Forex Trading – Technical or Intuitive ?

The FX, Forex or foreign exchange, is all vis-à-vis money. Foreign currency from all around the world is available to be bought or sold here. Any individual Forex trader or big and powerful business firms can buy or sell currency freely, on this currency exchange platform.

When dealing in foreign currency exchange, there is an ongoing cycle of buying and selling in the market. A trader can buy one foreign currency and then sell it on a higher selling price, just to buy another foreign currency, while making profit in between.

The only way to make money in Forex trading market to avoid as much emotional involvement as you can. While making investment or trading related decisions, always plan out a cautiously thought out strategy that takes the recent market tends and history patterns into consideration while making a deal.

With Financial markets, being intuitive or going with your instincts does not help much. Forex being an extremely unpredictable trading market where, at times, emotions tend to cost more than a wrong strategy. Emotions can dominate your trading sensibilities and decisions, making you go ahead with a deal purely based on your gut instincts.

What needs to be understood is the fact that trading industry is hard core strategy driven business. Market trends, rises and falls, do not go by a trader’s instinct, but can be influenced by past patterns and trends. It happens a lot during the time when a deal is about to be finalized, that the investor goes through a moment of intuitive spurs and would want to change the trading decision at the last moment. This should be avoided at any cost.

Whatever you are seeing in the market at the moment your deal is being finalized, do not change your pre planned decision at the last minute. So by the strategy you had planned in advance. That’s the only way to deal successfully with Forex trading, to be systematic in your approach, analytical with your decisions and insistent with your stand.

Be firm in your decisions. If you correctly analyze the trends of the Forex market, you can easily come to know that although the trading patterns are by and large predictable, there is a lot of sinking and floating happening within those trends. Currency prices rise and fall immediately. There is seldom any trend which has a smooth rise or fall of currency prices.

These are the situations when intuitions can kill your deal, landing you into major loss at times too. For instance, when you find out that the currency you’re holding is taking sinking southwards suddenly, you might get tempted to sell it off in loss, pack your bags and leave. Similarly, if you see that the currency you are holding is going on a rise, you try to buy more of it, just to increase your profits. Now these are the situations where emotional actions can kill your deal and thus, your trading future.

These are the times when you should hold on for a moment and study what exactly is happening and bank on greatly on your trading system. Your pre planned strategies and tactics will tell you precisely when to trade, to reap highest profits.

Almost all the Forex professionals or pros will advise the new traders and investors to build up their own trading system. This planned trading system will tell you exactly what to buy, when to buy, when to deal and what to deal for. Developing a trading system based on technical and fundamental analysis can be of benefit to its trader. Studying the past as well as present market trends can be immensely effective in getting some knowledge about what’s the future trend going to be.

There may come times, when your trading system and your instincts may become opposites, and you might get caught in the dilemma not knowing which to follow. This is the time when you should follow your trading system, as it is not just a mere emotional spur of the moment, but a suitably studied, pre planned strategy for a market based on trends and patterns.

To make your trading system even more efficient, you should clearly recognize the entry and exit point of your trading. Also kept in mind should be the extenuating factors for these points, and systematic strategy to exit properly. You should always set up a stop-loss order and a take-profit order in your deal. Clearly defining these exit points will help you, either by increasing your profits, or by decreasing your losses.

European Mother Funders (EMF)

Key News

• Yuan Faces Pressure for Appreciation on China's Interest-Rate Gap, Yi Says (Bloomberg)
• LONDON, March 9 (Reuters) - Britain's goods trade deficit with the rest of the world unexpectedly widened in January to its biggest since August 2008, raising further concerns about the strength of the country's broader economic recovery.

The Office for National Statistics said on Tuesday that after the sharpest drop in exports in over three years, Britain's goods trade gap widened to 7.987 billion pounds ($11.97 billion) from 7.010 billion in December, and well above the 7 billion forecast by economists.

• JOHANNESBURG, March 9 (Reuters) - Devaluing the rand would be a "very short-sighted" move for South Africa to make, International Monetary Fund (IMF) managing director Dominique Strauss-Kahn said on Tuesday.

Local union federation COSATU, an ally of the ruling ANC, has called on the central bank to widen its inflation targeting mandate and wants a much weaker rand to help boost local industries and create jobs.

Quotable

“If the euro could overshoot fair value of 1.23 by some 22 percent, why can’t it undershoot it by some 22 percent?”

Erik Nielsen, Goldman Sachs

FX Trading – European Mother Funders (EMF)
You probably read about it already; maybe you didn’t ...

Being proposed is a European Monetary Fund (EMF) -- similar to the International Monetary Fund -- that could step in and bail out Eurozone countries facing troubled fiscal situations.

Sound good?

EURUSD Weekly:

Maybe good enough to stem some of the euro’s fall ... in the very short term, but it’s certainly not an ideal solution to the difficulties pestering Eurozone members and global investors.

Most obviously, it could set

a bad precedent. Maybe the term moral hazard comes to mind.

If the mother funders bail out Greece, can they just wring out their mops, kick their feet up and retire with some nice Bordeaux? Doubtful, because they’ll be called on to clean up after ... uhhhh ... Portugal? Spain? Italy? ...?

Maybe this is simply a gesture to help restore sentiment and confidence in the monetary system. Here is Italy’s President, Giorgio Napolitano, commenting on the whole situation: “There's an awareness that our common

arsenal lacks the tools to prevent and efficiently control these crises when vulnerable countries are attacked.”

Until now the euro hasn’t been tested, the system hasn’t been pressured. Though still an outlying possibility, there are legitimate fears that a euro break-up could come from all this. Either way, they need something to keep the one-size-fits-all system together.

After all the scrubbing is done to restore fiscal disasters in the Zone, additional blemishes could, and likely will, be uncovered. Germany, an important member in deciding what measures must and can be taken to fix things

, is currently playing nice.

But their compassion and cooperation will be short-lived if solutions morph into real obstacles for the motherland.

Right now the Mother Funding idea is being met with mixed feelings. Some say, “No way! Can it now.” Others seem to think it’s aimed in the right direction.

A big argument addresses th

e acuity of an EMF mission – to help alleviate the fiscal basket cases and restore the common good. But some have pointed out that there are more important elements to be addressed that would go further in solidifying the common good. For instance, addressing the imbalances, getting surplus nations to consume ... rather than keep the pressure on debtor nations to fulfill this task.

As with many of the global actions taken and proposed during what I’ll dub the “Bailout Era,” the key, if public funding is deemed necessary, is to keep from restoring a system that can just as easily crumble as the o

ne before it.

For grins, I’ve modified the Erik Nielsen’s quotable (as included above):

If the ill-planned common currency could be brought into existence to begin with, why can’t it come crashing down and be banished to take its place as monetary history?

Cross-Eyeing: EURJPY

Let me go out on a limb here and say that a potential inverted head and shoulders pattern is forming on the EURJPY! I'm looking to go long on the pair once it hits the right shoulder of the formation. Moreover, that price level lines up nicely with the 61.8% Fibonacci retracement level. With stochastics at oversold territory, would we see the pair bounce up to correct itself once my buy order gets triggered?

On the fundamental side, it seems that concerns about Greece debt resurfaced yesterday. Apparently, Germany and France don't want to help bail out Greece, as they believe that the €4.8 billion in budget cuts are enough. I think that the markets are keying in on this issue, which may lead to some bearish sentiment towards the euro, which is exactly what I'm looking for since I've got a limit order way below the current market price.

There are a couple of reasons why I believe we could see another up move in the EURJPY. First of all, we've saw signs of life from the euro last week, when it made a nice rally on increased risk appetite on Friday. Yesterday's down move may simply be a reaction to the Greece news, and euro bulls may see this as an opportunity to get a better price for bottom picking.

Secondly, news from Japan emerged regarding potential currency intervention by the Bank of Japan. The yen has been on a rise this year, which is not what the Japanese government wants. The BOJ has been notorious for intervening in the markets in the past, because a weak yen leads to increased demand in Japanese exports.

Looking at BabyPips.com's economic calendar, the BOJ will actually be releasing its monetary policy meeting tomorrow. I wouldn't be surprised if we see some verbal intervention by BOJ officials in an attempt to weaken the yen.

Anyway, I will have two profit targets on this trade. I placed the first one at 125.00, last week's high and the second one at 127.00, a broken major support level. In order to give my trade some room to breathe, I placed my stop just a couple of pips below this year's low.

Again, here's what I'm going to do:

Long EURJPY at 121.80, pt1 at 125.00, pt2 at 127.00, stop at 119.50

Who is Queen Cleopiptra?

Raghee Horner is a private trader, founder of EZ2Trade Software, entrepreneur, and author. She has been trading forex, as well as futures and stocks for almost twenty years. She is a regular contributor at a number of sites including FXStreet, Trading Markets, Autochartist, eSignal and a featured speaker at the Forex and Traders Expos. Her commentary and analysis is seen daily by thousands of traders at her personal blog ragheehorner.com. She has written articles for Technical Analysis of Stocks and Commodities, Currency Trader, Your Trading Edge, and Traders Journal magazine.

Forex Trading - Safest Investment During Economic Crisis

Economic crisis is chocking the market with its strong grip all over the world. The markets are full of uncertainty, banks are unwilling to defreeze credits and people panic about their savings. When equities markets turned to risky investments for both financial institutions and individuals, is there any kind of investment that is still considered safe?


Forex trading, in my opinion, is the safest investment option available today. Many financial institutions and traders consider foreign currency holdings as the most secure investment option. When couple of years ago an middle class individual wouldnt even dream about entering forex market, today private investors enjoy the appealing forex investment opportunities.

Trading forex gives everyone a chance to enter the real business world. Assets are fully liquid and the biggest advantage of them all the ability to trade long or short on the week days, 24 hours a day. Some forex brokers go even further and offer trading possibilities even when market is closed. Even with a small deposit forex trader can earn generous amount via leverage options.

Forex trading holds a healthy investing potential for every investor around the world. Of course the draw back of forex lays in the fact that not many are familiar with the trading environment and not many have time to educate themselves about it. After all, forex trading requires a lot of learning and practice. When people need investing solutions at the time of uncertainty, learning is the last thing on everyones mind, no matter how worthy forex trading is.

Forex trading is not gambling you cannot simply put a bet on two currencies and wait for the results. Well, actually you can do so, but this will result in a very quick loss of your funds. Currency trading is full of technical terms that have to be memorized and fully understood and for new traders this can also be a big minus.

However, I still think that the pain of learning forex trading is worth even second of it. With a professional assistance of forex broker learning process can safe some time and energy and new forex traders can enjoy the investment opportunities right from their own home.

Another good question is whether financial crisis has or will eventually have any strong impact on forex brokers? After all, if you start forex trading, you have to trust your forex broker to take care of your funds and profits! Is it wise to stop trading at all during economic uncertainty?

My trading motto is trust, but always check. In my opinion, you can continue trading safely but at the same time the moment your profits reach the yes-you-can-withdraw level, you should take the money out. Every time you are done trading, leave no more than $100 in your account just for the save side. That way, even if things go bad, loosing $100 wont sting as much as loosing thousands.

I cannot guarantee anything and I dont know how other traders are handling the economic situation, but I havent stopped trading (although the spreads and swap rates are outrageous). So far every withdrawal request has been processed without problems and I keep my profits save by withdrawing them every chance I have got! Of course, I loose money because of the withdrawing fees and trading with small amounts isnt too attractive, but at least I am not scared every time I open my trading platform! My heart is free when I have nothing to loose.