FX Old News Article (may-2009)

FX Old News Article

by ac-markets.com 

MAY , 2009

Final US Treasury Auction of $26bn of 7yr Notes Goes Off Without a Hitch - USD Under Pressure

Yesterday's final US treasury auctions of $26bn of 7yr notes went off without a hitch. In a week which saw $101bn of new supply entering the market, investors' worries were calmed as bid-cover ratio and percentage awarded to indirect bidders matched auctions in the past. So it looks like for now the foreign demand for US debt is unchanged. However, as we had mentioned in the past if there was a...(more)

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Dollar momentarily constructive as U.S Govt. Yields rise massively – structural worries remain and GM prepares for bankruptcy filing.

The news monopolizing the financial newswires yesterday was the massive jump and subsequent selloff in U.S Government yields. US10Y jumped 20bps and closed above the important resistance of 3.70%. This could potentially be disastrous for the mortgage market, which is widely seen to be the major to an economic recovery in the U.S; furthermore high govt. yields stunt domestic growth and weighs on...(more)

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US Treasury Auction Pass Without Incident

Risky assets are once again in fashion' as yesterday's US treasury auction went off without a hitch and the US Conference Board consumer confidence jumped unexpectedly to 54.9 vs. 39.2 previously. US equities enjoyed another strong trading day and today both Asian and European indexes are trading higher. Going into yesterdays US trading session, markets optimism had begun to wane on the back of...(more)

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Market Focused on US Treasury Auctions

Yesterday's Holidays in the UK and US combined with a lack of fresh data has kept FX markets range bound. However, as European markets open we are seeing decent demand for the USD. The EUR/USD slipped through the 1.3900 level and the GBPUSD dropped below 1.5800. Traders are selling out of KRW after a 20% appreciation against the USD on the back of its neighbor’s hawkish activities. We expect a...(more) .........................................................................................

North Korea's Weapons Test Fail to Provide Markets with a Direction

With no major economic data today, worries and debate over the US ’s credit outlook and optimism surrounding the Eurozone's economic data will provide traders with a choppy, directionless trading day. The migration from risk aversion trading to the examination of fundamentals was tested by new missile tests from N. Korea. Local news agency reported that N. Korea successfully tested an underground...(more)

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USD forecast to extend losses versus Euro and Sterling

The week drew to a close in Asia with the Dollar showing no signs of recovery whatsoever. USD selling was the highlight yesterday with an early charge of EURUSD and GBPUSD getting sharply reversed on the back of S&P cutting its outlook for the UK 's AAA sovereign rating. Similar comments were made early this morning in regards to the USA . Price action...(more) .........................................................................................

Euro Rises on positive German ZEW survey

There was little in the way of news overnight but markets generally kept the faith and held in taking on a decided more 'normal' look as VIX broke back below 30 for the first time since September. Data was in the news (probably because there was little else to draw attention) but different interpretations of it probably make any strong conclusions hard to draw. US Housing Starts and Building...(more)

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USD Under Pressure as Stocks Rally

The risk rally continues. Risky assets recovered sharply yesterday after last week’s bout of selling. Sentiment received a further boost yesterday, as media reports suggested that US regulators decided to allow banks to just to repay the TARP funds, rather than requesting government approval. On the back of the report, banks that were recognized as not requiring additional capital are reported...(more)

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Shift In Global View on Weak GDP Figures

The release of German GDP on Friday, which showed a contraction of -3.8% q/q, took the wind out of the EUR and the “Green Shoots” theory. Pundits over the weekend, such as Times columnist Anatole Kaletsky, described the data as 'arguably the most catastrophic economic statistics produced by any official institution in the capitalist world since 1945'. We see such comments as overdone, but it...(more) .........................................................................................

Markets remain buoyant despite shimmers of risk aversion amidst deflation fears.

Equity markets in the U.S are set to end the week lower for the first time in 9 weeks as data flows this week were less encouraging than the headliners of last week. This said it is apparent that markets are convinced a bottom is in and there is no going back, U.S jobless claims coming out at 637K against a consensus of 610K not even rattling markets. In the newsletter I wrote on Monday I...(more) .........................................................................................

Data Disappoints & Challenges Near Term Recovery Hopes

It was only a matter of time before the economic data wouldn’t hold up to the hype and “green shoots” theory trampled on. And yesterday was such a day, quickly reversing risk takers growing optimism. Actually, yesterday started off very well, with China's retail sales posting a 14.8% y/y jump and recoveries champion continued to make headway. However, in the Eurozone industrial production...(more) .........................................................................................

FT Article Prompts USD Selling

Markets are currently stable, as participant wait for fresh news or data. Overnight, a report from the Financial Times weighed on the USD. The FT ran an opinion piece by David Walker, the former comptroller general of the US , suggesting that the US needs to take immediate action to steer clear of a downgrade in its AAA rating (re-hashing the long-term critique of US public finances). It’s...(more)

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Comments Help Risk Appitite
The EUR continues to be helped by recent risk-appetite, supported by equity market rallies and declining VIX and growing credibility to the ‘green shoots’ theory. In addition, as the market discounts the probability of a “black swan” event in the financial sector, the flight to safety trades becomes less relevant. With focus being put back on the Fed’s massively bloated balance sheet, timing of...(more)

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Risk appetite, jobs and more risk appetite... Oh and green shoots too!
The calls for tentative signs of a recovery a little under 2 months ago seem to have caught on – the movement verdantly labeled “green-shoots” has seen economic data improve consistently – and markets take heed of these signs by being more aggressive. Data such as the ADP and NFP numbers were more than encouraging (even Australian employment numbers were encouraging, actually rising while markets...(more)

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Stress Test Results Impact Benign & Markets Wait for NFP
The much anticipated results of the US bank Stress Test failed to soften investor’s optimism, despite 10 firms requiring nearly $75bn in new capital. US equity markets closed slightly lower and the USD was able to make some headway, as traders braced themselves for uncertain events (US 30year yields rallied sharply after the 30year auction went quite badly). However, on the release, with no...(more)
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Jobless numbers encourage investors as stress tests seem to be priced in, BoE and ECB announcements set to be benign.
The ECB and BoE are both meeting respectively today to discuss monetary policy. The MPC is set to keep rates the same and announce step 2 of their QE policy. Furthermore the BoE is expected to announce further GILT purchases – tapping into the remaining £75Bn of the £150Bn committed by the government. The ECB is expected to be cutting Refi rates by 25bps down to 1.00% and announce further...(more)
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Risk Appetite Fragile Ahead of Tomorrows ECB Meeting & Stress Test Results
After a slight drop in risk appetite due to newswire reports suggesting that BofA will need an additional $34bn of capital, risk taking seems to be creeping back into the markets (Citigroup's shortfall is reported to be 'more limited'). Yesterday's Wall Street session closed lower, with the S&P down -0.37%, but Asian regional indexes were able to rally back this morning. Initially, the USD...(more)

thank forex news by ac-markets.com

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Forex Trading

What is Forex Trading? Introduction to Forex Trading

Forex trading isn’t strange words for those who looking forward to make quick profit in the financial market. Most investors will have at least hear or read about Forex trading. If Forex is a new term to you, please do read the Introduction to the Forex market before proceed reading this Forex trading article.

Forex trading is said to be the highest risk with highest return investment (or speculation game to be more accurate) in the financial market. The amount traded in the Forex market is much larger than any stock market or even combining few stock markets. Forex trading is simply a world wide trading market running 24 hours from Monday to Friday. 

Everyday, there are new Forex traders entering into trading Forex. Some of them don’t even fully understand how Forex is traded but have already trading Forex. They are not idiot who want to burn their hard earned money, it’s just because Forex market is simply too lucrative market to enter with extreme high return. Any Forex traders can easily make a double return just in few minutes time trading Forex.

Forex trading is the trading of buying or selling certain currency. For example, buying US Dollar, then selling it later at a higher price to gain profit. Forex traders may also first sell US Dollar and later on buy it back at a lower price with the same gaining profit. It’s simple strategy of selling price minus buying price to make profit. In Forex trading, we just treat currency as a good, buy it and sell it.

You might now think how can Forex trading make huge profit just by selling and buying currency? Forex is traded using margin, Forex traders don’t need to full amount to buy any currency. For example, Forex traders just need 1000 Dollar to buy up 100,000 Dollar. This allows any Forex traders to make huge profit with little money.

Another important factor that any Forex traders can make huge profit is the high fluctuation for currency. Every day every seconds, the currency exchange rate is moving up and down, the Forex exchange rate fluctuate more heavily whenever there is any important economic data being released.

Forex trading is simply sounds too easy for anyone to make profit in very short time. But before you committed into Forex trading, it is strongly advised to have full understanding in Forex trading. Do read up other Forex trading articles in this website and share Forex trading knowledge in the Forex forums.

http://www.forex2u.com/fx2u-forex-strategy.html

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Forex Strategy for Successful Forex Trading

FX2u Forex strategy on successful Forex trading

By Forex2u.com, Thu Dec 8th

The essence of the FX2u Forex strategy is that it does not have any Forex trading system but could forecast the market trend accurately. 

Every set of Forex trading system available has its disadvantages. The market trend could not be forecasted. If the market could be forecasted, by depending on the RSI, PAR, MOM analysis techniques and some other theories, Forex traders could easily make a fortune.

Many Forex traders could not obtain the anticipated outcome by using these analysis tools, and suffer huge losses. The main reason is relying on some imperfect tools to forecast the unpredictable market trend is just a waste of effort. Therefore the FX2u Forex strategy spirit is to abolish the entire subjective analysis tool.

To survive in the market is to follow the market trend, following the market trend is the essence of the FX2u Forex strategy. By using the opposite theory to enter the market, will only lead to lost. The reason is that if the market rises, it may continue to rise. If the market drops, it may continue to drop. No one is able to forecast when the market trend will stop. 

By following the market trend, the market risk could be reduce to the lowest, the FX2u Forex strategy will advance the following the ten principles:

1. fully understand the how market function and the market trend, else don’t trade
   
2. After entering the market, the Forex trader must immediately put a market stop. 
   
3. If the stop order has been hit it must be executed immediately, Never make changes by lowering the stop order price.
   
4. If the forecast is wrong, Forex traders should leave the market immediately, then analyze again.
   
5. If the forecast is wrong, Forex traders should stop loss and should not increase trading. 
   
6. Forex traders should admit mistakes, do not continuously make mistakes.
   
7. All analysis tools are imperfect, mistakes could always occur.
   
8. If the market rises Forex traders should buy, if the market drops Forex traders should sell, always follow the market trend.
   
9. Forex traders should not forecast the market price because such forecast will not be as easy as forecasting the market trend.
   
10. If the forecast is wrong, once the loss reach 10%, Forex traders must stop loss immediately, do not let it surpasses 10%, otherwise it would be difficult to recoup the capital again.
    

If the forecast is wrong, once the loss reach 10%, Forex tradersmust stop loss immediately, do not let it surpasses 10%,otherwise it would be difficult to recoup the capital again.

aLvinHan is the editor of www.forex2u.com

http://www.forex2u.com/fx2u-forex-strategy.html

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Forex Training

1. Forex Market Background How the forex market has developed, why it presents an outstanding trading opportunity, and how it compares to futures markets.
    

2. Trading Strategy and Decision Making  Fundamentals of developing a basic trading strategy, including examples of some of the most common techniques.
    

3. Technical Analysis Basics of technical analysis including detailed descriptions and uses of some of the most advanced technical studies.
    

4. Controlling Risk One of the most fundamental factors in successful trading is controlling risk.  Learn how to limit downside both strategically and mechanically.
    

5. Forex Definitions and Terms Definitions of the most common foreign exchange terms, including technical studies and currency pairs.

6. Additional training from GFX Group...
   

http://www.forex-markets.com/training.htm

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Forex Definitions and Terms

Forex Definitions and Terms Presented in cooperation with Forex-Training.com  Ask: Price at which broker/dealer is willing to sell.  Same as "Offer".

Bid:  Price at which broker/dealer is willing to buy.
Bid/Ask Spread (or "Spread"): The distance, usually in pips, between the Bid and Ask price.  A tighter spread is better for the trader.   
Cost of Carry (also "Interest" or "Premium"): The cost, often quoted in terms of dollars or pips per day, of holding an open position.
Currency Futures:  Futures contracts traded on an exchange, most typically the Chicago Mercantile Exchange ("CME").  Always quoted in terms of the currency value with respect to the US Dollar.  Parameters of the futures contract are standardized by the exchange. 
Drawdown: The magnitude of a decline in account value, either in percentage or dollar terms, as measured from peak to subsequent trough.  For example, if a trader's account increased in value from $10,000 to $20,000, then dropped to $15,000, then increased again to $25,000, that trader would have had a maximum drawdown of $5,000 (incurred when the account declined from $20,000 to $15,000) even though that trader's account was never in a loss position from inception.

Fundamental Analysis:  Macro or strategic assessments of where a currency should be trading based on any criteria but the price action itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements.

Leverage:  The amount, expressed as a multiple, by which the notional amount traded exceeds the margin required to trade.  For example, if the notional amount traded (also referred to as "lot size" or "contract value") is $100,000 dollars and the required margin is $2,000, the trader can trade with 50 times leverage ($100,000/$2,000).

Limit: An order to buy at a specified price when the market moves down to that price, or to sell at a specified price when the market moves up to that price.

Liquidity:  A function of volume and activity in a market.  It is the efficiency and cost effectiveness with which positions can be traded and orders executed.  A more liquid market will provide more frequent price quotes at a smaller bid/ask spread. 

Margin:  The amount of funds required in a clients account in order to open a position or to maintain an open position.  For example, 1% margin means that $1,000 of funds on deposit are required for a $100,000 position.

Margin Call:  A requirement by the broker to deposit more funds in order to maintain an open position.  Sometimes a "margin call" means that the position which does not have sufficient funds on deposit will simply be closed out by the broker.  This procedure allows the client to avoid further losses or a debit account balance.

Market Order:  An order to buy at the current Ask price.

Offer: Price at which broker/dealer is willing to sell.  Same as "Ask".

Pip: The smallest price increment in a currency.  Often referred to as "ticks" in the futures markets.  For example, in EURUSD, a move from .9015 to .9016 is one pip. In USDJPY, a move from 128.51 to 128.52 is one pip.

Premium (also "Interest" or "Cost of Carry"): The cost, often quoted in terms of dollars or pips per day, of holding an open position. 

Spot Foreign Exchange:  Often referred to as the "interbank" market. Refers to currencies traded between two counterparties, often major banks.  Spot Foreign Exchange is generally traded on margin and is the primary market that this website is focused on.  Generally more liquid and widely traded than currency futures, particularly by institutions and professional money managers. 

Stop: An order to buy at the market only when the market moves up to a specific price, or to sell at the market only when the market moves down to a specific price.

Technical Analysis:   Analysis applied to the price action of the market to develop trading decisions, irrespective of fundamental factors. Below are the most common technical studies.  Click to view a description:

Bollinger Bands

Moving Averages

Parabolic SAR

MACD

RSI

Momentum

Stochastic

Slow Stochastic

CCI ("Commodity Channel Index")

ATR ("Average True Range")

Rate of Change

Standard Deviation

 

CURRENCY PAIRS:

Symbol		Currency Pair		Trading Terminology
GBPUSD		British Pound / US Dollar		"Cable"
EURUSD		Euro / US Dollar		"Euro"
USDJPY		US Dollar / Japanese Yen		"Dollar Yen"
USDCHF		US Dollar / Swiss Franc		"Dollar Swiss", or "Swissy"
USDCAD		US Dollar / Canadian Dollar		"Dollar Canada"
AUDUSD		Australian Dollar / US Dollar		"Aussie Dollar"
EURGBP		Euro / British Pound		"Euro Sterling"
EURJPY		Euro / Japanese Yen		"Euro Yen"
EURCHF		Euro / Swiss Franc		"Euro Swiss"
GBPCHF		British Pound / Swiss Franc		"Sterling Swiss"
GBPJPY		British Pound / Japanese Yen		"Sterling Yen"
CHFJPY		Swiss Franc / Japanese Yen		"Swiss Yen"
NZDUZD		New Zealand Dollar / US Dollar		"New Zealand Dollar" or "Kiwi"
USDZAR		US Dollar / South African Rand		"Dollar Zar" or "South African Rand"
GLDUSD		Spot Gold		"Gold"
SLVUSD		Spot Silver		"Silver"

Additional training from http://www.forex-markets.com/training.htm

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Controlling Risk

Controlling Risk Presented in cooperation with Forex-Training.com

Controlling risk is one of the most important ingredients of successful trading.  While it is emotionally more appealing to focus on the upside of trading, every trader should know precisely how much he is willing to lose on each trade before cutting losses, and how much he is willing to lose in his account before ceasing trading and re-evaluating.  

Risk will essentially be controlled in two ways:  1) by exiting losing trades before losses exceed your pre-determined maximum tolerance (or "cutting losses"), and 2) by limiting the "leverage" or position size you trade for a given account size.  
 

Cutting Losses

Too often, the beginning trader will be overly concerned about incurring losing trades.  He therefore lets losses mount, with the "hope" that the market will turn around and the loss will turn into a gain.  

Almost all successful trading strategies include a disciplined procedure for cutting losses.  When a trader is down on a positions, many emotions often come into play, making it difficult to cut losses at the right level.  The best practice is to decide where losses will be cut before a trade is even initiated.  This will assure the trader of the maximum amount he can expect to lose on the trade.

The other key element of risk control is overall account risk.  In other words, a trader should know before he begins his trading endeavor how much of his account he is willing to lose before ceasing trading and re-evaluating his strategy.  If you open an account with $2,000, are you willing to lose all $2,000?  $1,000?  As with risk control on individual trades, the most important discipline is to decide on a level and stick with it.
 

Determining Position Size

Before beginning any trading program, an assessment should be made of the maximum account loss that is likely to occur over time, per lot  (see "Drawdown" in "Glossary of Terms"). For example, assume you have determined that your worse case loss on any trade is 30 pips.  That translates into approximately $300 per $100,000 position size.  Further assume that the $100,000 position size is equal to one lot.  Five consecutive losing trades would result in a loss of $1,500 (5 x $300); a difficult period but not to be unexpected over the long run.  For a $10,000 account trading one lot, this translates into a 15% loss.  Therefore, even though it may be possible to trade 5 lots or more with a $10,000 account, this analysis suggests that the resulting "drawdown" would be too great (75% or more of the account value would be wiped out).  

Any trader should have a sense of this maximum loss per lot, and then determine the amount he wishes to trade for a given account size that will yield tolerable drawdowns.

Additional training from http://www.forex-markets.com/training.htm

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