Fundamental vs. Technical Analysis in Forex

The forex market has experienced enormous popularity in the past few years, thanks to technology and the flexibility offered by the genre for the average retail forex trader.  You can trade anytime and from anywhere, but success still depends on knowledge, experience, and emotional control, factors that impatient newcomers to this investment medium are loath to admit before they crash and burn.  Yes, casualty rates are high due to high risks, and specialized training is a must have from the get go.

For stock traders that wish to try their hand in this “greener pasture”, minor adjustments are necessary before committing real capital in the forex market.  A trader’s “best friends” continue to be fundamental and technical analysis, although a few nuances must be accommodated up front.

Fundamental Analysis

Stock traders tend to be deep in fundamental analysis skills related to financial statements, selected sector performance, and business cycle impacts.  In the forex world, the fundamentals are not so “isolated”.

• Nearly anything and everything can make the markets move, some things more dramatically, but sensitivity to events is definitely moved up a notch. 
• Currencies come in pairs and do not have “intrinsic” value. 
• Traders invest in a “position” that has “relative” value, depending on the nature of the economic health or the currencies respective countries. 
• Every position equates to a “long” in one and a “short” in the other. 
• Bankruptcy is not a concern, especially for the major pairs connected with the Dollar, but cyclical waves occur more frequently.

Experienced traders soon recognize that they cannot compete on a fundamental data interpretation basis with large global banks and hedge funds that devote considerable resources to this activity.  One needs awareness of key data release calendars to prevent being blindsided by a sudden disruption in the market, and an intuitive capacity to understand how major fundamentals will impact the market.  The objective then becomes to join a potential trend and ride it for all it is worth, accepting that if the market reverses, then you act quickly to minimize the damage.

Technical Analysis

Technical tools take on a greater importance in this medium since both volatility and sudden directional changes create a rather chaotic trading environment.

• Traders focus on a few favorite indicators and continually review a variety of timeframe snapshots to validate the certainty of a forceful trend, either up or down. 
• Fibonacci retracement ratios take on a more surreal nature as consistent signifiers of support and resistance. 
• Searching for high probability setups is facilitated by technical analysis as the only way to optimize both entries and exits in a very fickle market.
• Understanding trader psychology also helps in recognizing some of the subtler forex gyrations.

Pricing movements in the forex market, however, do replicate wavelike patterns and often suggest a tendency that can be anticipated with experience.  Technical indicators and pattern recognition skills do easily transfer from other trading mediums, but a quicker and defter touch is the distinguishing characteristic.  The action is swift, and you can easily miss a major market move in the blink of an eye.

The Need for a Disciplined Approach

Due to the intensity of the currency markets, a successful trader must have a step-by-step trading plan that governs his every move before, during, and after a position is closed.  The plan must incorporate both fundamental and technical analytics, along with prudent risk and money management principles.  Lastly, invest the time necessary in practicing on a “free” demo system that trades virtual cash with real time quotes.  Fine-tuning your trading plan will pay dividends later when real capital is on the line.

Investing in an Economic Downturn or Recession

It has been known for many moons, and over many business cycles, that during every economic downturn, or recession, things follow a similar path. One of the first things we see is a bear market in equities. Short-selling in the stock markets is a bit tricky, however, particularly with regulators around the globe deliberately trying to curtail it, so this is not the equivalent of going long in a bull market. So it came to be known that during

Correlation Between Currencies

Correlation between sets of data refers to the statistical relationship that exists between them. In forex trading, if we take two currency pairs, for example, we can calculate how closely their price is correlated, giving us insight that we may be able to exploit for future profit. This can result in improvements to our trade expectancy by refining our entry and exit strategy through analysis of highly correlated pairs, by optimization of exposure to uncorrelated currency pairs, or by several other means. If you are not sure what that means, it's ok, once you become familiar with the concept of correlation, its usefulness will be very clear. In this article, we will focus on how to calculate the "correlation coefficient", a number between -1 and +1, which indicates how closely related two currency pairs (or any other data sets) are. Follow-up articles will provide a broader study of its possible uses in extracting profit from the forex market.

Forex Hedging

There are a number of forex dealers, dare I say even the majority, who allow clients to practice what is commonly referred to as “hedging” in the forex. What this means is that they allow clients to open both long and short positions in the same currency pair, at the same time. Other dealers, on the other hand, automatically close your positions when you enter orders that are exactly opposite to your open positions. There is an ongoing debate among retail traders about whether the practice of “hedging” is useful or not. There are traders out there who swear by “hedging” and others who think it is absolute bollocks.

First off, let’s differentiate this type of hedging from hedging in other markets.

Forex Position Sizing

For many new forex traders, the promise of quick riches is difficult to resist. That is the main reason why every day, so many people from all walks of life begin trading the forex market. While some element of this “keep your eyes on the prize” mentality is necessary to get traders through the tough times, on any given trading day one should really focus on other things first.

Mechanics of a Forex Trade

For those who are thinking about entering the forex market for the first time, there is some very basic information that is often overlooked. For example, what exactly is happening when you enter a trade? Well it’s simple really, but important to understand. Say, for example, that you have a shiny new $10,000 account. You find a great entry on EUR/USD that you want to take. You enter a 1 mini lot long position with a 100 pip stop loss and a 200 pip take profit target at a price of 1.2500. What just happened? In the meantime, what you

Calculating Leverage in Forex

The concept of leverage is really quite simple, but its true meaning often becomes lost in the mountain of marketing-speak most forex brokers dish out at us traders. The misconceptions always arise as a result of the interchangeable usage of the words “margin” and “leverage”. These two concepts are related, but are in fact not interchangeable except in the most extreme (and suicidal) case where a trader decides to use the maximum leverage available to him under the broker’s house rules.

Forex Price Dynamics

In order to gain an understanding of what actually moves the prices, or exchange rates in the interbank market, we must first understand that for any transaction to take place, there must be a buyer and there must be a seller – there must be a counter party for every trade. Open interest in the forex can be loosely defined as the combination of all resting (limit) orders. Many market participants set such orders either above (sell limit) or below the current price (buy limit). These orders are to be filled only when price reaches the set level. For example, say we are trading EUR/USD and the current bid price is at 1.2500. We set a sell limit order at 1.2501. When will our order get triggered? Once all the sell orders at 1.2500 have found buyers, the bid

ECN vs. Market Maker Comparison

This article assumes some knowledge of the way the forex market and forex brokers work. If you are not familiar with this, we recommend that you first read our "Structure of the Forex Market" and "How Forex Brokers Work" articles. Contrary to popular belief, ECN's are not superior to Market Makers in every way. There are advantages and disadvantages on both sides.
Minimum Deposits

How to Choose a Forex Broker

Choosing a good forex broker is one of the most important decisions you need to make at the beginning (or at any point) of your forex trading career. Do not take this decision lightly, but at the same time don’t stress over it – the process does not need to be complicated – just like in your trading decisions, once you do your homework, things tend to fall into place. Chance favors the prepared trader and everything you need to make an informed decision is listed right here. All you have to do is follow the advice given and you will find yourself a broker that suits your needs. If you are not familiar with what is available, you can have a look at the brokers we have listed in our Broker Reviews section to familiarize yourself with who is who in the forex world. If you have already narrowed down your search to just a few, or even one broker, and want to be sure that they are in fact what you want, then keep reading.

Regulation (the "Legitimacy Test")

The first thing you need to do is check whether the broker is regulated. The fact that the forex market itself is not regulated opens the door to a lot of possibilities for a scheming mind. There are shifty brokers out there, ranging from outright scams to just badly run businesses which are not accountable to any regulatory body. The brokers who are regulated choose to be so, in order to add a layer of legitimacy to their reputation. Please do NOT fund any accounts with an unregulated forex broker. There are not many good reason to do so, and plenty of reasons not to. It just makes sense.

By far the most respected regulatory bodies are the US-based National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC). Most forex brokers, even if they are not based in the United States, are members of the NFA and registered Futures Commission Merchants (FCMs) with the CFTC. The UK based Financial Services Authority (FSA) is also a well respected regulating body, as is CySEC (Cyprus), ARIF (Switzerland), ASIC (Australia) and SFC (Hong Kong) among others. Just because a firm writes on their website that they are regulated however, does not make it so. Always check the websites of the regulating bodies themselves – they all offer a searchable database that allows visitors to find regulated members by name:
NFA/CFTC: http://www.nfa.futures.org/basicnet/
FSA: http://www.fsa.gov.uk/register/home.do
ARIF: http://www.arif.ch/en/membres.htm
CySEC: http://www.cysec.gov.cy/licence_members_1_en.aspx
ASIC: http://www.search.asic.gov.au/gns001.html
SFC: http://www.sfc.hk/sfcprd/eng/pr/html/PR002.jsp?charset=ISO8859_1

It is also important, particularly for US-based forex brokers, to be well capitalized. Well capitalized companies tend to be much more stable and less prone to insolvency. This is particularly true in the US because brokers here are not required to keep client funds segregated from company operating capital, so clients are at increased risk in case of insolvency. For CFTC registered FCMs, you can look up the broker’s operating capital:
http://www.cftc.gov/marketreports/financialdataforfcms/index.htm

Furthermore, if the broker does keep client funds segregated, it is certainly a bonus, since it provides additional protection of client funds even in case of insolvency. FSA regulated brokers, for example, are required to keep client funds segregated. This of course begs the question, where are the funds being kept? Are they in a safe account at a large bank or some dodgy private bank in the Cayman Islands? You can find answers to these questions in our broker reviews section. Alternately, the broker’s customer support should be able to answer these questions. If they cannot, they may be hiding something (or the customer service rep may simply be incompetent - either way it's not a good sign).
Finally, as far as legitimacy is concerned, it is always prudent to check the WHOIS database for the broker's domain name. If the contact information they provide is misleading, such as a virtual office, or hidden using a privacy protection service such as PrivacyProtect.org, it should immediately raise flags. Any serious business should freely display their real contact information instead of hiding it.
Timeframes

OK, so your broker has passed the “legitimacy test”. They are regulated, well capitalized, and they don’t mix client funds with operating capital. Now it’s time to make sure that they provide the type of trading conditions that suit your trading style. Depending the timeframes that you trade, it may be important for spreads/commissions to be very low. Also, if you trade very short timeframes (scalping) you should make sure that your broker doesn't have a problem with that. Generally, brokers who are market makers will have a problem with it, while brokers that use straight-through processing or actual ECNs generally don't mind. Please read our "ECNs vs. Market Makers" article if you are not sure what that means. If you are a day trader, then your transaction costs can make you or break you. If you enter and exit the market several times per day, these costs really add up. Consider, for example, that you are trading 1 mini lot (10,000), 5 trades per day on EUR/USD. If the spread your broker offers you is 3 pips on average, then you are paying $3 per trade, $15 per day, $300 per month etc… you get the picture. If you instead had a broker that offers you an average spread of 1 pip on EUR/USD, then you would be paying $1 per trade, $5 per day, $100 per month! That’s a difference that anyone serious about their business should not ignore.
On the other hand, if you are a position trader, who makes 5 trades per year, then the difference amounts to only $10 per year. This is minimal and may very well be outweighed by other factors, such as perhaps higher overnight interest rates in a carry trade strategy, or better customer support or some other factor that gives you more than $10 of value added with the higher spread broker. So neither broker is better or worse, they are just better suited to different styles of trading.

Automated vs. Discretionary Trading Styles

Some broker platforms are also better suited to automated trading. For example, MetaTrader 4 (MT4) is a favorite among retail traders who program their own “Expert Advisors” or “EAs”. If that’s you, then this could be a determining factor when choosing a broker. On the other hand, if you are a discretionary trader who bases trading decisions on a combined technical and fundamental analysis approach, then it may not matter to you whether the broker offers MT4 or not, as long as the platform offers you good charting. You can visit our broker reviews page for details on which brokers use which specific trading platforms.

Islamic Swap-Free Accounts

Another factor could be a broker’s choice to offer Islamic accounts, which do not charge or pay any rollover or swap interest. Traders bound by Sharia Law are not allowed to conduct any business dealing with interest, so some brokers may be off your list as a result. Many brokers offer swap-free accounts, but many also do not. Moreover, some brokers that do offer swap-free accounts may do so only under certain conditions (read extra fees), since such accounts are susceptible to abuse, and brokers are very much aware of that.
It should also be noted that the brokers who do offer swap-free accounts to all their traders, with no extra charges, are a great choice for non-Islamic traders as well, if they simply want to short the carry trade - just be careful, as most such brokers are not regulated.

How Forex Brokers Work

Like any other business in the history of business, your broker’s raison d’etre, is to make as big a profit as possible. There are about as many ways to go about this as there are brokers. For those who are in it for the long haul, however, it is generally best to adopt a set of practices which are deemed fair by their clients: certain boundaries are set, and operating beyond them can cost a brokerage its reputation, and along with it its clients. Straying outside these boundaries, therefore, is not considered as being in line with the long term goals of the business. How strictly these boundaries are enforced, especially when there is little chance of

Structure of the Forex Market

The forex is unique among financial markets in a number of ways. One of these is that it was not traditionally used as an investment vehicle. It had, and still maintains to some extent, a somewhat more utilitarian purpose. In today’s globalized economy, most businesses have some international exposure, creating the need to exchange one currency for another in order to complete transactions. For example, Honda builds its cars in Japan and exports them to the United States, where an eager American buyer exchanges his dollars for a brand new Honda. Some of this money has to make its way back to Japan to pay the factory workers that built the car, but first those dollars have to be exchanged for Japanese yen, since that is the currency the

Forex Profit Multiplier Review

Forex Profit Multiplier is a new forex product that is set to launch on October 19th. It has been created by Bill Poulos and his team at Profits Run, and is said to be the biggest and best forex trading product that they have ever produced. Whether the Forex Profit Multiplier course lives up to that bold claim remains to be seen, but from what I have seen of the preview videos, it certainly looks very impressive.
In the meantime let me tell you exactly what you will get when you buy the Forex Profit Multiplier course:
* The Forex Profit Multiplier Home Study Course

Forex Profit Accelerator Trade Alert Software Review

The Forex Profit Accelerator Trade Alert Software is a brand new product from Bill Poulos that provides you with 4 profitable trading systems, as well as trade alert software that alerts you to the very latest set-ups for each of these trading strategies.
(Update: The Forex Profit Accelerator software is now live, and you can now buy this software and the accompanying trading systems (or simply find out more information) by clicking here).
It is based on the original Forex Profit Accelerator course, but it now includes this advanced software as well. This will make your life a lot easier because you no longer have to scan through the charts of the major currency pairs looking for possible set-ups for whichever system(s) you are using. You simply open up the software and check out the latest set-ups in real time as they happen.

Forex Power Group Review

Forex Power Group finally launches later today, and I am now in a position where I can tell you exactly what you get when you subscribe to this unique service.
I have to say that it is unlike any other forex service I have come across so far because it has a wide range of different services that you can utilize to help generate some excellent forex trading profits. So without wasting any more time, let me show you exactly what you get when you join the Forex Power Group:
Automated / Mirror Trading

Forex Nitty Gritty Review

Forex Nitty Gritty is a brand new forex course from Bill Poulos, but unlike many of the useless robots and systems that are currently flooding the market, this one is actually very good. I was lucky enough to get my hands on a review copy and have since spent many hours going through all of the materials, so I can now offer you my full review of Forex Nitty Gritty.

(UPDATE: The Forex Nitty Gritty course is currently available for just $39.97 via this special link. Simply click on the link and wait until the video finishes, or exit the page to be presented with this special offer).

Forex Morning Trade Review

Forex Morning Trade is a simple but highly effective forex trading system that Mark Fric, a full-time trader, uses every day to trade the markets. I don't buy many forex courses or systems, but this one caught my eye because it places a single trade shortly before the London market opens (in order to capture the opening price moves), which I've always found to be one of the most profitable times of the day to trade currencies.

So let me give you some more details about the Forex Morning Trade system.

Forex Income Engine Trade Alert Software Review

This home study course has now been expanded and now includes the Forex Income Engine Trade Alert Software. So as well as the 3 different trading methods that you can use to trade the short term charts, you can also use this new automated software to help alert you to the very best set-ups for each of these strategies across all the major currency pairs.

My original review of Forex Income Engine 2.0 is below, but bear in mind that the new product - Forex Income Engine Trade Alert Software - includes everything listed below as well as the new software, all for the same price.

Forex Education - A Complete Guide

Anyone who wants to become a profitable forex trader will have to obtain some kind of forex education before doing so. There are many ways you can go about this. You can use certain resources where you can educate yourself for free, or you can attempt to cut the learning process quite significantly by paying money for your education.
In the rest of this blog post I want to outline various different methods you can use to give yourself a complete forex education, and start yourself off on the road to success:
Websites:

Forex Course

One thing you have to bear in mind when looking for a good forex course is that they all have different objectives. Some trading courses will be designed solely to teach you the basics of forex trading, just to get you up and running, whilst others will aim to provide you with a profitable trading strategy, or teach you about some of the more advanced subjects.

I always believe that the best forex course will do all of these things. That is why I always recommend one forex trading course in particular to all of my readers and subscribers.
It's called Forex Nitty Gritty and it was created by Bill Poulos, who is a veteran in this industry, having traded the markets for over 30 years.

Forex Candlesticks Made Easy

Candlestick charts are generally regarded as being more effective than bar charts because they can give vital clues as to a currency's future movements. However candlestick charts and indeed candlestick analysis is quite a complex subject which is why I strongly recommend grabbing yourself a copy of 'Forex Candlesticks Made Easy'.

This concise guide will tell you everything you need to know about candlestick charts and patterns. Plus not only will you learn about all the basic candlestick patterns, but you will also learn the advanced highly effective techniques used by many of the top professional traders to make consistent profits from trading.

So whether you know absolutely nothing about candlestick analysis or whether you have a good understanding but want to know how to find the most profitable candlestick patterns, I can highly recommend you check out this excellent guide.

Forex Brokers

One of the hardest decisions you face when starting out as a forex trader is which forex broker to go with. If you do a search online you will find hundreds of different forex brokers to choose from. The trouble is that some are better than others, and furthermore there are some that you should avoid like the plague.
So let me give you a list of things you should look out for when choosing a forex broker:

1. Regulation

Forex Avenger - My Honest Review

Forex Avenger is another new forex system to come onto the market. There was an awful lot of hype surrounding this one so I decided that I would actually buy Forex Avenger and see if it's any good or not. So here's my full and honest review:
First of all I have to say that the sales page really made me cringe. There's a lot of nonsense about the forex industry labelling this astonishing discovery “The Next Big Thing” and a video which is so full of hype it's embarrassing. It's the kind of sales hype you expect to hear on one of those awful shopping channels, which is a shame because the actual forex system is in fact very impressive.

FAP Turbo (Another New Robot) Is Released

I'm kind of reluctant to write a post about FAP Turbo, the latest forex trading robot to hit the market, because I've told my readers about other expert advisors in the past and nearly all of them have turned out to be pretty poor from the feedback I have received.

However the aim of this blog is to keep you up to date with the latest forex news and developments so I thought it was worth a mention, plus I know for a fact that a lot of my readers and subscribers are very interested in forex robots.

So what actually is FAP Turbo?

Currency Trading For Dummies

Currency Trading For Dummies is a very popular forex trading book written by Mark Galant and Brian Dolan. It is targeted mainly towards those people that are new to forex trading, and covers every single aspect of currency trading in some detail.
The Currency Trading For Dummies book, which has been the top-selling forex trading book on Amazon for some time now, is 360 pages long and is divided into 5 parts. There are 20 chapters in total and they cover a wide range of different subjects, as you can see from the list of contents below:

Introduction 

Collective2 Review

Collective2 tracks over 8000 different systems covering stocks, forex, futures and options. Each of these systems is monitored closely and you will find full statistics and track records for each individual system.
Therefore you can scan and filter this extensive list to find the system(s) that are most suitable for you. For example you could start by filtering the list to only show forex systems, for instance, and then you can sort the list by performance.

CashBackForex Review

CashBackForex are arguably one of the biggest and most popular companies that offer forex rebates, with other 14,000 registered members at the time of writing. They have been around for a few years now, but it is only recently that they have established themselves as a market leader in this area.
If you're not aware of forex rebates, they are basically a way of getting some cash back on every single trade you place, regardless of whether you win or lose.

Best Forex Trading Signals

There are very few forex trading signals providers that are genuinely consistently profitable month after month. There are many that claim to be and have impressive looking performance records but very often it transpires that they massage their numbers, and use hypothetical figures in their calculations, rather than trade their signals themselves.

ADVFN Review

ADVFN stands for Advanced Financial Network and they are one of the world's largest financial websites. They are mainly targeted towards UK traders, such as myself, but I understand they now have country-specific websites all over the world.

ADVFN's main focus is on providing traders and investors will all the tools and resources they could possibly need on a day-to-day basis. So for instance you get free stock quotes, live streaming prices and charts of stocks, indices, currencies and commodities, as well as breaking news and alerts. There are even free bulletin boards where you can chat about individual companies and exchange investing and trading tips and strategies with the other forum members.

Download Free Forex Catapult Expert Advisor

Today I want to tell you about a profitable expert advisor that you can download for free. It's called Forex Catapult and it's been created by Casey Stubbs.
This expert advisor is a 100% automated forex system that is based on Casey's own forex trading strategy, and it has been tested by over 200 traders, and continuously tweaked to ensure that it delivers maximum profits.
If you would like to download this free expert advisor or simply want to find out more, you can do so by clicking here.

Free Forex Catapult Expert Advisor And Webinar

Last week I told you about an expert advisor that you can download for free called Forex Catapult (here's the link once again). This was based on Casey Stubbs own trading system and although only available for one pair (the full version can be used on all pairs), it is still able to generate profits.
Anyway this week Casey is running a webinar that will talk about this automated expert advisor in more detail. He will discuss:
- how to download and set up this system
- how to optimize this system for more profit
- how you can win a copy of the full system
He will also answer any questions you may have, so if you are interested in registering for one of these webinars (there are several dates and times available between now and Friday), you can do so by clicking here.

Weekly Trading Update - 17-21 October 2011

I didn't place any forex trades at all this week and it was simply because I was too distracted by the share price movements of Tomco Energy, which is now up over 50% this week (and was up 100% at one stage).
I mainly invest in FTSE 100 stocks these days, but this is the one AIM stock that I hold in my share portfolio and it's finally burst into life. I have several million shares in this oil shale company and a few spread betting positions as well.

Forex Books On The Kindle

Today I want to talk about some of the forex books you can buy on the Kindle. If you haven't yet bought a Kindle (which you can buy here from Amazon.com or Amazon.co.uk), I highly recommend you do so because I bought one earlier this year and it's one of the best things I've ever bought.

It is essentially an ebook reader that stores thousands of books, and allows you to read any of the books you have in your collection (and download new books) on the move whenever you like.
I've mainly being using it to read travel books (to compensate for the fact that I have been unable to go anywhere since last year because I haven't been well enough), but I also like to read lots of business and finance books, particularly those that cover stock market investing and currency trading.

The great thing about having a Kindle is that you can choose from thousands of ebooks on Amazon, and they are usually slightly cheaper than the actual books themselves. Plus with regards to forex trading ebooks, they are now capable of displaying the exact same charts and tables as the printed books, which wasn't always the case when the Kindle first came out.

As I say there is a great range of books to choose from once you own a Kindle. You still have slightly more choice if you buy a printed book because not every single book is available in ebook form. However you will still find plenty of books to choose from.

Some of the ebooks are even free from time to time, and if you are patient enough you will often find that the price of a particular ebook will drop significantly at some point.

You don't need to spend a fortune to learn about a particular subject either. For example with regards to forex trading, here's a selection of currency trading ebooks that you can buy and download to your Kindle for less than $10 on Amazon.com:

- A Beginner's Guide To Forex, The Deep Psychology Of Success - $1.34
- Foreign Exchange Trading: The Golden Rules - $1.34
- How To Become A Successful Forex Trader - $1.34
- Insider's Guide To Forex Trading - $1.34
- Forex Strategy 10: Low Risk/High Return Currency Trading - $1.34
- 5 Simple Rules To Make Money With Forex Trading - $5.33
- My Forex Secret: Momentum Trading System With MT4 Template - $6.61
- Forex Day Trading Secrets - $7.76

This is just a small sample of books that you can choose from. There are loads of other forex ebooks to choose from.

Weekly Trading Update - 24-28 October 2011

Well it's been an excellent week for me this week. However that's nothing to do with my forex trading. It's mainly because the stock market has rallied and my stock portfolio is now in much better shape. I have banked some nice profits in the likes of BP and Rio Tinto, but I'm still holding several stocks for the long term, including Tomco Energy, which is still doing very nicely.
On the forex front, it has been more frustrating. There were excellent opportunities to go long on the GBP/USD and EUR/USD pairs using my main 4 hour trading system (see right for more details). However both the upward EMA crossovers took place in the overnight trading session (when the Eurozone bailout plan was announced), so I was unable to trade them.

Trading Stocks Instead Of Forex: FTSE 100 Or AIM?

In my last post, I talked about how I was thinking my future lay in share trading rather than forex trading. Well after writing this post, I was kindly sent a guest post from Nicholas Pascal that discusses stock trading in some detail, and highlights the differences between trading FTSE 100 stocks and AIM stocks. I hope you find it useful.

I think it’s important to first point out that there isn’t much of a close correlation between market movements in stocks and forex. An artificial connection between the two has been forged since the early 1970s, which saw the end of the era of fixed exchange rates and brought with it a new breed of trader making connections between stock price and currency market behavior. Nevertheless, this makes it harder to apply an indicator.

Weekly Trading Update - 31 October - 04 November 2011

There were no trades for me this week. Regarding my 4 hour trading system (see right for more details), there were no decent set-ups on any of the major pairs, and I haven't used my early morning breakout system this week because to be honest I have preferred to watch the share price movements of Tomco Energy instead.
This is the only small cap stock in my portfolio and it has continued to soar higher this week, despite a little bit of selling today after the latest RNS. I have already decided that if this stock gets to 10p in the next few years (which I'm sure it will), I will probably give up forex trading and put this blog into retirement because I will have more than enough to live on. If it goes beyond that or gets taken out at a higher price, then I definitely will.
Forex trading is proving to be very tough right now with all the uncertainty surrounding the Eurozone, and I am finding very few decent set-ups as a result. In fact I'm seriously considering not trading any more this year whilst there is so much uncertainty around.

My Experiences Of Trading Forex And Stocks Using Long Term Charts

To some extent trading the forex markets using long term charts (such as the daily and weekly charts) is a lot easier than trading the short term charts (such as the 1 and 5 minute charts). Indeed that's why my core trading system, ie my main 4 hour trading system (see right for more details), is based on the 4 hour and daily charts.
However when you are comparing long term forex trading to long term share trading, there is only one winner for me - share trading.

Weekly Trading Update - 07-11 November 2011

There were no trades for me again this week, and I've actually decided to stop trading forex for the time being. My 4 hour trading system just doesn't generate as many trades as it used to, and with the markets drifting aimlessly with all the uncertainty that's around right now, I think it's best to just sit on the sidelines.
Even if market conditions do change and we start to see a lot more volatility, it will be only last for a few weeks anyway because we have the Christmas and New Year holidays just around the corner, and the markets are always very quiet and impossible to trade at that time of the year.
Anyway I shall still be trading stocks, as this is what I love doing more than anything else, and I have this website and a few others to keep me busy, but there probably won't be any more Weekly Trading Updates for a while.

Are The Signal Providers On ZuluTrade About To Become A Lot More Profitable?

I've recently received an email from ZuluTrade telling me about an important development with regards to their signal providers. It looks like they are trying to improve the overall quality of their signal providers, and therefore help their customers generate more profits.

As you may know, the signal providers get paid a small commission per trade per subscriber. So therefore if they are successful, they will attract more subscribers who wish to have their signals auto-traded in their account, and therefore they will make more money.

Is There a Safe Forex Investment?

Foreign currency trading, or Forex (Foreign Exchange), has become in recent years one of the most popular investment sectors for small investors.
The removal of economic barriers and the creation of the global market in addition to the global communications revolution with the advent of Internet have become very accessible to foreign currency and huge profit potential. Many companies that offer various commercial services to the public relate to Forex. The amount of money transactions every day in Forex trading is summed up in trillions of dollars.
Why should I invest in Forex?
Forex is based on the relationship between v

Forex Investment Robot

Are you looking in to investing your money with minimum risk? You maybe wondering whether a forex investment robot can give you the kind of profit you want to make and just how reliable are these robots anyway. I will tell you that they are reliable and explain why I say so in the following paragraphs.
The first thing about trading in forex is that if you are not sure about what you are doing then you can start with a minimum investment. For as little as $50 you can start trading.

Forex Investment Is a Legitimate Home Based Business

Foreign exchange investment or simply called Forex investment is very tricky and crucial yet one of the most rewarding investment options in the market. The Forex market is the world's largest market and investing in it involves careful planning, business wits, careful analysis and common sense. Many have testified that they have been incredibly successful in Forex investing. It is considered a legitimate home based business - an option to consider if you are a stay at home parent and want something to do with your time and money.
Trader Beware

Managed Forex Investment - The Correct Way to Invest in the Forex Market?

Do not be misled by this title. The fact is that trading Forex, or foreign currencies, is not for everyone. The reality is that there is the potential to lose money. There is a potential to make money as well. The Forex investment market is one of the more volatile markets open to trading. This forex trading investment can result in large profits or large losses.

Benefits of Finding Good Forex Investment Management

Forex Investment Management is one of the terms used to describe the option a forex trader can use to participate in the Foreign Exchange Currency Market (forex) without the need to actively make trade decisions. Another term that will crop up frequently is Managed Forex Account. There are other names, but the key characteristic shared by all of them is that the forex trader pays someone else to manage their trading account.
Advantages of Forex Investment Management

Shorten You Learning Curve For Forex Investment - 2 Great Beginner Sites

Since 1989, I have been trading the commodities and futures markets, and since 2005, the currency spot market (also called foreign exchange or Forex). My journey has not always been profitable or easy, and if you embark upon this adventure (and yes, it is an adventure), then you need to be both excited, but cautious. Forex investing will require your focused attention and abilities to research.
Basics, Forums and Demo Account

Understanding Forex Pips

Pips and 'pips values' represent one of the most misunderstood concepts in Forex trading. Newbies, especially, often have trouble grasping the idea behind pips -- but, a solid understanding of pips is crucial to successful Forex investing.
If you have had trouble with pips, then today may be your lucky day. I'm going to attempt to clarify things once and for all with a brief pips tutorial.
Hopefully you are already familiar with the concept of 'basis points'. One basis point is equal to one one-hundredth of one percent, and represents the smallest increment of change measured for any financial instrument.

Forex PIPs

Knowledge of Forex PIPs is extremely important for calculating profit and loss in Forex online trading. Forex PIP is the abbreviation for percentage in point. It is the smallest unit of percentage increase or decrease in price for the currency. Last decimal point in exchange value of currency pair is signified as pip. If you bought USD (United States Dollar) for CHF (Swiss Frank) at 1.2475 and sold it for 1.2489, then you made 14 pips. However, the PIPs system is not same in case of USD/JPY. The decimals in ratio of USD/JPY are of only two points.

Forex Pips Strategy

Finding an effective forex pips strategy to use that is easy to learn and implement may prove to be a struggle for some people simply because of the huge number of complicated but ineffective systems and methods for currency trading that you can find online. In reality, forex trading does not have to be costly or difficult in order to be successful. Some are rather simple and easy to implement such as using the support and resistance levels in a particular market to get into trades with high success probabilities.

Forex Pips - Measuring Your Success on Forex

In the foreign exchange market (forex), percentage in point (pip) is everything. Pips are how fluctuations in price are measured, and they're how you gauge how well or how poorly your investments are doing. Since you're always dealing with at least one currency that appreciates or depreciates at a rate different from the United States Dollar (USD), it's important to be able to measure the value of your investment using a unit of measure that you can count on to be able to understand the true increase or decrease in value of your investment. If you want to trade on forex, you have to understand the concept of forex pips.

Watch Out For FOREX Pips (A Beginner's Guide To Commodity Investing)

What the heck is a Forex pip? Is it a medical condition that you need to worry about - getting some pips removed? OUCH! No, relax - nothing medical is going on but they are important to you but, in kind of good way. By definition: Forex = Foreign Exchange, pip = percentage in point - which is the smallest units of price in online foreign currencies that can be traded - (usually to the fourth decimal point - that's really small). When trading eur/usd, which is the euro against the dollar, a quote would be $1.4145 which is that you can buy 1 euro for $1.0001. Really small, but on a $100,000 position a pip = $10. This gives the trader leverage which means that a $100,000 position can be opened with only $1000. The market can move many hundreds of pips a day which also translates into significant gains. In turn, the market can move the other way depleting

Forex Pips Indicators

Forex pips indicators have a major speculative role to play in the foreign exchange market. They refer to the minute increments of a given currency. PIP is an acronym for "percentage in point" and Forex rates are expressed up to 4 pips or 4 decimal places. In Forex trading, they represent the smallest changes in the currency value. Even a small change in a pip can have a heavy effect on the final value of a particular currency upon its purchase or sale.

Asian stocks

HONG KONG: Asian stocks were mostly lower on Thursday after a credit ratings agency warning that US banks could be hit hard if Europe's debt crisis spreads beyond financially troubled countries like Greece.
Oil prices fell below $102 per barrel, while the dollar rose against the yen and the euro.
Japan's Nikkei 225 index lost 0.3 percent to 8,436.49 while Hong Kong's Hang Seng dropped 1.2 percent to 18,725.32. South Korea's Kospi was marginally higher at 1,858.26.

Benetton withdraws pope-imam kiss ad after protest

VATICAN CITY: The Benetton clothing company has withdrawn an ad showing Pope Benedict XVI kissing a top Egyptian imam on the lips after the Vatican denounced it as an "unacceptable" provocation.

Benetton had said its "UNHATE" campaign launched yesterday is aimed at fostering tolerance and "global love."

The campaign's fake photos show a half-dozen purported political nemeses in lip-locked embraces, including President Barack Obama and Venezuela's Hugo Chavez, and Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas.

The photo of the pope had been on the company's website all day but was pulled about an hour after the Vatican's protest. A Benetton spokesman confirmed to The Associated Press that the pope ad is no longer part of the campaign.

Private US software company sues RIM over 'BBX'

NEW MEXICO: New Mexico firm Basis International Ltd filed a motion against Research In Motion to stop the BlackBerry maker from using Basis' trademark, BBX.

In October, the Abuquerque-based Basis had threatened to take legal action against RIM unless it stops calling its operating system BBX.

"Basis built the BBX brand over the course of a quarter of a century to become synonymous with the term 'operating system independent,'" Chief Executive Nico Spence said in a statement.

Food inflation at 10.63% for week ended Nov 5

Food inflation eased to 10.63 per cent for the week ended November 5 even as prices of agricultural items, barring onions and wheat, continued to rise on an annual basis.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 11.81 per cent in the previous week ended October 29. The rate of price rise of food items stood at 11.41 per cent in the corresponding week of the previous year.

As per data released by the government today, onions became cheaper by 22.89 per cent year-on-year, while wheat price were down 3.63 per cent. However, all other items became more expensive on an annual basis during the week under review.

IMF European director Borges resigns

WASHINGTON: The International Monetary Fund said Wednesday that the director of its Europe program has resigned, citing personal reasons.
Antonio Borges' exit comes about a year after he began heading the IMF's European program, as the region struggled to rein in the fallout from its financial crisis.
The IMF has been a key player in the eurozone's debt crisis.

Sensex down 47 points in opening trade on weak corporate earnings

The BSE benchmark Sensex lost nearly 47 points in opening trade today, tumbling for the sixth straight session as funds and investors offloaded positions in knee-jerk response to India Inc's poorer-than-expected second quarter corporate earnings.

A weakening trend in global markets on lingering concerns over the euro zone debt crisis also dampened the trading sentiment here.

The 30-share Sensex, which has lost 793 points over the past five sessions, fell further by 46.64 points, or 0.28 per cent, to 16,729.23 in opening trade today, with capital goods, auto and IT stocks leading the fall.

What Is the Best Forex Software Trading Option of Today?

Forex software trading refers to using an automatic program to place and end trades for you in the forex market without your having to lift a finger. This technology scans the market to look for high probability trading opportunities and then invests accordingly once it finds something using your capital to trade with.
Just as importantly, the program follows that trade's performance along in the real-time market to ensure that you never lose money on that trade. Once that investment fluctuates out of your favor, the program trades away the now bad investment to shield you from sustaining any loss.
This begs the question, what is the best forex software trading option on the market today?