Forex Blog

Welcome to the December 2, 2007 edition of Carnival of Forex Trading.

ATradeADay presents What kind of trader are you? posted at A Trade A Day, saying, “Does your method have an edge? Are you a swing trader because it works? Or do you day trade because it sounds cool…”

Sagar presents 7 Countries Considering Abandoning the US Dollar (and what it means) posted at Currency Trading.net.

GiselleS presents Expert Advisors - For and Against Automating Your Forex Trading System posted at Finance: Currency Trading Articles from EzineArticles.com, saying, “An expert advisor is a piece of software which works as a plug-in for your trading platform. The purpose of an expert advisor is to automate your own (or someone else’s) trading system. Are there advantages to using expert advisors and should they be part of your overall trading strategy?”

vld2czech presents Stocks hedging with long position in Yen. posted at StockWeb, saying, “Going long with Yen to cover your stocks portfolio.”

That concludes this Carnival of Forex Trading edition. Again, not many articles were left by me after the editing, but I hope that you’ll enjoy all of them.

FXcast Forex broker announced today that it is now starting to accept corporate Forex trading accounts, providing full array of required paperwork. A legal company trading account can allow some successful Forex traders to create managed pool accounts based on FXcast brokerage. So, if you think you are good at Forex trading and view yourself as an entrepreneur you can try opening your own Forex trading company. Another good possibility which has now became possible is for exporting/importing companies to hedge their Forex risks using FXcast trading account, but that’s for really serious companies of course.

Welcome to the November 4, 2007 edition of Carnival of Forex trading. More general articles these time with a more detailed approach on pivot points trading and trailing stop technique.

Allen Taylor presents Doubling Stocks With A Small Bankroll posted at Investing World Today, saying, “Successful traders know that you should never risk more than a small fraction, like maybe 5%, of your bankroll at any given time. When I say risk only 5% I’m not suggesting you only spend 5% of your bankroll on shares, but rather that, for a losing trade, you exit the trade when your loss would only represent 5% of your bankroll.”

Sam presents Can YOU Make Money Trading Forex? The Foreign Currency Markets. Trade Foreign Exchange. posted at Surfer Sam and Friends, saying, “Can YOU make money trading Forex? Trading currencies in the Forex foreign exchange market, the small investor takes on the global money markets. Forex is the new Gold Rush of the Internet Age.”

Dr. Barry Burns presents How Football Ruined My Trading posted at Top Dog Trading, saying, “An unusual article, but it’s absolutely true about how watching football ruined my trading results for a short period of time. This story is a little embarrassing. I was going to write it last year. But finally got up the courage to reveal it as I thought we all have weaknesses and perhaps if I share mine, it will help you deal with yours.”

Ian Welsh presents More Abandonment of The Dollar posted at The Agonist.

Tony Rich presents How To Start Winning Again In Forex posted at NiaTradingSignals.

Sagar Satapathy presents How China Could Crash the US Dollar on a Whim posted at Currency Trading.net.

Ray Chong presents Protecting Profits - The Art Of The Trailing Stop posted at Trading Tips, Strategies and Insights.

ganes presents Pivot Point posted at Forex Trading Tips.

Dr. Barry Burns presents What Keeps You From Trading Success? posted at Top Dog Trading, saying, “Find out what REALLY prevents traders from making money. Here it is directly from the source!”

A new Forex article was added to my collection today. Hearing another success story of the Forex trader might as old to some people, as motivating to others. I think this one will be at least useful to many Forex traders. Experienced and professional Forex traders can say that part time Forex trading can’t be good and that it will always lack the “full market control and awareness”. Yes, I’d agree with them to some extent, but still, part time trading remains the only option to many Forex beginners (and not only beginners, just not professionals). So, here it is:

How I became a successful part time trader - by Joe Chalhoub

A new Forex strategy e-book now can be downloaded from my site - this time it’s about many (really a lot) powerful short term strategies and the basic rules of trading Forex using such strategies. It even has a chapter on Wolfe Waves - one of my best trading method for Forex charts. But don’t expect to spend 20-30 minutes to read some strategy from this e-books and begin earning millions in a few days. This is a big book with highly interconnected information that will help you a lot in your strategy building as a whole book, not separate chapters. Be prepared for some long but very interesting and educating reading:

Street Smarts - High Probability Short Term Strategies - by Laurence A. Connors and Linda Bradford Raschke.

Welcome to the October 4, 2007 edition of carnival of Forex trading. Only three quality Forex trading articles this time - definitely not too many. But they all are worth reading. No useless talking, but an interesting reading.

Thomas Ott presents A Review Of My Forex Trading posted at Neural Market Trends, saying, “I’m closing in on my 1 year anniversary of trading Forex my $100 Forex Experiment. I did really well ($ wise) in the beginning of the year only to get smacked hard between May and June.”

Thomas Ott presents US Interest Rates VS Currencies | Neural Market Trends posted at Neural Market Trends, saying, “A quick analysis that shows long term correlation between US interest rates and currencies. Part of a brain tease.”

Stirling Newberry presents Why the dollar is taking another beating now posted at The Agonist, saying, “The outlook for the US dollar is a constant and continued erosion, followed by an extended period where the dollar will be very weak compared to other currencies, until there are clear signs of a change in policy regime in the United States. The issue is confidence.”

After the Federal Open Market Committee released its statement yesterday EUR/USD remained on its positions until today’s early European session, which brought Euro to a rally behind the crucial 1.3800 mark. Will EUR/USD stay above it? Probably. Will EUR/USD break the 1.3850 resistance barrier to soar high to 1.4000 level? Less probably. Let’s look on the fundamentals.
Yesterday a labor productivity data for the industrial sector came out lower than expected by the majority of traders - 1.8% increase, instead of 2.1%. Meanwhile, consumer credit for June this year increased by 13.2 billion dollars, while analysts were expecting 6 billion dollars increase.
FOMC released another ‘inflation-concerned’ statement, leaving the interest rates at 5.25% level. While the main concern for the FOMC remains the inflation, it started to get nervous because of the risks connected with the economical growth and especially housing crisis.
Today data on business wholesale inventories came out slightly better than predicted - increased by 0.5% instead of 0.4%, while the crude oil inventories again dropped down significantly - by 4.1 million barrels.
Despite of FOMC being more inflation orientated, the economical growth correction will probably make them to decrease the interest rates at least once (or at least stop increasing it even more). Currently, housing data and oil inventories (taking in mind current oil prices) don’t look very promising for the U.S.

Welcome to the July 1, 2007 edition of Carnival of Forex trading.

Jimmy Atkinson presents How Does Terrorism Affect Your Trading? posted at Forex Blog.

George Courtney jr presents Go Global by Investing in Foreign Currencies posted at The Authentic Bartender Blog.

Mark25 presents Forex Exchange Rate - How Does It Get Calculated? posted at HotStrategies.com.

Ralph Morgan presents Enough Wealth: Adventures in Day Trading - 12 posted at Enough Wealth.

Bryan Moore presents How to Create Synthetic FOREX Currency Pairs posted at TheFinancialWhiz.Com, saying, “This article explains the principles behind creating synthetic Forex currency pairs. The problem a lot of traders run into is that they sometimes cannot directly trade a particular currency pair from their broker, this explains how you can dissect two currency pairs to create the one you need.”

That concludes this edition. Submit your blog article to the next edition of Carnival of Forex trading using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

When it comes to Forex trading it is usually associated intraday trading or more rarely - intraweek trading. This is caused mainly by the high volatility of major currency pairs which makes them potentially profitable in the small amounts of time, while making it too risky in longer terms. Second reason for the short-term Forex trading being more popular is a high leverage margin accounts - 1:100 or even higher – this increases single position risk and profit making it deadly risky in a long term.

Long-term trading in Forex can be defined as deliberate maintaining of open positions for more than a week. Under one week term is still considered a short-term for Forex – position lives through just a few different news releases and is not caused by long-term forecasting. Whereas position which is kept open for several weeks usually lives through some news releases on the same topic (but with different) and thus requires some long-term forecasting and technical analysis on daily/weekly charts.

Success in Forex trading (like in any other financial trading) depends greatly on trader’s psychology and emotions. Some traders are comfortable with fast and exciting (if trading can be exciting) trading style when positions are open and closed within minutes. Others prefer keeping their positions open for several hours – watch them rise or fall and have some time to react to the market moves. Trying to trade in the time periods that don’t suit your character type won’t bring you any profit. To trade successfully one must be emotionally integral and calm. If trader is uncomfortable with intraday or daily trading he needs to try something different. Long-term Forex trading is good for:

1. Traders that don’t have time to sit in front of their terminal for the whole day.
2. Traders that like to spend a lot of time in fundamental or technical analysis.
3. Those that can spend more than one day when it comes to the actual trading decision.

If you feel that you fall into one of the above categories of Forex traders I suggest you at least to try long-term trading. Perhaps, it will dramatically improve your trading results.
The best charts for the long-term trading in Forex market are daily and weekly charts (and other charts of bigger periods). Personally I prefer using a weekly chart for EUR/USD pair, since technical analysis patterns can be clearly seen on such chart (unlike short-term charts that often behave against all possible predictions). Determining a trend or breakout is not hard on the long-term charts usually. But even if a trader fails to recognize a pattern and opens a wrong position he will have many days to close it, and often he will have a chance to close even a bad position with a small profit. Using fundamental analysis in long-term Forex trading isn’t hard too. Trader just needs to analyze general trades in central banks’ interest rates decisions and act according to possible carry trade trends. Long-term trader also shouldn’t forget about general global trends – like oil prices, commodities, political situation and others. Maintaining stop-losses is very important and especially if trader uses high leverage – stop-loss shouldn’t be to far away from the open price. Trailing stop is good, but it should be manual, not automatic. Stop loss moving should be based on the Forex market behavior. Position target should be set according to the trader’s plan – when analyzing the long-term chart it is really not difficult to determine the most probable targets for the currency pair to land.

So, if you think that short-term Forex trading doesn’t posses a good potential for you as a Forex trader – try long-term trading. In Forex it is still good as it is with stocks. Just don’t forget that you are trading with leverage, that main trends are caused by central banks’ interest rates decisions and that stop-loss/target-profit should be placed according to charts technical analysis.

One of the oldest on-line Forex brokers present on the current market - High Street Networking (ForexHSI). It started its website back in 1999 and still remains a meaningful player on the market of retail Forex services. High Street Networking supports deposits via WebMoney and has a very good browser based trading platform available to its clients. Despite of this broker being unregistered with any financial controlling organization, working with such an old and established on-line company is less risky than with one of the money new Forex brokers which are not rare nowadays.