Custom Search

!!!!!! JOIN ETORO AND MAKE MONEY NOW ITS FREE!!!!!!!!

Tuesday, September 29, 2009

Financial Excitement

There has been a lot of frenzied action since yesterday's Fed rate cuts.

Personally, I've activated an account with OANDA. They allow very small accounts and any size of trade. Also, you can trade less common currency pairs at reasonable spreads. For example, during normal trading, the spread on the EURUSD is usually 0.9 pips. That's great!

Anyhow, more experiments under way.I've got some interesting ideas that I can try safely using OANDA. If I strike it rich, I'll reveal semi-cryptic clues...

Bottom Spotting the USD/CAD

Down and down it goes, where it will stop, nobody knows.

Just how low can the USD go compared to the CAD? Parity is an option. Below parity is an option. However, there have to be some fundamentals that come into play here. The amount of trade between the USA and Canada is huge!

Traditionally, the USD has always sat above the CAD.

Anyway, I'm not sure parity or below is realistic. I'm starting to dip my toe into this market. I've got a small stake which represents a "water mark" to help me gauge future expectations. Somewhere, presumably within the next 500 pips, we should find the bottom. From there, we should see lots of volatility and false starts, allowing for profit in the short term.

It should also provide for profits in the long term once the USDCAD starts trending towards a more appropriate historical level. Unless of course there is a large fundamental change happening. That's possible, but flying under the radar still.

The EUR/TRY Carry Trade

I'm dabbling in the EURTRY carry trade situation.

Due to the difference in interest rates you can pocket a bit of change as long as you maintain your short position. Obviously, however, nothing is free. The EURTRY market has a lot of volatility complete with sharp price spikes on the order of 1500 pips!

This means that you cannot leave a position completely open or you will risk the value of your entire account. However, it's possible that such a volatile market will make it impossible to execute a stop loss at the exact point you want or at the point spread you expect. Danger, Will Robinson, danger.

On the other hand there is no guarantee that another spike will happen in the short term future. You can certainly place a short sell order way up in the stratosphere and if you are lucky enough to grab it you might be lucky. It's also possible the spike will be much higher than a previous spike and you'll get burned. Alternately, the spike price could represent a new trading range and not offer you a large profit. There are no certainties - only risks and potential rewards.

Shall we play a game?

Trailing Stop Strikes

Well, whether it is a small correction or not I have no idea, but the USDJPY has gone down enough to remove me from the market. So, my profits have been pocketed and I need to look for opportunities to get back in.

The same is true for my AUDUSD holdings.

I'm starting to look into the USDCAD, in the long term, but there is always the risk that the US dollar will take a dump when the Tuesday interest rate news comes out. It would be hard to imagine that we could get to parity, or that we could stay there for long, but there is always the chance that the war in Iraq will push us there. I see an incredible load of debt being heaped on the USA combined with an inevitable drop in spending when the war ends.

On a different note, I find myself sitting on the sidelines. I don't like being on the sideslines, but I don't want to keep throwing money at a market to see if I can a place where it will stick. That costs too much. Maybe I'll investigate some carry trade ideas. For example, the EURTRY is appealing, though very risky.

Riding the USDJPY Train

Well, imagine my surprise to wake up to a hugely profitable swing in the USDJPY.

It's too bad that I wasn't awake during the action. I could have increased my position on the way through and grabbed stupendous gains from it. Anyway, I cannot complain, as I've added almost 10% to my account.

Isn't it great when you accomplish great things in your sleep?

Of course, I should note that I did have some losses on this pair during it's downtown nearly a week ago.

Minimal Participation

Sure, you want to have as much capital as possible involved in an upswing, but it's painful having a stake while the market slides.

Unfortunately, you have to keep dipping in your toe. At the apparent end of a long slide, or when a correction appears to run its course, it's time to dip in that toe. What happens when you end up tossing your coins into the fray and the market rejects your advances?

All you can do is repeat the same. On a downturn, open up a new position. On an upturn, release the last toehold and climb down a notch. At some point, perhaps in a day, or in a week, assuming the overall trend does not reverse, you'll have to catch and ride an upswing. Heck, even if the overall trend does reverse you should still catch an upswing if you are patient.

Then, as I blogged about previously, during the upswing you want to maximize your involvement. You want to jump in, safely, as your locked in profits rise, to ensure that all the losses from toe dipping pale compared to the wins you eke out on the return. Winning a multiple of the amount lost will be worth it.

You have to play to win... but you certainly don't have to put a lot into it until you see that you have the upper hand.

Riding the AUDUSD Upswing

ve been riding the recent AUDUSD increase.

Now, I have some competing issues on my mind. As the AUDUSD hits new highs I have to worry about corrections. However, if this instrument is going to continue rising, I'd hate to not maximize my participation. See my previous post about having to play to win.

Anyway, while a more experienced Forex trader might not have to "figure this out", I've finally stumbled on a strategy that I like.

As a current position moves into some level of profits I'll slap a trailing stop on that position. This locks in some quantity of profits, at my choice, that I can relax about no matter what happens in the market.

With that profit locked in, I can enter a new position and immediately set a (trailing) stop on that as well. This new position can have a total risk less than the locked in profit above though it doesn't have to. In any case, this lets me choose the risk level I'm taking.

If the new position gains enough, I can adjust the initial trailing stop, if desired, to lock in more profits, and then open up another position. This way I can ride an up trend with increasing participation while having any losses limited to a precise value on a single open position.

Of course, this can be modified, if I feel like being riskier, but since we are near recent highs I don't feel like taking larger bets.

Gun Shy

I'm still a little gun shy.

I see little dips and corrections, which is only to be expected, and my stress levels go through the roof. That's what I get for playing across the recent job reports news last week.

All I can do is remind myself of various cliches. You have to play to win. No risk no reward. Buy low sell high. No guts no glory.

I suppose all this concern is healthy. It will certainly remind me to limit my downside and not to take inappropriate risks.

You Have to Play to Win

Well, now that I've exited most of my positions profitably, I'm paranoid. What if I put in some more cash and the market takes another massive dump? Heck, it has been a long upward run so I'm sure a correction is brewing at some point, right?

You have to play to win.If I sit on the sidelines and fret away the day I'll get nowhere. What I need to do is participate in a guarded way. What I intend is to open up a new position, which immediately places me slightly under water, and then sell my current open position once the newly opened position is profitable. Of course, I intend to buy these new positions during moments of weakness -- which is where the fear factor comes in.

What if the moment of weakness is not just a moment, but instead the start of some massive retrenchment?

Anyway, when the new purchase is above water, I don't have to sell immediately upon achieving profitabilty and I can always use a trailing stop on the items that have moved significantly above water. The trick is that I want to increase my share of revenue earning movements without having to take undue risks. However, I do have to continue to take risks if I want to make profits.

Every Day Feels Like Sunday Baby

I don't know if you'll remember it, but there was a commercial on CNN a while ago that had this song. It would talk about stocks, making money and how great trading the NASDAQ was. Something like that anyway.

Well, when the markets are moving in your favor, every day feels like Sunday.

Yes, indeed, my pip grinding slogfest has been ongoing since Friday, but things have improved so much since then that I've recovered all my original losses and have been pocketing "here a pip, there a pip" at all hours of the day and night.

For example, at 3:00am, I'm catching an upswing or topping up during a short term downturn in a strong trend (e.g. AUDUSD).

Anyway, I don't want to give the impression that this is easy. It goes against every instinct in your soul when you see your positions dropping, your margin reaching dangeroud levels, and candlestick after candlestick dripping red. Stop loss strategies or not, at some point you need to be able to jump into the tide and try to start swimming... and you will have to wonder if every correction is the start of another onslaught.

Oh my, wherefore art thou precious capital?

I guess if I wasn't playing around with an extremely leveraged (200:1) tiny account with hardly any funds that life would be easier. However, do I have the discipline to not get into situations of margin mismanagement? Can I jump into a larger balance? What about opening up multiple accounts in order to segrate risks or risk strategies to appropriate capital levels?

Anyhow, I'm happy to be crawling out of the basement, but I want to try and capture the raw emotions, the ups and downs, that trading can evoke.

Grinding Out the Pips

Well, I've been grinding away at my open positions. Catching the tops of candles and buying in again at the bottom. I guess that means I'm fairly good at reading the short term charts with respect to top and bottom behavior.

I've got several dozen trades in the past couple of days. It's probably a little too much work to bother transposing all the data.

Suffice it to say that I had some extremely stressful moments, but that I held on through that sticking to my expectation that there would be a turnaround. I've been having success as the USDJPY, AUDUSD and EURCHF have been climbing out of their recent friday collapses.

I did get a phone call from my provider. They want me to upgrade to a fully paid account, a standard account, to the tune of $3000 or more. I don't think so. I'm pretty happy, for now, with my $100 account. I did add another $200 to the account to make sure I didn't run into a margin call. I'm not sure they'll like the idea but I'd really like to work like hell to turn my $300 into $3000.

If I can do that, then I can handle a standard account. Right?

Trading Begins in Three Hours

Not that anyone is counting.

Anyhow, I'm looking at my account report and I've noticed that I don't seem to be accruing any rollovers. Perhaps this is a feature of a trial SuperMini account as compared to a standard account?

I'll be forced to look for a new trading partner that doesn't penalize small accounts if that is the case.

Trading Begins in Five Hours

Given the recent news based rout of the Greenback I am expecting some heated trading and movement when the markets reopen.

Everybody has had time to fully digest the news. Everybody has had time to analyze their charts to the Nth degree.

I'm going to step out on a limb and predict some short term rebound in US currency. However, at the same time, the recent volatility might put some fear into the market. So, between fear and greed, which will win?

Friday, September 25, 2009

Forex Review: Taking Stock

The weekend is a good time to review what happened during the last week, take a look at long term charts, and to think about new trading strategies for the future.

As a relative newcomer to the game I'm taking my first good look at the idea of rollover. Basically, when you make a trade, it doesn't really involve your own money. You borrow one currency (the base currency) to exchange it for another (the quote currency). The margin deducted from your account for the trade can be thought of as extra money to ensure you can afford to buy back enough quote currency to pay back the original base currency lender.

Anyway, without getting into the details of timing, you pay interest on the currency you borrowed and earn interest on the currency you bought. If there is a difference in interest rates, and their often is, you can earn revenue for as long as you hold onto the quote currency. Of course, the reverse is also true, such that you could be making net interest payments too.

As for trading strategies, looking at the long term charts shows me that there is a lot of uncertainty and volatility in the markets these days. This spells risk. Times are dangerous. I've seen it suggested that now is a good time not to risk trading on the Forex if you are an inexperienced trader. This isn't going to stop me from playing with my tiny account though.Personally, I'm looking at the USDJPY as a source of opportunity. Yes, as you know, opportunity is a synonym for risk in the arena of investment and speculation. The question is, how low can the USDJPY really sink? Is there going to be a fundamental change in the financial status of Japan with respect to the USA? As always, you have to consider your ability to stay in a position that doesn't move in the direction you want, and how much risk to your capital you are willing to allow.

Trade Free Weekends

It looks like The Mobi has survived another week. Although, I have to admit I'm holding my breath on a few underwater instruments this weekend.

In particular, the USDJPY took a heavy knock on the jaw and is lying face down waiting for the three count. Maybe the weekend will be long enough to let the coach clean up a few wounds while the dollar catches it's breath for the next round? Get up Mobi, get up!

The Australian dollar was showing a little strength. Better yet, the AUDUSD was bobbing up and down and I was able to shave some pips here and there right up until the last couple of trading minutes. A couple of extra dollars in the account can make a big difference -- not so much for the value as for the extra margin buffer.

Personally, I was disappointed by the EURCHF. Cheffy, my pet name for the CHF (pretty clever, I know) was busy chomping on the Euro's nuts from the moment the US jobs report came out. Come on, we don't need the Euro to be a surrogate for the US dollar. Anyway, I'm just grousing because it would have been nice to see a little more traffic going in the opposite direction to the recent stampede.

Speaking of stampedes, the EURUSD was feeling pretty uppity. I'm afraid a large portion of my potential gains were penned up via some, in retrospect, cautious limits. That's really too bad, but as my last post said, I got some learning out of that too. Maybe one of these days I'll know enough to catch a bit of ka-ching here and there.

Heck, I guess I was spread all over the place. Pretty aggressive for a complete rookie if I think about it. Anyway, the GBPUSD was a bit ambivalent about the recent news. Sure, it left the dollar in the dust for a while, but the pound suffered from a guilty conscience and came back to offer encouragment. However, by the end of today it was tired of waiting up.

I'm thinking that once I can clear out of my current positions I'll move to trading within a basket of somewhat offset instruments. Heck, I'm sure I can figure out tons of ways to give away bits of money here and there. Most importantly, yes, it's still fun. I'm still stuck to the screen like a fly on a lightbulb. Yes, I am aware that usually this isn't too good for the fly. I'll change my analogies when I'm a cash magnet.

This Business Is Tricky

I'm learning. Every day I'm learning.

Some fundamental news came out this morning. That was great, and I got some profits because of it, but at the same time I had limits on a lot of my positions to help ensure that I'd get out of positions and free up margin room.

This means I've left a lot, and I mean a lot, of gains on the table. That's too bad.

In the currency exchange market, finding the right balance between caution and greed is tricky. You really don't want to exclude yourself from massive movements in your favor. At the same time, if there is no massive move, or if it isn't in your favor, you'd had darn well better be protected.

Exchange Rates Differ From Stocks

There is an important difference between Forex instruments and stocks or bonds. The nature of this difference requires that you adjust your thinking.When you buy a stock, the presumption is that with inflation or growth that the stock will eventually always climb. That, at least, is the goal.Trading on exchange rates is a different ballgame. The rate of exchange is a ratio representing the relative value of the two currencies. It simply is not possible to expect one currency to appreciate relative to another indefinitely. For example, if the exchange rate between two currencies widened a lot then trade opportunities would be created to adjust this imbalance.Obviously, with a plethora of fundamental variables and widespread speculation it will be difficult to determine the range, but you can theoretically consider Forex instruments to be variable between some unknown high and low exchange rate. Personally, I would prefer to rotate my charts 90 degrees, label each side with the currency in question, and then have the line move from left to right as the relative exchange rate adjusts.At the same time, I'd like it if instruments were mirror imaged. By this, I mean that we should not be limited to buying and selling EURUSD, for example, but instead that we should be able to buy and sell both EURUSD and USDEUR. Yes, I know all of this is semantics, and it would require work for the market makers to either support this or have the trading systems perform on the fly translations, but it would make things less susceptible to common misconceptions.Or so I think today. With a bit of time I'm sure I'll buy into the current way things are done if for no other reason that it is the way it has always been done. Also, at that point, why should newcomers have it easier than I did?

Survives

Well, the so-called sideways market just took a major jump down across a fair number of currency pairs.

I added some equity to my account just to make sure I would not suffer a margin call in situation that I feel comfortable waiting out.

I need to be careful though. If I add equity just a few more times I won't be playing with peanuts -- at least not according to the small quantity of assets owned by this financial rookie.

Looking At Me Sideways

The market has been rather docile today. Well, at least in the currency instruments that I have been nurturing.

What is going on with all this sideways action? The Forex gods must be crazy!

Without getting into particular positions and so forth, here are some things that are currently sitting on my piled-high plate:
  • AUDUSD
  • EURCHF
  • EURGBP
  • EURUSD
  • GBPUSD
  • USDCAD
  • USDJPY

Presumably I'll be able to lighten my load during the overnight session or tomorrow before closing. I'm still not all that comfortable sitting on a pile of open positions all weekend long.

New Strategy Yields New Results

Since the currency market was soundly trouncing me I've adjusted my trading. One thing I have done is move to a slower chart. I'm now trading on the 1hr charts instead of using anything smaller. Another thing I've done is spread my risk across different instruments.


With this, I've found I'm more able to judge movement potential. I'm also able to be more patient when I have some items on the rise and some items going down. Since the market often moves back and forth, over time, a large percentage of my positions are becoming cashable.

A Couple Trades

Okay, time to show that I'm not absolutely wrong 100% of the time. So much for the inverse signal idea... damn, foiled again.

B CADJPY 109.36 -> 109.61 = 2.17
B EURUSD 1.3645 -> 1.3658 = 0.30
I had a fair amount of margin on my account and figured I'd unload the EURUSD on a spike so I could leave myself a bit more wiggle room with respect to other open positions.

Amazing New Signal Devised

Based on recent performance this new signal operates at near 100% efficiency. From now on I'll blog about entering long and short positions in near real time. Whatever I do, just do the opposite. You'll be rich in no time.


!I highly recommend grabbing my blog feed.

Understanding The Advertising

Now that I'm playing in the currency trading world I have a much better understanding of all the Forex advertising floating around. As a rank beginner plenty of the ads are hard to understand but a few are geared towards you:

  • Learn how to trade
  • Trade with us
  • Commission free trading

This can help you enter the market while advertising that talks about pips, signals and so forth may not be relevant yet.

Once you are trading, experiencing ups and downs, you become intersted in some related services that will purportedly solve your problems:

  • Real time signals
  • Secrets and strategies
  • Lower pip spreads

These advertisements are all about helping you know when to trade and perhaps to ease your search for profits by lowering your pip spread.

The reason for all these services is that technical analysis can be hard work. Sure, the computer will do a lot of it, but you still have to look at a lot of charts for various currency pairs within various timeframes, spot market trends, find support and resistance levels, recognize key signaling events, map out price point targets for expected movements and then hope the market doesn't find a reason to ignore all your work.

The more of this that is automated, or at least heavily guided, the less time it takes to work through various scenarios. Anyway, as I'm happy to point out, I'm no expert, but I'm slowly learning and experimenting with a small real money account. At this stage I'm just hoping to share my efforts and and give other potential beginners some things to think about.

I Was Right!

Okay, so it's too late now, but dammit, I was right! Every single open position I had to unload is now in the money. Of course, that aforementioned $ss chapping is in progress too.

Anyway, rest assured that I'm laughing about the whole day at this point.

Definitely Getting Spanked

Hey, it's important to have a good attitude, so don't get me wrong. Right now I'm in the process of being spanked for being in the wrong side of the forex market. Again, if you are just dropping by, I'm only dealing with a $100 account. It's not that big a deal and I get to learn a lesson.I should close my EURUSD position and take a hefty percentage loss.However, it would really chap my $ss to see the market reverse and spank me again while I'm sitting on the sidelines. The lesson is that I need to let go of the position, work harder to not get "caught" on the wrong side of a movement, and simply not fret over any such losses.Time to accept a 40% loss and move on.If at all possible, try to learn from my experience, before you are forced to learn it with your own money.Okay, I just closed out all my open positions, got over it, and opened up a single contract on the other side. Let's see if the market has gotten tired of spanking me yet.By the way, a lesson within a lesson, writing about my situation and what I know I should do about it, made it easier to do so. Oh no, this might mean I have to reveal every screwup I make in an effort to get better at this. Talk about humbling.

1. What is Forex?

Whether or not you are aware of it, you already play a role in currency trading. The simple fact that you have money in your pocket makes you an investor in a nation's currency. By holding US Dollars, for example, you have elected not to hold the currencies of other nations. When a currency is traded, the transaction is carried out on the Foreign Exchange market (also referred to as the Forex or FX market). The Forex market is the largest financial market in the world, with over $1.9 trillion changing hands every day!
Unlike other financial markets that operate at a centralized location (i.e., the stock exchange), the worldwide Forex market does not have a central location. It is a global electronic network of banks, financial institutions and individual Forex traders, all involved in the buying and selling of national currencies. A major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

What is Forex? Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. However, with advances in technology over the years along with the industry's high leverage options, the Forex market is now available to money managers and individual Forex traders.†
With some initial capital (as low as $200 with CMS Forex), and a computer with an internet connection you can become a participant in this global and liquid financial market.
Or, you can test the market with a practice account that does not involve real money. Just fill out a simple form here to receive a username, after which you will be prompted to download VT
Trader, our trading software.

This Forex Overview continues with a quick, but detailed explanation of how forex trading works. You can continue by clicking on Next Page or use the navigation on the top of this page to skip ahead.

If you are looking for a more robust educational resource, please visit our Online Forex Course.

2. Trading Forex

Using fundamental and technical analysis, the individual trader attempts to determine trends in the price movements of currencies, and by buying or selling currency pairs, attempts to gain profits. The most often traded currencies, the major currencies, are those of countries with stable governments and respected central banks that target low inflation. Currencies that often trade along with the U.S. Dollar include the European Euro, the Japanese Yen, and the British Pound as they are the most liquid. A trader can trade these currencies in any combination. CMS Forex also offers the Swiss Franc, and the Canadian, Australia and New Zealand Dollars making for 19 total trading instruments when accounting for all the cross pairs. More "Exotic" currencies are not offered as they are often tightly regulated and simply too illiquid.

Buying and Selling Currencies
Traders can generate profits (or losses) whether a currency is rising or falling by buying one currency, which is anticipated to gain value against another currency or selling one currency, which is anticipated to lose value against another currency. Taking a long position is one in which a trader buys a currency at one price and aims to sell it later at a higher price. Alternatively, a short position is one in which the trader sells a currency that he anticipates to depreciate and aims to buy the currency back later at a lower price.
Buying or selling currencies in response to economic or political events which occur are reactive, whereas buying or selling currencies on anticipated events is speculative. The bulk of currency activity is generated by market participants anticipating the direction of currency prices. In general, the value of a currency versus other currencies is a reflection of the condition of that country’s economy with respect to the other major economies.
It is the trader’s option to take either a conservative or a more risk-taking approach. Employing a conservative approach, the trader establishes and liquidates positions quickly and efficiently to capitalize on even the slightest of price fluctuations, using limit and stop orders to manage risk. A limit order is placed to ensure a position is established once a price level in the market has been reached.* A stop order is placed to automatically liquidate a position at a chosen price level in order to limit potential loss on a particular trade. By placing orders in relation to technical support and resistance levels, the trader may profit incrementally from the minor price fluctuations that occur each day.

The Time in the Major Financial Centers Impacts Market Players



Centers - London, Tokyo, and New York City.


Foreign exchange is a continuous global market, providing participants with 24-hour market access. The only breaks in trading occur during a brief period over the weekend. Although foreign exchange is the most liquid of all markets, the fact that it is an international market and trading 24-hours a day, the time of day can have a direct impact on the liquidity available for trading a particular currency.
The major dealer centers and time zones are that of Sydney, Tokyo, London, and New York. Therefore, traders must consider which players are in the market, since in the modern interconnected financial world, events that occur at any hour, in any part of the globe, can affect some or all parts of the investment community.
The market's 24-hour nature is a substantial attraction to traders that prefer to trade at all times of the day, or night.

3. Forex Versus Stocks

Unparalleled liquidity In the forex market, over $3.2 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, you can use up to 100:1 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 100:1 leverage, you can control up to $100,000 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, you are never charged a commission. No clearing fees. No exchange fees. No Software fees. No brokerage fees.
*CMS 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 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.
Superior Software CMS Forex began in 1999. Since then, our team of professional forex specialists has spent many late nights improving our software and services to guarantee a simplified, all-inclusive forex system that enables users to make the most educated decisions possible – providing over 100 tools and technical indicators, as well as streaming Dow Jones News to cover necessary fundamental updates that impact the forex market. We offer advanced chart-based trading, streaming price quotes, custom alerts, as well as the ability to create an automated trading system (so you can pre-program your system to buy or sell at specified market occurrences). Through VT Trader, users are able to connect directly with the live currency market on a stable platform that has been made to make your currency trading as intuitive as possible.
Simply download our easy-to-install software and open a free practice account to become better acquainted with the live forex market.

4. Fundamental Analysis

Fundamental analysis involves examining the intrinsic value of a nation’s currency based on economic news releases that reflect the strength, or weakness, of a country’s economy. Fundamental traders follow these news announcements, known as “fundamental indicators,” because they paint a picture of a currency's strength in relation to other countries.
Fundamental indicators are reports that include statistical data on things such as employment, gross domestic product (GDP), international trade, retail sales, housing, manufacturing, and interest rates. The stability, growth, or decline in any of these sectors may have an effect – direct or indirect – on the value of a country’s currency.
Factors That Move The Forex Market
Central banks play a key role in the Forex market because they have the responsibility of changing the country’s “base” interest rate. A central bank has to find a fine balance when setting interest rates as it wants to maintain growth in the economy, but at the same time it has to be careful to curtail inflation. The bank’s decisions on whether to raise, cut, or hold the interest rate fuels speculation in the Forex market, where the value of a currency, or group of currencies, changes in real time.
In addition to information about a country’s economy, the value of a currency is connected to national and international political events, elections, and changes in government trade policies. The prices of sensitive commodities like oil and gasoline are an important fundamental indicator as high prices can hurt consumer spending and confidence, and curtail the activities of certain businesses and government services.
Natural disasters, terrorist attacks, and militarily actions in a sensitive region cause instability in the world and have a significant impact on the Forex market as they develop. These types of evens can be hard to predict in advance.
The ability to identify trends in macroeconomic indicators and reading central bank’s current and future actions is a valuable tool that comes from following financial news, watching the markets, and trading Forex.
If you are interested in trying, sign up for a free practice account; or to start trading real money on a live account.

5.Technical Analysis

The technical trader is concerned with studying patterns of price movement on the chart in order to predict the direction of current and future trends in the Forex market. The decision to buy, sell, or hedge a current position – or to stay out of the market entirely – is made upon this analysis. Identify recurring patterns and make educated assessments to guide your decisions; should you initiate a trade at the current price, or set your system to open a position at a future price? The goal of the technical analyst is simple: to make profitable Forex trades by identifying past patterns that have historically led to a predictable outcome. However, the potential risk should always be considered. A recurring pattern is not precise and does not guarantee a desirable or expected price movement.
Tools of the Technical Trader
Using various chart types and technical indicators, more accurate predictions can be made from better analysis of the Forex market. Technical indicators use price, volume, volatility, and other factors to create measures of how the market crowd is behaving. Technical indicators can be utilized to help decipher underlying currents that are behind price action. Trend lines, support and resistance levels, reversals, and numerous patterns can also be used to track and identify trends. Once a pattern is recognized (not all are apparent), the Forex trader can decide whether to place a trade, or wait and monitor the price to see if the predictions were accurate.

6. VT Trader - CMS's Trading Software

The internet revolution of the 90’s changed many aspects of everyday and corporate life. One such change was to open the Forex market to individuals. What was once the domain of banks, hedge funds, and giant multinational corporations is now accessible to retail consumers. What fueled this change was the onset of trading software that connected anybody to the currency markets through the internet.

CMS Forex was one of the first companies to offer a trading platform built specifically for the currency markets, VT Trader. It was also one of the first to enhance their trading software by letting traders place trades directly from a chart window and to follow the progress of positions visually on the screen.
VT Trader has live quotes, charts, and detailed and up to the minute account reports. VT Trader charts serve as a virtual canvas for trader to:
Effortlessly draw and customize trend lines and moving averages.
Map out support and resistance levels by applying Fibonacci ratios, price channels, and other drawing tools.
Use and combine over 100 different technical indicators in order to strengthen one's analysis.
The platform's interface is graceful in allowing the user to move and customize VT Trader's windows according to individual preferences.
VT Trader is packed with features. From simple ones like entry and bundled market orders, stops and limits, and hedging to more complex ones such as trading system and indicator builders, VT Trader has something for every level of Forex trader.
We welcome you to take VT Trader for a test drive to see for yourself the power of one of the most revolutionary trading platforms on the market. It is completely free to download; all one has to do to get started is sign up for a free practice account.
For more information on how to start using VT Trader, please view our VT Trader User Guide.