How to Break Loss in Forex Trading

The primary goal for any trader is to maximize winning trades and also to have as many winning trades as possible. However, where most traders go wrong is thinking that EVERY trade will be a winner and then becoming emotional when they hit an inevitable loser. Since most traders do not know how to lose properly, they typically experience a string of consecutive losing trades that significantly drains their trading account. It is these large series of losing trades or the ‘cycle’ of losing trades that we need to learn how to break, and in today’s trading lesson I am going to give you some concrete tips to help you avoid experiencing a large series of emotionally-induced losing trades…

Every trader has losing trades; in fact we can even say ‘losing is part of winning’ as a Forex trader. Whilst losing trades are indeed a part of trading that we cannot avoid, it is important to learn HOW to lose effectively. This is not a topic that is discussed very often since it is not exactly ‘hot’ or ‘catchy’, but I can assure you that until you know the correct way to lose a trade you will never become a long-term winning trader.

What does losing ‘properly’ mean?

In the opening paragraph I eluded to ‘losing properly’. You may have thought this sounded a little bit weird if you aren’t a very experienced trader or if you are still in denial of the reality of what it takes to become a successful trader. So, I want to explain what I mean by ‘losing properly’…

Basically, losing properly means accepting a losing trade and NOT BECOMING EMOTIONAL. How many times have you had a trade turn into a loser that you thought was the ‘perfect’ setup that just could not fail? It is these situations that give most traders trouble and cause them to become emotional after a loss. You have probably experienced a large string of losing trades after a trade setup that you thought was ‘perfect’ failed to work out how you thought.

A truth of trading is that no one ever knows and can never know what is going to happen in the markets with 100% accuracy, at least us small-time retail traders that is. So, if you believe this fact and accept it, you should always be consciously aware of the fact that every time you enter a trade you COULD lose the money you put on the line. Even if you are a master price action trader and your yearly success rate for your price action setups is say 80%, that still means you are going to lose 20% of the time, and the key here is that you never know WHICH trade will lose and which will win, so you HAVE TO practice proper Forex money management on EVERY TRADE you take.

The point here is that if you fully accept that you could lose on any given trade and you manage your risk properly as a result, you should largely eliminate any potential for becoming emotional after a losing trade and this is the key to both breaking a cycle of emotionally-induced losing trades as well as helping you avoid large strings of emotionally-induced losing trades.

How do you lose ‘properly’?

(Note: there are emotion-induced losing streaks and ‘natural’ losing streaks, some losing streaks are just a natural part of trading that we have to deal with by controlling our risk on every trade, but the losing streaks fueled by emotion are preventable and these are what I am talking about in this article)

Now that I’ve explained what losing properly means, and that you have to eliminate emotion after a losing trade in order to break an emotionally-induced cycle of losing trades (or avoid one), I want to give you some pointers on exactly how to eliminate emotion after a losing trade:

• STOP TRADING

It can be difficult to ‘wake up’ when you are in the middle of an emotion-fueled account-blow out, but if you can manage to take off the blinders for a minute and realize that you are out of control, the best thing to do is to simply stop trading, at least with real money. There’s nothing wrong with going back to demo trading to regroup or simply taking some time off from the markets all together. Indeed, if you are in the middle of an emotion-fueled losing cycle, it is unlikely that you can ‘trade your way out of it’, so instead accept the reality, take your losses, and regroup.

• START LEARNING

If you are experiencing cycles of emotion-induced losing trades and large strings of losers, you probably have some learning to do. Go and read some of my other Forex trading articles that cover topics like trader psychology and money management, these are likely to be of great benefit to you while you take some time off from the markets to regroup.

• RISK MANAGEMENT

Perhaps the most important aspect to losing properly and avoiding large strings of losing trades is simply to manage your risk effectively as you trade. Many traders email me looking for concrete rules to risk management, but in reality there are none because every trader’s financial situation is different. The dollar amount that you risk per trade is very important to your overall emotional state as you trade the markets. If you risk an amount that causes you to think about your trade all the time and lose sleep over it, you are obviously risking too much. My general rule of thumb is to always risk an amount that allows me to totally forget about the trade. If you are 100% OK with losing the money you have risked on a trade you will not lose any sleep over your trades and you will not become emotional after a losing trade. This is the KEY component to breaking cycles of losing trades and avoiding them in the first place.

• PATIENCE / DISCIPLINE

If you can manage to not jump back into the markets after a losing trade only because you want ‘revenge’ and to try and make back your lost money, you will largely avoid cycles of losing trades. When you trade with discipline you are able to employ the patience that you need to only take obvious price action setups and this allows you to avoid many less-obvious / low-probability trade setups. Ending your cycle of losing trades is all about recognizing the things that make you emotional in the market and then eliminating them. However, the trick to this is that you need to possess the self-discipline to actually not do the things you know you are currently doing wrong. Discipline in any area of life takes conscious effort, whether it’s going to the gym 4 days a week or trading the markets, if you want to reap the long-term benefits you have to put yourself out of your comfort zone for a while. Changing your habits in any area of life is often not comfortable at first; it is only after we go through some mild discomfort via employing discipline that we see our efforts pay off.

• DEMO TRADE

Demo trading is a tool you can use to stop a cycle of emotion-induced losing trades. When you feel like you are out of control in the markets and you know you are ‘running and gunning’ instead of trading like a sniper, try going back to a demo account to eliminate the emotions and regroup. This is probably the easiest way you can stop a cycle of losing trades because you still get to participate in the markets but you don’t have to risk losing any more money.

• BECOME A FOCUSED SNIPER WHEN YOU RETURN TO THE MARKETS

While you are taking some time off from real-money trading to help break your cycle of losing trades, it’s a good idea to train yourself up on an effective trading strategy like price action trading. Trading is largely a game of trial and error; most traders need to learn the lessons of over-trading, over-leveraging, and not having a mastered trading strategy the hard way, that is by losing a lot of time and money. So, make sure you learn something before you try your hand at real-money trading again. Take the time to truly master whatever trading strategy you are interested in, until you are consistently profitable on a demo account. Then, when you have everything in-line, including 100% confidence in your ability to trade your strategy, a well though-out Forex trading plan and a trading journal to track your progress, come back to the markets and try your hand at real-money trading again.

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7 Basic Tips on choosing Best FOREX Broker

There are some basic notices that you should consider when you want choosing online forex broker.

#1- Spread Amount

The spread, which is calculated in pips, is the difference between how much you can buy or sell a currency at a specific point in time.

Forex currencies are not traded through a central exchange market, so the spread can be different depending on the forex broker you use. Some online forex brokers have variable spread; some of them have two spread amounts that depend to day and night.

Some of them their spread depends to the position of market. When market is quiet the spread is small and when market is busy the spread is high. I prefer forex brokers that have fixed spread, because over the long term fixed can be safer.

#2- Execution

— How fast is the broker's order execution?

— Do they offer automatic execution?

— How much can you trade before having to request a quote?

— Do they trade against their clients?

The best way to find out is to open a demo account and give them a test drive.

#3- Leverage Options

Leverage is expressed as a ratio between the total capital that is available to be traded and your actual capital. For example, when you have a ratio of 100:1, your forex broker will lend you $100 for every $1 of actual capital you have. Leverage is a necessity in forex trading because the price deviations in the currencies are set at fractions of a cent.

Before choosing an online forex broker notice that what is their leverage. Many brokerages offer a flexible margin that allows you to choose the leverage that's right for you.

#4- Account Types

Notice the forex broker you choose has mini account or not. Mini account is designed for those new to online currency trading and those with limited investment capital. There is a smaller deposit required to start trade of just $300 or less.

#5- Trading Platform

Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature — they mean you can set up your trade and then leave the software to get on with it.

#6- Dealing tools and value-added services

Find out online forex broker that offers the best resources and information to help you make the smartest trading decisions. A good company should offer real-time charts, technical analysis tools, real-time news and data, and software or website support. Be weary of any company that refuses to share information or trial versions before opening up an account. You will want to try out their system before you choose to invest money in it.

#7- Support

Forex is a 24 hour market, so your online forex broker should offer 24 hour support. You should also check if you can close positions over the phone — essential in case your PC or internet connection crash at a critical moment. You could contact to their Internet help desks to see how quickly they respond to enquiries.

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Learn to Trade The Forex

Learn to Trade the Forex like a pro.  Let me help you understand how, when and why.  Forex may seem to be a very complicated word which business minded people are limited to understand. Start giving up that bad, negative notion about forex and start changing your life now by knowing ways on how to learn to trade the forex.

Learn to Trade the Forex Opportunity

Maybe not all but most people wants to have a little better life than what they have right now. People, generally, are goal settlers and practically speaking, most of these goals involve money or finance. We want more rooms in our house, a bigger car for our family, shop some more and explore the world. It is innate that we fight off poverty and always try to make our lifestyle better than what we have now so we find ways on how to have more money. In our quest of looking for money, one opportunity knocking loudly is a method called ‘learn to trade the forex’.

Reasons to Learn to trade the Forex

Like any opportunity, forex is a risk. However, despite this fact, do you know that there are around 3 trillion forex transactions happening each day? Many people take risks but only few succeed just because they missed the chance to learn to trade the forex. Any person is required to learn to trade the forex since it is not like other professions which after a specific number of hours of training and lectures, you can have a diploma in the end and start calling yourself a professional. Here are some reasons why you have to learn to trade the forex:

1) Forex is a 24 hour market. It never closes. However, in between these 24 hours, not all time is a good time for a forex transaction so it is important to learn to trade the forex to have tips which one is a good time.

2) Forex market is fast changing. Price can go up at one moment and, with just a blink of an eye, it could drop down very low. You need to learn how to trade the forex so you will be good in price forecasts.

3) There can be no insiders in forex. Set forex trade aside from those companies whom you have someone to ask for confidential information. Learn how to trade the forex so your knowledge can be your own insider.

4) There are about 30 currencies and probably majority are unknown to you. Many currencies can be sometimes good but if you do not have an idea what some of the currencies available are well you have to learn to trade the forex.

One can attend as many lectures and seminars or read books and watch video tutorials, but what one really needs to learn to trade the forex is practical experience. Go get your demo account now and practice perfectly by using the tips we are to provide until you learn to trade the forex in your own way.

Make the said reasons above why you have to learn to trade the forex your mindset and you are sure to be one of the forex masters in the future. Remember, it is a risk so you have to learn to trade the forex well.

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How to Trade Rick Free

Believe it or not there is an opportunity in Forex for one to guarantee a successful trade.  Imagine that. Being able to enter the market and have a 100% assurance that you will come out a winner. The concept is called arbitrage trading. An arbitrage opportunity exists when there are discrepancies in the market between brokers.

Allow me to create an example of an arbitrage.

Broker A has GPB/USD currently exchanging at 1.6388/1.6393, while Broker B has EUR/USD exchanging at 1.1832/1.1837, and Broker C is exchanging EUR/GBP at .7231/.7236.

There is a simple calculation to see if an arbitrage exists.

AAA/BBB * CCC/AAA = CCC/BBB

If for whatever reason this calculation does not equate each other evenly, an arbitrage exists and there is an opportunity to create a risk free profit.

If you were trading a standard lot, you would need to buy 100,000 Euros at 1.1837 while selling 100,000 Euros at .7231. Finally, you’ll need to sell the equivalent amount of the Pound that you had purchased in your EUR/GBP trade. In doing so you have essentially bought and sold the exact same amounts. In the process you guaranteed yourself $131 of risk free profit.

Does this sound too good to be true?

Well, arbitrages do in fact exist. However, they are extremely difficult to capture as price is always moving and when an arbitrage does exist you need to work extremely fast to be sure you are able to capture the arbitrage at the prices needed.

Then there is also the matter of having to spot the arbitrage itself. You would need to have a good amount of brokers that you have an account with and constantly scanning the various markets seeking out the discrepancies. Not a simple task.

And lastly, you are only guaranteeing yourself a risk free trade if the trade is placed accurately. When moving as fast as you need to, there cannot be any room for error. You will have a large amount of money in the market in exchange for a small sum of guaranteed profits.  You do not want to make the mistake of entering the market incorrectly and finding all your money is at risk. That defeats the purpose.

You would essentially need some sort of computer software to automatically scan the market for you, find the arbitrages, and place the orders for you at the price you need them to be at. With all that said… Good luck.

If it’s automation you want, you don’t need to seek out a computer to scan arbitrages. Success in the market is not simply isolated for risk free trading. The FX Trading Network has recommended Netpicks as a signal provider. Netpicks has been around since the dawn of Retail Forex and they have been providing winning signals since. Try them risk free

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Forex Quotes

Are you new to forex trading ? It is very simple. To start forex trading, we have to know what forex is. Forex trading means selling and buying different currencies of the world. The biggest and fastest growing market is the currency trading market. A forex deal is made when you buy and sell a currency at the same time.

More than $2.5 trillion is the daily turnover. Just as goods are traded in markets, currencies are traded in forex trading market. The currencies of various countries are the "Goods" in forex markets. For example you can buy Japanese Yen with US Dollars or you can sell Euro for Canadian Dollars. It is as simple as trading one currency for another.

Due to strict financial regulations individual traders were not allowed to do business in the forex market. Only from the year 1998 was forex trading made available for the public. Now the players in this market are institutional investors, central and commercial banks, hedge funds, corporations and private individuals.

Forex quotes are the first thing you have to learn when you start trading. The forex quotesare always listed in pairs (e.g. AUD/CAD 101.2): the first listed currency is the base currency with a constant value of 1 unit; while the second currency listed is known as counter. If you are a forex novice, then it is worthwhile to play it safe. You should stick yourself to trading with only one currency pair. Once you get used to the system, try expanding your trading. You can be more risk-taking and adventurous.
In the example given above, AUD/CAD 101.2 means a dollar of Australian dollar is equal to 101.2 Canadian dollars. That means, the quote shows the relative value of one currency when compared to the other. It implies that the value of AUD had been increased when AUD/CAD quote goes up.

Every quote has two sides, 'bidding' and 'asking'. The profit lies in the differences of 'bid & ask' price. For example JPY/USD 1.2433/1.2441; the 'bid' price is the price at which you sell the base currency; while the 'ask' price is where you buy the base currency. "Spread" is the difference of 'bid & ask'. In the example of JPY/USD 1.2433/1.2441, this means you can buy 1 Japanese Yen with 1.2441 USD or sell 1 Japanese Yen 1.2433.

The US dollar, Euro, Canadian dollar, British pound, Japanese yen, Australian dollar, and Swiss Franc are the seven major currencies traded. The most traded currency is the US dollar. If you happen to live in one of these countries it is better to start trading in that currency. It is because you will be in a better position to analyze its strength. To conclude, forex trading is claimed as "The World's Most Powerful Home-based Business". New investors should take time to learn this skill well, attend seminars, do paper work, read books and practice everything with a demo account before you consider trading with your own money. Forex trading is a long term solid way to make money and good profits.

Was this useful or what?!Really, Forex, is one of the best ways to create a solid income. Ifyou want to learn more about Forex and some great tools to automatethe process, feel free to visit us at: ForexSystemReport I'm Lance Giroux. Forex system Report ™ Senior Advisor.

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Forex Killer Review

The forex market is the biggest market in the world. One of the distinguishing features of this market is that it functions round the clock, excepting on the weekends. An increasing number of people are taking up forex trading these days. Currency trading is a booming market and there are many instances of people making huge sums of money in this lucrative market. One of the aspects which determine success or failure in the forex market is a good trading system. These days with advancing software technology you can find many trading software being available for this very purpose. Forex Killer is perhaps the most popular of all the trading software that is available nowadays. You can find many Forex Killer Review websites offering extensive details about the software.
Technically speaking, Forex Killer is not exactly trading software. It is more of a trading signal generator. This software would arm you with vital data that can help you decide on whether to enter a particular trade or not. The software will also help you with getting to know the probability of your success in a particular trade. You can find such useful information at the various Forex Killer review websites.
The currency trading market is one of the most complex markets of the world too. This is where trading software such as Forex Killer can come to your help. For instance, if you are trading on the pair of Euro and US Dollars, the algorithm of the software will calculate and let you make the decision as to trade or not. Just in case it gives you a 'no trade 'signal, it means that you better stay out of the particular trade. In case you get a 'trade' signal it would also come along with the trade probability. This trade probability denotes the percentage of chance that you may probably succeed in a particular currency trade off. The best way to get to know in detail about this software is to visit Forex Killer review websites.
Contrary to popular perception Forex Killer is not difficult software to use. You in fact need not be very technically accomplished in order to use this software. Almost anyone with basic knowledge of using computers can handle the software. You can come across many testimonials in Forex Killer review websites, where customers would have sung praises in favor of this easy to use software.
In fact this user-friendliness is what makes this software so popular in the first place. It also saves precious time during trading. The software in fact takes only a few minutes to scan almost dozens of currency pairs. You can also upload relevant data in a matter of few seconds with this software. Once you download this software, with a one time payment, you also ensure that you get access to life time trading signals. All these aspects make this trading software a favorite with forex traders

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The Unique Forex Growth Bot System

Forex Growth Bot is a new impressive forex bot that has became a member of a list of forex bots that are storming the forex market place. Initially, I was critical of forex bots and automated forex trading. However, I have now been won over as I observe all the good results from my trades.

Forex bots have been found to work effectively but there are some who have been unsuccessful after trying out for a couple of months. Bots vary one from another. That’s what I have learnt and paid a price for my ignorance thinking all bots are the same. Forex Growth Bot have proven to be one that had a lot of long term potential for me. It has been extremely well received by forex traders so far.

My initially deals were slow but they generated good results at the end of the month. It’s not a fast moving bot but it won’t burn your account.

Forex bots are generally developed to review historical data and trends so as to figure out when it is rewarding to trade. It is just like when I was analyzing manually except that utilizing a forex bot is straightforward and eliminates the requirement for lengthy time of sizing up graphs. In the long run, what can make a bot better as compared to the majority, is dependant on what has went into their encoding.

Therefore, in analyzing a forex bot, a great deal is dependent on the inventor and his practical experience in forex trading and of course his computer development expertise. Forex Growth Bot is designed by a Russian mathematician who has amazed me as being highly intelligent and motivated to develop a successful forex bot.

We have experimented with the robot for almost five months and I have already been seeing an impressive 70% to 80% of money making deals. This can be possibly a result of the bot's uncanny power to exit rapidly when support levels are broken.

It is better not to hurry in and trade instantly when trying out a brand new bot or software program. It's best to trade on paper first. Take some time and you should not hurry in but to trade for quite a while until you are more assured with the program.

To understand whether or not Forex Growth Bot operates or not, you would need to try it out for a time to accomplish justice to the method. A robot will not gain constantly and as long as it regularly wins, it is good enough. Therefore, just run it like I did and you may well be amazed by the end result.

So from my very own screening within the last few months, Forex Growth Bot functions for me very well and I will continue to use it to produce earnings for me personally.

To know whether Forex Growth Bot works or not, you would need to test it out for a while to do justice to the system. A bot will not win all the time and as long as it consistently wins, it is good enough. So just operate it like I did and you might be surprised by the result.

With bots like Forex Growth Bot available in the market, it becomes possible to earn an income from forex even from home, or in fact anywhere. For me, I started out forex trading right after I lost my employment and I don't have any plan to think about another employment

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Forex online system trading

Forex online system trading will help you reap benefits from the ever fluctuating forex market. Yes, it is now possible for a person to earn good profits by utilizing the online trading opportunity. Online forex trading system has helped many people carry out all their transactions right from their home, office or any other device where they can monitor complete transactions. All a person will have to do is install the online trading software which is available in the market. This will then connect them to the forex market servers.

How to work the online forex system trading?

Once the server connection has been established, it is now time for the client to build a proper database of previous market conditions. This will ensure that the software will carry out all the transactions according to the different strategies entered into the software. Forex online system trading works on the principle of market conditions. The client will have to enter all the necessary transaction values for different currency pairs. The software then acts accordingly and senses the changes in the market values to decide whether to enter a particular transaction or exit. Day forex online system trading helps a person carry out all the transactions during the day which best benefits according to the location.

Since the forex markets are run all through the day for 5 days in a week, choosing the best forex online system trading will help a client enjoy benefits. The software works completely on the database that has been entered into it before the system has been made live. If you think you may not carry out the transaction even after online system provision, then you can look out for broker forex online system trading. This particular option provides a client the opportunity to connect to the server of the trader where the trader will monitor all the transactions for the client.

Which to types the online trading systems exist?

Forex online system trading is the best way to carry out all the transactions with an ease. There are in general two different types’ available – signaling system and fully automated software’s. Depending on the requirement one will have to choose the one that best fits their criteria. Signaling system sends an alarm or message to the client when there is a change in the conditions observed in market. The client then requires carrying out the required transaction on his own without the support of the software. This is helpful for those who have good experience with the market conditions.

Forex online trading system has helped many people establish their own network of carrying out forex transactions. Forex online system trading is the simple way to carry out difficult transactions. The software works on strategies which are entered by the client for different currency pairs. Once the system is live and connected to the market servers, they will then carry out fully automated transactions. This is the best for many people to achieve the required goal of profits in the fluctuating forex markets. Look out for the best software available in the market to reap benefits from forex markets.

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How to Choose The Best Expert Advisor

There are numerous types of Metatrader expert advisors out there to choose from. In this section we will mention the different types in the marketplace.
The most common element to Metatrader expert advisors is that they are mathematically based, and use different types of algorithms. Most Metatrader expert advisors are very flexible and can include different types of trading strategies such as hedging strategies, reverse martingale strategies and many more so some overlapping can occur between these categories.
There are three main classifications of Metatrader expert advisors: Classic expert advisors, advanced expert advisors and the third classification is divided to: news, breakout, hedge, and scalper and adaptive.
News based EAs – This type of Metatrader expert advisor is based on news announcements. The main idea is they attempt to capture profits based upon large spikes in price due to an economic announcement.
Scalping based EA – Scalping based systems are trying to capture small amounts of profit, often in frequent intervals. This is one of the most common Metatrader expert advisor types. You have to be careful though, not all brokers will allow scalping. Some of the Metatrader expert advisors that fall into this category have been designed to “hide” their pending orders so that the broker has no idea that a scalp is about to happen.
Breakout System – Some systems are based upon a break out of current consolidation, meaning that they identify when a price of a certain currency pair breaks through a specific support/resistance level and capitalize on them.
Hedging EAs – These systems will open two separate and opposing positions that are set to minimize the loss on the “wrong” one, and maximize the profit on the successful one. Many Metatrader expert advisor systems are based upon this kind of strategy, as hedging is one of the oldest strategies out there.
Adaptive EA – This is a new type of Metatrader expert advisors. Many of them are based upon neural networks, making them “think” like human traders and giving them the ability to react and adapt to different market conditions.
Support and Resistance EAs – These are the “classic” Metatrader expert advisor type, as they have been around the longest. They basically will buy at support areas, and sell at resistance areas. A lot of the Metatrader expert advisors in this category also employ trailing stops to maximize your profits.
Advanced EAs – These Metatrader expert advisors typically can trade multiple pairs at the same time, while monitoring several different time frames as well. This gives the ability to recognize all layers of the trend, allowing the trader to take advantage of shifts in market behavior.
As you can see, there are a lot of types of Metatrader expert advisors you can choose from. You must remember that not all Metatrader expert advisor systems are the same. You will have to choose EA that will suit your trading needs.
We advise you to read the forex experts advisor reviews in our home page and run tests on the demo account of the expert advisor you choose.

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Types of Forex Expert Advisors

Forex expert advisor software can be used for many strategies and mathematical algorithms. They include hedging strategies, martingale, grid and reverse martingale strategies and many others. Sometimes it will be a combination of few strategies.
There are two different categories of Forex expert advisors. One is the classic and another is the further advanced type. Another group comprises of news, hedge, breakout, adaptive and the scalper.
The first type of expert advisors is the news based advisor. This is the hedging type where it will attempt to take advantage of the breaking news or the massive shifts in different pairs that will possibly occur during financial news releases.
Scalping expert advisors are restricted by many Forex brokers. You may risk the cancellation of your account if this software is used to deal with brokers who do not allow this. However they are the more profitable systems where they will secure small profits whenever available according to the trends.
Another type of Forex robots is the Breakout Based Expert Advisor where it will start opening a trade when the price of a particular pair breaks through support and resistance levels. The Hedge Based type will include any advisors that open two separate and contrasting positions while trying to minimize the loss and maximizing the profit.
For the adaptive FX expert advisor, it is newer compared to the other programs. Being the second generation of advisors, it is more adaptive to various environments and able to respond to different situations and trends. It is usually based on the neural networks, making them to think alike with human beings.
Another category is the classic expert advisors that attempt to trade with the rebound of support, reversals and resistance. When there is possibility of a high probability setup to occur, they will open a position. They usually come with trailing stop, a feature that helps to guarantee profits. They are also predefined to monitor the variety of market conditions for reversals and close your position on time whenever necessary.
The last type of expert advisors is the advanced expert advisors. They can trade several currency pairs and simultaneously monitor the timeframes. This unique ability will supply users with multiple options when choosing a trend and doing it manually will simply take you up to few hours of time.

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The 5 stages to becoming a trader

Step One: Unconscious Incompetence.
This is the first stage you take when starting to look into trading. You know that it’s a good place of making money because you’ve heard so many things of killer profit about it and heard of so many millionaires. Unfortunately, it just like when you first desire to drive a car you think it will be easy – after all, how hard can it be? Price either oscillates up or down – what’s the big secret to that then – let’s get cracking!
Unfortunately, just as when you first take your place in front of a steering wheel you find rapidly that you haven’t got the first idea about what you’re trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again and again, and again.
You may have initial success, and that may be even worse – cos it tells your brain that this really is simple and you start to be more risky.
You try to turn around your losses by doubling up every time you trade. Sometimes you’ll get away with it but more often than not you will come away scathed and bruised You are totally oblivious to your incompetence at trading.
This step can last for a week or two of trading but the market is usually swift and you will move to the next stage.

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How did you select your forex broker?

Hello everyone, What are the criteria you are looking for first when started going to trade? Let’s discuss.
I am a new trader and need your advice guys……
How did I choose my first broker? They were giving out $5 bonus on account opening, so I decided to try them out
this is how it worked for me, It might not be the best idea but it sure is effective,
so I got stuck with what broker to choose so what i did, and this was with three brokers,
i had an extra 100dollars you can use a smaller amount as long as its extra money or pocket change
-I opened a live account (to check how the deposit goes)
-i traded for a couple of days maybe a week (to check execution and connection) I did not trade for profit, I just ent crazy with small lots.
-I withdrew my money (to see their withdrawal)
-I contacted support for the smallest issue.inquiries just to see how they respond!
if you look at it you have checked the broker from top to bottom. of course it should be a known broker with good user feedback.
thats how i ended up trading with hotforex, the other two brokers that i tried were ok but on of them had a long withdrawal period and the other one took time to get response from support

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There are many details you can add. In fact you should know first that a broker is not your friend but it is not your enemy, you must be clear that you have to know that he will benefit if you perform most operations but not necessarily want him hurt you.

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Foreign Exchange Market Mechanisms

 

Foreign exchange market provides a forum or a meeting point where the currency of one country can be traded for the currency of another country. This kind of market is essential because different countries around the globe have different currencies for trading and that import and export of goods and services between countries is inevitable. If the trading is only within a country, local currency dealings are preferable. For example if Thailand imports aircrafts from the United States, it has to pay by U.S.Dollar currency and not by Thai bahts. From where will Thailand get U.S.Dollar currency unless there is a market for foreign exchange? So, the payment in a particular currency depends upon the exporting country or the currency preferred by the exporter. There are cases when the exporter also accepts payment in other currencies provided they fall under the "major/hard currencies" being popularly and widely traded around the globe. Examples of such currencies are U.S.Dollars, British Pounds, Euros, Japanese Yen, French Franc, Deutsche Mark and Swiss Franc. Foreign currencies are also used for direct investment in foreign countries investment options and lendings apart from export and import. The world's largest financial markets can be traced to foreign currency markets. The major participants in a foreign currency market are large commercial banks and central banks of countries.

Various aspects in Foreign Exchange Dealings

• Spot exchange rate
• Forward exchange rate
• Cross exchange rate
• Direct quotation
• Indirect quotation
• Spread
• Arbitrage process

The above equation is also called as the Foreign Exchange Market Mechanisms.

A note about direct and indirect quotations:

A foreign exchange quotation can either be a direct quotation or indirect quotation.

A direct quotation is otherwise called as European quotation. It is expressed in a way that reflects the exchange of a specified number of domestic currencies vis-à-vis one unit of foreign currency.

Example:  1.43020595 NZD = USD 1 is a direct quotation for US dollars in New Zealand.

An indirect quotation is otherwise called as American quotation. It is expressed in a way that reflects the exchange of a specified number of foreign currencies vis-à-vis one unit of local currency.

Example:  NZD 1 = 0.6973 USD is an indirect quotation for US dollars in New Zealand.

Two way quotations: The foreign exchange quotation typically consists of two quotations or rates: buying rate (bid price) and selling rate (ask price). Both the prices will be different because the foreign exchange dealers obviously want a profit out of each transaction. Suppose if a dealer bank quotes British pound sterling 1 = 1.50 USD – 1.57 USD; this means that the dealer bank is ready to purchase British pound sterling at $1.50 and sell at $1.57.

A note about Spread and Arbitrage Process:

Spread is the difference between the ask price (which is the sale price) and the purchase price (which is the bid price). The factors affecting Spread are the currencies involved in trading, the volume of business transactions during the day and the sentiments and rumours in the foreign exchange market. The size of the Spread will be directly related to the volatility of the currency. If the involved currency is subject to high volatility, the Spread will be higher to compensate for the higher risk involved and vice versa.

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Forex Vs Stocks

Unparalleled liquidity

In the forex market, over $3.98 trillion worth of trades are traded daily, which makes the currency trading market the most liquid market in the world – trading in 1 day what Wall St. trades in 1 month. No matter what time of the day or night it is, the forex market is always moving, and around the world active traders are buying and selling currencies.

50 times more leverage than trading stocks

With stocks, the maximum leverage is 2:1. But when you trade Forex with CMS Forex UK, you can use up to 400:1 leverage. For example, if you invest $1,000 in stocks, with 2:1 leverage you may buy up to $2,000 worth of shares. However, if you invest $1,000 margin on a foreign currency trade, at 200:1 leverage, you can control up to $200,000 in currencies. Leverage is one of the most appealing and risky factors of the forex market. Traders should note that trading using leverage may increase potential gains as well as losses on any given trade.

Scratch-out the middleman

Spot currency trading bypasses expensive middlemen that are always associated with trading stocks. With forex, clients are able to interact directly with the currency market, and can buy and sell at the simple click of a mouse. No mess. No hassle. No middleman.

Commission-free*

With CMS Forex UK, you are never charged a commission. No clearing fees. No exchange fees. No Software fees. No brokerage fees.
*CMS Forex UK charges no commission on your trades; we are compensated through the Bid and Ask prices or spread of a given currency pair. We may charge a fee for fund withdrawals. Please see Withdrawal of Funds for more information. Please be aware that the bank you deal with may be charging fees on your deposits or withdrawals. CMS Forex UK has no control over any applicable bank fees.

Forex and the technical trader

Because currencies typically develop strong trending patterns, a technical currency trader may potentially identify new trends, breakouts, and opportunities to enter and exit positions.

Measuring the currency market

Currency prices are reflected in the balance of supply and demand for currencies. When it comes to currencies, there are two primary factors that affect supply and demand and they are interest rates and the strength of the originating country’s economy as a whole. Fundamental indicators, such as foreign investment, PPI, CPI, GDP, and the trade balance, echo the overall health of the economy, and alter the supply and demand for that currency. Expert commentaries and data on interest rates, International trade, and currencies are release on a regular basis.

Trade forex 24-hours a day

When you are looking at your forex platform, you are actually looking at a window display of the world’s economy. Currency trading is available twenty-four hours a day, starting on Sunday at 5pm EST with the opening of the market in Sydney and Singapore. A short while after, the Tokyo market opens. Then London, which opens at 2am EST on Monday. And, by daytime in N.Y., the currency market has already been very active for fifteen hours. With currency trading, you are able to decide when to trade. Trading stocks when the U.S. markets are closed is difficult and only offers limited liquidity. With forex, you can trade twenty-four hours a day, from Sunday at 5pm EST. until Friday at 5pm EST.

6 major currency pairs vs. over 8000 stocks

There are approximately 8,000 publicly traded companies, deciding which one to trade can become downright tedious and confusing. How do you determine which needle to pull out of the haystack? With Forex, there are currently 6 major currency pairs to choose from, and about 34 second-tier currencies.

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What are prepaid forex cards?

Prepaid cards are used for making payments while you are travelling abroad. These are pre-loaded and enable you to access money in the required regional currency. You can also top it up depending on your requirement. The card allows you to withdraw cash in foreign currency, check your balance and shop. Banks such as ICICI Bank, HDFC Bank, State Bank of India, Standard Chartered and Axis Bank offer prepaid forex cards.
How do you apply and what is the limit?
You need to submit FormA2 and any other required forex document (as mandated under Foreign Exchange Management Act regulations), proof of passport and required funds. Once the funds get cleared or are paid to bank, the card gets activated. For leisure trips, you can load the card for a maximum of $10,000 (Rs 4.5 lakh) and $25,000 (Rs 11.25 lakh) for business trips. Banks charge between Rs 100-300 per card.

How are these better than others?
Debit and credit cards involve a service charge of three per cent for each usage. Withdrawals at ATMs would attract an extra flat fee of Rs 300. You would be billed at the exchange rate prevailing on the date of transaction and charged a currency conversion rate accordingly. Besides, any delay in bill payments will attract a penalty of 2.95 per cent a month. Travellers’ cheques are accepted at limited outlets and customers are charged an encashment fee of three-six per cent. Comparatively, forex cards are cost-effective, since the exchange rates get locked in on the day of transaction. You can avoid currency conversions, as the cards are available in major currencies. Withdrawing cash at ATMs abroad will attract a flat fee ($2/ euro 2/ £1).
Do exchange rates impact usage?
Yes. While using forex cards, be sure of the exchange rate you are spending at. You would be saving on expenses if the foreign currency’s value increases as against the rupee and vice versa.
What if I need to re-load the card?
You cannot top-up the forex card abroad, even if your bank has a branch there. You will need to contact the centre that issued the card. This can be a problem when there is no one back home, as he/she will again need to fill forms and make necessary payments. Intimating the bank in advance and leaving necessary documentation might be an option. Unused balance in your card can be encashed on return.
What happens if the card gets lost?
Intimate the centre that issued the card. Inform them about your location after 48 hours, since this is the time the bank will take to courier a replacement. In case of exigencies, it may send cash through money transfer facility, but costs will have to be borne.

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DIFFERENTIATE BETWEEN A TRADER OR A GAMBLER

Why do you trade?
Let me guess…
Because you want to make a crapload of money and be able to buy anything you wish?
While this is a perfectly valid reason, it will most likely lead to excessive greed and ultimately lead to your trading account’s destruction.
You might as well take your money to Vegas instead, and gamble it away.
Once your money is all gone, at least it was entertaining.
Greed is the worst motivation for trading. The market will always punish greed and will always reward moderation.
Never try to make all of your money on one trade.
Never try to make all of your money on one trade.
If you do, you are not trading, you are gambling!
There is a fine line between traders and gamblers. When there is real money on the line, there are always those who take blind chances.
If you want to be a successful, do NOT think like a gambler, do NOT take blind chances and do NOT solely rely on luck.
Luck comes and goes just like the gambler.
It’s the trader who remains.

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FAMOUS IN FOREX TRADING BY USING FOREX MARKETING

Marketing is one of the important part in forex trading. How about if you are interested in obtaining an automatic forex trading software? What is called a forex robot is an automatic forex trading software.
The Forex exchange Autopilot technology helps users design and run any automatic forex trading software.
One of the largest financial markets is the Forex trading. Day or night, it doesn’t really matter; the trade goes on even as half of the world is asleep. It offers a lot of opportunities for many organizations and individuals to make profit.
Learn More About Forex Trading at Forex-Robot-Secrets.com :
Doing paper trade and simulated trading can be tested even before using real money.
Automatic forex trading software utilizes a program to judge falls and rises in currency rates to make profitable trading decisions.
Don’t be a scared to lose a certain amount of money, because any trade involves a lot of it. You can instead stop orders, it doesn’t mean that you shouldn’t limit your losses. And above all, learning from your prior losses is very important.
A exceptional trader by day should be serious. Based on their pre-set criterial and parameters an individual is required to make decisions in certain situations.
Frequently make a point to follow your trading plan/system; so you can adequately evaluate the results of your plan. If expectations aren’t met, then it’s time to make adjustments and tunings, so that your plan be of good use ahead.
People plunge in deeper because they are persuaded by eagerness and fear.
There are also some day traders that are afraid to lose money. For instance your stock goes down, and you’re still hoping that after some time it will rise again.
Leave no room for fear or greed to take over, as a day trader this will take you straight to your losses.
You can also trade online with Forex trading at home if you’re serious about day trading. A requirement you must need is some software and hardware available for a good platform for you to work online trading.
One of the hardware requirements will be using an operating system with Window XP or the like. You shouldn’t use a LCD monitor less than 19inches.
Using the internet you can use two types of execution services. The first type differs on how reviewed, accepted, and accomplished customer orders are. It causes delay in a trade completion. On the other hand, the EDAT enables the trader to contact specialists directly. Resulting to a much faster achievement and approval of the orders.
Want to take the guesswork out of Forex trades? Read more Forex robot reviews in detail at Forex-Robot-Secrets.com. The Forex Autopilot technology helps users design and run any automatic forex trading software. Traders make successful trades on autopilot using Forex Robots.

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RULES OF CHINA AND EUROPE IN TRADING

Zombi continue sharing some important and fundamental issues about trading, commerce and business which are as follows:

The final decision on the standard to be adopted is the fundamental of all reform in currency. Hence it is very necessary to go fully into the points of difference between other countries of the world and China. Let me first point out the difference between Europe and China. In Europe, as I have already mentioned in the previous chapters, it was a choice between gold and silver, without any further encumbrances. The most important point, and one that should not be lost sight of, was that at the time the choice was made there was a great deal of fixity of ratio between the value of the two metals. The two questions that were then being considered were: first, the choice of the metal which would furnish sufficient metallic currency for the purpose of the growing international trade; and, second, the simplification of trade accounts by the adoption of one or other of the metals as the standard of value. Each state in Europe was changing the ratio -within narrow limits - of the values of one or other of the two metals whenever it deemed it necessary; and such a procedure was, of course, not very conducive to the free flow of international commerce. Opinion was divided between two courses; one was the adoption of gold, and the other, the retention of gold and silver as before, without variability in value. The events that led to the final adoption of gold in England I have already explained; and her example was sooner or later followed in all other countries, where there was a large growth in the industrial and manufacturing activity, leading to an enormous increase in the national wealth, wages and prices; there was also a comparatively increased supply of gold when silver production was decreasing. A country which has a bigger national wealth naturally prefers a unit of greater value than one with a smaller wealth, wages and prices. Thus it is no wonder that England fixed upon gold. There must also be sufficient supply of the coin or metal that forms the medium of exchange; at the time when England was growing richer silver production was decreasing; and it was but natural that England should have taken to gold. A little later, even as late as 1886, when the production of gold was showing no signs of increasing, economists were wavering, especially with regard to their faith in gold. But when once again the production of gold increased by leaps and bounds -and the manufactures and industries of not only England but practically all Europe were increasing, in an even larger ratio - the gold standard became a fixity. During recent years again, there was a slight uneasiness, not because of the paucity of gold production, but because of the enormous growth of credit on a very slender basis of gold. While some years previously there was talk of too much gold, there were complaints in 1912 that the production of gold was insufficient to meet the currency demand of the world. What the future may have in store for us we do not know. The war in Europe is likely to lead to problems which might probably bring down gold from the high pedestal it has been on for over twenty years - as the standard of value, of course.

Contrast the conditions in China with those in Europe. There is no comparison between the national wealth of the two countries. There are no manufactures in this country, and besides the country has been for nearly forty years buying more than it sold, and thus accumulating a large adverse trade balance. The country has no wealth with which to improve its industry and manufactures; and it is a well-known fact that the profits of industries and manufactures are greater than those of agriculture, and that such profits alone have enabled Europe to adopt and maintain a gold standard. Moreover, China has not even the freedom to develop into a manufacturing country which the European countries had the good fortune to have. When the several states in Europe adopted machinery they protected the nascent industries by heavy taxation on all such foreign goods entering the country. Even to-day, practically every country in Europe - except England - the United States, and all the British Colonies have the most voluminous schedule of protective taxation. Foreign goods entering China are taxed merely to furnish revenue to the Government, and not with a view to encourage local industry or with a view to enable her to compete with foreign manufactures. The standard of living, especially in view of the almost entire absence of manufactures and the small national wealth, is extremely low; and the ratio between the standard in China and English may be roughly put at one to fifty. Therefore, the basis of a unit must naturally be regulated by the considerations which I have mentioned above.

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ANNALS OF EURO (€)

The euro (€) is the official currency of 16 of the 27 Member States of the European Union (EU). The states, known collectively as the Eurozone, are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. The currency is also used in a further five European countries, with and without formal agreements and is consequently used daily by some 327 million Europeans. Over 175 million people worldwide use currencies which are pegged to the euro, including more than 150 million people in Africa.

The euro is the second largest reserve currency and the second most traded currency in the world after the U.S. dollar. As of November 2008, with more than €751 billion in circulation, the euro is the currency with the highest combined value of cash in circulation in the world, having surpassed the U.S. dollar.Based on IMF estimates of 2008 GDP and purchasing power parity among the various currencies, the Eurozone is the second largest economy in the world.

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What Is a Foreign Currency Swap?

A foreign currency swap is a type of contract that calls for the exchange of specific types of currency between two foreign parties. Those parties may be individual investors, corporate investors, or even the governments of two different nations. The process calls for creating an agreement that calls for exchanging or swapping the payments on one loan structured with one of the currencies for a loan of similar value and terms that is structured with a different currency.
There are a few distinctive things that set the foreign currency swap apart from other types of interest swap deals. One has to do with the fact that multiple currencies are used as part of the deal’s structure. This can allow both parties to benefit from the arrangement, depending on what happens with the rate of exchange that applies to those currencies over the duration of the loans involved. In addition, this strategy normally calls for utilizing loans of similar duration, usually no more than ten years. A foreign currency swap also involves exchanging payments on both the principal and the interest, rather than just the interest alone.


One of the chief benefits of a foreign currency swap is that it can help a foreign company to have access to interest rates that would be impossible otherwise. For example, if a UK company wanted to establish an operation in the United States, this method would make it possible to do so and take advantage of the rates that the US partner in the swap could command, rather than relying on the higher rates that would apply to an international loan situation. Assuming that the US partner was also interested in establishing or expanding an operation in the UK, this would in turn allow that partner to also benefit from the swap.
While the foreign currency swap can work to the advantage of both parties, there is always the chance that shifts in the rate of exchange between the currencies involved could undermine those benefits. For this reason, carefully selecting the loan conditions involved with each of the two loans will help to minimize issues that may be created by significant shifts in those exchange rates. Depending on the structure of the deal, it may be possible to allow for fixed and variable rates of interest as well as include some provision within the foreign currency swap that helps to keep the returns to both parties more or less within a reasonable range.

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Trading the News Releases

News and economic data are the main drivers of market developments, but in a little different way than many traders think. While many novice traders expect important economic events and news releases to be reflected on the price immediately, complain about the irrationality of the market when that doesn’t occur and protest that trading the news is not possible, in fact it is possible, and extremely lucrative in the long term, if one is willing to wait for the payback to arrive. In this article we will take a look at various data types, and attempt to classify them according to a few basic criteria. We will also try to explain how news releases determine market prices in the long term, especially those of greater value and impact on the market. Finally, we will say a couple of word on short term news trading, and how this could be achieved on the basis

In the US most major news releases occur between 8:30 am and 10 am New York time, and consequently trading is also most active and volatile in this period. Option expiries, and market openings take place during this period also, when traders are busy at their desks absorbing and evaluating overnight data, attempting to place all the developments in a general context for usage later in the day. Since volatility is so high in this period, the profit/loss potential is also the highest. It is obvious that proper risk controls and money management techniques will play a major role in our trading method, if we want to avoid being caught in false breakouts and whipsaws.

The markets’ reaction to any type of data is unpredictable. This is not only the case when the news release is in line with analyst expectations, as published by news channels and financial news providers, but also when the release surprised significantly. Sometimes it’s not even possible to predict how volatile the markets reaction will be to the news release. Sometimes the market will move within a range of fifty or more pips in response to data released. Sometimes a 100-pip movements in the span of one or two minutes will be reversed and completely negated by the price action during the rest of the day. Conversely, while news releases are usually the most volatile periods of a typical trading day, a very unusual release may be welcomed with relative calm if the market decides to do so. What is the cause of all this great unpredictability?

During a news release a number of speculators will react immediately, hoping to gain a quick profit and exit. These will create a very brief ballooning of spreads and volume in the immediate term, but also will distort the underlying technical picture greatly. As these initial buyers or sellers exit, momentum traders will attempt to join in and fuel a more sustainable short-term trend with their actions. Depending on the time and liquidity in the market, they may well be successful, but sometimes they too are checked by previously unknown order layers that check the advance of the price. When these absorb the momentum traders, and short term speculative entrants, the initial reaction of the price may be reversed or negated also.

But while this is so, we do not imply that it is not possible to trade the news in the forex market. All that must be born in mind by the trader is that he’s engaging in a game of probability; he must be very well aware that there doesn’t exist a news release that will ensure that the market will move in this or that fashion. Stop loss orders must not be very tight, and leverage must be kept quite low, so that the order we enter can survive more than a few seconds of the initial shock reaction by short-term actors.

The two major problems of trading the news arise out of the difficulty in gaining timely information, and evaluating that in a fast enough manner to facilitate quick entry into a trade. Hence, it is clear that the trader must have a very good idea of what he expects from the news release. Will he only open a position if the data shock the market? What is the threshold value for the data, above or below which a trade is justified? How long will the position be held? Which technical levels constitute the take-profit, or stop-loss orders for the trade? All these must be discussed and determined even before a trade order is entered. News releases must not be periods when the trader will be hesitating and vacillating between the various paths he can take. Instead, he must act like a machine, with almost automated movements, so that he can be immune to the emotional pressures created by the irrational short-term behavior of the market.

The last issue with trading news releases is born of the unreliable nature of the first versions. In fact, studies have shown that the BLS (the Bureau of Labor Statistics), for instance, consistently underestimates job losses in a recession, and underestimates job gains at the beginning of the boom. Nor does the experienced trader have any trouble in acknowledging this fact: revisions which reverse the meaning and character of the initial release are not at all exceptional in the markets. The short-term trader is not much bothered by this fact, but it has great significance for decisions on the long-term positioning.

There are two ways of trading the news.

1.Long term: Several academic studies have established that the impact of some news announcements have their immediate impact spread over a period of weeks and months, instead of the single day in which the markets are thought to discount them. Non-farm payrolls, and to a greater extent, the interest rate decisions of the federal reserve are good examples for this kind of news flow. While the markets react violently and unpredictably in the short term, the mechanisms set up by low interest rates, and full employment (or conversely, high unemployment) have consequences that are relevant to many sectors of the economy, and trading them on a long term basis is certainly possible. The trader who uses this strategy will build up his positions slowly, and will attach greater value to low frequency releases (such as GDP reports), and will wait until the overall picture offers clarity, before he makes his trade decisions.

2.Short term: To trade news on a short term basis, the trader must have a clear criterion on what kind of news will justify a trade. Many news traders seek at least a 50 percent surprise in the data to consider the release tradeable. The novice trader, in turn, can use the initial period of his trading career for perfecting his money management skills. Trading the news on a short term basis can be easy and lucrative if the trader is disciplined enough to cut losses, and accumulate profits, but panic and mood swings, and undisciplined methodology will quickly erase all the gains through shocks and volatility.

These are the various types of indicators which have the potential to cause the greatest short term movements in the markets
Consumer Price Index (CPI)

While very important, the severity of market reaction to CPI releases partly depends on the health of the general economy. In a booming economy, a string of uncomfortably high CPI values will force the central bank to raise rates in order to subdue growth. In a contracting economy, a high CPI value may prevent the central bank from realizing counter-cyclical interest rate reductions. Since central bank rates are so important for determining the tone of economic activity in the long term, markets pay great attention to the value of this indicator. On the short term, of course, these considerations have no relationship to the motives of speculators, but they do present the justification for violent short term price spikes for momentum traders and short-term speculators, if the data surprises in either direction.
Fed decisions

Depending on the nature of the decision, and how surprised by it the market is, the price swings can be very large and the immediate reaction meaningless with respect to the long term direction of the trend. Fed decisions are one of the most anticipated events in the market, and their macroeconomic significance certainly justifies this attitude. The Fed meetings typically last for about two days, beginning on Monday and concluding on Tuesday. Then the decision is released to the public at around 9 pm New York time.

Fed rate decisions can cause large movements if the rate change is different from what was expected by market consensus. In the absence of such a surprise, traders will concentrate on the tone of the statement accompanying the interest rate decision. Depending on how dovish or hawkish the statement is, the markets will readjust their future interest rate expectations, and on that basis they will reprice currency pairs. The repricing period can be quite long, and it’s unwise to expect this process to be completed in the course of a few weeks.

European central banks and the US Federal Reserve usually release their rate decisions during the first week of each month. As most of the important data are released during this first week from around the world, traders are exceptionally nervous and excited, amplifying volume greatly, but also increasing volatility, as the large amount of short term speculative money opens and closes very short-term positions. In fact, some traders turn the typical movements of this period into a trading strategy.
Non-farm payrolls

Sometimes called the mother of all data, on a typical month the time of this release coincides with the most volatile market action. Non-farm payrolls measure the payroll change of the non-farming private and public sectors. Since economic cycles, consumption, and consequently interest rates all depend on the employment situation of the US economy, the non-farm payrolls release is the most closely watched of all indicators.

For the most part, most experienced traders will avoid trading the immediate aftermath of this release, due to the somewhat nutty price action that follows it. If you’ll forgive the expression. On the other hand, if the trader is satisfied that the data release strongly suggests price movement in a direction, he will use the short term fluctuations that occur as a trading opportunity by entering orders that contradict the market’s short term direction.

While this data is so crucial to a nation like the US with a large domestic economy that is less dependent on trade and commerce, its equivalent is not as important for nations like Japan where the dynamics of the domestic markets is closely correlated to the situation of the global economy.

The non-farm payrolls data is typically released by the Bureau of Labor Statistics on the first Friday of each month.
Purchasing Managers' Index (PMI)

The PMI provide a very quick and accurate snapshot of the status of the various sectors of the economy. They do not create as much volatility as the other major releases (such as the non-farm payrolls data, or Fed decisions), but as a result they are also more tradable and safer as entry points. Needless to say, a very extreme value can create massive price shocks in either direction, but the real use of this data is for the guidance it provides for predicting the much more important data that is released towards the end of the week. We can trade these releases both on a trend following, or contrarian basis, depending on what our analysis is telling us about market positioning and the fundamental picture.
Conclusion

There are many more releases, and the trader can study each of them for creating his own strategy. The key point is protecting ourselves from emotional extremes, and making sure that we only open positions when we are really satisfied with the data release, and are confident that the scenario offers a reasonable profit potential.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.

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