Forex Blog

Someone sent me an article yesterday, so today I’ve decided to put it up on my site. This article is called 133 Trading Tips and it really contains 133 tips on how to trade Forex. I don’t know how one could come up with so many tips to a Forex trader, but all of them really make sense (at least to me). You can read that to sum up your knowledge or to find something new to yourself, but it’s definitely worth seeing. Here I’ll list some of my favorite tips from this article:

24. Be more objective and less emotional.
30. Don’t trade impulsively; have a plan.
47. Know why you are in the markets. To relieve boredom? To hit it big? When you can honestly answer this question, you may be on your way to successful Forex trading.
58. Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
64. A «buy and hold» strategy doesn’t apply in Forex trading.
69. Do not overtrade.
89. Cutting losses is painful for every trader. The ability to cut one’s losses in time is the sign of a seasoned trader.
132. Don’t use the markets to feed your need for excitement.

Today I’ve uploaded a new free ebook to my site — it’s about determining the trend direction and its parameters using the standard technical indicators in any financial trading environment. Many trading strategies and tactics a based on the trend-following — determining the trend in a given market situation can be a focal point in a trader’s intraday or long-term trading activity. John Hayden, the author of this book offers RSI, divergence and moving average as the primary tools for the trend identification:

Trend Determination — by John Hayden

EUR/USD trend: buy.
GBP/USD trend: buy.
USD/JPY trend: hold.
EUR/JPY trend: hold.

While NFA makes its requirements more strict for the Forex brokers operating in U.S. and the senate tries to enforce the regulation with CFTC, more and more brokers choose Switzerland as their primary location. Swiss regulation is reliable and authoritative, but now it remains more liberal than in U.S. Exto Capital is a Forex broker based in Switzerland (operated by Exto Financials). They offer downloadable and browser-based trading platforms, 2 pip spreads and high quality conditions for VIP (high volume) traders. Exto Capital offers mini-Forex accounts, but the minimum account size, even for mini, is $5,000.

USD recovered from its daily minimums against euro after the important fundamental reports were released today in U.S. EUR/USD has been trading with 70 pip gain today, but currently it’s trading near its open rate. Only net foreign purchases and Philadelphia Fed index showed some positive developments for the U.S. economy, while other releases were of a very little help for dollar bulls.

Initial jobless claims remained quite high last week — they rose 6,000 compared to previous week and were at 371,000 — just 1 thousand above the analysts’ expectation.

NY Empire State manufacturing survey index fell down in May from 0.3% to -3.2%. That’s not a big fall, but it’s negative and the markets will react respectively.

Net foreign purchases of the long-term securities were at $80.4 billion in March — above the revised February level ($64.9 billion revised down from $72.5 billion). Forecast for March purchases was at $62.5 billion.

Industrial production and capacity utilization both declined stronger than expected in April. Industrial production dropped 0.7% after growing 0.2% in March and with only 0.3% drop expectation for April. Capacity utilization declined from 80.4% to 79.7%, while the forecast was at 80.2%.

Philadelphia Federal Reserve index rose a bit in May — from -24.9 in April to -15.6 this month. It’s the highest reading of this index (which measures the U.S. business outlook) in five months.

While the April CPI report was expected by many Forex traders to improve the dollar positions and helped greenback gain before the actual release, disappointing CPI reading pushed EUR/USD up from its daily lows and it’s now trading almost without any loss (1.5459 currently with an open rate at 1.5465).

CPI (all items) was at 0.2% in April — that’s below the March value (0.3%) and the average market forecast (also 0.3%). Core CPI (except energy and food prices) was at 0.1% in April — also below the March value (0.2%) and the forecast expectations (0.2%).

Crude oil inventories increased insignificantly last week. Energy Information Administration reported a 200 thousand barrels growth after more than 5.6 million barrels gain a week ago.

Today EUR/USD fell down on Forex after a day of growth yesterday and on the daily chart the currency pair’s trend is slowly transforming into a flat pattern rather than bullish or bearish trend.

April retail sales in U.S. decreased as expected — they dropped 0.2%, after gaining 0.2% in March.

Export and import prices rose in April. Import prices increased 1.8% after 2.9% rise in March — the growth was largely caused by the oil price surge. Export prices rose 0.3% after 1.5% rise in March.

U.S. business inventories were up 0.1% in March — below estimated 0.4% growth and even far below 0.5% gain in February.

EUR/USD trend: hold.
GBP/USD trend: sell.
USD/JPY trend: hold.
EUR/JPY trend: hold.

One Financial is quite a new Forex broker, that is actually specializing on CFD and other futures trading, but offers Forex trading services too. They offer Muslim-friendly accounts (with no interest or swap) and Arabic support — so, it’s quite clear that they are aimed on the traders from Middle East. Their trading conditions are quite common — 3 pips spreads on EUR/USD, $1000 minimum positions, wire and credit card deposits and a custom platform that can be ran in browser. One Financial claim that they are registered and regulated by FSA (United Kingdom), but I’ve failed to find any mention about One Financial on FSA site. I can also note that their support isn’t very professional — it took me a lot of time to find out that they offer mini-Forex services.

EUR/USD fell today significantly, recovering from its two-day fall that was observed this week. It went down by more than 0.8% today — from 1.5532 to 1.5380. Good fundamental indicators from U.S. helped dollar to strengthen on Forex.

Productivity in business sector grew up in first quarter of 2008 according to a preliminary report that was released today. Annual rate of the seasonally adjusted productivity growth was 1.9% in Q1 — above 1.5% forecasted by market analysts.

Crude oil inventories last week increased by 5.7 million barrels (quite a lot compared to recent increases) and are now in the middle of the average range for this time of the year.