Best Times To Trade Currencies

Forex is a 24 hour market and there will be good setups for profitable trades in the Asian, European and US sessions. It pays to look at historical price data on forex charts to see what time of the day you could be watching the market and what time you could be doing something else. The aim is to trade when the average trading range is worthwhile and stay out of the market when price is in a narrow sideways range.

How Understanding FOREX Strategy and Analysis can Make You Richer

All successful traders have a carefully thought out FOREX strategy that they follow to make profitable trades. This FOREX strategy is generally based on a system that allows them to find good trades. And the FOREX strategy is based on some form of market analysis. Successful traders need some way to interpret and even predict some of the movements of the market.

There are two basic approaches to analysing market movements, in both equity markets and the FOREX market. These are technical analysis and fundamental analysis. However, technical analysis is much more likely to be used by traders. Still, it’s good to have an understanding of both types of analysis, so that you can decide which type would work best for your FOREX strategy

Want To Trade A Market That’s Open 24/7, Has High Leverage And Low Transaction Costs?

Dear Trader,

It never used to be possible… Historically, small time speculators and investors weren't able to trade the Forex market.

The minimum transaction sizes and strict financial requirements were so steep, that Forex trading was left to banks and major currency dealers. As such, they were the only ones who took advantage of the incredible liquidity and strong trending nature of this market.

Fortunately, new technology has allowed foreign exchange market brokers to break down the barriers and let smaller traders have a piece of the action.

This is good news when you consider that Forex market (by its very nature) is always in a ‘bull market’

You see, currencies always trade against one another. If one currency isn't doing as well, that means the opposite currency is doing that much better. For the smart trader, this means there is always a ‘bull market’ opportunity.

While it's not the same as trading in stocks or futures, with some guidance, you too can jump into this never-ending bull market.

So, if you're ready to take on currency exchange trading, you're going to need a crash course in how things work in this neck of the woods. And that’s where this website will help…

I’ve managed to secure the rights to republish a guide called “Successful Forex Trading”. It’s by no means a definitive guide - instead it covers all the basics to ensure you start off in the right direction.

US Dollar Relinquishes its Tepid Gains as the Dow Rallies

Through much of Thursday’s Asian and European session, the dollar was working on a modest but steady advance against most of its major counterparts. However, seeing as how this appreciation wasn’t supplied by any fundamental strength on the dollar’s own account; a timely reversal in equities would yield the same for the world’s most liquid but maligned currency. Investor optimism started to recover in the middle of the European session and the advance was amplified when the US market brought another round of earnings releases with it. While the third quarter earnings season doesn’t carry the authority of characterizing the definitive turning point for the markets (the previous quarter bore that responsibility) nor are market participants as hungry for any and all positive signs; the accounting to this point has offered evidence that a steady recovery is in place. Among the more notable companies to have issued income, returns or profit better than the market expected were American Express, McDonalds and AT&T. And yet, despite the consistent rally for the session, the benchmark Dow Industrial Average has not cleared the range that has developed over the past week. This is the same predicament that the dollar is, just in reverse. Investor sentiment has not veered from its bullish path; but another period of exhaustion suggests the steady buildup in speculative interests is growing extended.

Euro, British Pound Fail to Hold Ground as U.S. Dollar Rallies on Risk Aversion

The Euro pulled back from the yearly high and slipped back below 1.5000 following the rise in risk aversion, and the single-currency may test the 10-Day SMA (1.4903) for short-term support going into the North American trading session as equity futures foreshadow a lower open for the U.S. market.

Euro and Dow Challenge Psychological Barriers, Will The Rally End?

The EUR/USD has been held in check by the psychological resistance level of 1.500, which the pair recently broke above for the first time in over a year. We have seen a similar scenario with the Dow and 10,000 which could be expected as the blue chip index is currently explaining 61% of price action for the pair.

DPJ May Lead to a Weaker Yen

Non-Japanese speakers do not have to worry about change in Japan so much. Basic policies of DPJ are basically same as ones of LDP, former ruling party. However, yen will be weaker while we gradually notice DPJ's identity and policy.

I suppose non-Japanese speakers are embarrassed by change of power in Japan. As a good example, Washington Post and New York Times expressed concern about political view of Mr. Hatoyama, representative of DPJ and next Japanese PM. Their concerns do not come as a surprise. DPJ is not well known among them although Mr. Hatoyama's view is not so strange for Japanese.

But non-Japanese speakers do not have to worry about change in Japan so much. Basic policies of DPJ are basically same as ones of LDP, former ruling party. Do not forget DPJ is mainly composed of persons from LDP, former Socialist Party and central bureaucracy. (Mr. Hatoyama himself had belonged to LDP).

Some non-Japanese might point out new policies by DPJ, such as no plan to raise consumption tax rate, cash stipend to family with child (KODOMO TEATE) and so on. No problem. Based on Macro economics, DPJ's new policies do not change money flow in Japanese economy. The combination of no raising tax and expanding government expenditure had been adopted by LDP and will be kept by even DPJ.

Over 15 years, government expenditure has increased to cover stagnant household consumption in the Japanese economy. DPJ admits the necessity to increase in government expenditure, especially under the current economic recession. Cash stipend to family with child (KODOMO TEATE) is a good example for that. But DPJ strongly says no need to raise consumption tax rate. DPJ claims extra government expenditure is covered by cutting naff cost such as unbelievable high salary for retired bureaucrats.

Unfortunately, it is too logical to realize DPJ's claim. Japanese bureaucrats must not go in with DPJ, because bureaucrats try to show their power to spend money more and to keep their privileges.

As no raising tax and expanding government expenditure are written in DPJ's manifesto, DPJ would make attempts to realise it, heartily. As the results, new government would keep higher amount of JGB at least. In some instances, they might increase issuing JGB, which is basically same as LDP.

In a textbook of Economics, increase in government bond leads to higher interest rates. But no worry in Japan! Japanese household savings goes to JGB through deposit in bank, instead of expanding their consumption. It means JGB yield would be kept low or depressed lower.

FX traders of even non-Japanese speakers likely notice the next step. What would happen in lower JGB yield? Yes. Yen will be weaker while we gradually notice DPJ's identity and policy.

Risk Appetite Pulls Back Once Again but When Will the Bull Trend behind Currencies and Equities Finally Break?

Risk appetite has turned into another tentative reversal. These brief periods of tempered sentiment set within a more consistent and heady rise in optimism has been the normal pace the since the middle of July. So, the question we have to ask ourselves is whether the pull back over the past week is just another instance where the market is catching its breath before forging ahead or the makings of a meaningful and certain turn in risk appetite.

EUR/GBP Failure at Resistance Provides Scalping Opportunity

On a day that we saw significant volatility with the RBA unexpectedly raising rates and its implications for the Asian Region it was difficult to settle on a pair to execute scalping strategies. However, the EUR/GBP’s failure at a major resistance levels has given way to ideal scalping price action as traders debate whether to take the pair higher.

EURCHF's Range Looks for Fundamental Stability Amid Turbulent Volatility

The demand for yield has once again soared and the currency market has responded in kind. Rallies from high-yielding currencies and plunges from those sporting a low benchmark have sent most of the market to short-term breakouts and back into short-term trends. However, this shift is far from confirmation of a new direction for FX and the other asset classes. We have seen many swings in the recent past that have promised action but ultimately faltered with time. This makes for frustrating trading as setups for both ranges and trends ultimately fall to the directionless volatility and immediate reversals. These are not the conditions to develop normal range-based strategies. To improve our chances, or very solid technical developments. There are few opportunities that meet any of these three scenarios; but EURCHF at least fulfills the fundamental requirement. While all currencies fit somewhere on the market’s tacit risk spectrum, some pairs are buffered to the rising and falling of sentiment by deep economic ties. The close dependence of the Swiss economy on the broader Euro Zone (as well as the more or less coordinated policy efforts) establishes a semi-permanent state of congestion for the pair. There are certainly biases that develop within this chop and sharp responses to unforeseen SNB intervention; but there are is a general pattern to follow. Our setup looks to take advantage of the range low that has developed over the past two weeks with an aggressive entry and a tight stop that this pair can easily support. The long bias is purposefully aligned to potential intervention; but even if the central bank doesn’t act, the first target is still within reach. We will cancel open orders in a week.

US Dollar Rises Despite Stock Gains, Australian Data Points to Housing Bubble (Euro Open)

The US Dollar advanced despite of a sharp rally across Asian stock exchanges which would normally have been expected to weigh on the safety-linked currency. Australian lending and construction data pointed to a housing market collapse in the making in August. Swiss unemployment and the final revision of Euro Zone GDP are on tap ahead.

What makes a good Trading Strategy?

sk most NEW traders, and they will tell you about some moving average or combination of indicators or a chart pattern that they use. This is, as the more experienced trader knows, an entry point and not a strategy.

Any trader who is more experienced will say a strategy should also include money management, risk control, perhaps stop losses and of course, an exit point. They might also say that you must let your profits run and cut your losses short. A well-read trader will also tell you that your strategy should fit with your trading personality.

BUT there is one other vital ingredient that many traders forget - and that is to fully understand the "personality" of what you trade. Some traders specialise in say, gold or Brent crude or currencies or they might specialise in a particular index such as the FTSE 100 or the Dow but many traders choose to trade shares. Indeed some traders dabble in a bit of everything. I think this is the area that causes many traders to fail or at least not reach their full potential.

In my view: You absolutely MUST specialise.

I am sure that on the surface most people would say that sounds sensible but here is why it is a MUST!

Superficially, many charts look the same. I bet if you had not seen the charts for some time and someone where to show you a chart of Brent Crude over 6 months and then a chart of Barclays PLC over the same 6 months you would be hard pushed to say which was which purely on the look of the chart.

However, I bet that if you found a trader who trades ONLY Barclays day in and day out and also found someone who trades ONLY Brent Crude day in and day out, both of them would easily identify which was which. WHY?

Because every share, index or commodity has it’s own "personality".

Some will be volatile intra-day, some will follow their sector or the main index (market followers), some will do their own thing, some will spike up and down regularly, some will stop at key moving averages and some will just plough through. Some will move by 5% on average before they retrace and some by 2%. Some will gap up or down regularly, some will not. You get the idea!

Therefore, no matter how good you are at analysing indicators, moving averages, trends and patterns, the same strategy WILL NOT work for everything. I would go so far as to say that a strategy that works well for Bovis Homes, for example, is likely NOT to work for BT Group - they have very different "personalities".

So let’s return to our question: What makes a good trading strategy? Let me answer with a series of ten questions that you need to find answers to, in order to build a REALLY GOOD strategy.

1. What do you want to trade (share, index, commodity, currency, etc)? If your answer is shares (plural) I would urge you to pick one typical share at this stage to really specialise. You can add more later.
2. What "personality" does that share, index etc have?
3. What entry system is the most reliable for that share?
4. What stop loss system is the most effective for that share?
5. What average risk will a typical trade carry?
6. What exit system works well for that share?
7. What is your trading personality (attitude to risk, losses, discipline, how much do you worry etc) and can you trade that strategy without overriding it?
8. What timescale do you want to trade? (Using intra-day or end of day data)
9. How much data do you keep on past trades to help identify strategy weaknesses?
10. How does all this fit with your trading objectives?

Once you have an answer to each question you need to do one final thing. Make sure all those things fit together and complement each other. For example, if the ideal stop loss position represents a big average risk and conflicts with your own attitude to risk, you need to start again. If you will override your exit point because greed makes you hang in for more, you need to think again. Perhaps you shouldn’t trade that stock in the first place - look for one with a different "personality" which will lead to a strategy you can trade comfortably.

It is a long and sometimes painful iterative journey. You might need to go round and round in ever decreasing circles over a long time. Testing and refining, testing and refining before you can truly have a reliable and repeatable strategy that REALLY WORKS for you.

THEN, you can look for other things to trade that have the same "personality" as your specialist stock, index, commodity or currency.

Pivot Points

Those of you who have been trading for a while will be familiar with Pivot Points. During this lesson I want to go over how to find a Pivot Point and also a slightly different method of using them. First let’s look at how you calculate a Pivot Point.

Using a bar chart you will observe that each bar has an Open, High, Low and Close. This information represents all price activity during that particular period.

In the case of the following example, we shall use a daily bar. To calculate the pivot point all you need to do is add the High, Low and Close. Once this has been done you next divide the total by three, e.g. the cash FTSE on the 2nd May 02 had a High of 5192.70, a low of 5125.50, and a close of 5174.10. If you add the three together, you get 15492.3. You then divide that total by three to get a Pivot Point of 5164.10.

OK, so far so good, but what do you do with this information? Well, one technique I like to use intra day is to use the pivot point as a trend indicator. We already know that the Pivot Point for the 2nd May was 5164.10 and we will use this the next day as an intra day trend indicator.

If the price is above 5164.10, then I would only be long and if it were below 5164.10, I would only be short.

As price can fluctuate around any given point I also add a further proviso. If I have support close to 5164.10, I will first wait for the price to pass through 5164.10 and support before entering short. If I have resistance close to 5164.10, I will first wait for the price to move through the Pivot Point and resistance before entering long.

This method becomes even more powerful when the Pivot Point is close to the opening price. If, for example, the opening price is 5174.10, the Pivot Point is 5164.10, and I eventually go short at 5155, I can stay short the whole day as long as it does not go above the Pivot Point.

Once in a position I normally have a very tight stop to begin with and then will follow the market with a trailing stop to lock in profits.

Another way I like to add Pivot Points to my analysis is for more long-term projections. I will use the Pivot Point of a Yearly, Monthly and Weekly chart. In this case it would be the High, Low and Close of the previous Year, Month and Week.

How to Win the Forex Battle

Every trading activity is in fact participating in a battle. Winning the battle is a matter of knowledge, skill and experience. If you miss any of those you are going to join the long line of losers. Some says that 95 to 99 percent of the traders are lining up on the loser’s side.

How to win the battle in the currency market? It is easy to answer that question, based on the above approach – prepare yourself for the battle. If you treat currency market activity as a hobby you’ll ultimately lose all investments there. If you treat it as a business you still may loose everything.

The correct approach is: consider each pressing of the Buy/Sell button as entering a battlefield. If you enter it without having a knowledge, skill and experience on how to win, you are destined to fail. You may have some lucky trades in the beginning, though. That, by the way, is the worst case scenario for the rookie in trading.

The earlier you get your “bad” lessons, the better for your overall experience. No mater how good you consider yourself prepared, after demo trading lessons, you have no idea of the forces ruling on the real market.

In fact the worst enemy you are going to face in the very beginning is not hiding behind the walls of the global currency trading centers. Your most dangerous foe is hiding deep inside of you. That enemy is so powerful that you will be amazed how quickly it will wash away all your carefully considered decision.

No one has been able to evade the force of that destructive power. No one can understand or realize that force unless it has been confronted face to face. Start trading with real money and you will face it too. Fear, Greed or Hope are some of the names of that power.

Fear forces you to sell near the bottom and buy near the top. Greed forces you to get out of the market prematurely. Hope will keep in the trade until you loose everything. Fear may save you but hope may wreck you completely. Greed will never make you rich.

It is easy to give advice to trade without emotions and use the logic, only. How you can achieve that if you never have been there. You need to go through that turmoil, pick up your loses due to your emotional decisions and than analyze.

Study all your “bad” trades, because they are the most precious gifts on the way to proficiency in trading. Growing as an experienced trader is possible only after getting your losses in the beginning. Then sit down and carefully study the lessons they brought to you.

One thing traders never want to do is to admit of being wrong. The market is a constantly changing and it demands flexibility in taking decision. That implies monitoring and constantly adjusting, changing your decision and action. When your logical analyzes suggest that you are wrong – get out, quickly.

Once you overcome the emotions, concentrate on developing your signature way of trading. You can start with following different advisors and system and picking from them the things you like. Demo trade and test your ideas until you find the trade system which is matching completely your personality.

Now, you have to go back to emotion in a controlled way. Every time your system suggests a trade look inside you and see how you feel about this trade. You feel bad – discard it. If you feel good – keep it.

Here comes the final step: Looking for the final approval sign before submitting the trade. Here is the time, where the mastership shows up. Your weapon is loaded, the target is clearly seen on the visor and the finger is on the trigger. You have to make that final exhale, get the target over the cross point and shoot it.

How much knowledge, skill, experience and patience you need to build within in order to reach that very final stage of trading proficiency? Only you’ll know that and only you can do it. The rest is just numbers in your bank account.

Building a fortune by trading currency is not a mirage in the desert of live. There are hundreds of traders who are making living of that business and you can do it too. Study all you can find on the net and follow the steps of the best if you want to win that battle.

Canadian Dollar Technical Outlook

The USDCAD rally from 1.0631 is in 3 waves. The form suggests that the trend remains down. A break to a new low would expose a Fibonacci extension at 1.0317, the 78.6% retracement at .9914 and the 100% extension of the 1.3068-1.0782 decline at .9444. This level intersects a potential channel line at the end of September. 1.0950 is resistance.

US Dollar Forecast for Recovery Will be Put to the Test

The US Dollar finished the week higher against the Euro and other key counterparts, but a sharply disappointing Nonfarm Payrolls report nearly derailed the nascent Greenback recovery through Friday’s close. The trade-weighted US Dollar Index hit fresh monthly highs near 77.50 just ahead of the release. Immediate declines in the US S&P 500 initially sent the dollar higher, but markets clearly expressed their displeasure with the worse-than-expected payrolls release and sold USD through in subsequent trading. Sudden USD losses complicate our otherwise bullish near-term Dollar forecast, but we continue to forecast further Greenback recovery through near-term trade. Comparatively limited event risk in the days ahead has left volatility expectations lower, but flare-ups in financial market tensions could nonetheless force major moves across USD currency pairs.

Euro: Will Risk Appetite Hold EURUSD Up or Will the ECB Ease a Break?

There are more than a few concerns for fundamental euro traders in the days ahead. Where just a few months ago, the single currency was considered among the best speculatively positioned economies given its optimistic outlook for growth and hawkish bearings; we now see the euro struggling to find its place in a broad spectrum of relative risk and safety. In the normal scale of yield and risk, the euro stands just in the middle of the spectrum which leaves it to be jostled by speculative winds that find greater response from high yield (Aussie dollar) and struggling funding currencies (the US dollar). However, speculation is ever active; and some long-term considerations are starting to come to term. Among the most pressing concerns is the pace Euro Zone’s recover (especially in comparisons to that of the US) and the lingering potential for financial instability.

Risk Appetite Pulls Back Once Again but When Will the Bull Trend behind Currencies and Equities Finally Break?

Risk appetite has turned into another tentative reversal. These brief periods of tempered sentiment set within a more consistent and heady rise in optimism has been the normal pace the since the middle of July. So, the question we have to ask ourselves is whether the pull back over the past week is just another instance where the market is catching its breath before forging ahead or the makings of a meaningful and certain turn in risk appetite. The fundamentals that have developed over the months have increasingly supported an approach of caution as the outlook for growth has been deemed feeble and the prognosis for competitive yields in turn rendered bleak. Nonetheless, speculation doesn’t have to follow the lines of rationality and the natural stream of capital from the financial sidelines can continually feed the draw of capital gains. The appeal of buying into trends that are still young and selling later down the line clearly has its appeal for those that are looking to get back into the market and/or lost a significant percentage of their wealth during the 2007-2009 financial crisis. This is perhaps the most accurate rational for the steady trends the currency, equity and other capital markets that have sported since the definable turn in risk appetite back in February/March. However, this trend will not last forever; and the current pull back is putting the bull phase’s stability to the test once again. In the past week, we have seen both the dollar and yen make sharp but measured gains against high yielders. For confirmation, the Dow is the midst of its of its deepest correction since early July.

British Pound: UK Data, BOE Decision Present Breakdown Potential

The British pound was one of the strongest major currencies last week, losing only against the Canadian dollar and ending essentially unchanged versus the US dollar. That said, the moves may have been more of a relief rally than anything else, as the British pound has depreciated 2 percent against the greenback, 4.3 percent against the euro, and almost 5 percent against the Japanese yen over the past month.

Australian Dollar Rally May Finally Be Losing Steam

The Australian dollar was the weakest of the major currencies last week, and a bearish engulfing candle on the daily AUDUSD charts on October 1 suggests further declines could be in store. Since the Australian dollar still tends to move with other risky assets, traders should look for any fallout from the release of the G7 statement over the weekend. Though the statements don’t usually signal any sort of groundbreaking new biases, there are lingering concerns that there may be a more pronounced focus on currencies, and more specifically, US dollar weakness. Such a move would likely lead the US dollar higher, and thus, AUDUSD lower, on speculation of a coordinated intervention effort. Later in the week, the Australian dollar is going to encounter two of its most market-moving reports: a rate decision from the Reserve Bank of Australia and the net employment change.

New Zealand Dollar At Risk of Turn Lower on Extreme Sentiment

The New Zealand Dollar finished the week almost squarely unchanged against its US namesake, as a noteworthy pullback in global risk sentiment offset several bullish data releases from the antipodean economy. The National Bank of New Zealand reported that domestic Business Confidence surged to its highest levels in 10 years—painting a decidedly rosy picture for the future of business growth. Indeed, 49.1 percent of businesses expected the economy to improve over the next 12 months. Currently poor business conditions provide such a low base for growth that improvement should be relatively easy to come by. Yet we cannot deny that overall survey data points to a return to economic growth—however moderate—through the foreseeable future. Limited economic event risk in the week ahead gives little in the way of foreseeable volatility. New Zealand dollar traders should instead keep a close eye on broader financial market risk appetite as seen through the US S&P 500 and clear analogs.