How to Behave Providing Forex Currency Trade?

As you may guess Forex currency trade is very responsible and complicated occupation a person should not just plan but also provide correctly from the point of this person’s behavior. Well, if you are not sure you can provide any of the enumerated below points then we strongly recommend you to avoid any currency trading at all and at the Forex market in particular. And if you manage to control yourself without any efforts then you are welcomed any day and any time as a Forex newbie. So prepare to find how you should behave during Forex currency trade.
In fact all these points of how to behave oneself during Forex currency trade can be quite applicable to all kinds of trading and not just according to the risky and nervous-like FX trading. Nevertheless, this market still has its peculiarities and that is why you should consider and provide the following stereotypes of behavior:

1) Never start the Forex currency trade from investing your own money

The common sense is the key point. Forex experts do not recommend investing your own financial means till getting enough of practical experience a new trader may get only by trying his/her strategy in action via a demo account within the limits of any Forex currency trade and brokerage platform. Never start trading with huge sums of your real money because it can cost you a lot. Practice is required if you are sure that your trading strategy is the best one. Never miss the chance to test yourself no matter how tempting it seems to trade with real money at once. Be calm and consequent and you will be prepared to all possible unexpected fluctuations of this changeable financial market.

2) Perceive Forex currency trade only as a horse racing
It is sad but it is quite obvious that Forex is about your luck as well. Horse racing players know that any even the best planned strategy won’t work without guts feeling and luck. It seems ridiculous but start trading at the Forex and you will experience this on your own skin. You see, Forex currency trading is more about a betting than an analysis and there is never a 100 percent guarantee you will earn money at the Forex. You can never know precisely what will happen the next minute, you can calculate all variants but still can miss something or some things will occur that will influence on your open trades. In such way you can lose everything or become a billionaire. The temptation is high but considering such factor you can avoid investing too huge sums of money and stop dreaming to win all or nothing.

3) Avoid FX currency trade addiction

Many experienced FX traders find it funny when newbies who desperately wish to earn money in an “easy” way become addicted and literally don’t eat and sleep watching the fluctuations reflected within Forex charts. Remember one thing - you can’t get all money in this world no matter how hard you will try to do this. “Get a life”, they say and they are right. Schedule your time and never forget about the world that surrounds you except the Forex trading. Besides being tired because of 24-hour observation and constant following the latest news and Forex trends you can lose your vigilance and consequently lose all your money as well.  Experts also recommend never provide two trades at once because it may cause wrong decisions concerning both of them.

The Significance of the Foreign Exchange Reserves

Even if you are a newbie you have probably heard about the so called Foreign exchange market reserves. We will try to explain in the following article all the significant features of such Forex reserves and their impact on the global Forex trading system in general. So read further in order to find out more about these mysterious Forex reserves.
In fact there is nothing mysterious in the definition or functions of such Foreign exchange market reserves because they simply refer to the various foreign exchange notes and governmental debts which are held by the hugest world’s central bank organizations. Most of the world’s countries have their own Forex exchange market reserves which are used when it is necessary. By means of such reserves a country can impact on the exchange rates and on the import-export economy as well.
Speaking about more precise identification of the Foreign exchange market reserves, we should say the following: government representatives use such reserves in order to provide a proper amount of different international payments. The functions of such payments can be very different but mostly concern procuring of various services and products like raw materials, real estate objects and equipment for military forces. High reserves mean a country is rather powerful from the economical and financial point of view. As you may understand, every nation and government is very motivated to develop a strong and high Forex exchange market reserve. Having such a strong back-up a country can provide negotiations concerning reducing interest rates on a country’s debt and close the contracts with huge international partners on much better terms.
You may ask – what central bank organizations can get from such Forex exchange market reserves? And we answer – the officials get a chance to control exchange rates on their own domestic currency rates using reserves as strong financial back-ups and political tools. In order to make a domestic currency more stable and stronger a nation can spend a Foreign exchange reserve to purchase its own domestic banknotes. For sure, such activity will increase the demand for this currency which will lead to higher valuation rates. Or a country can use such a strong reserve to buy foreign banknotes in order to reduce the value of its domestic currency. Everything depends on the chosen strategy a country follows.

To make it easier for you - those nations which can boast stronger export economies are aimed at reducing the exchange rates making them weaker. In such way exported products become more affordable for foreign customers. Besides, a weak home currency can attract a buying interest for the security investments of a nation which become very cheap for foreign customers as well. So in order to attract more foreign potential customers and investors a nation with a strong foreign exchange market reserve can weaken a domestic currency on purpose.
As for the low exchange rates they set for home currency they can become inflationary due to the fact imports turn to be more expensive at home. If such situation occurs a central bank of this nation uses a FX exchange reserve to purchase a home currency and support in such way higher exchange rates under the circumstances when inflation turns into a concern.

Day Trade Scalping As the Popular Forex Currency Trading System

If you are a risky and gambling person then you should definitely make an entry in the Forex market with such type of a Forex currency trading system as day scalping trading strategy. You see, conservative and unconfident traders can’t afford to risk a lot if their means are small and they have not that peculiar feeling in their guts. Anyway, day scalping sounds scary and dangerous and we should confirm that this Forex currency trading system is really for those traders who are 100 percent sure in their forces and have strong will.

The definition and principle of work of the day scalping Forex currency trading system

The so-called day scalping trading system is grounded trades with on the short time frames like five-minute charts which a trader should quickly analyze and then use to conduct very fast buy/sell transactions that extract small amounts of pips – only from two to fifteen pips for one session. Such fast Forex transactions are quick and numerous which lets a trader to provide up to hundreds of such transactions per day having good profit margins in the end of a day. It is a very risky Forex currency trading system as it was mentioned mainly because all those Forex market scalpers are to increase the so called “per pip dollar” value in order to extract similar profits from other less risky and conservative open transactions where this value was lower. So they have to risk all the time.
Nevertheless, you can reduce all those risks to minimum being a Forex scalping trader with tight stop loss limits using them as the key factor your own successful Forex currency trading system. What do the tight stops mean? They mean you play for a Forex market while it is moving up and down right to a target. You as a scalper may stop many trades at once if they move in wrong direction and avoid in such way large losses.

Time frames used in the limits of a day scalping Forex currency trading system

As it was mentioned above those traders who are following the common day scalping Forex currency trading system choose to apply their systems on small time frame charts like one, two or five minute charts. The main task here is to spot such fast trade in a quick way entering and exiting it. Scalpers never hold overnight trades and never will execute those trades requiring longer time frames in order to derive some benefits and profits. If you are going to become a scalper you have to search for maximum liquid trades. Long trades just do not match any pattern of a day scalping Forex currency trading system.

The most obvious benefits of following a day scalping Forex currency trading system

You can earn higher profits risking in such way. If you increase the per pip value having just several pips you can exit the Forex market in the end of a day having the same profit margins as they have from more conservative trades requiring a larger amount of pips. The advantages are quite obvious and you can easily calculate them providing all anti-risk measures like tight stops in order to reduce the possible losses to minimum.

How Can One Develop and Sell a FX Robot?

Ask yourself how many times you have seen the ads in the Web offering to Forex traders to visit a website and buy/try or at least read about a new Forex robot. For sure, at least few times everyone has seen such ads but have you ever thought about making money by designing and selling your own Forex robots. If such a great idea visits your mind from time to time then you should definitely read further because we will tell you the secrets of how you can design and sell your own FX robot software.
Do we even have to say why FX robots are so popular nowadays? Because everyone is a bit crazy about those innovative automated and autopilot FX trading programs which are a real bliss especially for those Forex traders who like an idea of a successful trading without having reliable theoretical background and practical skills and relying only on expensive Forex software. We can’t approve such method but still confirm that Forex robots can be very useful especially if your Forex education was quite good from both theoretical and practical points of view.

Add to this fact such functions as constant controlling and managing your trades according to these parameters 24/5 any FX robot can provide and you will get an assistant that can help you without breaks because it doesn’t require sleeping and eating. Relying on a robot you can stick to your habitual schedule even providing a parallel working in the office being distracted from time to time thanks to the integrated tools which can send to a trader alerts about the upcoming changes at the Forex market so a person could respond in a proper way. So, if you are highly interested in making your own Forex robot because you want to earn money by selling its copies to other traders or simply because you want to have Forex robot software tuned up especially for oneself then follow the next advices.

How to design and then sell a FX robot?

Many new Forex robot builders and designers simply don’t know where to start to create really cool and which is more important a well-working program containing all necessary and maybe few additional and unique tools which can help investors, traders and brokers follow and manage their trades by means of your robot. This is not an easy task to do.
For sure, you have to be a programmer, this issue is not even worth of discussion because without certain practical and theoretical knowledge you won’t manage to build and run a robot in a proper way. From this point of view we can only recommend you to program your robot with an opportunity to gain profits which will be equal to a half or a bit less of the stop loss (your robot’s win-lose ratio should be about 66,7 percents).

Instead of the technical side we want to focus on the functions this robot should fulfill – it has to be designed to work fast, reacting quickly to all commands and is to be very customizable when it concerns tracking the latest Forex trends and displaying them as Forex charts. Besides you robot should be designed for mass exploiting which should be taken into account as well. Do not forget to build your own website where you can offer and enumerate all advantages of your robot software for automated trading.
Make sure that you use all means to promote your robot offer a subscription for a constant customers and free trial version in eager to attract more potential customers. Ask for an expert’s advise in order to organize and run your website and ad campaign properly.

The Impact Of Currency Conversions

The currency price of one country gets stronger and/or weaker against another country's currency on a daily basis, but what exactly does that mean for those who don't trade in the forex market? Currency exchange rates affect travel, exports, imports and the economy. In this article, we'll discuss the nature of currency exchange and its effect on people and the economy.

Before delving into the topic in more detail, we must first establish a constant; for demonstration purposes we will be talking about the relationship between the euro and the U.S. dollar. More specifically, we will be talking about what happens to the U.S. economy and to the economies of Europe if the euro trades markedly higher against the U.S. dollar. The assumption we will be making is that US$1 will purchase 0.7 euros.

The Impact on Travelers
If US$1 buys 0.7 euros, U.S. citizens will be more reluctant to travel across the pond. That's because everything from food to souvenirs would be more expensive - about 43% more expensive than if the two currencies were trading at parity. This is an illustration of the effect of the purchasing power parity (PPP) theory.

However, under these conditions European travelers would be much more apt to visit the United States for both business and pleasure. American businesses and governments (via taxes) in the areas that European tourists visit will prosper - even if just for a season.

The Impact on Corporations and Equities
The impact that this scenario would have on corporations (particularly large multi-nationals) is a little more complex because these businesses often conduct transactions in a number of different currencies and tend to obtain their raw materials from a wide variety of sources. That said, U.S.-based companies that generate the majority of their revenue in the U.S. (but that source their raw materials from Europe) would likely see their margins take a hit on higher costs.

Similar pain would be felt by U.S. companies that must pay their employees in euros. By definition, these decreased margins would likely have an adverse impact on overall corporate profits, and therefore on equity valuations in the domestic market. In other words, stock prices may drop due to these lower earnings and forecasts for future profit potential.

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On the flipside, U.S. companies that have a hefty overseas presence and draw in a significant amount of revenue in euros (as opposed to dollars), but pay their employees and other expenses in U.S. dollars could actually fare quite well.

European companies that generate the lion's share of their revenue in euros, but also source their materials or employees from the United States as part of their business, would likely see margin expansion as their costs and currency decrease. By definition, this could lead to higher corporate profits and equity valuations in some overseas stock markets. However, European companies that garner a significant amount of their revenue from the United States and must pay their expenses in euros are likely to suffer.

The Impact on Foreign Investment
Under these assumptions, it is likely that Europeans (both individuals and corporations) would expand their investment in the United States. They would also be better suited to make acquisitions of U.S.-based businesses and/or real estate. In fact, this has happened at several points in the past. For example, when the Japanese yen traded at record highs against the dollar back in the 1980s, Japanese firms made significant purchases of real estate - including the world-renowned Rockefeller Center.

Conversely, U.S. corporations would be less apt to acquire a European company or European real estate under US$1 for 0.70 euros scenario.

How Can You Protect Yourself from Currency Moves?
When planning a trip, check the most up-to-date currency conversion before you book your vacations so you can plan your choice of locations appropriately. (There are many ways of finding out local currency rates, including looking in the business section of your local newspaper, checking with a travel agency or searching the internet.) Incidentally, one of the best tips for travelers making purchases overseas is to use a credit card. The reason behind that is that credit card companies tend to negotiate the best rates and the most favorable conversions because they do such a high volume of transactions. These companies take out all the guess work for you, paving the way for smoother (and probably less expensive) transactions.

For small and large business owners operating in the U.S. that source some of their raw materials from Europe, one of the best moves can be to stock certain supplies if the price of the euro starts to climb rapidly against the dollar. Conversely, if the euro starts falling against the dollar, it may make sense to keep inventory at a minimum in the hope that the euro will decline enough for the company to save on its purchased goods.

Five Fatal Flaws of Trading

Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit - and more importantly, do it consistently. How do they do that? That's an age-old question. While there is no magic formula, one of Elliott Wave International's senior instructors Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don't claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person's life. Maybe you'll find one in Jeffrey's take on trading? We sincerely hope so. The following is an excerpt from Jeffrey Kennedy's Trader's Classroom Collection. For a limited time, Elliott Wave International is offering Jeffrey Kennedy's report, How to Use Bar Patterns to Spot Trade Setups, free. Why Do Traders Lose? If you've been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn't seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can't seem to prevent that invisible hand from depleting your trading account funds. Which brings us to the question: Why do traders lose? Or maybe we should ask, 'How do you stop the Hand?' Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account. Fatal Flaw No. 1 - Lack of Methodology If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won't work over the long run. If you don't have a defined trading methodology, then you don't have a way to know what constitutes a buy or sell signal. Moreover, you can't even consistently correctly identify the trend. How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn't matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can't fit it on the back of a business card, it's probably too complicated. Fatal Flaw No. 2 - Lack of Discipline When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously. Fatal Flaw No. 3 - Unrealistic Expectations Between you and me, nothing makes me angrier than those commercials that say something like, "...$5,000 properly positioned in Natural Gas can give you returns of over $40,000..." Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations. Yes, it is possible to experience above-average returns trading your own account. However, it's difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader - 50%, 100%, 200%? Whoa, let's rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them - and achieve them - you will fend off the Hand. For a limited time, Elliott Wave International is offering Jeffrey Kennedy's report, How to Use Bar Patterns to Spot Trade Setups, free. Fatal Flaw No. 4 - Lack of Patience The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction. That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you're a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week. All too often, because trading is inherently exciting (and anything involving money usually is exciting), it's easy to feel like you're missing the party if you don't trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade. How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don't worry about missing an opportunity today, because there will be another one tomorrow, next week and next month ... I promise. I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: 'Aim small, miss small.' I offer the same advice in this new context. To aim small requires patience. So be patient, and you'll miss small." Fatal Flaw No. 5 - Lack of Money Management The final fatal flaw to overcome as a trader is a Lack of Money Management, and this topic deserves more than just a few paragraphs, because money management encompasses risk/reward analysis, probability of success and failure, protective stops and so much more. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size. Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% - 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50-$150 on any given trade. Stocks might be a little different, but a $50 stop in Corn, which is one point, is simply too tight a stop, especially when the 10-day average trading range in Corn recently has been more than 10 points. A more plausible stop might be five points or 10, in which case, depending on what percentage of your total portfolio you want to risk, you would need an account size between $15,000 and $50,000. Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn't even address the size that they trade (i.e., multiple contracts). To overcome this fatal flaw, let me expand on the logic from the 'aim small, miss small' movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you're out all together. Break the Hand's Grip Trading successfully is not easy. It's hard work ... damn hard. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless. To get to that point, though, you must first break the fingers of the Hand that is holding you back and stealing money from your trading account. I can guarantee that if you attend to the five fatal flaws I've outlined, you won't be caught red-handed stealing from your own account. For more information on trading successfully, visit Elliott Wave International to download Jeffrey Kennedy's free report, How to Use Bar Patterns to Spot Trade Setups.

FOREX Trading Strategies

The world of trading and investment can be as frustrating as it can be rewarding! And Forex (Foreign Exchange) is no exception — often described as risky, profitable and complicated.
Forex is the largest trading market in the world.
Forex is the worldwide market for buying and selling currencies. These markets were developed to cater for the supply and demand of different currencies by governments, companies and individuals — for international trade and assisting importers and exporters.
Therefore those who trade in this market include consumers, businesses, investors, speculators and the banking industry.
Different countries use different currencies — which vary in their values against each other. Forex trading invovles the buying and selling of two currencies — trading pairs — you are selling one and buying another eg you may use the US dollar to purchase British pounds — if the supply of the pound lessens — it will cost more dollars to buy pounds — the Forex trader hopes to sell their pounds at a higher price than the purchase price.
A speculator in Forex is someone who accepts the possibility of adverse exchange-rate movements in the hope of making a profit from favourable movements in currency.
As a speculator you should always start trading with a small amount and have a trading system — which tells you when to get in and out of the market. It is a favourite option for currency traders as you can trade the Forex market 24 hours per day and the transaction costs are minimal.
This market — because of its sheer size — is hard to be manipulated — which stocks can be — it is more likely to be influenced by global news or events. Hence, the opportunity for 'insider trading' is eliminated.
However — beware -Forex brokers estimate that 90% of traders lose their money; 5% break even and only 5% achieve profitable results!