forex fire

The forex market has several advantages, which make it an
ideal trading market for many people who do or do not have
any knowledge of other markets. It takes only a short
tutorial to have you playing like a pro. In addition, the
forex market is fast. The prices can go up and down several
times a day, and there is no end to the combinations that
you can get. In addition, in time, with the proper
training, you can become a professional Forex trader and
even help other people come into the exciting world of
Forex. What is best of all is that the Forex trading market
is today the biggest market in the world, and there is no
end to the number of trades and transactions that you can
make. Advantage of the Online Forex Spot Transactions

The Forex spot market has a huge advantage because after
you see a price of a certain currency on your computer
screen, you can immediately buy or sell that currency and
get the current price for your trade. This gives you a spot
on connection to the online Forex market, and you are sure
that you are not missing anything, because it’s real time.

The fact that the online Forex spot market is concurrent,
allows for the many trades to take place each day, and
eventually is one of the reasons why the online Forex
market is a very quick option to make money. Unlike the
regular stock market, the Forex market is much more
dynamic, so you don’t have to sit and wait for changes in
your stock. You can view your currency on the spot, and if
you don’t like it from one minute to the next, you can go
and sell it immediately and not suffer any unnecessary
losses.

Accordingly, once you have noticed that the currency you
invested in has risen enough, and is saturated, you can
decide to sell it and reap the profits. The Forex spot
market is seen in it’s real time glory through the charts
offered by technical analysis, so you can view the dynamics
by yourself.

Trend lines

The basic trend line is one of the simplest of the
technical tools employed by the chartist, but by any
standard the most powerful and valuable tool in trading.
The trend line is constructed when there are three higher
or lower points to be connected. This forms a channel which
the price action can be monitored. As discussed, one of the
obvious presumptions derived from chart studies is that
prices have a prevailing tendency to move in a particular
direction. This trend frequently assumes a definition
pattern which evolves along a straight line. This ability
of prices to adhere extremely close to an imaginary
straight line is one of the most extraordinary
characteristics of chart movements.

Drawing a Trend line

The correct drawing of trend lines is an art like every
other aspect of charting and some experimenting with
different lines is usually necessary to find the right one.
Sometimes a trend line which appears to be correct may have
to be redrawn. With practice, the art of drawing trend
lines becomes easier, but initially there are some useful
guidelines in the search for the correct one. There must be
evidence of a trend. This means that, for an up trend line
to be drawn there must be at least two reaction lows with
the second low higher than the first. Once two ascending
lows have been identified, a straight line is drawn
connecting the lows and projected up and to the right. Once
the third point has been confirmed and the trend proceeds
in its original direction, the trend line becomes very
useful in a variety of ways. One of the basic concepts of
technical analysis is that a trend in motion will tend to
stay in motion. Therefore, once a trend assumes a
particular slope or a rate of speed, as identified by the
trend line, then it usually maintains the same slope. The
trend line then helps not only to determine the extremities
of the corrective phases but also importantly, when that
trend is changing. Very often the breaking of the trend
line is one of the best early warnings of a change in
trend.

The Significance of the Trend line

It is very important to discuss how to determine the
significance of a trend line. In every market and on every
chart you see there are many trends in motions, short term,
mid term, long terms, hourly and so on. However, not all
these trends will be significantly strong. If they are not,
a trader runs the risk of entering or exiting the market at
the wrong time. The more significant a trend line, the more
confidence it inspires and the more important its
penetration. There are two factors that determine the
significance of a trend line. Firstly, the length of time
it has been intact, and secondly how many times it has been
tested. A trend line that the market has tested 8 times for
example, but keeps pushing the price away, is obviously a
more significant trend line than one that has only been
tested twice. As a rough estimate after the third bounce
off the trend line will be when the market will start to
offer trading signals. Similarly, a trend line that has
been intact for the last 9 months is of more importance
than one that has been intact for 9 weeks. There is no
standard as to what duration one needs to wait before
relying on the trend, as some trends will only stay in
motion for short periods of time. To catch these, you have
to use the time in conjunction with the testing of the
line.

Support and Resistance

Support and resistance levels are ones of the most basic
but essential components of technical analysis. Support and
resistance are price areas where an abundance of trading
has taken place and where considerable buying or selling
pressure exists. Underlying support (buying pressure) keeps
a market in an uptrend, and overhead resistance (selling
pressure) keeps a market trending lower. Once a trader can
accurately determine where these levels are, they can be
used very effectively to manage risk, and identify profit
opportunities. By entering trades at price levels at which
a significant move is likely, the probability or reward
over risk is improved. There are support and resistance
levels that are applicable to every traders time frame.
Observing how the market reacts when encountering these
levels is a very good barometer to measure the strength of
the underlying trend. They are also key points for breakout
moves. Large quantities of stop loss orders will usually
accumulate at key support and resistance areas and will
often contribute to a dramatic surge in the market in the
direction of the breakout once these areas have been
penetrated.

Support Levels

A support level is a price area at which there should be an
increase in the demand for that product. A support area is
not difficult to find in a chart. When the market is in an
uptrend, any previously established congestion area is the
uptrend is usually an area of support. To draw a support
line you need to find at least 2 points on the chart that
adhere to this criteria. This then forms a line that can be
extended across the chart.

When a support area is penetrated on the downside, it then
may become the nearest resistance area to a subsequent
advance.

Resistance Levels

A resistance level is a price area characterised by
increased selling pressure or increased supply of a
particular investment product which tends to level off
advances. If the market is in an uptrend, any point at
which new highs are reached or any congestion on the upside
will act as resistance. To draw a resistance line you need
to find at least 2 points on the chart which adhere to this
criterion. This then forms a line which can be extended
across the chart.

When a resistance area is penetrated on the upside, it may
become then the nearest support area to any subsequent
decline.

Chowrich is the owner of Earning Best Online For further recommended resources on how to start a profitable Make Money Online business that is Guaranteed to jump start your internet business.
Click Here to grab your chances.

The trend in globalization will lead to greater integration of large number of producers and consumers in the global economy according to M. K. Pralahad in his book ”Fortune at the Bottom of the Pyramid’. IT continues to played an important role enabling democratized commerce.

Because of technological advances; information is getting more and more democratized. Today, on a global scale everyone has access to the same information and the potential to translate that information into intelligence. In the past, the profit was made mainly from ‘Information Arbitrage’. If you had access to privileged information, you could take advantage of that information to make a profit. Also, since information traveled slowly, the first movers had a huge advantage when it came to competition. But, with the coming democratization, the velocity of information has dramatically increased and thus decreasing the period when the organization can market product based on differentiation strategy.

The competition will be able to catch up quickly and offer the same product or service, thus pressurizing the company to reduce cost. This intense pressure from competition leads to ‘commoditization of product/service’ which in turn leads to what Economist call ‘Perfect Competition’. Economists have always loved ‘Prefect Competition’ model because from their perspective that it increases economic efficiency which is good for the society at large.

Thus, trend towards commoditization has accelerated and will continue to accelerate due to technological innovation. This accelerated commoditization which is at the heart of Nicholas Carr’s argument in his infamous HBR article ‘IT Doesn’t Matter’ where he makes an argument that in a ‘perfect competition’ model of future, your investment in IT cannot be leveraged for differentiation strategy.

So, can IT be used for differentiation strategy? The answer is unequivocally YES. First of all, there is always a lag in the availability of information. Even though, the technology continues to enable sharp increase in the velocity of information, the information cannot be made available instantaneously. A ‘business idea’ in an organization will not be known instantaneously to the competition. There is that lag time. But with the increased velocity of information, slow decision will be punished. Organizations need to set up agile business processes and streamline decision making ability if they want to take advantage of first mover strategy. IT can play a major role in this effort only if the core competencies of the organizations are identified and automated.

While the technology can be blamed for commoditizing of products faster, same technology can be leveraged to expedite creation of Network Externalities. Let’s take eBay as an example. While it is simple to copy eBay’s business model, it will be extremely difficult to create a value for the sellers because all the buyers have become eBay’s captive audience. So, in this example IT that enabled Network Externalities has created differentiation strategy for eBay.

IT can also enable seller identify the Long Tail aspect of the supply demand curve. Lets say the Company X is involved in selling music video downloads an specializes in ‘Fusion French Rap with Middle Eastern instruments with Hawaiian Hula dance’. Before large scale global IT adoption, it would have been difficult to identify the demand for that kind of specialized music video. Now, with the advances in IT infrastructure, the company X can reach the global customer base and find enough demand to be profitable. With the advent of social media, technology can be used to build community around that specialized product thus adding more ‘value’.

Thus, IT acts as a double edged sword. On one hand it has the power to force rapid commoditization of products. On the other hand IT can be leveraged as mentioned above to differentiate products and services for an organization. Even with democratized information availability, IT can help create first mover’s advantage. It all depends on how organizations use IT.

Raj Sheelvant is currently working as a Project Manager at a Large Multinational Computer Manufacturing Company. He holds MBA from W.P. Carey Business School of Arizona State University at Tempe, Arizona and MS in Engineering Science from University of Toledo, Toledo Ohio. He has a passion of leveraging IT to create and sustain competitive advantage for the Corporations. He strongly believes that IT can be used to ‘expand economic moat’ for the corporations but one need to make sure that the IT projects are always used to enable corporate and business strategy. He writes his blog on IT Strategy at http://itstrategyblog.com

He is also the author of several papers
“A Parallel Architecture for MUSIC Algorithm.”
International Conference on Signal Processing Application and Technology, Boston-92.
“Hypercube Architecture for Householder Algorithm.” 1992- Modeling and Simulation Conference, Pittsburgh.

You can check his LinkedIn profile at http://www.linkedin.com/in/rsheelv

Forex trading, short for foreign exchange trading, involves the buying and selling of the many currencies of the world. It does not operate via a central exchange site, like traditional stock market trading, and may, thus, fully function a 24-hour basis.

When compared to other exchanges, the trading market is the largest in the world, even beating the New York Stock Exchange (NYSE) by over a hundredfold, in terms of daily trading volume, most of which are conducted by private entities and individuals.

Because of the absence of a central exchange, trading happens between two parties directly. Buyers and sellers communicate and trade via the phone, the Internet or other communications networks worldwide.

In addition, trading forex is also speculative, meaning, they are based on expectations on whether a certain currency would rise or fall, depending on current market conditions. It is risky business, but the returns have often proved themselves worth the risk.

Basic forex trading

Forex trading involves the buying and selling of two currencies at the same time. This combination is often dubbed a cross, because it occurs between two moneys; for instance, the US dollar/Japanese Yen. The highest traded currencies in forex are the US dollar, the euro, the Japanese yen and the UK pound - the “majors”.

Trading normally occurs in the spot market, which is the largest because of its volume. Here, trades are made and completed directly and on the spot. You don’t have to wait too long to settle.

Advantages of forex trading

1. No 4pm trade closing time.

When you’re trading forex, you have 24-hours to do so from Sunday night to Friday night. This opportunity allows you to retract your moves and react immediately when a currency suddenly goes up or down. Breaking news are vital to trading.

2. Very liquid.

It is easy to convert your trades to cash in the market, especially if yours involves one of the majors. The high liquidity helps ensure that spreads are narrow and prices are stable throughout the period.

3. Strong potential for profits

This is particularly true with falling currencies. Because trading involves two currencies, when one rises, the other naturally falls. When a currency depreciates, it could be the perfect time to buy into it so that you can sell it for a hefty profit when it’s its turn to appreciate.

4. The higher the currency’s liquidity level, the cheaper it is to trade it.

This is why most forex trading patrons opt to trade majors, because they have the highest liquidity. In addition, trading is also more attractive to some money movers because of the absence of a commission. Thus, currencies are actually traded for their real merits and not because they come with misleading incentives.

There’s a lot more to learn about trading and the above merely scratches the surface. To be able to further understand what forex trading is and how it can help you grow your coffers, it is advised that you speak to an expert who more likely has all the answers to your questions. Or, yet, ask somebody who’s already had experience with forex trading.

Our mission at the Options University is to provide investors around the world with the very best in options education and tools, empowering them to use options for greater profit protection and less risk. To learn more on the options trading strategies for safer investing and bigger profits, please visit our blog at http://www.options-university.biz/blog/ for free trading tips and video e-Course.

There are a multitude of ways an individual or company can utilize the Internet for earning revenue. Many of which require developing your own web site, attracting traffic, processing payments and other tasks required for generating revenue. One method does not require any of these and just may be the perfect method for making money online.

The method I am referring to is trading foreign currency, also known as forex. Other acronyms include 4X and FX.

I don’t want to be misunderstood. Trading forex is not easy if you are unfamiliar with it. There are many things to learn before you trade real money. How do foreign currency prices work, how to choose the right broker, how does the daily news affect prices, what do technical indicators (price charts) tell you about price movement, proper money management and other information must be learned.

The good news is that there is a wealth of information that can be found on the Internet regarding forex. You can learn the basics first, then advance to more difficult concepts simply by researching the Internet at your own pace.

After learning the information you need regarding forex, you will need to then begin developing a trading strategy. You can develop your own strategy based on what you learned, or you can use a strategy developed by another trader. But be very careful, there are many unscrupulous people trying to promote strategies that may simply not work. Once again, do your research before purchasing any trading strategies.

Once you have decided on a trading strategy, be sure you test and re-test the strategy before using real money. That’s one of the many great benefits of trading forex is that you get to test your strategies with fake money (demo account) before committing any real money. Nearly all forex brokers offer a free demo account in exchange for your e-mail address that utilizes the same procedures as a real account.

Most people that think about making money online generally relate to having an online business where you sell products or services. The reason I chose to include trading forex in the ‘make money online’ category is because everything you need to learn can be found on the Internet, communication with forex brokers is done via the Internet, currency prices are served over the Internet, and trade execution is performed using your broker’s software interface over your Internet connection.

Because there are no sales to make, no traffic to generate, and no payments to process makes trading forex, in my opinion, the perfect method to make money online.

Kevin Moon offers information on trading forex including strategies, money management and other tips. He is currently offering a free download — How To Turn $300 into $30,000 in 6 Months — to all visitors to his web site, http://www.tornadoforex.com.

Hundreds of thousands of individuals have already joined the FOREX market. If you are
interested in a way to invest your money with quicker returns, FOREX may be perfect for you.
But before you can begin earning money, you should thoroughly understand the FOREX market.

Investing Methods

To better understand the FOREX market, you can compare this investing method to trading
stocks. In the stock market, you can buy shares of many different corporations in the hope that
stocks will rise, earning you a profit. Well, the FOREX market works in the same way, except
you are not buying shares of a corporation. Rather, you are buying and selling currencies. The
aim is the buy a currency and sell it when the currency rises, thus earning a profit when the
currency is more valuable.

As with the stock market, the FOREX market consists of those who invest a small amount as
well as those with millions to invest. Any individuals with any capital can join in on the action.
Because of the wide variety of FOREX brokers available today, you can become a FOREX trader
with as little as two or three hundred dollars.

Predicting Results

But like the stock market, the FOREX market is full of risks. When you are investing any money
there is always a risk of some loss. To minimize loss, many FOREX traders thoroughly educate
themselves through classes, online courses, books, and other materials. There are many kinds of
trading methods that will help you analyze current conditions and enable you to predict results.

The FOREX market is constantly changing, with drops and rises in currencies, 24 hours a day.
The trick is to predict these trends before they occur, so you can buy currencies low and sell them
when it is higher than the original cost. Sometimes, this means buying a dropping currency, and
waiting for that currency to take on an upward trend. This forces you to keep up to date on the
FOREX market conditions.

Online Trading

To become a FOREX participant, you should at least read a book, if not take a course. Because
real money is involved here, you must proceed with utmost caution. Many FOREX investors sign
up with FOREX related websites to receive newsletters, advice, and to keep up with currency
trends. Some investors even sign up to receive trends on their phones and PDA’s to stay in the
game.

The good news is that you have the opportunity to practice with play money before you put any
of your hard-earned cash through the FOREX market. When you sign up with a brokerage firm
that offers the option to trade online, you can use play money to test and understand the software.
You can use this valuable opportunity to put your research to the test by trying out different
trading methods to see if your predictions and analyses are correct. While the money may not be
real, the conditions are, which allow you a stable playground to learn and adapt to the FOREX
market.

Stay informed to stay on top of your game; your FOREX profits count on it. By remaining
vigilant, you’ll be able to pull in great profits through the FOREX market.

Get the latest in forex market know how from the only true source at http://www.forextradingline.com Check out our forex market pages.

Easy Language

TradeStation gives you the power to right code in Easy Language in order to back test your trading strategies. Now, while the name of the code is Easy Language, it is far from easy. If you have previous coding experience, then Easy Language will remind you a lot of C++, but if you have no previous coding experience, do not waste your time on trying to learn the syntax. Simply look to their third-party programmers for assistance. These developers are backed by TradeStation and they do not charge and obscene amount of money. Better yet, if you have a friend or relative that knows how to write code, they will quickly be able to write basic strategies for you.

TradeStation provides some basic literature on Easy Language, but if you want to really get your feet wet, you will have to purchase their home study course, which will run you a cool $149. Again, if you are here to trade, trade, and leave the developing to the programmers.

Historical Market Data

TradeStation has over 25 years of historical data. When you look a little closer, the amount of data is dependent upon which investment vehicle you are using:

• 4 years of intra-day Forex data
• 8 years of Eurex Futures and Index Data
• 16 years of intra-day Equities
• 25 years on intra-day Futures data

So, the real question is do you need all this data from TradeStation. Well, of course, if you are serious about testing your trading strategies. This amount of market data will allow you to back test your strategies in bull, bear and flat markets. You will quickly see how you would have faired in the bull market of the late 90’s, or the slippery slope down in ‘01 and ‘02. Most importantly, you can see how you would have done since the market recently bottomed in the spring of ‘03.

Automated Trading

I do not endorse mechanical trading, as I feel every trader should be responsible for his or her own trading decisions, but I have to admit, having the option of setting up automatic trading is impressive. In order to activate this feature, you should be certain that your strategy is working properly and has clear stop rules. The last thing you want is to take lunch and come back to realize you just bought a 10 thousand dollar hotdog. TradeStation also has a new feature that allows you to execute orders based on fundamental analysis. TradeStation is the first platform capable of scanning and executing orders based on fundamental factors.

Back testing Strategies

There is one part of back testing that TradeStation does not tell you about and that is slippage. When you write your Easy Language code, you can tell the code to exit a trade on the close of the current bar, or ext at market on the open of the next bar. The problem is you may want to write the code to get out at a specific price. Now, all of you Easy Language experts out there, please relax, I know that you can write code to get out at any particular price, but the average trader will not know how to write such detailed code. So, in summary remember that if you write your own code, the canned functions in Easy Language will not allow you to easily code your exits. Just make sure you verify in your performance report that your results have not been inflated or deflated due to slippage.

TradeStation will display a report of your hypothetical trading results. The TradeStation performance report lists everything from average time in trade, average gain, total commission, annual rate of return to name a few. Only problem, you cannot export the data to excel. So, one is forced to manually type in stats into your friendly worksheet processor. Depending on how much information you want to analyze, this exercise could prove to be time consuming.

Trade Execution

TradeStation has the quick order button execution of every other active brokerage firm. But the cool thing with TradeStation is the Order Cancels Order (OCO) and Order Stages Order (OSO) order types. For Order Cancels Order, you can instruct TradeStation to enter a position if the price breaks up or down. This works well when you have identified two levels on a stock as potential long or short entries depending on how the price breaks. The Order Stage Order allows you to stage multiple orders for an existing position. So, if you are long MSFT and want to exit in 3 increments, you can create an OSO order which will stage the orders and when a certain price is hit, it will exit a part of your position at a specific limit. I often hear traders say that they do not want to put a stop in, because if there limit is hit, they will have to cancel their open stop order, to then put in a limit order to exit the trade. Well, with OSO in you can place both a stop and up to 3 limit orders in TradeStation, so there is no longer any excuse as to why you can not protect your capital, the second you get in the trade.

Shorting

TradeStation does not have the books to short some of the more obscure stocks. So, if you want to short stocks that are not well known, you may encounter some trouble with TradeStation. This does not happen often, but it happens enough that it is noticeable.

Charting

The charts in TradeStation are in real-time and there are over a hundred indicators, show me, paint bars, etc. which can be displayed on the chart. The only negative is that you cannot execute trades by clicking directly on the chart. There are multiple screens in TradeStation that will allow you to close a position; unfortunately, the chart is not one of them.

Ability to Link Accounts

TradeStation has the ability to link all of your accounts. Therefore, you can trade futures, one minute and then put on a trade in your equities account the next. This is extremely convenient, since you do not have to open another application or go through the tedious process of logging into another account.

Commission Structure

If you are an active trader and you trade under 1k shares per lot, TradeStation makes sense. TradeStation has a per share cost up to 500 shares. The first 500 shares are $.01. So you can buy 100 shares for a $1 and up to 500 shares for $5. Over 500 shares, it is $.006 per share. So, if you trade 3k shares, TradeStation can become costly. The first 500 shares will cost 5 bucks and then the last 2.5k shares will run you another 15 bucks. The total cost would be 20 dollars one-way for the trade. In this example, it of course would be much cheaper to trade with a brokerage firm that has a flat charge for all trades. In summary, if you are going to trade in big lots, 1k or more, go with a flat fee brokerage firm, but if you’re going to trade under 1k lots, TradeStation is the place for you.

Support Center

TradeStation has a support and discussions forums, where traders share ideas, stories and Easy Language code. Unlike many forums, where there are only a few users, the TradeStation forum has hundreds of quality posts. I have been able to pickup tons of ideas as well as free Easy Language code for some of my strategies. Each post is grouped in categories and the users are quick to respond to your questions. TradeStation has also recently started a Wiki for both their platform as well as Easy Language. The Wiki is expanded daily. TradeStation also has a dependable phone support staff. I have yet to call and not be able to get someone on the line with in 15 - 30 seconds. The staff is always attentive and willing to help on any issue. There is a sales desk, equities desk, futures desk, and forex desk. Each department specializes in their respective areas, which prevents you, the client, from ever talking to someone who is unknowledgeable on how to address your issue.

Radar Screen

TradeStation is the only trading platform, which has a radar screen that can scan the market based on your own market criteria. Now this is not your standard, scan that can display stocks with an RSI under 30. The scan in Radar Screen can be as simple or as complicated as your Easy Language abilities will permit. So, if you want to look at stocks at 2-day highs, with 25k shares per minute, that are up a minimum of 2%, you can scan the market for this information in real-time. The only negative regarding Radar Screen is TradeStation only allows you to scan the market for 1k stocks. But, who needs to monitor more than 1k stocks?

See You At The Top,

Al Hill

Al Hill is the co-founder of mysmp.com (My Stock Market Power) which provides free trading articles to investors. Please visit http://mysmp.com/trading-articles.html for more free articles.

In the online world, having the right online currency trading software is just the same as being skillful in trading. No matter how good you are, you still need the right tools to get the job done and reap lots of rewards. Being able to have a suitable investment structure ensures success. This is why having the right tool to go with your needs or preferences will make your online investing endeavor successful.

Global Forex Trading is a top performing company in the realm of foreign exchange investment. It owes its success to its online currency trading software which has the capabilities to meet most superior investment software needs. This so called award-winning software is the Deal Book 360. It presents analysis instruments, visual online trading, and automated trading.

Another form of online currency trading software is the Deal Book WEB. This trading tool also comes from Global Forex Trading, which is a top competitor in the foreign exchange trading companies market. You can enjoy online trading anytime and anywhere as long as your computer is connected to the internet. This software is suitable for people on the move due to its highly flexible accessibility along with the usual charting and trading abilities. For people on the go, a laptop with wireless connectivity to the internet is a must to fully enjoy this software.

There are other quality software available online. Advanced Currency Markets is one which actually does away with downloading. It has sophisticated trading policies for online traders, allowing more variations. This software has the ability to function even in the presence of firewall installations. It offers a highly secure technology, along with the attributes of current charting tools and market updates.

Yet another form of online currency trading software is the Deal Book Mobile. This software can be used through your mobile gadget such as capable cell phones or PDAs. This software is an essential instrument in currency investing in the internet.

Whether using such investment software for computers or mobile devices, you should focus more on choosing which software has the greater features and services for your trading needs. There are free complimentary trials that you can use to get a feel of the software.

Online forex traders must have the ability to decide which forex software can serve their distinctive training goals and needs. It is always recommended for traders to choose trading software which offers first-rate and quality features as well as easy usability and precise performance.

The internet provides various websites offering online currency trading software. Read my blog for more information and sources regarding this topic.

Learn everything about forex trading from Davion’s wildly popular blog to learn how to trade forex - from mastering the basics of foreign exchange trading to discovery of new trading tips, strategies, tools and more. Also, read this informative article about 6 forex trading terms you need to know!

I wanted to talk to you about foreign currency investing strategies. This is a global market that provides a very nice opportunity to individuals all over the world. This market has grown to over three trillion dollars a day in trades making it the world’s largest market. This amount of money attracts a lot of get rich quick people. Do not become of of these people because they end up losing all their money because they don’t have the slightest clue on how to invest in this market. I’m going to share with you a little about what I’ve learned that has helped me in this market.

I think the most fundamental skill that people have a hard time implementing is cutting your losses. You’re going to have bad trades, just like the rest of us. The difference between profitable and unprofitable traders is how you deal with it. I used to think cutting my losses was stupid because the currency will typically go back up. It might. It could take a year to go back up. Are you willing to leave that much money in the market for a year, when you could cut your losses, get some of the money back and reinvest it in another profitable trade?

You have a 24hr market here, but it isn’t always profitable at all times. I find the low volume times quite unstable. The reason is that there isn’t enough trading going on for a stable supply and demand. If you look at the high volume time, there is a lot of trading going on and it seems almost chaotic. Even though it is extremely busy, there is an equilibrium of supply and demand, making it very stable.

I’m currently giving a 7 day free forex course. Newbies and experienced are all welcome. If you’re interested in participating, check out the Casual Forex Trader.

The US stock markets have performed nicely since the lows in March. However, it looks like this was a short term event. While football season is still months away, it is time to bring the defense out.

The Federal Reserve has signaled that they are done lowering rates for the time being. Without additional liquidity provided by the Fed, the markets have to focus on the economy. Unfortunately, the focus will be high oil prices, high food prices, and the fear of inflation.

The financial media is turning their focus on inflation and second guessing the movement of the Fed.
Confirmation of a recession in the US economy has not been made. While the economy is near stalling, it has not stalled yet. Does this mean the Fed lowered rates too much and created inflation? Probably not. But with a slow summer season for the media, the financial presses may take on the opinion that the Fed did lower too much and has created an inflation monster.

Investors have been worried about higher food prices as a confirmation of inflation. The reality is, higher food prices have come from the increasing use of bio-fuels. I am guessing that the high oil and food prices will start to come down after the Summer Olympics. China’s economy is running on full speed right now. After the Olympics, I think we will see the Chinese government tighten their rates to slow down their economy to a normal growth level. This should lessen the demand for oil.

For now, investors should be in a defensive mode for the summer. The use of inverse mutual funds is a nice vehicle to add to a portfolio. This will allow an investor to participate on the current downtrend in the market - and enjoy their summer.

John Rothe is President and Portfolio Manager of the Rothe Financial Group, based in McLean, VA. The Rothe Financial Group, LLC, is an independent money management firm focused on building and protecting the wealth of our clients through customized portfolio management solutions

For more information visit http://www.rothefg.com

Registered Representative.Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative. Cambridge Investment Research Advisors,Inc., a Registered Investment Advisor. Cambridge and Rothe Financial Group are not affiliated.

Forex Trading involves buying one currency in a currency pair, by selling the other. So if one is trading in EUR/USD, the trade may involve buying EUR by selling USD at the current market rate or vice-versa. Similarly buying EUR in EUR/GBP would require GBP to be sold.

Unlike options or stocks which have lots of companies that can be traded on, the forex market has got limited currency combinations which can be used to place the trades.

Despite this, often people wonder which currency pairs should be chosen for trading? Should it be USD based or should it be the one that is heavily volatile or should it be some other?

Lets look at few parameters which can be used to decide -

1. What is the pip spread involved - The biggest factor to be considered is the spread between the currencies. In layman’s terms, Spread is a difference between the sell price and the ask price of forex currency pairs as given by the forex broker. In other words, it is a commission of the broker or agent through which the trades are made. The lower the spread, the better it is for the forex trader. The lowest spread I have seen is in EUR/USD, which has the average spread is 2 pips to 3 pips. Typically a spread of upto 5-6 pips is good enough to trade.

2. What is the liquidity? - The more the liquidity, that means the higher is the amount of money being traded on that currency pair. So, this eventually means that that particular currency pair moves a lot in a the trading sessions. Its better to trade on such from a day trading perspective as the trades don’t need to be kept open for a longer time. I have seen that the GBP/USD is heavily liquidated. On average it moves about 100-150 pips everyday. This is followed by EUR/USD and USD/CHF.

3. How does the currency pair behaves? - Does it move technically or is it primarily fundamental driven? The one that is primarily fundamental driven doesn’t has much regard for technical analysis. I have seen JPY (Yen) as one such currency which is heavily fundamental analysis driven.

So, these are the some factors that can be used in identifying the currency pairs to be traded on. Though these factors are not an exhaustive list, they can be used as minimum basic rules. The pip spread is one important criteria. The lower, the better it is. However the currency pair should also be sufficiently liquidated as this means that there will be significant pips movement during a trading day.

If you want to increase the profitibility in forex trading, get my free forex report that contains some important rules on trading forex. Though the ebook contains important rules, yet lot of traders are either not aware of it or they forget about it. Don’t be one of them and get this free ebook on Forex Trading