ForexBoost Profitable Forex Trading Strategies

Tomorrow is NFP Friday

Tomorrow the US releases it's biggest report of the month called the Non-Farm Payroll report. Every currency trader who plays this market comes out for this one because it can be a huge market mover. This month should be no exception. As the US appears to be on the brink (if not already in) a recession, the NFP gives more insight into US employment. Yesterday we had the ADP Nonfarm Employment Change report that came in 70K higher than expected. This was huge and if this is any indication of the NFP numbers to come out tomorrow, this could be very good for the US dollar. The USD has been gaining strength for a while now so we'll see if this trend continues. Get ready because tomorrow at 8:30am EST, the ride begins!

Forex Day Trading Uniqueness

Most investors take a long-term perspective. They have the bigger picture of the market in mind. Forex day trading systems & strategies are more concerned with minute by minute fluctuations. Successful Forex day trading systems seek out a clear short-term currency move and try capitalize on that momentum before it changes direction. Although there are many trading opportunities that present themselves throughout the trading day, this type of Forex trading can be somewhat risky. It can produce substantial losses in a very short period of time if you don't know what you're doing. You should always be well prepared with your Forex day trading strategies so as to maximize your profits and minimize any losses. You can read more about Forex Day Trading on our ForexBoost parent site.

Learn, Don't Burn

Whether you're considering forex trading as a business or simply to diversif your financial portfolio, getting a solid forex trading education will be in your best
interest.

Just think about it. You know everyone is trying to trade forex these days, but don’t
you think you’d make more money at it if you did it better and smarter? Forex trading
is a rapidly growing online business and a lot of people are making money. So all you
need to do is spend a little time getting some quality training and education in forex
trading, and you too can sit back and watch the green backs roll in. Just remember to
learn all you can before jumping in and play it smart. Visit our ForexBoost site for
some quality forex trading education and forex trading strategies to help you get the
edge you need to succeed in this great business.

The seven major currencies of the Forex currency market

The currency trading system allows any currency that is backed by an existing nation to be traded. Of all of the currencies used in Forex trading systems, seven of those currencies are considered to be major Forex currencies. Major currencies are the currencies with the largest trading volume. Other currencies are considered to be minor currencies. Currencies are represented by a three-letter acronym. With most currencies, the first two letters represent the nation and the last letter represents the name of currency. The seven major currencies are as follows:

                                               

Nation	Symbol	Currency
United   States of America	USD	Dollar
European   members	EUR	Euro
Japan	JPY	Yen
Great   Britain	GBP	Pound
Switzerland   (Confederation Helvetica)	CHF	Franc
Canada	CAD	Dollar
Australia	AUD	Dollar

The Fundamentals of Forex Trading

Although the equity market and Forex market are very similar to each other, some key differences do exist. If you are a beginner the most important thing you need to do is to choose the right broker. Since there are so many to choose from, you need to consider the following factors:

· Types of account: A number of brokers offer more than two types of accounts. Mini account is the name given to small accounts and it has a requirement of trading for a minimum amount of 250 dollars. Besides this, there are standard accounts and premium accounts as well. Make sure that your broker offers you the right advice.

· Quality of institution: The Forex brokers have connections with the large lending institutions or banks because of the requirement of large amounts for trading. A good Forex broker needs to be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Never select a broker who has no backing from any reliable financial institution.

· Extensive tools and research: Forex brokers provide various trading platforms for clients like other brokers. Technical analysis tools, real time charts, support for trading system and real time news and data are included in the trading platform offered by the Forex brokers. Before you commit to any broker make sure that you request some free trials so that you can test the different trading platforms. Usually brokers even provide fundamental and technical commentaries, economic calendars along with research work. So find one who is equipped to provide all the required tools to succeed.

· Wide leverage options: It is essential to have leverage in Forex because the deviations in price are just fraction of a cent. Leverage is a ratio that is between the total capital available and the actual capital. It is an amount that is lent by a broker for trading, to any client. For instance, 100:1 ratio will mean that your broker will lend you 100 dollars for every 1 dollar of actual capital. You need to remember that low leverage will mean low risk of a margin call. So if you have limited cash ensure that your Forex broker offers you a high leverage. In case there are no financial issues with you, then you can select any broker who has a wide variety of leverage options.

· Lower spreads: Spread is the difference between the price at which any currency is purchased and the amount at which it can be sold anytime. Since the Forex brokers charge no commission, this difference acts as the base for them to make money. Lower spreads will save you a lot of money.

The Currency Trading System and the Forex Market

The currency trading system involves the trading of world currencies on Forex. The Forex market is the largest financial trade market in the world with a volume that is estimated to be more than triple that of combined stocks and other futures markets. The Forex market is a spot trading market with no physical exchange. Forex involves electronic trading processes that are inclusive of a network of banks, corporations and individuals. The Forex market operates 24 hours per day, all around the world.

 

The currency trading system allows any currency that is backed by an existing nation to be traded. Of all of the currencies used in Forex trading systems, seven of those currencies are considered to be major Forex currencies. Major currencies are the currencies with the largest trading volume. Other currencies are considered to be minor currencies. Currencies are represented by a three-letter acronym. With most currencies, the first two letters represent the nation and the last letter represents the name of currency. The seven major currencies are as follows:

 

                                               

Nation	Symbol	Currency
United   States of America	USD	Dollar
European   members	EUR	Euro
Japan	JPY	Yen
Great   Britain	GBP	Pound
Switzerland   (Confederation Helvetica)	CHF	Franc
Canada	CAD	Dollar
Australia	AUD	Dollar

 

The Euro is used by some of the richest nations in the world and is considered a rival to the US dollar. The US dollar forms the foundation for the global economy. Huge reserves of US dollars are held as security by most foreign banks. Many people expect that the euro will replace the U.S. dollar as the currency kept in reserve. Twelve European nations make up the European Monetary Union (EMU) and have the Euro as its currency. The Euro presents an exception to the naming convention used above since each member of the EMU uses the acronym, EUR. The EMU consists of the following nations, territories, departments, collections and possessions:

 

Austria

Belgium

Finland

France

Germany

Greece

Ireland

Italy

Luxemburg

The Netherlands

Portugal

Spain

The Vatican City

The Principality of Andorra

The Principality of Monaco

The Republic of San Marion

Europa Island

French Guiana

Guadeloupe

Juan de Nova

The Madeira Islands

Martinique

Mayotte

Réunion

Saint Martin

Saint Pierre

Miquelon

The Azores

The Balearic Islands

The Canary Islands

The G7 is another group of nations in the currency trading system. The G7 is made up of the world’s richest economies. G7 members consist of the following nations

 

                                               

Nation	Currency	Country Code
U.S.	Dollar	USD
Great   Britain	Pound	GBP
Canada	Dollar	CAD
France	Euro	EUR
Germany	Euro	EUR
Italy	Euro	EUR
Japan	Yen	JPY

Table 1: G7 Member Nations

Since the fall of the Soviet Union, there has been talk of a G8, which includes Russia as a member of the group listed above.

 

The currencies of lesser-known countries in the currency trading system are known as exotics. Exotics are considered to be the high-risk currencies in trading. Exotics that are most actively traded include the New Zealand dollar (NZD), the South African rand (ZAR) and the Singapore (SGD) dollar. Other noteworthy exotics include the Chinese yuan (CNY), Brazilian real (BRR) and South Korean won (KRW).

Is the United States in for a Recession?

I don't have a crystal ball but so far it certainly looks like we are. One of my most profitable ways to trade the forex market is at news time and the following indicators have become much more in focus lately. This has a lot to do with the subprime mortgage mess, the housing market, high energy costs and less money for people like you and me to have for spending:\

Consumer Confidence – It is study of consumer attitudes concerning both the present position as well as expectations regarding economic conditions conducted by The Conference Board. The level of consumer confidence is directly related to the intensity of consumer spending. Consumer spending accounts for two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might act in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend more money on things other than gas for their cars. Keeping this in mind, it’s easy to see how this index gives insight to the way of the economy. Changes in consumer confidence and retail sales don’t move in tandem month by month.

Consumer Price Index (CPI) – This is the measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the inflation rate. The CPI is the most followed indicator of inflation in the US, some forex training institutes also keeps record of it for training purpose. Inflation is a general increase in the cost of goods and services. The relationship between inflation and interest rates is the key to understanding how data like the CPI influence the markets. By tracking the trends in inflation, whether low or high, descending or ascending, investors can anticipate how different types of investments will perform.

Major Players in the Forex Market

Where the megabucks are, there is the home for all major players. And forex is a very special spot to be if that adage is true. It is no surprise that you will see all the big names of financial market of this forex world. The major players on forex trading are banks, central banks, interbank brokers, commercial companies, retail brokers and hedge funds.

Central Banks - The national central banks play a significant role in the forex markets and every bank has its own forex trading strategies. Ultimately, central banks try to control the money supply and often have official or unofficial target rates for their currencies. As some central banks have very significant foreign exchange reserves, their intervention power is significant. Among the most important duties of a central bank is the restoration of an orderly market in times of excessive exchange rate volatility and the control of the inflationary impact of a weakening currency.

Banks - The Interbank market caters to both the majority of commercial turnover as well as tremendous amounts of speculative trading. It is not uncommon for a big bank to trade billions of dollars everyday. Some of this trading activity is undertaken on behalf of corporate customers, but a banks treasury room also carries on a large amount of trading, where bank dealers are taking their own positions to make the bank profits. A large part of the banks’ trading with each other is occurring on electronic booking systems that have negatively affected traditional foreign exchange brokers. Banks always keep their employees up-to-date with latest forex trading techniques.

Interbank Brokers - Until recently, foreign exchange brokers were doing large amounts of business, helping Interbank trading and matching anonymous counterparts for relatively small fees. With the increased use of the Internet, a lot of this business is moving onto more effective electronic systems that are functioning as a closed circuit for banks only.

Commercial Companies - The commercial companies’ international trade exposure is the backbone of the foreign exchange markets. A multinational company has exposure in accounts receivables and payables denominated in foreign currencies. They can be protected against unfavorable moves with foreign exchange. That is why these markets are in existence. Commercial companies frequently trade in sizes that are insignificant to short term market moves, however, as the main currency markets can quite easily absorb hundreds of millions of dollars without any big affect.

Retail Brokers - The arrival of the Internet has added us a host of retail brokers. Retail brokers always use forex trading software for efficient forex trading and providing trading opportunities to their retail customers through their websites. There is a numbered amount of these non-bank brokers offering foreign exchange dealing platforms, analysis, and strategic proposal to retail customers. The fact is many banks do not attempt foreign exchange trading for retail customers at all, and do not have the essential resources or inclination to support retail clients adequately. The services of such retail foreign exchange brokers are more similar in nature to stock and mutual fund brokers and typically provide a service-orientated approach to their clients.

Hedge Funds - Hedge funds have earned a reputation for aggressive currency speculation in recent years. There is no doubt that with the increasing amount of money some of these investment vehicles have under management, the size and liquidity of foreign exchange markets is very appealing. The leverage available in these markets also allows such a fund to speculate with tens of billions at a time. It is also argued that hedge funds really perform a beneficial service to foreign exchange markets.

Investors and Speculators - In all effective markets, the speculator has a significant role taking over the risks that a commercial participant hedges. The boundaries of speculation in the foreign exchange market are ill-defined, because many of the above mentioned players also have speculative interests, even central banks.

The all above players play an important role in the forex trading system and each player leave a significant impact on the forex market. There's more to this market and you can learn more at our sister site ForexBoost.

Huge Forex News Trading Week

We don't get many news trading weeks like the one that's coming up. We'll be starting off with a New Zealand Trade Balance news trade tonight. Then the rest of the week has lots of potentially great news trades. On Halloween alone we have a record 7 news trades including the much awaited US interest rate announcement! I'm pumped so let's get ready to make some nice profits this week. We don't get many weeks like this so let's take advantage of it.

Free Forex Signal Service

I belong to a forex news trading service where we trade certain weekly news events. The profits far outweigh the costs of membership so as long as that's the case, I'm there to stay.

Every once in a while, other members will share things we wouldn’t have found on our own. This happened the other day when a member mentioned FX Nation Live. They offer lots of services including a free signal service. Don't let this one get away because I can't imagine this free service being offered forever.

The guy who runs FX Nation Live is DC Bonta, and is one of the most amazing traders I've ever seen. I traded his free signals and starting winning more trades than I ever did technical trading on my own. I do very well news trading but have never been great at technical trading because I just don't have the time to dedicate to doing it right. Having found this FX Nation Live service is great and I’m glad I found them. You will be too.