modforex

Dollar Edges Lower $

2010-09-06T22:17:00.001-07:00

Forex Markting

Written by John Kicklighter, Currency Strategist
Dollar Edges Lower as NFPs Solidify Investor Sentiment and Shake Out Remaining Volatility
Euro Traders Cautious of Favorable Forecasts from Officials’ When Yield Spreads Grow
British Pound Looks ahead to Next Week’s BoE Rate Decision for Underlying Trend
Canadian Dollar Could be the Most Speculatively Wound Major with the BoC Expected to Hike
Japanese Yen: Will the Bank of Japan Further Extend its Policy Effort or Take to Intervention?
Australian Dollar Traders Should Expect much Support from the RBA’s Policy Meet

Dollar Edges Lower as NFPs Solidify Investor Sentiment and Shake Out Remaining Volatility
Though liquidity was winding down quickly into the close of the week, we would nevertheless see a significant shift in the traditional market gauges for risk appetite Friday. With the help of a dubious nonfarm payrolls (NFP) report, risk appetite would start climbing before the US exchanges came online. The performances from the more sensitive asset classes were highlighted by a 1.3 percent advance from the S&P 500, a 7 bps rise in the 10-year Treasury note’s yield and 0.6 percent climb from EURJPY – all painting a consistent picture of improved risk appetite. Naturally, the safe haven US dollar would find itself on the opposite side of this positioning. However, the bearish progress marked is perhaps more discouraging than many would have afforded. With Friday’s performance, the Dollar Index closed a fourth consecutive daily loss and notched its lowest close since August 11th (a period when the currency was catalyzing its reversal from a two-month bear trend). A loose comparison between the price development of August and the two months that precede that; it is clear that that the ranks have been far more accommodative of selling the single currency than they have of buying it back up from ‘depressed’ levels. This does not necessarily establish a long-term bias for the greenback; but it is certainly something to keep in mind.
For the more recent swells in price action, today’s scheduled event risk would play a significant part – more than would have been expected. Though the August NFPs and ISM service sector activity reports are fundamentally important updates to the health of the US economy and notable market-movers in their own right; speculative interests were at a natural disadvantage Friday. Recently, we have seen the employment report (historically the greatest price driver for the US dollar on a consistent basis) temper its influence over price action as market participants took a big-picture view of labor. In turn, this would leave the market open to the natural withdrawal of liquidity into the weekend. A quiet end to the week was even more seductive given the fact that US markets (an important catalyst for speculative interests world-wide) would be closed Monday for an extended holiday weekend. Nevertheless, the smaller than expected 54,000 net loss in payrolls would be met with enthusiasm. IT helps that the previous month’s reading was revised up from a 131,000 to 54,000 contraction and that private payrolls had grown more than expected (by a net 67,000 new positions). Yet if we look at the details of this report, we see that the birth/death adjustment would account for a 115,000 increase to the overall figure, the broadest measure of unemployment rose to 16.7 percent (the standard merely advanced to 9.6 percent), and the total jobs added this year have tallied only 723,000. Considering the total number of American’s laid off in the preceding few years measured 8.4 million, it will take years at this pace to return to the ‘normal’ of just three years ago. As for the ISM non-manufacturing report, the 51.5 reading was a seven-month low for the largest sector in the economy. It is hard to distill lasting confidence from this data.
Looking ahead to next week, it will be a slow and choppy start for the greenback as US banks and exchanges will be offline Monday. However, beyond this lull, traders will look for prevailing risk winds and watch out for an expected policy announcement from President Obama.

Euro Traders Cautious of Favorable Forecasts from Officials’ When Yield Spreads Grow
Outside of the infectious and constant influence of investor sentiment, the euro would not find much fundamental drive from an otherwise quiet Friday session. The docket brought the final readings of the service sector activity reports for August (the Eurozone measure was revised modestly higher) and the regional retail sales report for July. The consumption figure offered a mixed update with a disappointing 0.1 percent increase for the month and stronger 1.1 percent annual read. Despite the questionable fundamental mix, however, the shared currency would still surmount a three-week high against the dollar, book an impressive bullish reversal against the Swiss franc and win a fourth advance versus the pound. This seems a continued effort to unwind the risk premium that was revived when financial uncertainty was stirred. It is difficult to see this recovery making too much progress though as Greek yield spreads near record highs and the EUR/USD Libor spread hits a 14-month high.
British Pound Looks ahead to Next Week’s BoE Rate Decision for Underlying Trend
The UK’s sole PMI service sector gauge for August did little to help the sterling with a 16-month low from an otherwise vital component of an unstable economy. Fundamental activity may have a little more influence next week though with a number of big events topped by the BoE rate decision. The central bank will not change its rates; but will an ECB, BoJ and Fed expansion of stimulus encourage the MPC to do the same?
Canadian Dollar Could be the Most Speculatively Wound Major with the BoC Expected to Hike
USDCAD was one of the biggest movers when the market processed the confidence-boosting US employment data. Ultimately, this was a move conceived and interpreted through Canada’s economic links to the US; but next week, the northern neighbor may pave its own way. The BoC rate decision is perhaps the biggest piece of scheduled event risk with economists predicting a 25 basis point rate hike to 1.00 percent.
Japanese Yen: Will the Bank of Japan Further Extend its Policy Effort or Take to Intervention?
Quoting unnamed officials today, a Bloomberg article proposed that Japanese policy makers were hesitant to intervene on behalf of their currency for fear of US disapproval. The yen is extraordinarily high against most of its counterparts; and it is a real struggle to support growth and normal market functioning. For this reason, we will look to the Bank of Japan for guidance on what to expect for growth and policy.
Australian Dollar Traders Should Expect much Support from the RBA’s Policy Meet
With investor confidence bolstering growth-dependent markets Friday, it comes as no surprise that the high-yield Australian dollar would put in for an advance of its own. For the week ahead, the currency will be especially dependent on this exogenous push. Without it, traders will be left to suffer the disappointment of a hold on interest rates and a probably bearish slant on the economy from the RBA.

Non-farm Payroll U.S. declines unless the expectations of economists, the unemployment rate rose to 9.6%

2010-09-06T22:16:00.000-07:00

Forex news

Nonfarm payrolls in the world’s largest economy tumbled 54,000 in August after falling a revised 54,000 the previous month amid economists’ expectations of -105,000. At the same time, the unemployment rate rose to 9.6 percent from 9.5 percent in July. In turn, the Japanese yen, and the U.S. dollar lost ground against all major currencies as sentiment shifted gears. Meanwhile, U.S. futures pushed higher subsequent to the report, and indeed, risk appetite maybe the main theme going into the North American trade. Market participants should caution entering a trade today as many traders are offline going into the holiday weekend.

Taking a look at the breakdown of the report, the private sector jumped 67,000, with most of the gains in education and healthcare. Also worth noting, the average hourly earnings rose 0.3 percent, which is up from 0.2 percent in July, while annualized earnings increased 1.7 percent. Some traders may overlook the report as much of the jobs that were created were part-time/temporary positions. There is not too much to be optimistic about as the labor market in the world’s largest economy is still depressed.

Prepared by Michael Wright

USD/JPY Intraday Chart

Source: Intellicharts – Prepared by Michael Wright

Following the “better” than expected report, the USDJPY pushed higher and now looks poised to maintain its northern journey going into the North American trade.

USDJPY Daily Chart

Source: Intellicharts – Prepared by Michael Wright

Taking a look at the USDJPY daily chart, the pair has worked its way into a descending channel. As of late, the end of the trend may be on the horizon as the pair once again tests the upper bounds of the range. If we see a clear break and close above the 20-day moving average, this will validate a potential profitable long trade. At the same time, our speculative sentiment index is slowly scaling back from its extreme levels. A reversal will point to USDJPY gains.

Written by Michael Wright, Currency Analyst

European Central Bank hold Rate at 1% & U.S $ Continues To Lose

2010-09-06T22:15:00.001-07:00

Forex Market News

Written by David Song, Currency Analyst

The Euro showed little reaction to the European Central Bank interest rate decision as policy makers held the benchmark interest rate at 1.00% in September, but the slew of data scheduled for the U.S. trade is likely to stoke increased volatility in the exchange rate as investors weigh the outlook for future growth.

Talking Points

Japanese Yen: Gains Ground Against Most Counterparts
Pound: Manufacturing Expands at Slower Pace
Euro: 2Q Growth Rate Expands 1.0%
U.S. Dollar: Pending Home Sales, Factory Orders on Tap

At the same time, ECB President Jean-Claude Trichet will be holding a press conference at 12:30 GMT regarding the decision made by the Governing Council, and the central bank head is likely to talk down the risks for the region as he expects to see a moderate recovery going forward.

Nevertheless, the preliminary 2Q GDP reading for the Euro-Zone showed economic activity expanded 1.0%, which was in-line with expectations, while the annualized rate increased 1.9% from the previous year amid an initial forecast for a 1.7% rise in the growth rate. The breakdown of the report showed household consumption increased 0.5% to top projections for a 0.2% rise, with government spending increasing 0.5%, while gross fixed capital formations advanced 1.8% from the first three-months of the year. At the same time, a separate report showed producer prices in the region increased at an annualized pace of 4.0% in July to mark the fastest pace of expansion since October 2008, and the data reinforces an improved outlook for growth and inflation as the recovery gathers pace. As a result, the ECB may look to revise its economic assessment and drop its dovish outlook for future policy as it maintains its one and only mandate to ensure price stability, and the Governing Council may see scope to reestablish its exit strategy going into 2011 as growth prospects improve.

The British Pound pared the previous day’s advance and slipped to a low of 1.5372 as the economic docket reinforced a weakened outlook for the region, and the GBP/USD may continue to trend lower over the near-term as it maintains the downward trending channel from the August high (1.5997). Meanwhile, the International Monetary Fund warned that the U.K. will need long-term reforms to manage its public finances as the group sees the region’s debt-to-GDP ratio more than doubling by 2015 from 44.1% in 2007, but went onto say that “current market indicators of default risk seem to reflect some market overreaction” as the government takes unprecedented steps to lower the budget deficit. At the same time, the economic docket showed home prices in the region fell more than expected in August as the Nationwide index tumbled 0.9% amid forecasts for a 0.3% decline, while prices increased 3.9% from the previous year, which marked the slowest pace of growth since November. As policy makers withdraw fiscal support despite the ongoing weakness in the real economy, the Bank of England is likely to maintain the expansion in monetary policy as it aims to encourage a sustainable recovery, and the central bank may hold a wait-and-see approach over the coming months as it aims to balance the risks for the region.

The greenback continue to lose ground against most of its major counterparts, with the USD/JPY retracing the previous day’s advance to reach a low of 83.99, and the dollar could face increased selling pressures throughout the day as the economic docket is expected to reinforce a weakened outlook for future growth. Pending home sales in the world’s largest economy is forecasted to fall 1.0% in July after contracting 2.6% in the previous month, while final 2Q reading for nonfarm productivity is projected to show a 1.9% decline amid an initial forecasts for a 0.9% drop. At the same time, factory orders are anticipated to rise 0.2% in July after falling 1.2% in the previous month, but the majors may hold its current range ahead of Friday’s Non-Farm Payrolls release as market participants forecast the U.S. economy to shed another 100K jobs in August.

Design simple momentum model

2010-09-06T22:14:00.000-07:00

Forex momentum model

in this topic you will learn how to design Forex momentum model

By Boris Schlossberg -- Investopedia.com

One of the key tenets of technical analysis is that price frequently lies, but momentum generally speaks the truth. Just as professional poker players play the player and not the cards, professional traders trade momentum rather than price. In forex (FX), a robust momentum model can be an invaluable tool for trading, but traders often grapple with the question of what type of model to use. Here we look at how you can design a simple and effective momentum model in FX using the moving average convergence divergence (MACD) histogram.

Why Momentum?

First, we need to look at why momentum is so important to trading. A good way to understand the significance of momentum is to step outside of the financial markets altogether and look at an asset class that has experienced rising prices for a very long time - housing. House prices are measured in two ways: month-over-month increases and year-over-year increases. If house prices in Sydney were higher in November than in October, then we could safely conclude that demand for housing remained firm and further increases were likely.

However, if prices in November suddenly declined from prices paid in October, especially after relentlessly rising for most of the year, then that might provide the first clue to a possible change of trend. Sure, house prices would most likely still be higher in a year-over-year comparison, lulling the general public into believing that the real estate market was still buoyant. However, real estate professionals, who are well aware that weakness in housing manifests itself far earlier in month-over-month figures than in year-over-year data, would be far more reluctant to buy under those conditions.

In real estate, month-over-month figures provide a measure of rate of change, which is what the study of momentum is all about. Much like their counterparts in the real estate market, professionals in the financial markets will keep a closer eye on momentum than they do on price to ascertain the true direction of a move.

Using the MACD Histogram To Measure Momentum

Rate of change can be measured in a variety of ways in technical analysis; a relative strength index (RSI), a commodity channel index (CCI) or a stochastic oscillator can all be used to gauge momentum. However, for the purposes of this story, the MACD histogram is the technical indicator of choice.

First invented by Gerry Appel in the 1970s, the MACD is one of the simplest, yet most effective, technical indicators around. When used in FX, it simply records the difference between the 26-period exponential moving average (EMA) and the 12-period exponential moving average of a currency pair. In addition, a nine-period EMA of MACD itself is plotted alongside the MACD and acts as a trigger line. When MACD crosses the nine-period line from the bottom, it signifies a change to the upside; when the move happens in the opposite manner, a downside signal is made.

This oscillation of the MACD around the nine-period line was first plotted into a histogram format by Thomas Aspray in 1986 and became known as the MACD histogram. Although the histogram is in fact a derivative of a derivative, it can be deadly accurate as a potential guide to price direction. Here is one way to design a simple momentum model in FX using the MACD histogram.

1. The first and most important step is to define a MACD segment. For a long position, a MACD segment is simply the full cycle made by the MACD histogram from the initial breach of the 0 line from the underside to the final collapse through the 0 line from the topside. For a short, the rules are simply reversed. Figure 1 shows an example of a MACD segment in the EUR/USD currency pair.

2. Once the MACD segment is established, you need to measure the value of the highest bar within that segment to record the momentum reference point. In case of a short, the process is simply reversed.

3. Having noted the prior high (or low) in the preceding segment, you can then use that value to construct the model. Moving on to Figure 2, we can see that the preceding MACD high was .0027. If the MACD histogram now registers a downward reading whose absolute value exceeds .0027, then we will know that downward momentum has exceeded upward momentum, and we'll conclude that the present set-up presents a high probability short.

If the case were reversed and the preceding MACD segment were negative, a positive reading in the present segment that would exceed the lowest low of the prior segment would then signal a high probability long.

What is the logic behind this idea? The basic premise is that momentum as signified by the MACD histogram can provide clues to the underlying direction of the market. Using the assumption that momentum precedes price, the thesis of the set-up is simply this: a new swing high in momentum should lead to a new swing high in price, and vice versa. Let's think about why this makes sense. A new momentum swing low or high is usually created when price makes a sudden and violent move in one direction. What precipitates such price action? A belief by either bulls or bears that price at present levels represents inordinate value, and therefore strong profit opportunity. Typically, these are the early buyers or sellers, and they wouldn't be acting so quickly if they didn't believe that price was going to make a substantive move in that direction. Generally, it pays to follow their lead, because this group often represents the "smart money crowd".

However, although this set-up may indeed offer a high probability of success, it is by no means a guaranteed money-making opportunity. Not only will the set-up sometimes fail outright by producing false signals, but it can also generate a losing trade even if the signal is accurate. Remember that while momentum indicates a strong presence of trend, it provides no measure of its ultimate potential. In other words, we may be relatively certain of the direction of the move, but not of its amplitude. As with most trading set-ups, the successful use of the momentum model is much more a matter of art than science.

Looking at Entry Strategies

A trader can employ several different entry strategies with the momentum model. The simplest is to take a market long or market short when the model flashes a buy or a sell signal. This may work, but it often forces the trader to enter at the most inopportune time, as the signal is typically produced at the absolute top or bottom of the price burst. Prices may continue further in the direction of the trade, but it's far more likely that they will retrace and that the trader will have a better entry opportunity if he or she simply waits. Figure 3 demonstrates one such entry strategy.

Sometimes price will retrace against the direction signal to a far greater degree than expected and yet the momentum signal will remain valid. In that case, some skilled traders will add to their positions - a practice that some traders have jokingly termed "SHADDing" (for "short add") or "LADDing" (for "long add"). For the novice trader, this can be a very dangerous maneuver - there is a possibility that you could end up adding to a bad trade and, therefore, compounding your losses, which could be disastrous. Experienced traders, however, know how to successfully "fight the tape" if they perceive that price offers a meaningful divergence from momentum.

Placing Stops and Limits

The final matter to consider is where to place stops or limits in such a set-up. Again, there are no absolute answers, and each trader should experiment on a demo account to determine his or her own risk and reward criteria. (To learn more, see Demo Before You Dive In.) This writer sets his stops at the opposite 1 standard deviation Bollinger Band setting away from his entry, as he feels that if price has retreated against his position by such a large amount, the set-up is quite likely to fail. As for profit targets, some traders like to book gain very quickly, although more patient traders could reap far larger rewards if the trade develops a strong directional move.

Conclusion

Traders often say that the best trade may be the one you don't take. One of the greatest strengths of the momentum model is that it does not engage in low probability set-ups. Traders can fall prey to the impulse to try to catch every single turn or move of the currency pair. The momentum model effectively inhibits such destructive behavior by keeping the trader away from the market when the countervailing momentum is too strong.

As Kenny Rogers once sang in The Gambler, "You've got to know when to hold them, and you got to know when to fold them". In trading, as in poker, this is the true skill of the game. The simple momentum model we've described here is one tool that we hope will help currency traders improve their trade selection process and make smarter choices.

If you want the best price and avoid fees

2010-09-06T22:13:00.000-07:00

How to get the best price and avoid fees

If you want to avoid the traps that will fall out when compared the exchange rates you must read this well

By : Ozforex

Comparing Exchange Rates

In most cases, non-bank providers offer significantly better exchange rates than the banks. There are some traps when comparing exchange rates that are outlined in the next section. The key point is to compare rates at the same time and ensure you are getting a genuine quote.

The Interbank rate is the wholesale rate. No customer will receive this rate but your aim is to get as close to that rate as possible when you book your exchange rate. The exchange rate that is applicable to you is the customer rate. If possible, negotiate a fixed margin or number of 'points' away from the interbank rate. The difference between these two rates, the margin, is how forex providers make their money.

Many providers display Inter-bank rates on their websites without making it clear that these are not their customer rates. You should not use posted website rates for comparison purposes unless the providers are willing to be bound by them.

Fees

Business and private customers can be charged two fees when they transfer funds. The first, a transfer fee, can be charged by the forex provider or bank at the beginning of the transfer. The second is a receiving bank fee which can be deducted when the funds arrive at the destination account. Savings on the exchange rate usually far outweigh the cost of fees so it's important to look at both the fees and the exchange rate combination when transferring funds.

original topic

Develop a strategy for risk management Forex

2010-09-06T22:12:00.000-07:00

Forex risk management

Before starting any business you must developing a strategy and plan so that puts the risks and losses of this work and the same thing in forex you must develop a strategy for risk management of FX

by : Ozforex

Investors need to be especially mindful of risk management when engaged in currency trading. The forex markets operate 24 hours and explosive movements can occur at any time which means investors can find themselves facing significant losses unless their risk is managed properly.

Trade Planning

The old adage "failing to plan is planning to fail" is very true of forex trading. Poorly considered rash trading will end in losses. Before each trade you should have trade plan that includes;

The exchange rate where you exit the position because you want to limit your losses
The exchange rate where you exit the position for a profit if the market moves in the desired direction
The dollar amount of the maximum you can tolerate losing if the trade goes wrong

Stop Loss Orders

Human nature leads most people to think most about the profit they hope to achieve in the trade. However successful risk management means investors should firmly establish where they will exit a losing position and how much that will cost them. Once the exit rate is established the investor should leave a 'stop loss' order with the broker. This means that should the market move against the investor overnight the broker will automatically cut the position thereby limiting the potential for further losses.

Take Profit Orders

Of course if things go to plan and the market moves in the desired direction the investor will make profits as long as the position is closed before the market reverses. Investors should leave 'take profit orders' (also know as 'limit orders') to exit the position for a profit.

Position Size

Leverage may allow you to trade positions 50 times the size of your trading capital but that doesn't mean it is a great idea to do so. Every forex investors will suffer losses at some point and it is important to take potential losses into account when deciding on the size of a currency trade.

To be conservative assume you have three or four losses in a row and then ensure you have enough capital and to cover this scenario.

Once you know your stop loss rate and how much you are willing to lose, you can calculate the size of the position that you are willing to enter.

original topic here

Forex trading

2010-09-06T22:11:00.000-07:00

What is Forex trading ?

Forex trading

In this topic we will explain the meaning of the word of Forex trading and how you can start Forex trading from zero to reach the stage of professionalism is that all you need to pause and read the topic so you understand every word on it

By Justin Kuepper -- Investopedia.com
The forex (FX) market has many similarities to the equity markets; however, there are some key differences. This article will show you those differences and help you get started in forex trading.

Choosing a Broker

There are many forex brokers to choose from, just as in any other market. Here are some things to look for:

* Low Spreads - The spread, calculated in "pips", is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don't charge a commission, so this difference is how they make money. In comparing brokers, you will find that the difference in spreads in forex is as great as the difference in commissions in the stock arena.

Bottom line: Lower spreads save you money!

* Quality Institution - Unlike equity brokers, forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need to provide). Also, if a broker is registered in Australia, registration information can be found on the Australian Securities and Investments Commission website. ASIC is also the key body that regulates financial markets, securities, futures and corporations.

Bottom line: Make sure your broker is backed by a reliable institution!

* Extensive Tools and Research - Forex brokers offer many different trading platforms for their clients - just like brokers in other markets. These trading platforms often feature real-time charts, technical analysis tools, real-time news and data, and even support for trading systems. Before committing to any broker, be sure to request free trials to test different trading platforms. Brokers usually also provide technical and fundamental commentaries, economic calendars and other research.

Bottom line: Find a broker who will give you what you need to succeed!

* Wide Range of Leverage Options - Leverage is necessary in forex because the price deviations (the sources of profit) are merely fractions of a cent. Leverage, expressed as a ratio between total capital available to actual capital, is the amount of money a broker will lend you for trading. For example, a ratio of 100:1 means your broker would lend you $100 for every $1 of actual capital. Many brokerages offer as much as 250:1. Remember, lower leverage means lower risk of a margin call, but also lower bang for your buck (and vice-versa).

Bottom line: If you have limited capital, make sure your broker offers high leverage. If capital is not a problem, any broker with a wide variety of leverage options should do. A variety of options lets you vary the amount of risk you are willing to take. For example, less leverage (and therefore less risk) may be preferable for highly volatile (exotic) currency pairs.

* Account Types - Many brokers offer two or more types of accounts. The smallest account is known as a mini account and requires you to trade with a minimum of, say, $250, offering a high amount of leverage (which you need in order to make money with so little initial capital). The standard account lets you trade at a variety of different leverages, but it requires a minimum initial capital of $2,000. Finally, premium accounts, which often require significant amounts of capital, let you use different amounts of leverage and often offer additional tools and services.

Bottom line: Make sure the broker you choose has the right leverage, tools, and services relative to your amount of capital.

Things To Avoid

* Sniping or Hunting - Sniping and hunting - or prematurely buying or selling near preset points - are shady acts committed by brokers to increase profits. Obviously, no broker admits to committing these acts, but a notion that a broker has practiced sniping or hunting is commonly believed to be true. Unfortunately, the only way to determine which brokers do this and which brokers don't is to talk to fellow traders. There is no blacklist or organisation that reports such activity.

Bottom line: Talk to others in person or visit online discussion forums to find out who is an honest broker.

* Strict Margin Rules - When you are trading with borrowed money, your broker has a say in how much risk you take. As such, your broker can buy or sell at its discretion, which can be a bad thing for you. Let's say you have a margin account, and your position takes a dive before rebounding to all-time highs. Well, even if you have enough cash to cover, some brokers will liquidate your position on a margin call at that low. This action on their part can cost you dearly.

Bottom line: Again, talk to others in person or visit online discussion forums to find out who the honest brokers are.
Signing up for a forex account is much the same as getting an equity account. The only major difference is that, for forex accounts, you are required to sign a margin agreement. This agreement states that you are trading with borrowed money, and, as such, the brokerage has the right to interfere with your trades to protect its interests. Once you sign up, simply fund your account, and you'll be ready to trade!

Define a Basic Forex Strategy

Technical analysis and fundamental analysis are the two basic genres of strategy in the forex market - just like in the equity markets. But technical analysis is by far the most common strategy used by individual forex traders. Here is a brief overview of both forms of analysis and how they apply to forex:
Fundamental Analysis
If you think it's difficult to value one company, try valuing a whole country! Fundamental analysis in the forex market is often very complex, and it's usually used only to predict long-term trends; however, some traders do trade short term strictly on news releases. There are many different fundamental indicators of currency values released at many different times. Here are a few:

* Non-farm Payrolls
* Purchasing Managers Index (PMI)
* Consumer Price Index (CPI)
* Retail Sales
* Durable Goods

Now, these reports are not the only fundamental factors to watch. There are also several meetings from which come quotes and commentary that can affect markets just as much as any report. These meetings are often called to discuss interest rates, inflation, and other issues that affect currency valuations.
Even changes in wording when addressing certain issues - the Reserve Bank of Australia chairman's comments on interest rates, for example - can cause market volatility.
Simply reading the reports and examining the commentary can help forex fundamental analysts gain a better understanding of long-term market trends and allow short-term traders to profit from extraordinary happenings. If you choose to follow a fundamental strategy, be sure to keep an economic calendar handy at all times so you know when these reports are released. Your broker may also provide real-time access to such information.

Technical Analysis

Like their counterparts in the equity markets, technical analysts of the forex analyse price trends. The only key difference between technical analysis in forex and technical analysis in equities is the time frame: forex markets are open 24 hours a day. As a result, some forms of technical analysis that factor in time must be modified to work with the 24-hour forex market. These are some of the most common forms of technical analysis used in forex:

* The Elliott Waves: Based on rhythms found in nature, the theory suggests that the market moves up in a series of five waves and down in a series of three waves. The key difference between the Elliott Wave Principle and other cyclical theories is that this theory suggests no absolute time requirements for a cycle to complete.
* Fibonacci studies: Interpretation of the Fibonacci numbers in technical analysis anticipates changes in trends as prices tend to be near lines created by the Fibonacci studies. The four popular Fibonacci studies are arcs, fans, retracements, and time zones.
* Parabolic SAR: This method was developed by J. Wells Wilder. Basically, if the stock is trading below the parabolic SAR (PSAR) you should sell. If the stock price is above the SAR then you should buy (or stay long).
* Pivot points: The pivot point is used as a predictive indicator. If the following day's market price falls below the pivot point, it may be used as a new resistance level. Conversely, if the market price rises above the pivot point, it may act as the new support level.

Many technical analysts combine technical studies to make more accurate predictions. (The most common is combining the Fibonacci studies with Elliott Waves.) Others create trading systems to repeatedly locate similar buying and selling conditions.

Finding Your Strategy

Most successful traders develop a strategy and perfect it over time. Some people focus on one particular study or calculation, while others use broad spectrum analysis to determine their trades. Most experts suggest trying a combination of both fundamental and technical analysis, with which you can make long-term projections and also determine entry and exit points. But in the end, it is the individual trader who needs to decide what works best for him or her (most often through trial and error).
Things to Remember

* Open a demo account and paper trade until you can make a consistent profit - Many people jump into the forex market and quickly lose a lot of money (because of leverage). It is important to take your time and learn to trade properly before committing capital. The best way to learn is by doing!
* Trade without emotion - Don't keep "mental" stop-loss points if you don't have the ability to execute them on time. Always set your stop-loss and take-profit points to execute automatically, and don't change them unless absolutely necessary. Make your decisions and stick to them!
* The trend is your friend – If you go against the trend, you had better have a good reason. Because the forex market tends to trend more than move sideways, you have a higher chance of success in trading with the trend.

Gold Prices news

2010-09-06T22:10:00.002-07:00

this news from The Street 2010-08-26

Gold for December delivery was down $2.80 to $1,238.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,246 & as low as $1,237.20. The dollar index was slipping 0.23% to $83.02 while the euro was slightly higher at $1.26 vs. the dollar. The spot gold price Thursday was falling more than $2, according to Kitco's gold

Make Money with Gold

2010-09-06T22:10:00.001-07:00

For millennia people have valued gold. There is something unique about it that no other metal has. Even today, it is still used as an asset that is the foundation of our modern system of fiat currencies. We are certainly in an era of big government spending and deficits. All of the major central banks have engaged in some degree of quantitative easing, flooding the world economy with newly created money. This has lead many to
wonder if we have a future of..

Settle Gold price

2010-09-06T22:08:00.000-07:00

Gold for December delivery closed up $ 4 to $ 1235.40 an ounce on the Comex division of the New York Mercantile Exchange. The price of gold traded as high as $ 1239.50, and as low as $ 1229.50 in the session on Thursday. The U.S. dollar index rose 0.21% to $ 82.40 while the euro slipped slightly to $ 1.28 against the dollar. The spot gold price was also adding more than $ 2, according to the Kitco gold index. Gold prices rose

Fed Uncertainty Principle

2009-06-28T20:07:00.000-07:00

Most think the Fed follows market expectations. Count me in that group as well. However, this creates what would appear at first glance to be a major paradox: If

TOKYO, June 17 (Reuters) - The euro rose on Wednesday as investors bought it back after steep falls against the dollar and yen this week, but the market struggled for clear direction as it tried to decide if a dollar recovery had run its course.

The dollar has fallen against major currencies such as the euro and Australian dollar this year, with investors unwinding safe-haven dollar positions as the worst of the economic crisis faded and as questions arose over its suitability as the world's reserve currency

Both it and the yen have clawed back some lost ground this month as investors have paused to assess whether rallies in riskier assets including shares have got ahead of themselves.

But with a question over its reserve currency status resurfacing on Tuesday, analysts said the market was not sure which direction to head.

Trailer: The B-Movie Trash Of Australia's 'Not Quite Hollywood'

2009-06-28T20:06:00.001-07:00

With the success, errr... release of Quentin Tarantino/Robert Rodriguez's "Grindhouse," you knew a bunch of new B-movie/grindhouse documentaries, celebrating terrible inept, low-budget films would come down the pike and Australia's verions, "Not Quite Hollywood," hit last year, making its debut at the Toronto Interntional Film Festival. Here's the synopsis:

Not Quite Hollywood is the wild, untold story of "Ozploitation" movies - a time when Australian cinema got its gear off and showed the world a full-frontal explosion of sex, violence, horror and foot-to-the-floor, full bore action! Jam packed full of outrageous anecdotes, lessons in maverick filmmaking and a genuine, infectious love of Australian movies, "Not Quite Hollywood" is a fast moving journey through Aussie genre cinema of the '70s and early '80s - an unjustly forgotten cinematic era unashamedly packed full of boobs, pubes, tubes... and even a little kung fu

We saw it on a lark at TIFF on the last day of the festival, when frankly, the lesser films always are scheduled, and appropriately, it was a lesser film. The doc features Stacey Keach, Aussie director Fred Schepisi, Jaimie Lee Curtis, Dennis Hopper and of course, Quentin Tarantino. Geeks and B-movie enthusiasts will probably love this documentary, but dubbed a "rockumentary," by its director Mark Hartley, it's as vulgar, crass and dunderheaded as the original films it documents. Dunno, we just don't get the celebration of terrible films. Sure, we understand the value and sociological implications of DIY, making things on the cheap and making your own infrastructure, and the picture is semi-interesting on those levels, but it's just more interested in rockin' with its cock out; as one of our friends remarked after we saw it, "that's something you watch at home on IFC for free," not something you go pay for in theaters. Perhaps appropriately loud and boorish (just like the content), it also comes off as an an AC/DC song cranked up 11 the entire time and is rather obnoxious. But constituents of this type of thing will surely love it. Not sure if there's an official U.S. release date yet. Doesn't look like it and it won't surprise us if it goes straight to DVD as it just skews far too niche.

British Airways Asks Staff To Work For Free

2009-06-28T20:06:00.000-07:00

British Airways is asking thousands of its staff to work for free for up to four weeks, spokeswoman Kirsten Millard said Tuesday.

In an e-mail to all its staff, the airline offered workers between one and four weeks of unpaid leave -- but with the option to work during this period. British Airways employs just more than 40,000 people in the United Kingdom.

Last month, the company posted a record annual loss of £400 million ($656 million).

Its chief executive declared at the time there were "absolutely no signs of recovery" in the industry.

"I'm 30 years in this business and I've never seen anything like this. This is by far the biggest crisis the industry has ever faced," said Willie Walsh, British Airways' chief executive.

A spokesman for one of Britain's biggest unions said its workers could not afford to work for free for a month.

'Terminator Salvation,' Next Tentpole To Be Bogged Down In Distracting Lawsuit

2009-06-28T20:04:00.000-07:00

Does every geeky tentpole have to be saddled with a distracting lawsuit these days? First it got ugly with "Watchmen" between 20th Century Fox and Warner Bros. and now the producers of "Terminator Salvation," are turning on one another. There is definite dissent in the ranks.

According to Variety, Moritz Borman has sued fellow producers Derek Anderson and Victor Kubicek and their Halcyon Co. banner, alleging fraud and breach of contract for not paying him producing fees."

Anne Thompson, who has interviewed some of the parties lays down the backstory, and basically its veteran producer against, newbies who sound like they're in over their heads."

"Call it rookie producer syndrome. New kids on the block raise money and enter the entertainment business. They buy up a hot property. They think they will make a killing. They bring in experienced people to help them. And something goes terribly wrong. Veteran producer Moritz Borman doesn't just go and sue someone, long before a movie gets close to its opening date. I interviewed Anderson and Kubicek when production was just starting on 'Terminator Salvation'. They were clearly excited newbies--who didn't understand why rating a Terminator movie PG-13 might be big news."

How will it affect the McG-directed picture itself? Well, since its an internecine battle it won't for the most part aside from slightly negative press, but Warner Bros. must be thinking, "jesus what the fuck" and "whew" since it shouldn't hurt their bottom line like "Watchmen" did. "Terminator Salvation" is due in on May 21 and could be the first big tentpole film of the summer if all goes well.

FOREX-Euro rises but market struggles with direction

2009-06-28T20:03:00.000-07:00

Euro rises vs dollar and yen, lifted by short-covering

* Trade choppy, dealers say volumes thin, exaggerating moves

* Market trying to assess how far dollar correction can go

By Charlotte Cooper

Both it and the yen have clawed back some lost ground this month as investors have paused to assess whether rallies in riskier assets including shares have got ahead of themselves.

But with a question over its reserve currency status resurfacing on Tuesday, analysts said the market was not sure which direction to head.

"The market seems to be bewildered, facing lots of different factors," said Kazuyuki Kato, treasury department manager at Mizuho Trust and Banking.

"And investors are shying away from taking risks after stocks entered a correction phase as optimism for the economy had gone too far," he said.

The euro edged up 0.2 percent from late U.S. levels to $1.3860 after earlier veering towards a one-month low of $1.3747 set on Tuesday. It has gained 11 percent on the dollar since March but is below its 2009 high of $1.4339 set this month.

The greenback fell on Tuesday after Russia suggested ahead of a meeting with leaders of Brazil, India and China there was a need for a reserve currency other than the dollar.

In the event, the four leaders avoided the reserve status issue in their statement after the summit, causing the dollar selling to peter out. [ID:nLG674351]

"At the end there was no strong comment to play down the role of the dollar," said Masafumi Yamamoto, head of FX strategy Japan at Royal Bank of Scotland in Tokyo.

Asian stock markets were largely negative on Wednesday, with investors doubting how fast the U.S. recession is easing after a mixed set of economic indicators.