Posts Tagged ‘forex trading’

What Markets IC Markets The Best For Forex In Australia

January 27th, 2011 No comments

I have been dealing in forex for more than eleven years, I originally started trading back in 1999 when there were only a couple of forex companies in Australia, as many of these brokers were quite new and not familiar with managing active investors like myself I was forced to search for a company offshore. After a great deal of searching I was able to locate a broker in Switzerland that could cater for high volume traders. It?s only been in the last 6 months that I once again began my search for a decent local Australian forex company and what I found was astounding to say the least.

After a couple of days scouring the internet I noticed that the forex landscape has changed dramatically, there is allot more choice than there use to be. Previously there we only really 2 major forex providers and both of them were market makers, not surprisingly the days of forex trading desks is over, the majority of providers now offer straight through processing a few of the top tier providers even have an ECN forex product offering.

I downloaded quite a few trading platforms, when I say a few I mean my monitor was covered with shortcuts to nearly every single platform available. Some trading platforms offered by brokers were online, although online trading platforms might at first appear simpler to use as no software needs to be downloaded they often lack the highly developed charting functionality of downloadable platforms and as a professional trader I can tell you that good quality charting is vital.

After road testing all of the online trading platforms that I had installed I found that the majority of them were probably not suitable for professional investors. The spreads on most of the trading platforms widened dramatically over news periods, although this isn’t uncommon as this is often when the market is the most unstable, I really didn’t expect the spread in EUR/USD to blow out by thirty five pips. A few of the broker platforms had fixed spreads, however I actually noticed a worse problem with these guys, their prices simply froze and I could not place any trades or get out of my open positions, in actual fact on two occasions the trading platforms simply crashed.

Of every one of the forex trading platforms that I trialled two were in fact ECN?s or electronic communication networks. An ECN is actually a mini marketplace where the forex company makes it possible for numerous banks to quote prices flowing into their trading platform. ECN brokers frequently have very tight spreads and far more transparent pricing than fixed spread providers and market makers. When trading with an ECN provider you will also find that your spreads won?t dramatically widen over news periods, the main reason for this is that with a lot of banks participating in the price formation it is expected that there will be buyers and sellers even in market instability.

Naturally as a professional trader my favored preference is an ECN forex broker, out of the two that I found in Australia I discovered that only one of them consistently had tighter spreads than the other on all the key forex pairs. I would say that it’s because they probably have more liquidity providers providing them with prices.

To cut a long story short I ended up picking IC Markets, it actually wasn?t a tough choice as these guys were the only company that could offer me consistently tight spreads even throughout news announcements in addition to a stable trading platform. So far so good, I have been dealing with them for about 3 months now and have had no troubles. As their spreads stay tight over the news I have had many more trading possibilities than I would have had with the other providers. If you?re in the marketplace for a trustworthy forex provider who is an ECN and can offer razor sharp spreads I can unquestionably say that form my experience IC Markets is one of the best out there.

Some Facts You Need To Know Concerning Forex Market

January 20th, 2011 No comments

Perhaps, you know that Forex is very popular presently. Although this is a complicated business, still many people are eager to try earn money on the Forex market. Actually, Forex can as well be called a foreign exchange trading. In the following post we are going to talk about on Forex market and the way it works.

To start with, we are going to look at the facts that can influence Forex. In case, you want to become a Forex trader, you need to know that “fundamental” factors of a country’s economy can play the major role on their currency?s exchange rates. Among these “fundamental” factors are: political positions and developments and relevant decisions made by a country’s central bank. Additionally, currency?s exchange rates of this or that country can be influenced by any relevant pieces of economic news affecting the country in question. That?s the cause why, for you to become a good Forex trader, it?s vital to be aware of this information at an early stage. What?s more, a good trader should be able to guess how the money markets will react to this or that news. Keep it in mind, it?s very important to know the latest political and economical news of the courtiers which currency you are dealing with. Indeed, this can be really unwise to ignore these fundamental elements basing the trading on the technical analysis only.

The next fact about Forex, you may be interested at is that each day approximately three trillion dollars is traded there. Because of this, it can be called the world’s most liquid market. Have you ever heard that Forex trading has many differences from to stock trading? Today many investors assume that Forex trading is a wonderful way to diversify their investments.

For sure, forex is a unique market as it has a few features that can differentiate it from other trading markets. These are: liquidity of market, the fact that the market operates 24 hours a day, 6 days a week, and that traders in the market typically generate low profit margins.

You also may want to know the Forex market was opened in the 1970? and it has changed much since then. For instance, today, it is not just the banks, but a range of institutions and investors that can take part in Forex trading.

And finally, it should be mentioned that every trader who choose to operate in Forex market, has to find as much useful things about forex trading and strategies used on this market. To do this, you may need to find some reputable course learning about all the peculiarities of the process of online trading and of course, suggest some good strategies.

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.

Trading Psychology And How To Keep Profits In Forex Market.

November 7th, 2010 No comments

In this post we will discuss the psychology of trading in Forex market. Regardless of trading experience all traders must know one of the main rule of successful Forex trading: give your position a chance to generate you profits.

In order to follow this principle, you need to have a lot of patience not to close a profitable position too early. And it is very important to know how to control yourself if you plan to stay in the market for a long time. If you don?t have patience, you can close a trade too early with a small profit but the other day you may have big losses and it will diminish your little profit.

In order to avoid it, try to use the rule of money growth. To accustom yourself to this principle, we can recommend you to imagine a bad trade in your mind. When you begin to ?scratch your hands? and want to close a trade early, immediately imagine a bad scenario of this trade. This is an effective technique. When a person imagines something bad, he instinctively doesn?t want this to happen. It will help you in your trading, but be careful not to believe in the bad trading scenario that you imagine. Otherwise, each time you imagine something bad, you risk to make it happen. Stay calm, because being nervous leads to the unsuccessful trading.

We would like to share with you our observations of trading Forex in Singapore. They are directly related to psychology, but this time not of the market, but of a trader. Singapore Forex as well as Forex in any other corner of the world is expanding and more new traders join this global market on a daily basis.

If a trader had a profitable trade or just began trading on that day, he could easily apply the rule that we talked about above. However, if a trader gets a loss earlier that day and then opens a next trading position, he is no longer able to follow the trading principles. And it?s all due to human psychology. Having a loss, a trader starts to be very cautious. At the smallest suspicion of a rollback, a trader stops his trade in order to cover his losses.

In other words, after some losses in trading a defense mechanism of a trader opens up. And instead of doing correct actions, he is making errors. After loosing a trader tries to take the lost back. Although the best solution would be to apply a little more patience and close a position not at the moment of covering the losses, but when the trading position brings profits. Thus you not only recover the losses, but also get a small profit. Once again we are convinced that psychology plays a great role in Forex trading in Singapore. Its understanding will allow you to dramatically improve your trading results.

Successful Online Trading System

August 31st, 2010 No comments

When trading in Forex market it is recommended to decide on a certain time frame of a Forex graph and trade according to it only. Professional traders use the time frames of 4 hours, 24 hours or 1 week. There are certain advantages and disadvantages for the high time frames. The bigger is your time frame, the more money you have to put to your trading account because each trading position requires higher margin. But at the same moment you have the chance to make higher income. The market?s situation is more stable for bigger time frames but it may take you loner to find a good opportunity to start a trade. In this article we would like to share a strategy of trading in 4 hours time frame using the candle stick charts that can be found at all Singapore brokers

Be prepared that trading with four hours candle stick charts requires a lot of patience and time. It may take you few days to find a good opportunity to enter the market and also from 12 hours to 5 days to stay in the market. This strategy is based on the trends that sometimes appear in the Singapore Forex market. The purpose is to open a trade in the beginning of the trend and leave it in the end of the trend. Following this strategy a trader must analyze the market and his open trades every 4 hours after the last candle in the 4 hours graph is finished.

When analyzing the market it is recommended to check the graphs for the certain currency pairs for 4-5 days back on a 4 hours candle stick chart in order to find out if there were some trends before or there is an opportunity for a potentially good downward or upward trend coming. The decision of opening or closing a trading order may be taken only every 4 hours when the last candle is finished and a new one has started.

If you see that the last three candles show that the trend is going up, this is a good moment to open a buy position. If at least 2 last candles go down, this is a signal for a potential downward trend and you can place a sell position. In order to diminish possible losses you can use such orders as take profit and stop loss. You can set a take profit order after 120 pips in case if the prices between the opening and closing of the market did not go over 80 pips for the last 5 trading days. If the rates surpassed 80 pips for the last 5 days, you can place the take profit order after 240 points.

We wish all traders good luck and invite them to share their experience of Forex trading in Singapore.