Forex Minis Shrink Risk Exposure by Selwyn Gishen
Trading currencies means buying one country's currency while simultaneously selling another country's currency. Every currency trade therefore involves two currencies. The usual size of a currency pair is 100,000 units, known as a "standard lot".
In most cases, beginner traders do not want to stomach the risk that comes with the exposure of a standard lot. As a result, most online forex brokers offer the ability to trade mini lots, which are 10,000 units of the currency rather than 100,000. For a new trader, these mini lots can be an especially effective tool for learning to trade forex. (For background reading, see Getting Started In Forex.)What is a pip?Before one can fully understand the benefits of a mini lot, it is important to review the concept of a pip. A pip is the smallest increment that a currency pair can move. For most currency pairs, a pip is a change in the fourth decimal place of the currency quote. For example, if EUR/USD is quoted at 1.5567 and it moves to 1.5568, it has increased by 1 pip. The value of 1 pip is calculated by the size of the lot that is traded. So, if you buy a standard lot of 100,000 EUR/USD at 1.5567 and it goes to 1.5568, a 1-pip move, then the value of your trade has increased by $10 (or 100,000 x 0.0001). (For more on this, see What is the value of one pip and why are they different between currency pairs?)If we did the exact same calculation using a mini lot, then we would multiply the 1 pip by the size of a 10,000 mini lot instead of the usual 100,000 lot. So 10,000 x 0.0001 = $1. When you trade a standard lot, the value of the pip is $10 but when trading a mini lot the value of a pip is $1. This is true when the U.S. dollar is the second, or quoted, currency in the pair. (For more, see Common Questions About Currency Trading.)Base Currency Vs. Quote CurrencyOne other piece of information to remember is that a currency pair is comprised of a base currency, which is the first currency listed in the pair, and the quote currency, which is the second currency listed in the pair. In the case of the EUR/USD, the euro is the base currency and the dollar is the quote currency
The profit or loss is always expressed in terms of the quote currency. If the currency pair is the GBP/USD, then the base currency is the British pound and the quote currency is the U.S. dollar. For the USD/CAD, the base currency is the U.S. dollar and the quote currency is the Canadian dollar. Why the dollar is listed first in some instances but second in others is just a matter of convention. (For more insight, see the Forex Tutorial: Reading a Quote and Understanding The Jargon.)The Value of a PipThe last important point that should be noted before we talk about mini lots specifically is the value of a pip. Suppose you are trading the GBP/JPY; the British pound is the base currency and the Japanese yen is the quote currency. Now in this instance, we have an exception to the fourth decimal place rule for the size of a pip. In the case of the yen, 1 pip is measured in the second decimal place. The yen is the only exception. To calculate the value of the move, if we buy dollars against the yen and the dollar goes up from 103.45 to 103.46, then we have a 1-pip move. Multiplying by the standard lot of 100,000 x 0.01 = 1,000 yen. To bring this back to dollars, you would then divide the 1,000 yen by the dollar rate, let's say it's 103.46, which equals $9.66.Why Trade Minis?The real value of trading minis is in the versatility it provides in matching the trade size to an acceptable level of risk. For example, suppose you decide to take a long position in the USD/JPY. Let's assume that your entry point is 103.55 and that you've set your stop-loss order 15 pips away at 103.40. If you have $1,000 in your trading account, the maximum risk you should take in any trade is 3% of your trading capital. Because your capital is $1,000, 3% of your capital is $30. If you are stopped out of this trade and you are trading a mini lot, you will lose $15. But if you are prepared to risk $30, you can actually trade two mini lots and get the power and benefit of some leverage. If you were only trading standard lots, this trade would not be possible because a 15-pip loss, as per this example, would be $150, which is 15% of your $1,000 trading capital. Given a risk tolerance of 3% of the portfolio, this is too much risk for one trade. (For related reading, see Forex Leverage: A Double-Edged Sword.)Mini lots allow a trader to adjust the amount of effective leverage used in each trade. With mini contracts, you can trade the equivalent of one standard lot by simply trading 10 minis. If you only want to trade a half of a standard lot, you can do so by buying five mini lots. ConclusionMini lots provide flexibility that standard lots cannot offer. A mini lot is simply 10% of a standard lot and therefore, by trading in minis you can trade in fractions of a standard lot, anywhere from 1 mini to 10 minis. Mini lots are useful if the natural stop loss for your trade is farther away than the maximum risk you feel comfortable taking. You can simply reduce the risk by decreasing the number of minis until that number would equate to the stop-loss risk. Of course, if your market maker offers you 100:1 leverage, then for an account of $1,000, you can trade up to 10 minis at a time. The number of minis traded should be governed by how much you can lose if your trade goes wrong, which should not exceed 2-3% per trade.
by Selwyn Gishen, (Contact Author Biography)Selwyn Gishen is a trader with more than 15 years of experience trading forex and equities for a private equity fund. For the past 35 years, he has also been a student of metaphysics, and has written a book called "Mind: How Changing Your Mind Can Change Your Life!" (2007). Gishen is the founder of FXNewsandViews.Com and the author of a forex trading guide entitled "Trading the Forex Markets: A Foundation Course for Online Traders". The course is designed to provide the trader with all the aspects of Gishen's Fusion Trading Model.
Saturday, August 2, 2008
Combining Forex Spot And Futures Transactions
Combining Forex Spot And Futures Transactions by Noble DraKoln
In 1972, for the first time ever, everyday investors were allowed to trade the difference in currency values in the United States. Much of the world had just stopped pegging their currencies against the dollar and the oil industry was fueling a worldwide explosion in importing and exporting activity. To tap into this, currency trading was introduced in the form of futures contracts. At the time, the Chicago Mercantile Exchange (CME) was strictly involved with agricultural products, but it saw the potential economic success of servicing the then nascent currency exchange market and decided to give it a chance.
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By 2008, currency trading exceeded $3 trillion dollars daily, but the majority of traders only participate in a fraction of the currency opportunities available to them. However, the currency market is a multilayered kaleidoscope of spot, futures and options trading. The currency market also has very distinct trending patterns that can become more difficult to interpret the shorter the time frame to trade. This is the problem that many new currency traders face as they enter the world of spot trading, but it can be overcome by combining spot, futures and options currency trades. Read on to learn how this works. Spot Trading ChallengesWith the introduction of the Commodity Futures Modernization Act of 2000, spot currency trading (forex) became the rage. Traders that were new to currency trading could enter the spot market with as little as $300, giving them leverage of almost 500:1. While the leverage is inexpensive, small fluctuations can represent larger losses, as well as large profits, in a short period of time. Another major drawback to spot currency trading is the potential interest rate charges of holding on to a spot contract past the requisite 24-hour time period. Combine these issues with the slippage that occurs as a result of sporadic trading activity, and the challenges quickly become apparent as to why traders may find trading in the forex spot market difficult. (For more, see Getting Started In Forex.)There is a better way. When currency trading was first introduced in the futures market, it was created to act as protection - a hedge for multinational corporations and banks that needed to protect themselves from the downside risk of buying free floating currencies. They would take delivery of a particular currency, such as the Canadian dollar, and then short it in the futures market or buy a put in the options market just in case the currency dropped in value. This protection would allow them to hold on to their Canadian dollar trade longer in the face of short-term fluctuations that were simply minor retracements in an overall longer term trend. In the past 30 years, nothing has changed. The currency spot market can still be protected by the futures currency market, and the option currency market can protect both the spot and the futures currency market. (For related reading, see Practical And Affordable Hedging Strategies.)The interrelationship between the currency spot and options and futures currency markets is rarely exploited by retail traders. Retail traders are typically fixated on fast profits with little regard to the downside risk beyond placing a stop order. This approach is just one-third of the currency universe. With the proper combination of the spot market and the futures market, or the spot market and the options market, a currency trader can optimize performance by taking advantage of both the short-term fluctuations while catching the long-term moves that would be missed by trading the spot market alone.
Downside Risk of Spot Forex Transactions In Figure 1, we can see the euro trending upward from $1.44 to $1.60. This entire move of 16 cents (1 cent = $1,000 when using a standard contract of 100,000 units) represents a potential gain of $16,000 in the spot market. From February of 2008 to April 2008, there were multiple pullbacks and retracements. On March 17, 2008, the market dropped in value from $1.56 to $1.53. This represents a $3,000 loss. The market eventually rebounds, but hindsight is 20/20 - while you are in the trade, there is no such consolation. A $3,000-dollar drop could wipe out the margin of a full-sized spot forex contract. So, while you could be right about the market's overall direction, you can be wrong on your timing in executing the trade. (For related reading, see Trading Is Timing.)
Figure1
Source: TradeNavigator.comWhile a trader with a strong money management program would not hold on to a loss of this magnitude all the way down, the fact that the trader must perfectly time the top and bottom of the market's activity in order to succeed makes profiting a herculean task. Fortunately, there is a simple way to protect your account in the face of these factors. In Figure 1, it can clearly be seen that the market is trending up. In order to take maximum advantage of this momentum, there is no doubt that the smart money would go long the euro, as shown in Figure 2. To avoid a sudden pullback in price, the easiest position protection is to either short the euro in the futures market or purchase a euro put option. (For more on this strategy, see Prices Plunging? Buy A Put!)
Figure 2
Source: TradeNavigator.comUsing Futures Contracts to Manage Spot RisksIf a euro futures contract is used, two new variables are added to the equation: the margin to use on the contract and the possibility that the market will move against your spot transaction. The margin in the euro futures market comes in either a full-sized contract or a mini futures contract. As of June 2008, a full-sized euro contract required a margin of $3,105 and every one-cent move would be equal to $1,250. A mini euro contract required a margin of $1,553, about half as costly, and a one-cent move equaled $625. (To learn more, see Forex Minis Shrink Risk Exposure.)Depending on the amount of capital available to you, a full-sized futures contract makes the most sense as a source of protection from downside risk. On the other hand, you are losing an additional $250 for each one-cent move if you decide to use a futures contract to protect yourself and the market moves against you. You could also attempt to use a mini-euro contract, but the opposite problem would occur. Every one-cent move is worth $625 in the mini, but every one-cent move in the spot is $1,000. This leaves the position underprotected by $375 and defeats the purpose of the protective position altogether.
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Using Options to Manage Spot Risks Another route that a trader can take is to use a CME euro put option. Based on an option's volatility, where its price is in relation to the underlying asset, and the time until expiration, the value of the put option will fluctuate. In this instance, we can choose to purchase a put option at the same price as when we decide to go long the spot euro contract. This would be considered an at-the-money option purchase. The option can range in value, but a general rule is that the option price will typically fall between 10-20% of the value of the futures margin. This could range anywhere from $300 to $600 in this instance. This small upfront cost is worth spending if it will help protect you from a $3,000 loss.Because an option's loss is limited to the amount invested, the spot trader's risk exposure never exceeds the premium's value. This means that the underlying spot position can increase in value without the worry that you will lose $250 for every one-cent move against you, like you would if you had a futures contract protecting you. (For more, see Getting Started In Forex Options.)
Figure 3
Source: TradeNavigator.comIn Figure 3, the euro successfully rebounds from its low and eventually exceeds the original entry price of the spot euro contract. Without the option contract as protection, there would have been a potential loss of $3,000 for a spot position, with little to no recourse. The only hope for the spot trader losing money would have been to use a stop loss-order and hope to catch the rebound in time to make up for the loss. Conclusion The spot, futures and option currency markets were designed to be traded together, creating a daisy chain of protection with one another. Retail traders that limit their trading to just the spot market rob themselves of one of the most important risk-management tools available to them. Trading in this combination format of spot and futures or spot and options is not perfect. Typically, for the smaller retail trader, combining currency spot and futures contracts can actually have the undesired effect of being too expensive while opening the trader up to unexpected additional price risks. Combining spot forex trading with options contracts has exactly the opposite effect, creating maximum protection and minor expense. No matter which tool is used to protect the spot position, the potential for loss still exists. It's simply a matter of shifting the loss from the primary position to a secondary position. By trading in this way, spot forex traders can develop a longer term outlook when they initiate a position. They will be able to trade without the fear of being right about the market, but not being able to afford to stick around because the leverage is so great. Plus, they will add another dimension to their trading: hedging, which was once thought to only be the domain of multinational banks.
by Noble DraKoln,
(Contact Author Biography)Noble DraKoln is founder and President of Liverpool Trading Company, and Speculator Academy. He is a licensed futures professional. He has been a guest speaker at various futures and forex trading conferences around the world including Los Angeles, Las Vegas, Chicago, New York, Paris, Frankfurt and Madrid, and is a former editor of Futures Magazine. His new book "Winning the Trading Game" is set to be released in March 2008 and is currently available on Amazon.com.
In 1972, for the first time ever, everyday investors were allowed to trade the difference in currency values in the United States. Much of the world had just stopped pegging their currencies against the dollar and the oil industry was fueling a worldwide explosion in importing and exporting activity. To tap into this, currency trading was introduced in the form of futures contracts. At the time, the Chicago Mercantile Exchange (CME) was strictly involved with agricultural products, but it saw the potential economic success of servicing the then nascent currency exchange market and decided to give it a chance.
document.write('');
By 2008, currency trading exceeded $3 trillion dollars daily, but the majority of traders only participate in a fraction of the currency opportunities available to them. However, the currency market is a multilayered kaleidoscope of spot, futures and options trading. The currency market also has very distinct trending patterns that can become more difficult to interpret the shorter the time frame to trade. This is the problem that many new currency traders face as they enter the world of spot trading, but it can be overcome by combining spot, futures and options currency trades. Read on to learn how this works. Spot Trading ChallengesWith the introduction of the Commodity Futures Modernization Act of 2000, spot currency trading (forex) became the rage. Traders that were new to currency trading could enter the spot market with as little as $300, giving them leverage of almost 500:1. While the leverage is inexpensive, small fluctuations can represent larger losses, as well as large profits, in a short period of time. Another major drawback to spot currency trading is the potential interest rate charges of holding on to a spot contract past the requisite 24-hour time period. Combine these issues with the slippage that occurs as a result of sporadic trading activity, and the challenges quickly become apparent as to why traders may find trading in the forex spot market difficult. (For more, see Getting Started In Forex.)There is a better way. When currency trading was first introduced in the futures market, it was created to act as protection - a hedge for multinational corporations and banks that needed to protect themselves from the downside risk of buying free floating currencies. They would take delivery of a particular currency, such as the Canadian dollar, and then short it in the futures market or buy a put in the options market just in case the currency dropped in value. This protection would allow them to hold on to their Canadian dollar trade longer in the face of short-term fluctuations that were simply minor retracements in an overall longer term trend. In the past 30 years, nothing has changed. The currency spot market can still be protected by the futures currency market, and the option currency market can protect both the spot and the futures currency market. (For related reading, see Practical And Affordable Hedging Strategies.)The interrelationship between the currency spot and options and futures currency markets is rarely exploited by retail traders. Retail traders are typically fixated on fast profits with little regard to the downside risk beyond placing a stop order. This approach is just one-third of the currency universe. With the proper combination of the spot market and the futures market, or the spot market and the options market, a currency trader can optimize performance by taking advantage of both the short-term fluctuations while catching the long-term moves that would be missed by trading the spot market alone.
Downside Risk of Spot Forex Transactions In Figure 1, we can see the euro trending upward from $1.44 to $1.60. This entire move of 16 cents (1 cent = $1,000 when using a standard contract of 100,000 units) represents a potential gain of $16,000 in the spot market. From February of 2008 to April 2008, there were multiple pullbacks and retracements. On March 17, 2008, the market dropped in value from $1.56 to $1.53. This represents a $3,000 loss. The market eventually rebounds, but hindsight is 20/20 - while you are in the trade, there is no such consolation. A $3,000-dollar drop could wipe out the margin of a full-sized spot forex contract. So, while you could be right about the market's overall direction, you can be wrong on your timing in executing the trade. (For related reading, see Trading Is Timing.)
Figure1
Source: TradeNavigator.comWhile a trader with a strong money management program would not hold on to a loss of this magnitude all the way down, the fact that the trader must perfectly time the top and bottom of the market's activity in order to succeed makes profiting a herculean task. Fortunately, there is a simple way to protect your account in the face of these factors. In Figure 1, it can clearly be seen that the market is trending up. In order to take maximum advantage of this momentum, there is no doubt that the smart money would go long the euro, as shown in Figure 2. To avoid a sudden pullback in price, the easiest position protection is to either short the euro in the futures market or purchase a euro put option. (For more on this strategy, see Prices Plunging? Buy A Put!)
Figure 2
Source: TradeNavigator.comUsing Futures Contracts to Manage Spot RisksIf a euro futures contract is used, two new variables are added to the equation: the margin to use on the contract and the possibility that the market will move against your spot transaction. The margin in the euro futures market comes in either a full-sized contract or a mini futures contract. As of June 2008, a full-sized euro contract required a margin of $3,105 and every one-cent move would be equal to $1,250. A mini euro contract required a margin of $1,553, about half as costly, and a one-cent move equaled $625. (To learn more, see Forex Minis Shrink Risk Exposure.)Depending on the amount of capital available to you, a full-sized futures contract makes the most sense as a source of protection from downside risk. On the other hand, you are losing an additional $250 for each one-cent move if you decide to use a futures contract to protect yourself and the market moves against you. You could also attempt to use a mini-euro contract, but the opposite problem would occur. Every one-cent move is worth $625 in the mini, but every one-cent move in the spot is $1,000. This leaves the position underprotected by $375 and defeats the purpose of the protective position altogether.
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Using Options to Manage Spot Risks Another route that a trader can take is to use a CME euro put option. Based on an option's volatility, where its price is in relation to the underlying asset, and the time until expiration, the value of the put option will fluctuate. In this instance, we can choose to purchase a put option at the same price as when we decide to go long the spot euro contract. This would be considered an at-the-money option purchase. The option can range in value, but a general rule is that the option price will typically fall between 10-20% of the value of the futures margin. This could range anywhere from $300 to $600 in this instance. This small upfront cost is worth spending if it will help protect you from a $3,000 loss.Because an option's loss is limited to the amount invested, the spot trader's risk exposure never exceeds the premium's value. This means that the underlying spot position can increase in value without the worry that you will lose $250 for every one-cent move against you, like you would if you had a futures contract protecting you. (For more, see Getting Started In Forex Options.)
Figure 3
Source: TradeNavigator.comIn Figure 3, the euro successfully rebounds from its low and eventually exceeds the original entry price of the spot euro contract. Without the option contract as protection, there would have been a potential loss of $3,000 for a spot position, with little to no recourse. The only hope for the spot trader losing money would have been to use a stop loss-order and hope to catch the rebound in time to make up for the loss. Conclusion The spot, futures and option currency markets were designed to be traded together, creating a daisy chain of protection with one another. Retail traders that limit their trading to just the spot market rob themselves of one of the most important risk-management tools available to them. Trading in this combination format of spot and futures or spot and options is not perfect. Typically, for the smaller retail trader, combining currency spot and futures contracts can actually have the undesired effect of being too expensive while opening the trader up to unexpected additional price risks. Combining spot forex trading with options contracts has exactly the opposite effect, creating maximum protection and minor expense. No matter which tool is used to protect the spot position, the potential for loss still exists. It's simply a matter of shifting the loss from the primary position to a secondary position. By trading in this way, spot forex traders can develop a longer term outlook when they initiate a position. They will be able to trade without the fear of being right about the market, but not being able to afford to stick around because the leverage is so great. Plus, they will add another dimension to their trading: hedging, which was once thought to only be the domain of multinational banks.
by Noble DraKoln,
(Contact Author Biography)Noble DraKoln is founder and President of Liverpool Trading Company, and Speculator Academy. He is a licensed futures professional. He has been a guest speaker at various futures and forex trading conferences around the world including Los Angeles, Las Vegas, Chicago, New York, Paris, Frankfurt and Madrid, and is a former editor of Futures Magazine. His new book "Winning the Trading Game" is set to be released in March 2008 and is currently available on Amazon.com.
Adding Leverage To Your Forex Trading
Adding Leverage To Your Forex Trading by Selwyn Gishen
In the foreign exchange markets, it is common to find leverage of 100:1 or even more. However, just because the market maker or broker may offer you leverage as high as 100:1, it doesn't mean you have to use all the leverage available. In fact, if you are a savvy trader, you will only use high leverage when you can calculate and manage the risks associated with the high leverage to your advantage. We'll show you how this is profitable without being problematic.
Margin and Leverage BasicsUsing money borrowed from a broker/dealer to purchase securities or foreign exchange is known as "buying on margin". A trader will usually place a certain amount of money in his or her brokerage account and the broker will use that money as a deposit to allow the trader to buy securities or foreign exchange contracts valued at a multiple compared to the deposited amount.Leverage is the use of other people's money to buy or sell contracts or securities. If a broker offers a 20:1 leverage, it means he is willing to allow the trader to borrow 20-times the amount of money in the account to make a trade. So, if a contract is worth $10,000 and the broker is offering 20:1 leverage, a trader will only need to have $500 in his or her account to purchase the contract worth $10,000. If the value of the contract goes to $11,000, the trader will make a profit of a $1,000. This would represent a return of 10% on the contract purchase price, but a return of 200% on equity. (For background reading, see Forex Leverage: A Double Edged Sword and Leverage's "Double-Edged Sword" Need Not Cut Deep.) The extreme amounts of leverage that are common in the forex markets occur because the forex is the largest and most liquid market in the world, making it very easy to get into and out of a position. This allows a trader to control, with a certain certainty, how much he or she is willing to lose on a trade. Because it is possible to exit a position quickly and efficiently, forex brokers allow their clients to benefit from high leverage. Forex Vs. Stocks and Futures MarketsLeverage in the forex markets is much higher than in most other markets. For example, if you trade equities, you will be able to borrow twice the amount of money you have in your account. In the case of futures, you may be able to borrow 20-times the amount of funds you have in your account. In the forex markets, because the leverage is so high, the broker or market maker will require you to sign an agreement specifying how a losing position will be dealt with. Because a highly leveraged account poses a greater risk for both the market maker and the trader, there is usually a mechanism in the agreement that will allow the market maker to automatically liquidate a trader's position if it loses 75% of the margin or deposit. To safeguard the broker/market maker and to ensure that the trader does not have to add extra funds to the account, the losing position will be automatically closed at a certain point in time if the losses on that position threaten to be more than the amount of money available in the trading account. Traders should read the agreements they have with their market makers very carefully in order to understand how a losing leveraged position will be addressed.Should a Trader Use All the Margin Available?Generally, a trader should not use all of his or her available margin. A trader should only use leverage when the advantage is clearly on his or her side. For, example, a trader should plan a trade and know exactly where to exit the trade if the market moves in the desired direction. Once the amount of risk in terms of the number of pips is known, it is possible to determine how much money will be lost if the trader's stop-loss is hit. As a general rule, this loss should never be more than 3% of trading capital. If a position is leveraged too much, so that the potential loss could be, say, 30% of trading capital, then the leverage should be reduced until the potential loss is no greater than 3%. Each trader will have his or her own risk parameters and may want to deviate either more or less than the general guideline of 3%. (For more insight, read Limiting Losses.)
Another thing for the trader to note is that the larger the amount of money one has for trading, the easier is it to use leverage safely. Because a leveraged position can lose money just as quickly as it can make money, a trader should have enough funds to act as a cushion against any drawdown or adverse moves without the risk of being automatically liquidated and losing the bulk of his or her trading capital.The specific risk of leverage is the fact that traders use borrowed money to buy or sell a contract. Unless the market is making a favorable move, losses will be magnified by the amount of leverage employed. How Should a Trader Calculate How Much Margin to Use?Suppose that you have $10,000 in your trading account and you decide to trade 10 mini USD/JPY lots. Each move of one pip in a mini account is worth approximately $1, but when trading 10 minis, each pip move is worth approximately $10. If you are trading 100 minis, then each pip move is worth about $100. Thus, a stop-loss of 30 pips could represent a potential loss of $30 for a single mini lot, $300 for 10 mini lots and $3,000 for 100 mini lots. Therefore, with a $10,000 account and a 3% maximum risk per trade, you should leverage only up to 30 mini lots, even though you may have the ability to buy or sell more than that. (For more, see Forex Minis Shrink Risk Exposure and Finding Your Margin Investment Sweet Spot.)ConclusionTrading in the forex markets offers many potentially profitable opportunities. Using leverage can magnify these opportunities to a very large degree. Using leverage requires a complete understanding of risk management and the use of properly defined stop-loss orders in the market. It also requires that traders be disciplined enough to follow the rules necessary for taking advantage of leveraged markets. Leveraged positions can be a trader's best friend or his or her worst enemy - it all depends on mindset and trading habits. Good traders are disciplined and adhere to their risk management rules.
by Selwyn Gishen, (Contact Author Biography)Selwyn Gishen is a trader with more than 15 years of experience trading forex and equities for a private equity fund. For the past 35 years, he has also been a student of metaphysics, and has written a book called "Mind: How Changing Your Mind Can Change Your Life!" (2007). Gishen is the founder of FXNewsandViews.Com and the author of a forex trading guide entitled "Trading the Forex Markets: A Foundation Course for Online Traders". The course is designed to provide the trader with all the aspects of Gishen's Fusion Trading Model.
In the foreign exchange markets, it is common to find leverage of 100:1 or even more. However, just because the market maker or broker may offer you leverage as high as 100:1, it doesn't mean you have to use all the leverage available. In fact, if you are a savvy trader, you will only use high leverage when you can calculate and manage the risks associated with the high leverage to your advantage. We'll show you how this is profitable without being problematic.
Margin and Leverage BasicsUsing money borrowed from a broker/dealer to purchase securities or foreign exchange is known as "buying on margin". A trader will usually place a certain amount of money in his or her brokerage account and the broker will use that money as a deposit to allow the trader to buy securities or foreign exchange contracts valued at a multiple compared to the deposited amount.Leverage is the use of other people's money to buy or sell contracts or securities. If a broker offers a 20:1 leverage, it means he is willing to allow the trader to borrow 20-times the amount of money in the account to make a trade. So, if a contract is worth $10,000 and the broker is offering 20:1 leverage, a trader will only need to have $500 in his or her account to purchase the contract worth $10,000. If the value of the contract goes to $11,000, the trader will make a profit of a $1,000. This would represent a return of 10% on the contract purchase price, but a return of 200% on equity. (For background reading, see Forex Leverage: A Double Edged Sword and Leverage's "Double-Edged Sword" Need Not Cut Deep.) The extreme amounts of leverage that are common in the forex markets occur because the forex is the largest and most liquid market in the world, making it very easy to get into and out of a position. This allows a trader to control, with a certain certainty, how much he or she is willing to lose on a trade. Because it is possible to exit a position quickly and efficiently, forex brokers allow their clients to benefit from high leverage. Forex Vs. Stocks and Futures MarketsLeverage in the forex markets is much higher than in most other markets. For example, if you trade equities, you will be able to borrow twice the amount of money you have in your account. In the case of futures, you may be able to borrow 20-times the amount of funds you have in your account. In the forex markets, because the leverage is so high, the broker or market maker will require you to sign an agreement specifying how a losing position will be dealt with. Because a highly leveraged account poses a greater risk for both the market maker and the trader, there is usually a mechanism in the agreement that will allow the market maker to automatically liquidate a trader's position if it loses 75% of the margin or deposit. To safeguard the broker/market maker and to ensure that the trader does not have to add extra funds to the account, the losing position will be automatically closed at a certain point in time if the losses on that position threaten to be more than the amount of money available in the trading account. Traders should read the agreements they have with their market makers very carefully in order to understand how a losing leveraged position will be addressed.Should a Trader Use All the Margin Available?Generally, a trader should not use all of his or her available margin. A trader should only use leverage when the advantage is clearly on his or her side. For, example, a trader should plan a trade and know exactly where to exit the trade if the market moves in the desired direction. Once the amount of risk in terms of the number of pips is known, it is possible to determine how much money will be lost if the trader's stop-loss is hit. As a general rule, this loss should never be more than 3% of trading capital. If a position is leveraged too much, so that the potential loss could be, say, 30% of trading capital, then the leverage should be reduced until the potential loss is no greater than 3%. Each trader will have his or her own risk parameters and may want to deviate either more or less than the general guideline of 3%. (For more insight, read Limiting Losses.)
Another thing for the trader to note is that the larger the amount of money one has for trading, the easier is it to use leverage safely. Because a leveraged position can lose money just as quickly as it can make money, a trader should have enough funds to act as a cushion against any drawdown or adverse moves without the risk of being automatically liquidated and losing the bulk of his or her trading capital.The specific risk of leverage is the fact that traders use borrowed money to buy or sell a contract. Unless the market is making a favorable move, losses will be magnified by the amount of leverage employed. How Should a Trader Calculate How Much Margin to Use?Suppose that you have $10,000 in your trading account and you decide to trade 10 mini USD/JPY lots. Each move of one pip in a mini account is worth approximately $1, but when trading 10 minis, each pip move is worth approximately $10. If you are trading 100 minis, then each pip move is worth about $100. Thus, a stop-loss of 30 pips could represent a potential loss of $30 for a single mini lot, $300 for 10 mini lots and $3,000 for 100 mini lots. Therefore, with a $10,000 account and a 3% maximum risk per trade, you should leverage only up to 30 mini lots, even though you may have the ability to buy or sell more than that. (For more, see Forex Minis Shrink Risk Exposure and Finding Your Margin Investment Sweet Spot.)ConclusionTrading in the forex markets offers many potentially profitable opportunities. Using leverage can magnify these opportunities to a very large degree. Using leverage requires a complete understanding of risk management and the use of properly defined stop-loss orders in the market. It also requires that traders be disciplined enough to follow the rules necessary for taking advantage of leveraged markets. Leveraged positions can be a trader's best friend or his or her worst enemy - it all depends on mindset and trading habits. Good traders are disciplined and adhere to their risk management rules.
by Selwyn Gishen, (Contact Author Biography)Selwyn Gishen is a trader with more than 15 years of experience trading forex and equities for a private equity fund. For the past 35 years, he has also been a student of metaphysics, and has written a book called "Mind: How Changing Your Mind Can Change Your Life!" (2007). Gishen is the founder of FXNewsandViews.Com and the author of a forex trading guide entitled "Trading the Forex Markets: A Foundation Course for Online Traders". The course is designed to provide the trader with all the aspects of Gishen's Fusion Trading Model.
Invest in Forex
Invest in Forex
The investment environment is as harsh and unforgiving as is the arctic landscape.
Awesome splendour conceals threat and ruin.
Only a select few with the proper mix of character, values, vision, expertise and resourcefulness succeed in such an environment.
Dear Investor,
At DayForex Capital Management we take our lead from the great explorers such as Sir Ernest Shackleton who kept a cool head, calculated the odds and took the necessary risks that led his men to safety with his philosophy, "Don't be afraid to change your plans. Don't be afraid to do nothing when that's the best thing to do. Prepare, prepare, prepare; plan, plan, plan."
We understand just how large and forbidding this market can be, dwarfing individuals and their systems. We have respect for the market and know that in the end humility , not arrogance, leads to success. Like Shackleton we believe that if one is going to be bold, this boldness must rest on detailed and careful preparation.
Join us on an epic voyage to investment success.
The reward is indisputable. We know, we have been there.
Register here to receive much more information
Sincerely,Dirk D. du ToitCEO, DayForex"What it takes to reach the destination"
The investment environment is as harsh and unforgiving as is the arctic landscape.
Awesome splendour conceals threat and ruin.
Only a select few with the proper mix of character, values, vision, expertise and resourcefulness succeed in such an environment.
Dear Investor,
At DayForex Capital Management we take our lead from the great explorers such as Sir Ernest Shackleton who kept a cool head, calculated the odds and took the necessary risks that led his men to safety with his philosophy, "Don't be afraid to change your plans. Don't be afraid to do nothing when that's the best thing to do. Prepare, prepare, prepare; plan, plan, plan."
We understand just how large and forbidding this market can be, dwarfing individuals and their systems. We have respect for the market and know that in the end humility , not arrogance, leads to success. Like Shackleton we believe that if one is going to be bold, this boldness must rest on detailed and careful preparation.
Join us on an epic voyage to investment success.
The reward is indisputable. We know, we have been there.
Register here to receive much more information
Sincerely,Dirk D. du ToitCEO, DayForex"What it takes to reach the destination"
How to get started with NZForex Foreign Exchange
Get Started
Select the appropriate link below for information about how NZForex can help you with your specific foreign exchange needs.
Foreign exchange for business General Exporters Importers
Foreign exchange for individuals General Overseas Purchase Living Overseas/Expatriates Migration Investments/Pensions
How do I transfer funds with NZForex?Dealing with us is simple. You register on the website and then log in. When logged in you can get quotes, add beneficiary details and book deals/funds transfers. After you register, an NZForex representative will call you to discuss your transfer(s) and make sure the system is set up correctly for your needs. You will also be able to ask any questions you may have about the service and process at this time. You can lock in rates prior to us having your funds for currencies if we can receive funds overnight or you leave a small deposit. If it will take longer for funds to reach us, it is better to send the funds to us prior to booking the exchange rate. Once we have the funds, you will be advised and can then lock in the exchange rate. Please note we do not support transfers in Indian Rupees, Indonesian Rupiah, Phillipine Peso, Thai Baht, Pakastini Rupee, Iraqi Dinar (and a number of other currencies) at this stage.
Benefits of using NZForex
No bank queuesOne of the great things about our service is that you can complete an international transfer without leaving your office or home. We give you a variety of ways to get your funds to us so we can send the international transfer as quickly as possible.
Unbeatable rates & low fees ? Yes please!Not only do we take the hassle out of your international transfers but we do it with low (or often no!) fees. We charge a maximum fee of NZ$ 15 for payments, and will waive the fee altogether on transactions that exceed NZ$ 10,000 per beneficiary. Click here for more details on fees.
Exchange rates - a simple guarantee. We will not be beaten!There is no need to shop around, our rates will be good straight up.
Security of your moneyThe safety of your money is an important consideration when deciding which provider you use to send money internationally.NZForex is a brand of OzForex Pty Ltd, a leading Australian foreign exchange provider. When dealing through NZForex you are transacting with OzForex. OzForex holds an Australian Financial Services Licence (AFSL) issued by ASIC to deal in foreign exchange. This licence can be viewed by following this link to the ASIC website: (AFS Licence number 226 484)OzForex offers a safe and regulated alternative to the banks for transferring funds. Our business effectively transits money from customer to beneficiary via leading financial institutions. We do not pay out client transfers until clients have paid OzForex which means we have no settlement risk on transfers. As we do not carry any overnight market risk, unlike some other providers, we do not suffer losses resulting from exchange rate movements and so you can feel comfortable that your transfer will reach the recipient on time, every time. Your funds are held in accounts with major financial institutions and are only released once your outward payment has been sent. OzForex is a trusted provider to thousands of customers world-wide who have enjoyed the benefits of excellent rates and low fees without compromising on service.Foreign exchange dealing is regulated in Australia by the Australian Securities and Investment Commission and companies providing services to deal in foreign exchange should be able to show they hold an Australian Financial Serviced Licence. You should not deal with a foreign exchange provider that cannot demonstrate in writing that they are regulated.Recent changes to the regulatory environment have seen foreign exchange regulation brought under the Financial Services Reform Act (FSR) administered by ASIC. Financial Service Reform was enacted to increase regulatory protection for consumers purchasing or being advised about financial products.You can visit the ASIC website to learn more about the regulatory environment in Australia and what it means for your protection and consumer rights.
Select the appropriate link below for information about how NZForex can help you with your specific foreign exchange needs.
Foreign exchange for business General Exporters Importers
Foreign exchange for individuals General Overseas Purchase Living Overseas/Expatriates Migration Investments/Pensions
How do I transfer funds with NZForex?Dealing with us is simple. You register on the website and then log in. When logged in you can get quotes, add beneficiary details and book deals/funds transfers. After you register, an NZForex representative will call you to discuss your transfer(s) and make sure the system is set up correctly for your needs. You will also be able to ask any questions you may have about the service and process at this time. You can lock in rates prior to us having your funds for currencies if we can receive funds overnight or you leave a small deposit. If it will take longer for funds to reach us, it is better to send the funds to us prior to booking the exchange rate. Once we have the funds, you will be advised and can then lock in the exchange rate. Please note we do not support transfers in Indian Rupees, Indonesian Rupiah, Phillipine Peso, Thai Baht, Pakastini Rupee, Iraqi Dinar (and a number of other currencies) at this stage.
Benefits of using NZForex
No bank queuesOne of the great things about our service is that you can complete an international transfer without leaving your office or home. We give you a variety of ways to get your funds to us so we can send the international transfer as quickly as possible.
Unbeatable rates & low fees ? Yes please!Not only do we take the hassle out of your international transfers but we do it with low (or often no!) fees. We charge a maximum fee of NZ$ 15 for payments, and will waive the fee altogether on transactions that exceed NZ$ 10,000 per beneficiary. Click here for more details on fees.
Exchange rates - a simple guarantee. We will not be beaten!There is no need to shop around, our rates will be good straight up.
Security of your moneyThe safety of your money is an important consideration when deciding which provider you use to send money internationally.NZForex is a brand of OzForex Pty Ltd, a leading Australian foreign exchange provider. When dealing through NZForex you are transacting with OzForex. OzForex holds an Australian Financial Services Licence (AFSL) issued by ASIC to deal in foreign exchange. This licence can be viewed by following this link to the ASIC website: (AFS Licence number 226 484)OzForex offers a safe and regulated alternative to the banks for transferring funds. Our business effectively transits money from customer to beneficiary via leading financial institutions. We do not pay out client transfers until clients have paid OzForex which means we have no settlement risk on transfers. As we do not carry any overnight market risk, unlike some other providers, we do not suffer losses resulting from exchange rate movements and so you can feel comfortable that your transfer will reach the recipient on time, every time. Your funds are held in accounts with major financial institutions and are only released once your outward payment has been sent. OzForex is a trusted provider to thousands of customers world-wide who have enjoyed the benefits of excellent rates and low fees without compromising on service.Foreign exchange dealing is regulated in Australia by the Australian Securities and Investment Commission and companies providing services to deal in foreign exchange should be able to show they hold an Australian Financial Serviced Licence. You should not deal with a foreign exchange provider that cannot demonstrate in writing that they are regulated.Recent changes to the regulatory environment have seen foreign exchange regulation brought under the Financial Services Reform Act (FSR) administered by ASIC. Financial Service Reform was enacted to increase regulatory protection for consumers purchasing or being advised about financial products.You can visit the ASIC website to learn more about the regulatory environment in Australia and what it means for your protection and consumer rights.
Forex Tutorial - A Short Introduction To FOREX
Forex Tutorial - A Short Introduction To FOREX
FOREX is the world’s largest and most liquid trading market. Many consider FOREX as the best home business you can ever venture in. Even though regular people have had
Best Forex Trading Books
the opportunity to take part in trading foreign currencies for profit (in the same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings.
Even though it has been somewhat of a loosely guarded secret, every day more and more investors are turning to the all-electronic world of FOREX trading for income and profit because of its numerous benefits & advantages over traditional trading vehicles, like stocks, bonds and commodities.
But, still, whenever something seems new or is just becoming a part of social conversation, news articles, and water cooler gossip, misconceptions have to be overcome, the mind has to be open and the slate has to be clear for starting out fresh with the CORRECT information.
So, in this article, it is my attempt to give you some solid, but not over-detailed, information on just what the heck "FX" (FOREX) means, what it is, and why it exists.
As a successful trader said, Trading FOREX is like picking money up off the floor
Not trading FOREX is like leaving it there for someone else to pick up." Others in the industry have also said, Trading FOREX is like having an ATM machine on your own computer.
Here's an explanation (one I feel you'll appreciate) of what FOREX is and how a bunch of traders, profit from it:
The Foreign Exchange Market, also referred to the "FOREX" or "FX" market, is the spot (cash) market for currency.
But, don't mistake FX as trading the futures market, where you buy a contract to purchase a particular currency at a future price in time.
What FX traders do is much less risky than trading currencies on the futures market, much more profitable, and a lot easier, than trading stocks.
So, you're probably wondering where it's at ... or ... how to access the FX market?
The answer is: FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Yes, if that's the first time you've heard about an all-electronic market, I know this may sound somewhat intriguing to you.
Here's what you are actually trading when you participate in the Foreign Exchange (FOREX) market:
Essentially, like the large banks who use the FX market to protect themselves from the fluctuating exchange rate of different currencies, as an investor, what a FX trader is doing is simultaneously exchanging one countries currency for another. So, in actuality, they're electronically trading a currency-pair and the price that is quoted to us is the exchange rate between the two currencies.
In other words, simply the quoted price is how many of the one currency is worth 1 of the other currency.
Example:
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders that use the right trading techniques / tactics that will allow them to profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large corporations who need to hedge, the other 95% is for speculation and profit.
About The Author : Adrian Pablo : Forex trader and freelance writer. http://www.1-forex.com Forex Tutorial - A Short Introduction To FOREX
FOREX is the world’s largest and most liquid trading market. Many consider FOREX as the best home business you can ever venture in. Even though regular people have had
Best Forex Trading Books
the opportunity to take part in trading foreign currencies for profit (in the same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings.
Even though it has been somewhat of a loosely guarded secret, every day more and more investors are turning to the all-electronic world of FOREX trading for income and profit because of its numerous benefits & advantages over traditional trading vehicles, like stocks, bonds and commodities.
But, still, whenever something seems new or is just becoming a part of social conversation, news articles, and water cooler gossip, misconceptions have to be overcome, the mind has to be open and the slate has to be clear for starting out fresh with the CORRECT information.
So, in this article, it is my attempt to give you some solid, but not over-detailed, information on just what the heck "FX" (FOREX) means, what it is, and why it exists.
As a successful trader said, Trading FOREX is like picking money up off the floor
Not trading FOREX is like leaving it there for someone else to pick up." Others in the industry have also said, Trading FOREX is like having an ATM machine on your own computer.
Here's an explanation (one I feel you'll appreciate) of what FOREX is and how a bunch of traders, profit from it:
The Foreign Exchange Market, also referred to the "FOREX" or "FX" market, is the spot (cash) market for currency.
But, don't mistake FX as trading the futures market, where you buy a contract to purchase a particular currency at a future price in time.
What FX traders do is much less risky than trading currencies on the futures market, much more profitable, and a lot easier, than trading stocks.
So, you're probably wondering where it's at ... or ... how to access the FX market?
The answer is: FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Yes, if that's the first time you've heard about an all-electronic market, I know this may sound somewhat intriguing to you.
Here's what you are actually trading when you participate in the Foreign Exchange (FOREX) market:
Essentially, like the large banks who use the FX market to protect themselves from the fluctuating exchange rate of different currencies, as an investor, what a FX trader is doing is simultaneously exchanging one countries currency for another. So, in actuality, they're electronically trading a currency-pair and the price that is quoted to us is the exchange rate between the two currencies.
In other words, simply the quoted price is how many of the one currency is worth 1 of the other currency.
Example:
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders that use the right trading techniques / tactics that will allow them to profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large corporations who need to hedge, the other 95% is for speculation and profit.
About The Author : Adrian Pablo : Forex trader and freelance writer. http://www.1-forex.com Forex Tutorial - A Short Introduction To FOREX
How do I choose my FOREX broker
How do I choose my FOREX broker
There are so many Forex brokers and services out there, that it is quite overwhelming to try and choose one.The trick is to understand what is most important to you while trading, and then to find the broker that best matches your demands.
Your demands are probably comprise of several factors, financial, technological and even psychological, feeling you must trust the broker you choose to deal with.To help lay out all these factors we generated our comparison table, which includes, what are in our opinion, the key questions you have to ask when choosing a broker. More importantly, this table supplies the answers.
We bring to the table our own experience with these brokers, making it possible for us to say how easy their systems are to use, what was needed from us to open an account, what we were offered back in return, how satisfied we were from their customer support, and how serious a company they actually are.
Once you feel that your main demands have been answered, and you are able to narrow down your choice to 2 or 3 brokers from the list, you should go on to reading the full reviews of our experience with them. The reviews will tell you more about WHAT these brokers have to offer and HOW they offer it to you.
Another powerful tool is reading what other traders have to say about their experiences. Always check out their opinions in our forum discussion rooms, and feel free to ask questions you feel you do not have answers to yet.
To help narrow down the selection, we prepared the list of our featured sites. Again, this is based on our own experience with these brokers, and these are the brokers we feel we can recommend to others to choose.
While this site is based on our own experience, we realize that at times others may encounter different experiences with the same brokers or service providers. If your experience was different than ours, please share it with us, so we can go on sharing objective information with all our users.
Good luck, and good profits!
There are so many Forex brokers and services out there, that it is quite overwhelming to try and choose one.The trick is to understand what is most important to you while trading, and then to find the broker that best matches your demands.
Your demands are probably comprise of several factors, financial, technological and even psychological, feeling you must trust the broker you choose to deal with.To help lay out all these factors we generated our comparison table, which includes, what are in our opinion, the key questions you have to ask when choosing a broker. More importantly, this table supplies the answers.
We bring to the table our own experience with these brokers, making it possible for us to say how easy their systems are to use, what was needed from us to open an account, what we were offered back in return, how satisfied we were from their customer support, and how serious a company they actually are.
Once you feel that your main demands have been answered, and you are able to narrow down your choice to 2 or 3 brokers from the list, you should go on to reading the full reviews of our experience with them. The reviews will tell you more about WHAT these brokers have to offer and HOW they offer it to you.
Another powerful tool is reading what other traders have to say about their experiences. Always check out their opinions in our forum discussion rooms, and feel free to ask questions you feel you do not have answers to yet.
To help narrow down the selection, we prepared the list of our featured sites. Again, this is based on our own experience with these brokers, and these are the brokers we feel we can recommend to others to choose.
While this site is based on our own experience, we realize that at times others may encounter different experiences with the same brokers or service providers. If your experience was different than ours, please share it with us, so we can go on sharing objective information with all our users.
Good luck, and good profits!
How do I make money in FOREX?
How do I make money in FOREX?
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments.
Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments.
Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
What is FOREX?
What is FOREX?
The FOREX Market (Foreign Exchange) is the biggest market in the world, where the average daily trading is over $1.9Trillion.This is a world wide market in which currencies are exchanged by various participants, such as world banks, multinational corporations, financial markets and most importantly – individual traders!YOU can be part of the excitement in the biggest trading market in the world, and share some of those $1.9 Trillion being exchanged daily! You can buy or sell Dollars, Euros, Yens, Pounds, and more, at a click of a button.All that’s needed is to chose a broker, sign up, and start trading Now! Join at any time - the FOREX market is always open, encompassing all time zones around the world (excluding Friday 10:00 pm GMT till Sunday 00:00 GMT). Most brokers offer web based trading platform, making it easy for you to trade anytime anywhere.If you are new to FOREX, many brokers will provide you with demo accounts, where you can practice trading with virtual money. Once you feel ready to start earning money, you can go ahead and open a real money account. Many brokers provide mini-accounts too, in which the initial deposits are lower than in the standard account.There is an abundance of educational tools out there, to help you learn the trade. Anything from books, land based classrooms, online guides, and even interactive simulators.While learning, it is advised to read users' forums to get the daily insight of what experienced traders are doing, until one day – you become one of the experts on the forum.The trick in FOREX is to trade on margin, meaning you are trading with capital borrowed from your broker. When choosing your broker you want the one who offers you the best terms. You also want to be aware of any risks involved in trading.Like everything else in life – practice makes perfect! It will take time to be an expert trader, but the liquidity is out there and the trading tools are easy to use, so you can start making money NOW!
The FOREX Market (Foreign Exchange) is the biggest market in the world, where the average daily trading is over $1.9Trillion.This is a world wide market in which currencies are exchanged by various participants, such as world banks, multinational corporations, financial markets and most importantly – individual traders!YOU can be part of the excitement in the biggest trading market in the world, and share some of those $1.9 Trillion being exchanged daily! You can buy or sell Dollars, Euros, Yens, Pounds, and more, at a click of a button.All that’s needed is to chose a broker, sign up, and start trading Now! Join at any time - the FOREX market is always open, encompassing all time zones around the world (excluding Friday 10:00 pm GMT till Sunday 00:00 GMT). Most brokers offer web based trading platform, making it easy for you to trade anytime anywhere.If you are new to FOREX, many brokers will provide you with demo accounts, where you can practice trading with virtual money. Once you feel ready to start earning money, you can go ahead and open a real money account. Many brokers provide mini-accounts too, in which the initial deposits are lower than in the standard account.There is an abundance of educational tools out there, to help you learn the trade. Anything from books, land based classrooms, online guides, and even interactive simulators.While learning, it is advised to read users' forums to get the daily insight of what experienced traders are doing, until one day – you become one of the experts on the forum.The trick in FOREX is to trade on margin, meaning you are trading with capital borrowed from your broker. When choosing your broker you want the one who offers you the best terms. You also want to be aware of any risks involved in trading.Like everything else in life – practice makes perfect! It will take time to be an expert trader, but the liquidity is out there and the trading tools are easy to use, so you can start making money NOW!
LiteForex offers
LiteForex offers revolutionary trading technology for beginner traders, and lets you start trading in the Forex market depositing just ONE DOLLAR! Your deposit appears in US cents on the Lite group accounts, so you feel like you are trading the same amount in US Dollars. This new technology allows Forex beginners to learn Forex in a REAL life situation with minimal investment!
LiteForex also offers competitive trading conditions for Forex professionals all around the world, and provides a dedicated Forex trading server and experienced customer support as well as analysis of Forex market and a professional affiliate program.
With more than 124,000 serviced users, more than 45,000 unique and live Forex trading accounts, more than 300 new traders every day, and more than 700,000 live orders every month, LiteForex is one of the most popular and fastest growing Forex companies in the world.
Take your first step to financial freedom. Enter the Forex world!
Open a Live Forex Account
LiteForex is a service mark and division of Straighthold Investment Group, Inc. - an independent market maker based on a MetaTrader 4, a very powerful and popular Forex trading platform, known throughout the world.
Join the very experienced Forex trader community learn how to use the MetaTrader 4 platform!
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LiteForex also offers competitive trading conditions for Forex professionals all around the world, and provides a dedicated Forex trading server and experienced customer support as well as analysis of Forex market and a professional affiliate program.
With more than 124,000 serviced users, more than 45,000 unique and live Forex trading accounts, more than 300 new traders every day, and more than 700,000 live orders every month, LiteForex is one of the most popular and fastest growing Forex companies in the world.
Take your first step to financial freedom. Enter the Forex world!
Open a Live Forex Account
LiteForex is a service mark and division of Straighthold Investment Group, Inc. - an independent market maker based on a MetaTrader 4, a very powerful and popular Forex trading platform, known throughout the world.
Join the very experienced Forex trader community learn how to use the MetaTrader 4 platform!
Get started on the Forex market with a Demo Account
Trading on the Forex market involves substantial risks, including possible complete loss of principal and other losses and is not suitable for all people. You are the best judge as to whether Forex trading is appropriate for you in light of your financial condition, investment experience, risk tolerance etc.
KKI Forex Rates
KKI Forex Rates
Updated at: 8/2/2008 6:09:38 PM (PST)
Courtesy: KalPoint.com / Forexpk.com
Khanani & Kalia International (Pvt.) Ltd.
Pakistan's First ISO 9001 & 27001 Certified Exchange Company
Remittance
KKI'S Buying
KKI'S Selling
US Dollar TT
72.1
72.5
US Dollar DD
72.1
72.5
Currency Notes
Australian Dollar
66.7
67.1
Bahrain Dinar
189.6
189.8
Canadian Dollar
69.7
70.1
China Yuan
9.7
10
Danish Krone
14.85
14.95
Euro
112.6
113.6
Hong Kong Dollar
9.12
9.22
Indian Rupee
1.65
1.75
Japanese Yen
0.664
0.669
Kuwaiti Dinar
268.2
268.5
Malaysian Ringgit
22.4
23
NewZealand $
52.2
52.6
Norwegians Krone
13.84
13.94
Omani Riyal
186.05
186.25
Qatari Riyal
19.69
19.79
Saudi Riyal
19.12
19.22
Singapore Dollar
52.1
52.5
Swedish Korona
11.72
11.82
Swiss Franc
68.1
68.5
Thai Bhat
2.2
2.4
U.A.E Dirham
19.55
19.65
UK Pound Sterling
142.6
143.6
US Dollar
72.1
72.4
Disclaimer
The Open Market Rates offered by KalPoint.com, in collaboration with Khanani and Kalia International (Pvt.) Ltd are provided to our users as a part of our premium services free of charge. The open market rates are current and are updated through out the day so that their accuracy can be maintained. However these are only the indicative rates. Since, the money market rates keep on changing through out the day, therefore, KalPoint.com does not hold any responsibility or liability whatsoever with respect to any transactions made by the users on the basis of these rates.
Open Market Analysis
On Saturday, 2nd Aug 2008
CURRENCY MARKET REPORT FOR THE WEEK ENDING AS ON 2nd August 2008
RUPEE/US DOLLAR:Bearish trend continued to prevail in the kerb as rupee shed shine versus the US dollar in the kerb market amid demand of US currency continued to rise. The American dollar started off new week’s trading at Rs.71/65, kept showing upward trend and was trading at Rs.72/10 on Saturday at 12:33PM local time. Thus, rupee incurred a loss of 0/45 paisas versus dollar on the local desk. In the international market, the dollar rose to a one-month high against the euro as a government report showed employers in the U.S. eliminated fewer jobs last month than analysts forecast. U.S. payrolls shrank in July for a seventh straight month, decreasing by 51,000, matching the previous month's decline, the Labor Department said today in Washington.
SBP Updates: As SBP disclosed monetary policy for the period of July-December 2008 on Tuesday and has further tightened by increasing the key discount rate by 100 basis points (bps) in a bid to control the soaring inflation.
Major Headlines of the week:
ABN AMRO renamed as RBS in Pakistan (www.thenews.com.pk)
Special session to rescue trapped investors today (www.dawn.com)
Inflation surges by 31.9pc (www.dawn.com)
Forwarded premium on foreign exchange has also come down(www.brecorder.com)
U.S. Jobless rate highest in 4 years, payrolls drop (www.reuters.com)
GM, Toyota, Ford’s July U.S. sales tumble (www.msnbc.com)
German retail sales fall in June (www. bbcnews.com)
RUPEE/EURO: Euro traded on a negative note versus rupee this week amid decline in its demand in the local market and weak performance in the international market. The single currency kicked off new week’s trading at Rs.113/25, continued to shed shine and was changing hands at Rs.112/30 on Saturday. Thus, rupee recovered 0/95 versus 15-nation currency in the open market. On the international desk, the 15-nation euro fell earlier today versus the dollar as German's Federal Statistics Office in Wiesbaden said retail sales, adjusted for inflation and seasonal swings, dropped 1.4 percent in June after increasing 0.5 percent in the prior month. ECB President Jean-Claude Trichet said on July 3 that he had ``no bias'' or ``pre-commitment'' after policy makers increased the main refinancing rate to 4.25 percent.
RUPEE/POUND STERLING:The cable continued to depreciate versus the national currency in the kerb this week amid demand of British Pound declined and remained weak in the international market. Pound Sterling opened new week’s trading at Rs.143/40, continued to slide and was trading at Rs.142/20 at close of markets on Saturday. Thus, rupee recovered Rs.1/20 versus Pound. On the international desks, the pound headed for its biggest weekly drop since mid- June as U.K. manufacturing shrank by the most in a decade. The pound declined as much as 0.6 percent to $1.9727, the lowest level since July 10, as an index of British manufacturing dropped in July to the weakest since December 1998. Sterling depreciated 0.8 percent versus the dollar this week.
RUPEE/YEN:The Japanese currency shed mere grounds versus rupee in the kerb dealings. Yen started off new week’s trading at 0/666 and was changing hands at 0/664 at close of markets on Saturday. Thus, rupee ended the current week on a positive note versus Japanese currency.
OPEN MARKET ANALYSIS ARE UPDATED DAILY
Courtesy : KalPoint.com / Forexpk.com
Updated at: 8/2/2008 6:09:38 PM (PST)
Courtesy: KalPoint.com / Forexpk.com
Khanani & Kalia International (Pvt.) Ltd.
Pakistan's First ISO 9001 & 27001 Certified Exchange Company
Remittance
KKI'S Buying
KKI'S Selling
US Dollar TT
72.1
72.5
US Dollar DD
72.1
72.5
Currency Notes
Australian Dollar
66.7
67.1
Bahrain Dinar
189.6
189.8
Canadian Dollar
69.7
70.1
China Yuan
9.7
10
Danish Krone
14.85
14.95
Euro
112.6
113.6
Hong Kong Dollar
9.12
9.22
Indian Rupee
1.65
1.75
Japanese Yen
0.664
0.669
Kuwaiti Dinar
268.2
268.5
Malaysian Ringgit
22.4
23
NewZealand $
52.2
52.6
Norwegians Krone
13.84
13.94
Omani Riyal
186.05
186.25
Qatari Riyal
19.69
19.79
Saudi Riyal
19.12
19.22
Singapore Dollar
52.1
52.5
Swedish Korona
11.72
11.82
Swiss Franc
68.1
68.5
Thai Bhat
2.2
2.4
U.A.E Dirham
19.55
19.65
UK Pound Sterling
142.6
143.6
US Dollar
72.1
72.4
Disclaimer
The Open Market Rates offered by KalPoint.com, in collaboration with Khanani and Kalia International (Pvt.) Ltd are provided to our users as a part of our premium services free of charge. The open market rates are current and are updated through out the day so that their accuracy can be maintained. However these are only the indicative rates. Since, the money market rates keep on changing through out the day, therefore, KalPoint.com does not hold any responsibility or liability whatsoever with respect to any transactions made by the users on the basis of these rates.
Open Market Analysis
On Saturday, 2nd Aug 2008
CURRENCY MARKET REPORT FOR THE WEEK ENDING AS ON 2nd August 2008
RUPEE/US DOLLAR:Bearish trend continued to prevail in the kerb as rupee shed shine versus the US dollar in the kerb market amid demand of US currency continued to rise. The American dollar started off new week’s trading at Rs.71/65, kept showing upward trend and was trading at Rs.72/10 on Saturday at 12:33PM local time. Thus, rupee incurred a loss of 0/45 paisas versus dollar on the local desk. In the international market, the dollar rose to a one-month high against the euro as a government report showed employers in the U.S. eliminated fewer jobs last month than analysts forecast. U.S. payrolls shrank in July for a seventh straight month, decreasing by 51,000, matching the previous month's decline, the Labor Department said today in Washington.
SBP Updates: As SBP disclosed monetary policy for the period of July-December 2008 on Tuesday and has further tightened by increasing the key discount rate by 100 basis points (bps) in a bid to control the soaring inflation.
Major Headlines of the week:
ABN AMRO renamed as RBS in Pakistan (www.thenews.com.pk)
Special session to rescue trapped investors today (www.dawn.com)
Inflation surges by 31.9pc (www.dawn.com)
Forwarded premium on foreign exchange has also come down(www.brecorder.com)
U.S. Jobless rate highest in 4 years, payrolls drop (www.reuters.com)
GM, Toyota, Ford’s July U.S. sales tumble (www.msnbc.com)
German retail sales fall in June (www. bbcnews.com)
RUPEE/EURO: Euro traded on a negative note versus rupee this week amid decline in its demand in the local market and weak performance in the international market. The single currency kicked off new week’s trading at Rs.113/25, continued to shed shine and was changing hands at Rs.112/30 on Saturday. Thus, rupee recovered 0/95 versus 15-nation currency in the open market. On the international desk, the 15-nation euro fell earlier today versus the dollar as German's Federal Statistics Office in Wiesbaden said retail sales, adjusted for inflation and seasonal swings, dropped 1.4 percent in June after increasing 0.5 percent in the prior month. ECB President Jean-Claude Trichet said on July 3 that he had ``no bias'' or ``pre-commitment'' after policy makers increased the main refinancing rate to 4.25 percent.
RUPEE/POUND STERLING:The cable continued to depreciate versus the national currency in the kerb this week amid demand of British Pound declined and remained weak in the international market. Pound Sterling opened new week’s trading at Rs.143/40, continued to slide and was trading at Rs.142/20 at close of markets on Saturday. Thus, rupee recovered Rs.1/20 versus Pound. On the international desks, the pound headed for its biggest weekly drop since mid- June as U.K. manufacturing shrank by the most in a decade. The pound declined as much as 0.6 percent to $1.9727, the lowest level since July 10, as an index of British manufacturing dropped in July to the weakest since December 1998. Sterling depreciated 0.8 percent versus the dollar this week.
RUPEE/YEN:The Japanese currency shed mere grounds versus rupee in the kerb dealings. Yen started off new week’s trading at 0/666 and was changing hands at 0/664 at close of markets on Saturday. Thus, rupee ended the current week on a positive note versus Japanese currency.
OPEN MARKET ANALYSIS ARE UPDATED DAILY
Courtesy : KalPoint.com / Forexpk.com
Trading Advice by Youssef Kassantini
Forex trading strategies and techniques are designed to help traders optimize trading styles and systems.¦nbsp; We hope you enjoy our Forex strategies!
Youssef Kassantini
The following strategies are posted for the purpose of education only.¦nbsp; Trading rules may be subject to different interpretation. Planned risk levels may be increased dramatically under extreme market conditions. Use ideas and/or modify them to suit your trading style, but only at your own risk. We recommend testing your trading system on demo account prior to investing real money.
Trading Advice by Youssef Kassantini
1. There is no sure method to always win, do not look for it.
2. Stocks do not sell for their worth, but for what traders think they are worth.
3. Buy on rumors; sell before news (not on news).
4. Be "objective", minimize emotion.
5. Do not overtrade; you pay the dues in health and commissions.
6. Never trade or invest based on hope.
7. The real news is not in the headlines, but behind them.
8. Pay little attention to gossips and rumors.
9. Cut losses, let profits run.
10. Look after your losses, your gains will look after themselves.
11. The crowd is correct most of the time; it is at turning points that they get things wrong.
12. News known is news discounted in the price.
13. A suitable broker is selected by referral, not newspapers.
14. Mental rehearsal helps in anticipating possible outcomes.
15. Most successful traders are loners; they think independently from the crown.
16. Buy when stocks have few friends.
17. Keep an eye on what smart traders are doing.
18. Never risk more than 10% on any single trade.
19. If you lose 50% of your capital, you have to make 100% for breakeven.
20. When in doubt, stay out.
21. Don't try to call every market turn.
22. Never invest more than you can reasonably afford to lose.
23. Trade liquid markets.
24. Cut down losses at a logical point, not convenient.
25. Investment objectives should be Liquidity, Income and Growth.
26. Don't speculate unless you can make it a full time job.
27. Don't buy too many securities you cannot follow up on.
28. Always keep cash reserve.
29. Never trade with a serious personal problem.
30. Ask yourself what you really want.
31. Learn to wait, be patient.
32. Always understand the Risk/Reward ratio.
33. Look at the big picture at all times.
34. Undertrading is better than overtrading.
35. Trade in steps, never buy the quantity of stocks you need at one time.
36. Speculation requires cool judgment, flexibility and courage. Pliability.
37. The worst losses come from uninformed people buying greatly overvalued stocks.
38. Never speculate with money you need to live.
39. Expect the unexpected when investor opinions are too unanimous.
40. Specify risk capital and the level of risk.
41. The trend is your friend, never trade against the trend.
42. Pay all bills before speculating.
43. Don't speculate with other person's money.
44. Don't neglect your business to speculate
45. Money you invest should be money you do not need.
46. Don't go joint account with a friend, play a lone hand.
47. Corrections are three times more severe than rallies.
48. Don't take advice from the uninformed; they know no more than you do.
49. It is easier to buy than to sell.
50. Don't spend your paper losses, they might turn into losses.
51. Don't give tips, they get you in trouble and seldom pays you back.
52. Don't blame others for mistakes. A professional trader should consider everything.
53. If you cannot sleep over an investment, it shouldn't have been done in the first place.
54. Protect profits, avoid uncertainties.
55. Plan the trade then trade the plan.
56. Be patient.
57. Know and follow the above rules!
Youssef Kassantini
The following strategies are posted for the purpose of education only.¦nbsp; Trading rules may be subject to different interpretation. Planned risk levels may be increased dramatically under extreme market conditions. Use ideas and/or modify them to suit your trading style, but only at your own risk. We recommend testing your trading system on demo account prior to investing real money.
Trading Advice by Youssef Kassantini
1. There is no sure method to always win, do not look for it.
2. Stocks do not sell for their worth, but for what traders think they are worth.
3. Buy on rumors; sell before news (not on news).
4. Be "objective", minimize emotion.
5. Do not overtrade; you pay the dues in health and commissions.
6. Never trade or invest based on hope.
7. The real news is not in the headlines, but behind them.
8. Pay little attention to gossips and rumors.
9. Cut losses, let profits run.
10. Look after your losses, your gains will look after themselves.
11. The crowd is correct most of the time; it is at turning points that they get things wrong.
12. News known is news discounted in the price.
13. A suitable broker is selected by referral, not newspapers.
14. Mental rehearsal helps in anticipating possible outcomes.
15. Most successful traders are loners; they think independently from the crown.
16. Buy when stocks have few friends.
17. Keep an eye on what smart traders are doing.
18. Never risk more than 10% on any single trade.
19. If you lose 50% of your capital, you have to make 100% for breakeven.
20. When in doubt, stay out.
21. Don't try to call every market turn.
22. Never invest more than you can reasonably afford to lose.
23. Trade liquid markets.
24. Cut down losses at a logical point, not convenient.
25. Investment objectives should be Liquidity, Income and Growth.
26. Don't speculate unless you can make it a full time job.
27. Don't buy too many securities you cannot follow up on.
28. Always keep cash reserve.
29. Never trade with a serious personal problem.
30. Ask yourself what you really want.
31. Learn to wait, be patient.
32. Always understand the Risk/Reward ratio.
33. Look at the big picture at all times.
34. Undertrading is better than overtrading.
35. Trade in steps, never buy the quantity of stocks you need at one time.
36. Speculation requires cool judgment, flexibility and courage. Pliability.
37. The worst losses come from uninformed people buying greatly overvalued stocks.
38. Never speculate with money you need to live.
39. Expect the unexpected when investor opinions are too unanimous.
40. Specify risk capital and the level of risk.
41. The trend is your friend, never trade against the trend.
42. Pay all bills before speculating.
43. Don't speculate with other person's money.
44. Don't neglect your business to speculate
45. Money you invest should be money you do not need.
46. Don't go joint account with a friend, play a lone hand.
47. Corrections are three times more severe than rallies.
48. Don't take advice from the uninformed; they know no more than you do.
49. It is easier to buy than to sell.
50. Don't spend your paper losses, they might turn into losses.
51. Don't give tips, they get you in trouble and seldom pays you back.
52. Don't blame others for mistakes. A professional trader should consider everything.
53. If you cannot sleep over an investment, it shouldn't have been done in the first place.
54. Protect profits, avoid uncertainties.
55. Plan the trade then trade the plan.
56. Be patient.
57. Know and follow the above rules!
FREE FX Seminar and Private Meetings
FREE FX Seminar and Private Meetings
Dear Traders and Money Managers
In our continuous efforts to expand our presence on the Asian FX market we decided to better explore new possibilities in such a flourishing and rising economy. In this perspective, Crown Forex senior specialists will be present in Jakarta in August 2008 to meet with potential clients and introducing brokers.
A two hour free seminar will be presented by our senior analyst and forex strategist Mohammed Isbeer on 25th August 2008 at a very prestigious hotel in Jakarta (the location will be communicated along with the confirmation of your registration).
FOREX Seminar
Topic of the seminar: Can Fundamentals guarantee profits?
The seminar will explain how we can apply fundamental analysis to FX trading, over short, medium and long term; how fundamental analysis can provide entry points and entry time. We will explain how fundamentals can lead your trades to more profit than any other tool in the FX market.
For more information about the schedule of the event please click here.
Private Meetings
One of the main goals of our visit to Jakarta is to answer all your questions and concerns with regards to Crown Forex SA and its unique services. A senior team will be present in order to give you a more comprehensive image of Crown Forex SA throughout the four days.
Make sure to book a private meeting directly with our team! A great opportunity to discuss Crown Forex SA offer and services with our senior specialists on a one-to-one talk.
Private meeting can be scheduled using the registration form at the link below. Meetings will take place from August 26th through August 29th. We are looking forward to seeing you there!
For more information send an email to marketing@crownforex.com or call +41 32 420 7070
U.S. Dollar Finishes the Week Higher Against Most Major Forex Markets
By James A. Hyerczyk
Commodity Trading Advisor registered with the National Futures Association
01 August 2008 @ 05:14 pm EST
In a sign of strength in the face of a global economic slowdown, the U.S. Dollar finished higher for the week against most major Forex markets. The only exception was the USD JPY which closed slightly lower mainly because of stock market uncertainty late in the week. The higher close is most likely a sign that the U.S. economic woes are about to recover while the global weakness may just be beginning to spread.
The EUR USD closed lower for the week as traders ignored the string of weak U.S. economic reports last week and instead chose to focus on the developing weakness in the Euro Zone. Despite a report of higher inflation, the Euro could not rally as many traders feel the ECB will leave rates unchanged because the economy is in the midst of a slowdown. Continue to press the downside in the Euro next week with 1.5302 the next possible downside target. Shorts really do not have to worry unless 1.5768 is taken out.
The USD JPY could not muster a gain last week after looking so promising early in the week. This pair made several attempts to breakout to the upside at 108.42 and 108.59 on its way to a major 50% price at 109.94 but failed to attract any buying interest at the high levels. The inability of the stock market to take out the previous week's high also weighed on this market. The Yen suffered from a lack of demand while the stock markets retraced inside of a tight range toward the end of the week. The daily chart indicates more downside pressure is likely as the trading action on Friday confirmed a closing price reversal top at 108.33. The next downside target is 106.07. Do not expect much on the upside unless this market can blast through 108.59. Without a strong rally in the stock market, this pair may trade sideways to lower until it reaches an area attractive to buyers.
The GBP USD finished lower for the week as traders are finally beginning to realize the U.K.'s economic problems are not going to go away. Pound traders are looking at high inflation, low consumer confidence and a tumbling housing market as the main reasons to continue to sell rallies against the trend. Based on the failure of the rallies last week, it looks as if shorts are entering on the rallies. Talk is still circulating that the U.K. economy is on the brink of recession.
The USD CHF closed higher for the week on expectations the stock market may stabilize and rally next week. With global weakness spreading the Swiss economy is looking weaker than usual. This is leading to talk that the Swiss central bank will leave rates unchanged. The key number to overcome is the main top at 1.0541. A rally through this area is likely to cause short-covering and a push to the major retracement area at 1.0625 to 1.0630.
The USD CAD traded higher for the week. With the global economies weakening, traders believe that demand for commodities may dry up, causing a substantial rally in the U.S. Dollar against the Canadian Dollar. The inability to break this market on the small rally in crude is a sign that traders are beginning to look at the long term picture and seeing lower oil prices. This week the USD CAD may continue to rally to the last major resistance on the weekly chart at 1.0321.
The AUD USD received bad news all week from poor retail sales to bearish home building approvals. Traders are starting to worry about the stability of the Australian economy. Financial market traders are increasing bets of a possible interest rate cut. The main trend turned down on the weekly chart, indicating further weakness to follow.
The New Zealand Dollar is feeling pressure from credit markets risks and the threat of another interest rate cut. In addition to the basic fundamentals, this market received a surprise later in the week that investments and withdrawals were suspended for the New Zealand Guardian Trust Co. Technically, the next downside target is .7241. Watch for a technical bounce at this level.
Please do not hesitate to contact us at 1-800-971-2440, with any questions.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
By James A. Hyerczyk
Commodity Trading Advisor registered with the National Futures Association
01 August 2008 @ 05:14 pm EST
In a sign of strength in the face of a global economic slowdown, the U.S. Dollar finished higher for the week against most major Forex markets. The only exception was the USD JPY which closed slightly lower mainly because of stock market uncertainty late in the week. The higher close is most likely a sign that the U.S. economic woes are about to recover while the global weakness may just be beginning to spread.
The EUR USD closed lower for the week as traders ignored the string of weak U.S. economic reports last week and instead chose to focus on the developing weakness in the Euro Zone. Despite a report of higher inflation, the Euro could not rally as many traders feel the ECB will leave rates unchanged because the economy is in the midst of a slowdown. Continue to press the downside in the Euro next week with 1.5302 the next possible downside target. Shorts really do not have to worry unless 1.5768 is taken out.
The USD JPY could not muster a gain last week after looking so promising early in the week. This pair made several attempts to breakout to the upside at 108.42 and 108.59 on its way to a major 50% price at 109.94 but failed to attract any buying interest at the high levels. The inability of the stock market to take out the previous week's high also weighed on this market. The Yen suffered from a lack of demand while the stock markets retraced inside of a tight range toward the end of the week. The daily chart indicates more downside pressure is likely as the trading action on Friday confirmed a closing price reversal top at 108.33. The next downside target is 106.07. Do not expect much on the upside unless this market can blast through 108.59. Without a strong rally in the stock market, this pair may trade sideways to lower until it reaches an area attractive to buyers.
The GBP USD finished lower for the week as traders are finally beginning to realize the U.K.'s economic problems are not going to go away. Pound traders are looking at high inflation, low consumer confidence and a tumbling housing market as the main reasons to continue to sell rallies against the trend. Based on the failure of the rallies last week, it looks as if shorts are entering on the rallies. Talk is still circulating that the U.K. economy is on the brink of recession.
The USD CHF closed higher for the week on expectations the stock market may stabilize and rally next week. With global weakness spreading the Swiss economy is looking weaker than usual. This is leading to talk that the Swiss central bank will leave rates unchanged. The key number to overcome is the main top at 1.0541. A rally through this area is likely to cause short-covering and a push to the major retracement area at 1.0625 to 1.0630.
The USD CAD traded higher for the week. With the global economies weakening, traders believe that demand for commodities may dry up, causing a substantial rally in the U.S. Dollar against the Canadian Dollar. The inability to break this market on the small rally in crude is a sign that traders are beginning to look at the long term picture and seeing lower oil prices. This week the USD CAD may continue to rally to the last major resistance on the weekly chart at 1.0321.
The AUD USD received bad news all week from poor retail sales to bearish home building approvals. Traders are starting to worry about the stability of the Australian economy. Financial market traders are increasing bets of a possible interest rate cut. The main trend turned down on the weekly chart, indicating further weakness to follow.
The New Zealand Dollar is feeling pressure from credit markets risks and the threat of another interest rate cut. In addition to the basic fundamentals, this market received a surprise later in the week that investments and withdrawals were suspended for the New Zealand Guardian Trust Co. Technically, the next downside target is .7241. Watch for a technical bounce at this level.
Please do not hesitate to contact us at 1-800-971-2440, with any questions.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
USD Technical Analysis for Forex Traders
Posted July 31st, 2008 by Jason Alan Jankovsky
uneventful day for the USD today despite the release of ADP private payroll data which came in higher-than-expected. Forecasting good news on the employment front traders took this morning’s data as a positive for the USD and lifted the Greenback to the best levels of the week so far extending gains seen yesterday.
The advance was short-lived as the majors reversed off the lows and returned to the upper end of their past 24 hour ranges; Cable holding firmly to gains over the 1.9800 handle after a low print at 1.9743. Traders report good buying from semi-official names helping to support into the end of New York.
EURO dipping down into new lows supported by Fib defense in the low 1.5500 handle; low prints at 1.5521 before bouncing into the 1.5580 area; traders suspect the worst may be over for the EURO after holding the 1.5500 handle but volumes were light on the bounce.
In my view the USD has simply extended the range near-term on late bids and will likely fall back to challenge the lows intraday again which I think will offer a buying opportunity. Technically the USD has not violated any significant S/R so far this week and more upside is possible after a corrective dip to wash out the late longs. USD/JPY and USD/CHF all traded into respective resistance making new monthly highs the past 24 hours.
USD/CHF tagged the 1.0500 handle and now looks set to drop off. Aggressive traders should be short from above the 1.0500 handle today. Yen has significant offers above the market at the 108.30/50 area and it will take a lot of effort to break the rate over the 108.50 zone. If that happens traders report a huge interest to buy the breakout and run with it as it appears that will be a significant psychological change for the rate. In my view, the USD will retreat from current pricing and sketch out a broader trading range. I don’t think the USD has the structural fundamentals for a sustained rally against the rest of the world’s currencies; although a wide trading range is likely. Look for a quiet overnight session ahead of tomorrow’s GDP data early.
Today’s US Dollar Trading
• USD extends range a bit• Two-way action portends more correction• Volumes moderate
Overnight Preview
• Look for a very quiet session overnight• Waiting on US GDP tomorrow
Looking AheadAll times EASTERN (-5 GMT)
• 8:30am USD Advance GDP q/q• 8:30am USD Advance GDP Price Index q/q• 8:30am USD Employment Cost Index q/q• 8:30am USD Unemployment Claims• 9:45am USD Chicago Business Barometer• 10:35am USD Natural Gas Storage• 1:00pm USD Treasury Sec Paulson Speaks
Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com
uneventful day for the USD today despite the release of ADP private payroll data which came in higher-than-expected. Forecasting good news on the employment front traders took this morning’s data as a positive for the USD and lifted the Greenback to the best levels of the week so far extending gains seen yesterday.
The advance was short-lived as the majors reversed off the lows and returned to the upper end of their past 24 hour ranges; Cable holding firmly to gains over the 1.9800 handle after a low print at 1.9743. Traders report good buying from semi-official names helping to support into the end of New York.
EURO dipping down into new lows supported by Fib defense in the low 1.5500 handle; low prints at 1.5521 before bouncing into the 1.5580 area; traders suspect the worst may be over for the EURO after holding the 1.5500 handle but volumes were light on the bounce.
In my view the USD has simply extended the range near-term on late bids and will likely fall back to challenge the lows intraday again which I think will offer a buying opportunity. Technically the USD has not violated any significant S/R so far this week and more upside is possible after a corrective dip to wash out the late longs. USD/JPY and USD/CHF all traded into respective resistance making new monthly highs the past 24 hours.
USD/CHF tagged the 1.0500 handle and now looks set to drop off. Aggressive traders should be short from above the 1.0500 handle today. Yen has significant offers above the market at the 108.30/50 area and it will take a lot of effort to break the rate over the 108.50 zone. If that happens traders report a huge interest to buy the breakout and run with it as it appears that will be a significant psychological change for the rate. In my view, the USD will retreat from current pricing and sketch out a broader trading range. I don’t think the USD has the structural fundamentals for a sustained rally against the rest of the world’s currencies; although a wide trading range is likely. Look for a quiet overnight session ahead of tomorrow’s GDP data early.
Today’s US Dollar Trading
• USD extends range a bit• Two-way action portends more correction• Volumes moderate
Overnight Preview
• Look for a very quiet session overnight• Waiting on US GDP tomorrow
Looking AheadAll times EASTERN (-5 GMT)
• 8:30am USD Advance GDP q/q• 8:30am USD Advance GDP Price Index q/q• 8:30am USD Employment Cost Index q/q• 8:30am USD Unemployment Claims• 9:45am USD Chicago Business Barometer• 10:35am USD Natural Gas Storage• 1:00pm USD Treasury Sec Paulson Speaks
Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com
Forex siesta part 2!
Forex siesta part 2!
Posted on July 29th, 2008 at 5:30 am by Dean Popplewell
Lack of optimism dominates all asset classes. Consumer confidence is dwindling and risk aversion strategies are starting to dominate as capital markets resume their bearish sentiment. Will US employment numbers this week provide further instability? Traders wish they could partake in the ‘ostrich syndrome escapades’, but, it’s very difficult to find isolated sanctuary at the moment.
The USD$ is little changed in the O/N trading session. Currently it is higher against 10 of the 16 most actively traded currencies in a ‘subdued’ trading range.
With most of the FX market participants twiddling their thumbs as forex-land enters the summer doldrums, both the FI and equity asset class got a good work out yesterday. With no economic releases of note, the IMF provided the spark that caused spiraling equity prices and government debt to remain better bid. They indicated that there is no end in sight to the housing slump. They expect worsening credit conditions to prolong the global economic slowdown, and remain concerned with financial capital issues. The financial stocks are the main global culprit. Consensus believes that when the do finally come to grips with their problems, their rebound is expected to be muted. Having enough capital remains their main priority, but, before the dust is settled, the market can expect some Tier 11 financials to collapse.
Thank you very much Mr. Bush! A historical two terms he has served, and his final legacy will be having the honor of passing on a record US budget deficit ($482b) to a yet unknown unlucky winner. This will leave a deep budget hole that will constrain the next president’s tax and spending plans for years. Analysts believe that the larger shortfall reflects dwindling tax receipts, due to the economic slowdown, the cost of an economic stimulus package and spending on the wars in Iraq and Afghanistan.
The US $ currently is higher against the EUR -0.05%, GBP -0.04%, JPY -0.20% and lower against CHF +0.03%. The commodity currencies are mixed this morning, CAD +0.06% and AUD +0.00%. Commodity prices are starting to turn the screws on the CAD$. The USD$, until yesterday, had been driven by bullish sentiment, the loonie has wilted due its strong correlation to oil, gold and grains. Commodities account for about 50% of Canada’s exports. Last weeks CPI report added little value to the currency. Despite the higher headline, the BOC has been very transparent in their elevated inflation predictions. The headline print pushed above +3% for the first time in 3-years, while core-CPI remained at +1.5% for the 3rd consecutive month (+0.1%, m/m). This provides us with stronger evidence that current inflation fears are ‘overblown’ and that there is room for the BOC to reduce rates (3.00%) if need be. The headline inflation will eventually lag into core-inflation, but, expect a weakening Canadian economy to continue to offset these pressures. Expect the CAD$ to remain under pressure, because of its ‘proximity and association’ with its southern neighbor. Traders continue to be better buyers of USD/CAD on pull backs. The medium term target still remains at 1.0250-1.03 level.
The AUD has printed a two week low (0.9565) after another Australia’s bank set aside more funds for US credit losses (ANZ-$1.2b). Investor fear that the subprime-mortgage crisis is adversely affecting their banking sector will temporarily put a lid on any AUD$ advances.
Crude is higher O/N ($125.66 up +93c). Nigeria has broken the monotony of continuous lower crude prices. Royal Dutch Shell has reduced its Nigerian production because of an attack on a pipeline by militants. This is not out of the ordinary, but, Nigerian crude is the highest grade, and any affect of production is a global concern. MEND has claimed responsibility for the attack. Don’t expect continued elevated pricing, as reduced global demand remains the biggest thorn for higher crude prices. Prices have dropped more than $22 from their record highs, which was reached in early July, on concern that record prices have cut demand for fuel in the US. The weaker USD$ has also temporarily contributed to supporting commodities. Last week, oil hit a 2-month low after a report indicated that OPEC had boosted output in July (+200k barrels a day) to cut prices as fuel consumption in the US and Asia drop. Similar situation with the Saudis, they can also produce more, but the demand will not be there to soak up this excess production, hence geo-political concerns may only be a temporary support. Technical analysts expect oil price to test the $120 level some time soon. The US consumers is quickly changing their consumption and spending habits as their total wealth has been eroded mainly due to leveraged house prices. Expect Iran to appear on the radar once again, as UN waits for their final response to suspending their nuclear enrichment program to not be a positive one. Last weeks EIA report showed that inventories of gas and distillate fuels (include heating oil and diesel) rose, further bearish evidence. Stocks increased +2.85m barrels to 217.1m (largest increase in 3-months). Distillate fuel stockpiles climbed +2.42m to 128.1m. Concluding that demand is been effected by the higher prices of late as consumers change spending habits. Gold rallied yesterday ($939) as higher energy costs and a weaker greenback have increased the appeal of the ‘yellow metal’ as an alternative hedge against inflation.
The Nikkei closed at 13,353 up +19. The DAX index in Europe was at 6,303 down -47; the FTSE (UK) currently is 5,307 down -6. The early call for the open of key US indices is mixed. Yields of the US 10-year bond eased 5bp yesterday (4.03%) and are little changed O/N. Treasuries remain better bid as global equities returned to their bearish ways coupled with an anticipated record US budget deficit signaling slower growth has fueled demand for the relative safety of the FI asset class.
Filed under: Dean's FX
Posted on July 29th, 2008 at 5:30 am by Dean Popplewell
Lack of optimism dominates all asset classes. Consumer confidence is dwindling and risk aversion strategies are starting to dominate as capital markets resume their bearish sentiment. Will US employment numbers this week provide further instability? Traders wish they could partake in the ‘ostrich syndrome escapades’, but, it’s very difficult to find isolated sanctuary at the moment.
The USD$ is little changed in the O/N trading session. Currently it is higher against 10 of the 16 most actively traded currencies in a ‘subdued’ trading range.
With most of the FX market participants twiddling their thumbs as forex-land enters the summer doldrums, both the FI and equity asset class got a good work out yesterday. With no economic releases of note, the IMF provided the spark that caused spiraling equity prices and government debt to remain better bid. They indicated that there is no end in sight to the housing slump. They expect worsening credit conditions to prolong the global economic slowdown, and remain concerned with financial capital issues. The financial stocks are the main global culprit. Consensus believes that when the do finally come to grips with their problems, their rebound is expected to be muted. Having enough capital remains their main priority, but, before the dust is settled, the market can expect some Tier 11 financials to collapse.
Thank you very much Mr. Bush! A historical two terms he has served, and his final legacy will be having the honor of passing on a record US budget deficit ($482b) to a yet unknown unlucky winner. This will leave a deep budget hole that will constrain the next president’s tax and spending plans for years. Analysts believe that the larger shortfall reflects dwindling tax receipts, due to the economic slowdown, the cost of an economic stimulus package and spending on the wars in Iraq and Afghanistan.
The US $ currently is higher against the EUR -0.05%, GBP -0.04%, JPY -0.20% and lower against CHF +0.03%. The commodity currencies are mixed this morning, CAD +0.06% and AUD +0.00%. Commodity prices are starting to turn the screws on the CAD$. The USD$, until yesterday, had been driven by bullish sentiment, the loonie has wilted due its strong correlation to oil, gold and grains. Commodities account for about 50% of Canada’s exports. Last weeks CPI report added little value to the currency. Despite the higher headline, the BOC has been very transparent in their elevated inflation predictions. The headline print pushed above +3% for the first time in 3-years, while core-CPI remained at +1.5% for the 3rd consecutive month (+0.1%, m/m). This provides us with stronger evidence that current inflation fears are ‘overblown’ and that there is room for the BOC to reduce rates (3.00%) if need be. The headline inflation will eventually lag into core-inflation, but, expect a weakening Canadian economy to continue to offset these pressures. Expect the CAD$ to remain under pressure, because of its ‘proximity and association’ with its southern neighbor. Traders continue to be better buyers of USD/CAD on pull backs. The medium term target still remains at 1.0250-1.03 level.
The AUD has printed a two week low (0.9565) after another Australia’s bank set aside more funds for US credit losses (ANZ-$1.2b). Investor fear that the subprime-mortgage crisis is adversely affecting their banking sector will temporarily put a lid on any AUD$ advances.
Crude is higher O/N ($125.66 up +93c). Nigeria has broken the monotony of continuous lower crude prices. Royal Dutch Shell has reduced its Nigerian production because of an attack on a pipeline by militants. This is not out of the ordinary, but, Nigerian crude is the highest grade, and any affect of production is a global concern. MEND has claimed responsibility for the attack. Don’t expect continued elevated pricing, as reduced global demand remains the biggest thorn for higher crude prices. Prices have dropped more than $22 from their record highs, which was reached in early July, on concern that record prices have cut demand for fuel in the US. The weaker USD$ has also temporarily contributed to supporting commodities. Last week, oil hit a 2-month low after a report indicated that OPEC had boosted output in July (+200k barrels a day) to cut prices as fuel consumption in the US and Asia drop. Similar situation with the Saudis, they can also produce more, but the demand will not be there to soak up this excess production, hence geo-political concerns may only be a temporary support. Technical analysts expect oil price to test the $120 level some time soon. The US consumers is quickly changing their consumption and spending habits as their total wealth has been eroded mainly due to leveraged house prices. Expect Iran to appear on the radar once again, as UN waits for their final response to suspending their nuclear enrichment program to not be a positive one. Last weeks EIA report showed that inventories of gas and distillate fuels (include heating oil and diesel) rose, further bearish evidence. Stocks increased +2.85m barrels to 217.1m (largest increase in 3-months). Distillate fuel stockpiles climbed +2.42m to 128.1m. Concluding that demand is been effected by the higher prices of late as consumers change spending habits. Gold rallied yesterday ($939) as higher energy costs and a weaker greenback have increased the appeal of the ‘yellow metal’ as an alternative hedge against inflation.
The Nikkei closed at 13,353 up +19. The DAX index in Europe was at 6,303 down -47; the FTSE (UK) currently is 5,307 down -6. The early call for the open of key US indices is mixed. Yields of the US 10-year bond eased 5bp yesterday (4.03%) and are little changed O/N. Treasuries remain better bid as global equities returned to their bearish ways coupled with an anticipated record US budget deficit signaling slower growth has fueled demand for the relative safety of the FI asset class.
Filed under: Dean's FX
Forex - Dollar jumps on surprise rise in U.S. ADP payrolls data
30.08, 9:49 AM ET
LONDON (Thomson Financial) - The dollar jumped higher against all major currencies after a surprise rise in ADP's U.S. private payrolls data.
The ADP National Employment Report showed a gain of 9,000 jobs in the private sector in July, confounding expectations of a loss of 50,000 to 60,000 jobs
Adding in the roughly 20,000 government jobs created monthly over the past year, the data suggests the closely watched non-farm payrolls data due to be released Friday will show a gain of 29,000 for July.
At 1.30 p.m., the dollar had strengthened to $1.5552 per euro from $1.5586 prior to the data. The pound fell to $1.9781 from 1.9814, while the yen weakened to 108.17 per dollar from 107.87.
chinny.li@thomsonreuters.com
cml/rw
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Neither the Subscriber nor Thomson Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.
LONDON (Thomson Financial) - The dollar jumped higher against all major currencies after a surprise rise in ADP's U.S. private payrolls data.
The ADP National Employment Report showed a gain of 9,000 jobs in the private sector in July, confounding expectations of a loss of 50,000 to 60,000 jobs
Adding in the roughly 20,000 government jobs created monthly over the past year, the data suggests the closely watched non-farm payrolls data due to be released Friday will show a gain of 29,000 for July.
At 1.30 p.m., the dollar had strengthened to $1.5552 per euro from $1.5586 prior to the data. The pound fell to $1.9781 from 1.9814, while the yen weakened to 108.17 per dollar from 107.87.
chinny.li@thomsonreuters.com
cml/rw
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Neither the Subscriber nor Thomson Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.
Forex On Margin
In the foreign exchange markets, it is common to find leverage of 100:1 or even more. However, just because the market maker or broker may offer you leverage as high as 100:1 doesn't mean you have to use all the leverage available. In fact, if you are a savvy trader, you will only use high leverage when you can calculate and manage the risks associated with the high leverage to your advantage.
Using money borrowed from a broker/dealer to purchase securities or foreign exchange is known as "buying on margin." A trader will usually place a certain amount of money in his or her brokerage account, and the broker will use that money as a deposit to allow the trader to buy securities or foreign exchange contracts valued at a multiple compared to the deposited amount. Leverage is the use of other people's money to buy or sell contracts or securities. If a broker offers a 20:1 leverage, it means he is willing to allow the trader to borrow 20 times the amount of money in the account to make a trade. So, if a contract is worth $10,000 and the broker is offering 20:1 leverage, a trader will only need to have $500 in his or her account to purchase the contract worth $10,000.
If the value of the contract goes to $11,000, the trader will make a profit of $1,000. This would represent a return of 10% on the contract purchase price, but a return of 200% on equity. (For background reading, see "Forex Leverage: A Double-Edged Sword" and "Leverage's 'Double-Edged Sword' Need Not Cut Deep.") The extreme amounts of leverage that are common in the forex markets occur because the forex is the largest and most liquid market in the world, making it very easy to get into and out of a position. This allows a trader to control, with a certain certainty, how much he or she is willing to lose on a trade. Because it is possible to exit a position quickly and efficiently, forex brokers allow their clients to benefit from high leverage.
Click here for a free special report, "Three Best ETFs for the Current Market," from fund expert Jim Lowell.
Leverage in the forex markets is much higher than in most other markets. For example, if you trade equities, you will be able to borrow twice the amount of money you have in your account. In the case of futures, you may be able to borrow 20 times the amount of funds you have in your account.
In the forex markets, because the leverage is so high, the broker or market maker will require you to sign an agreement specifying how a losing position will be dealt with. Because a highly leveraged account poses a greater risk for both the market maker and the trader, there is usually a mechanism in the agreement that will allow the market maker to automatically liquidate a trader's position if it loses 75% of the margin or deposit.
To safeguard the broker/market maker and to ensure that the trader does not have to add extra funds to the account, the losing position will be automatically closed at a certain point in time if the losses on that position threaten to be more than the amount of money available in the trading account. Traders should read the agreements they have with their market makers very carefully to understand how a losing leveraged position will be addressed. Generally, a trader should not use all of his or her available margin. A trader should only use leverage when the advantage is clearly on his or her side. For, example, a trader should plan a trade and know exactly where to exit the trade if the market moves in the desired direction. Once the amount of risk in terms of the number of pips is known, it is possible to determine how much money will be lost if the trader's stop-loss is hit.
Which energy stocks are the best investments now? Stay informed with a free trial subscription to Block Traders' Oil and Gold Monitor.
As a general rule, this loss should never be more than 3% of trading capital. If a position is leveraged too much so that the potential loss could be, say, 30% of trading capital, then the leverage should be reduced until the potential loss is no greater than 3%. Each trader will have his or her own risk parameters and may want to deviate either more or less than the general guideline of 3%. (For more insight, read "Limiting Losses.")
Another thing for the trader to note is that the larger the amount of money one has for trading, the easier it is to use leverage safely. Because a leveraged position can lose money just as quickly as it can make money, a trader should have enough funds to act as a cushion against any drawdown or adverse moves without the risk of being automatically liquidated and losing the bulk of his or her trading capital. The specific risk of leverage is the fact that traders use borrowed money to buy or sell a contract. Unless the market is making a favorable move, losses will be magnified by the amount of leverage employed. Suppose you have $10,000 in your trading account, and you decide to trade 10 mini USD/JPY lots. Each move of one pip in a mini account is worth approximately $1, but when trading 10 minis, each pip move is worth approximately $10.
If you are trading 100 minis, then each pip move is worth about $100. Thus, a stop-loss of 30 pips could represent a potential loss of $30 for a single mini lot, $300 for 10 mini lots and $3,000 for 100 mini lots. Therefore, with a $10,000 account and a 3% maximum risk per trade, you should leverage only up to 30 mini lots, even though you may have the ability to buy or sell more than that. (For more, see "Forex Minis Shrink Risk Exposure" and "Finding Your Margin Investment Sweet Spot.") Trading in the forex markets offers many potentially profitable opportunities. Using leverage can magnify these opportunities to a very large degree. Using leverage requires a complete understanding of risk management and the use of properly defined stop-loss orders in the market. It also requires that traders be disciplined enough to follow the rules necessary for taking advantage of leveraged markets.
Leveraged positions can be a trader's best friend or his or her worst enemy--it all depends on mind-set and trading habits. Good traders are disciplined and adhere to their risk management rules. This article is from Investopedia.com, the Web's largest site dedicated to financial education. Click here for more educational articles from Investopedia.
Using money borrowed from a broker/dealer to purchase securities or foreign exchange is known as "buying on margin." A trader will usually place a certain amount of money in his or her brokerage account, and the broker will use that money as a deposit to allow the trader to buy securities or foreign exchange contracts valued at a multiple compared to the deposited amount. Leverage is the use of other people's money to buy or sell contracts or securities. If a broker offers a 20:1 leverage, it means he is willing to allow the trader to borrow 20 times the amount of money in the account to make a trade. So, if a contract is worth $10,000 and the broker is offering 20:1 leverage, a trader will only need to have $500 in his or her account to purchase the contract worth $10,000.
If the value of the contract goes to $11,000, the trader will make a profit of $1,000. This would represent a return of 10% on the contract purchase price, but a return of 200% on equity. (For background reading, see "Forex Leverage: A Double-Edged Sword" and "Leverage's 'Double-Edged Sword' Need Not Cut Deep.") The extreme amounts of leverage that are common in the forex markets occur because the forex is the largest and most liquid market in the world, making it very easy to get into and out of a position. This allows a trader to control, with a certain certainty, how much he or she is willing to lose on a trade. Because it is possible to exit a position quickly and efficiently, forex brokers allow their clients to benefit from high leverage.
Click here for a free special report, "Three Best ETFs for the Current Market," from fund expert Jim Lowell.
Leverage in the forex markets is much higher than in most other markets. For example, if you trade equities, you will be able to borrow twice the amount of money you have in your account. In the case of futures, you may be able to borrow 20 times the amount of funds you have in your account.
In the forex markets, because the leverage is so high, the broker or market maker will require you to sign an agreement specifying how a losing position will be dealt with. Because a highly leveraged account poses a greater risk for both the market maker and the trader, there is usually a mechanism in the agreement that will allow the market maker to automatically liquidate a trader's position if it loses 75% of the margin or deposit.
To safeguard the broker/market maker and to ensure that the trader does not have to add extra funds to the account, the losing position will be automatically closed at a certain point in time if the losses on that position threaten to be more than the amount of money available in the trading account. Traders should read the agreements they have with their market makers very carefully to understand how a losing leveraged position will be addressed. Generally, a trader should not use all of his or her available margin. A trader should only use leverage when the advantage is clearly on his or her side. For, example, a trader should plan a trade and know exactly where to exit the trade if the market moves in the desired direction. Once the amount of risk in terms of the number of pips is known, it is possible to determine how much money will be lost if the trader's stop-loss is hit.
Which energy stocks are the best investments now? Stay informed with a free trial subscription to Block Traders' Oil and Gold Monitor.
As a general rule, this loss should never be more than 3% of trading capital. If a position is leveraged too much so that the potential loss could be, say, 30% of trading capital, then the leverage should be reduced until the potential loss is no greater than 3%. Each trader will have his or her own risk parameters and may want to deviate either more or less than the general guideline of 3%. (For more insight, read "Limiting Losses.")
Another thing for the trader to note is that the larger the amount of money one has for trading, the easier it is to use leverage safely. Because a leveraged position can lose money just as quickly as it can make money, a trader should have enough funds to act as a cushion against any drawdown or adverse moves without the risk of being automatically liquidated and losing the bulk of his or her trading capital. The specific risk of leverage is the fact that traders use borrowed money to buy or sell a contract. Unless the market is making a favorable move, losses will be magnified by the amount of leverage employed. Suppose you have $10,000 in your trading account, and you decide to trade 10 mini USD/JPY lots. Each move of one pip in a mini account is worth approximately $1, but when trading 10 minis, each pip move is worth approximately $10.
If you are trading 100 minis, then each pip move is worth about $100. Thus, a stop-loss of 30 pips could represent a potential loss of $30 for a single mini lot, $300 for 10 mini lots and $3,000 for 100 mini lots. Therefore, with a $10,000 account and a 3% maximum risk per trade, you should leverage only up to 30 mini lots, even though you may have the ability to buy or sell more than that. (For more, see "Forex Minis Shrink Risk Exposure" and "Finding Your Margin Investment Sweet Spot.") Trading in the forex markets offers many potentially profitable opportunities. Using leverage can magnify these opportunities to a very large degree. Using leverage requires a complete understanding of risk management and the use of properly defined stop-loss orders in the market. It also requires that traders be disciplined enough to follow the rules necessary for taking advantage of leveraged markets.
Leveraged positions can be a trader's best friend or his or her worst enemy--it all depends on mind-set and trading habits. Good traders are disciplined and adhere to their risk management rules. This article is from Investopedia.com, the Web's largest site dedicated to financial education. Click here for more educational articles from Investopedia.
CORRECTED-(OFFICIAL)-Indesit H1 net flat, forex hits sales
(Corrects EBIT forecast range in paragraph 6 following corrected statement by company)
MILAN, July 30 (Reuters) - Italian white goods maker Indesit (IND.MI: Quote, Profile, Research) said on Wednesday first-half net profit was flat with sales hit by a strong euro, adding 2008 results could fall if markets remained weak.
Indesit, which makes appliances from refigerators to washing machines under various brands, said in a statement net profit was 34 million euros ($52.99 million).
Consolidated sales, which benefited from rising volumes, fell 1.4 percent to 1.525 billion euros, hit by an unfavourable currency rate. At constant exchange rates, they rose 2.8 percent.
"If Western markets continue to be negative in the second half, if exchange rates stay unfavourable and if certain contracts have to be revised, it is probable the Group's results will be slightly down in the second half and over the whole year," Indesit said.
For the full year, it forecasts a decrease in sales of around 3 percent while EBIT -- earnings before interest and tax -- would be down between 10 and 20 percent on last year.
At constant exchange rates, revenues are expected to grow 1 percent with "record growth" in EBIT between 20 and 30 percent.
Shares were up 1.96 percent at 6.76 euros at 1329 GMT.
(Editing by Elaine Hardcastle)
MILAN, July 30 (Reuters) - Italian white goods maker Indesit (IND.MI: Quote, Profile, Research) said on Wednesday first-half net profit was flat with sales hit by a strong euro, adding 2008 results could fall if markets remained weak.
Indesit, which makes appliances from refigerators to washing machines under various brands, said in a statement net profit was 34 million euros ($52.99 million).
Consolidated sales, which benefited from rising volumes, fell 1.4 percent to 1.525 billion euros, hit by an unfavourable currency rate. At constant exchange rates, they rose 2.8 percent.
"If Western markets continue to be negative in the second half, if exchange rates stay unfavourable and if certain contracts have to be revised, it is probable the Group's results will be slightly down in the second half and over the whole year," Indesit said.
For the full year, it forecasts a decrease in sales of around 3 percent while EBIT -- earnings before interest and tax -- would be down between 10 and 20 percent on last year.
At constant exchange rates, revenues are expected to grow 1 percent with "record growth" in EBIT between 20 and 30 percent.
Shares were up 1.96 percent at 6.76 euros at 1329 GMT.
(Editing by Elaine Hardcastle)
Forex Signal Trading System a part of trading Platform.
by Joel Gardner
The forex Signal Trading System also sometimes known as FXOS is a tool used by forex traders. It comprises of a system of signals used in forex to alert a person when to buy or sell. SMS and email are used to send these signals to a subscriber alerting them of “Buy action”, “Sell Action” and “Standby Action”.
Being kept informed constantly is important when one is dealing in a market with fast changing circumstances. The Forex Signal trading Systems provides critical decision making information about market situation in real time. Information about your buy point, sell point, currency pair and as well as a profit and stop loss situations are crucial when deciding to take a certain position in the market.
These Forex signal trading systems also are included in any type of platform that is used for this purpose. They usually are a part of any package that is purchased from a reliable broker. Usually these packages are either manual or automatic. An automatic system is the best one to use and is the best for signal usage as well.
Automatic forex signal trading systems have a huge advantage over manual input as the signals updates are generated automatically with the current market changes keeping you updated in real time. Thus your response time will be cut down significantly. This is critical in a market which can be extremely volatile.
The successful planning and execution of your investment strategies will depend very much on feedback from actual market condition. So without the Forex Signal trading systems, you will be actually trading half blind. Now we can see why the signal systems is such a crucial part of the Forex is trading platform.
With up to date information provided by the forex signal trading systems about the current market situations, you can be more confident in your decision making when doing a trade. Because it is linked directly to the forex market, the information provided is reliable.
By getting a Forex signal trading system, you have given yourself the ability to utilize the market changes for your benefit. These alerts give you the chance to make the most of your money in your account. This gives you a leg up on profit potential.
These signal systems are a godsend in the area that you will know when is the proper time to buy or sell your foreign currency to be of benefit to you.
The forex Signal Trading System also sometimes known as FXOS is a tool used by forex traders. It comprises of a system of signals used in forex to alert a person when to buy or sell. SMS and email are used to send these signals to a subscriber alerting them of “Buy action”, “Sell Action” and “Standby Action”.
Being kept informed constantly is important when one is dealing in a market with fast changing circumstances. The Forex Signal trading Systems provides critical decision making information about market situation in real time. Information about your buy point, sell point, currency pair and as well as a profit and stop loss situations are crucial when deciding to take a certain position in the market.
These Forex signal trading systems also are included in any type of platform that is used for this purpose. They usually are a part of any package that is purchased from a reliable broker. Usually these packages are either manual or automatic. An automatic system is the best one to use and is the best for signal usage as well.
Automatic forex signal trading systems have a huge advantage over manual input as the signals updates are generated automatically with the current market changes keeping you updated in real time. Thus your response time will be cut down significantly. This is critical in a market which can be extremely volatile.
The successful planning and execution of your investment strategies will depend very much on feedback from actual market condition. So without the Forex Signal trading systems, you will be actually trading half blind. Now we can see why the signal systems is such a crucial part of the Forex is trading platform.
With up to date information provided by the forex signal trading systems about the current market situations, you can be more confident in your decision making when doing a trade. Because it is linked directly to the forex market, the information provided is reliable.
By getting a Forex signal trading system, you have given yourself the ability to utilize the market changes for your benefit. These alerts give you the chance to make the most of your money in your account. This gives you a leg up on profit potential.
These signal systems are a godsend in the area that you will know when is the proper time to buy or sell your foreign currency to be of benefit to you.
FOREX-Dollar eases on US jobless claims, oil curbs losses
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[-] Text [+] * Dollar falls broadly on disappointing U.S. data * Weekly jobless claims surge, reviving recession debate * Crude oil price drop limits dollar losses
(Recasts, updates prices) By Lucia Mutikani NEW YORK, July 31 (Reuters) - The dollar fell on Thursday
as news of a surprise jump in U.S. weekly jobless claims and
below-forecast economic growth in the second quarter reduced
prospects for Federal Reserve interest rate hikes this year. A decline in U.S. crude oil futures and a report showing
manufacturing activity in the country's Midwest region rose in
July, snapping a five-month run of contraction, saw the dollar
recouping the bulk of its losses, however. Analysts said a downward revision to fourth-quarter gross
domestic product growth to show a contraction had caught the
market by surprise, reviving the debate on whether the world's
largest economy was in, or close to, a recession. "Weekly claims are probably the most important number when
it comes to a forward-looking assessment of the U.S. economic
prospects and what we are going to see the Fed do," said
Stephen Malyon, senior currency strategist at Scotia Capital in
Toronto. "Certainly the GDP numbers were disappointing. The big
question is how strong is the U.S. economy? Our view is that
significant headwinds still face the economy and that's going
to keep the Fed on the sideline. That holds negative
implications for the currency." The euro surged to a session high of $1.5700, building on
an overnight rally sparked by a jump in euro zone inflation to
a record high in July. But an drop of more than $2 a barrel in
U.S. crude oil futures halted the currency's advance. The euro last traded at $1.5595, up 0.1 percent on
the day. The dollar cut losses against the yen to trade at
108.10 yen after falling as low as 107.58 yen. RATE HIKE PROSPECTS DIMINISH Implied prospects for the Fed to increase benchmark lending
rates by a quarter percentage point at its next monetary policy
meeting in September dropped as low as 30 percent from 40
percent on Wednesday, while perceived prospects for an October
hike fell to 60 percent from 76 percent. "We continue to have a see-saw session. The GDP numbers
took people by surprise, but the fact that Chicago PMI was
above 50 turned around sentiment which was very
dollar-negative," said Boris Schlossberg, director of currency
research at GFT Forex in New York. "Oil came down again, which is helping the dollar as
well." Data earlier showed the number of U.S. workers seeking
jobless benefits rose to 448,000 in the week to July 26 from a
revised 404,000 the prior week. It was the highest reading
since April 2003 and above forecasts for a 395,000 rise. Separately, the government said the U.S. economy expanded
at a 1.9 percent annual rate in the second quarter, up from a
revised 0.9 percent in the first quarter and below market
expectations for 2.0 percent growth. That followed a 0.2
percent contraction in GDP in the final quarter of 2007, first
reported as 0.6 percent growth. For more see [ID:nN31399964]. "These reports are a reminder that the dollar's fundamental
woes are not limited to banking writedowns and high oil prices,
but also a manifestation of weak macroeconomic data, at the top
of which is continued deterioration in the job market," said
Ashraf Laidi, chief strategist at CMC Markets in New York. Comments by euro zone central bank officials to Reuters
that the European Central Bank would raise rates again despite
faltering economic growth if inflation continued to climb or
expectations pick up did not help the euro, analysts said. "That could have something to do with the euro coming back
as well. We have seen material deterioration in euro zone
growth numbers," said Scotia Capital's Malyon. "The ECB targets inflation and if inflation does continue
to rise, then I think they would be prompted to raise rates
again, but I don't expect they will. The sharp rise in rhetoric
is the reflection of this game that the ECB is playing with
euro zone labor unions." Elsewhere, data showing British houses prices crumbled at
record rates and consumer confidence hit historic lows in July
weighed on sterling, pushing it down 0.1 percent to $1.9795
. The euro rose 0.2 percent to 0.7876 .
(Editing by James Dalgleish)
[-] Text [+] * Dollar falls broadly on disappointing U.S. data * Weekly jobless claims surge, reviving recession debate * Crude oil price drop limits dollar losses
(Recasts, updates prices) By Lucia Mutikani NEW YORK, July 31 (Reuters) - The dollar fell on Thursday
as news of a surprise jump in U.S. weekly jobless claims and
below-forecast economic growth in the second quarter reduced
prospects for Federal Reserve interest rate hikes this year. A decline in U.S. crude oil futures and a report showing
manufacturing activity in the country's Midwest region rose in
July, snapping a five-month run of contraction, saw the dollar
recouping the bulk of its losses, however. Analysts said a downward revision to fourth-quarter gross
domestic product growth to show a contraction had caught the
market by surprise, reviving the debate on whether the world's
largest economy was in, or close to, a recession. "Weekly claims are probably the most important number when
it comes to a forward-looking assessment of the U.S. economic
prospects and what we are going to see the Fed do," said
Stephen Malyon, senior currency strategist at Scotia Capital in
Toronto. "Certainly the GDP numbers were disappointing. The big
question is how strong is the U.S. economy? Our view is that
significant headwinds still face the economy and that's going
to keep the Fed on the sideline. That holds negative
implications for the currency." The euro surged to a session high of $1.5700, building on
an overnight rally sparked by a jump in euro zone inflation to
a record high in July. But an drop of more than $2 a barrel in
U.S. crude oil futures halted the currency's advance. The euro
the day. The dollar cut losses against the yen to trade at
108.10 yen
rates by a quarter percentage point at its next monetary policy
meeting in September dropped as low as 30 percent from 40
percent on Wednesday, while perceived prospects for an October
hike fell to 60 percent from 76 percent. "We continue to have a see-saw session. The GDP numbers
took people by surprise, but the fact that Chicago PMI was
above 50 turned around sentiment which was very
dollar-negative," said Boris Schlossberg, director of currency
research at GFT Forex in New York. "Oil came down again, which is helping the dollar as
well." Data earlier showed the number of U.S. workers seeking
jobless benefits rose to 448,000 in the week to July 26 from a
revised 404,000 the prior week. It was the highest reading
since April 2003 and above forecasts for a 395,000 rise. Separately, the government said the U.S. economy expanded
at a 1.9 percent annual rate in the second quarter, up from a
revised 0.9 percent in the first quarter and below market
expectations for 2.0 percent growth. That followed a 0.2
percent contraction in GDP in the final quarter of 2007, first
reported as 0.6 percent growth. For more see [ID:nN31399964]. "These reports are a reminder that the dollar's fundamental
woes are not limited to banking writedowns and high oil prices,
but also a manifestation of weak macroeconomic data, at the top
of which is continued deterioration in the job market," said
Ashraf Laidi, chief strategist at CMC Markets in New York. Comments by euro zone central bank officials to Reuters
that the European Central Bank would raise rates again despite
faltering economic growth if inflation continued to climb or
expectations pick up did not help the euro, analysts said. "That could have something to do with the euro coming back
as well. We have seen material deterioration in euro zone
growth numbers," said Scotia Capital's Malyon. "The ECB targets inflation and if inflation does continue
to rise, then I think they would be prompted to raise rates
again, but I don't expect they will. The sharp rise in rhetoric
is the reflection of this game that the ECB is playing with
euro zone labor unions." Elsewhere, data showing British houses prices crumbled at
record rates and consumer confidence hit historic lows in July
weighed on sterling, pushing it down 0.1 percent to $1.9795
(Editing by James Dalgleish)
Forex - Dollar enjoys shortlived gains after U.S. payrolls data
LONDON(Thomson Financial) - The dollar enjoyed shortlived gains after U.S. non-farm payrolls data revealed smaller losses than the market had expected.
The Labor Department said the economy lost 51,000 jobs in July, far fewer than the 72,000 jobs that economists had expected, although this has pushed the unemployment rate to its highest level in more than four years.
'A better-than-expected return for the July payroll report and also an upward revision to both June and May,' said Peter Stoneham, an analyst at Thomson Reuters IFR Markets.
The data sent the euro down to its weakest level against the dollar since June 24, before recovering again.
News that a survey has shown that U.S. manufacturing activity did not contract in July also helped briefly to support the dollar.
The ISM Manufacturing Index fell slightly to 50.0 in July from 50.2, beating expectations for a bigger decline to 49.2 and putting it at the level marking breakeven between expansion and contraction in the sector.
The euro had remained firmly on the back foot against the dollar earlier following a weak survey on euro zone manufacturing activity.
The purchasing managers' index for the euro zone manufacturing sector fell to its worst level in more than five years in July, even as raw material costs continued to soar, pressuring manufacturers into raising prices at the fastest rate in 18 months.
At 4.13 p.m., the euro was trading at $1.5582, up from $1.5560 at 10.43 a.m. Against the yen, the euro edged down to 167.42 from 167.50.
Elsewhere, the pound remained under pressure against the dollar and the euro following Friday's weak release of a key survey on UK manufacturing activity.
The purchasing managers' index on the manufacturing sector showed a worse-than-expected fall to 44.3 in July from June's 45.9, with the reading at its weakest since December 1998.
At 4.15 p.m., the pound had fallen to $1.9745 from $1.9779 at 10.43 a.m., and weakened to 0.7888 pounds per euro from 0.7866 earlier.
The Labor Department said the economy lost 51,000 jobs in July, far fewer than the 72,000 jobs that economists had expected, although this has pushed the unemployment rate to its highest level in more than four years.
'A better-than-expected return for the July payroll report and also an upward revision to both June and May,' said Peter Stoneham, an analyst at Thomson Reuters IFR Markets.
The data sent the euro down to its weakest level against the dollar since June 24, before recovering again.
News that a survey has shown that U.S. manufacturing activity did not contract in July also helped briefly to support the dollar.
The ISM Manufacturing Index fell slightly to 50.0 in July from 50.2, beating expectations for a bigger decline to 49.2 and putting it at the level marking breakeven between expansion and contraction in the sector.
The euro had remained firmly on the back foot against the dollar earlier following a weak survey on euro zone manufacturing activity.
The purchasing managers' index for the euro zone manufacturing sector fell to its worst level in more than five years in July, even as raw material costs continued to soar, pressuring manufacturers into raising prices at the fastest rate in 18 months.
At 4.13 p.m., the euro was trading at $1.5582, up from $1.5560 at 10.43 a.m. Against the yen, the euro edged down to 167.42 from 167.50.
Elsewhere, the pound remained under pressure against the dollar and the euro following Friday's weak release of a key survey on UK manufacturing activity.
The purchasing managers' index on the manufacturing sector showed a worse-than-expected fall to 44.3 in July from June's 45.9, with the reading at its weakest since December 1998.
At 4.15 p.m., the pound had fallen to $1.9745 from $1.9779 at 10.43 a.m., and weakened to 0.7888 pounds per euro from 0.7866 earlier.
FOREX-Dollar rises to 5-wk high vs euro, buoyed by US data
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 1 (Reuters) - The U.S. dollar climbed to five-week peaks against the euro and three-week highs against the British pound on Friday as better-than-expected economic data allayed worries about a much sharper slowdown.
The yen, on the other hand, gained broadly, benefiting from heightened stress in financial markets on news that General Motors (GM.N: Quote, Profile, Research) had hefty losses in the second quarter. That dragged U.S. stocks lower and triggered safe-haven bids for Treasuries.
"U.S. dollar sentiment has certainly changed for the better over the last couple of weeks," said Mark Frey, head foreign exchange trader at Custom House, a global payments dealer in Victoria, British Columbia.
"The U.S. economy has gone through some tough phases, but the jobs number was negative, but still better than expected. I think, more importantly, recent consumer confidence numbers and leading indicators, which are more forward-looking, have been more positive," he added.
Friday's data showed that U.S. employers eliminated 51,000 jobs in July, lower than market expectations for a payrolls decline of 75,000. A separate report said U.S. factory activity was unchanged in July, compared with the previous month, but above market forecasts. For details, see [ID:nN01429062]. Continued...
NEW YORK, Aug 1 (Reuters) - The U.S. dollar climbed to five-week peaks against the euro and three-week highs against the British pound on Friday as better-than-expected economic data allayed worries about a much sharper slowdown.
The yen, on the other hand, gained broadly, benefiting from heightened stress in financial markets on news that General Motors (GM.N: Quote, Profile, Research) had hefty losses in the second quarter. That dragged U.S. stocks lower and triggered safe-haven bids for Treasuries.
"U.S. dollar sentiment has certainly changed for the better over the last couple of weeks," said Mark Frey, head foreign exchange trader at Custom House, a global payments dealer in Victoria, British Columbia.
"The U.S. economy has gone through some tough phases, but the jobs number was negative, but still better than expected. I think, more importantly, recent consumer confidence numbers and leading indicators, which are more forward-looking, have been more positive," he added.
Friday's data showed that U.S. employers eliminated 51,000 jobs in July, lower than market expectations for a payrolls decline of 75,000. A separate report said U.S. factory activity was unchanged in July, compared with the previous month, but above market forecasts. For details, see [ID:nN01429062]. Continued...
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