial advantages to you both as a trader and as an investor. Forex-Trader tested Clearinghouses are reviewed in Tools of The Trade.

We have outlined a Getting Started path with uncomplicated steps. This is the path that we would take if we were beginning trading over again today with �what we know now�. The products and services we mention in these steps are all ones that we have personally used for some time with consistent success. As always you are free to forge your own path, and if you do, happy hiking. There is a mountain of products and services try out, and if you find ones you like better we would love to compare notes with you.

Explain More About Charting Services

To trade successfully you also must have good charting software and instantaneous data feeds critical to helping you analysis and interpret the movement of currencies moment to moment so you know when/why to buy or sell � this you subscribe to monthly. You can get a 2 week or more demo to familiarize yourself with one that has the features you like. The costs also vary, and some companies require a year commitment. There are some free charting services offered through the clearinghouses, but they tend to lack the tools to be truly useful. There are also some costly proprietary Specialty Software charting �hybrids� which are market forecasters tools that look more like video games than charts.

Explain More About How Clearinghouses Work

A good clearinghouse (i.e.. your computer access/link to the live Forex Exchange Market) is the partner with which you trade the money you have deposited with them in your trading account. After trying and demo-ing many we have found a small handful that are truly excellent for the beginner (and continue to be excellent as you grow) � meaning user friendly, legally accountable to regulatory bodies, and offering fair costs (spreads) for their services/trading software platforms. There still are many worrisome ones practicing in this closing era of unregulated forex trading (new Commodities laws are imminent).

The topic of matching the right clearinghouse for your needs is discussed more in Tools of the Trade, because it depends on a number of factors � how much you can open an account with, how much the clearinghouse profit spread, what your liquidity needs are, your minimum/maximum stop loss and margin requirements, even where you live and how much time you have to give to trading in a 24 hr. day.

How Much Does it Cost to Begin to Trade?

Learning to trade will entail the cost of books and whatever traiining method you choose. It will also include a reliable computer with a minimum 128 Mb of memory to run the charting software and trading platform. Ongoing �costs of operation� include the monthly costs of high-speed internet, charting software, the email forecasting subscriptions � plan on spending $150./mo. up for ongoing costs.

What about Pooled Clearinghouse Accounts to Trade with More Leverage?

We strongly do not recommend pooled accounts in any circumstance. Perhaps you are considering self-trading a pooled- together family account because it would give you a perceived advantage of more leveraged funds to trade (50:1 up to 100:1 leverage) � any risks of loss represent a potential risk to family relationships, and for this reason alone we do not recommend aggregating with family or friends.

However much worse are the too-numerous negative experiences of people allowing their investment funds to leave their control to become part of a �managed� pooled account. Not only is it a very risky investment idea, it is illegal for anyone to �pool� accounts without compliance with SEC (a USA Securities Exchange Commission) or international equivalent license. Never relinquish direct control over your money/trading account to anyone (i.e.. the ability to make withdrawals, deposits etc. directly by your own authority into your own account).

A good fund manager, if you do choose to go the (legitimate) Managed Account route rather than the Self-Trader route, will make certain you have your own �segregated account� in your own name in a bank or brokerage firm. These individual segregated accounts can still be traded together as though they were in a single account by a designated trader as long as the clearing house uses a trading platform that allows it. You, as the investor/account holder, have direct access online to your account activity at all times, and direct control over your own account in your own name (just like a bank account). The importance of this, for the safety of your funds, cannot be over emphasized


Quick Forex Ideas

foreign exchange calculator

In order to find a reputable broker or brokerage firm you�ll need to find out what others have thought of the prospective brokers� performance. One of the best ways to do that is to visit a few different financial discussion forums where you can ask questions and find out what others have thought about specific traders.

currency trading

Forex charting software includes many features as simple click fills. In this software an indicator is a series of data points that is derived by applying a formula to the price data of a particular security. Price data includes any combination of open, high, low or close points plotted over a period of time. Some indicators may use only the closing prices, while others incorporate volume and open interest into their formulas. The price data is entered into the formula and the software produces a data point. The goal of Technical Analysis is to build indicators and make indicator analysis to build market-timing strategy.
Check out the first commercially available Stock Trading Robot Which Earns $346.77 Per Week

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During your Forex training you will learn to control your own order flow by using the state-of-the-art ECN for Forex trading. You will learn how the Pros make money and learn the differences between Forex and equities trading. Decide for yourself, which is the best instrument for you. Don�t be surprised to find that you can use both in harmony. Forex offers 100 to 1 leverage and 24/6 trading hours � trade in the evenings, trade in the early morning before work. Learn to trade with discipline, a plan and the technical tools that the World currency Traders use.

Forex News

European Morning Update 13th March 2008

Thu, 13 Mar 2008 00:45:59 -0500
Dollar remains under pressure in Asian trading

Releases from Australia:

Australia – February Forecast Actual
Employment Change 15.0K +36.7K
Participation Rate 65.2% 65.2%
Unemployment Rate 4.2% 4.0%

There seems to end to the strength of Australia’s employment market which has seen jobs grow again, this time by a healthy 36.7K in February and bringing the total unemployed to a new 33 year low at 4.0%.

Australians are worried about inflation and higher interest rates but with jobs still plentiful these worries are lessened. It still keeps the pressure on wages and this is something on which the RBA will keep a close eye. It also helps them hike rates again to try and reign in inflation.

Releases from Japan:

Prior Current
January Industrial Production (F) (MoM) - 2.0% - 2.2%
February Tokyo Condominium Sales (YoY) -19.1% - 28.0%

Japan revised lower the January industrial production numbers by 0.2% to finalize the month at -2.2%. As is feared – but expected – shipments dropped by 1.0% over the month and inventories by -1.4%.

And production is not going to be helped by the continuing problems seen in the housing market which saw condominium sales worsen over February by 8.9% to -28.0% YoY. Following the initial decline last year the number has been gradually recovering and this latest setback will be a disappointment.

This fall in development is also hitting industrial production and the labor market which is dampening consumer demand. Having been looking around at apartments it is noticeable how prices are being lowered to be able to offload properties though this has not yet hit the brand new developments just yet. These tend to have a higher premium and also a higher demand.

And finally the Economic Minister Ota has been bemoaning the double blow of higher oil prices and a lower Dollar-Yen which predictably is hitting corporate profits. However, the higher Yen has provided a cushion to the full blows in the market but the underlying problem is more the reduced competitiveness of Japanese prices which is restricting exports.

The following economic releases are due today:

U.S. Business Inventories (MoM) +0.4%

Italian CPI (MoM) +0.3%
Italian CPI (YoY) +2.9%
U.S. Import Price Index (MoM) +0.8%
U.S. Import Price Index (MoM) NA
U.S. Advanced Retail Sales (MoM) +0.2%
U.S. Retail Sales less autos (MoM) +0.2%

U.S. Initial Jobless Claims (8th) 355K
U.S. Continuing Claims (1st)

The ECB is due to publish its monthly report
The SNB is due to announce its rate decision
Germany’s LFW Institute Presents New Economic Growth Forecast

Just as I thought it was safe to call a correction the Dollar baulked at being bought once again and has dipped to new lows. If I look at the wave structure and see the sheer lack of any significant pullback it does seem as if something is amiss. Indeed, as a general guideline when the first correction (wave ii) is shallow then the second (wave iv) is more complex.

On this basis I won’t totally give up the idea that we’re still in a correction especially given the levels we are currently approaching. Within an expanded flat (where part of the correction goes beyond the trend extreme and then returns to the first corrective level) we are uniformly close to these across the four majors. The expansions commonly reach 38.2% of the first leg of the correction with the exception of the Swissie which has a habit of expanding by 23.6%.

These expansion supports are at 1.5575 Euro, 100.00-20 Yen, 1.0079 Swissie and 2.0304 Pound.

These then set the barriers to continued losses which I would have to say would then likely extend losses towards the long terms targets at 1.5797 Euro, 98.55-90 Yen, 0.9960-90 Swissie and a more cautious 2.0460 Pound.

Until those breaks we should take note of the risk of a move back to the Dollar’s corrective highs seen over the past 2 sessions.

Note important support and resistance areas:

Res: 101.60-70 1.5659-92 1.0200-45 2.0458-60
Res: 100.66-00 1.5585-03 1.0130-65 2.0340-57

Spt: 99.40-85 1.5500-20 1.0054-79 2.0249-75
Spt: 98.55-90 1.5440-60 0.9959-93 2.0160-90

See Also

Forex Trading System
Forex System
Easy Forex