The presented Forex tools can assist you both in technical analysis and money management which will greatly enhance your trading results. All these online Forex tools are totally free and can be used at no cost:
MT4 Expert Advisors — Download free expert advisors for a Metatrader 4 trading platform. Test and use these EAs to empower your automated Forex trading and also to help the developing of your own Metatrader expert advisor or Forex strategy.
MT4 Forex Indicators — Free downloads of the MetaTrader indicators for a Metatrader 4 trading platform. You can use these indicators to improve your Forex trading strategy or develop your own MetaTrader 4 expert advisors.
Pivot Points Calculator — Four online web based pivot points calculators will help you to generate pivot points for any given time period. Pivot points are used to as the most important market trend points, where trend can meet support or resistance and actually change its course. Floor, Tom Demark's, Woodie's and Camarilla pivot points building rules are available with this free calculator. You don't need to download any software, just fill the form and get instant pivot point, resistance and support levels.
Pip Value Calculator — How much is one pip? How about EUR/CHF or CAD/JPY? With this free and fast online tool you can find out the value of 1 pip in USD for any lot size and any major or cross currency pair. Fill the form and get the pip value in one moment. No need to download any software!
Fibonacci Calculator — The web based Fibonacci retracement calculator will help you to generate basic Fibonacci retracement values for any given trend. These retracement values can be used as the most natural points of support and resistance for a given trend for any currency pair. On the currency trading market, the use of Fibonacci retracement levels to set orders and targets is one of the best ways to organize trader's portfolio.
Risk and Reward Forex Calculator — online calculator that will help you to find out the risks and rewards associated with your possible position's targets and stop-losses based on the Fibonacci retracement levels of the current market wave.
MetaTrader VPS hosting — special dedicated hosting for your MetaTrader (and usually any other) Forex platform and expert advisors. A good way to keep your strategy always active independently on your home or work PC.
Forex and commodity trading is always conducted on "margin". This means that a cash deposit, usually much smaller than the underlying value of the currency or commodity contract, is required in order to trade.
For example, a broker might require only $1,000 in the trader's account in order to trade a $100,000 currency position. The $1,000 is referred to as "margin". This amount is essentially collateral to cover any losses that you might incur. Since nothing is actually being purchased or sold for delivery, the only requirement, and indeed the only real purpose for having funds in your account, is for sufficient margin.
Margin should reflect some rational assessment of potential risk in a position. For example, if a currency is very volatile, a higher margin requirement would normally be justified. One common rule of thumb is a worst-case one day move in the market. So if a $100,000 currency position is unlikely to move by more than 1% (or $1,000) in a 24 hour period, a $1,000 margin requirement is probably reasonable. If, however, the currency or commodity in question is highly volatile and is likely to move by, say, $3,000 or more (or 3%, as is often the case with certain NASDAQ stocks and some commodities) it would put the broker at increased credit risk to require only a $1,000 margin deposit.
Note that margin available in your trading account is based on account equity, not account balance. The equity is the most accurate measure of the value of your account, as it takes into account unrealized gains or losses.
With a GCI forex account, clients can never lose more than their deposited funds. Other brokers may have other policies with respect to satisfying margin requirements.
A "pip" is the smallest increment in any currency pair. In EURUSD, a movement from .8941 to .8942 is one pip, so a pip is .0001. In USDJPY, a movement from 130.45 to 130.46 is one pip, so a pip is .01. How much in dollars is this movement worth, for example, per 10,000 Euros in EURUSD? How much is one pip worth per 10,000 Dollars in USDJPY? We will refer to the size, in this case 10,000 units of the base currency, as the "Notional Amount". The formula for calculating a pip value is therefore:
(one pip, with proper decimal placement/currency exchange rate) x (Notional Amount)
Using USDJPY as an example, this yields:
(.01/130.46) x USD10,000 = $0.77
or 77 cents per pip
Using EURUSD as an example, we have:
(.0001/.8942) x EUR10,000 = EUR 1.1183
But we want the pip value in USD, so we then must multiply EUR1.1183 x (EURUSD exchange rate):
EUR 1.1183 x .8942 = $1.00
This is in fact a phenomenon you will see with any currency in which the currency is quoted first (such as EURUSD, GBPUSP, or AUDUSD): the pip value is always $1.00 per 10,000 currency units. This is why pip (or "tick") values in currency futures, where the currency is quoted first, are always fixed.
Approximate pip values for the major currencies are as follows, per 10,000 units of the base currency:
USD/JPY: 1 pip = $.77; In other words a change from 130.45 to 130.46 is worth about $.77 per $10,000.
EUR/USD: 1 pip = $1.00; .8941 to .8942 is worth $1.00 per 10,000 Euros.
GBP/USD: 1 pip = $1.00; 1.4765 to 1.4766 is worth $1.00 per 10,000 Pounds.
USD/CHF: 1 pip = $.59; 1.6855 to 1.6866 is worth $.59 per $10,000.
KARACHI: State Bank of Pakistan (SBP) bought back 43.03 billion rupees ($534.40 million) of Treasury bills on Saturday under seven-days reverse-repo contracts at13.01 percent to inject liquidity into a tight money market.
WASHINGTON: The US budget deficit accelerated in March to hit a record nearly one trillion dollars just halfway through the current fiscal year, as the government moved to bail out troubled institutions, government data has shown. The deficit for the first six months of the fiscal year which began on October 1 was 956.80 billion dollars, according to the Treasurys monthly statement of receipts and outlays. Receipts during the six-month period to March 2009 were 989.83 billion dollars while outlays amounted to nearly 1.95 trillion dollars, the data showed. The March deficit of 192.27 billion dollars was higher than the 160 billion dollars expected by most analysts, coming on the back of money poured by President Barack Obamas administration to rescue financial institutions. All six months of the fiscal year so far recorded red ink. The last time the United States plunged into a consecutive six month deficit was during the October 2003-March 2004 period, officials said. The nonpartisan Congressional Budget Office (CBO) forecast last month the budget defi
cit could hit 1.845 trillion dollars for the whole year based on Obamas 3.5-trillion-dollar budget plan approved by Congress early this month. The CBO said its budget deficit estimate for fiscal 2009, which ends on September 30, would be four times the 2008 record shortfall and amount to 13.1 percent of the countrys total economic output. The Obama budget forecasts a 1.750 trillion dollar deficit in fiscal 2009, but foresees that figure falling to 1.171 trillion dollars in 2010. The plan sees the deficit soaring to the largest percentage of gross domestic product since World War II, but the president touted a string of cost savings designed to lay new foundations for the US economy. It also includes an optimistic forecast that the struggling US economy will post robust growth next year, projecting a 1.2 percent contraction in calendar 2009 but an expansion of 3.2 percent in 2010. The presidents plan includes investment in renewable energy, education, health care reform and is targeted to cut the deficit in half by the end of his current term in 2013. Republican lawmakers have labeled the plan "a road map to disaster," but Obama said that "by making hard choices and challenging the old ways of doing business, we will cut in half the budget deficit we inherited within four years." The Treasury data Friday showed the administration used 293 billion dollars under the Troubled Asset Relief Program (TARP) to keep financial institutions afloat while another 60 billion dollars was injected into ailing mortgage finance giants Fannie Mae and Freddie Mac. Nearly 120 billion dollars was also spent by the Treasury to purchase home mortgage securities, the data showed. A US home mortgage meltdown triggered financial turmoil stemming from soured mortgage based securities that led to the collapse last year of financial institutions, including US investment banking icon Lehman Brothers, and slammed the brakes on growth. The economy plunged into recession in December 2007.
For traders looking for robust trading tools and up to the second position and account information, FOREXTrader.java allows you to trade and manage your positions in a real time, web-based environment. This flexible platform is designed to run on both PCs and Mac as well as on various web browsers. 
Designed for active traders looking for an edge, this Windows-based platform offers a rich user interface in a highly customizable trading environment for maximum performance. Enhanced charting functionality and sophisticated order management tools help you to manage your positions quickly and efficiently.
Decode price charts more effectively and find trading opportunities faster.
·
Develop custom trade set-ups to try that match your goals
·
Analyze potential trades more efficiently, before you pull the trigger
·
Let us help you customize your charting packages
Stay on top of the markets and refine your skills as you trade.
·
Benchmark your progress over time for ongoing improvement
·
Identify your weaknesses and optimize your strengths - as a trader
·
Stay informed on market action and trading opportunities - personalized to your interests
Get familiar with our resources and advance your skills.
·
Develop a basic trading plan, tailored to your goals and risk tolerance
·
Learn how to get the most out of FOREX.com research and resources
·
Get your questions answered by a dedicated professional
Learn forex essentials plus trading strategies, and tips for intelligent risk management. Study on your own online and benefit from access to a dedicated Forex instructor. You'll learn how:
To anticipate and react to major announcements and events.
To recognize trading patterns and detect trading opportunities more effectively using technical tools.
Core risk management concepts and strategies.
This online course is ideal for students who want a quick introduction to forex. Seven web-based lessons will teach you.
Basic terms and concepts, like pips, major and minor currency pairs.
How to develop a personal trading plan using the tools and resources available.
Fast-track your forex skills - free of charge.
Before diving into the world's most traded market, FOREX.com invites you to attend a free 90 minute informational seminar, Getting Started in Forex.
Date
Location
Session Times
Sat 04/18/2009
Toronto, ONDoubletree Toronto Airport
10:00 AM1:00 PM
cookieLink('20090418-CA-ON-01')
Register
cookieLink('20090418-CA-ON-02')
Register
Sat 05/02/2009
Santa Clara, CAHilton Santa Clara
10:00 AM1:00 PM
cookieLink('20090502-US-CA-01')
Register
cookieLink('20090502-US-CA-02')
Register
Sun 05/03/2009
Sacramento, CAHyatt Regency Sacramento
10:00 AM1:00 PM
cookieLink('20090503-US-CA-01')
Register
cookieLink('20090503-US-CA-02')
Register
Mon 05/04/2009
San Francisco, CAHyatt Regency San Francisco
1:00 PM6:00 PM
cookieLink('20090504-US-CA-01')
Register
cookieLink('20090504-US-CA-02')
Register
Sat 05/16/2009
Burlingame, CAHyatt Regency SFO
10:00 AM1:00 PM
cookieLink('20090516-US-CA-01')
Register
cookieLink('20090516-US-CA-02')
Register
Mon 05/18/2009
Salt Lake City, UTSheraton City Centre Salt Lake City
1:00 PM6:00 PM
cookieLink('20090518-US-UT-01')
Register
cookieLink('20090518-US-UT-02')
Register
Sat 05/23/2009
Denver, COSheraton Denver West
10:00 AM1:00 PM
cookieLink('20090523-US-CO-01')
Register
cookieLink('20090523-US-CO-02')
Register
Sun 05/24/2009
Scottsdale, AZDoubletree Paradise Valley
10:00 AM1:00 PM
cookieLink('20090524-US-AZ-01')
Register
cookieLink('20090524-US-AZ-02')
Register
Mon 05/25/2009
Bellevue, WAHilton Bellevue
10:00 AM1:00 PM
cookieLink('20090525-US-WA-01')
Register
cookieLink('20090525-US-WA-02')
Register
Sat 05/30/2009
West Palm Beach, FLWest Palm Beach Marriott
10:00 AM1:00 PM
cookieLink('20090530-US-FL-01')
Register
cookieLink('20090530-US-FL-02')
Register
Sun 05/31/2009
Fort Lauderdale, FLHilton Fort Lauderdale Airport
10:00 AM1:00 PM
cookieLink('20090531-US-FL-01')
Register
cookieLink('20090531-US-FL-02')
Register
Wed 06/03/2009
Orlando, FLEmbassy Suites Orlando - Downtown
10:00 AM1:00 PM
cookieLink('20090603-US-FL-01')
Register
cookieLink('20090603-US-FL-02')
Register
Sat 06/13/2009
West Palm Beach, FLHilton Palm Beach Airport
10:00 AM1:00 PM
cookieLink('20090613-US-FL-01')
Register
cookieLink('20090613-US-FL-02')
Register
All times local
Led by our seasoned forex traders, these workshops bring you practical insider advice on trading the currency markets. You'll walk away from these sessions with an understanding of:
A primer for getting started in forex trading, a discussion built to introduce the concept of currency trading.
How to use FOREXTrader to test trading strategies through a personalized walkthrough.
Technical tactics to identify trading opportunities using ForexCharts by eSignal, an advanced charting tool.
Reading price charts for key trend formations - and translating them into trading opportunities.
Also, get a preview of Strategies in Forex Trading, FOREX.com's advanced training workshop for current live clients. Drawing on real-world trading experiences, FOREX.com will help you get up to speed quickly and effectively.
Currency Trading For Dummies by Mark Galant and Brian Dolan
Mastering the Trade by John Carter
ForeX Trading for Maximum Profit: The Best Kept Secret Off Wall Street by Raghee Horner
Getting Started in Currency Trading : Winning in Today's Hottest Marketplace by Michael Archer & Jim Bickford
Technical Analysis of the Financial Markets : A Comprehensive Guide... by John Murphy
Come Into My Trading Room: A Complete Guide to Trading by Alexander Elder
Forex Revolution : An Insider's Guide to the Real World of Foreign Exchange Trading by Peter Rosenstreich
A Complete Guide to Technical Trading Tactics : How to Profit Using Pivot Points, Candlesticks & Other Indicators by John L. Person
Japanese Candlestick Charting by Steve Nison
Technical Analysis from A to Z, 2nd Edition by Steven B. Achelis
Hedge - A position or combination of positions that reduces the risk of your primary position."Hit the bid" - Acceptance of purchasing at the offer or selling at the bid.
G7 - The seven leading industrial countries, being US , Germany, Japan, France, UK, Canada, Italy.Going Long - The purchase of a stock, commodity, or currency for investment or speculation. Going Short - The selling of a currency or instrument not owned by the seller. Gold Certificate - A certificate of ownership that gold investors use to purchase and sell the commodity instead of dealing with transfer and storage of the physical gold itself. Gold Contract - The standard unit of trading gold is one contract which is equal to 10 troy ounces.Gross Domestic Product - Total value of a country's output, income or expenditure produced within the country's physical borders. Gross National Product - Gross domestic product plus income earned from investment or work abroad.Good 'Til Cancelled Order (GTC) - An order to buy or sell at a specified price. This order remains open until filled or until the client cancels.
Factory Orders – The dollar level of new orders for both durable and nondurable goods. This report is more in depth than the durable goods report which is released earlier in the month. Federal Reserve (Fed) - The Central Bank for the United States.First In First Out (FIFO) - Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.Flat/square - Dealer jargon used to describe a position that has been completely reversed, e.g. you bought $500,000 then sold $500,000, thereby creating a neutral (flat) position.Foreign Exchange - (Forex, FX) - the simultaneous buying of one currency and selling of another.Forward - The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved. Forward Points - The pips added to or subtracted from the current exchange rate to calculate a forward price.French Central Government Balance – The difference between the central government's monthly income and spending. Fundamental Analysis - Analysis of economic and political information with the objective of determining future movements in a financial market.Futures Contract - An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.FX - Foreign Exchange.
Economic Indicator - A government issued statistic that indicates current economic growth and stability. Common indicators include employment rates, Gross Domestic Product (GDP), inflation, retail sales, etc.End Of Day Order (EOD) - An order to buy or sell at a specified price. This order remains open until the end of the trading day which is typically 5PM ET.European Monetary Union (EMU) - The principal goal of the EMU is to establish a single European currency called the Euro, which will officially replace the national currencies of the member EU countries in 2002. On Janaury1, 1999 the transitional phase to introduce the Euro began. The Euro now exists as a banking currency and paper financial transactions and foreign exchange are made in Euros. This transition period will last for three years, at which time Euro notes an coins will enter circulation. On July 1,2002, only Euros will be legal tender for EMU participants, the national currencies of the member countries will cease to exist. The current members of the EMU are Germany, France, Belgium, Luxembourg, Austria, Finland, Ireland, the Netherlands, Italy, Spain and Portugal.EURO - the currency of the European Monetary Union (EMU). A replacement for the European Currency Unit (ECU). European Central Bank (ECB) - the Central Bank for the new European Monetary Union.Eurozone Organization for Economic Co-operation and Development (OECD) Leading Indicator – A monthly index produced by the OECD. It measures overall economic health by combining ten leading indicators including: average weekly hours, new orders, consumer expectations, housing permits, stock prices, and interest rate spreads. Eurozone Labor Cost Index – Measures the annualized rate of inflation in the compensation and benefits paid to civilian workers and is seen as a primary driver of overall inflation.
Day Trader - Speculators who take positions in commodities which are then liquidated prior to the close of the same trading day.Dealer - An individual or firm that acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.Deficit - A negative balance of trade or payments.Delivery - An FX trade where both sides make and take actual delivery of the currencies traded.Department of Communities and Local Government (DCLG) UK House Prices – A monthly survey produced by the DCLG that uses a very large sample of all completed house sales to measure the price trends in the UK real estate market. Depreciation - A fall in the value of a currency due to market forces.Derivative - A contract that changes in value in relation to the price movements of a related or underlying security, future or other physical instrument. An Option is the most common derivative instrument.Devaluation - The deliberate downward adjustment of a currency's price, normally by official announcement.Discount Rate – Interest rate that an eligible depository institution is charged to borrow short-term funds directly from the Federal Reserve Bank.
Cable - Trader jargon referring to the Sterling/US Dollar exchange rate. So called because the rate was originally transmitted via a transatlantic cable beginning in the mid 1800's.Canadian Ivey Purchasing Managers (CIPM) Index – A monthly gauge of Canadian business sentiment issued by the Richard Ivey Business School. Candlestick Chart - A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.Carry Trade – Refers to the simultaneous selling of a currency with a low interest rate, while purchasing currencies with higher interest rates. Examples are the JPY crosses such as GBP/JPY and NZD/JPY. Cash Market - The market in the actual financial instrument on which a futures or options contract is based. Central Bank - A government or quasi-governmental organization that manages a country's monetary policy. For example, the US central bank is the Federal Reserve, and the German central bank is the Bundesbank.Chartist - An individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader. Cleared Funds - Funds that are freely available, sent in to settle a trade.Closed Position - Exposures in Foreign Currencies that no longer exist. The process to close a position is to sell or buy a certain amount of currency to offset an equal amount of the open position. This will 'square' the postion.Clearing - The process of settling a trade. Contagion - The tendency of an economic crisis to spread from one market to another. In 1997, political instability in Indonesia caused high volatility in their domestic currency, the Rupiah. From there, the contagion spread to other Asian emerging currencies, and then to Latin America, and is now referred to as the 'Asian Contagion'. Collateral - Something given to secure a loan or as a guarantee of performance. Commission - A transaction fee charged by a broker.Confirmation - A document exchanged by counterparts to a transaction that states the terms of said transaction.Construction Spending – Measures the amount of spending towards new construction, released monthly by the U.S. Department of Commerce's Census Bureau. Contract - The standard unit of trading.Counter Currency - The second listed Currency in a Currency Pair.Counterparty - One of the participants in a financial transaction.Country Risk - Risk associated with a cross-border transaction, including but not limited to legal and political conditions.Cross Currency Pairs - A pair of currencies that does not include the U.S. dollar. For example: EUR/JPY or GBP/CHF.Currency symbolsAUD - Australian DollarCAD - Canadian DollarEUR - EuroJPY - Japanese YenGBP - British PoundCHF - Swiss FrancCurrency - Any form of money issued by a government or central bank and used as legal tender and a basis for trade.Currency Pair - The two currencies that make up a foreign exchange rate. For Example, EUR/USDCurrency Risk - the probability of an adverse change in exchange rates.Current Account – The sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). The balance of trade is typically is the key component to the current account.
Balance of Trade - The value of a country's exports minus its imports.Bar Chart - A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line of the right of the bar.Base Currency - The first currency in a Currency Pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF rate equals 1.6215 then one USD is worth CHF 1.6215 In the FX markets, the US Dollar is normally considered the 'base' currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British Pound, the Euro and the Australian Dollar.Bear Market - A market distinguished by declining prices. Bid Price - The bid is the price at which the market is prepared to buy a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can sell the base currency. It is shown on the left side of the quotation. For example, in the quote USD/CHF 1.4527/32, the bid price is 1.4527; meaning you can sell one US dollar for 1.4527 Swiss francs.Bid/Ask Spread - The difference between the bid and offer price.Big Figure - The first two or three digits of a foreign exchange price or rate. Examples: If the USD/JPY bid/ask is 115.27/32, the big figure is 115. On a EUR/USD price of 1.2855/58 the big figure is 1.28. The big figure is often omitted in dealer quotes. The EUR/USD price of 1.2855/58 would be verbally quoted as "55/58".Book - In a professional trading environment, a 'book' is the summary of a trader's or desk's total positions.Broker - An individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission. In contrast, a 'dealer' commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party.Bretton Woods Agreement of 1944 - An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US $35 per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies.British Retail Consortium (BRC) Shop Price Index – Measures the rate of inflation at various surveyed retailers. This index only looks at price changes in goods purchased in retail outlets. Bull Market - A market distinguished by rising prices.Bundesbank - Germany's Central Bank.
Accrual - The apportionment of premiums and discounts on forward exchange transactions that relate directly to deposit swap (Interest Arbitrage) deals , over the period of each deal.Adjustment - Official action normally by either change in the internal economic policies to correct a payment imbalance or in the official currency rate or. Adjustment - Official action normally by either change in the internal economic policies to correct a payment imbalance or in the official currency rate or.Appreciation - A currency is said to 'appreciate' when it strengthens in price in response to market demand.Arbitrage - The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets.Ask (Offer) Price - The price at which the market is prepared to sell a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.At Best - An instruction given to a dealer to buy or sell at the best rate that can be obtained.At or Better - An order to deal at a specific rate or better.
The fundamentals include everything that makes a country and its currency tick. From interest rates and central bank policy to natural disasters, the fundamentals are a dynamic mix of distinct plans, erratic behaviors and unforeseen events.
That said, not every development will move a country's currency. Try to start by identifying the most influential contributors to this mix versus following every fundamental out there.
Forecasting models are both art and science, with so many different approaches that traders can get overloaded. It can be tough to decide when you know enough to pull the trigger on a trade with confidence.
Many traders switch to technical analysis at this point to test their hunches and see when price patterns suggest an entry.
Fundamental analysis is very effective at forecasting economic conditions, but not necessarily exact market prices. Studying GDP forecasts or employment reports can give you a fairly clear picture of an economy's health and the forces at work behind it. But you still need a method to translate that into specific trade entry and exit points.
The bridge between fundamental data and a specific trading strategy usually comes from a trader model. These models use current and historical empirical data to estimate future prices and translate those into specific trades.
There's a tendency to pigeonhole traders into two distinct schools: fundamental or technical. In fact, most smart traders favor a blended approach versus being a purist of either type.
Fundamentalists need to keep an eye on signals derived from price charts, while few technicians can afford to completely ignore impending economic data, critical political decisions or pressing societal issues that influence price action.
Fundamental analysis studies the core underlying elements that influence the economy of a particular entity, like a stock or currency. It attempts to predict price action and trends by analyzing economic indicators, government policy, societal and other factors within a business cycle framework.
If you think of the markets as a big clock, fundamentals are the gears and springs that move the hands around the face. Anyone can tell you what time it is now, but the fundamentalist knows about the inner workings that move the clock's hands towards times (or prices) in the future.
TrendTrend indicators smooth price data out, so that a persistent up, down or sideways trend can be easily seen. (Examples: moving averages, trend lines) StrengthStrength indicators describe the intensity of market opinion on a certain price by examining the market positions taken by various market participants. Volume or open interest are the basic ingredients of strength indicators. Volatility"Volatility" refers to the magnitude of day-to-day price fluctuations, whatever their directional trend. Changes in volatility tend to anticipate changes in prices. (Example: Bollinger Bands) CycleCycle indicators indicate repeating market patterns from recurrent events such as seasons or elections. Cycle indicators determine the timing of a particular market pattern. (Example: Elliott Wave) Support/resistanceSupport and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon is attributed to basic supply and demand. (Example: Trend Lines) MomentumMomentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is highest when a trend starts and lowest when the trend changes. When price and momentum diverge, it suggests 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)
Bar chartsThe most common type of chart showing price action. Each bar represents a period of time - a "period" as short as 1 minute or as long as several years. Over time, bar charts show distinct price patterns. Candlestick chartsInstead of a simple bar, each candlestick shows the high, low, opening and closing price for that period of time it represents. Candlestick patterns provide greater visual detail as they develop. Point & figure chartsPoint & figure patterns resemble bar chart patterns, except Xs and Os are used to mark changes in price direction. Point & figure charts make no use of time scale to associate a certain day with a certain price action.
Traders rely on price charts, volume charts and other mathematical representations of market data (called studies) to find the ideal entry and exit points for a trade. Some studies help identify a trend, while others help determine the strength and sustainability of that trend over time. Technical analysis can add discipline and minimize emotion in your trading plan. It can be hard to screen out fundamental impressions and stick with your entry and exit points as planned. While no system is perfect, technical analysis helps you see your trading plan through more objectively and dispassionately.
All market fundamentals are reflected in price data. Moods, differing opinions, and other market fundamentals need not be studied.
History repeats itself in regular, fairly predictable patterns. These patterns, generated by price movements, are called signals. A technical analyst's goal is to uncover a current market's signals by examining past market signals.
Prices move in trends. Technical analysts believe price fluctuations are not random and unpredictable. Once an up, down or sideways trend has been established, it usually will continue for a period.
Technical analysis attempts to forecast future price movements by examining past market data. Most traders use technical analysis to get a "big picture" on an investment's price history. Even fundamental traders will glance at a chart to see if they're buying at a fair price, selling at a cyclical top or entering a choppy, sideways market.
There are many different reasons that drive investors to trade spot gold:
Speculation on the price based on the use of fundamental and or technical analysis
Creating a balanced, diversified asset allocation model for an overall investment portfolio
Applying risk management as a hedge against market volatility and financial crises caused by economic, political or social turmoil.
Much like trading currency pairs, spot gold enables traders to take a long or short position in gold while simultaneously taking the opposite position in the U.S. dollar. Spot gold trades globally in an over-the-counter market, and gold prices float freely based on supply and demand. The spot price is the price quoted for the gold to be paid for (including delivery) two days following the date of the actual transaction (also known as the settlement date). Spot gold trades a lot like currency pairs in the foreign exchange market. Trading is available 24 hours a day from Sunday at 6:00 pm ET to Friday at 5:00pm ET. The spot gold market has no central market however, the main centers for gold trading are London, New York, and Zurich. Liquidity is typically highest when European market hours overlap with trading in New York - roughly four hours a day during the morning for U.S. traders. There is a twice-daily fix in London that helps to set a reference point for intraday gold prices. Settlement is very similar to forex settlements.
With average daily turnover of US$3.2 trillion, forex is the most traded market in the world. A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York. Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur - day or night.
Daily turnover in the world's currencies comes from two sources:
Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
Speculation for profit (95%). Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.
"Forex" stands for foreign exchange; it's also known as FX. In a forex trade, you buy one currency while simultaneously selling another - that is, you're exchanging the sold currency for the one you're buying. The foreign exchange market is an over-the-counter market. Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Unlike stocks or futures, there's no centralized exchange for forex. All transactions happen via phone or electronic network.
We've worked hard to distill our collective trading experience into an approach suitable for all skill levels.
Step 1: Understand the FOREX market. Dive into Forex 101 for a compact overview of the basics or sit back and join us at one of our live interactive webinars.
Step 2: Prepare to trade in a live environment. Register for one of our training courses and study at your own pace or join us at a local workshop, where our experienced instructors can teach you in a dynamic classroom setting.
Step 3: Test your skills risk free. Sharpen your technical analysis techniques with a free 30 day practice account.