Malaysia-Japan FTA boosts exports, narrow trade deficit

In a press conference to announce the country's 2006 trade performance, Rafidah said that since the Economic Partnership Agreement, as the FTA is officially known, came into effect last July, there have been ''positive effects'' on Malaysia's export performance to Japan.

Exports utilizing the preferential ''Certificate of Origin'' accorded under the agreement for the second half of 2006 were valued at 3.06 billion ringgit.

The main products exported under the preferential access included palm oil, articles of ethylene and veneered panels.

Other products that have gained better access into Japan were tropical fruit such as pineapples and watermelons, which increased fourfold during the six-month period after the implementation of the FTA, Rafidah said.

Electrical and electronic products remained Malaysia's number one export to Japan, totaling 16.47 billion ringgit, but that was 1.5 percent lower than in 2005 as Japan turned to cheaper sources such as China and Taiwan.

Liquefied natural gas was the second largest export from Malaysia with a value at 13.2 billion ringgit.

Exports of wood products, including veneer, plywood and particle board, accounted for half the increase in exports. Exports of wood products were valued at 4.81 billion ringgit last year.

Overall, as Prime Minister Abdullah Ahmad Badawi had announced late Thursday, Malaysia's total trade breached the 1 trillion ringgit mark for the first time last year at 1.069 trillion ringgit, 10.5 percent higher than the preceding year.

Exports rose 10.3 percent to 588.95 billion ringgit while imports rose 10.7 percent to 480.49 billion ringgit in 2006.

Rafidah is optimistic the growth momentum will continue in 2007 despite concern the rising ringgit will crimp exports.

The currency is now trading near a nine-year high at around 3.50 to the dollar.

''One factor that will support the (export) growth is the forecast stronger expansion of the Southeast Asian economies, from 5.2 percent in 2006 to 5.6 percent in 2007. ASEAN accounted for 26.1 percent of Malaysia's exports in 2006,'' she said.

Demand for Malaysia's electrical and electronic products that account for more than 45 percent of total exports, is also expected to remain robust as the U.S.-based Semiconductor Industry Association has forecast global semiconductor sales will expand 10 percent this year to $273.8 billion.

What to do about the gas 'crisis': maybe nothing

DESPITE what you may have heard, oil and gasoline prices have yet to reach record levels--once we adjust for inflation. Even so, the gasoline price spike that began in the fall of 2002 is the second most dramatic in American economic history--steeper than those in 1973, 1990, and 2000, and nearly as great as that experienced between 1979 and 1981. A back-of-the-envelope calculation finds that the average household today spends between $63 and $79 a month more for gasoline than it did just three years ago.

Perhaps the absence of an identifiable villain has dampened political outrage. Oil companies are making record profits, but there's no evidence that they're holding anything back from the market. Likewise, neither terrorists nor Iraqi insurgents have had any significant impact on OPEC production. Global oil production was 66.8 million barrels a day in 2002, 69.2 million in 2003, 72.5 million in 2004, and is at record levels in 2005.

Regardless, gasoline prices aren't particularly consequential in the grand scheme of things. Sure, we're approaching the record prices paid for gasoline in 1981--about $2.42 a gallon in today's dollars--but on average we're a bit more than half again as wealthy today as we were then. If we consider gasoline prices in relation to per capita disposable income, they are only 58 percent of what they were in 1981, 44 percent of what they were in 1955, and about 90 percent of what they were in 1972. That probably explains why gas-guzzlers are still selling as well as ever and politicians are hearing little outrage from constituents.

What's driving the oil market is demand--not primarily from American SUVs, mind you, but from the awakening economic giant that is China. U.S. consumption grew by about 700,000 barrels a day between 2002 and 2004, but Chinese consumption grew more than twice as fast: by 1.47 million barrels a day. But, even accounting for China, global oil consumption has increased by only 5.3 percent since 2002. How could that have resulted in a near doubling of world oil prices? There are two reasons.

First, the excess production capacity that characterized the world oil market since the price collapse of 1986 had finally all but disappeared by 2002. Accordingly, the recent surge in demand caught the market short. The only way to increase supply substantially is for producers to spend billions of dollars on new production capacity that won't come online for several years hence. Producers, however, fear another boom-and-bust cycle of over-investment followed by a price collapse. That explains why the recent surge in oil prices has not led to a corresponding surge of new supply for the market.

Second, consumers have been slow to adjust their behavior in response to rising prices. Trading in SUVs for Dodge Neons, moving closer to work, and rearranging commute routines to take advantage of mass transit and car-pooling can be costly in time and money. Motorists aren't about to pay those costs without evidence that the price hikes are here to stay. Even then, consumers may not respond as robustly as they have in the past, given that those increased gas prices are less of an annoyance thanks to higher incomes.

With both supply and demand relatively inelastic in the short run--meaning that neither responds very much to price signals--small changes in either will lead to very large price movements. That's because it takes a big price spike to get producers to cough up even a little more product and to get consumers to moderate their demand for oil.

How long will the current spike last? That depends on a couple of things. If the recent increase in demand is for consumption in the here-and-now, only two events will reverse the tide. The first is new supply--which could be several years into the future given the lag time between investment and production. The second is a break in demand, which could occur if China's economy cools off, if the global economy slides into a new recession, or if persistently high prices begin to encourage conservation and fuel switching.

However, if the oil demand we've witnessed is partially driven by inventory buildup, prices may fall when inventories are full or when investors become convinced that possible profits tomorrow are worse bets than sure profits today. Oil would then flow out of inventories, demand for oil would decline with speculators out of the market, and prices could come crashing down.

The majority view among market analysts is that the former story is more likely to be the case than the latter. Yet oil inventories have been growing steadily over the past year and storage capacity is dwindling. Accordingly, a price collapse cannot be ruled out--which further explains why producers are leery of spending billions for new production capacity.

Things could get worse before they get better. In a tight market with inelastic supply and demand, anything that interrupts supply--political unrest in Venezuela, Nigeria, or Iran, terrorist attacks in Saudi Arabia, increased insurgent activity in Iraq, hurricanes in the Caribbean, industrial accidents in refineries or along oil pipelines--could increase prices dramatically. Similarly, surges in demand from continued economic growth, unseasonable weather, or even currency revaluation in China could feed the spiral.

Becoming A Forex Trader Means Mastering The Tools Of The Trade

The Forex market is very much a technical market and as such it is supported by a barrage of software tools which are not simply helpful to the trader but are an absolutely essential part of trading in a market which enjoys both high volume and considerable volatility. It is essential therefore that traders not only know what tools are available to them but are skilled in their use.

At the heart of Forex trading is a wealth of information which has to be not only constantly updated but which also has to be accurate. Such data, which is essentially displayed through a series of computer screens, needs to cover both current currency price data and historical price data and the systems in use needs to be able to analyze and display this data in a form that is of value to the trader.

In addition traders need to have fast and easy access to current and historical political and economic data and have to have the ability to analyze currency movements in relation to such information.

There are two fundamental forms of trading in operation today - reactive trading (in which a trader buys and sells in direct response to political and economic events) and speculative trading (in which a trader buys and sells on the basis of his prediction of the direction in which the market will move in response to current political and economic events). Whether a trader is buying and selling on a reactive or speculative basis it is essential that he has accurate and up-to-date information on which to base his decision.

But information alone is not enough and traders also need to have access to a range of tools that allow them to analyze this information, whether such analysis is fundamental or technical in nature.

Fundamental analysis is based upon the belief that the market moves in response to such things as political events, economic news, changes in trading patterns, movements in interest and similar events. Tools required here will therefore include such things as software programs that can plot currency movements against trade data and interest rate data and use historic data to build models which predict movements in a huge variety of different political and economic conditions.

Technical analysis by contrast is based upon the belief that the market follows a pattern which has been well established over time and that future movements in the market can be predicted by analyzing and charting historical data to produce a series of models which can be used to predict future patterns.

Whatever your position either as a reactive or speculative trading and whether you are buying or selling on the basis of a fundamental or technical analysis of the market the one thing you need is information. In essence this means using a range of complex analytical tools and you will need to take the time to familiarize yourself with the tools available to you and then to master the skill of using these tools.

Forex Scalping Methods

Scalping the Forex market is one of the fastest growing methods for trading Forex in the modern day world. In Forex scalping trading is performed over much shorter periods than other forms of trading and income is often generated even from relatively small fluctuations in a currencies price.

The main reason people trade via scalping is often that due to the quick nature of the method, profits can be built up fairly quickly. What’s more it also makes market movements far less likely to cause a large differential in the buy and sell prices.

Other methods of trading such as technical and fundamental analysis rely on analysing trends and predicting movements based on past performance or current news. Forex scalping offers a much quicker turn of events and traders using this method are simply looking for lots of small movements in currencies in any trading day.

Due to this difference in speed of trading, Forex scalping often means that traders run a much tighter ship as the risk is spread short time over a large number of currencies. In other methods of trading losses can often run a bit loose as the trader searches for that one trade that will return a big profit.

When scalping a trader will often only hold a currency for a matter of minutes before they resell at a profit. What is basically happening is that the Forex trader is playing with the spreads to bring in money where others fail to spot such a small market move.

Almost all successful Forex scalpers base their strategy on absorbing masses of information about the market they are trading in. You will not find many new traders adopting scalping methods simply because of the level of knowledge and nerve you need to succeed.

It is also rare that a Forex scalper will hold their position overnight. Most will close all trades before finally turning their computer off. If they do not then the trade they leave running is not really following the Forex scalping method.

The scalping method is usually based on three factors:

Liquidity – The more liquidity in a market then the more attractive it becomes to a Forex scalper as they can make more profitable trades in any given period.

Volatility – Only the most stable of markets are attractive to scalpers as a big movement is not what they are looking for. A stable market offers the chance to gain lots of small profits from many many trades

Time – A successful Forex scalper will not always begin trading at the start of a day. True, the longer they have to trade then the more they can make but patience is the key since it is pointless trying to scalp the Forex if market conditions are not right, for example in a period of large economic uncertainty.

As you can see, providing you have taken the time to learn as much as possible about market conditions then Forex scalping methods are not that difficult to implement. In many ways they are much more secure than other methods and this is why the method is becoming so popular.

Essential Investment Books – What I Learned Losing a MILLION Dollars

This book by Jim Paul and Brendan Moynihan is a book any trader should read – The book correctly states that there are lots of different ways to make money and only a few ways to lose it. Therefore you need to concentrate on not losing first

If you have not read this book you will see the markets in a completely different light and one that could lead you to bigger profits and is simply one of the best investment books ever writtten.

What I Learned Losing a Million Dollars is a fascinating, insightful, easy-to-read true story of Jim Paul’s rise from a humble country background to jet-setting millionaire trader and Governor of the Chicago Mercantile Exchange.

It is an examination of the lessons he learned from losing a million dollars in the market which brought about his demise and then covers his rise from the ashes.

This book contains no technical theories and really focuses on how NOT To lose money – there are plenty of ways to make money so how come most traders lose it?

The answer lies as we have stated that:

It’s not how you make money that’s important there are many ways to do that, but are only a few ways to lose it and if you are mindful of them and don’t make losing mistakes - you can emerge a winner.

The book is essentially divided into two parts:

Section 1

The first half of the book about Jim’s life makes you feel close to him and the experience he is facing as his world crashes around him. It’s both funny and sad in equal measure and is a superb fiction story.

Section 2

After the loss and its aftermath, comes the authors views of what he had learned and this really is original, thought provoking and insightful. The authors show you how to identify and manage the risks, both monetary and emotional that is part of any decision making including trading.

Playing great defense

The authors covers the key areas ALL losing traders fail in, that let losses get out of control.

Key areas covered are:

- The three biggest mistakes traders make and how to avoid them.

- Why the most important part of building wealth is not losing it.

- The psychological pattern which all losses take in a traders head, regardless of the position size

The discussion on the risk/reward ratio, and why most other books get it wrong is perhaps the most interesting part of the book.

This point is worth the books price alone as the aothor explains

Why you have to take into account the PROBABILITY of return, and PROBABILITY of loss, when trading and not simply divide the size of your expected return by the size of your expected loss, as most authors suggest – if you do you will lose!

This really is the key point of the book if you want to keep losses under control as it states in the preface.

“This book is a case study of the classic tale of countless entrepreneurs: the risk taker who sees an opportunity, the idea that clicks the intoxicating growth, the errors and the collapse. Our case is that of a trader, but as with all case studies and parables the lessons can be applied to a great many other situations.

If you want a book to show you the importance of emotional discipline and the art of risk management, then this is it.

This book has recently gone out of print, so get your hands on a second hand copy or get to the library and read it.

Forex Trading - If you Work To Hard You Will Lose!

In forex trading many traders think because they are clever or smart, that they have more chance of winning, but the EXACT opposite is true. There are many clever traders, yet they lose because being clever and making money are NOT compatible.

Let’s look at this in more detail.

The Work Ethic Does Not Apply

In many jobs the more hours you put in the more you get out, but the normal work ethic simply does not apply in forex trading – you get your reward from being right about market price and not the effort you have put in to generate your trading signals.

If you took ten minutes to place your trading signal or 10 hours, the only thing that matters is the result of your action.

In society of course, we are taught knowledge is power and many clever traders think the more the better.

They feel they have a right or deserve profits, because they are cleverer than others.

This is a dangerous assumption!

Most clever traders tend to come to the market with an ego and an ego is one of the worst traits you can have when currency trading.

Below are some common errors that clever forex traders make, in addition to working to long on their forex trading strategy.

1. They construct clever complicated trading systems thinking the more complicated they are, the more their chances of success.

The reality is that simple systems work best, as they are more robust in the face of brutal market conditions.

2. They see the market as they want to see it and not as it is.

There is only one price that is right – the market price. Many clever traders can’t take this, they think the price should be what they have decided and they hold and justify losing positions because of it. They then get frustrated when the gains are not what they expect. Of course, they are making the critical error of letting their emotions get involved -his means discipline goes out the window and their forex trading system disintegrates.

Work Smart – Keep It Simple – Accept The Reality!

There are many traders who never went to college, who use simple systems and have a humble approach to forex trading, yet they make huge sums of money. They often beat traders who would seem to have more advantages than them, but as we have seen, it is the simple trader who has the edge.

They realize knowledge for the sake of it is no use and that simple systems work better than complicated ones – they are accepting the reality of trading:

The market is all powerful over them and they need to accept it.

This doesn’t mean you can’t make money – just like the sea captain knows the ocean is more powerful he can make a living from it providing he obeys its rules.

This attitude means that humble traders can take losses easily, maintain discipline and when the markets gives them an opportunity they can take it.

Keep It Simple

A simple forex trading strategy can be learned in about 2 weeks and it can be applied in less than an hour a day yet, this will not prevent the trader making huge capital gains.

In forex trading keep it simple work smart not hard and adopt a humble attitude and you can make a lot of money, it really is that simple.

Currency Forecasting - Not For The Feint Hearted

Currency Forecasting is an important resource in the quest to develop a better understanding of the diverse forces which influence rates of currency exchange throughout the world.

The art of currency forecasting advocates using an approach which comprises a combination of both technical and fundamental analysis. To provide a framework for effective decisions in this complex field, a good currency forecasting system needs to keep the operator informed with respect to both the world markets and intricate other factors that cause currency fluctuations.

Foreign exchange markets are influenced by changing relationships between countries and also internal situations such as the state of economies and changes of Governments. Even climatic variations have been shown to cause currency fluctuations.

Many professional currency traders use these fundamental aspects as the basis for decision making whereas others base their trades on mathematical models such as the Fibonacci ratios which have stood the test of many years. Fibonacci traders use mathematical models which indicate levels of resistance and support for various currencies at certain prices.

From my experience, I would recommend that you adopt a plan and stick to it whether you decide to use either fundamental of charting models. Search the internet for proven methods and consider undertaking a training course to expand your knowledge.

When you gain confidence and are ready to make your first investment make it a small one...or better still, make "paper trades" to test the value of your method.

You will hear stories of people who make huge profits with smart currency forecasting and trading but remember, for every winner, there is a corresponding loser. Good Luck

Forex Education - 5 Tips To Avoid The Online Currency Trading Trap

Online currency trading in increasing in popularity and with it comes the good, the bad and the “you know what.” Like any business venture there are people out there waiting to take advantage of you and people who genuinely want to help.

Some people hocking learn to trade packages are internet marketers riding the wave of a hot market in search of profits, while others are season professionals looking to create a win-win scenario for you.

So what do you do?

Here are 5 simple thoughts to keep in mind as your search for your Forex education online:

1. The Forex Education Program Itself

You want to make an assessment of the Forex education program’s approach to learning and ensure it matches your style. Some people can learn by reading a book (very few!), while other require a more structured hand holding approach. Some like a classroom environment, while others want to learn live and online.

Make sure you have access to live instructors, this will be your life-line when things get tough. Bottom line; If it resonates with you, then it most likely will fit and you will learn.

2. Guarantee Needs to be Real

Make sure the Forex education program you consider offers an adequate guarantee. Some programs out there offer only a 2-week trial for big dollar training packages. The refund period should be appropriate for the cost and 30-days at a minimum. The guarantee should provide adequate time to evaluate the product or service and then some.

On the flip side of the coin, if the guarantee is acceptable and you have not acted to properly evaluate the product or service within the time frame you should evaluate your own position to determine if you are ready for the training.

No Forex education product or service will make you money sitting on the self.

3. Coaching Required

We all need a coach. Yes, all the information you need to become a successful trader is online. Great, where do you start and how much money are you willing to lose separating the good information from the bad, let alone implementing this vast resource of information?

Any person who participates in activities that require peak performance in order to achieve success (Forex trading qualifies!) needs a coach. Make sure your Forex education includes programs that have individual or group coaching as part of the package. Nothing will accelerate learning like live interaction and mentorship. Don’t fall for the go it alone approach.

4. Establish Your Goals Prior to Learning

Ensure your personal goals are congruent with your Forex education goals. Be clear on why you want to learn Forex trading and what you want to get out of your training. Clarity will ensure the investment in your Forex education will be profitable.

Trading is all about personal responsibility. There is an old Buddhist saying that when you are ready to lean the teacher will appear. Remember, you are 80% of the success equation.

5. Fast Profits Beware!

If any Forex education product or service promises fast money, don’t think; just run away as fast as possible. Forex trading is a process that has to be learned like any other profession. Profitable Forex education will never focus on the money, the curriculum will be established entirely around learning the Process of Forex Trading.

The only Holy Grail in Forex trading lies in the six inch space between your ears. Learn the process and the money will take care of itself!

When done right, Forex trading should be an almost boring repeatable process. In fact the most valuable investment you will ever make is the one in yourself. Your Forex education will determine whether you eventually achieve your financial goals or not.

Remember, there is no such thing as failure there is only feedback. Keeping these tips in mind when searching for your Forex education product or service will allow you find a partner in your success.

Currency Trading Success - Be Objective NOT Subjective or Lose Your Equity Quickly

If you want to make money from forex trading and achieve currency trading success you need to make sure your forex trading strategy is objective as possible and keeps subjectivity out.

Many traders make the mistake of including to much subjectivity in their trading plan and lose; lets look at why this can be fatal.

Why Subjectivity will ensure you lose.

Many traders need to make a lot of subjective judgements about their trading signals before executing them – The problem is, the subjectivity that they have in their judgements sees their emotions come into play and they lose.

Let’s look at an example.

Elliot wave and cycles are supposed to objective yet you have to spot the set ups and make subjective judgements.

This means that you can be tempted to over ride signals, take signals you shouldn’t and generally let your emotions dictate your forex trading strategy.

The same goes for those traders who want to trade by following online news wires.

They need to decide how much the news has been discounted and how valid it is – this is difficult or near impossible and again, emotions come into play and the trader losses.

Be objective! and Create Rules

A better way to trade is to create a set of objective rules for your currency trading system, which mean you do NOT have to make subjective judgements – you simply follow the rules.

This keeps you focused and disciplined and keeps your emotions out of trading.

Here us a simple system that is an objective set of rules and consist of three main components.

1. Look For Valid Support or Resistance

This is support and resistance tested several times, that line up on the weekly and daily charts at the same critical levels.

2. Look For Tests of the Above

When the price moves towards the support and resistance – You should then have a timing indicator to either indicate it will hold or fail.

3. Timing a Trade

If price momentum falls into the levels using the stochastic and Relative strength Index (RSI) a short trade is taken.

If the support or resistance is broken and confirmed by the previous two indicators then a long trade on the breakout is taken.

That’s it no guessing or subjective judgement used, this currency trading strategy is a simple set of rules that are followed

Trading signals are executed in line with the trading rules.

Sounds simple?

It is! Most traders can’t do this they want to subjectively decide if the trade looks good and impose their own judgements upon the trade - in forex trading this is fatal!

Discipline goes out the window and emotions dictate the trading strategy and trading equity is lost.

Destructive Emotions

The enemy of any trader is his or her emotions. This is why most novice traders lose, they can’t get an objective plan and set of rules they can follow with discipline.

If you want to achieve currency trading success, make sure your currency trading system is objective as possible and keeps subjective judgements and emotions out or you will lose to.

FOREX Education - Getting the RIGHT Education to Win

If you want to win at FOREX trading you need the right education. The fact is 95% of novice traders lose all their equity quickly, that’s not because they don’t work hard or can’t win - they simply put their efforts in the wrong area.

Let’s look at how to achieve currency trading success by learning forex trading the right way.

Use the Internet

You can get all the Forex education you need for free on the net, you simply have to look in the right areas, which we will explain in more detail in a moment.

A fatal mistake

Is to think you can buy success from a guru or mentor on the net.

Most of the information sold is junk or available free anyway.

Many traders are duped by attractive advertising copy, claiming that you can make huge regular profits by buying an e-book for $100 or so, but the reality is:

If the information was so good it would not be sold; these vendors would simply trade for themselves and the fact is they don’t.

They make money from selling you forex education NOT trading and their forex trading systems simply don't work.

If you can find a trader with a real time track record of profits, their information may be worthwhile, but trust me, there are not many who can provide this.

The best way is to do it on your own and you can get it all the Forex Education you need for free.

Working smart not hard

Trading is very different to many other ventures in life, in that the effort you put in has no relation to the money you make.

You get paid for getting market direction right not how much effort you put in.

You should as beginner either start with long term trend following strategy or try swing trading – NEVER attempt day trading.

Forex day trading simply doesn’t work, as the data is to short to be reliable and is meaningless.

More novice traders start with forex day trading than any other method and they lose – don’t fall into this trap.

Long term trend following suits the patient trader, while forex swing trading suits the trader who likes to trade a bit more and is less patient.

Basics

To start get an understanding of support of resistance and technical analysis.

Next, you need to integrate a few indicators to confirm price momentum into support and resistance levels and see the odds of them holding.

Below find some indicators that are great for triggering forex trading signals and determing price momentum:

Stochastics, Relative Strength Index (RSI), Average Directional Movement (ADX)

Below find some indicators to determine help you spot support and resistance (in addition to trendlines) and determine targets and strength of the trend.

Bollinger Bands, MACD and moving averages.

If you learn about all the above indicators, support and resistance and also how a breakout strategy works, you will have ALL the forex education you need.

This will help you put together a simple, robust currency trading system, that can make fx profits.

When devising a forex trading strategy the above will help you make money in swing trading or trend following and you should spend no more than 30 minutes a day.

A Simple way to Forex Profits

A simple system also works better than a complicated one, as its more robust in real trading, with fewer elements to break.

Many traders over complicate their system and think more is better, but the reverse is true.

Final Words

The above will get you started with your forex education for currency trading success and you will have the basics to build on to make great regular profits from forex trading in under an hour a day.

Finally, you wont have spent a cent finding out the basics for this success – good luck!

Forex Trading Strategies in Forex Market

In order to succeed in forex market, one can follow certain strategies like technical analysis, fundamental and economic analysis, combination of these two, different currency pair relationships etc.

Other more advanced techniques are SAR, CCI, Stochastics, MACD, Liner Regression, Bollinger Bands etc.

One should not be scared of the terminology involved. One should follow a strategy which one can understand and follow well.

The two most important strategies of technical and fundamental analysis are also used in stock markets. It may be advisable to use both of them while some people may use either one.

Fundamental analysis covers economic and financial factors like GDP, inflation, employment figures, devaluation, trade statistics, capital movements etc. In technical analysis one takes help of charts, graphs, bars, trends etc.

Whatever the strategy one adopts, one should learn to be a disciplined trader. For this, one should consider the following:
• Always use stop losses of some kind
• Don’t use all of your balances, but keep some separately available for special situations.
• Start with small lot sizes
• Always have a win / loss limit
• Adjust margin according to market conditions
• Always get new training and education

Some people also use intra day strategy. With this, one can use multiple time frames for analysis like one minute, 15 minutes. 30 minutes and 60 minutes frames.

One noteworthy element of forex trading is risk management. This consists of stop losses and trailing stops. One needs to learn how to establish stops, fix initial stops and experiment with trading plans at the margin. One has also to learn trailing, breakeven and time stops.

Risk management seems to have become easier with more flexibility in forex trading rules. There is full transparency now in this, better ability to put bids and offers within narrow spreads and less cost per ticket. Some forex trading platforms automatically close all positions if an account declines 60%. This provides some added safety.

FX trading like commodity trading is always conducted on “margin”. The general ratio is 50:1 and can go up to 100:1 in some cases. This means that against every margin of $1000, one can hold a position of up to $50,000. In currency trading what one can lose at the most is just the amount of margin while as the potential for profits is substantial.

Forex - Trade The Non-Farm Payroll Report for Super Profits

Many investors in the foreign-exchange (FOREX) market trade only at or around the time of the release of the U.S. Non-farm Payroll Report (NFP). They are attracted by the volatility of currencies - particularly the major pairs involving the U.S. dollar - that occur during that time. Investors relying on this and other financial news events for their trading activity are referred to as news traders. Many others, while perhaps utilizing other methods of trading are sure to include the NFP on their trading calendars. Let's find out why so many traders are interested in this report.

The NFP comes out once per month, typically on the first Friday at 8:30 a.m., New York time. On occasion, it will come out on the second Friday of the month rather than the first, but always at the same hour of the day. The U.S. Department of Labor is responsible for the compilation and release of the report, which is kept secret until the official time for release arrives. The report contains data regarding unemployment in non-agricultural sectors of the U.S. economy. Incidentally, other industrialized countries also publish some semblance of this type of report. Simply put, if the numbers published in the NFP represent a major revision of the estimates previously made, the market response is likely to be quite pronounced.

The reaction to the anticipated NFP data on the part of traders world-wide, in terms of buying and selling activity, generally causes the price of the U.S. dollar to spike up or down. This usually happens the very moment the report becomes public. Sometimes, the spike occurs early, i.e. within the minute immediately preceding the 8:30 a.m. release. Although less frequently, it has also been observed that the spike can occur up to 15 or 20 minutes after the release of the report.

Other regular financial reports can also move currency prices, but are not as consistently dramatic or dynamic as the NFP in their result. Within the past couple of years, the range of movement in the price of the U.S. dollar as a result of the NFP has usually been between 50 and 90 pips in one general direction. Re-tracement, i.e. movement of the price back toward the original price, often provides additional trading opportunities. Many traders experience returns ranging from 5 to 20 percent from this one report alone.

Why does the NFP stand out in its ability to move the market? The NFP is published by the government of the United States as an official statement of what the U.S. economy is doing. Based on the contents of the report, the measurement of the health of the country is viewed in terms of its employment situation. Many scholars and traders alike view the employment situation in a country as a leading indicator of how things are economically with that country. If the employment situation is bleak, so must be its general economy. A weak economy invariably spells bad news for the currency of that particular country.

One must acknowledge and appreciate that the U.S. dollar has always generated a lot of interest among traders world-wide. Known for its liquidity, relative stability, and being backed by the world’s largest economy (at least until China takes the number one spot as expected in 2026), the greenback is often accepted as payment for goods and services all around the world. This is true even where it is not the official currency in a given jurisdiction. It is one of the relative few currencies known as “hard currency”, in the global financial realm. It is always in the spotlight as a global player.

Recent times have seen the U.S. dollar in a weakening trend in comparison to other currencies. Undoubtedly, global events including the U.S. involvement in Iraq, Pakistan and Afghanistan have contributed to the dim view shared by some regarding the value of the dollar. On the other hand, some see it as a good opportunity for U.S. corporations, large and small, to export goods and services to other countries. This may result in a rebound of the dollar in the long term.

Various strategies have been devised to take advantage of the tendency of the market prices to spike during the time of the NFP news release. As one might expect, some strategies work better than others. More and more vendors and programmers are developing and selling automated software to traders interested in the fast-paced environment surrounding the release of the NFP. The price range of such software can be anywhere from a few hundred dollars to several thousand dollars. Of course, manually trading the NFP can still be done successfully as many traders are proving. Regardless of the method or strategy, many in the trading world will continue to pay attention to the NFP and utilize its release as one of the greatest regular and recurring opportunities for trading in the FOREX market.

The Benefits of Forex Trading Systems

Today, Forex trading is a popular form of investment for many people, and many of them do not have experience or training in short-term trading. However, there are now two Forex trading systems that can help you with this exciting vocation. First, you have the Mechanical Trading System that works off the premise of technical analysis. The Discretionary Trading System, on the other hand, involves using your experience, intuition, and judgment. It is discretionary because you can choose what factors to use when deciding to buy or sell currencies. Before you stake your preference on either system, let us take a closer look at the benefits and concerns of each system.

The first major benefit of the Mechanical System is you can automate this system and back test it when you need to. However, it does have rigid rules you will need to follow. This is a great system if you want to keep your emotions in check as you decide on your trades.

On the other hand, the back testing feature is great only if you know what you are doing. This means you can back test and produce wrong information for trading. You can, however, subscribe to a tick data service to ensure you have the correct information. This also means paying for the extra service.

You also have to keep your technical analysis up-to-date. Not all the equations will change in a day or two, but in one year, or two years market conditions will have changed many times. If you keep using the old equations, you will get the same results that were applicable when you first bought the system.

But the mechanical system is the one for you if you just want to know when to enter and exit the market with your trades.

Now, let us look at the discretionary system

The great thing about this particular Forex trading system is that is easily adaptable to new market conditions. This works well for the constantly changing Forex market and is a major advantage over the mechanical system. Also, as you use the Discretionary system for some time, you will get to know how to interpret easily the buying and selling signals. This means you have a higher likelihood of profitable trades.

Your concerns would include your inability to either back test or automate the discretionary system. After all, how can you automate your habits, judgments, and aha moments. If you could, you would not trade but sell your system for profit.

It also takes time to gain experience, as well as develop a successful trading strategy. Some people have spent many years before they can master this aspect of trading. But once you get it right, you are well on your way to big checks from your broker. Though, in the early stages of trading, you could expose yourself to risk because of ignorance.

There you have a brief analysis of the benefits and concerns of the two Forex trading systems. You need to decide one or the other based on your personality. You may have a better edge with the Mechanical system if you can follow instructions well. On the other hand, if you prefer using your emotions and experience, the Discretionary System might suit you better.

Forex Trading Rules to Live By for Profitable Currency Trading

When trading the forex there are a few very important rules that you should never break. By sticking to these rules on a consistent basis, your chances of success as a profitable forex trader will greatly increase.

A big mistake most unsuccessful traders make, whether they are forex trading, trading stocks, or any other market, is that they let emotion get in the way, they break their own rules, and they lose big. Don't let this happen to you.

For your forex trading to be successful you need to set specific goals and objectives regarding your forex trades.

Like almost anything else you want in life, you'll greatly increase your chances of being a successful forex trader by developing and writing down specific goals that you want to reach. Your goals need to be specific, measurable and realistically achievable.

This doesn't mean you shouldn't aim big, but if you are starting with $10,000 in your forex account, you should not have a goal of being a millionaire by the end of the week. You're just setting yourself up for frustration and failure.

Your forex trading goals could be things like:

Achieve a maximum draw-down ratio of 1.6:1

Develop one new positive-expectancy forex trading system every six months

Consistency And Discipline in Forex Trading

If you are going to be a successful forex trader, you need to be consistent and disciplined when it comes to implementing your forex trading system. This is where many forex traders lose their way. They let their emotions get the best of them and break the rules of their trading system. This causes more (and larger) losses than usual and may drive you away from trading permanently.

It takes a lot of discipline to stick to your trading system. But it's necessary for long term success.

Let me give you an example that hurts many traders on the upside. They follow profitable trades after they have already closed out their position. While you need to let profitable trades run, it's also important to have ever higher stop losses in order to protect yourself.

For example, in your forex trading system your stop loss may be 5% behind the current price. If your trade drops 5%, you trigger the stop loss and get out. Here's where the problem can occur. It then rebounds and scoots much higher.

So instead of being happy that your system worked and you profited 20 or 30%, you are unhappy because you missed out on another 20% after your stop loss was triggered. So next time, you ignore the stop loss.

Unfortunately, it keeps going lower and lower and you keep holding, waiting for a rebound that never occurs and you've suddenly lost half your training account.

Discipline is a huge component of successful forex trading. Forget it at your own peril.

Learn FOREX - No Experience Necessary

When we think about the FOREX, we often hear about how hard it is but would you like to know how to learn FOREX with no experience necessary? Don't get me wrong, FOREX is difficult and risky but you can learn it even if you have no prior trading experience. You don't have to be a genius or a finance specialist to learn with this system either.

What you need is an investment strategy for FOREX that really works- not a gimmick, or a scam designed to take your money and leave you with little in return. There are so many different programs and systems on the market promising you get-rich-quick schemes and multi-million dollar plots for success that never follow through with their promises and that are really just marketing schemes designed to help some other guy get rich off of your misfortune.

Using the same techniques and most of the other traders will not make you successful. You must have more. You need that extra something to push you over the top and better than the majority. You need something that makes you stand out from the rest and succeed in ways that they do not. You also need to learn the proper techniques to help you control your own portfolio instead of letting the market control you.

Many people think that it takes years of experience to learn the secrets and techniques of the top traders in the market. While this may have been true in the past, it is not necessarily true anymore. What if there was someone willing to tell you all their secrets? If someone with years of experience in the market took the time to show you and teach you all that they knew, then you would start out jumping from a total beginner to someone very experienced and all in a very short time.

What if there was also someone capable of taking that information they have acquired and creating a system that makes it easy to trade in the foreign exchange even with no past experience? You can then begin to control your trades and create a winning portfolio and find your own financial freedom. Isn't it time that you enjoy life without having to work so hard?

When I first started researching the Forex I learned that it would take months to learn and studying charts and graphs and a lot of money to get started. Something that a full time job would not allow me to do.

Then a good friend of mine introduced me to a forex investment strategy. He told me how easy it was to learn and how it required no formal training and that I could be up and running in less than 3 hours. He also told me that he was earning monthly what banks and mutual funds were earning yearly.

You can only imagine my skepticism. So I started doing some research on the company and the proprietary software they were using. I took a leap of faith and opened up a demo account, and to my surprise everything that they claimed was true. I can honestly say that I'm earning more a month than my mutual funds and my bank are earning a year. This company does truly care about people and that is rare in this industry. I opened up my Live account on April 10, 2007 and I'm doing very well.

Generate High Returns Daily

Would you like to learn how you can generate high returns daily on the Forex? Many people have been told that the Forex is hard and they think that they can not succeed or that if they do, they will only see a small growth of returns. Some people never even try and others give up quickly when they don’t see the types of returns that they expect right away. Many others spend years investing time and time again but they never really achieve high returns on a daily basis. That doesn’t have to be true for you anymore with this great system!

If you want to be successful with Forex then you need to stand out somehow. You need to be different from all of the other investors and you need to have an edge over them. So many would-be successful investors spend time studying what the other investors are doing. If you use the strategies of 90% of the other investors, how can you expect to be in the top 10% by means of success? You have to have something that everybody else doesn't have.

How can you learn to generate high returns daily? With this proven- effective investment strategy, you can generate high returns daily even if you have never invested in the foreign exchange before. It works because it combines two revolutionary wealth concepts and an easy to use system that takes only minutes a day. All you do is set the system up with your specific details and it does all the work for you. It will hedge your position for you, it automatically tells you how many lots to buy and it does all the calculations for you so you don’t have to.

You can choose the parameters that must be met within your system so you have complete control over your portfolio but the system works to give you the best options and scenarios to help increase your profits to the max! You can set up your system to provide efficient data regarding your trades and to allow you to control exactly how much risk you are willing to take. Your system can be set up to know which currency pairs it plans to trade, how much money you are looking to invest and how much you are willing to invest. Once it is all set up, it does the work for you choosing which trades to make to help you gain a profit.

When I first started researching the Forex I learned that it would take months to learn and studying charts and graphs and a lot of money to get started. Something that a full time job would not allow me to do.

Then a good friend of mine introduced me to a forex investment strategy. He told me how easy it was to learn and how it required no formal training and that I could be up and running in less than 3 hours. He also told me that he was earning monthly what banks and mutual funds were earning yearly.

You can only imagine my skepticism. So I started doing some research on the company and the proprietary software they were using. I took a leap of faith and opened up a demo account, and to my surprise everything that they claimed was true. I can honestly say that I'm earning more a month than my mutual funds and my bank are earning a year. This company does truly care about people and that is rare in this industry. I opened up my Live account on April 10, 2007 and I'm doing very well.

Forex Trading - The Biggest 6 Mistakes That See 90% Of Traders Lose

The mistakes below are common amongst novice traders and ensure 90% of them lose and lose quickly – while novice traders make these mistakes so do experienced traders.

If you make them, you will lose so avoid them and increase your chances of success dramatically.

Here they are all ways guaranteed to lose you money.

1. You Can Buy Success

Many traders think trading is easy and they can buy success in forex trading for a few hundred dollars – major mistake!

Most forex education sold on the net is sold by marketing companies or failed brokers and simply doesn’t work – if it did it would not be sold.

There is some forex education you can buy that’s good and the best way to ensure it is worthwhile is only accept the proof:

A real time track record of profits no hypothetical simulations!

To follow a trading method you will need to understand how and why the logic works – if you follow it without understanding it, you will not have the confidence to follow it with discipline.

2. Being Clever Will Make You Money

On the other hand there are people who think being clever will make them money and they have a right to win because their clever – Another major mistake.

In many industries you get paid for how much effort you put in but not in global forex – you get your reward for being right and that’s all.

Many traders devise complicated systems that are extremely clever and they lose.

It’s a fact that a simple system will beat a complicated system, as its more robust with less elements to break.

Don’t complicate your trading system or methodology, keep it nice and simple.

3. Knowledge = Power = Profits

While you need a simple trading system to succeed you also have to learn the right knowledge.

Knowledge for knowledge sake in forex trading won’t make you money.

In fact most of the accepted wisdoms of forex trading are no help at all when trying to make money and that’s why 90% of traders lose.

Lets take one example, online news sources will help you win, as your better informed.

Yes you are better informed but that won’t make you money, in fact it will help you lose!

Why?

Because those news stories are just so convincing.

Think about it, these guys are telling stories their NOT traders and most news stories are convincing but dead wrong.

This is just one example and there are many more, where traders focus on the wrong knowledge and lose.

4. Day Trading Makes Money

One of the biggest myths of all is day traders make money.

Try and find one with long term track record of profits and you will look for years and never find one!

Why?

Because it doesn’t work – great story but that’s all it is.

It doesn’t work due to the simple fact that all daily volatility is random and if the data is random, you can’t get the odds on your side – PERIOD.

5. You Can Get Rich Quick

Yes you can, but this is not the norm.

Many traders think making over 100% is easy and over leverage, trade to much and take high risk low reward trades and then lose their equity.

Be realistic about what you can earn, in your first year if you made 50 – 100% then you would be up their with the top money managers in the world.

Take it slowly and look longer term – if you compounded 50% for 10 years you would be extremely wealthy at the end of the period!

6. Discipline

You here it time and time again – discipline is the key to success, but very few forex traders actually know what it takes to be disciplined, so here is a simple explanation:

To be disciplined relies on these three personality traits:

1. You must have a desire to succeed and accept that you are on your own and learn the right knowledge by developing your own trading reality.

2. This leads to confidence that you can achieve trading success.

3. From confidence comes discipline, to follow your trading methodology through the bad times without throwing in the towel, to achieve ultimate trading success.

Final Words

Read and digest the above and don’t make the same trading mistakes in your forex trading.

If you avoid them you could soon be on the road to big profits – Good luck!

Swing Trading Systems - Buying One For Long Term Profits

Swing Trading is fun, exciting and can be very profitable and is one of the easiest forms of trading for a novice to master.

There are many swing trading systems that are sold by vendors via e-books and software, and courses or of course you can build your own.

Lets look at choosing a swing trading system that can be you some great capital gains – so what makes a successful swing trading system?

Let’s find out.

Firstly let’s give our definition of swing trading

The object of a swing trading strategy is to make money from the intermediate swings within the longer term trends and these typically last for a few days or a few weeks – this is not day trading!

You cannot make money day trading as there is no reliable data - so don’t try.

Ok let’s look at buying one from a vendor and points to consider

Here are some points to consider when buying a trading system from a vendor:

1.Understand the logic

If are swing trading forex stocks, or futures you need to understand EXACTLY how the methodology works and why it will be successful.

You must understand why the system will work because you are going to have to have the discipline to follow it through losing periods and this only comes from understanding and confidence.

So if you buy a forex swing trading system don’t follow it blindly, understand everything about it. You need the discipline to follow a trading system through losing periods, or you have no method in the first place.

Swing trading is essentially simple and the method should be easy to understand and apply.

2. Does it suit your trading personality?

Swing trading systems vary in terms of the risks they take and the drawdowns they incur - make sure that you buy a swing trading system that suits your personality and your risk tolerance.

3. The track record

While a track record does not guarantee future profitability, it does give you confidence in its ability to make money and what it is capable of.

Look for a real time track record of profits over a two year period of trading.

Don’t trust hypothetical track records these are done knowing the closing prices and really if you know the closing prices its easy to make a profit!

4. The vendor

Find out as much as possible about the vendor and their trading experience – many systems are sold by failed brokers or marketing people, who simply make up a hypothetical track record, so be wary before buying.

Look for a money back guarantee if possible. This will give you the comfort that you will get your money back if the swing trading system you are being sold does not live up to the vendors claims.

Swing trading is great for novice traders as it provides regular trades and plenty of action while hitting the high return low risk trading opportunities.

Trading opportunities also do not take long to complete and the result is quickly known – hopefully in the swing trader’s favor!

Making Money And Having Fun In The Process Is What The Trading Is All About

Choosing Reliable Forex Software On line Forex trading is here to stay. Every day, millions of persons engage in the act of buying or selling currency online.

It seems that when it comes to Forex software, just about everybody has their own set of programs they would love to have you utilize. Knowing that software is not necessarily created equally,this means you will have to make some decisions about what you expect from the trading software that you decide to go with. Here are some tips you should consider before committing to any one software package.

The first question you should ask yourself about any trading software has to do with usability. Do you find the software to be logical to your mind? Should you need assistance at any point in the process, does the software provide the ability to access a help section? Being comfortable, with the way that the software works, is a huge part of whether or not you need to consider that particular software trading package. If it seems too complicated, then pass on that selection and move on to another potential candidate.

When you have identified a software packages that you believe is for you, find out what other consumers are saying about this software and find one that would be easy for you to use and that have a proven track record of success.

By identifying potential trade software packages and performing due diligence to obtain the relevant comments that have been shared by other consumers, you'll go a long way toward finding the ideal software package. Once found you will be able to enjoy your choice of Forex software for a long time to come.

The time is now here to decide, which one you would enjoy using as your trade software of choice.

Making money and having fun in the process is what the trading is all about. As someone that has been around for a long time in this business I know that it is truly a traders dream to find a complete trading solution that is accurate, easy to use and at the same time profitable. Designing trading systems that can full fill these three elements is hard work. I came across this system purely by luck and since then my trading has been more fun and very profitable. I passionately believe in this product and I am convinced that it’s the best Forex trading solution on the market today.

Learn Forex - Is Forex Trading The Ultimate Home Business Opportunity?

That's true, you can be a trader at home. Forex, or Foreign Exchange Market is by far the largest financial market in the world. About $2 trillion are traded EVERY DAY. The Forex market is the currency market, where a currency is traded against another. Quick example : you buy a dollar and sell euros. Not that easy to understand. But can we do this from home ? Yes, we can. About ten years ago, you would need millions of dollars to start trading. Now you can start with a few hundreds of dollars.

What you need is your computer and an internet connexion. You can trade from the comfort of your home, without having to deal with any boss or clients. You will only deal with money. Then you can start selling dollars and buying euros and make a profit.

You have to find a broker, where you will open an account and funding it. You will also have the possibility to get a demo account and practice, with fake money but in the real time market. I strongly recommend you practice a few months before thinking of "live" trading.

It is not that easy, it is extremely risky if you don't know anything about trading. First rule : don't invest what you can't afford to lose.

Forex is not a game, there is a lot of parameters to take in account, and human factor is one of the most important in this business.

You may have already understood it, currencies are traded by pairs. The european Euro versus the US Dollar, The US Dollar versus the Japan Yen, etc. When you buy a currency, you want to sell it later at a higher price. When you sell a currency, you want to buy it later at a lower price. This is how you make profit. Think like you were buying a foreign company share. You always want to buy low, and always want to sell high.

What you are looking to when trading currencies is the exchange rate. This will tell you your next move. Buy or sell. Currencies are part of the economy of each countries. When the value of a currency is increasing, this means the economy is going better as before. The exchange rate can be viewed as the country's economy compared to another economy. This is why economic factors can help you to predict your next move. If you know that a currency will increase, you will buy it and expect to sell it at a higher price, a higher rate.

You can choose the pair you want to trade, but the most people trade the main currencies, Euro, Dollar, British Pound, Japan Yen. And you can only choose to trade one pair only if you want. You are the only person that will make the decision. Hope you are making the good ones, profit can be huge, as well as losses.

Like any business, forex trading has to be taken seriously. Lots of people are trading the forex and some are earning thousands of dollars every day. But it needs a lot of training, education and analysis before reaching such results. It can be the perfect business and actually it is for advanced traders.

The Importance of Trading Psychology

Why is trading psychology so important? Trading psychology is so important because day trading can be a very emotional business. The wrong emotional state can make it difficult if not impossible to trade effectively.

Trading psychology is critical because there is so much emotion in many of us that is linked to money. We also know that many who enter into the trading arena fail. Why is that? There are numerous reasons why a large percentage of traders fail. The main reason has been cited as lack of discipline. Discipline is defined as, orderly or prescribed conduct or pattern of behavior, or, a rule or system of rules governing the conduct or activity. Discipline is necessary to accomplish any goal.

Discipline comes into play when combating fear and greed. Fear is typically based upon a fear of loss. No one really wants to lose money in the market. We've all heard the horror stories of people losing the money in their trading account or their entire trading account.

Fear of loss or fear of a further loss makes traders scared. Scared traders are very typically not profitable traders. The objective is to be a profitable trader.

Fear in many situations is triggered by not knowing what is going to happen next, basically this may be fear of the unknown. We feel much more confident when walking down a familiar street in our neighborhood than if we walked down an unfamiliar dark alley in a strange place. We can eliminate or minimize a great deal of fear by becoming more familiar with exactly what we are to expect. In other words, we need to have a trading plan, basically a trading roadmap so that we can know what we are to do each and every day. With a plan we also what the likely outcomes of those actions may be each and every day. In this way, we'll be met with far fewer surprises, and unknowns, which may trigger the fear.

The trading plan is a great way to start and maintain trading discipline. With this plan as a roadmap it will be much easier to get from point A, which is where we are now, to point B, which is where we want to be.

In your trading plan you may have notes written to yourself about what to expect. It is your expectation level that will dictate your satisfaction with your progress. Expecting a consistent return of 1000% per month will have you abandoning your trading very, very quickly. Having realistic expectations about the returns of your trading system and it's ups and downs will help you to maintain discipline in the long run.

One of the most difficult things for a trader to do is to continue to trade his trading system when it is going through a series of losses. A series of losses is a tough period of time for many, many traders, especially those who are unprepared or unwilling to accept the fact that all trading systems and methodologies have losing trades. If you do not have faith in your trading system when it does start to go through a series of losses it will make you nervous. If you had not studied the previous trades and do not have faith in your trading system fear will lead to a lack of discipline. Lack of discipline will eventually lead to not following your trading system. Not following your trading system will eventually lead to loss. This is another reason why carefully choosing a trading system is extremely important.

Conclusion

Controlling your emotions is critical to maintaining discipline while trading. Maintaining trading discipline is essential long-term trading success.

FOREX Day Trading - Brokers Love Day Traders For One Reason

FOREX Day traders are loved by brokers these are the traders they simply want more than any other type of trader.

FOREX day traders are wary of brokers, because they think they pick their stops off and that’s why they love them – but the real reason is:

Day traders are guaranteed to lose their money without any help from a broker. I used to work in the back office of a broker and we factored them in as losing straight away and a big fat profit for us.

So here are the reasons we loved them and other brokers do to:

1. Day trading by its very nature doesn’t work

Trying to trade in short time spans of a few hours or a day and to try and measure where prices are going is ridiculous.

All short term volatility is random and prices can and do, go anywhere.

We traded several thousand day traders and not one made money, they all lost.

The logic FOREX day trading is based upon is totally flawed.

Try this simple test:

Ask any vendor selling a system on the net and ask for a real time track record and see if you get one – You won’t.

Many of them are simply writers or failed brokers.

They make up track records sell them and then do a deal with a broker for a kick back commission and believe me the commission is good – we paid out tens of thousands every month!

2 Great commission

Day trading is the best commission to equity you can get and for a broker that’s great.

Lots of trades, eroding account equity to zero and paying commission every day.

Much better than a trader coming in and blowing his equity in a couple of trades.

Market makers are equally happy.

As they want the traders deposit lost and on their book.

They are trading against the client and don’t need to worry it will soon be in the bank. Furthermore, as day traders never make any big profits (running profits is totally alien to them)

The risk of carrying a day trader on your own book as a broker is low.

DO BROKERS HUNT STOPS?

The answer is no.

Day traders believe this, but the real reason is they set their stops to close.

Support and resistance are meaningless in day sessions and that’s why stops get hit all the time.

Its not the brokers fault, it’s the day traders for being stupid and placing his stops in meaningless time frames where volatility is random.

There you have it.

The reason brokers love day traders is their great money earners for the house and guaranteed to lose as well, which is perfect for market makers.

Technical Analysis - Using Support & Resistance Correctly

If you are trading with technical analysis one of the keys to making longer term profits is being able to use support and resistance to make profits.

Most novice traders however fail to trade with support and resistance correctly so here are some tips.

1. Support and resistance does not work in short time periods

Most novice traders try using support and resistance in daily periods – Forget it, you will lose.

Why?

Because these levels are totally meaningless.

Trillions of dollars a day are traded by millions of participants and to say that support and resistance is valid in such short time frames as a day or a few hours is laughable.

The only people who take notice of these levels are the small losing minority of day traders.

Don’t believe me?

Ask any day trader for a real time track record of profits using support and resistance and you won’t get one.

Volatility is random in short time frames and therefore any technical indicator you try to use wont work.

Novices try day trading and lose and wonder why, they need to get educated study volatility and standard deviation.

2. Support and Resistance Test and Time Span

Generally you want several tests (the more the better) and gaps between the tests.

The more tests you have the better, this means that traders will generally pay attention to them and when they hold are or broken.

However, when looking for support on resistance don’t just use the daily chart – Look at the weekly chart which will give you the bigger picture.

3. A Great Trade set up

Is when you get critical support and resistance on the longer weekly chart lining up with similar levels on the daily chart – These levels are very significant and you should look to trade them.

4. The Biggest mistake made by novice traders

The biggest mistake made by novice traders is they simply see support and resistance levels and trade into them and “hope” the market reacts in the way they want.

You will never make money this way -you must have price momentum in your favor.

Price momentum must support the way you are going to trade and we will look at this in more detail in part 2 of this article.

Canadian Dollar Performance Update - Spring 2007

During recent months, the Canadian dollar traded a tight range against Sterling between 2.2500 and 2.3000. This follows a sharp uptrend in GBP/CAD from a low around 1.9737 (02/03/06) to a recent high at 2.3567 (23/01/07) caused by expectations of higher interest rates in the UK, coupled with interest rate stagnation in Canada. At the same time, the US$ has weakened, forcing the exchange over US$2 per GBP and down to US$1.11 per CAD giving UK customers a boost while detracting the value for our southern neighbours.

In the UK, the Bank of England left interest rates on hold in April, however, expectations of higher rates in the months ahead continue to offer support to Sterling. With a buoyant housing market and strong levels of consumer spending, the market is expecting that the Monetary Policy Committee (MPC) will be forced to raise rates at least once more in an attempt to dampen down inflationary pressures. The headline Consumer Price Index (CPI – the most recognised measure of inflation in the UK) is currently running at 2.8% y/y against a target rate of 2.0% and raising interest rates is the most obvious way of combating rising prices.

Meanwhile, Canada has been faced by interest rate stagnation following the rise to 4.25% in May 2006. Risks to the Canadian economy remain finely balanced with the threat of an economic slowdown filtering across the boarder from the US. As its biggest trading partner, any signs of a struggling US economy may impact the Canadian economy although this has not really been the case so far in 2007. In similar fashion to the UK, the Canadian housing market remains robust with The Canadian Real Estate Association reporting strong sales of existing homes in February and record high average house prices. The Canadian Dollar is also likely to remain well supported against the US$ by rising oil prices given that oil exports represent a large percentage of the Canadian economy.

Looking back to March 2006 GBP/CAD traded a low of 1.9737 (02/03/06) indicating a difference of CAD 32,300 in less than twelve months when looking to transfer £100,000. Therefore, anyone looking to transfer funds between Canada and the UK should pay considerable attention to the GBP/CAD exchange rate as it can have such a dramatic impact upon their future wealth. Should you be looking to move large sums it definitely pays to monitor the markets and be aware of international factors that can affect which direction currencies will go. The debt and ongoing military interventions of the US will undoubtedly have some effect on the US$ against the CAD, though the weak US$ will most likely help boost the exports from their struggling economy. The recent trend of the Dow Jones to smash new records and factory orders starting to increase does point towards the start of a turn around for the US which, if fuelled by the exports will be another reason for the US to try to maintain a weaker dollar.

Advising migrants and businesses of currency movements and protecting them from the risks associated with fluctuating exchange rates is the speciality of currency brokers. Whilst nobody can guarantee future currency movements due to the sheer size and number of participants in the market, both personal and business accounts can increase their bottom lines in dramatic fashion by taking expert advice.

FOREX Trading - Make Money Fast a Novices Guide To Big Profits Quickly

If you want to make money fast in FOREX Trading this article is for you – Even if your novice trader you can build wealth quickly with low risk simply incorporate these simple tips in your trading plan.

Let’s look at how to make money fast in FOREX trading:

1. Follow long term trends

The big trends last for months or years and these are the best ones for making big profits – Use a simple long term trend following system.

2. Learn to buy breakouts

If you are not familiar with breakouts then you should study them and how to take advantage.

Fact:

Most major trends start from new market highs NOT market lows, so by buying breakouts, you will catch the really big trends and get low risk as well.

3. Be patient!

You don’t get rewarded for trading frequently you get rewarded with cash for being right.

The best risk reward trades don’t come around everyday, be patient and wait for them.

If you do your profitability will be considerably enhanced.

4. Don’t diversify

If you are trading a small account there is no point in diversifying.

Traders say it reduces risk that’s debatable, what’s not is:

That it restricts your profit potential.

Don’t diversify, back the trades that look good and you believe in and are confident of with as much as you can and risk 10 – 20%.

5. Don’t trail, stops to quickly

Another major error is to trail stops up to quickly.

If you are in a big move you are confident in then keep your stop back to avoid being bumped out by short term volatility.

In making money fast this is one of the hardest things to do, holding onto a trade when your open equity is being eaten into - sometimes by thousands of dollars a day.

Well if you want to make money fast get used to it.

Sure it takes courage and conviction, but when you eventually bank a 10 – 20,000 buck winner you will feel very good.

6. Success has you in it!

Forget trying to do this with other peoples systems it takes rock solid confidence and discipline and you need to have a system you have developed or someone else’s you know backwards.

To follow a system you must have confidence otherwise you will lack discipline and if you cant trade a method with discipline you have no method at all.

Use the above tips use a method you have confidence in and you will make money fast in online FOREX trading.

Good luck!

Can A Forex Trader Profit Greatly From The Presently Undervalued Yen

The Yen, the Japanese currency has come under scrutiny from the major developing countries for its weakness.

Its weakness should not come as a surprise since the country has kept it that way it order to encourage growth which was lacking due to the downturn that occasioned the pricking of the 1980’s bubble in the early 1990’s.

In 1995 when the yen reached the Y80 to a $1 rate, Japanese manufacturers were crying for help. Toyota estimated for every Y1 appreciation against the dollar, it lost $50million.

At that time, the hollowing out of Japanese industry to South East Asia was gathering pace and with a weak economy, the then government had no choice but to begin a weak yen policy.

To achieve the weak yen policy, government started splurging in order not only to keep the currency weak but to use demand to pull the economy out of the woods. It also slashed interest rates to zero when deflation raised its ugly head.

This policy however did not pull the economy out of the woods but it did make the currency weak. Also demand did not rise because both consumer and business confidence was low due to the weak employment market and the huge bad debts carried not only by the banking sector but by other financial and non-financial institutions.

Also the Japanese started buying dollars in large quantities to keep the yen weak. This worked spectacularly but at a huge cost.

The question now is whether the weak yen policy makes sense, its sustainability and when will the yen begin its appreciation to a more realistic level. This is of primary interest to any forex trader as any positions taken can yield enormous returns.

With the reforms carried out over the past few years by the outgoing Koizumi’s administration, the economy is now enjoying a recovery

Best of all, the first price rises in ages have now been confirmed and this has made the government judge the recovery as sustainable.

With inflation, the government policy of zero interest rates may now be over. Interest rates have now been increased for the first time in several years though - to a tiny 0.25% but it is still significant. As any trader knows, an increase in interest rates normally strengthens a currency. Interest rates will continue to edge higher as the Bank of Japan is hawkish about inflation remembering that it was cheap money that fuelled the 1980’s bubble.

Secondly, the government has since commenced a policy of mopping up excess funds in the economy and this led to a 4% plunge in the stock market in a single week in 2006. The days of both cheap money and excess funds may be over.

And to add to all this, the era of massive deficit spending to is coming to an end. This anyway is no longer needed now that the economy is recovering and inflation is in sight.

With a tight fiscal and monetary policy, the currency will definitely appreciate. The question therefore is when and by how much?

Within the next two years, I foresee the yen appreciating between 5-10% against the dollar and the euro. Such a surge will not adversely affect the manufacturing sector as consumer demand is now playing a positive role in respect of demand thereby reducing the dependency on exports.

The yen may eventually hit or perhaps surmount the Y100/$1 barrier in 4 years time if economic growth stays at 3% annually over a period of 5years and if interest rates hits the 4-5% mark.

My advice to traders- better buy yen as an appreciation of the currency will definitely occur.

Currency Trading - A Major Mistake Made By Novice Traders

There is one major error that novice traders make and continue to make.

Its not they lack a sound method, or they lack discipline, or even they can’t pick trade direction correctly it is:

They fail to deal with market volatility and the placing their stops correctly.

How often does this happen.

A trader sees a potential trade enters and then gets stopped out only to see the trade they had picked go the way they thought and pile up thousands of dollars and their not in!

It happens all the time – and the reason many novice traders lose is they have no understanding of how to correctly place and trail stops.

Let’s look at this in more detail.

We all know currencies exhibit long term trends but there are constant and frequent pullbacks within major trends and your aim is to stay with the longer term trend without being stopped out.

Let’s look at some ways to do this when engaging in online FOREX trading.

1. Forget FOREX day trading

All volatility is random in daily time frames so you have no chance of winning, so don’t try.

Ever seen a day trader with a real time track record of profits?

Neither have I and random volatility is the main cause – don’t even attempt it, unless you want to lose your money quickly.

2. Entering the trade and initial placement of stops

Quite simply the best way to enter a trader is to enter on valid breakouts and put the stop behind the breakout point.

Most major currency moves start from new market highs and buying breakouts tends to give good risk to reward and help you catch the biggest trends and profits.

3. Always look for confirmation

If you want to buy a dip don’t predict and hope - wait for confirmation if a change in momentum, this will increase your odds of success dramatically.

Use stochastics to do this – their ultimate timing indicator.

4. Don’t trail stops to quickly

Many traders try to avoid risk so much they create it.

If you start trailing your stop to quickly, you will simply be bumped out by volatility, so hold your stop back and have a target that has to be reached before you even consider trailing your stop.

5. You need courage

Many traders go on about discipline in relation to placing stops, but it’s just as important, or more important when trying to follow a profit.

It takes courage and discipline to hold a long term trend, when pullbacks eat into your open equity, sometimes by thousands of dollars.

You need the courage to take short term pullbacks in open equity in order to catch the big trends that can make you big profits.

Yes you have to be disciplined in restricting losses, but don’t forget this applies to making profits to!

Understand the following to increase profits and restrict losses

I am constantly amazed by traders who trade the market without any idea of volatility or an understanding of such concepts as standard deviation of price.

If you don’t know what standard deviation is, make sure you educate yourself.

An understanding of volatility is essential to making big profits in FX Trading

Your FOREX education should also include trading breakouts (for spotting low risk high reward trading opportunities) You also need to know about momentum indicators ( check out stochastics ) and targets ( study Bollinger bands)

If you want to trade FOREX, then you need to spend as much time on placing and moving stops as you do on getting a method that catches profitable trade direction.

You can have a great method but it will fail if you keep getting stopped out by volatility.

Deal with it, or lose at currency trading.

Contrary Trading - A Live Example and Big Potential Profit Opportunity

Contrary trading if done correctly can give you low risk and excellent profits if you know how to spot them and time your entry correctly.

Here we are going to look at a contrary trade that looks a great opportunity which we looked at a few days ago.

Lets see how things are shaping up.

The US v Canadian dollar has given us some great profits from the downtrend now we have that banked profit and we are now long as per our articles realized at the weekend.

Right, let’s take a look at this trade.

Pull up a free chart service such as futuresource.com and let’s get started.

Key Support

Is 1.10 – This is key support on the daily charts.

Momentum is still down in the dollar longer term, but the Relative Strength Index (RSI) has turned up from oversold levels and is moving up. Yesterday’s we have a double bottom which is near term support and then key support at 1.10.

Stochastics have crossed and turned to the upside with bullish divergence and short term we are looking for strength.

We may now get a good bounce to correct the technically oversold position.

Target would be the middle of the Bollinger band at around 113.00, if prices can punch through this level look for higher prices to unfold

The key ( as we said at the weekend) is to always wait for confirmation before jumping in.

We have done this and are now long.

You ALWAYS need confirmation of a near term bottom and change in price momentum before trying the long side if you are trading against a strong down trend, you should never guess or predict if support will hold.

Stop levels at below 1.10 on a close basis.

When the majority think one way then:

A move in the opposite direction is likely! This is the art of contrary trading.

The dollar has had a lot of bearish news recently and in the short term prices should at least bounce - this is the opportunity outlined above.

Contrary trading is all about trading against the consensus and this trade is definitely that!

My in box is full of lots of reports telling me the dollar is in free fall and has no chance of recovery – but in the short term there is:

As all the bearish fundamentals are discounted and a bounce should therefore occur.

This is what contrary trading is all about – low risk high reward and trading against the majority.

Forex Traders - Speculating on The Presently Undervalued Chinese Yuan

The Yuan can yield tremendous profits to investors if it rises against the dollar. The article below will discuss fully about the subject.

China’s trade surplus has been a sore thumb with the American government over the past few years. The Americans believe that their massive trade deficit with China is fuelled by a cheap Yuan policy which the Chinese government is determined to pursue in order to keep its economy humming at break neck speeds.

In order to keep the Yuan weak, the government has been mopping up dollars at a frantic pace. This has made China the country with the most foreign reserves, now topping over $1.2trillion. This is equivalent to half it’s GDP and will easily accommodate over one year of imports- which is far higher than the acceptable four months.

The question is- can the Chinese accept a revaluation of the Yuan to more acceptable levels?

The communist government is terrified of social disorder. Its only claim to legitimacy is the fast economic growth that has lifted hundreds of millions out poverty over the past two decades especially in the last six years.

One of its primary tools of achieving fast growth is the weak Yuan policy which has created and sustained a manufacturing and export boom which in turn as lifted growth to dizzying levels.

Unfortunately for the government however, there is still discontent. There are over a 100million surplus farm hands seeking work and unemployment still exist in the cities.

Also large parts of China still remain very poor especially the hinterland.

To add to this, many farmers in the rural areas where most of them are based complain about official neglect and corruption.

China thus believes it still needs years of fast economic growth to arrest the above mentioned problems.

However, things are not as simple as they seem.

First and foremost, the weak Yuan which is tied to the dollar is causing liquidity to rise to dangerous levels within the economy. This is in turn swelling demand to horrendous levels. And deflation has now been replaced by inflation. Too high a level of inflation may bring- wait a minute- social disorder. Many analysts speculate that high inflation was perhaps the true trigger for the Tiananmen tragedy.

From high inflation perspective alone, the Yuan needs to strengthen

Anyway, the government has begun tightening credit, always preferring to use crude monetary instruments such as restricting the quantity of loans flowing to some certain sectors especially real estate and steel which are poster children of the boom.

This is working to slow down growth both only slightly.

Growth can only be moderated if the Yuan rises. And the truth is that a rise will not lead to a downturn, but at most – a very soft landing. Growth may slow to 8% which is not bad but less than the double digit figures it has been enjoying of late.

The government has since 2005 permitted the Yuan to appreciate and it has consequent gone from Y8.28/$1 TO 7.71/$1. And interestingly enough, this did not cool the economy.

This indicates that further strengthening of the currency may not in reality have a dampening effect on growth.

The question now is- to what level must the Yuan rise before it reaches its real value?

Tying it with a basket of other currencies, the value will need to rise to between 6.50 and 7Yuan to the U.S currency. Whether the government will have the stomach for it is another matter.

The economy can still grow at 8% annually.

The probability of such a rate appreciation taking place may be plausible bearing in mind that the government has allowed the currency to appreciate slowly against the dollar in particular.

For the time being, however, I foresee the currency hitting 7.40Yuan to a $1 within the year or at the least 7.50.

This portends a fat profit for any trader that decides to make a move now. It may be one of the best pickings for the year.

Forex Trading Training- Rules For Placing Orders

If you have started your Forex trading training you may initially have a challenge with understanding how orders are placed. I remember when I first started reading about the Forex and practicing in a demo account, it took me a while to understand how stops and limits worked in relation to price.

This article sets out the main rules governing the placement of orders with a free graphic download in the resource box at the end which you can keep on your desktop and refer to at anytime until the rules have 'sunk in'. You will find this lesson extremely important if you are in the early stages of your forex trading training.

Here are the basics:

1. In each currency pair, the first currency is the base currency which you either buy or sell. For example, in the case of EUR/USD, if you believe the euro is going to strengthen against the US dollar you would place a BUY order (go long). If you believe the dollar will strengthen against the euro, you would place a SELL order (go short) for the EUR/USD currency pair.

2. In your dealing station you will notice two prices quoted for each currency pair, a BID price and an ASK price. The difference in the two prices is known as the pip spread the dealer takes from every trade. For the major currency pairs this can be between 3-5 pips. NOTE: When you place a BUY order you will enter the trade at the ASK price. When you place a SELL order you will enter the trade at the BID price.

3. There are two types of orders you can use to enter a trade:

* Market Order

* Entry Order

A market order is an order to buy or sell at the market price the moment you enter the trade by clicking your mouse button.

An entry order is an order to buy or sell when the market price reaches a certain target or level you anticipate from your technical analysis.

Note: Avoid market orders as they seldom give you the best entry point unless you really understand the market. An entry order allows you time to analyze key price levels and set the order to be executed only if price pulls back or reaches that level. This way you enter the trade at an optimum level.

Stops and Limits

Once you have calculated your trade and anticipated how far you think price will go, you need to enter a limit order so the trade will automatically exit at that profit level. In the case of a buy order, your limit will be set above the entry price. In the case of a sell order, your limit will be set below the entry price.

For your protection you then need to set a stop order. If price goes against you your trade will exit at a loss according to the number of pips you have calculated that you can afford to lose taking into account your equity. In the case of a buy order, your stop would be below the entry price. If the case of a sell order, your stop would be above the entry price.

As part of your Forex trading training, it is important to get very familiar with the software you are provided with from your online broker. Practice, practice, practice, making entry orders, and setting the entry price and the stop and limit levels.

It is easy in the early days of Forex trading training to get mixed up with direction. You may wish to place an entry order to sell (go short) and inadvertently put a buy order in instead only to get a shock when you see a minus figure under the pip column steadily growing.

The details explained above are available in a graphic you can keep on your desktop and refer to at any time you are trading. Just go to the link in the resource box below and get a copy.

Then as part of your daily Forex trading training, refer to it each time you place a trade in your demo account until your understanding of the rules of order entry, bid and ask price, stops and limits, come automatically without thinking.

You will be laying a solid foundation for more advanced Forex trading training steps so you can concentrate your mental energies on price and chart analysis rather than being sidetracked by confusion over basic order rules.

Forex Trading Signals - General Criteria To Assess Usefulness Of Forex Trading Signals

Depending on the type of forex trader you are, forex trading signals can form a part of your trading arsenal.

Forex Trading Signals Defined

Forex trading signals comprise forex information on buy and sell orders or entry and exit signals sent by forex brokers or forex analysts to their subscribers either for a fee or for free.

Time Validity Of Trading Signals

Obviously, forex signals are basically forex trading opinions and are not embedded in stone. At best, they are educated opinions formed after analysis by brokers or analysts who study price trends, make economic assessments and form their opinions on the state of the currencies that their trading clients hold, or are transacting. Such signals are valid for certain periods of times and often carry short term specific value and are worthless with the passage of time.

Assessing The Forex Trading Signals

If you are a forex trader who would like to benefit from trading signals issued by any forex broker or analyst, it is important to assess the methodology the forex broker uses to issue these signals. More importantly, how reliable are their signals? Does the broker or analyst has a good record of being accurate in his signals? How detail are those signals issued? Are they issued with clear cut trading recommendations or are they couched in uncertain terms? Are the signals just a representation of pivot prices or price projections without giving basis or the explanatory notes on how to derive and use them?

Big Brokers versus Small Advisory Trading Signals

This aspect of checking the background of brokers and analysts issuing these trading signals is an important activity because of the speculative nature of forex trading. As forex trading is a large market, as in any other financial trading market, and owing to the speculative nature of the market, you must subscribe only to signals that are proven to be reliable. The larger brokerage firms are able to afford more analysts or cover more ground before they release their trading signals in comparison to an individual analyst operating from a small advisory company.

Forex Trading Signals As A Timing Device

There are trading signals that are issued based on methods that are novel and developing in contrast to those that are known for their performance. For example, pivot trading signals is a common trading signal system that is followed by many forex brokers and you can get these pivot trading signals as timing signals.

Dissemination of Trading Signals

With the advent of high technology and fast communication via the internet, trading signals can be routed to your email box as an email, or they can be delivered via sms ( short messaging system) or by fax. All this helps in ensuring you get the signals in a timely manner.

Recommended Use Of Trading Signals

Is it good to use these signals outright?

Generally, unless the issuer of the signals has a proven track record, it may be easier for your peace of mind to use these trading signals as a basis to research further. You may want to check these signals in your favorite charting program or to run further technical or fundamental analysis on any aspect of the trading signals that you receive to test their reliability.

The next time you receive any invitation to subscribe for what is claimed to be an "accurate, reliable and timely" trading signal service for forex trading, remember to check and assess their claims, or even rank them.

Considering the fact that you will soon be very familiar with certain currency-pairs that you are trading frequently, you may not be interested in accepting the broker's trading signals outright. Where you have an accurate trading system that is capable of identifying and generating accurate and timely signals, you can be in control of all your trades, and especially the entry and exit trading signals.