GBP/USD Currency pair

n this article we consider the peculiarities of GBP/USD currency pair. GBP/USD is an abbreviation of British pound and US dollar currency pair. The currency pair quote indicates how much money it is necessary to pay in order to buy 1 British pound.
It is very popular trading instrument in Europe and, especially, in Great Britain. It stands third on the list of the most traded currency pairs worldwide, daily trading turnover reaches 12% of the total Forex market turnover. This currency pair is really unpredictable and has strong volatility. Its fluctuations are short-term and unstable. Due to such behavior in the market it was called Cable.
Daily fluctuations of the currency pair reach 130 points on average. Low liquidity of this pair is observed only in the Asian region (average movement is about 30 points). That is why novice traders are not recommended to start with this pair.
Many traders prefer EUR/USD to the Cable. As a rule, British pound moves in the same direction as EUR/USD, but not always.
Pound-dollar movement can be absolutely different from the same euro-dollar in the period when certain “cable” news is released. For example, the British Government changes interest rate through the Central bank. Pound movements are similar to the movements of euro and Swiss franc. One should always be careful trading with pound because nobody knows what surprise it will bring this time. Pound often moves against the news; even when everything seems favorable for the currency, its rate can fall down. Many traders choose this pair for swap trading because of a substantial difference in interest rates of pound and dollar.

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Six Tips for Long Term Investment

The long term investor needs to follow a strategy that is compatible with long term investment success.

A long term investor requires that the investment is safe, that his capital is secure and that there is a reasonable risk free return on the investment. Banks offer a reasonably risk free investment however the interest rate is very low. The Stock market has much higher returns but there is an aspect of risk which deters some investors. For all this the stock market can proffer the long term investor the opportunity to invest with manageable risk and a good return.

Six Tips for Long Term Investment:

A key long term strategy for a long term investor is to diversify their investments into various instruments such as stocks, bonds, and mutual funds. Most investment advisors recommend that not more than 10% of an investment portfolio should have more than one stock or other similar investment. Investments should be spread over geographical areas of the world such as Asia, America, Europe and also emerging markets. In addition several market or industrial sectors should be used so as to avoid the risk of a sector collapsing and a huge lose of capital.

Investors tend to be lone wolves and don’t take advice easily however even though you might not take the advice at least listen to it some of it might make sense. Try and invest in the companies whose products you like. Try to analyze the companies you are interested in and see if you like their business strategies. There are many resources on the internet that can help you understand investments. Also although an investments past performance is no guarantee that in the future it will perform well it can be prudent to choose investments that have been strong performers over the last couple of years.

Another tip is to keep an eye on your investments. Don’t invest and then forget about them. Even if you are investing for the long term you need to make sure that you have investments that are performing as you had expected against the market indices. Don’t be tempted to sell investments that are doing well to take your profit; you are in it for the long term so investments that are doing well should continue to grow. On the other hand investments that are not doing well should be sold and replaced. Remember that it is better to lose a little rather than wait in the hope that the investment will do better when in fact it continues to do badly and you lose more money.

Don’t be tempted to cash in your dividends as the return on an investment is a combination of reinvested dividends and stock appreciation. The yields might seem small but over a period of years they can make a big difference. Part of the analysis of your potential investments is looking at stocks that have a history of regular dividends.

One of the golden rules of investing is that when the market is down then that is the best time to buy stocks and when the stock index market is high its time to sell the stocks that are not performing so well and reinvest the proceeds in other instruments such as bonds or real estate.

Finally as you are investing for the long term it is important that you don’t reduce your funds through unnecessary fees and commissions. Keep your trading down to a minimum so as not to incur fees that reduce your funds. When the markets turn down don’t make the mistake of panic selling. The economy goes in cycles so a market that is down will soon move up again. Always bear in mind that a market that is low presents a buying opportunity.

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Forex Trading - Should You Invest?

Forex trading was not available to the average person up until recently when technological advancements made trading currencies possible even with small amounts of capital. In the past, this was the monopoly of large financial houses, governments, central banks and multinational corporations that were in trading Forex to facilitate international trade. Now the market has changed allowing retail traders to take part even with a few hundred dollars and this has made this market the largest on earth with more than four trillion dollars in daily turnover.

The Forex market can be highly profitable if handled carefully with proper money management as well as risk management. Regular currency trading can be nerve racking and trading with a true picture of the potential of trading is the best. This can be achieved by studying the market (using the charts and the useful information they can provide) from as many angles as possible.

Another advantage with Forex trading that novices have is the ability to do a test run with a virtual currency account. Here, you can practice all that you have learned about Forex trading systems without having to risk any real money although all other aspects from trading signals to placing of orders can be real. After starting off with a demo account you can graduate onto a micro and then to a mini account which gives you the best opportunity to handling your money and optimizing investing even with a few hundred dollars. This is the training ground for many traders and by this time you will find out whether currency trading is actually your cup of tea.

After a mini account it is a matter of risk analysis, market analysis combined with the best investment opportunities to be found. The psychological aspect of trading is also important for traders as it determines how risk is handled by a trader and how much trading pressure he is able to handle. Patience is certainly a trait that will pay handsomely in the long run

A trader who is able to enjoy trading will definitely be more successful at it. The secret of being successful also depends on how much work goes into studying the market, trends and entry and exit points. Trading currencies has to be treated as a business where you are in it for the profits rather than a lottery or a get-rich-quick scheme.

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Automated Trading

Today the high popularity of Forex is mainly caused by the fact that you can trade having a computer and Internet access, you do not need to invest large sums in order to start trading on the market, and also trader can use the advisors for automated trading.
People, who have just started their work at Forex, very often do not have the required experience and knowledge in order to begin trading themselves. That is why about 70% of traders use the automated trading – advisors. The usage of the automatic trading system helps to avoid the influence of the human emotions, panic, excitement, etc. on the trade process. The advisors are developed on the basis of long experience of the successful traders and professional analysts. However, even the programs of automated trading can not guarantee 100% profit; nevertheless, due to them you start trading at Forex market, having minimum of knowledge and experience in this area.
What is the Automated Trading, as known as the trading with the help of expert advisors?
Advisors are the special programs, including different modules, which are used when the charts, indices, received from the broker to trader, are processed and analyzed.
The programs of the Automated Trading were developed and are used by traders in trading for a long time, and every year the number of such programs grows, a lot of them are updated and become more perfect in the work. The trading with modern expert advisors allows to receive profit as well as to get familiar with Forex market and acquire skills and knowledge, which are needed in order to trade successfully.
The major part of advisors, provided by different companies for the automated trading, as a rule, does not require special skills to start work with them. You just need to download them and install, that is all, you can start trading, which very often gives a result immediately.
Most often the automated trading systems are provided for free, with the detailed description of program’s functions, but sometimes this description does not correspond to its real possibilities. That is why despite all advantages of advisors, you should not rely on them completely. Traders, who have enough experience and know much about trading strategies, start trading independently, guessing the movements of exchange rates on short time intervals.

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