Forex Blog

I’ve fixed some javascript related bugs in both pip value and position size calculators. Those bugs prevented newer versions of non-IE browser from actually calculating any results. I’ve also added new currencies and currency pairs to those calculators. Now they can handle 65 currency pairs. Here is the list of the currency pairs that were added today:

AUD/DKK (Australian Dollar — Danish Krone)
AUD/PLN (Australian Dollar — Polish Zloty)
AUD/SGD (Australian Dollar — Singapore Dollar)
CHF/SGD (Swiss Franc — Singapore Dollar)
EUR/CCK (Euro — Czech Koruna)
EUR/DDK (Euro — Danish Krone)
EUR/HKD (Euro — Hong Kong Dollar)
EUR/HUF (Euro — Hungarian Forint)
EUR/LVL (Euro — Latvian lats)
EUR/NOK (Euro — Norwegian Krone)
EUR/PLN (Euro — Polish Zloty)
EUR/SEK (Euro — Swedish Krona)
EUR/SGD (Euro — Singapore Dollar)
EUR/SKK (Euro — Slovak Koruna)
EUR/ZAR (Euro — South African Rand)
GBP/DKK (Great Britain Pound — Danish Krone)
GBP/NOK (Great Britain Pound — Norwegian Krone)
GBP/SEK (Great Britain Pound — Swedish Krona)
GBP/SGD (Great Britain Pound — Singapore Dollar)
GBP/ZAR (Great Britain Pound — South African Rand)
NZD/SGD (New Zealand Dollar — Singapore Dollar)
SGD/JPY (Singapore Dollar — Japanese Yen)
USD/CCK (US Dollar — Czech Koruna)
USD/DKK (US Dollar — Danish Krone)
USD/HKD (US Dollar — Hong Kong Dollar)
USD/HRK (US Dollar — Croatian Kuna)
USD/HUF (US Dollar — Hungarian Forint)
USD/LTL (US Dollar — Lithuanian litas)
USD/LVL (US Dollar — Latvian lats)
USD/MXN (US Dollar — Mexican Peso)
USD/NOK (US Dollar — Norwegian Krone)
USD/PLN (US Dollar — Polish Zloty)
USD/RUB (US Dollar — Russian Ruble)
USD/SEK (US Dollar — Swedish Krona)
USD/SGD (US Dollar — Singapore Dollar)
USD/SKK (US Dollar — Slovak Koruna)
USD/ZAR (US Dollar — South African Rand)

One of the best things about these calculators is that, unlike many others similar ones, these can be saved as a web page on your PC and used off-line, because they don’t require PHP or the Internet connection.

Apart from some minor site redesign I’ve added a new feature to the site today — Forex newsletter. You can subscribe to it for free and receive monthly issues of the newsletter with a lot of interesting Forex information. The core of the newsletter is going to be composed of all the main Forex events for the month, some fundamental analysis and the news from the on-line Forex industry. I am also planning to include all the site’s updates — new e-books, expert advisors, indicators, brokers etc. in this monthly newsletter.

The subscription process is very easy — you just need to fill a small form on the subscription page and confirm your e-mail address. Your private data won’t be shared with anyone and you will be able to unsubscribe from the mailing list at any time. I don’t have a planned date for the first newsletter issue — I think that it will be early in May 2008. I hope that it will be interesting to all my visitors and other Forex traders.

As you can see there are huge potentials to make profits on the Forex. But like any financial market, there are risks associated with Forex trading, and even the most experienced of traders makes a wrong decision every once in a while that ends with them losing a large sum of money. Because the Forex market is such a volatile and unreliable market, it is absolutely necessary that you have a thorough knowledge of trading techniques and plans, market indicators, as well a clear understanding of the Forex market itself.

Before you even think about buying or selling any currency on the Forex market, you will need to have a good understanding of what exactly the Foreign Exchange Market is, and how it works. You wouldn’t make an investment without thoroughly researching it, and knowing exactly what you are getting into. The Forex market is no different, and you wouldn’t want to do something with your hard earned money without knowing every single detail. Therefore, you should do some reading about the Forex market, its origins, general history and facts, as well as some of the more detailed information about how the market mechanism works to determine currency prices and exchange rate values. To get started, the best place to find information about the mechanics behind how the Forex functions (except this site, of course) is Wikipedia. You can gather a great deal of information about the position of Forex in global economies, how the Forex market functions and how this function is performed, as well some of the basic terms that are used when dealing on the Forex market. You wouldn’t want to begin trading on the Forex market without knowing what terms such as derivatives, options, and futures mean.

Now that you have some general knowledge about the Forex market, it is time to do some real world research of the Forex market to better understand how price and exchange rate values are affected by real world events. To do this, I would suggest you look for some articles relating to exchange rates, the Forex market, or events that have affected the dollar’s value. For example, it should not be hard to find articles that describe how the value of the U.S. dollar has been affected by record high oil prices. CNN and Forbes have excellent, high quality articles relating to these topics available for free.

Right now you are probably feeling that doing research about the Forex market and reading articles about it won’t help you one bit when it comes to real life situations. However, by reading more about the Forex you are subconsciously learning about market indicators, devising plans and strategies, as well as touching on the practice of Forex news trading. From articles that you read or information that you have learned, you are taking in a lot of information that translates into practical knowledge that can be put to use when you start buying and selling on the Forex. For example, if you read an article pertaining to the U.S. Federal Reserve relieving inflationary pressure, you will automatically know that when the Fed makes an announcement about lowering interest rates or lending money to financial institutions, the U.S. dollar will decrease in value.

Every good Forex trader knows that the secret to success comes from a well planned strategy or system that enables them to determine profitable trades. A system usually is used to find good trades, though you do need to analyze the market before you can create a good system. Even though you can find pre-developed strategies in various places on the web (however, they usually cost a great deal of money), it is always better to create your own system. A system developed by you can not only better focus on your goals, but it will also allow you to better understand to what extent economic events will affect the Forex market and what type of events cause market fluctuations. Though many sites on the web require you to pay a fee to use their resources to develop your system, there are still a few sites that are absolutely free. You can use this site or any other similar free Forex resource to get some help in your own system development.

The February Treasury budget deficit beat the last signs of life out of the fadollar today as the released numbers were far worse than the most pessimistic expectations of the economic strategists. The budget deficit was at $175,6 billion, while the forecasted value was at $170,0 billion. Last year February budget deficit was at $120,0 billion. That’s an astonishing $55 billion (45.8%) increase of the deficit in a year-to-year comparison.

EUR/USD hit its new record value on Forex today after the news on the budget were released. The currency pair started at 1.5341 today and reached the 1.5526 level soon after the release.

Crude oil inventories report for the last week added a little positive to the markets situation today, they increased by 6.2 million barrels compared with the previous week.

Joe Chalhoub presents an article about how to become a real Forex trader, not some opportunist who is trying to reap some fast rewards and become a millionaire in no time. Foreign exchange market has became very attractive for many people recently. Traders come with hopes and go without after losing some their hard-earned money. Taking control in trading, developing your own organized approach to trading is the only way the newbie financial trader can become a real professional and start to earn systematically on Forex.

The presented Forex article is called How to Take Control in Forex Trading. I hope you will enjoy it, especially if you are only starting to enter the world of the currency trading

A German banking institution Varengold Wertpapierhandelsbank AG started the on-line retail Forex broker this year — VarengoldBankFX. It’s one of the few MetaTrader retail brokers maintained by the major banking institution. They support mini Forex accounts, but the minimum positions size is twice as much as usual 0.1 lot. CFD and metal trading is also available (CFD is not available to U.S. citizens). Unfortunately, like with many other institutional Forex brokers, wire transfer is the only accepted method of deposit and withdrawal.

Dollar went straight down today on the currency market after the U. S. Bureau of Labor Statistics released its report on the February’s stressed employment situation. EUR/USD reached 1.5454 — a new historical maximum on the release, but then corrected significantly and now (as of 16:00 GMT) is trading at 1.5345.

Nonfarm payrolls in February decreased by 63,000 compared to the 22,000 decrease in January. Market analysts forecasted 25,00 growth for the last month, but they failed to predict such a bad outcome. Surprisingly enough, unemployment rate became lower after February and is now at 4.8% against 4.9% last month. For some unknown reason overall unemployment rate decreases while nonfarm payrolls decrease and the jobless claims grow. Maybe workers are moving into farming sector in U.S.?

It started eleven days ago on the ForexFactory forum, but I’ve read it first about a week ago on a TalkGold forum’s thread titled “Mt4 Brokers Are All Scam Brokers By Definition”. Of course, I’ve got interested in this topic because I’ve been trading on MetaTrader brokers’ accounts for almost two years and I have never thought of them being a scam “by definition". That made me read both of the threads thoroughly.

Here is the main problem that is pointed out in those threads. Back in February 2006 MetaQuotes announced a 5-day test of the Virtual Dealer Plug-in on the demo trading server. This plug-in was designed to imitate “real dealer work — random time of answer, requote etc [sic!]“. Eleven days ago a post on ForexFactory forum shows a part of some document’s scan describing plug-in’s functionality, including such things as “automated moving up the Limit & Stop Level and Freeze Level according to the preset list of news time”, “disabling (setting, modifying, deletion) of pending orders during news receiving”, “Max Losing Slippage”, “Max Profit Slippage”, etc. Thread starters and many other forum participants believe that this plug-in is being used in all MetaTrader 4 brokers on real trading accounts and that’s what making all such brokers the cheaters. The fact that MetaQuotes deleted all threads about the Virtual Dealer Plug-in on their forum added even more confidence to those traders.

So, what now? Personally, I can say that there’s no actual proof that this plug-in is used on real accounts on any of the MT4 brokers (I am not saying all). I am almost sure that this plug-in (or its newer version) was used during the Automated Trading Championship by MetaQuotes (this competition was for demo accounts). Another point — even if this plug-in can be used on real accounts and is used there by some of the MT4 brokers, it doesn’t imply that all of them are using it and are outright scams.

What will happen when more traders will read about this problem? Those, who thought that the MetaTrader brokers are evil, will definitely become more sure in their belief, those, who didn’t mind before, most probably won’t mind this problem too.

What should you do in this situation? I don’t know, but I’ll continue to trade with the brokers I’ve been using for a long time now, if I find that they hunt my stops or have a high slippage in their favor I will immediately switch to another broker. But I don’t think that it’s a good choice to leave a broker, with services of which I am currently satisfied, just because of some suspicious plug-in’s existence.

Today dollar continued its bearish trend against euro and pound, sliding down significantly after the consumer confidence release. Both EUR/USD and GBP/USD were going for correction after the better than expected PPI report, but started to return to their earlier positions in shortly after the Conference Board’s release.

Producer Price Index (PPI) gained 1.0% in February — a significant value for a one month change, after 0.3% fall in December and with only 0.4% gain forecasted for this month. Core PPI increased 0.4% — also higher than analysts’ forecast (0.2% growth).

Consumer confidence index in February dropped to 75.0 from 87.9 in January. That’s a rather horrible result — except of the period of Iraqi War in 2003, consumer confidence is now at its record low value since November 1993. Time to use the R-word again?

Citigroup introduced a new retail Forex broker this year — CitiFX. I uploaded the information related to this broker on my site today. CitiFX uses the trading platform made by Saxo Bank. There are no mini Forex accounts available and the minimum deposit is also very high — $10,000. Leverage is lower than in majority of other broker — 1:50 and 1:25 on some pairs. Demo accounts are available for free. This broker can be an interesting choice for the existing Citi customers, but for the vast majority of the Forex traders such conditions are far from preferable.