Archives for October 2007

?Defining Trading Trend and Ranges in Forex Trading

When you choose to start trading in the Forex market, which is often call the foreign exchange market, you will need to bone up on a little trading vocabulary. Learning specific terms and what they mean are essential before you even think about using real money to trade. You would never get into a pilot’s seat and try to fly a plane without ever having taken flying lessons. The same goes for foreign exchange market trading. You need to be fully aware of what you are doing. This is a market that is not quickly learned, so you should never assume that once you jump into it, you will learn as you go. While some people opt to do that, they typically end up losing an adequate sum of money because they were not as prepared as they should have been. Knowing the importance of trading trends and ranges in Forex trading is very important. If you are thinking of trading in the Forex market, be sure you know what these terms mean and their implications.

Trading Trend

When price moves consistently in one direction in the Forex, a trend occurs. When the direction is higher, the trend is often called bullish. When the direction of the price is moving lower, the trend is often called bearish. These terms are relative of course. When you define a trend, you should always remember that price peaks and troughs are in the same direction. When you are dealing with a bearish trend, remember that price highs and lows are moving lower. Likewise when you are dealing with a bullish trend, they are moving higher.

Often when trends occur, it is possible to draw support lines under one that is moving higher (an uptrend). You can also often draw resistant lines above one that is moving lower (a downtrend). Once you see these lines break, it can be assumed that the trend is complete. At this point there is a possibility that the trend will begin to reverse. When it does reverse, you will need to know the pattern of what that entails.

Trend Reversal

When you hear of a trend reversal, it simply means that the direction of market prices is changing. Often you will see trend reversals following a four step pattern. Usually, this includes the market making a new high, the trend line being broken, the market making an intermediate low, and a new rally that does not match the first high. Many times you will see prices break the previous low however. You may come across terms such as Double, Triple Tops, and Bottoms, which are all trend reversal patterns. Head and shoulders patterns are also popular reversal patterns.

Trading Range

The trading range is actually a sideways chart pattern. It is often used to represent a resting period before the original trend is resumed. You may see these when you are charting trends and should know what they imply.

Often trends are very important to investors. Those who engage in trend-following are people who look at major trends and make decisions in the direction of the trend. This can be a good strategy, but you must know a great deal about trends and the market in general in order to use this technique successfully. Beginners are not usually very good at tracking trends and using trend-following techniques. One thing that you should also note is that some price movements are trendless. This means that they have no clear direction, which makes trend-following nearly impossible.

Remember, that in order to fully understand trends, you must be educated in the ways of the market and foreign exchange in general. Beginners should not rely heavily on foreign exchange market trend tracking. Once you get more experience you can begin looking into tracking more and more. However, be aware that different things affect and influence the Forex. These influences can change what people expect trends to be. Therefore, you should be a seasoned trader in order to rely on the trends and ranges alone. Educate yourself on these terms and learn to recognize them in the actual market. After all, learning the terms is one thing and being able to see them in reality is different.

?An Overview of the Euro’s Performance in the Forex Markets

The Forex, also called the foreign exchange market is the largest and most liquid trading market in the world. Unlike the stock exchange, the Forex does not have a certain trading place or closing time. Instead, over $2 trillion are traded and sold every day. The Forex never closes and trading takes place twenty-four hours a day during the business week.

There are currently six major currency pairs that are used and traded each day on the Forex. These six pairs account for up to 90 percent of the trading activity each and every day. These include the euro and the US dollar (EUR/USD), the Japanese yen and the US dollar (JPY/USD), the US dollar and the Swiss Franc (USD/CHF), the Australian dollar and the US dollar (AUD/USD), the British pound and the US dollar (GBP/USD) and the US dollar and the Canadian dollar (USD/CAD).

Each of these currencies operates a little differently in the Forex and fluctuates a little on a daily basis. The Euro is very important in the foreign exchange currency. It does not just represent one country, but a total of twelve countries in Europe. The countries that are members of the European Union and recognize the Euro as currency are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and Sweden. Out of the fifteen members of the European Union, only two do not recognize the euro as the official currency. These are Denmark and the United Kingdom. Sweden only began using the euro in 2005.

Currently the euro is comparative to the US dollar and is worth about 90 cents to the dollar. In 1999, all of the European countries locked the value of their own currencies in relation to the euro. This means that all of the currencies were worth about the same as the euro. These countries soon began using the euro as their currency so that the money could be used across the borders and used without the need for getting other forms of currency. This transition helped make the euro worth more and become a more accepted form of currency.

The use of a single currency across many countries has both advantages and disadvantages in relation to the Forex. One of the biggest benefits of the euro is that the exchange rate is lowered, thus making investment across borders easier. There are risks in the changes in the value of the currency. This means that companies find it risky to import or export outside their currency zone and that profits could be lowered. Using a unified form of currency eliminates this worry. It creates a more risk free import and export area, which already relies heavily on intra-European exports.

Another benefit of many countries using the euro is that it eliminates the need for conversion fees. When a person or business has the need to exchange currency, there is a fee involved. Most financial institutions charge some sort of percentage for conversion and while it is a relative small amount, it adds up. Multiple changes add up all across Europe. Eliminating these fees saves the economy in the long run.

When looking at the Forex and the way the euro performs, it is also important to remember that using one form of currency creates a deeper financial market. This means that the European markets are much more liquid than in the past. There is more competition with the euro not that it is more widely accepted and used. The idea that it will created a deeper financial market means it will affect they way the consumers spend the currency all across the continent. This will in turn, lead to increased amounts of money that is spent on the stock market.

Now that the euro has become one of the major currencies in the world, trading for it and with it will increase on the Forex. The Forex is usually dominated by the US dollar, but the euro is making a strong stand. The use of this currency all over the European countries is appealing in many ways and it is widely accepted all over the world. Both businesses and individuals benefit from the use of the euro in these countries without the worry of having the exchange the money as much as in the past.

GFT Forex

Introduction:

Global Forex Trading (GFT) is a leading online Forex trading firm and a prime market maker. Gary L. Tilkin founded GFT Forex, Division of Global Futures & Forex, Ltd., in ’97. GFT Forex was formed to deal with the ever-increasing number of currency trading demands customers had in the futures and spot forex markets.

GFT Forex brings an unyielding integrity in all its services, and offers high-class 24 hours customer support to the foreign exchange participants. Over the years, GFT Forex has steadily developed its client portfolio to include leading financial institutions, multinational companies, hedge funds and individual traders/investors.

Neighbors’ envy Owners’ pride

GFT Forex offers next-generation currency trading devoted to empowering its customers with complete market accessibility. It endows its customer’s the facility to carry out transactions on a level playing field, and offers an competent, instantaneous and inexpensive means of trading through its unique and sophisticated trading platform called DealBook(r) FX.

Forex traders need quick, precise deliverance of currency prices endowing them to make well-informed trading decisions in volatile forex markets, but the majority software had failed to deliver. GFT Forex turning point happened when it created its own proprietary forex-trading platform.

Advantages of trading with GFT Forex

Apart from the customary features such as 24 hours online currency trading, 100:1 leverage, commission free trades and regulated FCM grade, GFT Forex highly advanced currency-trading platform and value-added services, is what places it in a league of its own.

GFT Forex offers the following advantage to forex traders:

– 3 Pip spreads on EUR/USD and USD/JPY markets
– Guaranteed fills on stop-loss and limit orders
– Multiple currencies trading platform
– Managed Forex
– Free one-on-one Forex training
– Superior charting capabilities
– Commentator analysis
– Single-click dealing
– Trade over 60 currency pairs
– Unparalleled liquidity
– Wireless trading
– No slippage on client orders

Finale

Rule No.1: Never lose money. Rule No. 2: Never forget GFT Forex.

GFT Forex is undoubtedly one of the worlds’ leading online forex brokers offering commission-free trading in the foreign exchange markets. It offers a class-apart Internet trading platform, swift and efficient execution of trades, and has the industry’s lowest margin requirements. The trading platform provided by them gives you the winning edge in implementation, vital market information, and account supervision.

?Eight Important Aspects in Choosing Your Forex Broker

When choosing a forex broker there are many factors to take into account.

Trust

Experience

References from past clients

Level of success

Amount of advice to be given

Convenience

Amount of margin offered

Speed

All of the above are of course important. In any financial transaction it is important to trust the broker you work with. This trust is garnered by the experience level the broker has. Of course there are some new brokers starting out who are quite trustworthy, but most people would rather work with an experienced broker. For that reason most new brokers attach themselves to a firm where they can be mentored and gain experience.

References from past clients are important. If your broker has helped someone else is successful in the past and that person is willing to speak up for him that says a lot. You can gage the level of success your broker has had by speaking with past clients and seeing how well they did working with this broker. Next, take a look at the amount of advice your broker is willing to give you. Of course, you make your own decisions and will never take another person’s word for everything, but it is good to have knowledge to work with, and advice from an experienced broker is key information to factor in. Convenience is also impotent. If you live in California then an Ohio broker might not be the best choice. But in the age of the internet that factor has become less relevant. With fax and email where you and your broker live has become less important.

The amount of margin offered is important. Margin is used to leverage your money. A broker who gives you a 50 to one margin is more valuable than one who gives you 20 to one. And of course speed. Is your broker quick? Does he return phone calls and emails promptly? If so, perhaps you can work with him.

Your broker will b a trusted advisor and someone that you may be working with for years to come so choose the relationship carefully. Ask friends and acquaintances who are active in forex trading what broker they use and how they met. It is quite possible that you can get a referral from a friend or acquaintance you trust and acquire a good forex broker that way.

Another good way to find a forex broker is to go online. There are message forums, chat rooms, and email groups through portals like Yahoo, Google and MSN that contain a wealth of information. Getting onto one of these online communities and asking other people for advice is the way that many people found their broker. If a broker has several clients in an online community who are happy with what he has accomplished for them, then that is a good indication that you might be happy with him as well. Take advantage of the number of people who are on the internet and join some of these online communities. Ask question and you’ll probably learn a great deal from the experiences that other people have had. Also find trade journals, magazines and ezines to subscribe to. Read as much as you can about the subject of forex trading before going into it. Become a smart shopper and smarter trader.

Finding a good forex broker is a job in itself. When you visit with a forex broker you are in essence conducting an employment interview to determine if this is the broker you wish to handle your financial affairs, so be thorough. Ask plenty of questions. Ask for references. Don’t be shy. Also check with other people in the office of the broker and see if you would trust them to fill in for your broker if he were not available. And, see if the broker is willing to offer you a demo account to use to get in some practice before you actually make an investment. If the broker is able to do so and encourages you then it means that the broker wants educated clients and is not just out for the quick buck. See what kind of training and tutoring the broker is willing to offer. A good broker will offer to answer your questions and help you through the learning process.