Posts Tagged ‘forex market’

Day Trading In Comparison With Other Strategies Of Currency Trading.

January 11th, 2011 No comments

Generally it is believed that trading for a short period of time, when a trading position lasts no more than one day, a trader performs a large number of transactions, among which there are both profitable and unprofitable trades. At the same time, during the long term trading, you can invest your deposit longer for higher profits, making your money work over a longer period of time, which in turn minimizes the number of orders and minimize your losses. Although it is not always possible to expect that the chosen direction of the trend will be successful. At that moment another significant factor comes to play as the vision of the market and the ability to provide significant economic situation in the world and analyze financial data for making trading decisions and applying them to the market for an extended period of time. But if you are sure in terms of profitability of your trading method, you can decide which trading technique is better for you: day trading or the long term investment.

When trading online for long periods of time, usually traders try to invest no more than 2-5% of the initial deposit into one position, gradually investing the remaining capital in the short-term trades. With regard to specifics of the day trading it is completely different, and every investor selects the risks for himself, since not everyone can afford to invest about 50% of the initial deposit with a stop loss at 30 pips. I think this is a high risk. But if you are sue in terms of profitability of work, imagine you have $ 10,000, 60-70% of them is in the short-term trade that you invest in any financial instrument, at the same time minimizing your risks of 10-20 pips. If you have successfully made the operation and your current trade is making you 100% profit, your investments reached the breakeven point and the “market noise” is not able to damage it. But such things happen very seldom. I think that a normal trader would never do like that, because it is very risky.

Trading Forex in Singapore market, we often make a number of financial transactions, carry on them during one day, a maximum of three days for the complete exposure of the transaction and getting profitable results. Usually Singapore trader tries all sorts of trading methods on a short interval of time, I would say that at short intervals of time it is very hard to trade according to a technique. Generally it is considered that a good system should be focused directly on a specific set of conditions in the Forex Singapore market. That is, there can be hardly a single technique, which can be bought for several thousand dollars and applied to all times of price movements. Each situation on the market needs a different approach.

What Is The Best Strategy For Online Trading

January 10th, 2011 No comments

Each of you, I am sure, is dreaming of a good future, expensive house, big car, interesting job, and financial independence. Yes, this is the goal of many people and in order to achieve it they do both good things and bad ones. And what about to live and work on an island in the Canaries ejoying sunshine all year long, Internet access, beach, warm water, tanned girls and men. Sure you will say that it’s not real, this can not be, but I will say that it can. Of course, I myself do not live on the islands, though, I think, soon I’ll be there. I heard a lot about good Singapore FX traders who live on the islands at their villas, and do not experience any discomfort there. So if one trader is able to live and work like that, then we can too.

Many materials have been written about day trading, many Forex trading techniques were offered by great traders of the world that trade and make great profits to their owners. I wouldn?t say that all this is nonsense, because I applied many strategies and used to build my own vision and view of market movements during the trading hours. Each Singapore trader, according to the development of his own approach of trading is able to trade successfully and generate profits on the market. It is not excluded, of course, that sometimes a trader will go into losses, but as a rule, improving the system over a long period of time can greatly help you to work on Forex market.

Our research articles will help you to understand that it is not enough to have one trading method for trading in the market. We believe that a successful vision of the market needs to approach the market analysis more globally, that is not from the perspective of a system that was created long ago, but in terms of the real situation happening in the market. Since every situation must be described in its own way and may be unique, that?s why it is not very good to use the same system for all occasions. Reasons of market changes, as a rule, cannot be always detected by technical analysis only. Technical analysis should be used only for short-term trading for finding the best moment for entrance, as at these moments you can entirely rely on the analysis.

To sum it up, we can say that day trading is for traders who over a period of time have learned to feel the market and are able to take correct decisions during the fast changing market?s trends. As a rule, you cannot just learn it, this knowledge comes with time you spend on trading in Singapore Forex market, and then by applying the gained knowledge it will help you develop business knowing how to think and make decisions in financial markets.

The History Of Foreign Exchange Trading

December 31st, 2010 No comments

The economical crisis of 1930 was a first stride to the formation of Forex in Singapore and other countries in the world. The outbreak of worldwide inflation after the First World War made it impossible to keep a fixed price for gold. The international economical crisis of 1929-1933. led to the destruction of economic and trade ties and forced the governments of leading world countries to abandon the national currency peg to the price of gold. In those years, the world’s reserve currency was the British pound sterling, which could be exchanged at a fixed price for gold and London was the world?s financial center.

When World War II drew to the end, the U.S., Britain and France took the lead in the Bretton Woods Conference (July 1944). According to its results the exchange rate peg was bound to the price of the US dollar, which in turn was rigidly pegged to the price of the same gold. Thus, the priority has moved to the United States, since this country at that time was the most developed economic power and suffered in the war years less than others. Exchange rates of national currencies could volatile from the established parities with the dollar by no more than 1%.

This plan worked great during some time, however, being adapted to accelerate post-war revival of world economy, it has shown weakness in the period of rapid growth. Economic growth speed in different countries was different and led to the increase of global prices. It resulted a significant increase of inflation, and the quote of gold in the market has exceeded the official fixed exchange rate.

In August 1971, U.S. President Richard Nixon annuled the national currency peg to gold and, later, in December of that year made his mind to devalue the national currency. These actions were the beginning of the path out of hard peg exchange rates to gold and the transition to a floating exchange rate system. Finally, the change to floating exchange rates has been set in Jamaica in Kingston in 1976. Since then the role of commercial banks was enlarged as a mechanism through which the international currency transactions were made.

Since then the national currency quotes became more volatile that showed a great opportunity for financial trading. In the beginning the main members of Forex Singapore and world financial market were banks and corporations with huge funds. Later the financial markets became open for smaller members that opened a door for every person to try his had in Forex trading in Singapore.

The Forex market is currently characterized by the largest volume of deals carried out (over one trillion dollars a day). Due to the appearance of internet and the access to the global telecommunications network, trading in Forex market is made around the clock, with a gradual movement of trading centers from the Pacific to Asia, Europe, and later to United States of America.

The Importance Of Unemployment Rate In Fundamental Analysis Of Financial Trading

December 26th, 2010 No comments

The employment rate is a widely used macro-economic indicator in Forex trading in Singapore that is applied in the Fundamental analysis of the market and can be displayed in the economical calendar of any Singapore Forex broker. As well as many others world economical and political factors, the state of the labor market has a huge impact on the national currency of any country. The big attention to employment must be given in the countries that are in the transitional phases of the economy, in particular, the transition from recession to recovery.

Forex traders must watch the info of employment of those countries whose national currencies are the most popular in the Forex market. Most attention is paid to employment in the United States because the dollar continues to be the key currency in Forex trading and the news of employment in USA usually have a significant influence on currencies? rates related to the dollar.

The situation of the labor market in the United States is characterized by two parameters:

Nonfarm payrolls – the number of positions (excluding temporary jobs related to agriculture), the rate affects about 340,000 companies in 500 industries;

Household employment – the number of working people among any group of people with different specialties.

These factors cover a number of jobs and the employed population in the USA. They are extremely important to accurately find out the growth of unemployment. In addition, the parameter Nonfarm payrolls very important indicator in Forex Singapore, which shows the dynamics of employment in USA. Its increase shows the employment growth and leads to an raise of the USD price.

The unemployment rate is at the heart of labor market indicators. It is calculated out of the balance of unemployed to the amount of all employed people. As a result, the unemployment rate also affects the rate of national currency. A fall in unemployment leads to an increase in foreign currency and vice versa. In addition, the unemployment rate is related to the growth of GDP (Okun law), which is also one of the most important macroeconomic aspects. The raise in the unemployment rate by 1% reduces GDP?s growth by 2%. Usually the calculation of the unemployment rate are done with the numbers that show the size of the Nonfarm payrolls index.

Statistical data of the unemployment rate in the USA and the indicator Nonfarm payrolls are available from 08:30 am Washington time every first Friday of the month.

The beginning of the recession allows you to watch the duration change of the workweek. If the working week is shortened, then the country has an economic crisis.

The average hourly wage helps to define the beginning of inflation. A huge increase in wages, outstripping productivity also shows the beginning of inflation in the country.

Volatility Of Financial Market And The Development Of Your Own Trading Strategy.

October 25th, 2010 No comments

When working on developing of your own trading strategy, don?t forget to take the activity of the currency market into your consideration. The Forex in Singapore as well as other parts of the world is working 5 days a week, 24 hours a day, which allows any trader from any part of the word take part in the global currency trading and not to miss any big opportunity to increase your funds. Every trader must understand and take into his account the timing of various trading sessions since the foreign exchange market at different period of a day may behave differently.

Each currency pair that is traded in Forex market has some volatility where it shows the biggest price changes. It usually takes place during the certain hours of a day when the country is active and many events happen. Usually every country has biggest influence on its currency, so knowing the schedule of each trading session may give you a hint which currencies it is better to trade.

London (European) session is the largest Forex market and is more volatile than any other sessions. During the London session about 30% of daily
Trading volume are done on Forex market. The average price change for all currency pairs during the London session is about 80 pips. For example, the daily range of currency pairs as GBP/CHF and GBP/JPY is about 140 pips. In addition to these pairs, the most popular pairs in Forex market at this time considered to be USD/CHF, GBP/USD, USD/CAD and EUR/USD. Realizing of volatility for each traded currency pair helps you to set levels of stop-loss orders more correctly.

It is a fact that after the London session is finished, many large investors prefer to move their investments from the European currencies to the US dollar. As at that time the New York (USA) session starts that is the second biggest turnover in the Forex market. Understanding the time of different sessions and their pecularities, can become the basis for the building of the trading system. The New York session is open from 12.00 to 20.00 GMT. The highest volatility during the day is seen in the period from 12.00 till 14.00 when both European and American sessions are open.

After the USA session is finished the Tokyo session starts, which runs from 0.00 to 8.00 GMT. This session includes all Asia and such big financial centers as Singapore Forex trading and Hong Kong. The closest attention during this period is paid to the currency pairs GBP/CHF and GBP/JPY at an average daily change of about 100 pips. Trading in Singapore is also concentrated on AUD, SGD and NZD currencies. Taking into the consideration the features of different sessions you can make a trading technique that takes into account time zones when the appearance of a trend is most likely. Using the time aspect of trading sessions and some good technical indictors is the key to creating a successful trading system.

Is It Difficult To Invent An Ideal Trading System?

October 24th, 2010 No comments

Every trader?s desire is to build an automatic trading system that would trade by itself and make you profit. There are many traders who rush forward purchasing different automated trading systems dreaming to increase their capital without having any trading knowledge. The thing is that not every trading system is effective.

It doesn?t matter how many attempts were done to invent the effective trading system. For today all the existing trading systems don?t provide constant income. Foreign exchange market Forex is a mixture of a variety of financial events, economic situation and the nature of a trader. Theoretically it is impossible to make a single strategy that would take into account all these points. Some professionals believe that the most effective trading strategy is the one that includes as little parameters as possible, but the tests show that this approach doesn?t give the wished results too.

Needless to say how much hours were spent on creation and testing of an ideal trading system that would make profit on Forex trading. Every day millions of traders, mostly the newbies, loose a lot of money trading with the automated systems. We don?t say that all automatic systems are bullshit and have no chance to succeed ? absolutely not. The thing is that when the trading decision is on a leaving person, sometimes its results are much better than that of a robot.

Following our researches, the best results show the indicators in the swing trading. If you look at the graphs, you will see that the market always goes up and down. Successful optimization of parameters of the indicator can give precise signals to buy or sell at the peaks of currency?s waves. Placing the small orders of 10-15 pips on the minute chart, may give you a good result in a short period of time. Please notice that this strategy of trading is called scalping, when you open a lot of short term positions. Not all Singapore brokers allow scalping, so before you apply this technique, be sure that your broker will not ask you to close a trading account.

Dreams associated with a fast enrichment in a short time with little effort excite the minds of many online traders. If you are using a trading system that doesn?t work for you, don?t think that there was a mistake in the code upon its building. Until today most experienced programmers are not giving up on finding a ideal trading system that brings a stable income. Every na?ve newbie needs to know and remember that Forex trading in Singapore is a complicated thing that is not so easy to automate. The most effective trading system may be done on emotionless calculations and long experience. Before you try to build a trading system, you need to spend many years on studying the Singapore Forex market and the language of programming.

Common Errors Made By Traders In Forex Trading

October 11th, 2010 No comments

For the last time the number of the beginner traders who wish to try themselves as investors in different financial markets is rapidly growing in Forex Singapore. But nevertheless, despite the development of new teaching methodologies and professional growth of the teachers, we cannot avoid noticing that the most usual mistakes of the new traders repeat themselves from year to year. In this article we would like to discuss what prevents the beginner traders from becoming professionals and succeed in online trading. In addition we will be glad to share our experience of currency trading and provide the novices with some valuable tips that can be used not only on Forex market, but in all financial markets in general.

One of the most basic mistake is a lack of necessary education about Forex trading. People start trading Forex after reading some posts about Forex trading or without it at all. It is almost impossible to learn currency trading just reading some materials. If you take any profession as an example, everything needs practice in order to develop the skills of work. A doctor may learn for six years in the university, but he will never know how to operate people if he doesn?t practice it. Why then trading online is treated differently by the majority of the newbie traders? After you gain some knowledge about online trading, the next level is to practice in demo account under the guidance of a teacher. Besides the demo trading account must be treated as a real one. The trader must experience the feeling of trading with real funds. Only after that you can carefully start working with real funds.

The other crucial mistake made by traders in online trading is the exaggerated haste and self-confidence. According to statistics, those traders who passed a trading course usually earn money in the first period of time, but quickly loose everything afterwards. The problem is very evident. During the first few months novice traders trade very cautiously according to the rules of trading, analysis and money management. After they make some money they become more secure in Forex market and think that online trading is a very simple thing and some rules are not necessary. This is a very dangerous moment when the new traders start avoiding the rules. The main rule in online trading is following the rules of the strategy that you have created or have bee taught forever.

Though Forex in Singapore is growing from year to year, every trader must treat this work very carefully and with responsibility. Almost every Singapore online brokerage firm gives the traders all necessary tools to help them succeed: instruments, charts, news, demo account and trading courses. Use them to increase your chances for successful trading.

Is It Possible To Make Capital On Online Trading?

September 15th, 2010 No comments

As soon as the entire world saw the opportunity to trade Forex online from the comfort of your home instead of the noisy Stock Exchange centers, more and more online Forex brokers appeared. All places were full of leaflets with a short description of opportunities that Forex market has to offer. Then a wave of fierce struggle for every client has diminished due to the massive losses of the new traders. How often we have seen information that Forex is a con and only millionaires can gain profit there as they trade with huge investments. Though all Singapore Forex brokers do their best to provide their traders the best trading instruments, still it is almost impossible to fosee the direction of the market and most of the newbies just ended up with the full losses of their funds.

Thosetraders who stayed on financial market either were successful traders or those who like the excitement of a trading game. Anyway, nobody said that it is simple to earn a lot of funds on Forex trading, for most audience trading Forex is a lottery where you can win a jackpot. It took some time to understand that Forex trading is a tough work and you need to learn and work a lot in order to develop the trading skills that are required for a successful trading.

The initial leaflets said the truth: the basics of online trading is very simple: buy cheap and sell expensive. But the thing is that you need to find the right entry point into the market and know to determine a trend. Of course the desired gian will appear only after you get a necessary experience and ability to analyze Forex market as well as financial news. Forex in Singapore turned into a big business, where almost everybody tried himself in this risky job. Many trading schools were opened teaching newbies from the entire world both in online and offline classes.

The main question of any new to Forex trader is ?how much you can earn on Forex market?. There is no definite reply on this question. Theoretically you can earn millions of dollars, but it depends on many things. Currency market has a huge potential, but not everyone can gain. There are always opposite sides: those who gain and fail. As the funds that the successful traders gain, are actually the investments of those who fail. Online trading is like a pool with the sharks, where everyone is hunting for your investments. The success of your online trading depends on experience and capital. By a simple mathematical calculation, starting from $1000 – $2000 you can increase your investment in few times during a year. Don?t you think that it is a good investment of your funds? Definitely it is. Though if these are your last money and you depend on them, we wouldn?t recommend you to invest in Forex, because it is risky and you have as many chances to loose as to gain.