Online Forex trading is a business of risk. It is only wise to choose your online Forex platform providers and brokers with utmost care. You can read books, magazines, or surf online for the corporate profiles and investment portfolios of the brokers you are considering, but oftentimes, this is not enough.
What you need to do is consult online Forex trading reviews. Here, you will have access to actual assessments from small investors themselves, accurate evaluations from expert financial institutions, and helpful comparisons based on key market indicators.
Benefits of Consulting Reviews
Online Forex trading reviews allow you to read technical analysis of different brokers' performances over the past months or years, either as a whole or in terms of specific currencies. Many reviews are written by veterans in the currency trading industry - people who have traded successfully for years. More often than not, these technical data are rewritten in laymen's terms so that you can understand them completely.
Online Forex trading reviews allow you to compare and contrast brokers, so that you can find one that is willing to handle your investment the way you want it handled. The information from these reviews will help you zoom in on a company whose policies are well-matched to your behavior as an investor - your willingness to take risks, your level of conservatism, etc.
Finally, online Forex trading reviews give you access to the opinions of investors themselves, big or small. The assessments of others who share the same viewpoint and context as you can often prove to be more indispensable than the opinions of trading experts. These people speak your language, share the same concerns as you, and probably have the same questions. Their reviews can give you enough market intelligence to intuitively manage your own portfolio.
Online Forex Trading provides detailed information on Online Forex Trading, Learn Online Forex Currency Trading, Online Forex Trading Systems, Online Forex Trading Reviews and more. Online Forex Trading is affiliated with FX Currency Trading.
Tuesday, August 21, 2007
Forex - Euro
LONDON (Thomson Financial) - The euro is steady ahead of a key German business survey, which is likely to be weighed down by the recent turmoil in the financial markets.
Analysts expect the ZEW business confidence indicator to drop in reaction to the ongoing turmoil in financial markets. The expectations component is forecast to drop to -5 in August from +10.4 in July, while the current economic sentiment is expected to retreat to 84 from 88.2.
'Therefore, the euro won't get major support from the fundamental side,' said Carsten Fritsch, currency strategist at Commerzbank Corporates & Markets.
'It would need a notable fall in risk aversion, which doesn't seem on the cards just yet, in order to see the euro moving higher, although the situation on financial markets has stabilised after the Fed decided to cut the discount rate on Friday,' he added.
The market worry is that the drop in sentiment may begin to impact upon actual economic growth, especially as second-quarter economic growth in the single currency zone's largest economy came in lower than anticipated.
'At other crisis points such as the Asian Crisis in 1998, September 11 and the start of the second Gulf War, a softer ZEW has been a precursor for a weaker IFO,' said Stuart Bennett, analyst at Calyon.
'Both of these surveys tend to be accurate indicators for German GDP growth and suggest that the engine behind the euro zone recovery risks stalling, despite the Bundesbank's optimism,' he added.
The German central bank yesterday struck an upbeat tone, describing the recent stock market correction and the US Federal Reserve's surprise decision last Friday to cut its discount rate by 50 basis points as a 'welcome normalisation'. It added that both German and global growth prospects remain favourable despite the slowdown in the second quarter.
Elsewhere, the yen recovered further ground as equities came well off their highs, with the positive sentiment following the Fed's rate cut waning.
The Japanese currency suffered in the wake of Friday's Fed announcement, coming well off the two-and-a-half-month highs reached against the dollar late last week as a measure of risk appetite began to return to the market.
This trend has reversed moderately, however, with most feeling that the boost to equities and risky assets from the Fed's move, which most interpreted as a prelude to a cut in interest rates next month, will be short-lived.
Investors will be interested to see what Richmond Fed President Jeffrey Lacker, one of the most hawkish members says about the current situation when he delivers a speech later.
'It would be interesting to see if he tones down his comments especially with the FOMC recently focusing its attention on the downside risks to growth rather than inflation being its predominant concern,' said Ian Stannard, currency strategist at BNP Paribas.
'While calming words from Fed's Lacker would allow asset markets some stability today, we highlight the downside risks of the economy and the general flow of financial and credit news,' he added
Analysts expect the ZEW business confidence indicator to drop in reaction to the ongoing turmoil in financial markets. The expectations component is forecast to drop to -5 in August from +10.4 in July, while the current economic sentiment is expected to retreat to 84 from 88.2.
'Therefore, the euro won't get major support from the fundamental side,' said Carsten Fritsch, currency strategist at Commerzbank Corporates & Markets.
'It would need a notable fall in risk aversion, which doesn't seem on the cards just yet, in order to see the euro moving higher, although the situation on financial markets has stabilised after the Fed decided to cut the discount rate on Friday,' he added.
The market worry is that the drop in sentiment may begin to impact upon actual economic growth, especially as second-quarter economic growth in the single currency zone's largest economy came in lower than anticipated.
'At other crisis points such as the Asian Crisis in 1998, September 11 and the start of the second Gulf War, a softer ZEW has been a precursor for a weaker IFO,' said Stuart Bennett, analyst at Calyon.
'Both of these surveys tend to be accurate indicators for German GDP growth and suggest that the engine behind the euro zone recovery risks stalling, despite the Bundesbank's optimism,' he added.
The German central bank yesterday struck an upbeat tone, describing the recent stock market correction and the US Federal Reserve's surprise decision last Friday to cut its discount rate by 50 basis points as a 'welcome normalisation'. It added that both German and global growth prospects remain favourable despite the slowdown in the second quarter.
Elsewhere, the yen recovered further ground as equities came well off their highs, with the positive sentiment following the Fed's rate cut waning.
The Japanese currency suffered in the wake of Friday's Fed announcement, coming well off the two-and-a-half-month highs reached against the dollar late last week as a measure of risk appetite began to return to the market.
This trend has reversed moderately, however, with most feeling that the boost to equities and risky assets from the Fed's move, which most interpreted as a prelude to a cut in interest rates next month, will be short-lived.
Investors will be interested to see what Richmond Fed President Jeffrey Lacker, one of the most hawkish members says about the current situation when he delivers a speech later.
'It would be interesting to see if he tones down his comments especially with the FOMC recently focusing its attention on the downside risks to growth rather than inflation being its predominant concern,' said Ian Stannard, currency strategist at BNP Paribas.
'While calming words from Fed's Lacker would allow asset markets some stability today, we highlight the downside risks of the economy and the general flow of financial and credit news,' he added
Saturday, August 18, 2007
forex online platform trading
Forex trading has entered the home and lives of many people around the world, both men and women; all of them coming from many walks of life. Being this a relatively new phenomenon in the department of alternative income opportunities.
It was only about ten years ago that the Forex market moved into our homes. And this was made possible only thanks to the invention and rapid spreading of the internet. The technology that made online forex trading possible.
Before the internet era, trading was an activity reserved only to the big players, banks, brokerage firms, in short; only wealthy people could aspire to enter the currency markets. But the arrival of the internet and the online trading platforms available for downloading, most of them free of charge, to the computers of regular citizens have come to transform the face of forex currency trading in a few years.
The easy accessability to the forex markets and the ever increasing number of new forex traders that has taken place in the last few years has motivated the brokerage firms to improve their services and the accessibility of their trading platforms. Not only with better and more efficient software but also with new financial products as the Mini-account that allows people to trade with an awaesome minimum margin of only $100 or even less in their trading account.
Once you download and install the trading platform from your broker, there are many out there you can choose from. You will notice the many features made available to the trader thanks to these platforms. For example, they will show you the current prices of the most important currency pairs, also included with the platform will be the charting software that will let you perform the technical analysis needed in order to find good trades.
The charting tools coming in with the software included in the trading platform package is really handy. It usually has all the important indicators, RSI, Bollinger Bands, Fibonacci levels, etc. and they are just one click away from you to use. And yes, you can even draw on the chart. The software also includes applications for the entering and exiting of trades (stop, limit, etc), and all is managed in real time through your home internet connection. And of course, when involved in online forex trading it is important to consider the fact that the higher the speed of your connection the better your trading experience will be. No one wants to lose information in the middle of a tight trade.
Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of forex tradingSaturday, August 11, 2007
Foreign exchange market
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex markets currently exceeds US$ 2 trillion. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks
Trading characteristics
There is no single unified foreign exchange market. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currency instruments are traded. This implies that there is no such thing as a single dollar rate - but rather a number of different rates (prices), depending on what bank or market maker is trading. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs.
| Rank | Currency | ISO 4217 Code | Symbol | |
|---|---|---|---|---|
| 1 | United States dollar | USD | $ | |
| 2 | Eurozone euro | EUR | € | |
| 3 | Japanese yen | JPY | ¥ | |
| 4 | British pound sterling | GBP | £ | |
| 5-6 | Swiss franc | CHF | - | |
| 5-6 | Australian dollar | AUD | $ |
The main trading centers are in London, New York, Tokyo, and Singapore, but banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the US session and then back to the Asian session, excluding weekends.
There is little or no 'inside information' in the foreign exchange markets. Exchange rate fluctuations are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates, budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.3045 dollar. Out of convention, the first currency in the pair, the base currency, was the stronger currency at the creation of the pair. The second currency, counter currency, was the weaker currency at the creation of the pair.
The factors affecting XXX will affect both XXX/YYY and XXX/ZZZ. This causes positive currency correlation between XXX/YYY and XXX/ZZZ.
On the spot market, according to the BIS study, the most heavily traded products were:
-
- EUR/USD - 28 %
- USD/JPY - 18 %
- GBP/USD (also called sterling or cable) - 14 %
and the US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%). (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers).
Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus far still largely dollar-centered. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market.
Factors affecting currency trading
Although exchange rates are affected by many factors, in the end, currency prices are a result of supply and demand forces. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.
Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology.
Economic factors
These include economic policy, disseminated by government agencies and central banks, economic conditions, generally revealed through economic reports, and other economic indicators.
Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).
Economic conditions include:
Government budget deficits or surpluses: The market usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.
Balance of trade levels and trends: The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, trade deficits may have a negative impact on a nation's currency.
Inflation levels and trends: Typically, a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency.
Economic growth and health: Reports such as gross domestic product (GDP), employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.
Political conditions
Internal, regional, and international political conditions and events can have a profound effect on currency markets.
For instance, political upheaval and instability can have a negative impact on a nation's economy. The rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.
Market psychology
Market psychology and trader perceptions influence the foreign exchange market in a variety of ways:
Flights to quality: Unsettling international events can lead to a "flight to quality" -with investors seeking a "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts.
Long-term trends: Currency markets often move in visible long-term trends. Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends. [4]
"Buy the rumor, sell the fact:" This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought".[5] To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.
Economic numbers: While economic numbers can certainly reflect economic policy, some reports and numbers take on a talisman-like effect - the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.
Technical trading considerations: As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form patterns that may be recognized and utilized by traders for the purpose of entering and exiting the market, leading to short-term fluctuations in price. Many traders study price charts in order to identify such patterns
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