vendredi 26 février 2010
Caractéristiques des instruments financiers dérivés
Les options et les futures sont des instruments financiers dérivés ; cela signifie que leur prix s’établit en fonction de celui de la valeur sous-jacente. Ces instruments dérivés doivent leur succès à la forte volatilité des marchés des devises, des actions, des obligations, des matières premières. Or, la volatilité est synonyme de risque et constitue à la fois une source de chances et de dangers. L’investisseur peut réaliser des gains en exploitant les flictuations de cours, mais risque également de perdre tout ou partie de sa mise, comme lors du krach d’octobre 1987. Dans le domaine des placements, la maîtrise du risque constitue un aspect primordial. Les options et les futures permettent de gérer le risque d’une manière efficace et peu coûteuse. C’est pourquoi une place financière moderne ne saurait se passer des ces instruments.Transfert du risque et amélioration du rendementLe principal avantage des instruments dérivés réside dans le fait qu’ils permettent de transférer les risques. En effet, les risques inhérants aux marchés financiers ne sont généralement pas répartis conformément aux anticipations des participants. Tel investisseur souhaitera par exemple protéger son portefeuille contre une baisse des cours, tandis qu’un autre investisseur n’hésitera pas à prendre des risques supplémentaires afin d’augmenter ses chances de gain si le marché évolue selon ses prévisions. Grâce aux options et aux futures, chaque investisseur à la possibilité de transférer à d’autres participants plus audacieux les risques qu’il ne souhaite pas assumer.2. L’effet de levierL’une des caractéristiques des options et des futures réside dans le faible niveau de l’investissement par rapport aux montants impliqués dans la transaction. Cela signifie qu’il est possible de contrôler des montants importants avec une mise de fonds relativement modeste. Les fluctuations relatives du prix des options et des futures sont donc nettement plus importantes que les variations du cours du sous-jacent. Cette relation est appellé effet de levier. Le négoce d’instruments dérivés offre donc des chances de gain considérables, mais recèle également des risques des pertes correspondants.3. La flexibilitéLes options standardisées et les futures peuvent être négociés à une bourse centralisée telle que l’EUREX, ce qui garantit une flexibilité optimale à l’investisseur. Celui-ci a en effet la possibilité de constituer à tout moment une position correspondant à son appréciation du marché et à sa propension à prendre des risques. Il peut réagir rapidement et avec souplesse aux fluctuations du marché en clôturant par exemple sa position.4. Transparence et liquiditéEu égard à leur excellente négociabilité, ces instruments suscitent l’intérêt d’un grand nombre d’investisseurs, ce qui contribue à améliorer la liquidité du marché. Sur un marché très liquide, il est en effet possible d’échanger en tout temps des quantités importantes de titres sans qu’il en résulte des variations de cours exagérées.Le négoce éléctronique au Globex garantit une grande transparence au niveu des prix, des volumes et des transactions conclues, ce qui augmente considérablement l’attrait du marché. Le négoce des options à la criée existe toujours aux US pour les matières premières par exemple.Introduction aux optionsDéfinition – qu’est-ce qu’une option ?Une option est un contrat conclu entre deux parties qui confère à l’acheteur le droit, contre paiement de la prime,
jeudi 25 février 2010
حمى الذهب - Gold fever
بعد أشهر من التزايد المستمر في اسعار المعدن الأصفر بسبب عمليات الشراء التي قامت بها البنوك المركزيه و الطلب في الأسواق الاسيويه، بدأ الذهب بمسار تصحيحي كبير يقود اسعاره للانخفاض. كما يتوقع المحللون للذهب ان يستمر في سلوكه التصحيحي باتجله انخفاض سعره حتى كانون الثاني – يناير او شباط-فبراير من السنه القادمه 2010 قبل توجهه من جديد الى الصعود باتجاه ارقام قصوى جديده، باعتبار ان الذهب يعامل افضل من النقود و يضل الأستثمار الأكثر امانا.
مؤخرا، التجار و المضاربون يقودون الذهب الى مناطق تذبذب في اسعاره، في حين ان توقعات بقرب قرار رفع الفائده من المركزي الأمريكي تدفع باسواق السيوله و الذهب للأسفل، و اذا اتخذ المركزي الأمريكي مثل هذه الخطوه خلال الشهرين المقبلين فمن الممكن ملاحظه هبوط حاد في اسعار الذهب، ولكن، من الممكن رؤية السابق كفرصه للشراء لأن رفع معدلات الفائده ستكون مجرد محاوله لدفع الدولار للأستقرار. ولكنها لتأثر على جميع انواع العجز المالي و طباعة النقود بالنسبه للعشر سنوات القادمه حيث لا يمكن ادامة تأثير رفع الفائده. و بذلك، سيستمر الذهب بالصعود على المدى البعيد بالرغم من احتمال وجوده في مناطق اسعار 1100 دولا للأونصه في الأيم القادمه.
مؤخرا، التجار و المضاربون يقودون الذهب الى مناطق تذبذب في اسعاره، في حين ان توقعات بقرب قرار رفع الفائده من المركزي الأمريكي تدفع باسواق السيوله و الذهب للأسفل، و اذا اتخذ المركزي الأمريكي مثل هذه الخطوه خلال الشهرين المقبلين فمن الممكن ملاحظه هبوط حاد في اسعار الذهب، ولكن، من الممكن رؤية السابق كفرصه للشراء لأن رفع معدلات الفائده ستكون مجرد محاوله لدفع الدولار للأستقرار. ولكنها لتأثر على جميع انواع العجز المالي و طباعة النقود بالنسبه للعشر سنوات القادمه حيث لا يمكن ادامة تأثير رفع الفائده. و بذلك، سيستمر الذهب بالصعود على المدى البعيد بالرغم من احتمال وجوده في مناطق اسعار 1100 دولا للأونصه في الأيم القادمه.
Fundamental Factors behind Major Currencies
Every currency traded in Forex is influenced by the conditions in its country of origin, and the external relations that affect its value. Economic Indicators (GDP growth, import/export trade accounts), social factors (unemployment rate, real estate market conditions) and the country’s central bank policy are the factors that determine the currency value in the Forex market. Each one of the six major currencies has its particularities, and we are going to analyze the fundamentals that drive the currencies individually.
The U.S. dollar (USD) is the most traded currency in the Forex market. It is also used as a measure to evaluate other currencies and commodities. The reserves in USD are by far the largest being held by different nations, and they compose 64% of the world reserves. Globally speaking, the fundamentals that drive the U. S. Dollar are several. Since the largest amount of metallic commodities and the oil are mostly traded with prices in USD, significant demand variations in these markets will reflect directly on the currency value, as it happened in 2008 with the EUR/USD reaching 1.60, being the oil price a big contributor for this event. In the domestic market, the biggest factor that has been moving the dollar are the industry indicators and the real estate boom, and both were caused by an unsustainable credit system which could not be paid, causing a domino effect in the United States economy, and consequently, worldwide. During the last few years, the USD has been losing ground for other currencies, thanks to the credit bubble, and erroneous social policies, but it will still remain as one of the most powerful currencies for an undetermined period of time.
The euro (EUR) is by far the newest currency traded among the major pairs traded on Forex markets. It is used by 16 European Union member countries and it tends to enlarge during the next few years. The fundamental factors that move the Euro are often based on the strongest economies using the new common currency, such as: France, Italy and mainly Germany. The countries’ indicators regarding export trade, inflation and unemployment rate tend to have a high impact on the EUR movements, considering that countries such as Germany are larger exporters of manufactures and technology. Europe still remains an energy dependant from the Russian gas and the Middle Eastern Oil, making higher demands for these commodities to have a negative reflect on the European Union common currency.
The pound sterling (GBP) is the national currency of the United Kingdom, and the fundamental factors that move it are as complex and variable as the British economy and its global influence. The London commodity market plays a fundamental role in the GBP trends, being a reference for oil and gold trading. Nevertheless, as a powerful and globally dynamic economy, the United Kingdom indicators, social situation and the housing sector are perhaps the main determinant factors for the GBP price. Lately, the British economy has faced inflation issues, which led the interest rates to be cut, industrial recession, and other domestic factors that made the trading movements to naturally flow from the GBP towards other strong economically backed currencies, such as the EUR.
The Japanese yen (JPY) is the strongest and by far the most traded currency in the Asian market. Japan’s economy is mainly orientated to the industrial production exportation, and the economic situation of its main commercial partner, the USA, tends to have a direct influence on the JPY market. The JPY is a low-yield currency, being the GBP/JPY the most volatile pair traded on Forex, usually the scalper’s favorite one.
Switzerland is a small country located in the European Alps, yet, its strong international trade and money influx, made the Swiss franc (CHF), one of the main currencies traded on Forex. The CHF is often preferred by low yield investors. In times of financial instability, such as for the last years with the USD, many traders choose the CHF as a safe investment. The CHF trends can be often compared to those of the gold, increasing their value while other markets’ tends to depreciate during economic downturns.
The Canadian Dollar (CAD) faces a similar situation with the other commodity currencies, being majorly an export-dependable. Most of the Canadian production is exported to the USA. Facing the very same credit bubble problem that dragged America into recession, Canada has to deal also with a decreasing demand for all commodities. The CAD usually correlates positively with the prices for the all commodities.
The U.S. dollar (USD) is the most traded currency in the Forex market. It is also used as a measure to evaluate other currencies and commodities. The reserves in USD are by far the largest being held by different nations, and they compose 64% of the world reserves. Globally speaking, the fundamentals that drive the U. S. Dollar are several. Since the largest amount of metallic commodities and the oil are mostly traded with prices in USD, significant demand variations in these markets will reflect directly on the currency value, as it happened in 2008 with the EUR/USD reaching 1.60, being the oil price a big contributor for this event. In the domestic market, the biggest factor that has been moving the dollar are the industry indicators and the real estate boom, and both were caused by an unsustainable credit system which could not be paid, causing a domino effect in the United States economy, and consequently, worldwide. During the last few years, the USD has been losing ground for other currencies, thanks to the credit bubble, and erroneous social policies, but it will still remain as one of the most powerful currencies for an undetermined period of time.
The euro (EUR) is by far the newest currency traded among the major pairs traded on Forex markets. It is used by 16 European Union member countries and it tends to enlarge during the next few years. The fundamental factors that move the Euro are often based on the strongest economies using the new common currency, such as: France, Italy and mainly Germany. The countries’ indicators regarding export trade, inflation and unemployment rate tend to have a high impact on the EUR movements, considering that countries such as Germany are larger exporters of manufactures and technology. Europe still remains an energy dependant from the Russian gas and the Middle Eastern Oil, making higher demands for these commodities to have a negative reflect on the European Union common currency.
The pound sterling (GBP) is the national currency of the United Kingdom, and the fundamental factors that move it are as complex and variable as the British economy and its global influence. The London commodity market plays a fundamental role in the GBP trends, being a reference for oil and gold trading. Nevertheless, as a powerful and globally dynamic economy, the United Kingdom indicators, social situation and the housing sector are perhaps the main determinant factors for the GBP price. Lately, the British economy has faced inflation issues, which led the interest rates to be cut, industrial recession, and other domestic factors that made the trading movements to naturally flow from the GBP towards other strong economically backed currencies, such as the EUR.
The Japanese yen (JPY) is the strongest and by far the most traded currency in the Asian market. Japan’s economy is mainly orientated to the industrial production exportation, and the economic situation of its main commercial partner, the USA, tends to have a direct influence on the JPY market. The JPY is a low-yield currency, being the GBP/JPY the most volatile pair traded on Forex, usually the scalper’s favorite one.
Switzerland is a small country located in the European Alps, yet, its strong international trade and money influx, made the Swiss franc (CHF), one of the main currencies traded on Forex. The CHF is often preferred by low yield investors. In times of financial instability, such as for the last years with the USD, many traders choose the CHF as a safe investment. The CHF trends can be often compared to those of the gold, increasing their value while other markets’ tends to depreciate during economic downturns.
The Canadian Dollar (CAD) faces a similar situation with the other commodity currencies, being majorly an export-dependable. Most of the Canadian production is exported to the USA. Facing the very same credit bubble problem that dragged America into recession, Canada has to deal also with a decreasing demand for all commodities. The CAD usually correlates positively with the prices for the all commodities.
New Zealand Dollar Rebouns Slightly on Favorable Trade Balance
The New Zealand dollar has been impacted by a decline in risk appetite globally on growth concerns in Europe and North America, but today, after the country’s trade balance showed a smaller trade deficit, the currency rebounded.
The kiwi, as the South Pacific currency is often referred to, rebounded from the lowest rates in almost a month as a decline in the nation’s imports allowed the negative trade balance gap to tighten, being that a favorable reason to allow the New Zealand currency to make a correction and pare its losses partially.
NZD/USD traded at 61.98 from as low as 60.88 prior to the trade balance data publication.
If you want to comment on the New Zealand dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
The kiwi, as the South Pacific currency is often referred to, rebounded from the lowest rates in almost a month as a decline in the nation’s imports allowed the negative trade balance gap to tighten, being that a favorable reason to allow the New Zealand currency to make a correction and pare its losses partially.
NZD/USD traded at 61.98 from as low as 60.88 prior to the trade balance data publication.
If you want to comment on the New Zealand dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
Dollar to Gain on Grim Global Outlook
The U.S. dollar profited last week from a wave of uncertainty that brought investors to opt for safer bets in foreign-exchange markets, and this trend might last for a longer period mainly versus European currencies as the economic outlook in the region is far from optimistic.
The dollar started February touching new record highs in 2010 versus the euro and gaining sharply versus the pound, as the U.S. economic is providing better figures than other economic regions around the world, and traders might witness a longer rally for the U.S. dollar as China new bank loans restrictions is likely to show reports impacted by the these measures in the following months. The euro is one of the currencies which is losing the most versus the greenback as its already well known budget deficit issue among some Eurozone member countries is making investors to avoid the region for the moment, making the dollar to touch the highest level in 6 months versus the European single currency.
Reports in the U.S. have been considerably better than in countries like the U.K., Australia and emerging markets, and this, combined with lack of confidence regarding the global economic recovery so expected in 2009 for the current year is making the dollar to rank among the best bets in forex markets this month.
EUR/USD is at 1.3639 as of 04:39 GMT from an opening rate of 1.3655. GBP/USD traded at 1.5602 from 1.5590.
If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
The dollar started February touching new record highs in 2010 versus the euro and gaining sharply versus the pound, as the U.S. economic is providing better figures than other economic regions around the world, and traders might witness a longer rally for the U.S. dollar as China new bank loans restrictions is likely to show reports impacted by the these measures in the following months. The euro is one of the currencies which is losing the most versus the greenback as its already well known budget deficit issue among some Eurozone member countries is making investors to avoid the region for the moment, making the dollar to touch the highest level in 6 months versus the European single currency.
Reports in the U.S. have been considerably better than in countries like the U.K., Australia and emerging markets, and this, combined with lack of confidence regarding the global economic recovery so expected in 2009 for the current year is making the dollar to rank among the best bets in forex markets this month.
EUR/USD is at 1.3639 as of 04:39 GMT from an opening rate of 1.3655. GBP/USD traded at 1.5602 from 1.5590.
If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
Pound to Trade Below $1.60 on Weak Resilience, Fed Rate Hikes
The U.K. economy is being one of the slowest to recover from the global slump that started in the second semester last year, and as economies recover globally faster than in the British Isles, the pound may decline further versus the euro and the dollar.
After posting the fourth consecutive weekly decline versus the greenback, the outlook for the British currency remains rather unattractive, as forecasts suggest a higher than previously expected budget deficit for the following years in the U.K., forcing the currency down versus most of the 6 majors traded in foreign-exchange markets. The Federal Reserve is likely to increase borrowing costs in the world’s wealthiest nation as several reports coming from different sectors of the economy indicate a rebound that would make possible earlier than expected increases in interest rates, affecting positively the dollar in currency markets, which is likely to climb further versus the pound.
Even if the Moody’s Investors Service affirmed last week that it will not downgrade the U.K.’s top credit rating, investors are not confident that the British economy will provide better data which could stop a losing streak set for the sterling for the upcoming weeks.
GBP/USD closed the week at 1.6251 from an opening rate of 1.6484 in the beginning of the week.
If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.
After posting the fourth consecutive weekly decline versus the greenback, the outlook for the British currency remains rather unattractive, as forecasts suggest a higher than previously expected budget deficit for the following years in the U.K., forcing the currency down versus most of the 6 majors traded in foreign-exchange markets. The Federal Reserve is likely to increase borrowing costs in the world’s wealthiest nation as several reports coming from different sectors of the economy indicate a rebound that would make possible earlier than expected increases in interest rates, affecting positively the dollar in currency markets, which is likely to climb further versus the pound.
Even if the Moody’s Investors Service affirmed last week that it will not downgrade the U.K.’s top credit rating, investors are not confident that the British economy will provide better data which could stop a losing streak set for the sterling for the upcoming weeks.
GBP/USD closed the week at 1.6251 from an opening rate of 1.6484 in the beginning of the week.
If you want to comment on the Great Britain pound’s recent action or have any questions regarding this currency, please, feel free to reply below.
Euro to Plunge Deeper on Fiscal Crisis Consequences
The outlook for the European currency is perhaps the worst since its introduction in 1999, as disparities among Eurozone members’ financial structure is likely to decline the appeal for the currency even further, since measures to bring budget deficits to the ECB’s target are likely to set several countries into a longer recession.
After the Greek crisis affected markets in the Eurozone raising concerns regarding massive budget deficits in several bloc’s members, traders became more skeptical towards interest rate hikes in the region, as a series of financial measures to be taken by Greece, Portugal, Spain and others, are likely to force the European Central Bank to maintain its benchmark interest rate at the lowest level since the Euro was introduced, considering that these measures to control the nations’ budget deficits will certainly require stimulus to avoid a new wave of recession in the region.
The euro has already lost 5 percent against the dollar this year, and despite European officials efforts to ensure the profitability of investments in the region, an exodus of capital towards other economic regions is evident since last year’s third quarter and so far this trend has a extremely high possibility of continuing to cause the euro’s depreciation.
EUR/USD traded at 1.3588 as of 16:02 GMT from an opening rate of 1.3626 yesterday.
If you want to comment on the Euro’s recent action or have any questions regarding this currency, please, feel free to reply below.
After the Greek crisis affected markets in the Eurozone raising concerns regarding massive budget deficits in several bloc’s members, traders became more skeptical towards interest rate hikes in the region, as a series of financial measures to be taken by Greece, Portugal, Spain and others, are likely to force the European Central Bank to maintain its benchmark interest rate at the lowest level since the Euro was introduced, considering that these measures to control the nations’ budget deficits will certainly require stimulus to avoid a new wave of recession in the region.
The euro has already lost 5 percent against the dollar this year, and despite European officials efforts to ensure the profitability of investments in the region, an exodus of capital towards other economic regions is evident since last year’s third quarter and so far this trend has a extremely high possibility of continuing to cause the euro’s depreciation.
EUR/USD traded at 1.3588 as of 16:02 GMT from an opening rate of 1.3626 yesterday.
If you want to comment on the Euro’s recent action or have any questions regarding this currency, please, feel free to reply below.
Top 10 Myths about Forex
Forex is a market where exchange of one currency with another currency takes place. It’s the market which provides accessibility and liquidity to the traders to buy and sell one foreign currency in exchange of another.
Forex traders seek profit in buying currencies low and selling them high. This kind of trading became more popular with the widespread of the on-line Forex brokers. There is a lot of information available about Forex on the web. However there also many myths surrounding the foreign exchange market:
Forex trading is easy. Many people that want to dive into the world of the foreign exchange market believe that the Forex trading is easy — you just read a book or two and then you will be able to earn daily profits with just 2-3 hours trading daily. Others think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s just a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice.
"I will make money in Forex, if I can trade stocks successfully." Success in stock market doesn’t imply that you will get success in Forex market — there are many differences between trading stocks and the spot currencies. First of all, Forex market requires a lot of hard work and dedication as this market is open for 24 hours a day. You cannot just sit in front of your computer for the whole day and night, so the best way is that you should find the most suitable time periods for trading. Second, “buy&hold„ strategy simply won’t work in Forex market. Third, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.
"I can make profit whenever I want if Forex market is open 24 hours a day." Once again, you won’t be sitting in front of your PC for the whole day to be able to trade 24 hours. You’ll have to develop automated trading software to get the advantage of 24 hours a day working schedule.
"I can be a successful Forex trader just following someone else’s signals." Many beginning traders get burned by the blind signal-following. That’s like putting away the whole responsibility for your actions to someone else. That may sound cool, but in reality you end up with the huge losses. Learn to rely on your own knowledge and skills. Remember that there were no great signal-followers in any financial market.
No commission is to be paid in Forex market. You only have to pay the spread, but you don’t have to pay the commission. And what’s spread? It is the difference between the buy and sell price of the currency pair at the same moment. You may end up with the major part of your profits in the broker’s hands if you plan to rely on the short-term trading.
Forex is a scam. Some skeptics and disappointed traders think that Forex is just some new fad to scam people for their hard earned money. Although there are many scams that are hiding behind the "brand" of Forex, that doesn’t mean that the Forex itself is a scam. There are many institutional Forex brokers, regulated Forex account managers and other solid companies in the market to whom you can trust.
"I need to exactly predict the market outcome to be profitable in Forex." There is no scientific method to know something in advance in the market with a 100% certainty. There would be no Forex market if you could know the exact currency rates beforehand. Trading is not the game of certainties; it’s a game of odds. One of the first things that new traders learn is to think in the terms of probabilities and risk-to-reward ratios.
"I need to use a very complex strategy to be successful in Forex." It’s a popular myth, in which many on-line sellers would want you to believe. The main requirement to be successful in Forex is a self-discipline and money management. There are many traders that make consistent profits with rather simple and old strategies.
"I need to have a lot of starting capital to get profit in Forex." Big capital investment won’t help you in Forex. You don’t need a lot of money to diversify in currencies and you can’t move the currency rates with your trading orders (you’d need billions of dollars to do that). Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.
Forex is gambling because it’s completely random. Although there is no certainty in Forex (as in any financial market) it doesn’t mean that it’s completely random. And it’s certainly not a gambling, since your success in this market depends mostly on your skills and experience, not on your luck.
Knowledge is power — so it’s better for you to learn distinguishing some stereotypical myths from the real thing. Don’t fall for the promises of getting some easy profits in Forex, but don’t be afraid of the market just because some people think it’s not possible to earn there. Be rational — this quality will help you either if you are going to trade in Forex or not.
Forex traders seek profit in buying currencies low and selling them high. This kind of trading became more popular with the widespread of the on-line Forex brokers. There is a lot of information available about Forex on the web. However there also many myths surrounding the foreign exchange market:
Forex trading is easy. Many people that want to dive into the world of the foreign exchange market believe that the Forex trading is easy — you just read a book or two and then you will be able to earn daily profits with just 2-3 hours trading daily. Others think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s just a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice.
"I will make money in Forex, if I can trade stocks successfully." Success in stock market doesn’t imply that you will get success in Forex market — there are many differences between trading stocks and the spot currencies. First of all, Forex market requires a lot of hard work and dedication as this market is open for 24 hours a day. You cannot just sit in front of your computer for the whole day and night, so the best way is that you should find the most suitable time periods for trading. Second, “buy&hold„ strategy simply won’t work in Forex market. Third, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.
"I can make profit whenever I want if Forex market is open 24 hours a day." Once again, you won’t be sitting in front of your PC for the whole day to be able to trade 24 hours. You’ll have to develop automated trading software to get the advantage of 24 hours a day working schedule.
"I can be a successful Forex trader just following someone else’s signals." Many beginning traders get burned by the blind signal-following. That’s like putting away the whole responsibility for your actions to someone else. That may sound cool, but in reality you end up with the huge losses. Learn to rely on your own knowledge and skills. Remember that there were no great signal-followers in any financial market.
No commission is to be paid in Forex market. You only have to pay the spread, but you don’t have to pay the commission. And what’s spread? It is the difference between the buy and sell price of the currency pair at the same moment. You may end up with the major part of your profits in the broker’s hands if you plan to rely on the short-term trading.
Forex is a scam. Some skeptics and disappointed traders think that Forex is just some new fad to scam people for their hard earned money. Although there are many scams that are hiding behind the "brand" of Forex, that doesn’t mean that the Forex itself is a scam. There are many institutional Forex brokers, regulated Forex account managers and other solid companies in the market to whom you can trust.
"I need to exactly predict the market outcome to be profitable in Forex." There is no scientific method to know something in advance in the market with a 100% certainty. There would be no Forex market if you could know the exact currency rates beforehand. Trading is not the game of certainties; it’s a game of odds. One of the first things that new traders learn is to think in the terms of probabilities and risk-to-reward ratios.
"I need to use a very complex strategy to be successful in Forex." It’s a popular myth, in which many on-line sellers would want you to believe. The main requirement to be successful in Forex is a self-discipline and money management. There are many traders that make consistent profits with rather simple and old strategies.
"I need to have a lot of starting capital to get profit in Forex." Big capital investment won’t help you in Forex. You don’t need a lot of money to diversify in currencies and you can’t move the currency rates with your trading orders (you’d need billions of dollars to do that). Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.
Forex is gambling because it’s completely random. Although there is no certainty in Forex (as in any financial market) it doesn’t mean that it’s completely random. And it’s certainly not a gambling, since your success in this market depends mostly on your skills and experience, not on your luck.
Knowledge is power — so it’s better for you to learn distinguishing some stereotypical myths from the real thing. Don’t fall for the promises of getting some easy profits in Forex, but don’t be afraid of the market just because some people think it’s not possible to earn there. Be rational — this quality will help you either if you are going to trade in Forex or not.
Top 7 News Sources for Financial Trader
Getting the latest important news is a vital requirement for every Forex, stocks or options trader। The Internet is full of various sites, but not all them feature financial news or provide such news in a timely manner. This list consists of top ten sources for the trader’s news that are updated often and are not mixed up with irrelevant news.
1-Bloomberg — the ultimate news source about everything that is in any way related to the financial markets. Categorization by the regions helps in finding important international news.
Forbes.com
2-Breaking News — a great site to get the recent financial information, it also provides free news from several paid news sources (i.e. Associated Press). Stock market traders will like the coverage of almost all kinds of companies.
3-Reuters Business & Finance — Reuters is one of the most professional informational companies in the world and they offer news as a free service to everyone।
4-BusinessWeek — they may be too old-fashioned, but BusinessWeek still features some exclusive news content and the very professional analysis.
5-Financial Times — I like FT for they are not as US-centered as some other financial news sites, they offer a pretty good world news outlook. Can be recommended as a source of Forex related news if you prefer trading exotic currency pairs.
6-CNNMoney — opposite to FT, CNN prefers news from United States, but it’s still good because the majority of world stocks are concentrated on the Wall Street. It will also be useful to the Forex dollar traders.
7-CNBC — a "must have" bookmark for every currency trader; news on foreign currency markets are delivered at the top quality level.
1-Bloomberg — the ultimate news source about everything that is in any way related to the financial markets. Categorization by the regions helps in finding important international news.
Forbes.com
2-Breaking News — a great site to get the recent financial information, it also provides free news from several paid news sources (i.e. Associated Press). Stock market traders will like the coverage of almost all kinds of companies.
3-Reuters Business & Finance — Reuters is one of the most professional informational companies in the world and they offer news as a free service to everyone।
4-BusinessWeek — they may be too old-fashioned, but BusinessWeek still features some exclusive news content and the very professional analysis.
5-Financial Times — I like FT for they are not as US-centered as some other financial news sites, they offer a pretty good world news outlook. Can be recommended as a source of Forex related news if you prefer trading exotic currency pairs.
6-CNNMoney — opposite to FT, CNN prefers news from United States, but it’s still good because the majority of world stocks are concentrated on the Wall Street. It will also be useful to the Forex dollar traders.
7-CNBC — a "must have" bookmark for every currency trader; news on foreign currency markets are delivered at the top quality level.
Recommended Forex Brokers
The bad thing about all brokers is that they can’t make you trade better in Forex. The best thing that they can do for a trader is to offer him enough freedom, tools and support to bring his trading strategy to life. Here is the list of those brokers that try not to interfere with the ways that a trader chooses:
FXOpen — some people say that they have too many traders to be efficient but, in my opinion, the amount of traders using this broker proves its quality. After all, it has a nice set of features:
Contests among traders
Bonus programs
Alternative payment methods: WebMoney, LibertyReserve, CashU, E-Bullion and other payment options
2 pips spread on EUR/USD
InstaForex — a some sort of competition to FXOpen, this broker offers so many bonus and contest promotions to its traders that this alone is enough to make some traders join. But there are more advantages:
Trade with MetaTrader platform
Leverage your trades up to 1:500
Deposit and withdraw funds via WebMoney, Moneybookers and other ways
Earn interest on deposit
Low minimum account size
AvaFX — original Forex broker with almost 4-year history of satisfied customers. Except traditional Forex trading provides also CFD, gold and oil trading:
1:200 leverage
Custom trading platform
Trade oil, gold and other commodities
WebMoney, PayPal and many other ways to fund your account
MetaTrader platform for Forex and commodities trading
Forex4you — relatively new Forex broker that tries its best to keep up with the competition and offers extra-high quality level of service. See for yourself:
More than 50 trading instruments
Free news feeds from leading news agencies
Cent trading (if you feel cheap)
MetaTrader platform
Up to 12.5% yearly interest on trade balance
FXOpen — some people say that they have too many traders to be efficient but, in my opinion, the amount of traders using this broker proves its quality. After all, it has a nice set of features:
Contests among traders
Bonus programs
Alternative payment methods: WebMoney, LibertyReserve, CashU, E-Bullion and other payment options
2 pips spread on EUR/USD
InstaForex — a some sort of competition to FXOpen, this broker offers so many bonus and contest promotions to its traders that this alone is enough to make some traders join. But there are more advantages:
Trade with MetaTrader platform
Leverage your trades up to 1:500
Deposit and withdraw funds via WebMoney, Moneybookers and other ways
Earn interest on deposit
Low minimum account size
AvaFX — original Forex broker with almost 4-year history of satisfied customers. Except traditional Forex trading provides also CFD, gold and oil trading:
1:200 leverage
Custom trading platform
Trade oil, gold and other commodities
WebMoney, PayPal and many other ways to fund your account
MetaTrader platform for Forex and commodities trading
Forex4you — relatively new Forex broker that tries its best to keep up with the competition and offers extra-high quality level of service. See for yourself:
More than 50 trading instruments
Free news feeds from leading news agencies
Cent trading (if you feel cheap)
MetaTrader platform
Up to 12.5% yearly interest on trade balance
Forex News Trading
Traders on the Foreign Exchange market, Forex market for short, can potentially make thousands of dollars based on the volatility and fluctuations of a country’s currency. To better themselves and have a leading advantage over other traders, some Forex traders and investors participate in a practice known as news trading. The risks are very high, but the potential gains can be worth thousands of dollars and many traders and investors use this technique.
The technique of news trading is quite simple. It is the trading of foreign currency immediately before or after an important economic news announcement. After such announcements, there is a high possibility that market prices will fluctuate, either for the better or worse, depending on the announcement. For example, if the U. S. Federal Reserve announces another increase of the interest rate, many traders might invest in the U.S. dollar as it is expected that its value will appreciate. The main advantage of news trading is the potential for a country’s currency to make huge gains or losses in very little time. Within minutes of an economic announcement, a country’s currency can gain or lose one hundred points almost instantly. The potential of huge profits attracts Foreign Exchange traders and investors, however there are various risks associated with news trading.
Like any investment, there is always a risk, and news trading on the Forex market is no different. Though the potential profits are huge, the losses are also equally as large. The dangers of news trading come from the fact that a trade must be made quickly or else you are going to lose. If you are caught on the bad side of a trade, your money will be gone quicker than you can blink your eye. You will lose money so fast that there won’t even be time for you to manually close your trades, leaving you with nothing. Stop-loss orders are also potentially dangerous as there is a high probability of slippage because of the sudden price fluctuation.
Though some investors and traders might get lucky trading news, there is only a small probability that you will make a profit. Even if you are an expert news trader, you should still be very, very cautious when participating in this practice. Successful news trading depends solely on how you get your news. The most successful news traders are the ones with the fastest news feeds and those that are able to quickly place their trades immediately after an announcement has been made. Even using other forms of news trading, such as placing orders above or below the market price is still a guessing game, and those traders in the market who base their trades on guesses, won’t have much money after a short time.
For many Forex traders and investors, their trades are dictated by technical indicators and price indexes. Hours are spent researching every indicator, taking every risk into account and then making a decision based on everything they have studied. However, for a Forex news trader, none of this matter, and the only thing they take into account is economical news announcements.
News trading is possible because the Forex market is always open, unlike many financial markets. In a financial market, securities trades of certain stocks are suspended when an important company announcement is being made. These announcements are usually made after the market has closed for the day. However, because the Foreign Exchange market is open 24 hours, any economic announcement will have direct affects on the currency of that country, and maybe others as well. In the Forex market, there are eight major currencies that are traded, as well as over seventeen derivatives to be traded as well. This means that on any given day, there will always be economic announcements from any of the major traded currencies. The major trader currencies are as follows:
U.S. Dollar (USD)
Great British Pound (GBP)
Euro (EUR)
Japanese Yen (JPY)
Australian Dollar (AUD)
Swiss Franc (CHF)
Canadian Dollar (CAD)
New Zealand Dollar (NZD)
Because of the availability of each currency, currency pairs, and its derivatives, such as USD/JPY, EUR/USD, AUD/USD, as well as several others, each currency can be traded at any given time because these currencies are globally traded.
Any Forex news trader or news investor will have to have the latest most up to the moment news announcements. Even if the news announcements are only a couple of minutes old, this can have devastating effects for any trader who has risked any sum of money. Most news traders like to keep an eagle eye on any news regarding economical activity, but most importantly news dealing with interest rates changes, FOMC rate decisions, retail sales figures, inflation indicators such as the consumer price index (CPI), producer price index (PPI), unemployment figures, industrial production announcements, boost in business and consumer confidence, as well as business sentiment surveys. Manufacturing sector surveys, trade balance release details, and foreign purchases of U.S. Treasuries may also prove useful for a news trader to better make decisions regarding when or when not to trade.
However, it should be remembered that these news announcements can have ranging impacts on a country’s currency, and after an announcement, the volatility of a currency may greatly fluctuate. It is important to take advantage of news that creates movements in volatility that will last for a few minutes or even hours. Trading on the Forex market based solely on news is a difficult and sometimes dangerous practice. However, there are some indicators that can make a news trader’s job easier, such as breakout indicators (Bollinger bands, breakout of a candlestick bar, or a price bar). Research has proved that news announcements can impact a currency’s value quite severely, in some cases it can gain or lose anywhere from 33 pips to 124 pips, opening up the ideal trading opportunity looked for by news traders. If a news trader is able to act quickly enough, even the smallest news release can be turned into a potential profit of thousands of dollars. However, it is important to remember the volatility of such announcements, and although the profits seem endless, the losses can happen too.
The technique of news trading is quite simple. It is the trading of foreign currency immediately before or after an important economic news announcement. After such announcements, there is a high possibility that market prices will fluctuate, either for the better or worse, depending on the announcement. For example, if the U. S. Federal Reserve announces another increase of the interest rate, many traders might invest in the U.S. dollar as it is expected that its value will appreciate. The main advantage of news trading is the potential for a country’s currency to make huge gains or losses in very little time. Within minutes of an economic announcement, a country’s currency can gain or lose one hundred points almost instantly. The potential of huge profits attracts Foreign Exchange traders and investors, however there are various risks associated with news trading.
Like any investment, there is always a risk, and news trading on the Forex market is no different. Though the potential profits are huge, the losses are also equally as large. The dangers of news trading come from the fact that a trade must be made quickly or else you are going to lose. If you are caught on the bad side of a trade, your money will be gone quicker than you can blink your eye. You will lose money so fast that there won’t even be time for you to manually close your trades, leaving you with nothing. Stop-loss orders are also potentially dangerous as there is a high probability of slippage because of the sudden price fluctuation.
Though some investors and traders might get lucky trading news, there is only a small probability that you will make a profit. Even if you are an expert news trader, you should still be very, very cautious when participating in this practice. Successful news trading depends solely on how you get your news. The most successful news traders are the ones with the fastest news feeds and those that are able to quickly place their trades immediately after an announcement has been made. Even using other forms of news trading, such as placing orders above or below the market price is still a guessing game, and those traders in the market who base their trades on guesses, won’t have much money after a short time.
For many Forex traders and investors, their trades are dictated by technical indicators and price indexes. Hours are spent researching every indicator, taking every risk into account and then making a decision based on everything they have studied. However, for a Forex news trader, none of this matter, and the only thing they take into account is economical news announcements.
News trading is possible because the Forex market is always open, unlike many financial markets. In a financial market, securities trades of certain stocks are suspended when an important company announcement is being made. These announcements are usually made after the market has closed for the day. However, because the Foreign Exchange market is open 24 hours, any economic announcement will have direct affects on the currency of that country, and maybe others as well. In the Forex market, there are eight major currencies that are traded, as well as over seventeen derivatives to be traded as well. This means that on any given day, there will always be economic announcements from any of the major traded currencies. The major trader currencies are as follows:
U.S. Dollar (USD)
Great British Pound (GBP)
Euro (EUR)
Japanese Yen (JPY)
Australian Dollar (AUD)
Swiss Franc (CHF)
Canadian Dollar (CAD)
New Zealand Dollar (NZD)
Because of the availability of each currency, currency pairs, and its derivatives, such as USD/JPY, EUR/USD, AUD/USD, as well as several others, each currency can be traded at any given time because these currencies are globally traded.
Any Forex news trader or news investor will have to have the latest most up to the moment news announcements. Even if the news announcements are only a couple of minutes old, this can have devastating effects for any trader who has risked any sum of money. Most news traders like to keep an eagle eye on any news regarding economical activity, but most importantly news dealing with interest rates changes, FOMC rate decisions, retail sales figures, inflation indicators such as the consumer price index (CPI), producer price index (PPI), unemployment figures, industrial production announcements, boost in business and consumer confidence, as well as business sentiment surveys. Manufacturing sector surveys, trade balance release details, and foreign purchases of U.S. Treasuries may also prove useful for a news trader to better make decisions regarding when or when not to trade.
However, it should be remembered that these news announcements can have ranging impacts on a country’s currency, and after an announcement, the volatility of a currency may greatly fluctuate. It is important to take advantage of news that creates movements in volatility that will last for a few minutes or even hours. Trading on the Forex market based solely on news is a difficult and sometimes dangerous practice. However, there are some indicators that can make a news trader’s job easier, such as breakout indicators (Bollinger bands, breakout of a candlestick bar, or a price bar). Research has proved that news announcements can impact a currency’s value quite severely, in some cases it can gain or lose anywhere from 33 pips to 124 pips, opening up the ideal trading opportunity looked for by news traders. If a news trader is able to act quickly enough, even the smallest news release can be turned into a potential profit of thousands of dollars. However, it is important to remember the volatility of such announcements, and although the profits seem endless, the losses can happen too.
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