Forex trader blog

Using the ‘Market Pull’ strategy in Binary Options trading

stevenson — Fri, 04 May 2012 11:01:46 +0000

Binary Option trading is fast gaining popularity from stock investors. This is primarily because Binary Options have the potential of bringing in huge returns within a limited period. All what traders have to do is make a simple yes or no decision and within few a few minutes, cash is credited into their accounts.

Binary Options trading is very dynamic. Traders have to be smart and use the right trading strategy at the right stage of trading. The Market Pull strategy is one of the strategies with the potential of pulling in massive profits for your investment. The fundamental of this strategy is that, a movement in a certain option has an effect in another related option.

For example, Canada’s economy is heavily reliant on oil. If the barrel price of oil goes up, it is likely if not certain that the value of the Canadian Dollar will go up. In the case that the barrel price of oil depreciates, expect the value of the Canadian dollar to go down.

This simple analysis is important in determining the profitability of your investment. Below are examples of assets interrelationships to consider.

Gold

The price of gold is an important factor in binary options trading. For major exporters of gold such as Australia, the price of Gold determines the price of its currency. A rise in the price of Gold leads to appreciation in Australian dollar and vice versa. You can use this interrelationship while trading in such assets.

US Dollar

The USD is the world most popular currency. When the value of the USD appreciates, the demand for products goes down and vice versa. Try checking the value of the dollar when trading in company stocks.

The release of a new product by a company attracts the attention of many traders. However, before, jumping into the opportunity analyze the value of the dollar to see the new product will realize a significant increase in sales for the company.

There are several other complicated interrelationships to consider. A binary option broker will help you understand more of the Binary Options trading strategies.

Check out for more binary options strategies at Binary Options That Suck!

The Best Way to Choose a Good Forex Broker

stevenson — Tue, 24 Apr 2012 12:57:15 +0000

Once you decide that you want to begin trading Forex, actually opening your account feels like a really big thing, as if you are on the verge of starting a new career. However, as you start to look about for good quality Forex brokers, you’ll quickly realise that there are literally thousands of different brokers out there for you to choose from. So how should you actually choose a really good Forex Broker? This article will outline three important considerations you should weigh up before making your decision as to the broker you go with:

1. Make Certain that the Broker Offers Convenience and a Good Spread

This is the most important part of choosing brokers, making certain that they are convenient for you when it comes to withdrawing and paying money rather than using some obscure third party system of payment. Look out for Paypal as well as credit card deposits and check that they can handle bank wires. In addition, be certain up front that their foreign exchange spreads suit your needs. This is crucial as the difference in the spread is going to be the difference between the bid and the asking price so it is a vital part of your ability to clear good profits. Ensure that you choose a broker who has competitive spreads that wont fluctuate a lot. In addition, in terms of convenience, spend some time researching their trading tools. Some traders out there don’t use the most commonly used software, Metatrader – would you really want to sign with them?

2. Do Some Research with the Regulatory Agencies

Because Forex is global, there is no single regulatory body, but each and every country has its own regulator to monitor the brokers working inside their borders. So, in the US the brokers are monitored and regulated by the National Futures Association or the CFTC (Commodity Futures Trading Commission). Should you narrow your search down to a broker you want to use, you should check with the agency website and make sure that no complaints have been lodged against them. Never go for a broker who is not part of a regulatory body.

3. Read their Reviews

No matter which broker you choose, you will be able to read reviews of their services online. Most brokers have hundreds, if not thousands of clients and many of them will leave reviews in the foreign exchange forums. Check these reviews to make sure they are a good broker.

Esther is a finance journalist. She writes about all areas of personal finance from forex to penny shares and from mortgages to credit cards to business loans. She also blogs for a firm of Chicago personal injury lawyers.

Explaining Forex Market Future Markets

stevenson — Wed, 11 Apr 2012 09:47:24 +0000

The forex market is undoubtedly the biggest market in the world; with just over $4 trillion passing through the coffers on a daily basis according to Bank for Investment Settlements. Many believe the only way in to foreign exchange is through trading the forex market but that isn’t the case. There is a second, also formidable, market that sees a respectable $100 billion passing through its systems on a daily basis; that of the currency futures market. Currency futures are future contracts playing the forex market trade with the underlying commodity being the currency exchange rate. This market provides access to the foreign currency exchange in a way similar to most typical future contracts.

The Origins of Currency Futures

Currency futures, also termed forex futures or foreign exchange futures, are contracts obligating the sale or purchase of specific predetermined amounts of a particular currency at a fixed price and date; in this way it is greatly related to the forex currency market. Getting their start in 1972 around the same time as the gold standard and fixed exchange rates systems were dropped, currency futures were introduced by the Chicago Mercantile Exchange now known as the CME group. In much the same way future contracts work, a forex market trader will honour a currency future sale or purchase in contract months with standard maturity dates falling traditionally on the third day of March, June, September and December. While not as fast-paced as the real time online forex market, currency futures offer thrills of their own calibre.

Buying a Currency Future

Not everyone is cut out for trading in the forex market, but with future currencies perhaps more people can be primed and trained in order to take on the challenge. The difference from vanilla forex is that while forex market brokers would deal via currency brokers, currency futures are processed through exchanges that offer regulation in terms of centralised pricing and clearing. One purchases a future contract in a unit as one would purchase a packet of chips for example; the market price of one is relatively the same from broker to broker. There are exchanges worldwide that offer future currencies including the NYSE Euronext, Tokyo Financial Exchange and the Brazilian Mercantile and Future Exchange for example.

The Summary

Future currencies are similar to a cellular contract, they’re safe since you know you’ll always have the airtime needed, but they’re inflexible and perhaps do not provide the uppers and downers of the forex market which so many get their thrills from. However they are a simple way to join in the foreign currency exchange and perhaps a good way to dip your feet into the waters of the forex market.

Eugene Calvini is a writer and forex enthusiast; at first only armed with a Metatrader 4 demo account he has improve to a professional forex trading account through determination and self-taught skill.

Investing for Income – Understanding the Yield Curve

stevenson — Mon, 19 Mar 2012 10:33:38 +0000

Guest post contributed by Elizabeth Goldman, a freelance forex writer, on behalf of Everest Forex the destination to learn forex trading and get bonus forex points. All views and opinions are those of the writer and do not necessarily represent Everest Forex.

While many investors choose stocks and mutual funds solely for the prospect of future growth and appreciation, others have more immediate needs. A person who is currently retired may need to turn his or her nest egg into a steady stream of income, while someone getting ready for retirement might look at rebalancing their portfolio to focus more on income producing investments.

No matter what the reason for income investing, it is important for all income minded investors to understand the yield curve. Understanding this important concept is key to controlling risk in your portfolio while still maintaining the purchasing power of your money for the long term.

The classic definition of the yield curve is a line which plots interest rates of bonds with an equal credit quality but different maturity dates. Typically a bond with a longer maturity will have a higher interest rate, assuming both bonds are equally creditworthy.

For instance, an investment grade bond maturing three months from now may have an interest rate of 1 percent, while a one year investment grade bond may yield 1.5 or 2 percent. In the bond market investors are taking a larger risk when they purchase a bond with a longer maturity. The yield curve means that those investors are rewarded for their risk with a higher interest rate.

The most oft cited example of the yield curve uses the U.S. Treasury market. Treasury yields are typically listed for the three month, two year, five year and thirty year Treasuries. The yield curve that compares the yields on these instruments is used as a benchmark for everything from mortgage debt to corporate bonds. This yield curve is also used by economists and bankers to predict changes in growth and economic output.

There are three possible shapes for the yield curve – normal, inverted and flat. Each of these yield curves provides different clues about the future shape of the economy and interest rates. In a normal yield curve, longer maturity debt instruments have a higher interest rate than short term ones.

When the yield curve becomes inverted, longer term bonds tend to yield less than shorter term instruments. Economists watch closely for an inverted yield curve, since it can be an early warning sign of an economic slowdown or even a recession.

When the yield curve is flat, there is little difference between long term and short term instruments. Flat yield curves are often seen during periods of economic transition, such as when an economy is starting to grow again after a period of recession.

It is important for all fixed income investors to pay close attention to the yield curve, since it can be a good early warning sign. If the yield curve becomes inverted, fixed income investors may face the prospects of lower interest rates, as central bankers try to fight off a looming recession by cutting rates. Bond investors who see the yield curve flattening out or normalizing may want to watch the duration of their investments, since the value of a bond or the net asset value of a bond fund tend to decline when interest rates rise.

The yield curve is not the only thing investors need to worry about when buying bonds and bond funds. But if your primary investment objective is income, you would do well to take a look at the current yield curve on a regular basis.

Stanley Druckenmiller is the World’s Richest Forex Broker

stevenson — Wed, 14 Mar 2012 08:46:58 +0000

Many people may not know the name Stanley Druckenmiller but for those who work in the Forex trading industry the man in synonymous with extreme wealth thanks to his skilled mind on funds. Druckenmiller is the man who made $1 billion profit in one day when working for Quantum Funds.

Career Background

Druckenmiller graduated from Bowdoin College in 1975. He studied English and Economics, both of which were his passion and he had his sights set on becoming a professor in those fields. He started working on his Ph.D. at Michigan University but decided that it was not for him and in 1977 left to take up a position as a stock analyst at Pittsburgh Bank. His skill and talent for trading was immediately noticed and within one year he was at the helm of the bank’s Equity Research Group.

In 1981, at the age of 28 Stanley Druckenmiller founded Dusquesne Capital Management with $1 million. Moving on a few years down the line to when Druckenmiller accepted a position at Quantum Funds. Working with George Soros, the two men became known as the guys who “broke the Bank of England.” In 1992 they made a profit of one billion US Dollars in one day.

Skills

Since his successful record-breaking profit in one day, Druckenmiller has managed to maintain his exceptional standard of trading by consistently achieving over and above 25% profit when trading over a 10 year period. Stanley Druckenmiller is still considered the best Forex broker in the world.

Personal Life & Philanthropy

Rated at the 91st richest person in America, Druckenmiller enjoys the life that his trading skill has afforded him and with a personal fortune of $3.5 billion, he has amassed a decent car collection that he stashes at his home in Southampton. Clearly a man who likes a bit of speed, Druckenmiller also houses his personal jet, a Bombardier Global Express, in a hangar at Teterboro Airport.

Before it’s claimed that Stanley Druckenmiller enjoys his money too much it must be pointed out that is the man who, in 2009, gave more money to charities than any other person in the States. He runs many charities and is involved in several philanthropic initiatives.

Conclusion

Stanley Druckenmiller trades with a sound strategy that he has used through the years. He’s not afraid to take risks but they’re calculated. He is the insight guru for Forex traders the world over.

Vida Denning is a freelance writer who recently took up the challenge of Forex trading. She opened a FX account and then used the MT4 download to teach her a few things about the complex work of foreign exchange.

Different Kinds of Insurance that People Need

stevenson — Tue, 06 Mar 2012 15:29:28 +0000

Insurance offers financial protection against damages or losses that may occur. The coverage of the insurance varies from the type of insurance availed. Wondering what insurance might work for you? Here are the lists of different kinds of insurance that people need.

Vehicle Insurance

One of the different kinds of insurance that people need is vehicle insurance. Vehicle insurance provides financial protection in an event of an accident. Vehicle insurance covers the medical payments of the insured party, the physical damages attained by the insured vehicle and property damage, fire, theft and bodily injuries of the third party. However, vehicle insurance coverage might vary depending on the country you live in because each region has a certain jurisdiction.

The cost of vehicle insurance also varies from the type of the car driven and also the age of the driver. The cost of premium might rise to the roof if the driver is a teenager because teenagers are more prone to accidents. Luxury cars are insured in a high amount because the parts are expensive to replace in an event of an accident.

Certain discounts are available to cut premium costs. Be sure to ask your insurer about this. For example, students with good academic grades may avail of discounts.

Business Insurance

Business insurance has many forms varying from the needs of the business owner. Some of those forms are named as Professional Indemnity and Business Owner’s Policy.

Home Insurance

Home insurance covers for damage of the policyholder’s home excluding earthquake, flood and maintenance-related issues as risks. For those who rent houses, home insurance offers inventory but it is available as a separate policy. This indemnity also helps those who acquired their homes from loan to recover their money if there are damages in the house.

Life Insurance

It provides financial benefit to the decedent’s family or beneficiary which is paid upon death. The insurance may cover the payments for the burial or funeral of the decedent. The insured person may also choose if the monetary benefits will be paid in a lump sum cash payment or an annuity.

Life insurance companies offer life insurance contracts that accumulate cash values. If the insurer surrenders the policy, the cash value may be liquidated or may be borrowed if the need arises. The tax law in U.K and U.S states that the interests of the cash values are free of tax.

Health Insurance

Health insurance provides monetary assistance for medical treatments. Under which is the dental insurance. Dental insurance covers for the payment of monthly regular check ups and dental works. In U.S and Canada, an employee is entitled to a dental insurance together with a health insurance.

Casualty Insurance

Casualty insurance provides monetary benefit apart from a specific property. Some of insurances under this category are crime insurance and political insurance.

Crime insurance insures the policyholder against losses due to criminal acts and third party. Political insurance, on the other hand, may be availed of the companies with businesses that are operating in countries, which have risks in political loss.

The different kinds of insurances that people need which were mentioned above are of great help to lessen the burden if an accident occurs. Nobody wants an accident but it is better to be safe and ready than to lose a property or even life. Get insured.

7 Forex Trading Misconceptions

stevenson — Mon, 05 Mar 2012 07:37:25 +0000

The forex market and forex trading has become a popular career and part time investment scheme and way to make capital on the side. The forex market can be volatile and there are certain forex trading strategies to take into account for forex trading success. There are certain steps and tips that many forex traders follow but what about the misconceptions with forex trading. There are many misconceptions relating to the forex trade process and in this informative article we look at the 10 most popular misconceptions that a forex trader should avoid falling victim to.

Misconceptions surrounding forex trading

1. Indicators and fancy tools

Some forex traders swear by indicators and intricate tools for success and many beginners believe this too. Traders believe that these will help them better understand the market but the reason that this is negative is that they spend too much time concentrating on these factors instead of paying attention to price action, where the indicators are derived from.

2. Not understanding risk and reward

A huge forex trading misconception in the basics is that you do not need sufficient information on risk and reward. This is recipe for failure and this is something all traders should be totally knowledgeable about.

3. Not understanding position size

This forex trading misconception has much to do with stop losses and where to utilize them. It is a harmful misconception to think that you do not need to know about position size and where to effectively use your stop losses strategy.

4. The importance of forex trading strategies

Many forex traders let excitement get the better of them and just start trading. The misconception that you do not need a forex trading strategy will end up being harmful to the trader. To be a successful forex trader, one should plan ahead and see the value in forex trading strategies.

5. If you want to gamble, head to the casino

There is a general misconception among beginner traders that forex trading is somewhat like gambling. This is incredibly wrong. It is a strategic investment that is based on many factors and information.

6. Trading with emotion

We have all seen the emotionally fuelled trading movies with people screaming and being generally emotional. This is a general misconception relating to forex trading as letting your emotions get the better of you will not prove beneficial. Stay level headed and this will in turn help you make rational decisions.

7. Patience is a virtue

Patience is incredibly important when it comes to forex trading. You need to wait until the best time to trade and the best time to cut your losses. It’s not about being rash but rather about acquiring the patience for the optimum trading deal.

Jemma Scott has an avid interest for the forex market and the misconceptions and mistakes surrounding it. Her interest stems from having an fx account herself and metatrader 4 download.

Private Equity and Hedge Funds: What’s in a Name?

stevenson — Mon, 05 Mar 2012 07:27:38 +0000

Nomenclature within the financial world can be both fascinating and confusing. Here is a fun little brain teaser relating Shakespeare to what a difference a turn of a phrase makes in the financial world.

“What’s in a name? That which we call a rose by any other name would smell as sweet.”

Even those of us with the shortest of attention spans when it comes to British Lit know that this quote belongs to Shakespeare. We may not know the precise play, or the character who was assigned this famous turn of phrase (Romeo and Juliet; Juliet.) However, the genius of Shakespeare was the universality of his themes. What other playwright’s work makes just as much sense when the setting is Ancient Rome or Nazi Germany? Not many. Shakespeare’s contains kernels of truth that transfer no matter what the time or place.

Add a Little Not So Scientific Method

So, does a rose smell just as sweet if we call it by any other name? Let’s apply some not so scientific method and see what happens when we apply this to financial terminology – say we apply it to the term “private equity fund.”

Most would agree that a general definition of the term “private equity fund” is equity capital that isn’t publicly quoted. Of course for this definition to have any meaning at all one already must know the definition of equity capital which is a definition anyone reading this would know (or should know, or wants to know.) Of course equity capital simply means the money invested that is not repaid to the investor, rather it is invested in ordinary shares of a company. The purchase of ordinary shares normally brings to mind that which is publicly quoted.

Of course, this definition is incomplete unless we also include the fact that private equity funds are usually used as a means to “purchase” much more than ordinary shares in a company. Rather, the intention is usually to purchase the company itself for the purpose of holding onto it while developing it into something able to entice a tidy sum when it is sold – and “Voila!” – those who fronted the private equity funds in turn make a tidy return on the original investment of the private equity fund.

Is this a Trick Question?

Now let’s apply a little pseudo-science to see if Shakespeare was right about that rose. Now, instead of “private equity fund” we’ll call it a “private equity hedge fund” and see if it still smells the same (so to speak.) Once again, anyone reading this does know, should know, or wants to know the definition of a private equity hedge fund. Simply put it turns out that a private equity hedge fund smells just a little bit different than a traditional private equity fund. The most basic difference is that hedge funds are usually sold short versus the long term investment of your basic private equity fund.

So, it might appear that Shakespeare was wrong. If you call something by another name it may smell as sweet – but it’s going to smell different. Actually, it was a trick question because Shakespeare’s quote refers to changing only the name and not the thing itself. But the exercise does give one food for thought. A hedge fund is a type of private equity fund – so it is “thing” and at the same time “not the thing.”

The lesson here isn’t about Shakespeare, it is about being very careful when we measure exactly what is meant by a turn of phrase – or financial investment opportunity.

DealMarket provides deal flow software for entrepreneurs. A private equity fund should give the entrepreneurs the oportunity to make profit.

Money Management Guide For Forex Traders

stevenson — Mon, 20 Feb 2012 13:23:40 +0000

Regardless of how good your trading strategy is that you have learnt in your Forex trading course, how smart you are or how intelligent your algorithm is, it all means nothing without money management. Rather than writing about how you must use stop losses, only risk a set % of your account or “never risk more than you want to lose” we are going to look at just two slightly different styles or money management and their pros and cons.

Style 1 – Changing your position size to risk a fixed percentage of your account per trade

This is the ‘straight out of the box’ money management taught at every credible Forex trading course. New traders will assign x% of their capital for every trade and then change their position size to suit the distance to their stop loss. So, if their trade turns out to be a loser, they know that they are only going to lose that set % of their account. Whether it is 1, 2, 3, 6, 10 or 50% of their account, the decision is theirs (the varying amounts you can use are not going to be discussed in this article). This is a great way for a new trader to approach trading as it will really help to limit their losses and preserve their account balance for as long as possible until they reach consistency.

But, there is one major problem with fixed % of capital trading that will severely hamper a consistent trader. If you risk 2% on every trade and have 10 losing trades in a row, you have lost 20% of your account. This means that is now going to take more than 10 winning trades in a row to get you back to where you were initially, as your 2% value is lower. So, once you have experience and consistency with your strategy it is very inefficient to trade this money management style. However, once you learn Forex trading strategies that are frequently successful it may be time to re-consider this approach.

Style 2 – Fixed position size trading

Usually, when people start to learn Forex trading, they try and trade this style too quickly, before they really understand and have the knowledge of the statistics of their strategy – this usually results in a quick blow-up of their account. With fixed position size trading the trader will decide that for every single trade he puts on he will risk a set value per pip whether it is 1 GBP, 5 GBP or 1,000 GBP (the varying amounts you can use aren’t going to be discussed in this article. In order to trade in this style the trader must have a solid grasp of his/her trading strategy, have thorough logs and know precisely what his/her largest losses/biggest draw downs have occurred over time. Enough data is required to know confidently that worst losses have been identified and solved. Once this data is sufficient a pip value can be assigned to the trading strategy and really make the most out of the trades that “go like a flier” and make lots of pips. This is certainly more favorable to being stuck on a lower position size.

Working towards ‘Style 2’ takes many months and experience, not so much with your trading, but with your statistics. Your statistics must be solid; there must be no incorrect entries or losses due to breaking rules, or exiting early. Your statistics must be an accurate and a complete representation of your trading strategies and how you trade. A thorough and complete Forex trading course will teach you how to work towards this and attain making the larger profits from fixed position size trading. Changing your position size to maintain a fixed % of your account as risk will protect your account, but not grow it efficiently.

If you want to know more about Forex learn trading from proven and successful training companies only. Visit our website for more information about our Forex trading course.

Choosing Appropriate Forex Trading Platform

stevenson — Mon, 20 Feb 2012 07:22:11 +0000

A Forex trading platform simply refers to a type of application that acts as a channel for data between a broker (i.e. market maker) and trader. A Forex trading platform offers data, for example, charts as well as quotes. The application also comprises of an interface for keying in orders that need to be affected by the broker.

Forex trading platforms can be based locally, which means that it can be installed on the PC of the trader. The default operating system can be Windows, Mac or Linux OS. The type of forex trading platform used will hinge on the requirements of a broker.

There are brokers that prefer using applications, which are web based. These are Forex trading platforms that run by making use of Java. The benefit of making use of web-based forex trading platforms is that they can be utilized on virtually any kind of PC that has internet connectivity.

Forex trading platforms are usually accessible for free-of-charge. However, there are a number of brokers that permit traders to buy applications, which incorporate better functionality for a small amount of money. On the other hand, there are brokers that offer Forex trading platforms that offer varying levels of functionality to traders who are highly active in the market.

Online Forex Trading

Online forex trading needs similar items from a Forex trading platform which are needed for dealing any other kind of security. The application basically acts as an intermediary for the Forex trader and the retail broker.

The application selected ought to also offer real-time information as well as historical statistics to the trader. This is in addition to offering the trader access to all kinds of orders that ought to be accessible so as to deal in the Forex market effectively.

The following are some of the factors that you need to take into account while shopping for the best Forex trading platform:

Is it available for download for free? If there is a fee to be paid for it, are there extra features that are provided?
Does the application come with technical indicators?
Is the Forex trading software you are purchasing compatible with Windows, Linus or Mac OS? In addition, is the application web-based?
Can the application enable you to trade from charts?
Does the application have order interface? If so, what kinds of orders are accessible?
Are you able to access historical information through the application?
Does the application you are planning to purchase enable the user to backtest strategies?

Robert enjoys writing articles related to Wolfe Wave and Copy Trade.