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Moving Averages Are Not So Average by GoLearn Forex

Moving Averages – they are not so average

EUR/USD and USD/CHF

On Thursday of last week we saw the EUR and CHF finally break near term resistance.  The EUR cleanly sliced through 1.50 and took out near term resistance around the 1.5055 handle.  The CHF finally broke parity with the Dollar after struggling for weeks.

The very next day the Dollar was saved by the news coming out of Dubai. Risk aversion was on as traders unwound short Dollar positions to cover themselves.  We discuss Moving Averages a fair amount especially since the 50 SMA has acted as support for such an extended period of time and for a number of currencies such as the EUR and CHF.

The CHF touched .9918 on Wednesday only to give back its gains on Thursday.  In the Chart below notice the CHF low on Friday as fear penetrated the market place.  As a sense of calm returned the CHF was again bouncing off the 50 SMA, as support held again.

INSERT CHART CHF

The EUR easily breached resistance last Wednesday when the DXY hit new lows for the year.  As you can see on the Chart below it closed just below the Fibonacci Retrace level of 76.4%.  The very next day the EUR gave back all its gains as the market was reeling from the news of the day.

As details emerged and fear stirred recent wounds in the market the EUR plummeted again. Notice the level the EUR hit before retracing its losses on Friday.  The 50 SMA again held support for the EUR.

INSERT CHART EUR

The moral here: Do not discount these as just “average” lines.  Even if you question the indicative validity of a moving average the very fact that institutional traders monitor these levels makes them exceptionally important if for no other reason.

Mixed Day for Global Equity Markets After Dubai’s Announcement by GoLearn Forex

It was a mixed day for the Global Equity Markets on Friday following Dubai’s debt default announcement the day before.  The markets in Asia continued to sell off while in Europe they apparently felt the exposure was sufficiently contained.  In the U.S on Friday after returning from Holiday the day prior, it was the DJIA’s turn to take some risk off the table as it closed lower by 154.48 points to 10,309.92 Opening session futures are pointing positive in premarket hours.

The United Arab Emirates (UAE) Central Bank issued a statement indicating they would offer financing to the local and foreign banks at 50bp over the 3month local benchmark rate.  This facility offered by the U.A.E C.B will ensure liquidity and restore some confidence in the market.

On the economic data docket for Monday we have a number items set to print out of the U.K.  However, forex traders will be analyzing Black Friday sales numbers as well as the ensuing weekend figures.  Currently, net sales figures look to be on par with last year.  Additionally for Monday, Euro-zone CPI will hit the wire as will Canadian GDP.

Upcoming Forex Events for November 30, 2009

EUR     CPI (YoY)      Forecast   0.40%  Previous  -0.10%

CAD    GDP (MoM)    Forecast  0.40%  Previous  -0.10%

USD    Chicago PMI    Forecast  53.00  Previous  54.20

AUD    Interest Rate Decision Forecast  3.75%  Previous  3.50%

FOREX trading is actually the kind of trading where the monetary value, which is known as currency of a country, is exchanged for some other country’s currency at the rate of exchange that will be prevailing at that time.

There is an another kind of trading which is known as Futures trading, which is all together based on a value that is predicted about a particular type of currency. In this particular type of trading you just make mere assumptions about the future value of a currency. This kind of trading is totally different from FOREX trading. There are many times when people are believed to have a confusion regarding both these type of trading. When you will be surfing on the internet, then it’s quite possible that you may find some other terms that are strongly related to FOREX. Some of these terms are FX, FORX, Four X, or sometimes also referred to as 4X.

All the processes of FOREX trading are carried out with the help of brokers or through makers of market. So taking this particular point into consideration it is really very important to perform the process of your research before you make any sort of fund into a marginal trading account that is very well required for your trading.

If you are the kind of person who is genuinely very much interested in this sort of trading in the trading market of FOREX, then it is of great importance that you perform the process of your research.

In order to choose the right one for yourself you actually need to read what others traders have to say about FOREX market and especially if they were able to make or lose their large amount of money while trading on the front of FOREX. Before making an entry into the FOREX market, you should always learn the specific language that is being used in trading.
There is a strong need for you to have an optimum amount of knowledge about the trading language that is being used so that you will never have any sort of confusion between the certain numbers of terms, which are frequently used in this particular market of trading.
Each and every trader makes all the possible efforts in order to capture points or in trading terms known as pips. A pip is that thing which is actually considered as a point in the great community of currency trading. FOREX trading is the one that is also known as Spot trading or is sometimes also called as a trade that is made on the fronts of Spot market.

If a trader takes care of all these things, then for sure he or she is going to make quite a large sum of money.

Forex trading basically involves currency as the trading material and is easier when compared to other stock based trades. Of course, the strategy of the trading sequence is difficult but not the trade itself. With the advancement in internet and technology, a massive impact has been created on Forex market. Now it’s easy to monitor and trade in Forex from anywhere. All you need is a secured internet connection and access to the market.
Forex trading is based on bid/sell method. As with any other stock market is concerned, in Forex market, you buy/sell currency pairs. I shall explain this logic with an example, so that you understand things better.
Now say, you want to make profit out of the smallest investment you have made with the USD. All you need to do is to monitor the market rate of other currencies. In a Forex trade, let us assume that the flow of USD drops significantly. The traders on the other end, who can pay you in Euro, will offer a bid for the USD’s which you have invested. The value awarded for the Euro will be higher than the equivalently invested USD. You can either accept the bid or hope for an increased value. On reasonable hikes, you will be paid the amount for the USD you drop in for the trade.
Only registered traders are eligible to participate in this auction process. Other traders who are online speculators will trade through a bank or brokers. Brokers, for such trades, charge a commission. It is important to calculate all these transactions, including the brokerage, since this will sway the profit account.
The global Forex market trades around trillion dollars, a single day. Many traders lose money by sheer miscalculations and multiple inputs. It is not a bed of roses. One should be very careful when playing in Forex market. It is better not to invest any money that is not affordable into the Forex trading market, since it is a fact that success and profits are not claimed just because you have invested.
The world of internet and online trading has given the traders a lot of advantage. You can also ask for a demonstration account to your broker to play with. Advanced technology like oscillators can also help you to determine the value of the Forex trade. But, blindly believing in any of these for trade can be in vain. These can be used for analyzing purposes. Also, it is a fact that the Forex market is pretty stable when compared to the other stock markets. Long term plans are more useful for intraday plans. To make the most out of the currency trading, it is important to know what you do by yourself.

EUR/USD – Last: 1.5025

GBP/USD – Last: 1.6540

USD/JPY-Last: 86.80

CAD/USD – Last: 1.0585

Research by http://www.ufxbank.com

EUR/USD – Last: 1.4945

GBP/USD – Last: 1.6406

USD/JPY-Last: 86.37

CAD/USD – Last: 1.0626

Research by http://www.ufxbank.com

This article will circle around a fact that can bring you a lot of success in the trading world. Most of the traders are not aware of this fact.
In the past 50 years, approximately 95% of the traders were not able to attain any success in the forex market. Now the technology has evolved and improved, use of specially designed forex softwares, faster delivery of information, and all the other things have improved a lot but still there is no change in the number of winners. It is very clear that there is something else which is needed to achieve success in the forex market and many of the traders do not know about it. So, let us have a close look on this missing link.
Most of the traders believe that if they have the right strategy, they have it all. They can go out and do anything they want to do. But, this is not true. The forex market is not so easy to beat. As technology is creeping in making its mark in the market, many forex softwares are available in the market which includes the good ones and the cheap ones. Most of the traders go with the cheap ones which do not cost much but they lack the very purpose for which they are designed. They fail to help the trader and ultimately the trader suffers a loss.
Apart from this, many people think that market moves on mathematical equations. They start predicting the market trends based on some bizarre mathematical equations. You should realize one thing, everything about the market is known to you. There is nothing hidden from you. There are no permutations and combinations involved. The market is moving based on probabilities.
People believe that if they know something about the market that others are unaware of, then they are the kings of the market. But, remember this, the forex market is one of the most volatile market all over the world. The market can change instantly in a fraction of a second.
The golden rule to rule the market is to be simple. Simple strategies are the best strategies. They will work all the time and they are better than any other complex strategy.
Now, you have a simple strategy with you, what next? A trader should have the discipline to apply the strategy and the right mindset to follow the strategy as it has been defined.
The reason behind such big numbers of failure is the human nature. Human emotions are the major obstacles when it comes to trading. A trader should not lose his patience when he suffers a loss. He should be strong enough to stick to his strategy in order to succeed. But many traders fails to do so and end up losing.
You need to understand the market and accept the challenge that it throws to you. Once you learn this art, you will definitely make a mark in the trading circuit.

The forex investors or the forex traders are always seen depending on analysis of some sort in order to plan their technical approaches. Basically, there are 2 kinds of fundamental analysis they are forex fundamental analysis and technical analysis. In this article, we will see what is fundamental analysis and the way in which it is used in forex.
Forex Fundamental analysis indeed is closely related to the economic as well as political conditions affecting the prices of the currencies. The forex traders who make use of fundamental analysis depend on news report in order to collect the data about the inflation, rates of unemployment, economic policies as well as growth rates.
This fundamental analysis is frequently being used to get a brief idea of the movements of the forex currencies and to offer an overview of the economic conditions that have a great impact on a particular currency. Most of the forex traders do depend on technical analysis, as such to plot the exit as well as entry points in the forex market and complement their outcomes with the fundamental analysis.
The prices of the currencies in forex are greatly affected by the demand and supply forces that are again indirectly affected by economic situations. The 2 very common and significant economic aspects that have an impact on the demand as well as supply are the strength as well as the interest rates of an economy. The trade balance, foreign investment and gross domestic product affect the strength of an economy.
The academic sources and the government keep on releasing a number of signals. These are regarded as the reliable sources of economic health and they are being followed by the different sectors of the forex market. These signals are released on weekly and monthly basis.
There are 2 important fundamental signals. They are: international trade and the interest rates. There are even other signals that include the durable goods order, retail sales, consumer price index (CPI), purchasing manager’s index (PMI) and producer price index (PPI).
The rates of interest may have a weakening or a strengthening effect on a specific currency. The higher rate of interest do catch the attention of the foreigners and this plays a vital role in strengthening the local currency; whereas the stock market investors frequently show a reaction to the increased interest rate by selling away their holdings with the thought that higher cost of borrowing would have an adverse effect on most of the companies. The stock investors, may thus, sell their holdings resulting into a downturn in the market.
The trading signals strongly affect the financial markets and hence the forex traders should know them thoroughly while they are making any trading approach. This is of great importance.

EUR/USD – Last: 1.5102

GBP/USD – Last: 1.6654

USD/JPY-Last: 86.51

CAD/USD – Last: 1.0500

Research by http://www.ufxbank.com

You all would be having a clear cut idea about FOREX trading.
Am I right?
And if you know about this market then you would be having a clue about the fact this particular market of FOREX trading is considered to be as the better source of investment than any other trading market.
Now let’s discuss about some of the major reasons that states the valid point of consideration behind FOREX trading being an investment avenue which is very much superior to trading in the area of stocks and bonds.
1) Making a Modest type of investment and trading on marginal basis:

because of the reason that FOREX market operates on the basis of margin trading or on the basis of trading made on the capital that is borrowed, you need to commute on the basis of your own capital to only a small fraction of the size of your whole trade and your broker will be the one who will lend you rest of the needed money.
Now I am going to quote an example for you will help you in understanding all this in a better way. Typically for a trading broker who wants to execute a trade of around $10,000, you or any other trader may only need to put up very small percentage that is aroun1% on the amount of $100. You actually have the great power to multiply all your available funds by a quite big factor of 100 times, thus enabling you to place much larger bets, and it also gives you an opportunity to spread your hard earned money over several transactions.
2) Pretty Low costs of transaction: in the trading markets that deals with stock, where there are commissions lied upon broker and other major costs the cost of a transaction to you or to any other trader. But it’s not evident always. Thus, if you are able to see a stock price, then you are tend to pay more if you make a purchase and you will surely be receiving less if you sell out the purchased stock. In the very big world of FOREX market, there are no such hidden costs associated, like in the case of stock market, and you will be receiving the exact price that the trading broker has quoted for you.
3) Making a trade at the rate of 24 x 5: because of the reason that some major financial centers are very well dispersed geographically and thus their time-zone are very much different, trading in the trading market like FOREX market is pretty much applicable for 24 hours in a day and that too for five days in a week. This gives you the great opportunity of making a trade whenever you wish to do so.