A Performance Snapshot of the Euro in Forex Markets

The financial profile of Europe has changed completely since the introduction of the Euro. Today, with the Euro, individual...

... currencies of many different countries are a lot stronger and more powerful than ever before.

New currencies have more value,
and different European countries feel the financial advancement since they adopted
the euro. Prices have gone up on virtually everything, from real estate to
restaurant food, and with that the spending power has gone up as well.

The spending patterns of citizens is a very good measure of the economic profile of
the country’s currency. Although the spending habits of Europeans are certainly
changing, there is no doubt that these patterns are going to influence the economy.
Many Europeans are fearful of this change, seeing that families are becoming more
consumer-based. Everything, from cereal packaging to Christmas decorations, seems
to becoming bigger and bigger.

This type of economical shift was seen in America just a few decades ago, and now it
seems Europe will undergo the same shift. It cannot be ignored that with these new
spending habits the European currency is blossoming on a steady rate of incline.
When the euro was first introduced it was equivalent to one dollar. After a short
dip, the Euro now seems to be on a pretty steady incline, blossoming into a true
power currency alongside the British Pound. Needless to say, the dollar has seen a
considerable decline since 9/11 and the birth of the Euro. What once was equivalent
has now left the American dollar in its dust.

Despite its young existence, everyone can agree that the Euro has proven to be a
very hardy currency. Just as the dollar is known to always bounce back economically,
it is suspected that the Euro will become one to do the same. This may seem hard to
imagine, though, since it is hard to imagine the euro crashing at all. Though the EU
was concerned to bring more Eastern European countries in on the Euro, the Euro has
proven to sell itself and everyone wants a part of it.

The Euro is one of the oft-targeted currencies in the Forex Trading market. The
Euro may be a very new currency, but it is based on the joining of a group of
countries whose wealth has been around for centuries, as it is based in an
economically solid region of the world. Although some were skeptical upon its
initial introduction, everyone now seems to be enjoying the financial benefits that
the Euro has brought.

The Euro is a very good bet on the Forex market. Traders seem to have faith in the
Euro because of its good record and the fact that it has a support network that not
a lot of world currencies have. Even if an individual country showed a negative
change in its economy due to the euro, the Euro itself would not necessarily be
affected because its value is determined by such a vast network of countries. A
negative event in one place can be counteracted by a positive event in another
country. For this exact reason the Euro is expected to continue to be a wise choice
on the Forex market.

forexrate.co.uk

The dollar continues to fall

We open the week of November 18th, with what has become a familiar trend; the dollar continues to fall. The...

... greenback finished off trading on Friday down against most major currencies as credit and housing worries continue to haunt the US economy.

Figures from the Department of Treasury regarding International Capital, Balance of
Payments, and Industrial numbers hindered any hopes of the greenback gaining on its
progress from early last week. Instead, investors start the week offering the
greenback in bulk. Another hit to the dollar came this weekend as the Gulf
Cooperation Council, made up of the lion's share of the Gulf States, discussed the
possibility of revaluating their currencies away from the greenback. This has become
a developing trend as China leaked several hints that they were doing the same, not
too long ago.

The greenback this week will have to rely more heavily than usual on outside events,
as the shortened Holiday week holds little relevant news in the US economic
schedule. Tuesday will see the release of the FOMC meeting minutes which should
highlight any suspicion about if and when the Fed will intervene once again to
change the economic outlook of the dollar.

US Housing will look to be a notable subject this week with two statements set to be
released. Today at 18:00GMT, we will see the release of the National Association of
Home Builders Housing Market Index, ahead of Tuesday's Housing Starts numbers.

Other than that the Greenback is expected to remain under pressure, as more and more
nations lose faith in the currency that once represented the symbol of economical
robustness, and is now becoming less relevant on a global scale.

* EUR
The Euro ended trading last week in a consistent fashion, rallying late against the
greenback to stay above the 1.46 level. The Euro has become a mainstay in the global
economic world, as some see it as the world's new dominant currency. It seems as if
any gain from the greenback is not substantial enough to deter the overwhelming
strength that the 13 Nation currency has had lately. A quick peek to the week ahead
could see a slight dip in the Euro, most likely in the early parts of the week. This
however will likely be a short lived trend as the Euro has consistently rallied from
falling positions over the last several weeks. This trend has affected the
relationship between the GBP and the EUR as well, as gaps between the two European
currencies are slowly closing.

The G-20 Conference in South Africa this past weekend was surprisingly mum regarding
any serious change in currency policies. Leaders mentioned that the state of the
world's economic slowdown was "difficult to predict", helping not one bit in shoring
up investor concerns.

The week ahead sees little relevant news from the EU economic calendar. This week
will see a speech by ECB President Trichet at the Frankfurt European Banking
Congress on Friday. As the President normally spurs market volatility when he
speaks, this time should be a bit different as his words come late in the week on
Friday. The Euro should continue to progress slowly barring any surprising news
events as investors have come to see it as a strong and stable option when trading.

* JPY
The JPY once again benefited from slumping housing prices as investors shied away
from high-yielding assets funded by the JPY. The Japanese currency was up against 15
of the 16 major currencies to end Friday trading and looks to continue its forward
progress. The presumption is that the upcoming housing numbers from the US this
week, will continue to push the JPY forward. The focus on Japan at the G-20
Conference in South Africa was geared toward structural reform and fiscal
consolidation. The Japanese would ultimately like to contribute more positivity to
the JPY via local events as opposed to being reliant on outside factors. BoJ
Governor Fukui touched upon his concern revolving the rapid appreciation in recent
JPY numbers.

The Japanese economic calendar stays barren of any important news events, as the
Holiday week also corresponds with celebrations in Japan. It will be intriguing to
see how investor behavior develops in regards to carry trading; it is likely we will
see a boost in the JPY as the week begins.

Technical News
* EUR/USD
There is a very distinct triangle forming on the 4 hour chart which appears to be at
a key level before a breach. If a move towards the 1.4620 will occur, it will
probably validate a deeper bearish move into the 1.4570 zone.

* GBP/USD
The cable has been trying to massively correct the intensive bullish move, and is
now trading around 2.0530. The sharp bearish channel is in a high spot at the
moment, and together with a strong bearish cross on the slow stochastic, represents
a very good potential for a short position.

* USD/JPY
The pair is showing a very strong bearish momentum that appears to be overlooking
the normal price movement proportions, and is now trading at the impressive 110.50
level. The direction appears to be down, as both RSI and slow stochastic strengthen
the bearish notion.

* USD/CHF
After touching a base at 1.1155, the pair now consolidates a bit higher at 1.1170.
all oscillators show that the bearish momentum will probably continue, and that a
breach through the next key level of 1.1150 is quite imminent. If the key support
level will hold, we might see a correction back to the 1.1220 levels.

The Wild Card
* Crude Oil
After a failed attempt to breach through the 90.00 level, oil is showing a very
strong bullish comeback, and is steadily heading to the 95.00 level and beyond. This
is a great opportunity for
forex traders, to rejoin the strong trend in its new journey up.

www.forexyard.com

London Gold Market Report

Gold Holds Steady as World Stock Markets Drop on New Credit Woes; British Pound Falls After Weak Data.SPOT GOLD PRICES...

... ticked lower but held above $801.50 per ounce in Asian trade on Monday, spiking higher in London as world stock markets continued to sell off.

"I'm telling people this is the place to take money off the table and look to rebuy on a pullback," says Robin Wilkin at J.P.Morgan in London.

"Gold is still struggling on the upside after the strong rally and with big resistance just overhead," agrees Phil Smith for Reuters India.

"Support kicks in at $770 to the downside and overhead the very big level is $835 which is the 1980 high," Smith believes.

Gold futures traded at the Tocom in Tokyo today rose 1.6%, playing catch-up with Friday's dramatic $18 gain in the US session. The Nikkei stock index, meantime, dropped by the same proportion.

Financial stocks in the Asia-Pacific region fell nearly 2% after the world's biggest bank – Citigroup – lost its CEO, Chuck Prince, yesterday.

Citigroup now says it may need to write-down a further $11 billion on mortgage-related investments after admitting to a $6.5 billion write-down for the July to Sept. period.

In Hong Kong the Hang Seng index sank by 5%, closing nearly 10% below last Tuesday's new all-time record high. The Hang Seng had previously risen by one-half since the start of April.

European stocks opened the week sharply lower, dropping 0.6% in early trade. Here in London, shares in the UK's second-largest grocery chain, Sainsbury's, dumped one-fifth of their value this morning after an investment fund backed by the government of Qatar walked away from bidding for the supermarket, citing "credit market turbulence".

The Qatar Investment Authority was asked last week to inject an extra £500 million ($1bn) to cover a "potential" shortfall in Sainsbury's pension fund.

"I am sure gold will reach $850 by the end of this year," reckons Yukuji Sonoda at Daiichi Commodities in Tokyo. "Every government is very anxious about the Dollar [and] this will automatically support the Gold Price. There's a strong intention from the Chinese government to sell the Dollar."

"If there's more money flowing into gold, maybe we can even see gold at $900 by the end of this year," says Ronald Leung of Lee Cheong Gold Dealers in Hong Kong, talking to Reuters today.

In India – where the Diwali festival of lights this coming Friday will mark an auspicious time for gold buying on the Hindu calendar – Gold Prices in jewelry shops this weekend reached 10,310 Rupees per 10 grams, an 18-month high according to D.D.News.

"Gold Prices are already more than Rs 1,300 higher than the last Diwali levels," says the newswire. "Besides festival demand, a sharp surge in international prices has also added to the rally in the domestic [Indian gold] markets."

Meantime on the currency markets, the US Dollar crept higher vs. the Euro overnight, bouncing half-a-cent from last Friday's new all-time low.

The British Pound, meanwhile, sank nearly 1¢ from last week's quarter-century highs on news that UK industrial output shrank in the year to Sept. Sterling then dropped to $2.0805 after the PMI of confidence in the services sector fell to 53.1 points in Oct., well below expectations and down from Sept.'s reading of 56.7.

That move on the currency markets pushed the Gold Price in British Pounds back up to last week's closing level, just shy of a new all-time high above £386 per ounce. For Eurozone investors wanting to Buy Gold Today, the price rallied 0.4% from a dip to €553 per ounce.

Over in the energy markets, US crude oil dropped 1.4% overnight to $94.61 per barrel after Kurdish rebels in northern Iraq freed eight Turkish soldiers. PetroChina, newly listed on the Shanghai stock exchange today, meantime bucked the sell-off in world equities to gain more than 160% on its debut.

Now larger than the entire Russian stock market, PetroChina became the world's biggest company by market value at $1 trillion.

But the surging price of oil threatens to push the cost of living sharply higher, according to Alan Greenspan, former head of the US Federal Reserve. "The United States is tremendously vulnerable to oil price shocks," agrees Herb Kelleher, chairman of Southwest Airlines.

"We're headed for a crisis insofar as our consumption of energy is concerned."

"Just since August," says a statement from American Airlines, "average spot market crude oil prices have risen by nearly $14 a barrel. That increase translates into more than $1 billion of additional annual expense for American."

Rising oil prices are also denting profit potential in the gold mining sector. Newmont Mining, the world's second-largest producer, said last week that earnings-per-share doubled between July and Sept. from the same period in 2006. But it raised its cost-per-ounce forecast from $400 to $430.

Oil accounts for 12% of Newmont's costs said CEO Richard O'Brien last week. Newmont's stock has risen by 15% so far this year.

The spot Gold Price, meantime, has risen by 25%.

Adrian Ash
BullionVault

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – where you can Buy Gold Today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2007

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

www.forexrate.co.uk

Economic Indicators

We have created a comprehensive glossary of economic indicators from the relevant markets. While these indicators are generally applicable economic terms, some of them are specific for the country of their release.

To access the definitions of the terms listed below, please see "Foreign Exchange Markets: A Practical Guide", an innovative approach to covering FX fundamental and technical analysis.

Auto Sales
Balance of Payments
Balance of Trade (Merchandise Trade Balance)
Beige Book Fed Survey
Business Inventories and Sales
Capital Account (now known as Financial Account)
CBI Surveys
Construction Spending
Consumer Price Index (CPI)
Current Account
Durable Goods Orders
Employment Cost Index (ECI)
Employment Report
Factory Orders and Manufacturing Inventories
Gross Domestic Product (GDP)
HICP (Harmonized Index of Consumer Prices)
Housing Starts/Building Permits
IFO
Implicit Deflator
Index of Leading Economic Indicators (LEI)
The Institute of Supply Management (ISM)
L
M1
M2
M3
New Home Sales
Personal Income and Personal Consumption Expenditures (PCE)
Producer Price Index (PPI)
Productivity
Purchasing Managers' Index (PMI)
Retail Sales
Tankan Survey
ZEW Indicator

see more

US Jobs Fails to Support Dollar

Markets shrugged off a sharply higher than expected October US non-farm payrolls report, battering the dollar to fresh lows against the euro at 1.4528 and the sterling just beneath the 2.09-level. Lingering jitters over credit conditions in the US continue to plague the greenback.

The October labor report revealed robust growth in non-farm payrolls, sharply exceeding market expectations by twofold at 166k compared with a downwardly revised September reading of 96k. The unemployment rate remained unchanged at 4.7%, while hourly wages increased by 0.3%. Durable goods orders for September were unchanged from the previous month posting another 1.7% decline, while the ex-transports reading improved by 0.4%. Factory orders gained by 0.2% in September compared with a 3.3% drop a month prior.

The dollar initially rallied off the strong jobs data but quickly relinquished its strength as traders bought up the majors on the dip – reaffirming heavily bearish dollar sentiment. Renewing concerns about liquidity conditions were new Fed injections today that resulted in the Fed’s largest infusion of funds since September 2001. The Fed announced repurchases totaling $41 billion, exceeding the $38 billion injected at the height of the credit crunch panic in August.

forexnews.com

How use a trading plan!!

A plan should be written in stone while you are trading, but subject to re-evaluation once the market has closed. It changes with market conditions and adjusts as the trader's skill level improves. Each trader should write his or her own plan, taking into account personal trading styles and goals. Using someone else's plan does not reflect your trading characteristics.

Building the Perfect Master Plan
What are the components of a good trading plan? Here are 10 essentials that every plan should include.

1. Skill assessment - Are you ready to trade? Have you tested your system by paper trading it and do you have confidence that it works? Can you follow your signals without hesitation? If not, it's a good idea to read Mark Douglas's book, "Trading in the Zone", and do the trading exercises on pages 189–201. This will teach you how to think in terms of probabilities. Trading in the markets is a battle of give and take. The real pros are prepared and they take their profits from the rest of the crowd who, lacking a plan, give their money away through costly mistakes.
   
   
2. Mental preparation – How do you feel? Did you get a good night's sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off - otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hungover, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.
   
   
3. Set risk level – How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren't going your way.
   
   
4. Set goals – Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders use will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a dollar loss per share, your goal should be a $3 profit. Set weekly, monthly and annual profit goals in dollars or as a percentage of your portfolio, and re-assess them regularly.
   
   
5. Do your homework – Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the S&P 500 or Nasdaq 100 exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don't gamble.
   
   
6. Trade preparation – Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.
   
   
7. Set exit rules – Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.
   
   Before you enter a trade, you should know where your exits are. There are at least two for every trade. First, what is your stop loss if the trade goes against you? It must be written down. Mental stops don't count. Second, each trade should have a profit target. Once you get there, sell a portion of your position and you can move your stop loss on the rest of your position to break even if you wish. As discussed above in number three, never risk more than a set percentage of your portfolio on any trade.
   
   
8. Set entry rules – This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: "If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here." Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don't have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don't get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities.
   
   
9. Keep excellent records – All good traders are also good record keepers. If they win a trade, they want to know exactly why and how. More importantly, they want to know the same when they lose, so they don't repeat unnecessary mistakes. Write down details such as targets, the entry and exit of each trade, the time, support and resistance levels, daily opening range, market open and close for the day, and record comments about why you made the trade and lessons learned. Also, you should save your trading records so that you can go back and analyze the profit/loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (which is necessary to calculate trade efficiency), and other important factors, and also compare them to a buy-and-hold strategy. Remember, this is a business and you are the accountant.
   
   
10. Perform a post-mortem – After each trading day, adding up the profit or loss is secondary to knowing the why and how. Write down your conclusions in your trading journal so that you can reference them again later.

source:investopedia

Speculation VS investment - Day trading VS occasional position

It is very important that the individual wanting to trade foreign exchange be aware of the very marked difference between speculation and investment. Forex trading is by nature a speculative occupation. Foreign exchange markets are amongst the most volatile markets in the world. When traded on a margined basis they effectively become the most volatile in the world.

DAY TRADING

Day trading in foreign exchange can be extremely profitable and high-risk profile traders can generate huge percentage returns even overnight. Day trading is however a mentally and psychologically challenging activity and is by no means meant for everyone. Day trading is essentially speculation and day traders essentially only do that: day trading. Most people who trade foreign exchange are not professional day traders however.

DAY TRADING ALTERNATIVE

Often the contractors of foreign exchange brokerage services are professionals in some capacity or other. These people do not day trade but take the occasional position from time to time. This is also speculation and should not be confused with making an investment.

Conclusion

The conclusion here is that the nature of foreign exchange trading not lend itself as much to investment as it does to speculation and hedging (hedging may be performed in forward instruments). It is possible in a sense to make an investment in foreign exchange over a long-term period but this necessitates a large account value and low leveraging.

http://www.ac-markets.com

Currency Pair?

The quotation and pricing structure of the currencies traded in the forex market: the value of a currency is determined by its comparison to another currency. The first currency of a currency pair is called the "base currency", and the second currency is called the "quote currency". The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency.

All forex trades involve the simultaneous buying of one currency and selling of another, but the currency pair itself can be thought of as a single unit, an instrument that is bought or sold. If you buy a currency pair, you buy the base currency and sell the quote currency. The bid (buy price) represents how much of the quote currency is needed for you to get one unit of the base currency. Conversely, when you sell the currency pair, you sell the base currency and receive the quote currency. The ask (sell price) for the currency pair represents how much you will get in the quote currency for selling one unit of base currency.

For example, if the USD/EUR currency pair is quoted as being USD/EUR = 1.5 and you purchase the pair, this means that for every 1.5 euros that you sell, you purchase (receive) US$1. If you sold the currency pair, you would receive 1.5 euros for every US$1 you sell. The inverse of the currency quote is EUR/USD, and the corresponding price would be EUR/USD = 0.667, meaning that US$0.667 would buy 1 euro.

source:investopedia.com

Technical analysis..,important point!

The methods used to analyze securities and make investment decisions fall into two very broad categories: fundamental analysis and technical analysis. Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value. Technical analysis takes a completely different approach; it doesn't care one bit about the "value" of a company or a commodity. Technicians (sometimes called chartist) are only interested in the price movements in the market.

Despite all the fancy and exotic tools it employs, technical analysis really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future. In other words, technical analysis attempts to understand the emotions in the market by studying the market itself, as opposed to its components. If you understand the benefits and limitations of technical analysis, it can give you a new set of tools or skills that will enable you to be a better trader or investor.

In this tutorial, we'll introduce you to the subject of technical analysis. It's a broad topic, so we'll just cover the basics, providing you with the foundation you'll need to understand more advanced concepts down the road.

What Is Technical Analysis?
Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

Just as there are many investment styles on the fundamental side, there are also many different types of technical traders. Some rely on chart patterns, others use technical indicators and oscilators, and most use some combination of the two. In any case, technical analysts' exclusive use of historical price and volume data is what separates them from their fundamental counterparts. Unlike fundamental analysts, technical analysts don't care whether a stock is undervalued- the only thing that matters is a security's past trading data and what information this data can provide about where the security might move in the future.

The field of technical analysis is based on three assumptions:

1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.

1. The Market Discounts Everything
A major criticism of technical analysis is that it only considers price movement, ignoring the fundamental factors of the company. However, technical analysis assumes that, at any given time, a stock's price reflects everything that has or could affect the company - including fundamental factor. Technical analysts believe that the company's fundamentals, along with broader economic factors and market phiscology, are all priced into the stock, removing the need to actually consider these factors separately. This only leaves the analysis of price movement, which technical theory views as a product of the supply and demand for a particular stock in the market.

2. Price Moves in Trends
In technical analysis, price movements are believed to follow trends. This means that after a trend has been established, the future price movement is more likely to be in the same direction as the trend than to be against it. Most technical trading strategies are based on this assumption.

3. History Tends To Repeat Itself
Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Technical analysis uses chart patterns to analyze market movements and understand trends. Although many of these charts have been used for more than 100 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.
source: contributor investopedia.com

The fundamental analysis trading..be sure!!

Those trading in the forex rely on the same two basic forms of analysis that are used in the stock market : fudamental analysis adn analytical analysis.

The uses of technical analysis in forex are much the same: price is assumed to reflect all news, and the charts are the objects of analysis.
But unlike companies, countries have no balance sheets, so how can fundamental analysis be conducted on a currency?

Economic Indicator
Economic indicators are reports released by the government or a private organization that detail a country's economic performance. Economic reports are the means by which a country's economic health is directly measured, but do remember that a great deal of factors and policies will affect a nation's economic performance.
You may recognize some of these economic reports, such as the unemployment numbers, which are well publicized. Others, like housing stats, receive little coverage. However, each indicator serves a articular purpose, and can be useful. Here we outline four major reports, some of which are comparable to particular fundamental indicators used by equity investors:

1. The Gross Domestic Product (GDP)
The GDP is considered the broadest measure of a country's economy, and it represents the total market value of all goods and services produced in a country during a given year. Since the GDP figure itself is often considered a lagging indicator, most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility. The GDP is somewhat analogous to the gross profit margin of a publicly traded company in that they are both measures of internal growth.

2. Retail Sales
The retail-sales report measures the total receipts of all retail stores in a given country. This measurement is derived from a diverse sample of retail stores throughout a nation. The report is particularly useful because it is a timely indicator of broad consumer spending patterns that is adjusted for seasonal variables. It can be used to predict the performance of more important lagging indicators, and to assess the immediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility. The retail sales report can be compared to the sales activity of a publicly traded company.

3.Industrial Production
This report shows the change in the production of factories, mines and utilities within a nation. It also reports their 'capacity utilizations', the degree to which the capacity of each of these factories is being used. It is ideal for a nation to see an increase of production while being at its maximum or near maximum capacity utilization.

Traders using this indicator are usually concerned with utility production, which can be extremely volatile since the utilities industry, and in turn the trading of and demand for energy, is heavily affected by changes in weather. Significant revisions between reports can be caused by weather changes, which in turn, can cause volatility in the nation's currency.
4. Consumer Price Index (CPI)
The CPI is a measure of the change in the prices of consumer goods across over 200 different categories. This report, when compared to a nation's exports, can be used to see if a country is making or losing money on its products and services. Be careful, however, to monitor the exports - it is a focus that is popular with many traders because the prices of exports often change relative to a currency's strength or weakness.

So, How Are These Used?
Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation. Here are a few useful tips that may help you when conducting fundamental analysis in the foreign exchange market:

• Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
• Be informed about the economic indicators that are capturing most of the market's attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most watched indicators.
• Know the market expectations for the data, and then pay attention to whether or not the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results and, if there is, be aware of the possible justifications for this difference.
• Don't react too quickly to the news. Oftentimes, numbers are released and then revised, and things can change quickly. Pay attention to these revisions, as they may be a useful tool for seeing the trends and reacting more accurately to future reports.

Conclusion
There are many economic indicators, and even more private reports that can be used to evaluate the fundamentals of forex. It's important to take the time to not only look at the numbers, but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader.
source:contributor investopedia.com

The menu of Forex,...pips, margin, leverage, long/short, bid,ask,etc...??

How tom read a FX Quote??

Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:

GBP/USD = 1.7500

The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).

When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.

When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.

The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.

You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.

Long/Short

First, you should determine whether you want to buy or sell.

If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.

If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.

Bid/Ask Spread

All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.

The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell.

The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy.

The difference between the bid and the ask price is popularly known as the spread.

Let's take a look at an example of a price quote taken from a trading platform:

On this GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449. Look at how this broker makes it so easy for you to trade away your money.

If you want to sell GBP, you click "Sell" and you will sell pounds at 1.7445. If you want to buy GBP, you click "Buy" and you will buy pounds at 1.7449.

In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. For right now, try to pretend you know what’s going on…

EUR/USD
In this example Euro is the base currency and thus the “basis” for the buy/sell.

If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.

If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.

USD/JPY
In this example the US dollar is the base currency and thus the “basis” for the buy/sell.

If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen.

If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.

GBP/USD
In this example the GBP is the base currency and thus the “basis” for the buy/sell.

If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar.

If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.

USD/CHF
In this example the USD is the base currency and thus the “basis” for the buy/sell.

If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc.

If you believe that the US housing market bubble burst will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc.

What the heck is a Pip?

The most common increment of currencies is the Pip. If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.

As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the US Dollar is quoted first, the calculation would be as follows.

Let’s take USD/JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)

In the case of USD/JPY, 1 pip would be .01

Therefore,

USD/JPY:

119.80
.01 divided by exchange rate = pip value
.01 / 119.80 = 0.0000834

This looks like a very long number but later we will discuss lot size.

USD/CHF:

1.5250
.0001 divided by exchange rate = pip value
.0001 / 1.5250 = 0.0000655

USD/CAD:

1.4890
.0001 divided by exchange rate = pip value
.0001 / 1.4890 = 0.00006715

In the case where the US Dollar is not quoted first and we want to get the US Dollar value, we have to add one more step.

EUR/USD:

1.2200

.0001 divided by exchange rate = pip value
so
.0001 / 1.2200 = EUR 0.00008196

but we need to get back to US dollars so we add another calculation which is

EUR x Exchange rate
So
0.00008196 x 1.2200 = 0.00009999

When rounded up it would be 0.0001

GBP/USD:

1.7975

.0001 divided by exchange rate = pip value
So

.0001 / 1.7975 = GBP 0.0000556

But we need to get back to US dollars so we add another calculation which is

GBP x Exchange rate

So
0.0000556 x 1.7975 = 0.0000998

When rounded up it would be 0.0001

You’re probably rolling your eyes back and thinking do I really need to work all this out and the answer is NO. Nearly all forex brokers will work all this out for you automatically. It’s always good for you to know how they work it out.

Spot Forex is traded in lots. The standard size for a lot is $100,000. There is also a mini lot size and that is $10,000. As you already know, currencies are measured in pips, which is the smallest increment of that currency. To take advantage of these tiny increments, you need to trade large amounts of a particular currency in order to see any significant profit or loss.

Let’s assume we will be using a $100,000 lot size. We will now recalculate some examples to see how it affects the pip value.

USD/JPY at an exchange rate of 119.90
(.01 / 119.80) x $100,000 = $8.34 per pip

USD/CHF at an exchange rate of 1.4555
(.0001 / 1.4555) x $100,000 = $6.87 per pip

In cases where the US Dollar is not quoted first, the formula is slightly different.

EUR/USD at an exchange rate of 1.1930
(.0001 / 1.1930) X EUR 100,000 = EUR 8.38 x 1.1930 = $9.99734 rounded up will be $10 per pip

GBP/USD at an exchange rate or 1.8040
(.0001 / 1.8040) x GBP 100,000 = 5.54 x 1.8040 = 9.99416 rounded up will be $10 per pip.

Your broker may have a different convention for calculating pip value relative to lot size but whichever way they do it, they'll be able to tell you what the pip value is for the currency you are trading is at the particular time. As the market moves, so will the pip value depending on what currency you are currently trading.

What the heck is Leverage?

You are probably wondering how a small investor like yourself can trade such large amounts of money. Think of your broker as a bank who basically fronts you $100,000 to buy currencies and all he asks from you is that you give him $1,000 as a good faith deposit, which he will hold you for but not necessarily keep. Sounds too good to be true? Well this is how forex trading using leverage works.

The amount of leverage you use will depend on your broker and what you feel comfortable with.

Typically the broker will require a minimum account size, also known as account margin or initial margin. Once you have deposited your money you will then be able to trade. The broker will also specify how much they require per position (lot) traded.

For example, for every $1,000 you have, you can trade 1 lot of $100,000. So if you have $5,000 they may allow you to trade up to $500,000 of Forex.

The minimum security (margin) for each lot will vary from broker to broker. In the example above, the broker required a one percent margin. This means that for every $100,000 traded, the broker wants $1,000 as a deposit on the position.

source:baby-pips.com

Introduction the FOREX online

After we give article to you about seven steps learning of FOREX online, that's the basic point to you. Now we give you article about the definition or meaning of FOREX, and everthing related point of FOREX online.

What's FOREX??
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of about $2 trillion a day.wauu...bravo. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!

What's traded on FOREX?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY). Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

Which curency are traded?
The most popular currencies along with their symbols are shown below:

Symbol	Country	Currency	Nickname
USD	United States	Dollar	Buck
EUR	Euro members	Euro	Fiber
JPY	Japan	Yen	Yen
GBP	Great Britain	Pound	Cable
CHF	Switzerland	Franc	Swissy
CAD	Canada	Dollar	Loonie
AUD	Australia	Dollar	Aussie
NZD	New Zealand	Dollar	Kiwi

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.

When can currencies be traded?
The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.
The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…, so flexible...:)

Time Zone	New York	GMT
Tokyo Open	7:00 pm	0:00
Tokyo Close	4:00 am	9:00
London Open	3:00 am	8:00
London Close	12:00 pm	17:00
New York Open	8:00 am	13:00
New York Close	5:00 pm	22:00

What does it cost to trade FOREX?
An online currency trading (a “micro account”) may be opened for with a couple hundred bucks. Do not laugh – micro accounts and its bigger cousin, the mini account, are both good ways to get your feet wet without drowning. For a micro account, we'd recommend at least $1,000 to start. For a mini account, we’d recommend at least $10,000 to start.
In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.
The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
source:babypips.com

First Step, Learn basic about Forex...(you must have to know!!)

Learn FOREX in seven steps...check this out!!

1. Maximize Your Tools

Be sure there's a multiple tools to help you learn forex trading to become a better currency trader including free market news, and real time charts. The most valuable tool in your forex trading education, however, is the the platform currency trading Demo account, which allows you to test out forex trading strategies and learn forex trading from your mistakes without risking real money.

2. Risk Management

Every successful trader should know how much risk he is willing to take, and what profits should result from the trade. The use of stops and trailing stops is most often used to minimize losses. This is the basis of every realistic forex trading strategy. It can also be the most important factor when attempting to learn forex trading.

3. Two Ways to Trade

There are two types of traders, technical and fundamental. Both have a radically different approach to making trading decisions. Click here to find out which camp you belong to. Knowing both can help complete your forex trading education.

4. The Basics of Technical Analysis

All technical analysis starts with a few basic building blocks. With these as a foundation, you can start to make sound currency trading decisions.

5. Applying Technical Analysis

Every platform provides tools for basic technical analysis. Technical analysis shows you price history, support, resistance, trends and more.

6. Fundamentals Everyone Should Know

All Traders should understand why economic releases, interest rates, and international trade are important to movements in the currency market.

7. Psychology of Trading

The biggest enemy to most traders is not the market, but themselves. Learn four basic forex trading principals that will help you to avoid the four biggest mistakes that traders make.

source:T & K Forex Inc

Forex Online trading plan your future here..enjoy...it..!!

OKey guys, plan your future here!!..., FOREX (FX) ONLINE TRADING is kind of online bussiness. High risk and High return, right!!, so u must should know how much risk is willing to take, and what profits should result from the trade. That's the point u must understand. That's it? absolutely NO, There's more points that you must learn if u want to be succesfuly in FOREX (FX) ONLINE TRADING...We try to give more information related to online trading(basic learning about FOREX), tips and trick, news update, prediction currency, and live parameter/indicator currency(update every 30 seconds). OK get the professional trader with us...!!