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Be a Smarter FOREX Currency Trader: Three Basic
Principles
Below I will describe three basic principles that may come in
handy for currency traders. They are very easy to implement and
potentially take advantage of as you will see.
Principle 1
Some currency traders find that it is useful to always trade a
given currency pair at the very same time every day. The
reasoning for this is that most of the other traders buying or
selling that currency pair may also trade at the same time. Major
trading pits may also be working the exact same shift every day.
This technique may be especially useful for currency traders who
exploit technical analysis. Again, the reasoning for this is that
it may be possible to standardize the trading conditions if one
trades during the same time frame every day, if only for a very
little bit. However, that small bit of standardization may yield
several pips worth of profit. Nevertheless, it is readily obvious
that the foreign exchange market can be very volatile and
random.
Principle 2
Certain currencies trade with a certain volatility at a
certain time. Once you've finished practicing your trading skills
on a demo account and you decide to test the waters using your
own investment capital, you may want to minimize the amount of
liquidity and volatility to hedge your risk. Alternatively, you
may want to increase the risk involved, and potentially increase
your profit potential. (It should be noted that very heavy risk
is involved under any circumstances.)
The foreign exchange market follows the sun around the world
moving from the United States to Australia and New Zealand to the
Far East, to Europe and finally back to the United States.
Overall foreign currency trading volume is determined by which
markets are open and the overlap in the times that these markets
are open. Currency trading volume is relatively high 24 hours a
day, but there are considerable peaks in activity when the
British, European, and US markets are open simultaneously, which
is from 1 pm GMT to 4 pm GMT. Pacific Rim markets, such as Japan
and Hong Kong, show a dip in their trading volume while there is
extensive volume in the US market at the very same time.
Nevertheless, it is still possible to perform technical analysis
on Pacific Rim currencies. By trading during a certain time
frame, one may be able to either minimize or maximize the level
of volatility (and risk) for a given currency pair.
Principle 3
Although the above is a general statement about the activity
volume for certain currencies, it may be a good idea to attempt
to capture the level of volatility for given currency pairs. You
can potentially use Bollinger bands, a tool used by technical
analysts, to quantify volatility. Bollinger bands compare
volatility and relative price levels over time. Some currency
traders cannot trade a day in their life without using Bollinger
bands, while others may not find any use for them; it is really
up to you to decide whether Bollinger bands are of any use to
your specific situation.
I have described three basic principles that may potentially
come in handy for currency traders in the foreign exchange
market. They are very easy to implement and may reap rewards (or
lack thereof) depending on market conditions. Hopefully these
principles will help you come up with your own successful
strategies for trading currencies in the foreign exchange
market.
Danville's high-life Ponzi schemer gets prison San Francisco Chronicle ... bilked people by promising them extraordinarily high annual returns - as much as 36 percent - from foreign currency trading, according to the Securities ...
Forex Is Back, But Different Wall Street Journal As shown in regional central banks' latest semiannual reports on currency trading, those volume gains were driven by a unique combination of crisis-related ...
US growth doubts sap enthusiasm for equities Financial Times In currency trading, the dollar fell below Y86 for the first time in eight months on Friday, capping a poor week for the US unit. The dollar index was down ...
Village life Financial Times Mr Schwarzenbach, who made his fortune with the Interexchange currency trading business he founded, also owns the Lord Foster-designed Dolder Grand Hotel in ...
RELATED ARTICLESChoosing A Forex
Broker
With currency trading becoming ever more popular, the
number of brokers is growing at a rapid rate. What should
one look at when deciding which broker to open an account
with? These are the important points to consider.
A Beginner's Guide to
FOREX
FOREX is the abbreviation for the Foreign Exchange market.
FOREX is basically an international exchange market where
currencies from all over the world are bought and sold for
profit.
Forex Broker Involvement
Optional
To trade on the forex market, the largest financial market
on the planet, one must use a forex broker. Not unlike a
stock broker, a forex broker can also makes suggestions
about which moves to make when exchanging foreign currency.
Reality of Online Forex
Trading
Foreign exchange trading is the trading of currencies. Most
currencies can be traded.
Assessing the
Opportunities Presented by the New Iraqi
Currency
Could it be possible that you are staring right into the
most spectacular financial opportunity of the century?
Operation: Iraqi Freedom will undoubtedly be a war marked
in history for loss and tragedy, American victory, and the
rise of a nation with a new democratic government. But
could it also be a war historically remembered for the
financial opportunity it created for the sharp investors
who keenly recognized an ephemeral chance at the right
time?The War on Iraq ended with a nation placed on the
footstool of many new operations.
Money Management, Part
2
FEARING LOSSESThere is a huge difference between being risk
averse and fearing losses. You must hate to lose.
Business and the
Forex
The business world is a complex web of supply and demand.
Money and goods, physical or otherwise, pass through the
global market every single day.
Forex2u Forex Strategy
On Successful Forex Trading
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.
Facts of Day
Trading
Are you thinking of entering the fast-paced world of day
trading? Arm yourselves with the information from this fact
sheet on day trading.What is day trading?Day trading is an
investment tactic that does online daily stock trading with
a relatively short investment.
A Look at Online Forex
Brokers
An online forex broker is a firm that facilitates retail
trading using Internet technologies. Global Forex Trading
(GFT), one of the popular online forex brokers.
Sending Signals for
Trading in Forex
Forex signals are sent by a forex firm to their subscribers
in order to buy and sell currencies. These signals are
called entry and exit signals for the forex dealers.
Factors Influencing a
Currency Pair Exchange Rate
IntroductionThe exchange rate refers to the value of the US
dollar against the values of currencies of other countries.
Such a rate helps determine how much we pay for imported
goods and services and how much we receive for what we
export, among other things.
The Secrets of the
Super-Traders
The first and perhaps most important "secret" is to realize
that your methodology or approach (no matter how good) is
only part of being a highly successful trader. This applies
to any trading style including, day trading, swing trading
or position trading.
What are Your Options
Regarding Forex Options Brokers?
Forex option brokers can generally be divided into two
separate categories: forex brokers who offer online forex
option trading platforms and forex brokers who only broker
forex option trading via telephone trades placed through a
dealing/brokerage desk. A few forex option brokers offer
both online forex option trading as well a
dealing/brokerage desk for investors who prefer to place
orders through a live forex option broker.
New Opportunities with
Forex Trading
The simplest definition of currency trading is the practice
of exchanging one country's currency for another country's
currency. Basically, currency trading involves four main
variables: currencies, exchange rate, time, and interest
rate.
Forex Currency
Trading
It is possible to buy and sell money from different
countries on the foreign exchange market called Forex.
Forex currency traders can profit by taking advantage of
the dips and swells in the foreign currency market.
Financial Crises, Global
Capital Flows and the International Financial
Architecture
The recent upheavals in the world financial markets were
quelled by the immediate intervention of both international
financial institutions such as the IMF and of domestic ones
in the developed countries, such as the Federal Reserve in
the USA. The danger seems to have passed, though recent
tremors in South Korea, Brazil and Taiwan do not augur
well.
Momentum Trading: A
Practical Day Trading Strategy to Get Profits from Hot
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Momentum day trading can be extremely profitable when done
correctly..
Welcome to the World of
Currency Trading
Indeed large multinational and individual banks and other
major financial institutions have dominated FX trading
(also known as Forex trading), but there is a paradigm
change in the nature and type of investing. According to
one estimate, in the new millennium, there are over 6
million online investment accounts, up from 1.
Forex Options Market
Overview
The forex options market started as an over-the-counter
(OTC) financial vehicle for large banks, financial
institutions and large international corporations to hedge
against foreign currency exposure. Like the forex spot
market, the forex options market is considered an
"interbank" market.
MORE RESOURCES updated Sat. July / 31 / 2010
