5 Reasons to Invest in Forex Trading

The increase in popularity of Forex trading systems has been nothing but extraordinary. Every private investor that has been in the markets for even a short period utilizes at least one type of currency software trading system. In fact, research has shown us the number two reason people who enter into the Forex markets don't become profitable is either they don't have a high quality Forex trading system or they failed to take time to learn how to use it properly and test their understanding of the software using a free demo account supplied by a Forex brokerage firm. The number one reason failed at making money in the currency markets is rather obvious; they had no idea what they were doing because they never took the time to learn Forex trading.

YOUR BRAIN IS NOT A COMPUTER:
The amount of data generated by the currency markets daily is staggering. Those statistics need to be captured, processed and distinguished into categories of what is relevant and what is of no use. It is not possible for a human to do this as efficiently as a computer.

ABILITY TO PROGRAM SPECIFIC CHARATERISTICS:
Most Forex trading systems have preprogrammed algorithms based on there initial design. The vast majority of the systems fall into one of three categories; a trend based system, a signal based system or a formula based system. The purchaser has the option of selecting or combining the techniques they find important and inputting there own options thus customize there approach towards the information they consider vital to the decision making process.

COST OF A FOREX TRADING SYSTEM:
Do to there mass appeal and the fact they are sold worldwide in vast quantities the cost of these products has dropped in recent years as the quality has improved drastically. Most of the products sell in the $100 to $200 range for a piece of software which millions were spent on the development.

UPDATING AND UPGRADES:
Most of the systems are updated and upgrade a few times a year and there is usually no cost to the purchasers. The developers of these products realize there number one selling mechanism is word of mouth advertising from happy clients and by provide the latest developments in the markets free of charge they are going to get more sales to new customers out of it.

YOUR ABILITY TO MAKE MONEY:
To put it quite simply if you don't have one you are going to find it very difficult making money in the markets. After all, everybody you are going to be competing against is using at least one to help with the decision making process. How can you possibly process all the information as efficiently as they can if you don't have one? The answer is you can't.
As long as you purchase a top rated
source: http://www.tradingforexreviews.com
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4 Things A Wise Forex Trader Should Always Consider

When you enter the world of forex trading you must always consider the big advantage of having a wide knowledge of how the currency markets behave. You should aim to be a wise forex trader, with the right techniques, more than simply spending your time willing you could guess the future.
Among the things you should always consider in your forex career we can find:

1.- Never enter a trade where you risk more than 5% of your total capital. Even having more than 4 percent of your trading capital on the table can be considered as a major and unnecessary risk. You must be careful with the high leverage characteristic of the forex market, a feature that some times can work against you.

2.-Before you enter a trade consider a wide time perspective, specially if you are new to the forex markets. Always remember that there is a high degree of randomness implicit to the price charts. In order to decrease this randomness showing in the charts you should use wide time ranges, such as 60 minute, 4 hour and daily charts. This way you will be able to plan your trades with more accuracy and profitability potential.

3.- Use technical indicators with care and wisely, do not over rate them. Mainly if you don’t quite understand how they work in more depth. Remember, technical indicators do not predict the future. What they do is showing you the major trend and then you must use your knowledge and trading system in order to catch a profitable trade.

4.- Do not be afraid. Never approach forex trading wit fear in your mind. Be precaution but not fearful. In forex prices will fluctuate dramatically often, so you need to be sure not to panic at the first move of the market against you, you should be patient enough to wait and see the market turn in your favor. Do not over react to any initial loss. If you have reasonably determined the major price trend, using your forex trading system be patient and let the market work in your favor.
source: http://www.1-forex.com
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How to select a Forex Broker

The decision of which brokerage firm is best for you is as important in the Forex market as it is in the Stock Market. The way of evaluating the various firms differs slightly between the two markets, however. Forex trades do not involve commissions, but they do have what are known as spreads, which is the difference between the price a currency can be purchased and the price for which it can be sold at a given point in time. This spread (which is expressed in "pips") is how the brokerage makes its money, so it serves the same purpose for them as a commission. You can be pretty certain that the spreads vary between brokerage firms just as widely as commissions do in the Stock Market, so investigate this carefully before making your selection.
Most brokerages dealing with the Forex market are involved with large financial institutions where the funds are available to provide sufficient leverage for their clients. It is still important to make sure your firm is reliable. They should be registered as a FCM (Futures Commission Merchant), and regulated by the CFTC (Commodity Futures Trading Commission).
Most firms offer widely varied packages of tools that assist you in making trading decisions and understanding the market better. They provide information and research that is available to you in many different formats. It is wise to take a little time to study these tools, and to find the ones that are most helpful to you. They are going to end up being very important and you need to be comfortable with them.
Look for a firm with a wide variety of account and leverage options. The ability to use the Forex market's advantages in leverage is one of the things that makes it the most attractive to you as an investor, and you want to have the maximum flexibility here. Although there are a few unethical firms operating, a few references and inquires should be able to identify them. This selection process is worth a little effort and an investment of time. It is an investment that is going to the most likely to pay off.
Source: http://www.forexforum.net/fx-articles/6689-how-select-forex-broker.html



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Forex Trading Made Easy With 25% Monthly Returns

Imagine trading the forex market with no stress, no worry and all the time in the world! Imagine pulling in returns of 25% plus per month with only 5 minutes work per day!
I know this probably sounds too good to be true but believe me there are thousands of traders right across the globe raking in profits like this with only 5 minutes work per day!
Following a system that is tried and tested is one piece in the puzzle, being disciplined and using proper money management is the other piece.

While there are any number of services available that offer big returns and training cd's etc etc, they usually take you a long time to learn and also a big chunk of your day to implement their strategies.
The latest craze to hit the market is mechanical trading. Mechanical trading simply put is a system that you follow every day where you can put your orders on and walk away, knowing in advance what your chances are of winning and losing are.
Basically if there are 10 trades in the system for a month then everyone following that system would take 10 trades.
The advantages of following a system like this include more time with your family, friends, hobbies etc. Also you can still work your regular job while earning a nice second income. Along with these benefits of course is the emotional side of trading.
With a system like this you can just set and forget. You simply put your trade order in, set your stop loss and take profit point and just walk away and continue on with your normal day to day routine.
As I mentioned before, following a mechanical trading system and being disciplined equals great monthly returns plus a lifestyle one can only dream of!
Sources:

http://doorways2success.com/?page_id=5
http://www.forexforum.net/fx-articles/6775-forex-trading-made-easy-25-monthly-returns.html

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3 Important Forex Concepts For New Traders

As you enter the world of Forex you will find yourself learning and using many new concepts that you may not have used or heard before.

Three of this important concepts that you must understand are what “Pips” are, What “Volume” is and what you do when “Buying” and “Selling Short”. They may look more like four concepts but Buying and Selling are like the two faces on the same coin so we can consider them as a single concept.

Lets first introduce what Pips are. Maybe you have heard or read already how many pips a day you can make using some trading system. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3451 then an increase to 1.3452 would be a “one-pip” increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pair you are trading. And depending the type of account you have, regular or mini, each pip will have a value of $10 or $1. So if you make 10 pips a day with a regular account you would have made $100 and with a mini-account $10.

Now we can talk about the Volume; trading Volume is a quantity that tells traders how much money is being traded at one particular moment. And the forex market is known by its high volume of trading during most of the time markets are open. Some times there can be spikes in the volume during some type of news breaks and during the time New York stock exchange is open. The volume of transactions in Forex, even in a slow day, will always be much higher than the volume traded in other large exchanges at their full capacity.
Now maybe the most obvious of the concepts. Buying refers to the acquisition of a particular currency pair to open a trade. Selling short refers to the selling of a particular currency to open a trade. When you Buy, you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high. In the case of Selling short, it looks a bit more complicated. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. I know it seems kind of tricky, but once you are in front of your trading station it will look much simpler.

Understand well these three concepts and you will start with solid steps you trading career

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Forex Indicators to Watch

Currencies do not become weaker or stronger randomly. A large portion of a currency's value is based on consumer confidence based upon the economic strength of the country. Economic strength is determined by certain key factors. These factors are closely watched in FX trading market. When these economic indicators change and the value of a currency will fluctuate accordingly. A countries currency represents the economic health of that country and the price is reflective in its currency.
Fundamental economic factors have become increasingly important market movers. When focusing on the impact that economic numbers have on price in the FX market there are 5 top indicators to watch. These indicators that we are about to discuss have a strong effect to generate volume and to move prices in the market.

Economic News Impacts The Short-Term Trading and The Long-Term.
The data itself is not as important as whether or not it falls within market expectations. Besides knowing when all the data is released, it is vitally important to know what economists are forecasting for each indicator. For example, knowing the economic consequences of an unexpected monthly rise in the Consumer Price Index. The actual, is not nearly as vital to your short-term trading decisions as it is to know that this month the market was looking for CPI to fall.
Analyzing the longer-term ramifications of an unexpected monthly rise in prices can wait until after you've taken advantage of the short term trading opportunities. Market expectations for all economic factors are public knowledge. You should be tracking these economic data indicators on an economic or forex calendar.

1.Payroll \ Unemployment
Strong job creation is a good indication of economic growth, as companies must increase their workforce in order to meet demand The unemployment rate is also a good measure of the strength of the labor market. One of the ways analysts gauge the strength of an economy is by the number of jobs created, and the percentage of workers unable to find jobs.

2. The Discount Rate \ FOMC Interest Rate Decisions
The Federal Open Market sets the discount rate, which is the rate at which the Federal Reserve Bank charges member banks for overnight loans. The rate is set during the FOMC meetings by the regional banks and the Federal Reserve Board. Lets take a further look at these two factors.
The discount rate is an interest rate a central bank charges depository institutions that borrow reserves from it. For example, the German Bundesbank offered a discount rate up to 1999 until interest rate policy was transferred to the Europen Central Bank.
A depository institution is a financial institution in the United States, such as a savings bank, that is legally allowed to accept monetary deposits from consumers. Federal depository institutions are regulated by the Federal Deposit Insurance Corporation (FDIC).
An example of a non-depository institution might be a mortgage bank. While licensed to lend, they cannot accept deposits.
The Federal Open Market Committee (FOMC), a component of the Federal Reserve System, is charged under U.S. law with overseeing open market operations in the United States, and is the principal tool of US national monetary policy(Open market operations are the buying and selling of government securities.) The Committee sets monetary policy by specifying the short-term objective for those operations, which is currently a target level for the federal funds rate (the rate that commercial banks charge on overnight loans among themselves). The FOMC also directs operations undertaken by the Federal Reserve System in foreign exchange markets, although any intervention in foreign exchange markets is coordinated with the U.S. Treasury, which has responsibility for formulating U.S. policies regarding the exchange value of the dollar.
There are 8 meetings scheduled per year. The dates are known in advance so mark them on your economic calendar and incorporate them into your forex trading strategies.

3. Trade Balance
The balance of trade measures the difference between the value of goods and services that a nation exports and the value of goods and services that it imports. A trade surplus results if the value of exported goods exceeds that of imported goods, whereas a trade deficit exists if imported goods exceed exported goods.
Generally this information is released around the middle of the second month following the reporting period. Again this should be apart of your trading strategies.

4. CPI – Consumer Price Index
The CPI is a key gauge of inflation, as it measures the price of a fixed group of consumer goods. Higher prices are considered negative for an economy, but since central banks often respond to price inflation by raising interest rates, currencies sometimes respond positively to reports of higher inflation. Below is a further explanation of CPI.
A consumer price index (CPI) is a measure of the average price of consumer goods and services purchased by households. It is one of several price indices calculated by national statistical agencies. The percent change in the CPI is a measure of inflation. The CPI can be used to index (i.e., adjust for the effects of inflation) wages, salaries, pensions, or regulated or contracted prices. The CPI is, along with the population census and the National Income and Product Accounts, one of the most closely watched national economic statistics.
This information is released monthly.

5. Retail Sales
Retail sales is a measure of the total goods sold by a sampling of retail stores. It is used as a gauge of consumer activity and confidence as higher sales figures would indicate increased economic activity.
This information is released monthly
Happy trading.
source: http://www.forex-money-exchange.com
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Nonfarm Payroll

source: http://www.forexforum.net/forex-tutorial/economic-indicators-nonfarm-payroll.htm

Definition
The employment situation is a set of labor market indicators. The unemployment rate measures the number of unemployed as a percentage of the labor force. Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation´s business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls.

Why do Investors Care?
If ever there was an economic report that can move the markets, this is it! The anticipation on Wall Street each month is palpable, the reactions are dramatic, and the information for investors is invaluable. By digging just a little deeper than the headline unemployment rate, investors can take more strategic control of their portfolio and even take advantage of unique investment opportunities that often arise in the days surrounding this report.

The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they´re getting paid and how many hours they are working. These numbers are the best way to gauge the current state and future direction of the economy. They also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed chairman Alan Greenspan talks about this data frequently and watches for inflation constantly.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it´s a good bet that interest rates will rise, bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events.

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8 Golden Forex Trading Recommendations

1. The Trend is your friend.
2. In up-trends, buy the dips; in downtrends, sell bounces.
3. Let profits run, cut losses short. Always use protective stops to limit losses and move them only to reduce potential losses or protect newly achieved profits.
4. Set up your plan before entering the market; don´t trade impulsively.
5. Employ at least a 3 to 1 reward-to-risk ratio.

6. When pyramiding, follow these guidelines:
a) Each successive layer should be smaller than the preceding one.
b) Add only to winning positions.
c) Never add to a losing position.
d) Adjust protective stops to the break-even point (or better).
7. Learn to be comfortable being in the minority, if you are right on the market, most people will disagree with you.
8. Keep it simple; more complicated isn´t always better.
source: http://www.forexforum.net/forex-tutorial/recommendations.htm
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3 Most Important Forex Fundamental

There are three forex fundamental indicators, which is very important role in influencing price movements in the forex market, namely:
1. JoC (Journal of Commerce)
JoC index includes 18 indexes of industrial raw materials (materials) that supply or support the process and the early stages of manufacturing, development and production of energy. This index is more sensitive than the other indexes, because this index indicates changes in the level of inflation that will affect other indices.
2. Merchandise Trade Balance
Merchandise trade balance is one of the most important indicator in the economy. The value of this indicator can trigger long-term changes in monetary policy and foreign policy. Trade balance shows the net difference between exports and imports in the economy of a particular country.

3. Employment Indicators
Employment Indicator is the economic indicators that have important meaning in some aspects. The level of employment, naturally, can become a yardstick in measuring how healthy the economy of a country. Unemployment is a lagging indicator. Features characteristic of lagging indicators, which is very important to remember, especially during the recession (the economy), is when investors focus on the health and recovery of employment conditions, employment into the last economic indicator to the note. When the decline in economic conditions require that the termination of employment occurs, needed a long time to generate the psychic return confidence in the managerial level, before increasing the number of workers. Announcement of the level of employment in general, have important meaning in the financial market, especially for the forex market. In the market of foreign exchange (forex), the data are presented will surely affect the transition from recovery to the decline in economic conditions. This may explain the importance of this indicator is when an economy is in extreme conditions, this indicator shows the level of reliability in the business world. Decrease in unemployment reflects a level of reliability of the business world, and so is vice versa. Read More...

Sharia Mutual Funds

Sharia Mutual Funds is a mixture of infrastructure investment that combines stocks and bonds in a sharia product, which is managed by the investment manager. Investment managers offer sharia mutual funds to investors who are interested, while the funds obtained from investors was managed by investment managers to put in the stocks or bonds that sharia considered profitable.
Sharia Mutual Funds is intended to meet the needs of groups of investors who want to earn income from investment sources and cleaner ways that can be accountable to the religious who are in line with the principles of sharia.
Mutual funds can take the form of Sharia, such as conventional mutual funds. But have differences in operational, and the most visible is in the process of screening portfolio. This filtrating according to the principles of sharia will be issued shares that have illicit activities such as usury, alcoholism, gambling, pork, cigarettes, prostitution, and pornography and so on. Sharia Mutual Funds in the investment not only aims to obtain a higher return. Not only do maximization of welfare to the owners of capital, but also consider that the portfolio owned remain on the aspects of investment in companies that have products that both lawful and do not violate the rules of sharia.



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Forex Hedging and Averaging Techniques

Forex hedging is a situation where we open 2 positions contrary to the currency and the same number of lots. Often used hedging if the price turn directions and traders do not want to grow big loss without the cut loss (close these positions despite loss). In general, they use this technique without a stop loss. Other terms of hedging is locking.
Example: A trader open Buy EUR / USD 1 lot and the price is not appropriate hopes to move down and the position is still floating loss 20 points, the trader can make the open Sell EUR / USD 1 lot on the currency so that the same loss locked is only 20 points. Although the price to move towards any fixed to floating 20-point loss
Forex averaging is one way to minimize the defeat with a way to open similar position on a different level. Averaging the purpose of this is to use the average price level differences from the ordered price to minimize the loss.

Example: A trader open Buy EUR / USD 1 lot on the price of 2.0100, but the price to move down to the 2.0000 level so that floating-point loss -100. Trader is averaging can do with the way open positions Buy EUR / USD 1 lot on the price of 2.0000 while it also. This means that there are 2 open positions. Position the first floating-point loss -100. The second position is 0 point. (regardless of the assumptions spreads).
When the price and then move up to 2.0050 positioning the first floating loss -50 points, the second position is 50 points profit. In total impasse is the second position (BEP). When prices move up above the 2.0050 level, it means traders have been profit. Read More...

5 Kinds of Forex Risk Management

There are 5 kinds of risk management forex trading that can be used, we can use one or all depends on the willingness and ability of risk will be borne by traders.

1. Stop Loss / Stop Loss Order
This technique is a technique that is most easily where we take that risk only in how many points we have specified (for example, 30 or 50 points from the price that we take). To use the technique of stop loss orders stop to give us the price when we buy (buy orders) or above the price when we sell (Sell orders).
Example: If we buy USD/JPY 117.00 we put a stop loss / stop order sell at 116.50. So when the price downs to 116.50 our only loss 50 points.

2. Limit Order
This technique is a technique order book position in the price that we set our self. The price we set for entry position buy or Sell, so if the price is not reached then we will not have losses and costs. Limit orders apply until closing time with the New York Market, closing market interests or to limit the canceled.
Example: We put the limit buy orders USD/JPY at 116.00 and the price is only down to 116.50 and then back up to 117.00, so the limit orders were not subject to the order and then we can cancel it.

3. Hedging / Locking
This technique is a technique that many traders use, but this technique should be used with calculation as well. This technique is the risk because we have to analyze when we open hedging / locking position. We will also be charged with the commission and charge the cost of interest swap 2 times, so we should be enough funds to pay for it. This technique is used traders who do not want to recoup at all.
Example: If we Buy USD/JPY and 117.00 Sell USD/JPY 116.90 in our open position 117.00 buy if prices rise above 117.10 and 116.90 Sell open position if prices drop below 116.80.

4. Switching / Turn Over
This technique is a technical change position, a position where if we make the wrong we discard or liquidate the position that we have and replace with a new position opposite direction.
Example: If we Buy USD/JPY 117.00 and the price down to 116.80 liquidate the position we buy it, and then take a position in the new Sell 116.80.

5. Averaging
this technique is a collection of technique positions, where we add the same position at different prices. This technique is a technique that requires large capital, but also large potential benefits.
Example: If we Buy USD/JPY 117.00 and 116.50 in the price down and then we buy more at price 116.50, and if the price down to 116.00 again at price we buy it, then release it all in the position if the price rose to 117.50.
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Hotnews: Stocks Fall After News of Citigroup Layoffs

By Renae Merle
Washington Post Staff Writer

Stocks fell 150 points this morning as Citigroup announced plans to eliminate more than 50,000 positions and retailers' woes appeared to deepen, but had regained some of those losses by lunchtime.

Citigroup's jobs cuts are in addition to the 23,000 the company already announced this year and will bring its workforce to about 300,000. The struggling New York bank also said it would also cut expenses by 20 percent after posting four straight quarters of losses.

The company's stock was down 6 percent in morning trading, making it one of the biggest losers on the Dow Jones industrial average, but it managed to rebound and was up 1.8 percent just before 1 p.m. It has lost nearly two-thirds of its value this year.

The Dow Jones industrial average was flat, down 8 points, at 1 p.m., while the Standard & Poor's 500-stock index was up 0.3 percent, or 3 points. The tech-heavy Nasdaq also was up 0.3 percent, or 4 points.

One of the Dow's few bright spots was General Motors, which was up 9.3 percent. The company has said it could run out of money next year, but investors appear optimistic about a $25 billion emergency bill Democrats are expected to unveil on Capitol Hill today to help the struggling auto industry. President Bush and congressional Republicans have opposed the legislation because it would use cash from the $700 billion financial rescue program Congress created to shore up the U.S. banking system.
In economic news, industrial output rose 1.3 percent last month, after plunging by the largest amount in over 60 years in September, according to the Federal Reserve. But that did little to offset concerns about that the country has already fallen into a recession.

"Do not be fooled by the sharp headline increase in industrial production," Nigel Gault, chief U.S. economist at IHS Global Insight, said in a research note. "Industrial production may have bounced up more than anticipated in October, but that's largely because its hurricane-related plunge in September was even steeper than first estimated, so there was a bigger loss of output to be made up."
National Association for Business Economics survey released today found most economists believe that a recession has already begun and that the downturn will continue into 2009. The survey also found that the unemployment rate is expected to reach 7.5 percent by the end of the year.

"Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit market stresses and evidence of spillover to the real economy," Chris Varvares, the group's president, said in a statement. A dimmer outlook for consumer spending accounted for most of the growing negative economic outlook, according to the group's statement. That was reflected today in a new series of grim earnings reports from major retailers.

Target, the huge discount retailer, was down nearly 1 percent after reporting a 24 percent drop in third-quarter profits that beat analysts' expectations. Lowe's said third-quarter profits fell 24 percent and lowered its fourth-quarter expectations as consumers delayed home improvement projects and big-ticket purchases. Its stock was up 9.4 percent.

"We expect continued, broad-based external pressures on our industry, as rising unemployment, falling home prices, tight credit and volatile equity markets continue to erode consumer confidence and impact sales," Robert A. Niblock, Lowe's chairman, said in a statement. "In light of the difficult environment, we remain cautious in the near term and focused on providing great service to customers, increasing market share, controlling expenses and appropriately managing capital expenditures to drive long-term returns for shareholders."

Crude oil prices were flat in morning trading at $57 a barrel.

Overseas stocks were mixed today. Japan's Nikkei closed up slightly, 0.7 percent, even after the government said the country had fallen into a recession. The FTSE in London and Paris's CAC 40 closed down 2.4 percent and 3.3 percent, respectively.

source: http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111701043.html?hpid=topnews 
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Technical Vs Fundamental Analysis in Forex

Forex traders make decision using two kind of forex analysis: technical analysis and fundamental analysis. Technical analysis uses charts, trend lines, and some indicators like Moving Average, Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), Bollinger Band, Fibonacci, Pivot point, candlestick patterns and another mathematical analysis to learn market probability. While fundamental analysis is predicts forex price movement with translating some information about economic situation, including news’s, reports and policies which published by government. It contains also rumors.
Which is better?
Let’s return to the basics of forex trading. What causes the price movements?
The answer is: Expectations and speculation from the market! News is not the cause of price movements. On the other hand, the indicator / mathematical calculations also are not driving the price.

In the technical analysis, when trading based on a chart, as an example of the trend line and the MACD line has been indicated that the trend line broken and lines on the MACD has crossed over. And then when prices rise, this does not mean that the pattern of the indicators that lead to price movements. But it is because many traders based on these lines. At that time, they do the same (buy/ long) in theories of the indicators are concerned. This is a cause prices actually raise from the corresponding input indicators.
Essentially, the indicator is only as a follower and not as a cause of price movements.
On fundamental analysis, the drastic price movement occurs when there are events that are not presumed. Events such as these can increase or decrease in interest rates from the central bank, until the political or war. Examples are the 9/11. When the 9/11 happened, the rate of USD weakened because each person will estimate the effect of the U.S., so likely to weaken USD. This incident caused many market participants to sell USD. After that, USD rate is down dramatically.

The question is how much money is traded on technical analysis and fundamental analysis?
Generally, the large banks, hedge fund managers, and other large financial institutions are using the basic fundamental analysis. And because they are the holders of most of the money in the world, so when they do trade, the price will move in accordance with what they do. This is in accordance with economic laws, for example when there are many buyers USD, EUR, the amount outstanding in the market will be reduced, causing the price of USD rise.
How about trading with traders who use technical analysis? They can not have the amount of money as financial institutions at the top (although the combined total). Furthermore, various technical indicators are totaling hundreds and timeframe different. This causes each indicator and timeframe page generate predictions that vary greatly.

Tips for traders who use technical analysis and fundamental analysis
For those of you who use technical analysis, tips that we give is: Only use common indicators used by traders and trade only when there is no important economic news. For those of you who use fundamental analysis, tips that we provide are: patience, discipline, trade only when there are important economic news and make sure the times that you use is really appropriate.

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Forex Fundamental Analysis Resources

Here are some resources which we could make them as our forex fundamental references:
TV
- CNBC
- Bloomberg
- CNNMoney
Internet Resources:
- http://www.forexfactory.com/
Providing the actual news with its significance effect to the forex price. Every news has an icon shows how important is the news to affect the forex market. It’s helpful site, especially for trader who like the volatile market
- http://www.fxstreet.com/
Giving news and also strategy analysis
- http://www.forexnews.com/
The news provides 24 hours. This site will help us to easily research about forex market generally. Also it is gives us some descriptions about how the news and banks influences the forex market
- http://www.mataf.com/
A site with brief analysis of any forex traded pairs
- http://www.saxobank.com/
Just click on Forex Trading Strategy to see the reviews about today forex price movement
- http://www.currencypro.com/
Click on menu “Today’s Hot Topic” and you will find good strategy analysis

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Forex Fundamental Factors

Here are some fundamental factors which could affect on forex price movement:
- Monetary factor; it is very vital to forex fundamental analysis. Change of monetary policies in one country, export value, incomes, employment and another monetary factors will affect on currency value of that country
- Interest rate; the value of interest rate will influence on currency value that will also affect the interest rate of credits, investors desires etc
- Political and social factor; change of the leader, cabinet, security level will affect the currency value. More stable the country is, more higher its currency value
- Disasters and chaos; it is the unpredictable factor but has negative effects to currency value



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Forex fundamental indicators

Economic Indicators:
- The Gross National Product (GNP)
- The Gross Domestic Product (GDP)
- Investment Spending
- Consumption Spending
- Government Spending
- Net Trade

Industrial Sector Indicators
- Industrial Production
- Capacity utilization
- Factory orders
- Durable goods orders
- Business inventories

Inflation Indicators
- Producer Price Index (PPI)
- Consumer Price Index (CPI)
- Gross national product implicit deflator
- Gross domestic product implicit deflator
- Commodity Research Bureau’s (CRB) futures index

Employment Indicators
- Consumer spending indicators
- Employment Cost Index (ECI)
- Retail Sales
- Consumer sentiment
- Auto sales

Merchandise trade balance
Construction data



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The Ten Commandments of Trading

I found article below from mailing list I joined with. I forget who the writer is, but it should be considered as advices for our trading style. Here is..
1. The Trend is sacred thou shalt never trade against it.
2. Thou shalt trade according to the system for it is the word of Trading.
3. If the Trading givith not clear signal the shalt thou wait on the sidelines.
4. Thou shalt set your STOPS and keep them holy.
5. Thou shalt never trade on emotion especially greed for it is evil.
6. Thou shalt never gamble trade for this is a sign of greed.
7. Major news event are evils thou shalt never trade during these evil times.
8. Thou shalt never listen to pundit as they are often false phophets.
9. Thou shalt give 1% of thy earnings to charity in honor of The Great Trading.
10 Thou shalt have fun in thy trading and rejoice in it even whilst losing thine ass.




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Best Time for Selling Stocks

When is the right time to sell stocks? The stocks could be sold when its price has overpriced. Stocks value or price target can be confirmed through fundamental analysis and technical analysis. In fundamental analysis, this price target commonly found in every financial research which published by the securities.
Each security or brokerage of course has own view about stocks outlook then the price target for every security is different each other. Sometime this difference is very extreme, and then you should base on price target averages from these stocks.
Based on technical analysis, price target can be found through chart analysis. Generally, an analyst in stock broker has ability to analyze stocks technically then he can sets the price target of the stocks and recommends when to buy or sell a stock.
Many analyst or investor has a view only based on fundamental analysis without pays attention to technical analysis. But it’s recommended if we compile two ways of analysis to get larger perspective. Fundamental analysis can be used to answer the question, “What kind of stocks I have to buy or sell?” While the technical analysis used to answer the question, “When we have to buy or sell these stocks?”




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Forex Risk

Below are several things that must be considered related with some risks in forex trading or investing

• Just remember that capital which you traded in forex is idle money or unused fund that you ready to lose it all
  
• Don’t be in hurry to trade or invest in forex only because you has understood one or two forex trading techniques
  
• Use the forex demo account for enough time before starting real account
  
• Use forex trading stop loss and limit position to limit the profit and loss
  

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Forex Margin dan Leverage

The term of leverage (commonly in ratio 1:100, 1:500) in forex trading means if you want to trade $100,000 you don’t have to pay $100,000 but you only need margin $ 1,000 (in leverage 1:100) as guarantee fund to your forex broker.
So margin can be defined as guarantee fund that hold by broker temporarily when you do some forex trading positions. Margin will back to your account after you close or liquidate your position.
If you have cash $10,000 in forex broker who has leverage 1:100, it means you can open trading position with amount near to $1,000,000. It also means that to use size contract $1,000,000 you only need 1% margin ($10,000)
Another example: if you have capital $500 and your broker has leverage 1:100, and you want to buy using 1 mini lot (10,000) then margin that hold is 1% from the amount of contract size (10,000) which is 1% x 10,000 or using margin $100. It means that your capital will be hold temporarily and used as margin by broker in amount $100 and the $400 will be used to defense your loss. If anytime you close the position then the margin $100 will back to you.
The advantage of leverage is with smaller capital you can trade bigger contract size. With the equal capital, you can use bigger contract size than without using leverage. Then with the equal capital, you have chances to get more big profit everyday. Read More...

Forex Fundamental Analysis

There are two kind of forex price movement analysis. They are technical analysis and fundamental analysis. Now, we’ll discuss about forex fundamental analysis. To get some forex fundamental analysis, a trader usually uses some information from various media through newspaper, datasheet, internet, television etc. The medias are usually add some prediction about forex price movement that affected by fundamental indicators.
Usually, fundamental data is published every month except GDP and unemployment cost index which is published quarterly. Every fundamental data is given in pair number. The first number shows last month result while the second number shows this month prediction.
Generally, forex fundamental data is published in several times before the data announcement as a prediction (forecast). In forecast, the second number is the closest prediction. When the official announcement is published, and then the second number is the official data for the running month




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Ten Forex Advices

In this article we’ll learn some advices for our forex trading psychology:
1) Don’t trade with real forex account before trying forex demo account
2) Don’t hope so much to gain big profit from forex in short time
3) Don’t use loan fund which has high interest rate to trade forex
4) Invest some fund which we already to loose it all
5) We have to plan trade, so we can act quickly when the forex price moves reversely against our planning
6) Don’t trade in many pairs at same time
7) Having a discipline in risk management
8) Don’t ever blame someone if you face a risk. Remember, the market is always right, try to ride with the forex market wave. Just follow the trend!
9) Having loss is fairly matter
10) Keep our body and soul healthy




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Forex Trader Levels

Beginner forex trader
He is new trader who starts and designs winning records, searching the experience with playing forex in simulation, trying to find the best strategy and buying or downloading many books related to forex trading

Advanced forex trader
He was found a suitable method according to his personality. He starts to use forex ‘real account’ and struggling to design his winning records while he is learning

Competent forex trader
He starts to use many tools in forex trading, has a tight discipline in his trading and begin to enjoy the profit

Proficient forex trader
He always plan his trade and trade his plan to gain the forex trading profit

Expert forex trader
He usually opens position without emotion and try to do automated trading




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Forex Trading Ideas

- in forex trading, every position has a different story each other
- forex market moves without our intervention
- forex trading not a science which we can choose something then resulting what we hope
- no “holy grail” in forex trading that can produces profits constantly
- forex trading is probability
- winner mentality and stable emotion is the most important thing in order to gain success in forex trading
- risk management has a vital part in forex strategy
- choose our most comfortable strategy in forex trading
- enough capital to start forex trading
- do not marry with our trade




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Forex Trading Orders

Market order
Market order means you will buy ask price which running at the time or sell in bid price which running at the time. For example you will buy GBP/USD pair and the running price at the market shows 1.8900/1.8904. It means, your broker want to buy GBP/USD from you at price 1.8900 and sell to you at 1.8904

Pending Order
Pending order is automatically order for opening Long/Short position only if the price you ordered before was reached. If your order has not been reached yet, then the order still active and waiting till it been reached. There are two kind of pending order: pending order stop and pending order limit.
Stop Order
If you want to buy at ‘above’ current price, then use Stop Order Buy and if you want to sell at ‘under’ current price, then use Stop Order Sell.
For example:
Current Ask Price is 1.0000 and you only want to buy (LONG) if the price move to 1.0050, then you could use Stop Order Buy
Current Bid Price is 1.0000 and you only want to sell (SHORT) if the price move to 0.0950, then you could use Stop Order Sell



Limit Order
If you want to buy at ‘under’ current price, then use Limit Order Buy and if you want to sell at ‘above’ current price, then use Limit Order Sell.
For example:
Current Ask Price is 1.0000 and you only want to buy (LONG) if the price move to 0.0950, then you could use Limit Order Buy
Current Bid Price is 1.0000 and you only want to sell (SHORT) if the price move to 1.0050, then you could use Limit Order Sell

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Forex Price Range

High: is the highest price in its period from the beginning of period (open) till the end of period (close)
Low: is the lowest price in its period from the beginning of period (open) till the end of period (close)
Open: is the opening price for one period
Close: is the closing price for one period




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Forex Long and Short Positions

LONG position or open BUY in Forex trading is a position when a trader buys any currency at some price and aims to sell it then at higher price. So, the trader gets profit in the increasing (bullish) market (pair chart is up trending). For example: you buy at position 1.2500 then you sell it at 1.2550. It means that you take profit 50 points/pips.
LONG or open BUY is wishing the pair price will increase in order to take profit. For example: Long (BUY) GBP/USD, it means you wish GBP/USD chart is up trending or Pounds will strengthen against USD. The increasing of pair price can be assumed that the currency at the front of the pair is strengthens against currency at the behind. For example: the chart of pair GBP/USD is up trend then it means GBP is strengthening against USD.The used price at OPEN BUY / LONG is buy price (ASK) and the used price to close/liquid is sell price (BID).easily, LONG position often mentioned as BUY.
SHORT position or open SELL in Forex trading is a position when a trader sells any currency at some price and aims to buy it then at lower price. So, the trader gets profit in the decreasing (bearish) market (pair chart is down trending). For example: you sell at position 1.2500 then you buy it at 1.1550. It means that you take profit 50 points/pips.



SHORT or open SELL is wishing the pair price will decrease in order to take profit. For example: SHORT (SELL) GBP/USD, it means you wish GBP/USD chart is down trending or Pounds will weaken against USD. The decreasing of pair price can be assumed that the currency at the front of the pair is weakens against currency at the behind. For example: the chart of pair GBP/USD is down trend then it means GBP is weakens against USD. The used price at OPEN SELL/ SHORT is sell price (BID) and the used price to close/liquid is buy price (ASK). Easily, SHORT position often mentioned as SELL.
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Forex Quote

Forex Quote is consists two prices, lower price (Bid) and higher price (Ask/Offer). Bid is price which the forex broker (dealer) is willing to buy from you. While Ask / Offer isi price which the forex broker (dealer) is willing to sell to you. Bid is always lower than Ask. The subtraction between Bid and Ask is spread. The smaller spread from dealer forex , the bigger profit for forex trader

Forex quote is seems like this:
Quote GBP/USD; Bid/Ask: 1.8900/1.8903.
It means sell price to your broker is 1.8900 and buy price from your forex broker is 1.8903. Its spread (1.8903-1.8900) is 3 points.
Just remember:
If you open position ‘Buy (Long)’, it means you open position with ask price, and will be closed (close/liquid and also included stop loss and target profit) using bid price.

If you open position ‘Sell (Short)’, it means you open position with bid price, and will be closed (close/liquid and also included stop loss and target profit) using ask price.



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How does Forex trading works?

Forex trading is exchange one currency with another currency in order to get profit from the spread of currency value. For example: A trader gets a profit from BUY GBP. He buys 10,000 Pounds with USD in the beginning of November 2008 when the price of GBP/USD is 1.8700. (Buy GBP/USD) GBP: (+) 10000 -> bought by USD 1.8700 x 10000 = (-) 18.700. In the tomorrow, he is exchange 10,000 pounds back to US dollar in the price 1.9000. (Sell GBP/USD) GBP: (-) 10000 -> sold with USD 1.9000 x 10000 = (+) 19.000. In this example, the trader gets the gross gain USD 300 (-19.000+18.700).



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Forex: Is it needs huge capital?

Fortunately, it does not! It is because forex online trading is different from traditional forex trading. The forex online trading provider (forex online broker) usually only needs low initial deposit (generally about USD 250), while the traditional forex broker needs initial deposit at least USD 10,000. There is some forex broker which has no swap rate for Moslem forex trader. Usually you just have to give statement that you are a Moslem and get no interest account. On the other hand, there is forex broker which has not overnight charge. So, what do you needs for starting forex online trading?
1) Personal Computer (PC)
2) Stable and rapidly internet connection
3) Capital. There is no business without capital, and so it forex trading. But, in the brief time, if you had best strategy in forex trading, then your capital which limited will be unlimited and probably you will get financial freedom




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Forex Online Trading

Forex Online Trading is the transaction that trade currencies online through internet connection. With daily volume average above US$ 2000 billions, forex trading is 46 fold bigger than all stock markets in the world and it is the most liquid market in the world. Forex market also called FX market is the biggest financial market in the world. As we know, forex market opens during 24 hours continuously.


What is the advantage of Online Forex Trading compared with another investment?
• Forex online trading has no commission
• Two way opportunities, it means you can gain profit from forex trading in the bearish market or the bullish market
• Forex is 24 hours market continuously. You probably gain the profit during 24 hours. Forex makes you possibly trade 5X24 hours a week, starts from Sunday evening till Friday evening
• Forex is the most liquid investment product
• In forex online trading, you can use multiplier leverage, as you have a capital $ 1,000, then you can trade using $100,000 in broker which has leverage 1:100

Why are you had to learn forex online business?
• In forex, you are your own manager, no one can fire you
• In forex, you can set your own target. When you must work, how long will you work with it and how much profit you want to earn.
• In forex, you can make money whenever and wherever you are, as long as you have a computer (even PDA) and connected with internet.
• In forex, initial capital is small relatively if it is compared with another business for gaining unlimited income
• In forex, you can make money in 24 hours 5 days a week

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Forex Point/Pip and Contract Size

Point (pip) is the smallest unit of price movement in forex trading. One point (pip) for GBP/USD pair is 0.0001 while one point for USD/JPY pair is 0.01. For example: In the GBP/USD pair, the price movement from 1.9000 till 1.9060 is 60 points. Value of point (pip) is depend on amount of contract size (lot) and used currency.
Contract Size (Lot) is the smallest amount in forex trading. Generally, contract size (lot) which mostly used is Standard Lot, Mini Lot and Micro Lot. Standard Lot is equal with $100,000, Mini Lot is $10,000 and Micro Lot is $1,000. If your broker supported Standard and Mini Lot, then you can trade with fold of 100,000 and 10,000. for example: $30,000, $120,000, etc.




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Forex Currency Pair

The currency pairs of forex market can be classified into three categories as below:
Direct currency
Direct currency is the currency which exchanged with USD, e.g. GBP/USD, EUR/USD and another forex pair that compared with USD and the USD written at the behind
Indirect currency
Indirect currency is the currency that exchanged to buy USD e.g. USD/JPY, USD/CHF and another forex pair with compared with USD and the USD written at the front
Cross Rate
Cross rate is the currency which not compared with USD e.g. GBP/JPY, EUR/CHF, AUD/CAD etc.



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