Saturday, May 23, 2009

Forex - Unify the US and Canadian Currencies

As a matter of patriotism rather than merely diminished opportunity, American traders in the foreign exchange (FOREX) market are often disappointed when their favored greenback loses value against its rivals. This is especially true if the rival currency is the Canadian dollar. Unifying the Canadian dollar and the American dollar will forever eliminate this concern. Here are ten reasons this may be an idea whose time has come.

1. Continental Partners: The USA and Canada share a continent as well as a coast-to-coast border, making them natural partners and facilitating easy trade.

2. Trading Partners: : The countries are, in fact, each other’s largest trading partners, while the USA is the world’s largest economy. Both are members of the powerful G8 financial organization.

3. Political Stability: : The two republics are both politically stable democracies.

4. Common Language: : There is no language barrier, as English is the primary language in both countries.

5. Synergistic Gifts: : Canada’s natural resources coupled with American technological leadership will help to ensure that the unified currency will remain the most powerful and valuable in the financial world.

6. Stimulation of Cross-border Spending: : Unification will stimulate rather than stymie cross-border shopping and travel from both sides. There will be no longer be interruptions of these traditions as presently is the case when one currency has increases significantly in value against the other.

7. Successful Model from EEU: : Unification seems to have worked pretty well for the European Economic Union with diverse languages and politics, it will most likely work for two similar countries. After all was said and done, the value of the euro appreciated tremendously against the U.S. dollar since 1999, the year of first issue. Admittedly, this qualifies as a “me to” reason, but not all things European are bad.

8. Globalization: : The world economy is becoming more global, and, therefore, unification of these particular currencies is a giant step in that direction, helping online commerce to grow also.

9. More Effective Collaboration: : Collaboration between the two countries on matters of trade and finances will arguably be all the more cooperative and sensitive to the needs of the respective continental partners.

10. Facilitate NAFTA: : The unification will also better facilitate the effectiveness of existing economic legislation and treaties, including the North American Free Trade Agreement (NAFTA).

Of course, to get any such measure passed will require the approval of two countries via their authorized legislative and regulatory bodies. Additionally, such a massive measure could take years to implement. After many official studies, including the impact on the environment—as in saving trees and lower carbon emissions—perhaps our respective governments can see light in this proposal. Hopefully, the prevailing Canadian attitude will not be, why didn’t the Americans propose that when the currencies were not at parity? Still, it is better late than never.

Choosing Forex Brokers in USA

The US dollar is one of the most powerful currencies in the forex trading system. It is actually one of the most basic trading values used in this specific market. So if you are new in the market and you would like to learn the ins and outs of the US dollar trading, you might be able to boost your profits with the help of forex brokers in USA. Forex brokers serve as the middle man between two different parties-you and your buyers or sellers. They can also give you their consultancy services in the process.

You can choose to either get in touch with forex brokers in USA as a consultant or you can also choose to employ them as your trading partner. Either way, they can be an asset for you if you know how to use their influence and expertise accordingly. Two of the most important things that you need to understand when choosing your US forex broker is the forex spread which they currently use and the reputation as well as the capital they have to sustain them.

Utilizing the Forex Spread through these Brokers

A forex spread is actually the method of trading in itself. When you trade with people in the currency market, each network you have can be considered as a spread. But when you make use of forex brokers, they use a number of spread methods to make sure that you get more exposure which can also translate into more profits for them. The term is coined as spread because it makes efficient use of scanning the market for potential customers. But one thing you should keep in mind is that its different spread strokes for different forex brokers.

Forex brokers in USA may or may not publish their prices on their site. This is actually an important point to consider because it helps you understand how much profits you can gain out of them when done in comparison with spreads. There are actually two different types of forex spreads-the fixed spread which makes use of a fixed method and currency rates regardless of the trading time and the variable spread which may depend loosely on the current scene in the trading market.

Reputation and the Brokers' Capital Resources

Of course there's also the issue of choosing your broker depending on the reputation they have. Reputation is important especially if you want to expand your networks. You will also be surprised how some potential business partners may choose to not deal with you if you have a forex broker who's professional ethics are questionable. In the world of forex, it may not always be about profits.

Another important consideration is capital resources, because it gives you an idea of the rates and features you will get to enjoy through the forex broker you choose to hire. Some may be able to waive your fees and there are also those who will be able to connect you with other rising forex markets. They may end up to be a wealthy source of vital business information.

Saturday, May 16, 2009

Automated Forex Trading Program

Automated Forex Trading Software is an application developed to trade foreign currency automatically, utilizing your PC. These software applications are very useful to those who are not familiar with foreign currency trader signals, how to obtain them, or how to use them. Those who are new to foreign currency trading can benefit largely from Automated Forex Software in many aspects. Making money on the foreign currency market in auto-pilot mode is something that many people consider a dream. Trading manually is a process which requires monitoring the market, catching up on financial news, analyzing the market trends, and actually placing the trades all by yourself. That can be a long and tedious affair. That's why those who prefer easier (but proven way), chose to take a shorter route and trade automatically by utilizing software applications.

How does Automated Forex Trading Software work?

Technology is developing at a rapid pace! Trading foreign currency on auto-pilot is done with one of several Automated Forex Trading Software. These software applications come pre-programmed with intricate mathematical trade models and have the ability to monitor foreign currency markets on a continuous basis. This monitoring is done 24/7, five days a week (foreign currency market is open Mon-Fri) until the automated trading software sees a trading opportunity. Automated Trading Software then places the trade for you automatically and resumes its market monitoring, waiting for an exit point for your current trade or an entry point for another.

This process is expedited automatically from your PC without you having to be in the room at all. All you need to do is make sure your computer is running the whole time your autopilot is attached, and your internet connection is working. Once you have set it up, the Automated Forex Trading Software is an entirely hands off approach to foreign currency exchange market.

There are many software applications out there that promise very high returns on investment, but the truth is, many programs aren't really that good and it takes luck and testing to find one that lives up to their promise. One of the recommended auto-pilot robots is Marcus Leary's automatic pilot. It specializes in the EUR/USD currency pair and works 100% automatically. There are a lot of traders who use the automatic robot as a key weapon in their professional arsenal.

Automated Forex Trading Software is not used just to generate increased profits, but also to help you have more time for other things in your life, and reduce the stress which manual trading often brings on. If you're looking for high returns on your investment, this will definitely be worth trying out.

Saturday, May 9, 2009

Forex Quotation To Traders

The delusion conceptually propounds that traders operate at a spontaneous FOREX market (as stipulated by B. Williams, A. Elder, E. Nayman, etc.). But it is not the case. Traders do their job inside a well-organized and controlled currency exchange market, governed by the Consortium of the world’s largest banks.

Hence, who is pushing the currencies up and down, who defines trends, corrective actions and flats?
And, who, ultimately, places a trend at a point, where the majority of traders are happy to think they have saddled the wave and are about to win an enormous profit! Now! Not to be scared! Not to close the position! Not to be satisfied with a minor profit! Later on we will discuss that sort of stupidity. Thus, one persists to continue long in spite of more and more degrading profit. Shortly, the loss starts growing with light velocity! Are you familiar with the situation?

Well, who has reversed the rate?

And who generally tugs currency rates?

Tugging is surely centralized. Compare on-line quotes of several Dealers or banks to find out that they are per second coincident. Do each bank’s traders act in such synchronism, that even not seeing each other, they place identical orders so that quotation is in 100% agreement? NOTHING IS A MIRACLE HERE!

But prior to further explanation, we will listen to Bill Williams, the FOREX scholar (Trading Chaos, Ch. 6): “…let us trace a trend formation process. Earlier, the market and the market trading venue did constitute a single physical space. Majority of large grain traders were concentrated on the “floor”. Their orders involved amounts, sufficient to move the market; they enjoyed better control over the market than at present. During the latest 20 years markets have grown worldwide. Now, not only “Purina Ralstone”, “Kellog” and other prominent commercial associations seek hedging their cash assets transactions. So do millions of the world’s minor profiteers and farmers, competing with them in anticipation of perspective grain price fluctuations? This fact also implies strong potential for traders with nowadays, trends not being constructed on the floor. The latter mainly ensures the market liquidity by way of tackling “outer orders”.

The fact, that today’s trends are formed rather “outside the floor” than “on the floor”, as before, enables one to trace further market tendencies with trade volume being the key thereto. Our only on-line information is restricted to tick volume, time and price. Tick volume constitutes a number of price changes per a certain time period. It is not at all a number of traded contracts. Multiple researches revealed no significant difference between actual and tick volume. Using a tick volume, we may suppose, that it represents actual volume. It is a real-time volume, thus being our key to what’s going on in “trading pits”.

Two basic elements are organic to FOREX trading: brokers on the floor and remote traders. Local brokers constitute staff, executing orders, thus earning their salaries and/or commissions. They don’t possess money to be at their disposal. They are order executors. Their prospects are not burdened by prices, they getting for the orders management.

Remote traders use their own money. They have to pay the price out of their own pockets, unless they are getting a good one. Traders have to be much superior in skill to brokers since they independently take their own decisions, while the broker’s job is to follow the others’ orders.
Remote traders are supposed to support the market by way of taking its opposite side. As a rule, they are not at all crazy about any long-term transactions. Quite a few remote traders have been participants to our private training programs, and it is to be admitted that a 10-minute long transaction may seem quite a long-term one for some of them.

Think back to the fact that trends are built up of orders, delivered to the floor from outside, but not of long-term positions entered by remote traders. Since the traders’ job is to take the side opposite to the orders arriving from outside, they have no prospects of trading in between themselves. They follow your money. We are emphasizing again, that tick volume is our key to understanding what’s going on in the Forex Market. Remote traders do not contribute any significant volume to trading, which might result from dealing with similar traders on the floor. Trends emerge from incoming orders. That is why we are to be certain about when and in what amount the outer order is supplied to the floor. It is presented via a tick volume change”.

So, we, traders, turn out to be price locomotives, don’t we? And brokers on the floor just allocate and execute order, incoming from us, don’t they? And on April, 1, 2005 they all (meaning: we all) together decided to swivel the trend and to stay short against all the rules, news and common sense… I wonder if the scholar ashamed or not?

As regards the above quotation, I have chanced to hear a single argument in favor of Bill Williams (I guess you understood for what sake I’ve cited it in detail): it all pertains to the futures markets; we neither read nor use the above at Forex. Strange enough, these are the arguments of Williams’s advocates, but not of Williams himself.

This book is actually intended for both: futures markets and Forex Market. That’s why pictures taken from both the markets are so mixed up and the author never differentiates between the Technical Analysis methods thereof. Thus, either the author does not trace any difference between the two markets, or he is not eager to reveal it to the reader.
And neither in the foreword, nor in the remarks did Williams and his publishers refer to the fact that something of “Trading Chaos” is inapplicable to FOREX, and thus should not be made use of by a trader at FOREX.

I have repeatedly come through this peculiarity of Williams (correct specific case method definition being extended to a wider coordinates scale) and it actually induced me to write this book. In all and all, the methods and advice, absolutely true and correct for a PART of Forex Market are claimed by Williams to be universal for the WHOLE of Forex Market without being demonstrated where the above is effective and where it isn’t.

The same is being done by Williams’s opponents and advocates, who visualize the portion of Forex where his methods are operable only. As different from analysts and Williams’s bibliographers, TRADERS require much stronger to realize a demarcation with pro-Williams trading to the one side thereof and with counter-Williams trading to the other one.
Logically there comes a question: what might be added to Williams’s indicators in order to turn them effective at the point where they are presently ineffective (see details in chapter on the Williams Alligator).

And now we are getting back to the issue of who supplies traders with FOREX rates quotation, bearing in mind that it’s us, traders, who exercise rates movement in accordance with Williams’s standpoint. Millions of traders have actually been studying FOREX by virtue of the “Trading House” and it is really worth studying. This is one of the most interesting and instructive editions whose repeated reading each time brings about something new and useful.

However, in some passages it smells being custom tailored. Is Williams ignorant of the fact that there is no single FOREX exchange and there’s no single trading venue or floor? And that Pacific, Asian, European and American session classification is arbitrary?

Did You see currency rates move, while there’s a day off in the USA with the banks closed? So did I. So, who has made up his mind in the USA to trade on the floor on a day off?
Then, who prompts rates, who formulates trends and turns them with no objective reason for the rate to swivel and to rush in a direction, not being requisite at all?

Here is the answer, as provided by No. 11, 2002 “FOREX Profiteer” magazine’s article by Nadezhda Larina “Electronic Broker Systems at FOREX market”, http://www.ifin.ru/publications/read/351.stm), reading: ”… an FOREX dealing “Electronic Broking Service (EBS)” enjoys wide popularity with the extra-exchange inter-bank FOREX market. It has been developed by the Consortium of largest FOREX trading participant banks in association with “Quotron” informatics expert company and launched in 1993. Presently EBS incorporates 13 world’s largest market-maker banks, viz,: BN AMRO Bank, Bank of America, Barclays Capital, Citibank, Commerzbank, Credit Suisse First Boston, HSBC Bank PLC, J.P. Morgan Chase and Co.Lehman Brothers, Royal Bank of Scotland, S-E Banken, UBS AG along with Japanese Minex Corp., established by a Consortium of Japanese Banks in a joint manner with KDD Japanese telecommunications company and Dow Jones Telerate.
EBS offers a completely integrated range of dealing services for the professional inter-bank market, being a leading anonymous inter-bank FOREX trading electronic dealer. It is currently used by over 2500 dealers in 850 world banks and yields a trade turnover of about USD80 billion daily.
See there also: “Three greatest FOREX dealers - Citibank, J.P. Morgan Chase and Deutsche Bank, together with Reuters Group PLC) have started Atriax system in June, 2001.The latter terminated the operations in spring, 2002 after having failed to stand the competition.

Can you imagine a monster machine, capable of forcing three world’s largest banks - Citibank, J.P. Morgan Chase and Deutsche Bank to abandon their business plans! Or capable of reversing the EURUSD from 1.3660 to 1.1865 and thus instantaneously executing orders of all the world’s traders, going and standing short! And thus within, April-June, 2005, buying the EUR from traders at USD1.36, 1.29, 1.20, 1.19, etc.

Do you see the loss? Watching the EUR slip 1700 pts after having bought it at 1.36… But, possibly, there is no loss at all?

All of Larina’s basic provisions have actually found confirmation 2 years later in the UK “Financial Times” article by Jennifer Hughes: “A PC occupying trading floor” (see it on Financial Times 2004).
It underlines that during the precedent 2 years the Consortiums turnover has grown by extra daily USD20 billion thus currently stretching to USD100 billion, whereas the most prominent internet-based trading platforms ensure the average of USD15-20 billion daily turnover.
So, let’s jump to some conclusions:

1. The FOREX market is not the same as it used to be earlier, say 11 years ago.

2. There is in fact “a price fluctuation relative uniformity”, otherwise, practical quotations similarity with all the world’s brokers and traders.

3. The reason for the above uniformity has been honestly disclosed from technological standpoint, being the “flourish of electronic exchange technologies”.

4. There is no mention of other reasons for similar rates at absolutely different FOREX trading platforms the world over what links together the above platform and FOREX rates at them from financial, organizational, contractual viewpoints, etc).

5. The great interest is the remark from “Financial Times” reiterating the changes at FOREX during the latest years as narrated by an anonymous ex-dealer (?) who compares the FOREX market as of those 11 years ago: “It used to be a hell noisy and a hell splendid!”

In his opinion the market has lost a significant portion of its individuality with rise of technology. A very interesting phrase: “It used to be a hell splendid”. I would add:” It used to be a hell volatile”, with reference to the fact that the daily rates travel went as far 400 to 500 pips. And there’s nothing of the kind now.

6. Now, why has “The Financial Times” only interviewed the EBS Consortium official?
J. Jeffrey and the currency transactions department director, Fabian Shey Why wasn’t it desirous to interview the Reuters representatives (UK)? What’s the reason for such kind of disrespect to the compatriots?

Or were they hard to be contacted in London, where The Financial Times and Reuters HQs are located, moreover after maintaining that presently both, EBS Consortium and Reuters are dominant at the inter-bank market? Or The Financial Times possesses enough information on compatriots from Reuters to hold that the EBS Consortium official’s interview is sufficient without any Reuters?

7. Please, pay attention to the following from The Financial Times: “Anyway, other opinions are available. According to Justin Trenner, the current volume of on-line trading is turnover amounts to USD100 billion daily with the steep growth observed”. The Financial Times thus turns out to recognize its complete inability to trace not only FOREX cash flows, but even the trading volumes at those platforms.

The principal difference between stocks and FOREX is, by the way, readily apparent from the above. Those, writing about similar Fundamental and Technical Analysis methods for both the markets, are either ignorant as to fundamental difference of these markets, or they are deliberately swindling millions of traders.

When pointing out, that, besides the above Banks Consortium, there exist other electronic dealing facilities (e.g. Electronic Broker Service, Reuters Dealing 2000-2, etc.), N. Larina has overlooked their interrelations aspect. And there are a lot of questions: how and why there is coincidence of trends, corrections, historical highs and lows in the course of a single day, etc.

And what is the way to reconcile the statement on shunt operation of EBS and Reuters Dealing facilities with the information that Citibank, J.P. Morgan Chase and Deutsche Bank together with Reuters Group Plc have failed to stand the competition? Is it attributable to the fact that the Consortium has actually acquired Reuters, maintaining its formal sovereignty in order to support traders’ opinion that FOREX market is free and independent? If affirmative, then it’s fairly clear why the Consortium was not scared to buy the EUR on its dip from 1.36 to 1.1860, since there nothing to be afraid of with one’s knowledge of the point, below which one will not drop the rate as well as the point to stage the EUR rally to in several months with no one to interfere with Your so doing.

Hopefully, it’s now understandable who swivels trends at FOREX! The world’s largest banks Consortium does have power to reverse rates, whenever desirous, overthrowing fundamental laws, news releases, trends and common sense, just the way we witnessed on 01.04.2005 charts. But it’s not at all, traders, as claimed by Williams.

That’s why there is obvious ineffectiveness of the Williams’s Market Facilitation Index (MFI) based on fluctuations of traded volumes; to be more precise, sometimes the indicator tells the truth, whereas sometimes it lies in a barefaced manner.

The reasons are stated above: the banks Consortium pushes rates to where it needs, but not to where traders going into deals, thus accumulating the volumes, indicated on the screen. That’s why traders turn losers when making use of the Williams’s MFI indicator.

Thursday, April 30, 2009

Online Forex Trading

Online forex trading systems are usually provided by various online brokers. This in turn tells us that there are various of such systems in the market.

Now the question is which the better one is? Or is there any?

The truth is there are no better ones. As long as the online forex trading system comes with the indicators that an individual prefer using, it should be fine.

However it is crucial that the user of an online forex trading system has a good internet connection and an optimized computer system. This is crucial because of the latency issue when trading online.

How can internet latency affect your online currency trades through an online forex trading systems?

If your internet connection is slow, your online orders made through an online forex trading system will not be submitted to your online forex broker on time. For this reason, you could be losing a few PIPS (small price change in a given exchange rate).

For example: The bid price of the currency pair (EUR/USD) shown on your computer screen is 1.4825 and evaluating the currency pair on your indications, you somehow feel that the EUR currency will grow stronger at the end of the trading day and so you decide to buy EUR at 1.4825. However due to latency issues, by the time your order is logged by your online forex broker, you will end up buying EUR at a higher rate (meaning less profitable) especially in a fast moving market where every second counts.

If your computer is laggy (slow), the same situation will occur.

Needless to say, there is nothing wrong with any online forex trading system as long as your computer and internet connection is at its highest performance.