CURRENCY PAIRS — UNDERSTANDING AND READING FOREX QUOTES

Our first grade in forex literacy is for understanding how to read the price quote. In forex, currencies are always quoted in pairs. In other words, it’s only possible to value a currency in terms of another one. If you want to buy 100 Euros, how are you going to pay for it? If you were to pay in euros, you’d not be currency trading, and when you use another currency to fund your purchase of the euros, you’re actually creating a forex quote.

It’s actually quite easy to evaluate forex quotes once you get the hang of it, and the fastest way to learn is by considering some examples:

EUR/USD 1.2786

So what does the above quote tell us? What it says is that 1 Euro is able to buy 1.27 units of the US currency. Or, continuing on our previous transaction, we would have to pay

127 USD for 100 Euros we wanted to buy.

But in fact this value is only the average of the bids (price to buy) and offers (price to sell) for a currency pair at a particular time. The bid-ask spread is usually very low for the most liquid pairs, such as the EUR/USD, but at times of illiquidity in the markets, as before a statistical news release, or a central bank decision, the spread can widen to much greater levels.

The quote represents the best pricing that the world market offers for a currency pair at a particular moment. A quote on a computer does not usually include all of the offers and bids all over the world, but because of the very liquid nature of the forex market, any significant difference in quotes across different parts of the world is very quickly eliminated through computer-based, automatic arbitrage, and consequently, except at times of market turmoil the difference between regional quotes is quite low.

So let’s say return to the EUR/USD quote. Our quote is at 1.2786, and the bid-ask spread is at 0.009, as stated by the broker. What this means is that there’s a difference of 0.9 cent between what you pay to buy the same currency pair, and what you’d receive if you were selling it. There’s always a spread in even the most liquid markets, but the spread is usually widened further by the brokerage firm, so that it can make a profit from the individual traders’ deals.

The important point to keep in mind when evaluating quotes is that one quote is valid for only a fraction of a second. At times of market tension, great fluctuations can occur within the scope of one minute, rendering the quote almost useless. Despite the great focus on prices and price patterns among many traders, it’s always advisable to keep the time of the day, of the year, and the emotional atmosphere of the market in mind while deciding on what we should do about a particular quote. For example, quotes during the last few weeks of the year, or in the Thanksgiving week, or at about an hour before the opening of the US market have far less value in determining future price direction and trends than those seen during an ordinary business day at regular hours. So, to repeat, the trader must not only know the price quote at a given moment, but also the seasonal, hourly, and emotional backgrounds that influence the quote before he decides to make a trade on the information.

That skill can be gained through practice, and is perhaps easier learned through experience than reading.

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Inflation Will Remain Far Below ECB's 2% Target in 2015

Inflation in the euro area declined to 0.7% in October. The very low figure was not a oneoff but the result of the combination of low wage pressure and the end of the super-cycle in commodity prices.

Following the weaker-than-expected inflation figure we now project average inflation at 0.8% in 2014 and an increase to 1.1% in 2015.

The projection is based on the following forecast for the subcomponents.



Core inflation will remain low in 2014 and slowly start to increase in 2015. Core inflation mainly depends on prices in the service sector, which are highly dependent on labour as an input, so the subdued core inflation in 2014 reflects the high unemployment rate and the low wage pressure. In 2015, when economic growth is expected to pick up, the unemployment rate will start to decline and there will be a moderate wage pressure.
Inflation in food prices is also expected to slow down due to the end of the super-cycle. In the first 10 months of 2013 average inflation in food prices was 3.0% and was above overall inflation. The end of the super-cycle implies food prices are expected to increase around an average of 1.5%. Hence, overall growth will be closer to core inflation.
Inflation in energy prices is projected to continue to be negative until mid- 2015. This follows as supply is getting a boost due to new technologies to make most of the countries' shale formations in terms of natural gas and oil output. Additionally, growth in oil demand is slowing as growth in China is lower and less energy intensive.
There is an upside risk to our inflation forecast for 2014 stemming from the increase in the Italian VAT in October 2013. So far it does not seem that the higher VAT has spilled over to consumer prices but it can take some time before inflation starts to increase. In case the VAT increase affects consumer prices, the effect on inflation is expected to come in gradually and should add 0.2pp to euro inflation during 2014. However, the effect from the higher VAT will not change the underlying development in inflation and will drop out in 2015.

The lower euro inflation is a result of a decline in inflation in the periphery as well as in the core countries. Most core countries inflation rates are moving below the 2% target and the inflation rates in the periphery countries are generally balancing around deflation.

The outlook for inflation being much lower than the ECB's 2% target implies we expect the ECB to cut the refi rate by 25bp at the ECB meeting in December.

The lower inflation adds support to growth in the euro area. Lower inflation - driven by commodity prices - increases real income and hence purchasing power. In the euro area real wage growth is now rising 0.8%. This is a clear improvement from the decline in real wages of around 1% that took place in 2011 and 2012.

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AUSTRALIAN FOREX NEWS (AUSTRALIAN FOREX)

The Australian forex market is essentially about exchanging Australian dollars for another currency and vise versa. The demand for Australian dollars in the forex market has risen significantly since the currency was floated by the government in December 1983. With about A$1.9 trillion worth of transactions taking place everyday, the Australian dollar is the sixth most traded currency in theforex market . The currency lags only the US dollar, the Japanese yen, the Euro, the British pound sterling and the Canadian dollar in terms of trading volume. Australia Forex: Reasons for Popularity of the Australian Dollar The Australian forex market has benefited from the popularity of the country’s currency. Here are some of the reasons for the popularity of the Australian dollar: The relative lack of government intervention in controlling the value of the currency in the forex market. Relatively high interest rate offered by the Royal Bank of Australia (RBA). The strategic location of Australia in the Asia-Pacific region. Free export and import of the currency up to A$10,000. Relative stability in the country’s political and economic environment. Lower impact of global recession on the Australian economy. Australia Forex: Regulations for Brokers Forex trading in Australia is regulated by the Australian Securities and Investment Commission (ASIC). The Australian law and regulations necessitate: All brokers offering retail forex services to be registered with the ASIC. All forex brokers to have an Australian Financial Services License. Alternatively, they could be licensed with the RBA. Australian Forex: Importance of the Central Bank The RBA plays a critical role in the Australian forex market. It meets 11 times in a year to discuss issues related to its monetary policy and interest rates. Its decision on interest rates can affect the value of the dollar in the Australianforex market. Australia Forex: Most Active Trading Hours The best hours to trade in the Australian currency is around the time when Tokyo trade opens. This is the time at which the Australian economic data, which has a direct impact on the value of the country’s currency, is released.

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DETERMINATION OF FOREIGN EXCHANGE RATES

Exchange rates respond directly to all sorts of events, both tangible and psychological— Business cycles; Balance of payment statistics; Political developments; New tax laws; Stock market news; Inflationary expectations; International investment patterns; And government and central bank policies among others. At the heart of this complex market are the same forces of demand and supply that determine the prices of goods and services in any free market. If at any given rate, the demand for a currency is greater than its supply, its price will rise. If supply exceeds demand, the price will fall. The supply of a nation’s currency is influenced by that nation’s monetary authority, (usually its central bank), consistent with the amount of spending taking place in the economy. Government and central banks closely monitor economic activity to keep money supply at a level appropriate to achieve their economic goals. Too much money è inflation è value of money declines è prices rise Too little money è sluggish economic growth è rising unemployment Monetary authorities must decide whether economic conditions call for a larger or smaller increase in the money supply. Sources for currency demand on the FX market: The currency of a growing economy with relative price stability and a wide variety of competitive goods and services will be more in demand than that of a country in political turmoil, with high inflation and few marketable exports. Money will flow to wherever it can get the highest return with the least risk. If a nation’s financial instruments, such as stocks and bonds, offer relatively high rates of return at relatively low risk, foreigners will demand its currency to invest in them. FX traders speculate within the market about how different events will move the exchange rates. For example: News of political instability in other countries drives up demand for U.S. dollars as investors are looking for a "safe haven" for their money. A country’s interest rates rise and its currency appreciates as foreign investors seek higher returns than they can get in their own countries. Developing nations undertaking successful economic reforms may experience currency appreciation as foreign investors seek new opportunities.

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Short brief to forex Beginner

The US Dollar is the most traded currency in the world. It’s estimated to be involved in around

90% of all currency trades.

Even though the Dollar is the dominant currency, London is the dominant financial centre for

forex trading, with around 37% of the global market. New York is a distant second, with around

17% of the market.

Forex is not a new business and its history is as old as the history of money. But forex markets

have grown rapidly in recent years. In fact, trading volumes have more than doubled since 2004.

The increase in popularity has been due to a number of factors: the growing importance of

foreign exchange as an asset class, the increased trading activity of high-frequency traders, and

the emergence of private investors as an important market segment.

The main advantages of forex trading are:

• 24-hour trading, 6 days a week

• Zero commissions

• Enormous liquidity means tight dealing spreads

• Leveraged trading with low margin requirements

• The ability to profit in rising or falling markets

The forex market is the only financial market in the world that is truly open 24 hours a day, 6

days a week. As one market goes to sleep, another one opens. Trading starts in New Zealand

followed by Sydney, and moves around the world to Tokyo, London and New York.

The sheer size of the forex markets keeps dealing costs very low.

Forex trading is typically commission free. And the high volumes of trading (called ‘liquidity’)

means dealing spreads (the difference between the buy and sell price) are tiny. How tiny? In

forex markets, we’re talking as small as 1/100th of 1%.

Forex is also normally traded on ‘margin’, meaning you only need to put down a fraction of your

actual trade size. Because of the huge liquidity of the forex markets, the typical deposit or

‘margin requirement’ is only 1%. In other words, with a deposit of £1,000 you can place a

£100,000 trade.

You can make a lot of money by spending a small amount of money. Of course, leverage

magnifies both profits and losses. It amplifies your results.

A key feature of forex trading is that it’s always done in ‘pairs’. Every forex trade consists of two

currencies. 

You are effectively buying one currency and simultaneously selling another - you

exchange one for the other. That’s why the rate at which they are traded is called the exchange

rate.

The first currency in a pair is referred to as the “base currency” and the second is called the

“quote currency”.

Most currency pairs are priced out to four places past the decimal point.

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What happens in the market?

The currency trading (foreign exchange, Forex, FX) market is the biggest and

fastest growing market on earth. 

Its daily turnover is more than 2.5 trillion

dollars. 

The participants in this market are central and commercial banks,

corporations, institutional investors, hedge funds, and private individuals like

you.

Markets are places where goods are traded, and the same goes with Forex. In

Forex markets, the “goods” are the currencies of various countries (as well as

gold and silver). 

For example, you might buy euro with US dollars, or you

might sell Japanese Yen for Canadian dollars. It’s as basic as trading one

currency for another.

Of course, you don’t have to purchase or sell actual, physical currency: you

trade and work with your own base currency, 

and deal with any currency pair

you wish to.

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Ultimate Traders Package on forex

Both the novice and the more experienced Forex trader can gain new insights into Forex trading from

the comprehensive, step-by-step approach of MTI’s Forex training methods.

MTI’s Ultimate Traders Package on Demand is a five-phase Forex training program using live, online

Forex training classes in conjunction with home study materials. 

Through a variety of Forex tools and

resources and around-the-clock support from Forex analysts and Education Specialists, students can

learn how to make education trading decisions and build their trading confidence. The Ultimate Traders

Package on Demand includes:

16 in-depth online Forex training modules packed full of essential Forex information

Trading challenges and exercises designed to prepare students for the live market

Weekly client-only webinars that includes a LIVE! walk-through of the Forex market

Exclusive proprietary trading systems that teaches students to spot market direction and

establish entry and exit positions

Weekly mentorships with the FX Chief where he’ll focus on the psychological aspects of trading

Unlimited access to a variety of archived videos on a variety of Forex topics including Fibonacci,

Equity Management and Japanese candlesticks

2-Day On-site Forex training workshop lead by a Forex professional to review the lessons

covered in the Ultimate Traders Package on Demand

NEW! Auto-Trader Charting Add-On - an exclusive charting add-on that could help you automate

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GRATE TECHNICAL ANALYSIS For INVESTOR : Part -1.

GENERAL PRINCIPLES

Technical analysis is the study of market dynamics, most often by means of charts, with the goal of forecasting of the future direction of price development. The term "market dynamics" includes three main sources of information that can be used by a technical analyst: price, volume and open interest (as applied to the futures market). The price will mean "thermodynamic" balance between the supply and demand for the specific currency. And it does not matter what caused the balance: estimations of macroeconomic parameters, recommendations of specialists, psychology of currency traders or some other circumstances. Let us formulate three postulates on which technical analysis is based:

The course (price) takes into account everything. Any factor that influences the price (economic, political or psychological) has been already considered by the market and included in the price. Thus, everything that influences the price someway will definitely have an effect on this price. Using price charts and many of their combinations, the market announces its intentions to an attentive analyst that has a task to interpret these intentions in the right way and time. The knowledge of this motivation of market wishes is hardly required for correct forecasting. That is why everything one needs for forecasting is just to study the price chart.

Price movement is subject to tendencies (price trends). The main goal of making charts of price dynamics is to find the tendencies at early stages of their development and to trade in accordance with their trends. Directed movement of the price is called a trend.

Three types of trends (tendencies):

Up ("bullish" trend) – the prices go up

Down ("bearish" trend) – the prices go down

Sideways (flat, whipsaw trend) – no definite trend of prices.

Three types of trends (tendencies) according to their duration:

Long-term (main) – a trend with the term from 6 months to several years.

Medium-term (intermediate) – a trend with the term from 2 weeks to 6 months.

Short-term (short) – a trend with the term up to 2 weeks.

Basic laws of price development:

The current trend in likely to keep than to change its direction.

The trend will move in the same direction until it weakens.

Main types of charts

1. A linear chart – plots only the closing price for every subsequent period. It is recommended for short time frames (up to several minutes).

2. A bar chart – shows the highest price (upper point of the bar), the lowest price (lowest point), the opening price (the dash to the left of the vertical axis) and the closing price (the dash to the right of the vertical axis). It is recommended for time frames of 5 minutes and longer.

3. A Japanese candlestick chart (is made on the analogy of the bars). The rectangle between the opening price and the closing price is called the candlestick, while the dashes from the candlestick to the high and low prices at any given time frame are called shadow. The presentation is similar to representation in bars. The candlestick with high > low is called a bullish candlestick (White Day) and its body is filled in white (or green). The candlestick with high < low is called a bearish candlestick (Black Day) and its body is filled in black (red). The candlestick, where the open and the close are approximately equal, and the high and low are very different, i.e. the body of the candlestick has a small size as compared with the shadow are called Doji.

4. A point and figure chart: does not have linear representation of time, a new bar of prices is plotted after another trend appears in the dynamics. A figure is drawn if the prices go down by a certain number of points (reverse criterion), if the prices go up by a certain number of points, a point is drawn.

5. Arithmetic and Logarithmic Scales. For some types of analysis, especially if it concerns long-term trend analysis, it is useful to utilize the logarithmic scale. In the arithmetic scale the distance between the points is invariable. In the logarithmic scale, a similar distance corresponds to similar changes percentagewise.

6. Volume charts.

DOW THEORY

Initially, the principles set forth by Charles Dow were used to analyze the American indexes created by him, the industrial and railroad industrial averages. But most of Dow’s analytical derivations can be equally well used on financial markets.

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Forex — the Foreign Exchange Market

At the end of the 1970s, after abolishing the fixed rate system of national currencies as compared to US dollar, the FOREX market started to be formed (Foreign Exchange operations – operation of exchange of currencies based on demand and supply). By now the FOREX market has turned into a global market that is united by a communication network and that is opened on Monday morning in New Zealand and is closed on Friday evening in the USA. 

Depending on the time zone and on the entering of various regional participants on the market, everyday trade on the forex market is divided into several trading sessions. Below we mention the main regional sessions on the FOREX market.

American and Asian sessions are the most aggressive, the biggest volume of operations falling on the European sessions. New Zealand and Australian sessions are considered as the most quiet.

The product that is traded at the FOREX market is money (a product with 100% liquidity) – a product that has both buyers and sellers at any time on the FOREX market. Twenty-four-hour access to the foreign exchange markets of Asia, Europe and America make it possible for the trader (a person, who manages capitals on financial markets) to make transactions at a most profitable price, while a bank credit with a 1:100 leverage 

provided by its counterpart allows the trader to get high profit with a relatively small collateral (own means) within a short period of time. The fact that it is very simple to do the transactions (over the phone or using Internet) makes this market attractive for business people.

Unlike other markets, the FOREX market is characterized by the biggest volume of trade, minimum cost of the transactions and the quickest way of the flow of funds. Liquidity of the forex market has grown up to several trillions a day. At present, operations on the FOREX market are the main source of income for many leading banks and other financial institutions in the world.

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Another way to categorize Technical Indicators

Technical Analysis

:

Patterns and forecast methods used today

Basic Forex forecast methods:

Technical analysis and fundamental analysis

This chapter and the next one provide insight into the two major methods of

analysis used to forecast the behavior of the Forex market. Technical analysis

and fundamental analysis differ greatly, but both can be useful forecasting

tools for the Forex trader. They have the same goal - to predict a price or

movement. The technician studies the effects, while the fundamentalist

studies the causes of market movements. Many successful traders combine a

mixture of both approaches for superior results.

If both Fundamental analysis and Technical analysis point to the same

direction, your chances for profitable trading are better.

The categories and approaches in Forex Technical Analysis all aim to support

the investor in determining his/her views and forecasts regarding the

exchange rates of currency pairs. This chapter describes the approaches,

methods and tools used to this end.  However, this chapter does not intend to

provide a comprehensive and/or professional level of knowledge and skill, but

rather let the reader become familiar with the terms and tools used by

technical analysts.

As there are many ways to categorize the tools available, the description of

tools in this chapter may sometimes seem repetitive. The sections in this

Another way to categorize Technical Indicators:

The indicators and tools aim to provide information in various approaches:

•

Cycle indicators

A cycle is a term to indicate repeating patterns of market movement,

specific to recurrent events, such as seasons, elections, etc. Many

markets have a tendency to move in cyclical patterns. Cycle indicators

determine the timing of a particular market patterns. (Example: Elliott

Wave).

•

Momentum indicators

Momentum is a general term used to describe the speed at which prices

move over a given time period. Momentum indicators determine the

strength or weakness of a trend as it progresses over time. Momentum is

highest at the beginning of a trend and lowest at trend turning points. Any

divergence of directions in price and momentum is a warning of weakness;

 

if price extremes occur with weak momentum, it signals an end of

movement in that direction. If momentum is trending strongly and prices

are flat, it signals a potential change in price direction. (Example:

Stochastic, MACD, RSI).

•

Strength indicators

Market strength describes the intensity of market opinion with reference

to a price by examining the market positions taken by various market

participants. Volume or open interest, are the basic ingredients of this

indicator. Their signals are coincident or leading the market. (Example:

Trading Volume).

•

Support/Resistance indicators

Support and resistance describe price levels where markets repeatedly

rise or fall, and then reverse. This method shows the price levels at which

the market is expected to reverse and stay within the S/R levels (e.g. –

not exceeding the support or the resistance level). This phenomenon is

attributed to basic supply and demand forces. (Example: Trend Lines)

•

Trend indicators

Trend is a term used to describe the persistence of price movement in

one direction over time. Trends move in three directions: up, down and

sideways. Trend indicators smooth variable price data to create a

composite of market direction. Generally, the trend could be either UP,

or DOWN, or TREAD (flat). (Example: Moving Averages, Trend lines).

•

Volatility indicators

Describe the intensity of fluctuations in the market prices. A change in

the volatility level hints at a coming change in the price. Volatility is a

general term used to describe the magnitude, or size, of day-to-day price

fluctuations independent of their direction. Generally, changes in

volatility tend to lead changes in prices. (Example: Bollinger Bands).

Unlike the fundamental analyst, the technical analyst is not much concerned

with any of the “bigger picture” factors affecting the market, but

concentrates on the activity of that instrument's market.

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If you are New to Forex Trading read this?

Forex is traded much like any other financial instrument, using a combination of fundamental and technical analysis.

If you'd like to learn how to become a successful forex trader, consider a professional forex training course. FOREX.com is pleased to offer multiple forex training options that teach investors how to:

Understand the logic behind Forex trading

Recognize market trends

Develop a forex trading plan

Utilize tools to help you manage risk

React to major economic events impacting global currencies

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Forex Tips to Play with Safely

Be careful when you’ve started to invest your money into investments with this one, because in playing the forex we will have 2 chances, which is a loss that can not be at bargain-bargain anymore and opportunities that benefit both the multiple of the capital we invest.

Well, sometimes there are people who lust when playing forex, to the extent that they invest all their money until no trace, but do not try this way because it can be dangerous, I once heard a story of someone who started with capital of 1 billion, but he’s still a beginner, until funds shrank to 80 million, So, be careful in playing.

Here are forex tips on safe play:

1. playing with a small number of lots, a maximum of 0.1.

2. make sure you are also sizable capital depend on the number of lots you are playing, that I recommend is 0.1 to 0.1 ever you please at least start with a capital of 25 million, because playing the forex with small capital will only be wasting your money, because the movement of foreign exchange was fierce.

3. Put an investment when the news was a big class, meaning that if there is big news that has a major influence on the movement of foreign exchange so please you invest according to predictions of movements in currency values.

4. Do not use a robot!.

5. Do not invest your money when the market is stable.

6. Do not be too long to hold Loss.

In this way you can play the forex with a safe, and play with the calculation (because of using the news, not thought. And that used large capital investments posted yet smaller, more flexible if loss

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Non-farm payrolls Use at Forex

Monthly changes in labor including agriculture . Non-farm payrolls is the indicator most closely monitored in the employment data, as it is considered as the most comprehensive measure for job creation in the United States. Differences in the data on the numbers NFP is very important, given the importance of economic employment data for the U.S. . 

In particular, political pressures come into play, because the Fed is responsible for keeping the number of jobs in order to show that a positive and substantial impact to interest rate changes. data showed that non-farm payrolls showed employment increased or decreased as a major effect on inflation. On the other hand, Non-farm Employment suggests a slowing economy, the decline of the currency makes U.S. .

One of the most widely anticipated report on the economic calendar the U.S. include employment situation, because the report gives an overview of job creation, losses, wages and hours of work in the United States . The data in the report on the survey directly to the public. In can be directly from the public with any personal interview. The effect is an effect on the business world, so the accuracy of its data is reliable. The employment situation has important figures such as: Change Data Non Farm payrolls, unemployment, industrial payrolls, the company's balance sheet income statement each month.

The data needed to make a Non Farm Payroll report is as follows: 

Status of Working Age: 

I Population Age Earning / Working for 2 periods.

  I.1 Working

  I.2 Not Working

Not Working Age Population II

Percentage of Population Not Working: 

III Percentage Composition of Population is Not Working

 III.1 Male Adult

  Female Adult III.2

  III.3 Youth

  White III.4

  III.5 Leather Black (African-American)

  Hispanic and Latino Population III.6.

Breakdown of the Working Population:

Composition IV Working population which includes components of Non Farm Payroll 

     Goods Production Sector IV.1 

     IV.1.1 Construction

     Plant IV.1.2

     IV.2 Sector Service Providers

     Retailing IV.2.1

          2 Professional and Business Services

          Health and Education 3.Jasa

          4.Rumah Pain and other services.

   IV.3 Government

Hours: 

      Total hours worked V 

      Industry VI

      VII Overtime

Wages Amount paid:

    - The average wage per hour (Total)

    - The average weekly wage (Total)

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Part I. Forex Scam - Money Managers

But fortunately, the Forex Peace Army is here. If you spend some more time with us and not just in our Military School – you will get much more material, both theoretical and practical, that will prevent you from been a scam victim of any forex scam.

I hope you know demand/supply financial law. While demand exists – supply will exist also. In other words, while people exists that buy into these frauds – there will be swindlers always near them. Another reason is that people are less familiar with currency trading compared to bonds and stock shares. Bonds and stocks are intuitively easier to understand and they have solid barriers to start trading. At the same time there is a huge campaign to show that trading on forex is easy. On TV you see a well dressed person who sits in front of a laptop somewhere on the see shore with cup of coffee. With a smile, he or she presses buttons on trading software. After that he or she jumps into an expensive car and drives to some country club. That makes people think that this is really so. When they match advertisement on TV with some “great trading system” being offered – that’s it! One desire confirms the other!

 : So, as I’ve promised we will talk a bit about the other side of the moon – possible pitfalls that wait on the road of forex trading. One of the biggest pits is Forex Scam. We even more have to speak about it, since we are the Forex Peace Army and “seek and destroy” scam is our major aim. So, we know a lot about them, their tricks and cunning. But here we will just point out the biggest issues and will not overlap with other content of our website. In corresponding parts you will find a lot more information that also appears to be really practical and not just theoretical as it is here.

Rizwan Awan lures in a new victim

Click here to read the true story a forex account manager who never stops scamming.

Pipruit: Yes, I need to know more. Forewarned is forearmed.

 : Right and we will start with Trading Managers. May be this will not touch you at this time, but I’m ready to bet that before you have come to our school – you’ve thought about it. Trading Managers are those who offer you to trust them your money. These people will trade/invest for their clients. Many people think about this seriously. “I do not know how to trade and know nothing about Forex and financial markets. But I want to increase my capital, and increase it solidly. If I put my money on bank deposit – this will give me too small of a return, while here I can become rich fast, at least this is financial markets – fast way to high wealth.”

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That is the thought sequence of many people. When they come to this conclusion, the next thought is: "They take just a part of my profit. This sounds reasonable” and then “What do I know about trading and forex – nothing. But they are professionals with large experience of successful trading, they know what to do, since they have spent a long time in this business. With my job on my shoulders – I have no time to study trading and forex, why I shouldn’t trust professionals?"

Pipruit: Well, you’re right, sir. I’ve had such thoughts initially, because a professional manager will probably trade much better than me. I think I'll look online for forex account managers and see if there's one showing good returns on his website.

 : Well, don’t you think that this is a bit of curious venture – give your money to the first comer?

Pipruit: … I don’t know, he is still a manager…

 : Right. The major question is manager of what and to where? To take clients money is very simple task, especially on over-the-counter market as Forex, that are not so strictly regulated, compared to exchange markets. As a result your so-called manager charter a private plan and leave for some tropic personal island somewhere and will use your money to help pay to build a castle on the shore. And you will try to start a lawsuit to catch this bastard and get your money back. If you will get very lucky and lawsuit will start – it will appear that there is huge drawdown in client’s assets, but your manager now claims to be unemployed and all his property is hidden away in some banana republic offshore and does not appear to belong to him legally.

Pipruit: I can’t believe it…

 : Ok, may be this is too ultimate a picture and I carry it too far for the average managed forex scammer. But still, manager could be in cahoots with the broker so he will trade too much to pay more spread, he could intentionally lose all your money and get kickback from Dealing Desk broker and it will be very hard to prove it. There are a lot of different chances to grab your money.

Pipruit: So, I can’t trust to any manager?

 : Not quite. In fact, there are persons that are really good managers who are real old sweats of trading with huge experience and knowledge. They exist, but they are more the exception rather than the rule.

Pipruit: I see and what I have to do to find one?

 : Yes you can. This may or may not be a smart decision. But here is some advise to you:

1. Before giving your trust to anybody – scrutinize and investigate his results in trading. Our Managed Accounts reviews and Managed Accounts Performance Tests will help you with that;

2. Depending what you’re searching for, signals, trading systems or managers – investigate all of our other reviews and all of our performance tests.

3. Pharaoh does a great work – visit his Basics boot camp and particularly the topic dedicated to managed forex accounts to learn some ways to separate scam managers from real ones.

For the short haul that will be enough. If you will need some more – you can ask questions at the FPA and try to dig into this issue deeper.

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Major anti-scam rule to follow

 Do you remember “Dennis The Menace 2” movie, where two crooks have come to Mr. Wilson and offered him a rejuvenation machine “for only $15,000”. This is such a good machine, it’s priceless and we will give it to you just for 15 K USD advance payment. You have no risk, since you have our priceless machine as a pledge. Surely we will return you your puny 15 K USD if somehow you will become unsatisfied, what is hardly likely. Don’t you think that we can change puny 15K for our super machine – this is madness.

Pipruit: Yep, excellent movie – one of my favorite, especially Denis’ dog – Briar.

 : Right. I like this dog too, but let’s return to our business. You have to remember what kind of machine this was…

Pipruit: Sure I do – that was a fake

 : Right. Now I’ll give you another description. What will be if some well-dressed gentlemen will come to you and offer some superb trading system or managed account or software or anything else, that will give you 10000000…0000% of profit in 1 year with 100% probability. This is just a pips machine – just take a look at past performance! It will turn your 1000 USD account into billions in just one year and Mr. Buffet will clean your boots to make some money! This system (software, manager) costs just a puny 20 K USD. You have no risk, since you will get our priceless software or trading system on your hands. If something will go wrong – we will surely return your money, since we will not want to risk our priceless invention for your puny 20 K USD.

Pipruit: I get the analogy, sir. By the way, I’ve seen this offer a lot of times. Some advertisement I even got by post in pretty good envelopes on excellent glossy paper with charts, explanations and so on.

 : Yep. This is also of this kind. So, anybody has to understand that the major rule – There is no Holy Grail on Forex. You can get money and profit only as a result of hard work – sounds equal to any other sphere right? Those swindlers also get money by hard work – but their work is of another kind. Trading is an exciting journey, but there is no trigger that adds to your 1000 USD the letter “K”, turning your cash to 1000 K USD. 90% of all who offers you such products mostly are swindlers and as we call them – scam. They are not some mystic substance – they do really exist and their hard work is to grab your money once you have become careless.

Pipruit: But why does it continue to happen even now, since this fact is well known already?

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Linkage Between Technical and Fundamental Analysis

To become a master forex, you need to know how to effectively use both types of analysis. Let’s look at an illustration that shows how focusing on just one type of analysis could turn into a disaster.

* Let us say that one time you look at your charts (technical) and you find an opportunity that very good trading opportunities. With a fiery passion you once had a dream that money will fall like rain from the sky. You think, wow I’ve never seen an opportunity like this sweet (I love my chart).

* Then with full confidence you immediately proceed to enter orders to broker transactions. With a big smile, eagerly await your reply as though profits have been in plain sight.

* After a few moments, and the order has been opened, you know …. price movements into the opposite direction and move to another, you see a loss of 40 pips. Apparently if you know, just no interest at the rate of decline in the currency you who are holding, so the value of those currencies weaken, and now everyone in the market moves to remove the currency (against all your graphic analysis).

Maybe you think that the illustration above is too over or dramatized. Yes. possible, but at least you can get the purpose of illustration. Moreover such as we now return to your question. ‘Can you guarantee if this does not happen? ”

Back to the illustration above, so now your dream seemed in vain, beautiful dream you are damaged by lightning in broad daylight, worse you feel that the charts / analysis of your field who are seen as waste only (buang2 time and the mind / brain). But if you are more wise not to ignore the fundamental factors, perhaps the above need not occur.

Forex is like a big ball of energy moving and flowing, the ball there is a balance between fundamental and technical factors that play a role in determining where he will move, where the direction of the market. No reply can be the dominant element of control to 100%, be it fundamental or technical, even the forex market was not separated from the natural law.

Remember how will the presence of the mother and father against son. Mother gave Dad gives sensitivity is rationality. The best results for children remains the synergy of both.

In learning forex analysis, the same applies when deciding the type of analysis to be used. Do not rely on just one. Instead, you must learn to balance the use of each of them, because that’s going to make you really can get the most from your trading.

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Euro could rise due to increase in the CPI, dollar looks at data for clues as to QE

The euro may extend the gains as inflation confronts the betting on ECB stimulus. The dollar interprets the U.S. news flow continues regarding the expectations of a reduction of QE.

Interview approaches

• Euro could rise if the CPI increase on stimulus expectations for ECB overloaded
• U.S. dollar considered news flow continues through eyes of a Fed QE outlook
• NZ dollar develops in Asia amid signs of resistance against strong currency than average

The preliminary data of the CPIs of the euro zone in May are the headlines of the calendar in European trading hours . It is expected that inflation will rise to 1.4 percent year on year, which is the first increase in eight months. A surprise on the upside, according to the German data , which were released earlier in the week, could dampen the expectations of a short-term extension of a stimulus and the ECBeuro support.

Later, the focus is directed to the numbers on the private income and expenditures of the U.S. and also to the Chicago PMI survey and the final revision of the measure of consumer confidence from the University of Michigan in May. Traders will continue to regard the U.S. economic news through the eyes of policy expectations for the Fed, with stronger results probably the bets will heat up relatively rapidly to a retreat from the monthly QE purchases. Such an outcome is likely the U.S. dollar inflation, while weak numbers should cause the opposite effect.

The currency markets were in consolidation mode overnight, with little change majors, as traders digested the increase in volatility over the last week. The New Zealand dollar proved to be well supported in the trading session and put on encouraging economic data on average 0.4 percent against its top counterparts.

The terms of trade index rose unexpectedly in the first quarter to 4.1 percent, which represents the largest increase in three years, while the scale for the ANZ economic optimism reached its highest level since July 2011. Together, the results indicate the resistance to the strong exchange rate, which threatens to undermine the growth in an economy in which exports account for nearly 30 percent of GDP.

Take advantage of the mood in the market with the DailyFX Speculative Sentiment Index

Asian trading hours:

GMT	WHRG	EVENT	ACT	FORECAST	PREV
22:45	NZD	Terms of trade index (QoQ) (1Q)	4.1%	1.5%	-1.2%
23:01	GBP	GfK survey on the consumption of confidence (MAI)	-22	-26	-27
23:15	JPY	Nomura / JMMA PMI manufacturing (MAI)	51.5	-	51.1
23:30	JPY	Household expenditure (yoy) (APR)	1.5%	3.0%	5.2%
23:30	JPY	Make money to candidates (APR)	0.89	0.87	0.86
23:30	JPY	Unemployment rate (APR)	4.1%	4.1%	4.1%
23:30	JPY	National CPI (YoY) (APR)	-0.7%	-0.7%	-0.9%
23:30	JPY	National CPI excl fresh food (YoY) (APR)	-0.4%	-0.4%	-0.5%
23:30	JPY	National CPI excl Food, Energy (YoY) (APR)	-0.6%	-0.7%	-0.8%
23:30	JPY	Tokyo CPI (yoy) (MAI)	-0.2%	-0.4%	-0.7%
23:30	JPY	Tokyo CPI excl fresh food (yoy) (MAI)	0.1%	-0.2%	-0.3%
23:30	JPY	Tokyo CPI excl Food, Energy (YoY) (MAI)	-0.3%	-0.7%	-0.7%
23:50	JPY	Industrial Production (MoM) (APR P)	1.7%	0.6%	0.9%
23:50	JPY	Industrial Production (YoY) (APR P)	-2.3%	-3.4%	-6.7%
1:00	NZD	ANZ economic optimism (MAI)	41.8	-	32.3
1:00	NZD	ANZ activities outlook (MAI)	34.3	-	30.3
1:30	AUD	Credit to the private sector (MoM) (APR)	0.3%	0.3%	0.2%
1:30	AUD	Credit to the private sector (yoy) (APR)	3.1%	3.0%	3.2%
1:35	CNY	MNI Business Sentiment Indicator (MAI)	56.7	57.1	58.5
3:00	NZD	M3 (yoy) (APR)	6.5%	-	7.0%
4:00	JPY	Production of motor vehicles (yoy) (APR)	-6.5%	-	-16.4%
5:00	JPY	Housing Starts (YoY) (APR)	5.8%	4.1%	7.3%
5:00	JPY	Works contracts (yoy) (APR)	2.0%	-	-3.4%
5:00	JPY	Annualized Housing Starts (APR)	0.939 million	0.923 million	0.904 million

European trade time:

GMT	WHRG	EVENT	EXPECTED / AKT	PREV	EFFECT
6:00	EUR	German Retail Sales (MoM) (APR)	0.4% (A)	-0.1%	Means
6:00	EUR	German Retail Sales (YoY) (APR)	1.8% (A)	-2.5%	Means
7:00	CHF	KOF leading indicator for Switzerland (APR)	1.07	1.02	Means
8:00	EUR	Italian unemployment rate, seasonally adjusted (APR P)	11.6%	11.5%	Deep
8:00	EUR	Italian unemployment rate, seasonally adjusted (1.Q.)	11.6%	11.2%	Deep
8:30	GBP	Net consumer credit (APR)	0.4 billion	0.5 billion	Deep
8:30	GBP	Net loans Sec. Dwellin on (APR)	0.5 billion	0.4 billion	Deep
8:30	GBP	Mortgage approvals (APR)	54.6 thousand	53.5 thousand	Means
8:30	GBP	M4 money supply (MoM) (APR)	-	-0.9%	Deep
8:30	GBP	M4 money supply (yoy) (APR)	-	0.3%	Deep
8:30	GBP	M4 ex IofC 3M, saar (APR)	3.3%	4.6%	Deep
9:00	EUR	Estimated the Euro-zone CPI (yoy) (MAI)	1.4%	1.2%	High
9:00	EUR	Euro-zone CPI - Core (YoY) (MAI A)	1.1%	1.0%	Means
9:00	EUR	Euro-zone unemployment rate (APR)	12.2%	12.1%	Means

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