Forex Secrets. Delusion No1. Forex Currency Rate and Economic Factors Impact on Exchange Rate
April 30, 2009 by Currency Trading Tips
Filed under FOREX Market
The delusion conceptually propounds that intraweek and intraday FOREX currency quotes movement is governed by either improvement or by deterioration of the state’s economic situation. But in reality, even in case the actual Forex news are superior to the estimated one, the FOREX quotes up/down movement is of 50/50 probability.
This statement is thoroughly important. Once the job of Forex trader is gambling on FOREX exchange rates differential (FOREX pairs up/down movement), the following is to be realized to obtain faultless profit:
FOREX pairs pricing mechanism (say at point X where you are completing the market analysis)
Factors imparting growth/decline to FOREX rates (up/down from point X).
Thus, having understood the FOREX ratesfactors effective at the extra-exchange (book-maker) FOREX market and the given currency motive factors, a trader must possess distinct knowledge of whether to buy or to sell the given currency pair.
So, what are these factors?
FOREX student suggest unambiguous interpretation of factors responsible for the price formation and the fluctuations there of:
Forex rate constitutes a demand-supply balance for a given goods (currency).
Any violation of this balance, (for instance, in case where the estimated news is in disagreement with the issued official one), results in the FOREX rates reciprocation in chase of a new demand-supply balance. Poor demand brings about decline in a certain currency rate, with a high demand leading to the growth of the latter. The situation continues as long as the currency buy/sell demand comes to balance at another level or at another point.
Referring to the B. Williams (“Trading Chaos 2” Chapter 1 “The market is what you are thinking of it”):
Each world market is dedicated to distribute or share limited amount of something… among those desirous to obtain it most of all. The market affects it by way of finding out and identifying the exact price? Underlying the buyer’/sellers’ power absolute equilibrium point.
The above point is readily established by stock, futures, bonds, FOREX and options markets, be it either via an open auction or by virtue of a computerized facility. Markets spot this point prior to any misbalance being detectable by You or by me or even by traders at the exchange floor.
With this scenario holding true – and it really does – we are in position to jump at certain simple yet important conclusions as regards the information being circulated through the market and enjoying doubtless acceptance”.
Thomas Demark was more laconic in “Technical analysis - an emerging science”:
“Price movement is governed by demand and supply. Should demand exceed supply, there’s a price rally and if visa versa, there’s a price decline. All economists do share these underlying principles”.
Hence, the role of fundamental analysis for FOREX market is readily apparent.
In scholar fiction one will discover roughly the following explanation, persistently wandering from book to book, from site to site and suggesting attaining successful trading at FOREX market by way of scrutinizing the country’s economic fundamental data, viz. by tracking the factors reflective of the country’s economy condition as below:
State economy condition dynamics indicators (GDP, trade & payments balance, current account, industrial production, etc. It is knowledge, that the higher the above indicators – the faster the economic and the currency price growth);
Stock indices, via average arithmetic index of the country’s securities market condition and dynamics. E.g.: 0.3% daily DJI growth in the USA means that this certain day the shares of 30 leading US companies, being pictured by DJU, went 0.3% more expensive. By similarity, DAX30 is the major German index, incorporating the price of shares of the country’s 30 leading companies.
The country’s interest rate, since the higher the rate, the greater number of investors is eager to invest into the country’s economy and hence into national currency strength.
Rate of inflation (the higher the rate, the quicker the National Bank will hike the interest rate). With this assumption, the CPI constitutes a key factor.
Money supply growth in domestic market, which fact brings about the inflation, leading to the interest rate hike.
The country’s gold and currency reserve assets.
Variation dynamics correlation of: balances of payment, trade balance, state budget, gross domestic product (GDP), etc.
Trade and industry dynamics (industrial production, industrial orders, DGO, capacity utilization, retail sales, etc.)
Construction statistics (construction spending, new home sales, housing under construction, building permits, etc.)
Labor statistics (unemployment rate, new jobs, etc.)
Society investigations (consumer confidence, consumer sentiment, purchase managers and service managers sentiment, etc.)
To be considered additionally are the country’s political stability and tranquility (clearly, any political, natural and other cataclysms are sure to turn investors nervous making them withdraw the investments from the country, thus weakening its national currency). And with the currency being the national economy derivative, changes in economic data will inevitably result in the above currency rate movement.
Conclusions:
Progress in economy results in the currency exchange rate rally.
Decrease in economic indicators leads to the national currency rate decline.
To sum it up, critical economic and political news (whose calendar is issued in advance and is familiar to any trader) constitute a standing factor giving rise to misbalance and causing the currency rate fluctuations.
In anticipation of important economic and political news FOREX pair crawl to the rates as inspired by the estimates (“rumored trade”), whereas upon actual news there occurs a pulse motion of FOREX pairs in accordance with the scheme below;
Forex rate grows if actual news are better than the estimated one;
Forex rate declines if actual news are worse than the estimated one.
ARE YOU FAMILIAR WITH THESE ABC BASICS OF STUDYING FOREX?
Do you accept that one can earn money by way of using these basics, known to every trader?
Then why, having absorbed these economic axioms, 90% of Forex traders in the world are losers rather than winners.
Where is the delusion of the above ABC truth, nudging traders towards losses? Let us perform sort of point-by-point analysis.
The currency exchange FOREX market is a book-makers one. It is gambling on rates difference without direct money delivery to the exchange market, except for hedging of traders’ funds by Forex brokers, via buy-sell difference especially during strong trends). Then, www.forexite.com reads: “Trading is performed without actual currencies supply, which fact cuts overheads and enables Forexite to go long and short on the currency” http://www.forexite.com/forexite_advantages/forex_advantages.html.
Comment: Have you ever met any book-makers;
o whose logics was coincident with that of THEIR clients (traders),
o whose stakes were being made in accordance with THEIR technical analysts forecasts, economic laws and common sense?
And what extent of doubt and skepticism should be attached to THEIR free “recommendations”, “advice”, “surveys” and “forecasts”, laid out at THEIR sites through THEIR analysts?
As a regular result, over 90% of the world traders are still loosing their deposits at FOREX each time they follow Thomas Demark stereotype that “All the economists share these underlying principles”.
Comment No.1. In as much as the above underlying principles are 90% contradictory to practice, it gives rise to the following question. Might these “underlying principles, shared by all economists including Thomas Demark” have possibly turned into dogma, alien to life and practice?
Comment No.2. What should a trader lean on: practice or dogma even if supported by great names, provided that the trader is purported at earning money?
FOREX analysts issuing their daily bulky market reviews are not FOREX traders in the overwhelming majority (see detailed discussion below). And on bringing together pairs 1, 2 and 3 there appears certain regularity.
Please, think over A. Elder words, that: “FOREX rates and the fundamental analysis are tied together with a mile-long rope. The fundamental analysis is ultimately decisive. But anything is likely to happen prior to this eventuality”. See http://forum.alpari-idc.ru/viewtopic.php?p=233365&sid=a15db5e24b0eec0a8cf725e2c5cac859).
Another, yet no less renowned trader and analyst, Bill Williams underlines the same mental regularity of an experienced professional trader (level 3 of his trader’s skill rating as per “Trading Chaos 2”): “On attaining level 3 you emerge as a self-provided pro trader. You are always familiar with the market’s basic, usually invisible structure. You no longer need to refer to others’ opinions. You needn’t read “Wall Street Journal”, watch market-oriented TV programs, and subscribe to information bulletins, waste money on information channels”.
Comment: Logically, there is a counter-implication, that if You are eager to become a successful trader, You are to restrict the influence of various surveys and recommendations on yourself even in case they originate from the world famous “Wall Street Journal”, to say nothing of crude gurus in analyst skins who use to know ahead of time where currencies will go.
Forex news is a scheduled issue of fundamental data, which as a rule impairs FOREX rates a sharp pulse of motion. But then, why the currency rates movement vector is only 50% coincident with the ABC truism logics as to where the rate should rush in case of actual news being much better or worse than the estimate. And, please, make an attempt to answer the following question, stirring for every trader: why with the new being worse than expected (say, on US economy), the USD currency would initially fall by 40 pips (news work-off) but in 5 to 10 minutes it would swivel back and would display a 200-point rally, with no account to either the issued news or to common sense.
Below are some examples:
Fig. 1. GBPUSD chart as of April 1, 2005 after the news, positive for the GBP and negative for the US economy.
(Picture you can see on author site )
In March the CIPS manufacturing index amounted to 52.0 (with the previous data revised from 51.8 to 51.6). Oil price in NYC has grown by USD 2.40 up to USD57.70 per bbl (new record of the latest 21 years). Non-farm payrolls in the USA was minimum since last July (previous data revised towards lower values). There has been a decline in the Michigan sentiment index to 92.6 (median estimate was 92.9, with 92.9 previously).
All the US indices faced a fall down. DJI at NYSE has fallen by 99.46 pips (-0.95%) towards closing at 10404.30. NASDAQ declined by 14.42 pips (-0.72%) to 1984.81. S&P500 slipped by 7.67 pips (-0.65%) to 1172.92. 30-yr US Bonds yielded 4.729 (0.037 lower as compared to the previous close). By contrary, FTSE100 has grown by 19.60 pips (+0.40%) to 4914.00.
Now, the question is to certified economists: what will happen to the GBPUSD within one day or even several hours upon publication of these data? You are right, USD should not simply fall down, it should collapse. Powerfully, swiftly. Well, well…
And this time, the same question to experienced traders. By FOREX news headlines You might have guessed that the events are taking place at the Friday American session. Correct. Initially, anyway, the GBPUSD chart will go up by 100 pips (news wok-off), followed by a pullback. Then Forex chart starts a new rally.
It is now to be tracked whether the GBP will breach the latest rally high or not. If affirmative, it will rush up by approximately 160 pips (Elliott wave 1 was 100 pips, while EW 3 is 60% longer). But if the high is not breached? The GBP currency quote will in no way come to a standstill, moreover on Friday afternoon. Hence, - down, to the starting point! And, if breached, similar situation takes shape but the counting is performed in a “down” direction (EW1, being the same 100 pips plus 187 pips from 1.8826 to 1.8759 being EW 3).
The FOREX day trading tactics will be given scrutiny in a separate chapter. A still separate chapter will be dedicated to Friday trade at American session due to its inherent specifics and to strong seemingly inappropriate movement. The movement is, of course, appropriate. To say nothing of Friday. But it will be touched upon later.
Now, getting back to the currency chart. As apparent, the GBPUSD pair movement on Friday, April, 01, 2005 is in no way in conjunction with the US economy fundamental data. Each forex trader can provide from tens to hundreds of similar instances, where the news are of a certain vector, whereas, after a fraudulent rush along the news vector, a currency applies reverse thrust.
Thereafter, the next day, in daily currency surveys, certified economists are sure to explain all to us by way of inventing another undisguised nonsense, like: “in spite of certain data, traders decided that the currency has already worked-off this side”. But! How could this occur on Apr, 01, 2005, provided that the currency has been staying flat in a narrow range in the course of the whole of the European session?
Otherwise, another explanation may emerge, that forex traders were expecting still more inferior news on the US economy… But! By how much more inferior, if according to DJ, the US non-farm payrolls MA was equivalent to 180K, with actual being +110K, estimate being +225K and prior being +243K? And in what manner do these economists count up world traders: by capita, by countries or by the funds, lost by those, who continued staying long in a holy belief in renowned academic scholars postulate of FOREX rates being tied up to countries’ economy statistics.
I wonder if I’ll ever chance to witness legal procedures to be instituted against any of those famous scholars, so that no one would dare claim that fundamental data trigger rate spikes.
The same pertains to economists, writing about the way, hundreds of thousands traders throughout the globe have conspired to conclude that it is time to reverse the trends with absolutely no grounds. Is it really feasible?
Such reading-matter is, but hammering a single question into one’s head: is it lie or is it stupidity of those cooking daily reports for taking traders for a ride, fooling them up and keeping them from the truth, which might be of great avail to them in daily trading. Traders are not a decisive factor, thus rates movement is in no way dependent on their will. Practically in no way.
Wanna check? Negotiate with tens of traders of the trading floor and arrange for a simultaneous entry long on some exotic FOREX pair. In so doing, try to push up either the NZDHKD, or the NZDCAD, or the HKDCAD. No need? I think so. You’ll certainly suffer failure with the above, to say nothing of the EUR, GBP, CHF.
Another example:
Fig.2. GBPUSD movement as of May 13, 2005.
(Picture you can see on author site )
This is an M15 chart of the American session, where the USD pair has grown by over 100 pips from 1.8583 to 1.8481 against the news, negative for the US economy:
Most indices have dropped down: DJI at NYSE – by 49.36 pips (-0.48%) to close at 10140.12; S&P500 – by 5.31 pips (-0.46%) to 1154.05. NASDAQ has grown by 12.92 pips (+0.66%) to1976.80. 30yr US Bonds yielded 4.484 (0.047 drop from previous close)
There is a fall in Michigan sentiment index. In May UMich was 85.3 with med est 90.0 and prior 87.7. So it was worse than the estimate, reaching the low since March, 2003. The index decline was being observed for the fifth month.
The April US export price index was +0.6% with prior of +0.7%.
Below are other similar examples of that same day.
Fig. 3. EURUSD chart as of May 13, 2005.
(Picture you can see on author site )
Hundreds of examples may be offered, where the Forex news vector is opposite to that of the currency movement. Practically, actual news may happen to be superior or inferior to the estimate. FOREX quotes up/down movement is also of 50/50 probability irrespective of the above.
Why does it happen and what is the way for a trader to pinpoint entries and exits? This is going to be discussed in ensuing chapters of this book and in the Masterforex-V Trading Academy proceedings.
Full text of this article and pictures of examples http://www.masterforex-v.su/
If you wish to be trained on Trading System Masterforex-V - one of new and most effective techniques of trade on Forex in the world visit http://www.masterforex-v.su/
Thanks to Vyacheslav Vasilevich (MasterForex-V) for contributing this article to our Currency Trading blog:
This statement is thoroughly important. Once the job of Forex trader is gambling on FOREX exchange rates differential (FOREX pairs up/down movement), the following is to be realized to obtain faultless profit:
FOREX pairs pricing mechanism (say at point X where you are completing the market analysis)
Factors imparting growth/decline to FOREX rates (up/down from point X).
Thus, having understood the FOREX ratesfactors effective at the extra-exchange (book-maker) FOREX market and the given currency motive factors, a trader must possess distinct knowledge of whether to buy or to sell the given currency pair.
So, what are these factors?
FOREX student suggest unambiguous interpretation of factors responsible for the price formation and the fluctuations there of:
Forex rate constitutes a demand-supply balance for a given goods (currency).
Any violation of this balance, (for instance, in case where the estimated news is in disagreement with the issued official one), results in the FOREX rates reciprocation in chase of a new demand-supply balance. Poor demand brings about decline in a certain currency rate, with a high demand leading to the growth of the latter. The situation continues as long as the currency buy/sell demand comes to balance at another level or at another point.
Referring to the B. Williams (“Trading Chaos 2” Chapter 1 “The market is what you are thinking of it”):
Each world market is dedicated to distribute or share limited amount of something… among those desirous to obtain it most of all. The market affects it by way of finding out and identifying the exact price? Underlying the buyer’/sellers’ power absolute equilibrium point.
The above point is readily established by stock, futures, bonds, FOREX and options markets, be it either via an open auction or by virtue of a computerized facility. Markets spot this point prior to any misbalance being detectable by You or by me or even by traders at the exchange floor.
With this scenario holding true – and it really does – we are in position to jump at certain simple yet important conclusions as regards the information being circulated through the market and enjoying doubtless acceptance”.
Thomas Demark was more laconic in “Technical analysis - an emerging science”:
“Price movement is governed by demand and supply. Should demand exceed supply, there’s a price rally and if visa versa, there’s a price decline. All economists do share these underlying principles”.
Hence, the role of fundamental analysis for FOREX market is readily apparent.
In scholar fiction one will discover roughly the following explanation, persistently wandering from book to book, from site to site and suggesting attaining successful trading at FOREX market by way of scrutinizing the country’s economic fundamental data, viz. by tracking the factors reflective of the country’s economy condition as below:
State economy condition dynamics indicators (GDP, trade & payments balance, current account, industrial production, etc. It is knowledge, that the higher the above indicators – the faster the economic and the currency price growth);
Stock indices, via average arithmetic index of the country’s securities market condition and dynamics. E.g.: 0.3% daily DJI growth in the USA means that this certain day the shares of 30 leading US companies, being pictured by DJU, went 0.3% more expensive. By similarity, DAX30 is the major German index, incorporating the price of shares of the country’s 30 leading companies.
The country’s interest rate, since the higher the rate, the greater number of investors is eager to invest into the country’s economy and hence into national currency strength.
Rate of inflation (the higher the rate, the quicker the National Bank will hike the interest rate). With this assumption, the CPI constitutes a key factor.
Money supply growth in domestic market, which fact brings about the inflation, leading to the interest rate hike.
The country’s gold and currency reserve assets.
Variation dynamics correlation of: balances of payment, trade balance, state budget, gross domestic product (GDP), etc.
Trade and industry dynamics (industrial production, industrial orders, DGO, capacity utilization, retail sales, etc.)
Construction statistics (construction spending, new home sales, housing under construction, building permits, etc.)
Labor statistics (unemployment rate, new jobs, etc.)
Society investigations (consumer confidence, consumer sentiment, purchase managers and service managers sentiment, etc.)
To be considered additionally are the country’s political stability and tranquility (clearly, any political, natural and other cataclysms are sure to turn investors nervous making them withdraw the investments from the country, thus weakening its national currency). And with the currency being the national economy derivative, changes in economic data will inevitably result in the above currency rate movement.
Conclusions:
Progress in economy results in the currency exchange rate rally.
Decrease in economic indicators leads to the national currency rate decline.
To sum it up, critical economic and political news (whose calendar is issued in advance and is familiar to any trader) constitute a standing factor giving rise to misbalance and causing the currency rate fluctuations.
In anticipation of important economic and political news FOREX pair crawl to the rates as inspired by the estimates (“rumored trade”), whereas upon actual news there occurs a pulse motion of FOREX pairs in accordance with the scheme below;
Forex rate grows if actual news are better than the estimated one;
Forex rate declines if actual news are worse than the estimated one.
ARE YOU FAMILIAR WITH THESE ABC BASICS OF STUDYING FOREX?
Do you accept that one can earn money by way of using these basics, known to every trader?
Then why, having absorbed these economic axioms, 90% of Forex traders in the world are losers rather than winners.
Where is the delusion of the above ABC truth, nudging traders towards losses? Let us perform sort of point-by-point analysis.
The currency exchange FOREX market is a book-makers one. It is gambling on rates difference without direct money delivery to the exchange market, except for hedging of traders’ funds by Forex brokers, via buy-sell difference especially during strong trends). Then, www.forexite.com reads: “Trading is performed without actual currencies supply, which fact cuts overheads and enables Forexite to go long and short on the currency” http://www.forexite.com/forexite_advantages/forex_advantages.html.
Comment: Have you ever met any book-makers;
o whose logics was coincident with that of THEIR clients (traders),
o whose stakes were being made in accordance with THEIR technical analysts forecasts, economic laws and common sense?
And what extent of doubt and skepticism should be attached to THEIR free “recommendations”, “advice”, “surveys” and “forecasts”, laid out at THEIR sites through THEIR analysts?
As a regular result, over 90% of the world traders are still loosing their deposits at FOREX each time they follow Thomas Demark stereotype that “All the economists share these underlying principles”.
Comment No.1. In as much as the above underlying principles are 90% contradictory to practice, it gives rise to the following question. Might these “underlying principles, shared by all economists including Thomas Demark” have possibly turned into dogma, alien to life and practice?
Comment No.2. What should a trader lean on: practice or dogma even if supported by great names, provided that the trader is purported at earning money?
FOREX analysts issuing their daily bulky market reviews are not FOREX traders in the overwhelming majority (see detailed discussion below). And on bringing together pairs 1, 2 and 3 there appears certain regularity.
Please, think over A. Elder words, that: “FOREX rates and the fundamental analysis are tied together with a mile-long rope. The fundamental analysis is ultimately decisive. But anything is likely to happen prior to this eventuality”. See http://forum.alpari-idc.ru/viewtopic.php?p=233365&sid=a15db5e24b0eec0a8cf725e2c5cac859).
Another, yet no less renowned trader and analyst, Bill Williams underlines the same mental regularity of an experienced professional trader (level 3 of his trader’s skill rating as per “Trading Chaos 2”): “On attaining level 3 you emerge as a self-provided pro trader. You are always familiar with the market’s basic, usually invisible structure. You no longer need to refer to others’ opinions. You needn’t read “Wall Street Journal”, watch market-oriented TV programs, and subscribe to information bulletins, waste money on information channels”.
Comment: Logically, there is a counter-implication, that if You are eager to become a successful trader, You are to restrict the influence of various surveys and recommendations on yourself even in case they originate from the world famous “Wall Street Journal”, to say nothing of crude gurus in analyst skins who use to know ahead of time where currencies will go.
Forex news is a scheduled issue of fundamental data, which as a rule impairs FOREX rates a sharp pulse of motion. But then, why the currency rates movement vector is only 50% coincident with the ABC truism logics as to where the rate should rush in case of actual news being much better or worse than the estimate. And, please, make an attempt to answer the following question, stirring for every trader: why with the new being worse than expected (say, on US economy), the USD currency would initially fall by 40 pips (news work-off) but in 5 to 10 minutes it would swivel back and would display a 200-point rally, with no account to either the issued news or to common sense.
Below are some examples:
Fig. 1. GBPUSD chart as of April 1, 2005 after the news, positive for the GBP and negative for the US economy.
(Picture you can see on author site )
In March the CIPS manufacturing index amounted to 52.0 (with the previous data revised from 51.8 to 51.6). Oil price in NYC has grown by USD 2.40 up to USD57.70 per bbl (new record of the latest 21 years). Non-farm payrolls in the USA was minimum since last July (previous data revised towards lower values). There has been a decline in the Michigan sentiment index to 92.6 (median estimate was 92.9, with 92.9 previously).
All the US indices faced a fall down. DJI at NYSE has fallen by 99.46 pips (-0.95%) towards closing at 10404.30. NASDAQ declined by 14.42 pips (-0.72%) to 1984.81. S&P500 slipped by 7.67 pips (-0.65%) to 1172.92. 30-yr US Bonds yielded 4.729 (0.037 lower as compared to the previous close). By contrary, FTSE100 has grown by 19.60 pips (+0.40%) to 4914.00.
Now, the question is to certified economists: what will happen to the GBPUSD within one day or even several hours upon publication of these data? You are right, USD should not simply fall down, it should collapse. Powerfully, swiftly. Well, well…
And this time, the same question to experienced traders. By FOREX news headlines You might have guessed that the events are taking place at the Friday American session. Correct. Initially, anyway, the GBPUSD chart will go up by 100 pips (news wok-off), followed by a pullback. Then Forex chart starts a new rally.
It is now to be tracked whether the GBP will breach the latest rally high or not. If affirmative, it will rush up by approximately 160 pips (Elliott wave 1 was 100 pips, while EW 3 is 60% longer). But if the high is not breached? The GBP currency quote will in no way come to a standstill, moreover on Friday afternoon. Hence, - down, to the starting point! And, if breached, similar situation takes shape but the counting is performed in a “down” direction (EW1, being the same 100 pips plus 187 pips from 1.8826 to 1.8759 being EW 3).
The FOREX day trading tactics will be given scrutiny in a separate chapter. A still separate chapter will be dedicated to Friday trade at American session due to its inherent specifics and to strong seemingly inappropriate movement. The movement is, of course, appropriate. To say nothing of Friday. But it will be touched upon later.
Now, getting back to the currency chart. As apparent, the GBPUSD pair movement on Friday, April, 01, 2005 is in no way in conjunction with the US economy fundamental data. Each forex trader can provide from tens to hundreds of similar instances, where the news are of a certain vector, whereas, after a fraudulent rush along the news vector, a currency applies reverse thrust.
Thereafter, the next day, in daily currency surveys, certified economists are sure to explain all to us by way of inventing another undisguised nonsense, like: “in spite of certain data, traders decided that the currency has already worked-off this side”. But! How could this occur on Apr, 01, 2005, provided that the currency has been staying flat in a narrow range in the course of the whole of the European session?
Otherwise, another explanation may emerge, that forex traders were expecting still more inferior news on the US economy… But! By how much more inferior, if according to DJ, the US non-farm payrolls MA was equivalent to 180K, with actual being +110K, estimate being +225K and prior being +243K? And in what manner do these economists count up world traders: by capita, by countries or by the funds, lost by those, who continued staying long in a holy belief in renowned academic scholars postulate of FOREX rates being tied up to countries’ economy statistics.
I wonder if I’ll ever chance to witness legal procedures to be instituted against any of those famous scholars, so that no one would dare claim that fundamental data trigger rate spikes.
The same pertains to economists, writing about the way, hundreds of thousands traders throughout the globe have conspired to conclude that it is time to reverse the trends with absolutely no grounds. Is it really feasible?
Such reading-matter is, but hammering a single question into one’s head: is it lie or is it stupidity of those cooking daily reports for taking traders for a ride, fooling them up and keeping them from the truth, which might be of great avail to them in daily trading. Traders are not a decisive factor, thus rates movement is in no way dependent on their will. Practically in no way.
Wanna check? Negotiate with tens of traders of the trading floor and arrange for a simultaneous entry long on some exotic FOREX pair. In so doing, try to push up either the NZDHKD, or the NZDCAD, or the HKDCAD. No need? I think so. You’ll certainly suffer failure with the above, to say nothing of the EUR, GBP, CHF.
Another example:
Fig.2. GBPUSD movement as of May 13, 2005.
(Picture you can see on author site )
This is an M15 chart of the American session, where the USD pair has grown by over 100 pips from 1.8583 to 1.8481 against the news, negative for the US economy:
Most indices have dropped down: DJI at NYSE – by 49.36 pips (-0.48%) to close at 10140.12; S&P500 – by 5.31 pips (-0.46%) to 1154.05. NASDAQ has grown by 12.92 pips (+0.66%) to1976.80. 30yr US Bonds yielded 4.484 (0.047 drop from previous close)
There is a fall in Michigan sentiment index. In May UMich was 85.3 with med est 90.0 and prior 87.7. So it was worse than the estimate, reaching the low since March, 2003. The index decline was being observed for the fifth month.
The April US export price index was +0.6% with prior of +0.7%.
Below are other similar examples of that same day.
Fig. 3. EURUSD chart as of May 13, 2005.
(Picture you can see on author site )
Hundreds of examples may be offered, where the Forex news vector is opposite to that of the currency movement. Practically, actual news may happen to be superior or inferior to the estimate. FOREX quotes up/down movement is also of 50/50 probability irrespective of the above.
Why does it happen and what is the way for a trader to pinpoint entries and exits? This is going to be discussed in ensuing chapters of this book and in the Masterforex-V Trading Academy proceedings.
Full text of this article and pictures of examples http://www.masterforex-v.su/
If you wish to be trained on Trading System Masterforex-V - one of new and most effective techniques of trade on Forex in the world visit http://www.masterforex-v.su/
Thanks to Vyacheslav Vasilevich (MasterForex-V) for contributing this article to our Currency Trading blog:
Vyacheslav Vasilevich (Masterforex-V)
Professional Trader from 2000 year.
President of Masterforex-V Trading Academy.
Author of Books:
1. Trade secrets by a professional trader or what B. Williams, A. Elder and J. Schwager not told about Forex to traders.
2. Technical analyses in Trading System MasterForex-V.
3. Entry and Exit Points at Forex Market
Books web site http://www.masterforex-v.su/
How do change over a title at a currency exchange and how much will it cost?
April 30, 2009 by Currency Trading Tips
Filed under More Currency Trading Answers
Can you answer camclk2004’s question about Currency Trading?:
My cousin is giving me a 1993 olsmobile 88. How much will it cost to change the title over at a currency exchange.
Get a Money-making Website
My cousin is giving me a 1993 olsmobile 88. How much will it cost to change the title over at a currency exchange.
Get a Money-making Website
Can You Make a Real Living With Automated Currency Trading?
April 29, 2009 by Currency Trading Tips
Filed under About Currency Trading
Many people are turning to Currency Trading to beat the credit crunch. With more jobs being lost it seems Forex Trading using Automated Currency Trading Systems is the new work at home alternative.
If you are an investor and you haven’t had any luck with your investments one of the things you should consider includes currency trading. You don’t need to have any pre-qualifications when you learn an automated currency trading system. You can start with a small amount to open an account. There are plenty of ways to get started. A small deposit of as little as $250 gets you a robot trading account. Many of these offer e-books for instructions and learning and will even guide you through designing your investment strategy.
When you open a Forex trading account with many online robots starting with $5,000 to $10,000, the account will usually come with free online automated currency trading classes. The classes will walk you through everything you need to do to get started with your automated investments. You will learn the right time to enter a trade, how many trades to make, how to manage your positions, and the right time it is to exit specific trades.
Even if you are a complete beginner, you can still start trading almost instantly. Anyone can invest. Beginners can learn Forex trading. Even expert investors take advantage of trading classes and investing in the Forex market because it is the best way to invest today and finally make a big return on your investment. Automated Trading Systems are ideal for people that are new to Forex Trading. Currency trading is where the money is today and anyone can use an automated system.
A trading strategy is extremely important when you are an investor. Most Forex trading systems will teach you how to build a strategy that works for you. You can learn step by step how to buy and sell currencies at the right time. You need to know how to manage stop losses and your money. Automated currency trading is the best solution because all of these things can be learned and work for you while you are away. This is a real set it and forget system once its installed.
People trading in the stock market who are losing their shirts are now switching to the currency markets. It is definitely the route to go when you are looking for a new way to trade. Currency trading may seem a little scary as opposed to stocks. However, the market is excellent and there is a lot of money to be made in currency trading.
Forex trading is the best solution for someone who is not doing well with stocks and bonds and looking for something new. You will have to open a minimum account in order to get started. If you begin your investment with a large amount of money you may even have access to free classes to get your started. Automated currency trading is the best thing you can do because you won’t miss the good trades because the system will do it for you.
Thanks to Michael Barnes for contributing this article to our Currency Trading blog:
If you are an investor and you haven’t had any luck with your investments one of the things you should consider includes currency trading. You don’t need to have any pre-qualifications when you learn an automated currency trading system. You can start with a small amount to open an account. There are plenty of ways to get started. A small deposit of as little as $250 gets you a robot trading account. Many of these offer e-books for instructions and learning and will even guide you through designing your investment strategy.
When you open a Forex trading account with many online robots starting with $5,000 to $10,000, the account will usually come with free online automated currency trading classes. The classes will walk you through everything you need to do to get started with your automated investments. You will learn the right time to enter a trade, how many trades to make, how to manage your positions, and the right time it is to exit specific trades.
Even if you are a complete beginner, you can still start trading almost instantly. Anyone can invest. Beginners can learn Forex trading. Even expert investors take advantage of trading classes and investing in the Forex market because it is the best way to invest today and finally make a big return on your investment. Automated Trading Systems are ideal for people that are new to Forex Trading. Currency trading is where the money is today and anyone can use an automated system.
A trading strategy is extremely important when you are an investor. Most Forex trading systems will teach you how to build a strategy that works for you. You can learn step by step how to buy and sell currencies at the right time. You need to know how to manage stop losses and your money. Automated currency trading is the best solution because all of these things can be learned and work for you while you are away. This is a real set it and forget system once its installed.
People trading in the stock market who are losing their shirts are now switching to the currency markets. It is definitely the route to go when you are looking for a new way to trade. Currency trading may seem a little scary as opposed to stocks. However, the market is excellent and there is a lot of money to be made in currency trading.
Forex trading is the best solution for someone who is not doing well with stocks and bonds and looking for something new. You will have to open a minimum account in order to get started. If you begin your investment with a large amount of money you may even have access to free classes to get your started. Automated currency trading is the best thing you can do because you won’t miss the good trades because the system will do it for you.
Thanks to Michael Barnes for contributing this article to our Currency Trading blog:
If you would like to learn more about Automated Currency Trading using your spare time and turning it into a rewarding income. You can get started right away go here..> http://www.simpleforexonline.com Plus, its way easier than you think!
4 Simple Steps to Currency Trading Success
April 29, 2009 by Currency Trading Tips
Filed under About Currency Trading
If you want to learn currency trading the right way you need to be aware that 95% of traders lose - not because they because they don’t try, its just they get the wrong Forex education and this results in a swift wipeout. Here, we are going to give you a plan to devise and implement a forex trading strategy for success in 4 simple steps.
1. Accept Responsibility
If you want to make money in currency trading then you need to accept responsibility for your destiny - no one else is going to give you success you have to take it for yourself.
This means no blaming your forex broker, a guru or the currency markets; you are on your own.
That’s no bad place to be, as all successful traders in currency trading accept this fact and love the challenge.
If you want to make money in currency trading you can, there is nothing to stop you as everything about successful currency trading is specifically learned.
Don’t fall for its easy, its not and with the rewards on offer you wouldn’t expect it to be either.
2. Accept These Facts For Currency Trading Success
The most important fact to accept is that currency trading is a game of odds not certainties, predicting the market and scientific theories, and pinpoint accuracy is a lie perpetrated by vendors and they won’t give you success.
You’re like a successful card player simply playing the high odds but instead of hands their trading opportunities.
You bet big when the odds are in your favor and fold when there not it really is that simple and it will make you a lot of money, if you do it correctly.
Accept that you have to have confidence in what you are doing (which comes from self education and knowledge of your personality) this then gives you the discipline to follow your currency trading system.
Of course - If you can’t follow your currency trading system with discipline, you have no system in the first place!
Markets can be frustrating and you have to wait for the right opportunities but you can win, if you get learn currency trading the right way.
Now lets look at your method for currency trading success.
3. Your Currency Trading System
Building a trading system should be based on the following points and if you work smart and get the right knowledge, it should only take you a couple of weeks to master the basics and have a robust forex trading system that can get the odds on your side.
1. Use a long term trend following system
2. Learn about support and resistance and the timeless method of breakouts - if you don’t know what they are read our other material.
3. Confirm any trading signal you execute with momentum oscillators, this is the key to getting the odds on your side, if you don’t trade with momentum your not trading the odds.
4. Employ a money management system that ensures you have clearly defined get out area when you enter a trade for both losses and profits
Also you need to:
Keep your system simple!
Simple systems are easy to understand, apply and are more robust than complicated ones. If your trading system has to many indicators and it will break in the brutal world of trading and in currency trading less is more just a few is enough.
You can win with a simple system based upon support, resistance and just a few momentum indicators and this is very quick to build and test.
5. Getting Success
Don’t work hard at trading! Work smart and only learn the right forex education.
There is plenty of rubbish sold on the net. For example, most novice traders love day trading yet its guaranteed to lose you money or trust scientific systems that are as accurate as your horoscope.
These traders are naive lazy or both - don’t join them or you will lose.
Once you have built your currency trading system, don’t do any more work on it. Many traders bang on about learning all the time - but if you are happy with your trading system and the logic is sound, there is no need to do more work.
You don’t get paid for effort in forex trading you get paid for being right and that does not involve hard work!
It should only take you 30 minutes or so to execute your trading signals per day and that’s it - get on with your life.
If you follow the above four simple steps you can enjoy currency trading success. You will get the right forex education you need, have the confidence and discipline to apply your forex trading strategy for big gains.
Most traders fail not because they lack a method, but because they lack the mindset to apply it with confidence and discipline and this point cannot be stressed enough. If you want to learn to trade successfully, keep the above points in mind and they will lead you to currency trading success.
Thanks to Monica Hendrix for contributing this article to our Currency Trading blog:
1. Accept Responsibility
If you want to make money in currency trading then you need to accept responsibility for your destiny - no one else is going to give you success you have to take it for yourself.
This means no blaming your forex broker, a guru or the currency markets; you are on your own.
That’s no bad place to be, as all successful traders in currency trading accept this fact and love the challenge.
If you want to make money in currency trading you can, there is nothing to stop you as everything about successful currency trading is specifically learned.
Don’t fall for its easy, its not and with the rewards on offer you wouldn’t expect it to be either.
2. Accept These Facts For Currency Trading Success
The most important fact to accept is that currency trading is a game of odds not certainties, predicting the market and scientific theories, and pinpoint accuracy is a lie perpetrated by vendors and they won’t give you success.
You’re like a successful card player simply playing the high odds but instead of hands their trading opportunities.
You bet big when the odds are in your favor and fold when there not it really is that simple and it will make you a lot of money, if you do it correctly.
Accept that you have to have confidence in what you are doing (which comes from self education and knowledge of your personality) this then gives you the discipline to follow your currency trading system.
Of course - If you can’t follow your currency trading system with discipline, you have no system in the first place!
Markets can be frustrating and you have to wait for the right opportunities but you can win, if you get learn currency trading the right way.
Now lets look at your method for currency trading success.
3. Your Currency Trading System
Building a trading system should be based on the following points and if you work smart and get the right knowledge, it should only take you a couple of weeks to master the basics and have a robust forex trading system that can get the odds on your side.
1. Use a long term trend following system
2. Learn about support and resistance and the timeless method of breakouts - if you don’t know what they are read our other material.
3. Confirm any trading signal you execute with momentum oscillators, this is the key to getting the odds on your side, if you don’t trade with momentum your not trading the odds.
4. Employ a money management system that ensures you have clearly defined get out area when you enter a trade for both losses and profits
Also you need to:
Keep your system simple!
Simple systems are easy to understand, apply and are more robust than complicated ones. If your trading system has to many indicators and it will break in the brutal world of trading and in currency trading less is more just a few is enough.
You can win with a simple system based upon support, resistance and just a few momentum indicators and this is very quick to build and test.
5. Getting Success
Don’t work hard at trading! Work smart and only learn the right forex education.
There is plenty of rubbish sold on the net. For example, most novice traders love day trading yet its guaranteed to lose you money or trust scientific systems that are as accurate as your horoscope.
These traders are naive lazy or both - don’t join them or you will lose.
Once you have built your currency trading system, don’t do any more work on it. Many traders bang on about learning all the time - but if you are happy with your trading system and the logic is sound, there is no need to do more work.
You don’t get paid for effort in forex trading you get paid for being right and that does not involve hard work!
It should only take you 30 minutes or so to execute your trading signals per day and that’s it - get on with your life.
If you follow the above four simple steps you can enjoy currency trading success. You will get the right forex education you need, have the confidence and discipline to apply your forex trading strategy for big gains.
Most traders fail not because they lack a method, but because they lack the mindset to apply it with confidence and discipline and this point cannot be stressed enough. If you want to learn to trade successfully, keep the above points in mind and they will lead you to currency trading success.
Thanks to Monica Hendrix for contributing this article to our Currency Trading blog:
NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF’s
For free trading guides and an exclusive Forex Trading Course visit our website at:
http://www.learncurrencytradingonline.com/index.html
What is it that determines the curreny exchange rate?
April 29, 2009 by Currency Trading Tips
Filed under More Currency Trading Answers
Can you answer Tristan Robert Due March 20’s question about Currency Trading?:
For example: I was in Japan for 3 years and the exchange rate was always fluctuating. I saw it go as low as 140 yen to the USD and as high is 95 yen to the USD.
For example: I was in Japan for 3 years and the exchange rate was always fluctuating. I saw it go as low as 140 yen to the USD and as high is 95 yen to the USD.
Help me out. I didn’t pay attention in economics class.
Best Currency Trading Software
