Posts Tagged ‘forex’

Monday, September 3rd, 2012

Forex Horoscope for August 03.09 – 09.09, 2012

Aries (March 21 – April 19)

For Aries it is better to concentrate on trading in the beginning of the week than discuss it with other traders. On Monday and Tuesday silence tactics will bring you a significant profit. To preserve the gain, substitute silence for inactivity on Friday.

Taurus (April 20 – May 20)

If you are pragmatic Taurus, relaxation and spending time with friends may be good for your wallet. Informal communication will open new frontiers for trading, as well as help to learn about nonstandard trading strategies and grasp the market laws. Do not hurry to test your theory on practice, take some time till the next week to think over the information received.

Gemini (May 21 – June 21)

People in trouble are left to themselves. Gemini will have to do their best to survive the gale of stock market in the beginning of the week and stay afloat. The Promised Land will appear on the horizon on Wednesday, but Gemini will be able to feel ground under their feet only on Friday given that they work hard.

Cancer (June 22 – July 22)

For Cancer the mantra of this week is: “work, work, and work again”. Forex will demand dedication and involvement from you. The worst day for trading karma is Wednesday as you will have to try uncomfortable asana. Trading nirvana will be achieved on Friday.

Leo (July 23 – August 22)

The importance of being earnest will be of much importance for Leos this week. Inattention towards the details and natural lack of care may result in huge losses. It is good that inborn quick wit and imagination are always to your service.

Virgo (August 23 – September 22)

When the door is closed, the window opens. On Monday Virgos may lose but on Tuesday they will find a way to restore their financial stability. Unforeseen change of strategy and trading style, use of indicators or even trading platform – all this will positively contribute to your budget.

Libra (September 23 – October 23)

Yield curve for Libras will remind of sine wave. Monday losses will give a way to small profit on Wednesday which will hardly offset Friday’s damages. Unfortunately, it will be possible to change trigonometric function into linear one only during the next week.

Scorpio (October 24 – November 22)

Scorpios, like equilibrists, are on a shoestring above the bankruptcy. Utmost concentration, patience and coolness will help to close deals with the maximum profit. The main thing is not to look down but think of how reach the end of the week.

Sagittarius (November 23 – December 21)

Sagittarius will have to come down to earth. You spend more that earn. Try to avoid any losses and find new opportunities for earning. Work hard to reach the sun as Icarus did.

Capricorn (December 22 – January 19)

Capricorns, just stay calm! Losses happen on Forex and damages of Monday and Tuesday will not affect your financial prosperity. You are a first-class trader in the prime of your life and your trading session on Thursday and Friday will be the best evidence of this.

Aquarius (January 20 – February 18)

Aquariuses lost in the thicket of Forex market should look for a trail of bread crumbs. Practical pieces of advice from other traders on Thursday or Friday may increase your deposit. But be sure to choose the right adviser.

Pisces (February 19 – March 20)

Per Monday’s aspera ad Friday’s astra. For Pisces the beginning of the week will be marked with unsuccessful deals but they will manage to take the right course on Wednesday. Thursday’s and Friday’s flight in free space of currency market will be profitable for you.

Oil is Black Gold of Economy

Wednesday, August 22nd, 2012

Is there any relation between goods and currency markets?

It is worth noting that every currency unit is tied to inventories and has no value without them. Oil being an integral part of economy’s security and economic competitiveness of many countries ensures this value. The U.S. dollar directly depends on oil prices and has great influence on the international currency market.

As a rule, when oil prices rise, the dollar falls and vice versa. The same negative correlation could be seen in a currency of any country that depends on oil import. However, if it is one of major black gold exporters (Canada, for example), then oil price growth will have positive impact on the rate of national currency.

That is why oil price statistics can be a part of Forex fundamental analysis.

Added by Roman Tsepelev,
InstaForex development manager

Trader Best Friend: Emotions or Logics?

Tuesday, August 21st, 2012

Every time we take up something new, we have doubts. And this is normal! Doubts are the result of estimating yourself, of searching personal features that are needed for this new activity. At the beginning of the journey a trader cannot avoid being unconfident of his/ her abilities, knowledge and skills. This is exactly what urges to look for more information and for the advice of the experienced, to visit courses and webinars, and in fact, to being extremely cautious. It is concerns, that trigger our self-development, that appear to be the signs of success in the future activity.

Of course, for a totally green on Forex trader it is significant to master technical and fundamental analysis. This is needed to understand the way the international currency market operates, as “trader” is a very difficult occupation, which requires skills of analysis as well as special knowledge. The sign of that the work is effective can be non-randomness of profit, ability to explain what stands behind every step on Forex market.

It may seem that having realized the rules of the financial markets and read a lot of books, i.e. having acquired sufficient information about trading and Forex, one can easily add funds into a bank account merely sitting in front of the PC connected to the Internet. But it is not that simple!

The main part of people sees the most attractive feature of trading in the easy way to earn money and fast speed of getting rich. And of course, these ideas cannot but worry and evoke powerful emotions. A novice trader is so much captivated by a zest to yield, that he / she is incapable of realistic estimation of personal actions on Forex. Aside from knowledge and logics, in order to profit on Forex, discipline and cold reasoning are necessary. An ability to stop in time, to enter the market at the correct moment, to be very attentive, to monitor carefully the currency exchange rates and to behave with no hazard – all these skills are the main supporters of a profitable trader. Being absorbed by emotions is considered as the main obstacle for the newbies.

Emotions urge to act, help to go forward and never stop. But being overwhelmed by emotions disorient and has a negative impact on the attentiveness. Huge expectations from the trades conducted increase their importance so much that they cause a trader’s lack of self-trust. In this case, this self-doubt prevents from gradual development as a professional.

So, emotions or logics? Both! The Golden Mean Rule has never been cancelled.

Using knowledge and skills of analysis will definitely help you to work on Forex, but a certain share of emotions urging you to accomplishments will not be excessive.

Good luck in conquering new highs!

Added by Andrey Misyuk,
InstaForex Clients’ relationship manager

Understanding the Fundamentals – Money Supply

Thursday, July 26th, 2012

Money supply is basically the total amount of currency circulating in an economy at a specific time. It involves issued paper money, coins, and other liquid instruments such as funds on checking and savings accounts in the bank.

The value of Money supply is an important macroeconomic indicator because it may impact the economy through price level of goods and services, inflation, and the business cycle. The government or the central bank releases the information annually.

Analyst from both public and private sector carefully monitors it because of its possible effect on the economy. It is controlled through policies, born from careful analysis of economists, regarding interest rates and increase or decrease of the volume of money currently circulating the economy.

The increase of supply most probably lowers the interest rates thus attracting investments, generating jobs in the process, that would most probably land on the hands of the consumers. The more money in the hands of a consumer, the greater the urge to spend. Businesses would then react to this by increasing the rate of production which would walk hand-in-hand with the increase in the demand of labor.

The types of money and its value on the Money supply are categorized in “M”s:

M0 – is the total cash resource circulating the country.

M1 – All the tangible money, such as coins and currency, and the most liquid resources such as demand deposit and traveler’s cheques. M0 + checkable deposits.

M2 – The combination of the previous type and all time-related deposits; savings deposits, and non-institutional money-market funds. M1 + time deposits ( less than $100,000) and other highly liquid savings.

M3 – The broadest measurement of the money. It includes M2 plus time deposits exceeding $100,000, institutional money-market funds, short-terms repurchase agreements, and other larger liquid assets. M2 + large time deposits and deposits above $100,000.

M4 – the sum of all the preceding types.

The degree of importance of these indicators vary from country to country. There are countries like the United States that pay more attention to M2 while M3 outweighs the other types in most European countries. The Great Britain gives more significance to M4.

Stephen Stevenson

Carry trade

Friday, June 1st, 2012

Each trader has his personal approach to the situation on currency market and his own trading methods and trading system. Each one chooses the strategy that to his mind is the most effective. As a rule, the opinions of traders on that subject are different.

But today we will focus on the most popular strategy appreciated by traders all over the world.

Carry trade is the trading method based on the difference between low-yielding and high-yielding national currencies. The main principle of the strategy is to purchase a currency yielding a lower interest rate and sell it at higher interest rate. In other words, you open a position with a large swap point trying not to close it as long as possible in order to get a maximum profit with the help of swap points.

The bigger the difference between the interest rates of currencies in your pair is, the bigger is the size of swap points. Therefore, you should choose currencies with the biggest difference in interest rates. The most popular currency pairs are AUD/JPY, NZD/JPY, and GBP/CHF.

You can get the necessary information on exchange rates any time. The detailed information can be easily found on the websites of central banks and Forex-brokers.

As any other trading strategy, Carry trade has its own peculiarities. Firstly, in order to gain profit you should use the large initial deposit and keep a position open as long as possible. Secondly, the interest rates are subject to fluctuations. They can change sharply which is quite risky.

Thus, in order to use the strategy Carry trade successfully, it is crucial to follow the changes of exchange rates and focus on long-term trade. In this case patience is the key to successful trade.

Added by Andrey Misyuk,
InstaForex Clients’ relationship manager