Lesson07-Trading Tips for The Major Currency Pairs

Trading Tips for The Major Currency Pairs 

 Trading the US dollar opens a whole new market to the potential trader, a market where one can participate in the cyclical nature of the global economies. Wish to diversify away from the US dollar... buy the Euro. Wish for movement in the market... trade the British Pound. Believe that Japanese economy is going to grow... buy Japanese Yen. Geopolitical tensions... buy the Swiss Franc. Trading majors gives you choices. 

All About the Majors: EUR/USD

Making headlines around the globe, the EUR/USD is perhaps the best known pair in the world! For the past 3 years it's been making high after high, but a reversal could send the price plummeting! In the meantime, it provides plenty of trading opportunity as it ranges between extended breakouts.

The euro has been called the "anti-dollar" since it is highly sensitive to US data. Because the recovery in the US has been uncertain, the market closely watches developments in the US economy to determine the strength of the recovery. Fears that the US is hitting a "soft patch" in its economic growth generally boost the euro.

Though the EUR/USD actively trades 24-hours a day, the most action is concentrated in the time when the US and European banking hours overlap, from 7:00 AM EST to 10:00 AM EST. Of all the majors, this pair best reflects how the US economy is doing compared to the rest of the world. 

EUR/USD Profile

The US economy is dependant on imported oil—so movements in the price of oil tend to impact the value of the dollar!

• Average daily range: 111 pips
• Tends to consolidate into wide ranges after sharp trends
• Good for: trading in all time frames, depending on strategy 

 What moves EUR/USD?

Surprises in US economic releases This pair is hypersensitive to US data and will move when results come as a surprise- especially indicators that measure growth or recovery in the US.

Talk of Euro as an alternative reserve currency Because the US dollar is held as a reserve currency by many banks around the world, a diversification into euros would drive the value of the euro up causing a sharp move in the pair.

Interest rate differentials As the Fed raises interest rates, money will flow into the US as investors move to capitalize on these higher returns, boosting the value of the dollar.

Trade Deficit Because the imbalance of more imports vs. exports has the potential to reduce the value of the dollar in the long run, the market is very concerned with the trade balance in the US. Changes can cause a big shift in the value of the US dollar.

Fundamentals to Watch

FOMC Rate Decisions Watched closely since any increases in the interest rate automatically bring in foreign capital, increasing the value of the dollar.

US Non Farm Payrolls Amid fears of a "jobless recovery," the market has become very sensitive to this indicator, which measures new jobs created in the US.

U.S. Current Account...

US Trade Balance A measure of how much the US exports compared to how much it imports. To many net imports can drive the value of the dollar down, since more capital is leaving the US and being sold abroad, which drives down the value of the dollar.

US TIC Data Treasury Inflow Capital is a measure of how much foreign buying of US securities is happening. This can offset an imbalance of too many imports, since money is coming to the US to purchase goods which drives the value of the dollar back up.

US Retail Sales The US economy is largely driven by consumer demand. If this number is unhealthy, it can indicate a decline.

FOMC Minutes The breakdown of Federal Open Market Committee meetings. Scoured for any clues about how the Fed perceives the state of the Economy. Since the Fed makes interest rate decisions, insight into their outlook can help the market predict the interest rate outlook.

European GDP Gross domestic product. A measurement of output, and more importantly, growth in an economy.

European Trade Balance A measure of how much Europe is importing versus how much it exports. Too many imports mean that the currency will get weaker because more Euros are being sold to purchase foreign goods.

European CPI Consumer price index, a measure of inflation in Europe. Inflation that is too high or too low may prompt Europe’s central bank to raise or lower interest rates.

ECB Rate Decision Refers to the European Central Bank’s monetary policy. If inflation is too high, the ECB will raise interest rates to slow borrowing and spending. If economic growth is sluggish, lowering interest rates will help boost activity. High interest rates make a currency more attractive.

IFO Business Climate Survey Acts as an early indicator for economic development in Germany, which is Europe’s largest economy. Measure of sentiment that is weighted by industry to provide a composite outlook.

German Unemployment As Europe’s largest economy, German unemployment is read as a gauge of economic conditions in the Euro zone as a whole.

All About the Majors: USD/JPY

The USD/JPY is an enigmatic pair that gives a good proxy of US versus Japanese strength. At the same time, the Bank of Japan works to keep the Yen weaker than perhaps it truly is, since a strong Yen would hurt Japan’s export sector by making its products more expensive.

Because interest rates in Switzerland are so low, the CHF is also a popular funding currency for carry trades. Because growth in the Swiss economy has been slow for some time, many investors are entering into USD/CHF as a carry trade, making the pair extremely sensitive to any changes in the interest rate outlook for either the US or Switzerland.

The USD/JPY is most active at the open of the Asian session (6 PM to 9 PM EST) as well as during the early US trading session (7 AM – 10 AM EST). 

USD/JPY Profile

Watch interest rates and outlooks carefully – the JPY is a funding currency for many carry trades and so it’s hypersensitive to the prospect of a rate change.

• Average daily range: 102 pips
• Popular funding currency for carry trades since interest rate is so low
• Good for: trading in all time frames, depending on strategy 

 What moves USD/JPY?

Chinese Yuan: If China revalues its currency (thereby allowing it to become stronger and closer to its true value) then Japanese exports would be able to compete better in the US and China against Chinese products. If this happens, the Bank of Japan could then stop intervening in the market to keep the Yen weak, which would result in an increase in the value of the Yen

Oil prices Japan is highly dependent on imported oil. Higher oil prices can impede both production and growth in Japan as it makes input costs significantly more expensive.

Japanese reserve diversification Japan holds large reserves of US securities and currency. A diversification out of dollar only holdings could result in a large sell off in the US dollar, driving the price down.

Fundamentals to Watch

FOMC Rate Decisions Watched closely since any increases in the interest rate automatically bring in foreign capital, increasing the value of the dollar.

US Non Farm Payrolls Amid fears of a “jobless recovery,” the market has become very sensitive to this indicator, which measures new jobs created in the US.

U.S. Current Account...

US Trade Balance A measure of how much the US exports compared to how much it imports. To many net imports can drive the value of the dollar down, since more capital is leaving the US and being sold abroad, which drives down the value of the dollar.

US TIC Data Treasury Inflow Capital is a measure of how much foreign buying of US securities is happening. This can offset an imbalance of too many imports, since money is coming to the US to purchase goods which drives the value of the dollar back up.

US Retail Sales The US economy is largely driven by consumer demand. If this number is unhealthy, it can indicate a decline.

FOMC Minutes The breakdown of Federal Open Market Committee meetings. Scoured for any clues about how the Fed perceives the state of the Economy. Since the Fed makes interest rate decisions, insight into their outlook can help the market predict the interest rate outlook.

Japanese Inflation A measure of inflation in Japan. Closely monitored because when too high or too low, it can prompt a change in the interest rate outlook of a country.

Japanese Consumer Spending A measure of how much Japanese consumers are spending. The Japanese economy is driven primarily by its export sector, but consumer spending is an important gauge of economic activity and prosperity.

BoJ Monetary Policy Meeting When Japanese bank officials meet to determine monetary policy. Has direct implications for currency traders since they often hint at whether or not they intend to intervene to protect the Yen from becoming too expensive—hence making their exports more expensive.

Japanese Trade Balance Japanese imports vs. exports – the Japanese economy is highly dependent on exports; a drastic change in this number can have implications on the value of the Yen.

Japanese Industrial Production A measure of activity in the Japanese manufacturing sector. This acts as a gauge for the level of production and growth in the economy.

Tankan Survey A quarterly business survey gives a detailed assessment of Japanese business conditions. The headline number shows the difference between the proportion of optimistic businesses and the proportion of pessimistic businesses. A large positive number means that optimism pervades.

All About the Majors: GBP/USD

The GBP/USD, also called the cable, is by far the most volatile pair of all the majors. Prone to huge breakouts and dramatic reversals, the pair can move uninterrupted for hundreds of pips, providing multiple opportunities to traders in all time frames.

When the US lowered interest rates, the GBP/USD became a hot carry trade – especially when the housing bubble in the UK prompted the Bank of England to raise UK interest rates further. However, this is becoming less the case with every rate hike out of the US – making the pair extremely sensitive to any changes in the interest rate outlook for either country.

The volatile pair trades most actively from London open until lunchtime in the UK (around 4:30 AM EST) and then during early US trading session (7AM to 10 AM EST). It can often travel 150-200 pips a day. 

GBP/USD Profile

Breakouts and reversals in the GBPUSD can be momentous-- active traders are advised to respect their stops!

• Average daily range: 156 pips
• Most volatile major; can make huge moves in a single day
• Good for: trading in all time frames, depending on strategy frames, 

What moves GBP/USD?

Shifts in monetary outlook for the GBP Since the GBP is held by many in carry trades, this pair is very sensitive to any changes in interest rate outlooks.

UK housing market The UK housing market is the Bank of England’s top gauge for inflation in the UK. The housing bubble prompted a series of rate hikes, and new developments are closely monitored by the market.

US economic data The market is very sensitive to the outlook for the US economy, since recovery has been uncertain. A pickup can have implications for the US interest rate outlook, which could also affect the value of the GBP/USD.

Fundamentals to Watch

FOMC Rate Decisions Watched closely since any increases in the interest rate automatically bring in foreign capital, increasing the value of the dollar.

US Non Farm Payrolls Amid fears of a "jobless recovery," the market has become very sensitive to this indicator, which measures new jobs created in the US.

U.S. Current Account...

US Trade Balance A measure of how much the US exports compared to how much it imports. Too many net imports can drive the value of the dollar down, since more capital is leaving the US and being sold abroad, which drives down the value of the dollar.

US TIC Data Treasury Inflow Capital is a measure of how much foreign buying of US securities is happening. This can offset an imbalance of too many imports, since money is coming to the US to purchase goods which drives the value of the dollar back up.

US Retail Sales The US economy is largely driven by consumer demand. If this number is unhealthy, it can indicate a decline.

FOMC Minutes The breakdown of Federal Open Market Committee meetings. Scoured for any clues about how the Fed perceives the state of the Economy. Since the Fed makes interest rate decisions, insight into their outlook can help the market predict the interest rate outlook.

Bank of England Meeting Meeting at which Bank of England officials set monetary policy and decide whether to change interest rates or leave them the same.

UK Housing Prices The UK housing market is the number one gauge of inflation in the United Kingdom. It is closely watched since the Bank of England will raise rates if growth is too high.

UK Unemployment The UK economy is closely monitored for any changes. Unemployment is a good general indicator of the health of an economy.

UK Retail Sales figures provide a good indication of...

UK Inflation indicators are watched closely as they can...

All About the Majors: USD/CHF

Known increasingly as the "legacy pair" as trading activity moves from USD/CHF to EUR/CHF, the Swissy is the predominant safe haven currency in the world because of Switzerland’s long history of stability and neutrality. When the markets sense geopolitical turmoil, capital tends to move into Switzerland. Unexpected global events and spikes in the price of gold will create opportunities in this pair.

Because interest rates in Switzerland are so low, the CHF is also a popular funding currency for carry trades. Because growth in the Swiss economy has been slow for some time, many investors are entering into USD/CHF as a carry trade, making the pair extremely sensitive to any changes in the interest rate outlook for either the US or Switzerland.

USD/CHF is most active during European open hours (3 AM to 4:30 AM EST) through the early US trading session (7AM to 10 AM EST).

USD/CHF Profile

USD/CHF tends to trade inversely to the EUR/USD, and will trade in a range when EUR/USD is ranging.

• Average daily range: 127 pips
• Popular funding currency for carry trades since interest rate is so low
• Good for: trading during certain times of the day, when Europe and US open 

What moves USD/CHF?

Geopolitical tension: US-negative developments in the world will cause a move in the pair as investors move funds out of US dollars into "safe-haven" Swiss francs.

Gold prices Higher or lower gold prices will cause a corresponding move in the Swiss franc since the Swiss franc is one of the few world currencies that still is partly backed by gold.

SNB monetary policy Swiss monetary policy changes could have an effect on the standing of the CHF as a carry trade funding currency.

Fundamentals to Watch

FOMC Rate Decisions Watched closely since any increases in the interest rate automatically bring in foreign capital, increasing the value of the dollar.

US Non Farm Payrolls Amid fears of a "jobless recovery," the market has become very sensitive to this indicator, which measures new jobs created in the US.

US Current Account...

US Trade Balance A measure of how much the US exports compared to how much it imports. Too many net imports can drive the value of the dollar down, since more capital is leaving the US and being sold abroad, which drives down the value of the dollar.

US TIC Data Treasury Inflow Capital is a measure of how much foreign buying of US securities is happening. This can offset an imbalance of too many imports, since money is coming to the US to purchase goods which drives the value of the dollar back up.

US Retail Sales The US economy is largely driven by consumer demand. If this number is unhealthy, it can indicate a decline.

FOMC Minutes The breakdown of Federal Open Market Committee meetings. Scoured for any clues about how the Fed perceives the state of the Economy. Since the Fed makes interest rate decisions, insight into their outlook can help the market predict the interest rate outlook.

Swiss KoF Leading Indicators A composite of business surveys from various sectors of the economy (industry, retail and wholesale) that is combined to form a leading indicator that aims to project GDP growth approximately 8 months into the future.

Swiss CPI Consumer Price Index. A measure of inflation in Switzerland; a significant change may have implications for interest rate policy in Switzerland.

Comments from Swiss officials Watched for any indications of change in Swiss monetary policy.

Swiss GDP Gross Domestic Product. A measure of growth and productivity in the Swiss economy.

SNB Rate Decisions Any changes in the interest rate by the Swiss National Bank has implications for the pair as a carry trade.

Lesson06- undestanding GBP/USD

GBP and USD currency trading

The GBP/USD rate is comprised of the British Pound Sterling as the 'base' currency, and the US dollar as the 'counter' or 'quote' currency.The GBP/USD exchange rate is actually a comparison of the value of one currency in relation to the other. For example, the quotation GBP/USD 1.45 means that one British Pound Sterling is exchanged for 1.45 US dollar. If the forex rate increased to 1.50, this would reflect a strengthening British Pound Sterling as compared with the US dollar. You would buy, if you expected that the British Pound Sterling would continue to strengthen against the US dollar.

As trading occurs on currency comparison, it is easy to trade GBP/USD in any economic environment. GBP/USD forex trading is favoured as a way to reduce portfolio risk as it provides the ability to profit in rising and falling markets.

Lesson 05-Currency trading terms

Trading Hours

With only a short break on the weekend, forex trading takes place 24 hrs per day. With the increased use of global high speed Internet connections and 24 hour trading, the forex market is an almost constant activity centre.

A Few Forex Terms

Everyone trading forex needs to know the basic terms listed below to get started. For more information, be sure to browse our online glossary.

Foreign Exchange

Foreign exchange, or Forex, is a decentralized global market for buying and selling currencies.

Spot Market, Forwards and Futures Markets

The "spot market" is the largest segment of the forex market, and deals with the current price of currency, and immediate trades. The "forwards market" involves custom designed contracts for independent transactions occurring at a specific future date. The "futures market" involves standard contracts for a future date, under the auspices of an established exchange.

Currency Pair

Two currencies are always involved in a forex trade - one is being bought in exchange for the other. Together, those two currencies are called a currency pair, and are usually represented as two three-letter currency abbreviations. For example, consider the currency pair EUR/USD. In this example, the first currency, the Euro (EUR), is called the Base Currency and the second, the US Dollar (USD) is called the Quote Currency.

For most transactions, either the USD or EUR is used as the base currency. In the case of the example EUR/USD, the value of the USD (the quote currency) is considered in relation to 1 EUR. If the quoted price for this pair is 1.3553, this means that 1 Euro can buy 1.3533 US Dollars.

Here is how that information might be used. If a trader thinks that the value of the US Dollar will decrease in value relative to the Euro, he might buy the EURUSD, currency pair and then later sell the pair for a profit when the value of the pair increases (representing a decrease in the value of the USD, the quote currency) See below for a detailed example of a similar trade. 

Pip

A pip is the smallest unit of price for any currency. It is an abbreviation of Percentage in Point. Most currencies are expressed to the fourth decimal point, and the pip is the smallest change in the fourth decimal place, or 0.0001. This means that for USD, a pip is 1/100th of a cent. The Japanese Yen is the only currency expressed to the second decimal place, making its pip value 0.01. Profits or losses in forex trading are often expressed as pips. 

Bid Price, Ask Price and Spread

Bid and Ask Price

In any forex transaction, one currency is sold at the same time another is bought. Just as in an auction, the foreign exchange market uses the terms Bid and Ask to describe the value of the currency.

A simple rule to remember when considering a forex trade is that you can buy a currency pair at the Ask price, and sell it at the Bid price. It is easy to remember which price is which: the market "Bids" a certain price when it buys a pair from the forex trader, and is "Asks" a certain price when it sells a currency pair to the trader.

The terms Bid and Ask make best sense when considered from the perspective of the Market. The Bid price is the price at which others are willing to purchase a particular currency pair, while the ask price is the price at which others are willing to sell the currency pair.

To restate this important concept in terms of base and quote currencies, the Bid price is the amount the market is offering to buy the base currency, while the Ask is the amount that the market is asking to sell the base currency (in a price denominated by the quote currency).

Forex prices sometimes express both Bid and Ask values in the form Bid/Ask. For example, a USD/CAD forex quote might be expressed as 1.0180/83. This price indicates that the Bid is 1.0180, and the Ask price is 1.0183. 

Spread

Spread is the difference between the Bid and Ask prices. In the case of the USD/CAD forex quote mentioned 1.0180/83, the spread is .0003, often expressed as "3 pips". Forex brokerages often set the spread of currency pairs offered at fixed amounts. For the forex trader, this fixed spread allows for better pricing consistency from trade to trade.

For an example of how this information is used when calculating profit and loss in forex trading, please see the Mechanics of Forex Trading section.

Leverage and Margin

Leverage

Leverage allows a large amount of currency to be bought with a small investment. The amount of leverage available to a trader varies with the broker, for example 100:1, meaning that currency trades worth $100,000 can be made with an investment of $1,000. The word "leverage" originally meant the effect of using a lever to move a much larger object. In forex terms, leverage allows the use of credit to buy more currency with just a small amount of money on deposit. That deposit money is usually called "margin".

Margin

Margin refers to money actually deposited into a forex trading account. A trader must have a certain amount of money, the "margin" in their account before they can trade in the forex market. The amount required relates directly to the amount of leverage available. For example, if a margin account has a value of $1000 and leverage is 100:1, the trader can trade up to $100,000 in foreign currencies. Note that the amount of available margin will increase or decrease as the value of the forex currencies actively traded increase and decrease in value, through a process named "marked to market", through which profits and losses are immediately credited to or deducted from the trader's margin account.

Lesson 04-Broker for Forex

           As I explained in my early lessions to earn money from forex you should have a broker. Im going to introduce you the same broker I use because its reliable as I already know it.

this broker is hot forex. follow the link and go to open live account. you will see the below page

You have to provide your details. give the correct details. if you wish to start with small amount (<500$) you can select micro type or if you wish to start with more than 500$ you can select premium. follow the instructions and you will receive an email with username and password.

they will ask you to download an agreement and sign. download it and fill and sign. after email them the scanned copy of  signed   document together with a billing proof (A bill that comes to your name/bank or credit card is better) and your Idetity card. if you have a passport its better because our idetity card is in singhala and they cant read.. so they will not approve. If you dont have passport submit a scanned copy of driving license. Upload in pdf or JPEG format.

 when submitted they will call you within a day or two and tell you all the information and will ask you to put money once they approve the account.

when you logged in you can go to the depost tab and start depositing money. better to follow all visa and master cards tab where minimum 5$ and maximum 1000$ can be doposited. its very easy and your account will be immediately updated with the account balance and you can start trading immediately.

 

Once you complete the registration you can start trading. if you are new you can start a demo account and try trading for some time before actually start to trade. you can follow my blog and even learn how to trade. however most easy option is follow this link and go to zulu and open an account with them and link you zulu account to hotforex account. then use some experts to trade for you can collect the money. 

Hotforex issue a master card if you register for it you can easily transfer your money the card and take the money from an ATM machine. elase you can request a cheque/Bank via transfer/credicard transfer and if you habe Skrill account you can get money transfered to that account. If you have any questions ask me ? all the best ....!

Lesson 03-Major currency pairs

THE U.S. DOLLAR

The U.S. dollar (USD) is the base or quote currency with the following FOREX major currency pairs: USD/JPY, USD/CAD, USD/CHF, EUR/USD, GBP/USD, AUD/USD, and NZD/USD. Additionally, the USD is the base currency and is paired with the following currencies: NOK, SEK, SGD,

DKK, CNY, MXN, BRL, ZAR, and other exotic currencies depending on each broker’s availability.

The USD (also abbreviated $) is the official currency used in the United States of America. It is considered the standard currency unit that is used in commodity markets across the globe (especially gold and crude oil markets). It also is currently the most employed reserve currency in the

world. This allows the country to hold trade deficits with other countries without experiencing depreciation.

The volatility of the currency is usually low to medium. The economy of the United States has the strongest influence on the rest of the world, especially in the computer technology, medical, aerospace, and military fields. It is principally market-oriented; thus corporations and private businesses lead in decision making.

THE EURO

The euro (or EUR) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: EUR/USD, EUR/JPY, EUR/GBP, EUR/CHF, EUR/AUD, EUR/CAD, and EUR/NZD. Additionally, the EUR is the base currency and is paired with the following currencies: NOK, SEK,

SGD, DKK, CNY, MXN, BRL, ZAR, and other exotic currencies depending on each broker’s availability.

The euro is the currency that is actually used in most member countries of the European Union. It was created in 1999 and implemented in 2002 and represents the result of the most important monetary reform on the entire continent. It was designed with the intent of rendering free trade easier

between the members of the Euro zone, aiming at the same time for a political integration. The EUR/USD currency pair is nicknamed “fiber,” and this is said to come from the fact that the Euro zone comprises the greatest optical fiber network in the world. Its market volatility used to be

low, but it has been seen to increase to medium in the recent months. The European Central Bank (ECB) and the other central banks of every member country manage the currency through the European System of Central Banks (ESCB). The ECB is the only authority that has the power to

set monetary policy, whereas the issuing and distribution of notes and coins are done by the other members of the ESCB. All the decisions and procedures among the members of the European Union are based on agreements between its member countries. Adoption of the euro has allowed the Euro

zone to become the largest economy in the world. This actually makes it a stronger currency than the U.S. dollar.

THE AUSTRALIAN DOLLAR

The Australian dollar (AUD) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: AUD/USD, AUD/JPY, AUD/CHF, AUD/NZD, EUR/AUD, GBP/AUD, and AUD/CAD. It is also the base currency in some exotic pairs. The AUD is the official currency of the Commonwealth of Australia. It is also familiarly called the “Aussie,” which nickname also extends to the AUD/USD currency pair. It is the sixth most traded currency in the FOREX

market and accounts for about 5 percent of worldwide foreign exchange transactions. Its popularity stems from the almost inexistent intervention of Australia’s government in the FOREX market, with the add benefit of Australia’s political and economic stability. The volatility it shows in the

markets is low.

Australia’s economy is based on domestic industrial production (particularly of machinery and transportation equipment) and export of raw materials (mostly from its huge mining activity) and products from its agricultural sector.

THE CANADIAN DOLLAR

The Canadian dollar (CAD) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: USD/CAD, CAD/JPY, CAD/CHF, AUD/CAD, EUR/CAD, GBP/CAD, and NZD/CAD. The CAD is the official currency of Canada. Coin and bill denominations

are similar to those of the U.S. dollar. It is familiarly called the “loonie” because of the image of a loon that appears on one of the faces of the coins, and traders also use this nickname to designate the USD/CAD currency pair. The volatility of the Canadian dollar in the FOREX market is low, although

it is heavily related to fluctuations in oil prices. The economy of Canada is quite similar to that of the United States, being market- and production-oriented, having evolved from a mostly rural economy (before World War II), and now being principally urban and industrial, with the increase in manufacturing, mining, and service sectors. Its principal trading partner is the United States.

THE BRITISH POUND

The British pound sterling (GBP) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: GBP/USD, GBP/JPY, EUR/GBP, GBP/CHF, GBP/AUD, GBP/CAD, and GBP/NZD. Additionally, the GBP is the base currency paired with the following currencies:

NOK, SEK, SGD, DKK, CNY, MXN, BRL, ZAR, and other exotic currencies depending on each broker’s availability. The GBP is the official currency used in the United Kingdom (Great Britain). It is one of the world’s most widely traded currencies, along with the U.S. dollar, the Japanese yen, the euro, and the Swiss franc. Additionally, it is the currency unit with the highest value among the “majors.” The GBP/USD currency pair is familiarly called the “cable” in traders’ slang because the rates originally were transmitted via a trans-Atlantic telegraph cable. The market volatility of this currency is low to medium.

The economy of the United Kingdom is one of the largest in the world, with a strong agriculture and mining industry. The services sector represents the main percentage of the gross domestic product, and tourism has been developing strongly in recent years. THE SWISS FRANC The Swiss franc (CHF) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: USD/CHF, CHF/JPY, GBP/CHF, EUR/CHF, CAD/CHF, AUD/CHF, and NZD/CHF.

The CHF is the official currency of Switzerland and Liechtenstein. The currency is used by the Central Bank of Switzerland. The letters CHF stand for “Confederatio Helvetica Franc.” The USD/CHF currency pair is familiarly referred to as the “Swissie” among FOREX traders. The volatility of the Swiss franc in the FOREX market is usually low to moderate. The CHF is a fairly stable currency, especially in its relationship to the euro, with which it maintains a strong correlation. This causes the EUR/USD and USD/CHF currency pairs to be the highest negatively correlated

pairs, with a factor of more than 90 percent. Thanks to Switzerland’s strong political and economic stability, the currency is used mostly as a reserve currency by financial institutions and wealthy private individuals throughout the world.

THE JAPANESE YEN

The Japanese yen (JPY) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: USD/JPY, EUR/JPY, GBP/JPY, CHF/JPY, CAD/JPY, AUD/JPY, and NZD/JPY. The JPY is the official national currency of Japan. Originally pegged to the USD after World War II, the yen switched to a system of floating exchange rates after 1971. The volatility of the JPY in the FOREX market is usually low to medium. Japan’s economy is predominantly based on its manufacturing industry. The JPY traditionally has been a weak currency because its circulation is

limited to domestic business, thus hindering Japan’s position with regard to foreign trade. Additionally, the country depends completely on oil imports and exclusively on its export of manufactured goods; this renders the JPY very sensitive to rises in crude oil prices and overall energy costs.

The weakness of the currency has been maintained over the years as a protection for the local manufacturing and export industries; however, the JPY has been experiencing a rising trend that has diverted some foreign investments to other countries, where much lower costs still can be found.

The most important index of Japan’s economy is the industrial production index, which is strongly correlated with the export index.

THE NEW ZEALAND DOLLAR

The New Zealand dollar (NZD) is the base or quote currency with the following FOREX major and crossed-rate currency pairs: NZD/USD, NZD/JPY, GBP/NZD, EUR/NZD, NZD/CHF, and NZD/CAD. The NZD is the official currency of New Zealand and some of the islands on the Pacific Ocean. The currency is informally called the “kiwi” because of the image of a kiwi bird that appears on its $1 coin, and the term also designates most particularly the NZD/USD pair. The volatility of the

NZD in the FOREX market is low to medium. Similar to what happened in Australia, the economy of New Zealand has been transformed from an agricultural-based market limited to British concessionaries into a free and industrialized market now competing on the global scene. This has greatly helped the develop ment of technology; however, New Zealand’s exports still depend mostly on agricultural products.

THE DOLLAR INDEX

The U.S. Dollar Index (USDX) measures the global value of the USD relative to a basket of foreign currencies (e.g., Euro, Japanese yen, Pound sterling, Canadian dollar, Swedish krona, and Swiss franc) through a geometric progression weighted-average calculation. It was started in March

1973 with a value of 100, when the leading trade nations agreed to freely quote their currencies one against the other. After reaching a peak of 165, the USDX has been trading lower over the recent years, dropping almost to 70 in March 2008. The USDX is listed on the New York Board of Trade,

and its value is updated continuously 365 days a year. Its volatility can be compared with that of stock index futures because of its amplitude and variability.

GOLD CFDS

Metals, and most particularly gold, are usually traded through the futures market or gold exploration stocks. More recently, introduction into the markets of contracts for difference (CFDs) has allowed traders to have easier access to market transactions involving metals. The market quoted by the CFD provider is a two-way market, as with FOREX currency pairs, and thus the provider obtains a profit by means of the spread, charging no commissions on transactions. A gold CFD is a financial derivative that represents a theoretical order to buy or sell at least 10 ounces of gold, which is the minimum required to open a gold transaction. The margin required is quite low on gold CFDs,

usually representing 2 to 3 percent of the value of the transaction. You can take the contract on the spot price or the futures price, with standard contracts providing the equivalent of US $100 per $1 movement in the gold price and mini contracts providing one-tenth that size. There is also another type of CFD used for gold, called the binary CFD, that is based solely on the daily rise or fall in the price of gold, with value taken at the daily close. If gold rises, the binary CFD will close at

100, and if gold falls, it will close at 0 at the end of the day. The investor’s profit or loss is determined by the difference between the effective opening and closing prices.

CRUDE OIL

The price of crude oil is influenced directly by OPEC (Organization of the Petroleum Exporting Countries), which is made up of 12 nations whose economies depend on oil export revenues. The fluctuation in prices is related to production quotas that are imposed by this organization. The

final prices that consumers pay for oil products are determined by several components: supply and demand, effective production, refinery costs, and taxes on oil, which can vary greatly depending on country. Crude oil is traded on the market as a commodity through futures and spot markets as well as CFDs.

CROSS-RATE CURRENCY PAIRS

The currency pairs that derive their respective rates from their individual relationships with a third FOREX currency rate are called crosses or cross-rate pairs. All currency pairs that do not include the U.S. dollar fall into this group: EUR/GBP, EUR/CHF, EUR/AUD, GBP/CHF, CHF/JPY, CAD/JPY, EUR/JPY, and GBP/JPY. They are usually very volatile owing to a lesser liquidity, and this causes the spread between bid and ask prices to be much wider than on most majors, for example, the most liquid pairs, such as EUR/USD and USD/JPY. This can be a disadvantage because it increases the trading risks, but some of them can represent a very interesting option, such as the GBP/JPY pair, precisely because of its high volatility.

EXOTIC CURRENCY PAIRS

Some of the secondary foreign currencies that are yet somehow traded heavily in the FOREX market are the exotic currency pairs and a few European but non-euro-based denominations. They are usually traded as quote currency and paired with some of the most prominent majors (e.g., USD,

EUR, GBP, and AUD), but they also can become the base currency between each other.

CHINESE YUAN OR RENMINBI

The Chinese yuan (CNY) is the official currency of China. CNY is the official International Organization for Standardizations (ISO) code for the renminbi (RMB), issued by the People’s Bank of China. The currency displays a low to medium volatility in the FOREX market. In July 2005, China revalued the yuan (which was pegged to the USD) to allow it to fluctuate versus a basket of currencies and protect it from large swings owing to its ties with the American currency. China’s economy has become increasingly market-oriented and open to foreign trade and investments since 1978, which represent a strong element in its overall growth.

SWEDISH KRONA

The Swedish krona (SEK) is the official currency of Sweden. Its volatility is evaluated as medium to high mostly owing to the wide extent of foreign trade, where it constantly depends on the economic status of other currencies. Sweden is a member of the European Union, but it didn’t

adopt the euro and instead maintains its local currency as official. The country shows a low and stable inflation rate, and its economy is mostly based on exports, especially in the areas of information technology and telecommunications.

NORWEGIAN KRONE

The Norwegian krone (NOK) is the official currency of Norway. The country is one of the largest exporters of oil, and increases in the demand for oil have injected a great deal of money into its economy, making it very dependent on fluctuations in oil prices, however. The volatility of the currency itself is low. The economy of Norway is more service-oriented, and the country is

involved in a great number of offshore activities. It is a small country with a small population, but it is one of the wealthiest countries in Europe. Other exotic currencies you can find are the Danish krone (DKK) and The Singapore dollar (SGD) with low volatility, the Mexican peso (MXN)

and the Brazilian real (BRL) with low to medium volatility, and the South African rand (ZAR) with medium volatility.

THE IRAQI DINAR

Although not yet traded on the FOREX, the Iraqi dinar has been highly promoted as a good investment in recent years since Central Bank of Iraq started issuing a new and stable currency that experienced a great revaluation, rising approximately four times its original value (from about 4000

dinars per dollar as its lower low to 980 dinars per dollar as its highest high, actually trading at around 1200 dinars per dollar). This boom had started a series of wild speculations and the spread of a huge promotion, especially on the Internet, as well as scams associated with that promotion, where

unusually higher rates of exchange and thus extraordinary returns were promised in the hope that enough speculators would be attracted, thus making the exchange rate explode much higher as soon as the currency enters the market.

However, the rates for the currency vary over a wide range, and there is a huge difference between the official fixed rate of 1449 dinars for $1 set up by the International Monetary Fund (IMF) for the Central Bank of Iraq and retail quotes from dealers and trading companies, which offer quotes

between 1050 and 1350 dinars per $1. Additionally, this is a currency with practically no liquidity, mostly because of the discrepancies in price and the fact that the banks do not trade the dinar openly with the public. In addition, dealers will sell dinars to the market but not always buy back the dinars, so there are few counterparts for transactions, making it difficult for the investors to cash out of the currency. Finally, the overextended negotiations on the Internet, with inexperienced investors trapped and blinded by the fabulous promotion, allow dealers to mix old dinars, bought at a much cheaper price, and new dinars, thus lowering the value of the original amount purchased, which puts the

investor immediately at a loss. Some other dealers offer just a blatant scam, taking the money of the investor and disappearing, never delivering the currency. It is extremely important to be well informed before risking funds into any currency investment, especially when the offers are “too good to be true.”

Lesson 02-The Basics of forex

Basics

The FOREX (i.e., FOReign EXchange) market is an international market where the money (currency) of every country is sold and bought freely. It was launched in the 1970s at the moment of introduction of free exchange rates, and the price of one currency against another that occurs from supply and demand is determined only by market participants.                       
There is no external control, and competition is free because all the participants can decide to transact or not. In this respect, the FOREX is a  perfect market because it can’t be controlled or monopolized by any of its  participants. The enormous number of transactions executed day after day    
in a continuous activity make it the biggest liquid financial market. According to various assessments, money masses in the market constitute up to US $4.5 trillion a day.                                               
This market has seen recent turnover as high as US $6 trillion in a day, and the average most recently has been hovering at around US $3 trillion a day. The exact figure can’t be determined because the transactions are not centralized on a single exchange.  Trading is conducted all over the world through telecommunications and electronic networks 24 hours a day, 5 days a week starting from 00:00  

Greenwich Mean Time (GMT) on Monday (some starting a little earlier) to 10:00 p.m. GMT on Friday (some closing a little later). There are dealers quoting currencies in every time zone through the main central markets: Frankfurt, London, New York, Tokyo, Hong Kong, Australia,
New Zealand, etc. To get a better understanding of FOREX quotes, you just have to know
that one unit of the base currency is equivalent to the exchange rate in the quote currency. For example, if EUR/USD is trading at 1.2762, the price of 1 euro (base currency) in dollars (quote currency) will be 1.2762 dollars. FOREX trading is conducted through individual contracts. The standard contract size (also called a lot) is usually 100,000 units. This means that for every standard contract you acquire, you are controlling 100,000 units of the base currency. For this contract size, each pip (the smallest price increment) is worth $10. Many companies offer mini accounts in which you can trade units of 10,000, where the pip value is $1 or even smaller.
In comparison with other markets, trading the FOREX market allows very low margin requirements because of leverage. In FOREX, you don’t need to obligatorily buy a currency first in order to sell it later. It is possible to open positions for buying and selling any currency without actually
having it at hand: For a standard account size, usually Internet brokers establish a minimum deposit such as $2000 for trading in the FOREX market and grant a leverage of 1:100. That is, opening the position at $100,000, a trader invests $1000 and receives $99,000 as a credit. For those wishing to get started at a smaller investment size, many brokers offer a mini account. The FOREX mini account offers smaller contract sizes controlling $10,000 units. The usual account minimum to start a mini
account is about $250. With a mini account, you only need $50 as a margin deposit requirement
per every $10,000 lot traded. The leverage is usually 200:1 (10,000 /50 = 200), and in some cases it can rise to 400 or 500:1 (you then would need even less margin to operate). Thus, with $250, you could trade a maximum of 5 mini lots; with $500, a maximum of 10; with $1000, a maximum
of 20; etc.
This leverage is 50 times greater than for stocks (stock day trading provides a 4:1 intraday leverage for traders who have $25,000 or more in an account by U.S. law). Using a high degree of leverage is not always appropriate because it can be very risky, but it provides the trader with a higher
degree of flexibility for the execution of different trading strategies. Even further, now some brokers are offering a micro account. I personally would not recommend these because the leverage is really high, but a  micro account may be a good way to get your feet wet, so to speak, by trading
real money before moving on to a more standard size account. Micro accounts require as little as $25 to open and be able to control $1000 units. The pip values, on average, are about $0.10 (10 cents).
You can always go to www.JamesDicks.com to see what brokers I use. The FOREX is able to maintain its objectivity and avoid being controlled or manipulated by one or few of its participants because the volume transacted is so high that if any of them would want to do so, by changing
prices at will, they would have to operate with tens of billions of dollars. This is the reason why the FOREX can’t be influenced by any single participant, and even though there are situations where a huge transaction can seem to take control of the market for a few moments, the balance is established
again almost immediately because of the great liquidity involved. This also allows traders to get a profit by opening and closing positions within a few seconds. The FOREX market is always moving. You can chose to maintain a position for a very short time or for longer periods, even years; it will
depend only on your own trading strategies. In the FOREX, it is possible to perform speculative activities without the need for a real money supply. This is referred to as marginal trading.
The amount required as a guarantee for the transaction is low, thus providing an opportunity to open positions with a small account in U.S. dollars (some local brokers also accept some of the main currencies, such as the euro, pound sterling, Japanese yen, etc.) and buy or sell a lot of other
different currencies. Transactions can be conducted very quickly and yield a profit while the
exchange rates go up or down. Marginal trading implies operating with borrowed capital, where you need only a small percentage of the total sum of the transaction. For example, you have analyzed the situation in the market and have come to the conclusion that the euro will go up against the dollar. You open 1 lot for buying the euro (EUR) with a margin of 1 percent (1:100 leverage) at the price of 1.2750 dollars per euro (the margin needed will be $1275) and wait for the exchange rate to go up. Sometime later, you see that your analysis was right. You close the position at 1.2827 and earn 77 pips ($770).
Most currencies have a daily range of fluctuation of about 100 to 150 pips on average, some even more. This gives FOREX traders the opportunity to make money on these changes. There are several tools that allow the trader to be able to understand and make decisions on the market, grouped basically under fundamental ortechnical analysis. There is a constant exchange of political and economic information going on, and it is important to be informed on this because this will have an impact on the overall behavior of the market and will show market reaction as price changes. This is called fundamental analysis, an overview on all this information and how it affects a particular country and currency value. Fundamental analysis takes account of rumors, political events, and the local and international economy, such as, for example, the rates of inflation and unemployment, taxes, and interest rates. The political stability of a particular country and unexpected events also have great influence on the fluctuations of that country’s currency.
Sometimes, especially in the case of economic forecasts, this information can become a self-fulfilling prophecy in that a certain outcome is expected, so the market reacts before the fact, thus starting a movement in prices that can be seen as an early move, and if the forecast is confirmed, the prices suddenly can start going in the opposite direction from the real move because the predicted result has already occurred, and traders are now closing their positions. This can lead to market reactions that seem completely opposite to what the economic releases are implying for the currency, although there are also many details that could be modifying the outcome because all the currencies are moving in unison, and their respective interaction will affect all the others. Thus the fundamental details sometimes can be too big to grasp completely. Only the big banks and financial institutions, which employ professional economic analysts, can have access to a more precise and wide array of information with timely accuracy.
Technical analysis affirms, on the contrary, that all this information is already priced in and that the resulting reactions are visible on charts. It is based essentially on prices, time, and volume: What are the lowest and highest prices that a currency has reached in how much time or during what
period, and how many transactions were performed? Technical analysis also assumes the repetitiveness of the market, which it most probably will perform again in the future as it has already performed in the past. It analyzes past quotes and predicts the prices to come based on statistical and mathematical calculations.
Both technical and fundamental analyses complement each other. A professional trader should consider both sides at any moment because some of the elements of each type of analysis will be present in the other. For example, a fundamental trader will have to consider resistance and supports, and a technical trader must be aware of the news that will have an impact on price changes.

Lesson 01-Forex auto trade the easy way

Introduction to Forex

Hi friends,

I’ve been lucky enough to be able to share with you this valuable information about the forex trading. Although its still emerging in Sri lanka, Forex is one of the most matured financial markets in the world.

From the western world, we’ve heard stories about traders who arise in the early hours of the morning to trade; traders who have laptops in their bathrooms; traders who spend upwards of 16 hours a day analyzing charts and creating systems. We are not going to belabor all the stories We’ve been told, but trust me, the list goes on and on, and, frankly, they get stranger and stranger. Is this what trading is, an addiction?

If more time spent trading and analyzing yielded better results, heck, I would do it. But it doesn’t. Bottom line is that just as many traders stink today as they did 20, 30, 50 years ago, and there are more traders in the markets now than ever before. Present-day traders have sophisticated equipment,
unprecedented access to data, order flow, and transparent order entry. 

I’m smiling right now as I think back when I began as a teenager, in my initial trading stage, I realized I was a part-time trader. And in reality, so are most traders. If we wanted a job, I’m sure
there are easier ways to make a living and not put ourselves through the meat grinder of being a trader. If you’re reading this because you think it will be easy, kindly close this. But let me say, it ain’t hard!

I will show you how to analyze the market, how to use visual and objective tools, and then formulize a plan to trade successfully. This is not day trading, which we don’t do. This is not investing, although many of the strategies  could help you with that facet of your portfolio. This is about
grasping a few concepts that if properly understood and applied, can yield healthy and consistent returns.

The forex market offers the best order entry, leverage, and access of any market. This market is available 24 hours a day and can most likely fit your schedule. This is not about being a full-time trader. My goal is to allow you to fit trading into your current schedule. That means quick, accurate
analysis that you can repeat over and over again.This is as much a written text as it is a complete course. I’ve included links and charting examples, which allow me to walk you through
the concepts here. I’m especially happy about that because this makes it easier for me to show you additional examples of the strategies I use, such as working across multiple time frames and pairs. I also invite you to join me and experience trading while following this course on my blog.

 How to copy the experts

 Actually following is the best site that I found which provides Forex trading facilities to a trader. it simplifies the work a lot for the trader and therefore anyone with a little or no knowledge can easily start trading with as little as 25$ capital. the greatest function of this agent is that it will enable you to automate your trading by following a expert traders. simply you can ask them to buy or sell in your account following the best traders. so when ever selected trader trades,, you will also enabling you to make a lot of money easily. so its highly recommended to have a try with this ZULU traders. actually it will help you to learn a lot.

First you should have a account in the zulu trade and then you should have an account with a broker. I have my with Hotforex. Zulu have a setting that it will ask you to select the broker and ask you to connect the broker account by providing username and password. once connected what you trade by using ZULU will be traded in forex market under your Hotforex broker. the minimum deposit is 25$ even you can have a free demo account first before actually putting money. once the account is active zulu will enable you to add signal providers where you can select best traders and ask your brokers to copy their trades and execute your trades. That means.. you just allow the account to trade automatically following expert trades... Isn't that great.. you can control the risks with the settings in your account.. Ive done it and I actually could make 10$ the first day with 100$ deposit. I'm just sharing If you want to trade Forex believe me this is the easiest way. If above link is not working you can use this

Join.zulutrade.com 

when you follow the link you will be presented a page as given below where you can join the network. follow the open account tab and provide your details. they will ask for your identity card and billing proof. you need to email them your identity card and billing proof document.(scan and email the pdf files)

home screen:

once you join you will receive an username and password to your email address. use the username and password and login to your account.

the next thing to do is connect your account with your broker. you should have a broker account to do this. I will give how to do it in a separate discussion. then provide the broker username and password and it will display as you are connected.

broker connnection:

 

next you have to deposit some money to your account. go to the fund tab and follow the link. the money will actual added to your broker account. you can use credit/debit cards. it will immediately display the balance in your window. you have to add minimum 25$.  Now you are ready to go..!

Explore the tabs in your page. you will see a tab called trade where you can trade forex your self. thats one option but what we target is the more easy option .. signal providers.

Trade:

 

go to settings tab and follow add a signal provider. you can select many signal providers. but there is a minimum balance in your account to add a matching signal provider. for example if you have only 50$ in your account you have to find a signal provider whose minimum requirement is 50$ or low. you will see that more money you have in your account you can add better signal providers. 

Settings tab:

 

add a suitable provider. then assign the trading amount for him usually add 0.01 lot  which means $1000 dollar trade and number of trades that you allow him to open on your account. put a value 1-2-3 etc. their is health bar on top of your window. it will indicate the risk. if its green , you are fine. don,t let it go beyond 60%  and take low risk. Let your signal provider to help you earn money.

you can see the actual performances of the signal provider and your history of transactions as well. if you find a good signal provider you can earn money doing almost nothing.

History performance:

  If you can find the right signal provide you can easily make money here. see some of the profiles of the signal providers.

 

 

How to open the broker account is given in below post.

http://forexforlankans.blogspot.com/2012/10/broker-for-forex.html

hope you will have a more green profile and less red.

 

remember when you start earning ,, share this to your friends.. It will never affect your profits. everybody can earn this way isn't it good.!

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