Fundamental Analysis

Fundamental analysis involves examining the intrinsic value of a nation’s currency based on economic news releases that reflect the strength, or weakness, of a country’s economy. Fundamental traders follow these news announcements, known as “fundamental indicators,” because they paint a picture of a currency's strength in relation to other countries.

Fundamental indicators are reports that include statistical data on things such as employment, gross domestic product (GDP), international trade, retail sales, housing, manufacturing, and interest rates. The stability, growth, or decline in any of these sectors may have an effect – direct or indirect – on the value of a country’s currency.

Factors That Move The Forex Market
Central banks play a key role in the Forex market because they have the responsibility of changing the country’s “base” interest rate. A central bank has to find a fine balance when setting interest rates as it wants to maintain growth in the economy, but at the same time it has to be careful to curtail inflation. The bank’s decisions on whether to raise, cut, or hold the interest rate fuels speculation in the Forex market, where the value of a currency, or group of currencies, changes in real time.

In addition to information about a country’s economy, the value of a currency is connected to national and international political events, elections, and changes in government trade policies. The prices of sensitive commodities like oil and gasoline are an important fundamental indicator as high prices can hurt consumer spending and confidence, and curtail the activities of certain businesses and government services.

Natural disasters, terrorist attacks, and militarily actions in a sensitive region cause instability in the world and have a significant impact on the Forex market as they develop. These types of evens can be hard to predict in advance.

The ability to identify trends in macroeconomic indicators and reading central bank’s current and future actions is a valuable tool that comes from following financial news, watching the markets, and trading Forex.

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What is Stop Loss

Stop loss is a widely used order aiming mainly at limiting the possible losses in case of negative market movements.
Stop loss is used only with open positions. When the market conditions are not favorable for a trader and the price has reached the level of Stop loss, the deal is closed automatically. Therefore, Stop loss helps the trader to control losses and in case of failures to keep safe at least the part of the deposit.
If a trader does not use Stop loss orders, the position is closed by the broker when the sum of losses is equal to the sum of the deposit.
There are 3 types of Stop loss orders: fixed Stop loss, sliding Stop loss and combined Stop loss.
Fixed Stop losses are set while opening positions. They cannot be replaced until the deal is closed. Sliding stop losses, on the contrary, can be replaced any time depending on the price movement. Another name for sliding Stop loss is Trailing stop that can be replaced either manually or automatically considering the traders settings.
Presently there are lots of discussions on whether it is necessary to use Stop losses or not. Some traders believe that Stop loss should be compulsory for trading, emphasizing the ability of Stop losses to prevent the loss of the whole deposit. If the price is rapidly moving in direction, which does not correspond to the forecast, the deal that has not been closed in due time can result in significant losses. The opponents of Stop loss believe that this order can limit not only losses, but profits as well. As the price movement is often unpredictable and unexpected, it can develop according to the trader’s expectations though with some periodic bounces crossing the Stop loss line. In this case the position is closed with losses though it was a possible to close it with profit.
As a rule, the decision on whether to use Stop loss or not depends on the individual strategy of a particular trader. Therefore, there is no single opinion on the necessity of using the limiting the losses.

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Technical analysis Principles

Technical analysis is a method of forecasting price movement by data comparison in different time frames and by eliciting regularities of market behavior. Application of a technical analysis in Forex activities is irreplaceable for the most of traders.
Technical analysis is based on three general principles:
1. Market movement is taken into account by everybody
The price is always impacted by external factors, however technical analysis implies that investigation of political, economic and psychological factors influencing the price movement is not obligatory, as the main motion indicator is the price as it is. Any slight influence of factors is considered and reflected by a price, that is why it will be the object of study.
2. Price movement moves in a certain direction
For applying a technical analysis it is necessary to comprehend the trend meaning. The main goal of a technical approach is determination of price move tendency in order to trade in compliance with this trend.
There are three trend types:
•  Bullish when price moves up
•  Bearish when price moves down
•  Flat - has no certain price move direction
As a rule, during the price movement you can elicit each of trend types, but only one of them can be major. Worth keeping in mind that tendency change takes place only after it gives certain signals.
3. History repeats itself
This principle implicates that in the course of human history the rules and analysis types do not change, that preconditions a multiple repeating of price movement on different time intervals.
The market dynamics is primarily studied by means of charts during a technical analysis. The main tools are as follows:
•  Oscillators
•  Japanese candlesticks
•  Bar chart (intervals)
•  Line chart
•  Trend indicators
•  Wave analysis
Technical analysis can be a foundational forecasting instrument in the currency market. This technique is successfully used by professional traders and analysts of Forex. Their long experience points to practicability of using technical analysis in trading.

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Trade Arrangment - Every Trader Must Know

Any trader either a newbie or a professional should develop the most convenient and profitable trading system for himself. Trading strategy is one of the basic elements of the trading system. Undoubtedly, there are many trading strategies on the international currency exchange Forex market, but it does not mean that each of them can be applied by all traders. Before developing a trading system the trader should define which strategy will be the most appropriate. It should save trader’s time searching for the most applicable trading system. In order to decide on the trading strategy you have to take into account two factors:

- personality and internal constitution;
- financial capacities.

Most traders make a great mistake by following an unnatural trading strategy for them. The problem is that the major part of traders, regardless of their trade experience, does not think about that. The second reason is lack of financial resources in order to choose the most relevant trading strategy. Consequently, a trader does not have any other way except for choosing a strategy which meets the requirements of small capital, not taking account of the first component.

We consider all trading strategies as follows:

Intraday trade

Adherents of this type of trade are mostly beginners, it is connected with currency market dynamics which attracts novices. Intraday trade has the following peculiarities:

• Positions can be opened during one trading day and by the end of the day they should be closed or, in case of urgency, carried over the next trading day with setting protecting orders;
• All trades are short-term and meant for taking just a part of profit;
• Within a day the number of trades can be more than one;
• Intraday trading does not require huge financial investments;
• The work time interval is minute charts.

Intraweek trade

As a rule, traders, disappointed in intraday trade, try this strategy. Intraweek trade has no such furious market movement as in intraday trade. It may seem that market is motionless. But it is just at first sight. Intraweek trade has some peculiarities as follows:

• A trade can remain opened for ten days;
• All trades are counted on taking the most part of profit on market movement;
• As a rule, not more than 2 positions are opened during a week;
• Requirements for invested funds are much higher than for intraday trading;
• The work time time is multi-hour charts.

Positional trade in the direction of positive swaps

As a rule, positional trade is used only by patient traders. Positional trade is distinguished from the previous two by a pressure put on trader, and moreover, a trader has more free time. Positional trade has the following characteristics:

• The work time interval is daily and weekly charts;
• A trade can remain open during months;
• Requirements for invested capital are the highest, compared to the intraday and intraweek trades;
• An option of being outside the market during correction periods is available.

Probably, every trader can find additional definitions of the strategies, but the basis is one of these strategies to become ideal for you. In order every trader to be able to choose the most appropriate strategy for him/her, let us consider which strategies are applicable to different characteristics of a trader. However, strategy choosing is a responsibility of traders.

First, let us look through advantages and disadvantages of the intraday trade:

Advantages:

• Huge capital is not necessary;
• Trader may stop trading any time;
• Minimal risk;

Disadvantages:
• High emotional pressure;
• It is required much time for refreshment;
• Lack of time during a trading session.

This strategy is suitable for traders with a great endurance and virile character, quick reaction and strong nerves.

Intraweek strategy:

Pros:

• Insignificant pressure;
• High profitability;
• Less time is required for refreshment;
• There is free time during a trading session.

Cons:

• Significant volume of funds is required;
• Trader can be outside the market during the trend correction;
• Impossibility to stop trading at any moment;
• Necessity to hold opened position for 24 hours.

This strategy suits traders who combine such qualities as working capacity, deliberation and thoughtfulness, because first time trader will need to monitor positions 24 hours a day, analyzing all market changes. It is really timely at the moment of market trend formation. Meanwhile, usage of multi-hours charts will be uncomfortable for you due to signals which are shaped on the night bars.

Positional trade:

Pros:

• A lot of free time;
• No emotional pressure;
• No necessity in refreshment.

Cons:

• Periods of absolute inactivity;
• Impossibility to stop trade at any moment;
• Limited number of currency pairs for trading;
• Necessity in huge capital for trade.

This strategy suitrs traders who have a great patience, purposefulness and big funds.

In case you have achieved absolute coincidence of a trading strategy, your character and financial capacities, it would be a perfect variant for you.

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Sell Usd/Cad

Sell Usd/Cad @ 0.9962
T.p -0.9890
S.L -1.0070

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EUR/USD Currency Pair

The international currency market is built on principles of buying one currency and selling another. The daily market turnover is about 3 million US dollars. With the help of brokers and dealing centers one can trade almost any world currency.
In this article we consider one of the most popular currency pairs – EUR/USD. The euro-dollar currency pair appeared on April 7, 1989. The initial EUR/USD rate was 1.0445.
Statistics for 2007 confirms that 27% of all operations are executed with euro-dollar currency pair. To the present time EUR/USD pair has been the most traded and popular in the international currency market Forex. The pair is interesting both for professionals of currency speculations and absolute novices of trading. It is one of the most active pairs in the market and notable for insignificant volatility, attracting traders with different experience on Forex. EUR/USD pair movements are smooth, but during the day high activity can be noticed and used by the intraday and short-term traders for getting great profit.
Traders who actively work with the euro-dollar currency pair should be always aware of economic events in the USA and Eurozone. The pair adheres to the trend trading. Entering the market trader should estimate the current prices, draw a trend and find the historical levels of short trading prospect.
Every currency pair in the market has its own peculiarities and suffers from impact of different factors. Traders should realize these peculiarities and trade paying great attention to them.

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Buy Usd/Cad

Buy Usd/Cad - 0.9895
Stop Loss - 0.9800
Take profit - 35 pips, 70 pips

Trade on Ur risk

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Forex Cross Currency Pairs

On Forex there are cross currency pairs, which do not include the US dollar, unlike major currency pairs.
The analysis of the US dollar movement is of crucial importance in trading major currency pairs. The analysis of the second currency quoted in a pair (EUR - the euro, JPY - the Japanese yen, CHF - the Swiss franc, GBP - the British pound) is not that essential. Trading major currency pairs is quite a profitable strategy. Still, dealing with such pairs is worth trying, once you have gained some experience on Forex.
Cross currency pairs. The value of a currency in such pair is denominated in other currency units - not in USD. The rates of these pairs are called cross rates.
The most-traded pairs are those with euro, for instance, EUR/CHF, EUR/GBP, EUR/JPY. These pairs are distinctive due to their high liquidity. A currency pair can sometimes be more liquid than USD/CHF because of institutional players, willing to work with the Swiss franc.
The yen is an integral part of another cluster of cross currency pairs: CAD/JPY - the Canadian dollar and yen, NZD/JPY - the New Zealand dollar and yen, as well as GBP/JPY - the British pound and yen. This cross currency cluster is quite popular with investors and traders, as they can engage in carry trade with its pairs. Carry Trade is selling a certain currency at a relatively low interest rate (for example, the yen) and then buying a currency at a higher one. This scheme enables a trader to gain profit from the difference between two rates.

The highest interest rates are those of the following developed countries: Canada, New Zealand and Great Britain. The currencies of these countries are thus the most widely used in carry trade against the Japanese yen.
A trader dealing with major currency pairs can face a situation, when the US dollar is just as strong as the second currency quoted in pair. The situation is tricky as USD is rather unpredictable.
 If both the USA and Eurozone show persistent economic growth, it is unclear what decision to make - either to open or close a trade. Trading in EUR/JPY is optimal when the yen is under pressure of geopolitical factor, for example.
The most popular cross currency pairs are as follows:

EUR/CHF - Eurozone is Switzerland`s major trade partner. The Swiss franc has rather low interest rate, which makes this currency preferred for carry trade operations. The pair has been showing a positive trend since 2006.

EUR/JPY - A much-used cross currency pair owing to its interrelation with USD/JPY and EUR/USD. Traders often speculate on its movement, relying upon interest rates and differences between the growth rates of Japan and Eurozone.

NZD/JPY - This pair is in great demand among cross currency pairs at carry trade dealing, as it has the widest difference between the interest rates. The pair is good for long positions, particularly if general fundamental and technical indicators are favourable for its growth.

EUR/GBP - Eurozone is the second important trade partner for Great Britain. So, if a trader takes into account fundamental factors related to England and the British pound, he is sure to work with this particular pair since GBP/USD is most affected by USD movement in the market.

CAD/JPY - One can use the ability to foresee the upcoming oil prices trend trading with this cross currency pair. Canada is the second on the list of largest oil reserves in the world. This country is a net oil exporter, so that it gains profit from rising oil prices, whereas the major oil importer, Japan, suffers losses. Thus, opening long positions with this pair is the most profitable ahead of oil price spike.
Working with cross currency pairs, a trader can open carry trade deals. Difference between two countries is a good advantage in trade. Each cross currency pair has its characteristics, interest rates differences; it is dependent on certain political and economic events determining its trend.

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Strategy 20 pips a day - Make Atleast 400 pips per week

Forex scalping strategy “20 pips a day” enables a trader to gain 20 pips daily, i.e. at least 400 pips a weak.
According to this strategy the given currency pair must move actively during the day and also be as volatile as possible. The GBP/USD and USD/CAD pairs are considered as the best. Trading should begin no earlier than 12.30 GMT due to the volatile movements of American session, provided that this day no breaking news on economy is expected. But in case there is, it is necessary to enter the market after the news release.
A trader is recommended to choose a 30 minute interval setting a standard average Momentum 5 indicator in the trading terminal and 20 SMA moving average.

 Click here to zoom

A close candle located above the 20 SMA and Momentum indicator fixed above the average level indicate the point of the market entry for further purchase. When the price drops below the moving average and Momentum Indicator is located lower than the average level, it is necessary to open a sell deal. When a deal is open and the price is ready to cross the 20 SMA line, the position should be closed.
Stop loss and Take profit are set on the level of 20 pips. As the interval is quite small, it is possible to use Trailing stop (from 1 pip). As another option, the order can be placed to the zero are when the price has passed 10 pips.
The creators of the strategy believe that the strategy 20 pips a day can be profitable only if each recommendation listed above is observed.
 

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Sell Nzd/Usd

Sell Nzd/Usd @0.8270

S.l - 0.8370
t.p - 40pips nd 70 pips

Trade on ur risk

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Main Secret of Short-term Trading

The secret is the less you trade, the less you earn.

 Sad but true. Think of any investment that you have ever made. Were you able to finish a job in one day? And if you were so lucky, how many times did you do it again? Undoubtedly, very few. That’s because the universal rule of speculation is the same as for growth.

We need time to increase profits.

Successful Forex traders know that a one-minute market can move forward a little, in 5 minutes it will move a bit further, and in 60 minutes still more, and who knows how far it will go in one day or in one week. Losing traders feel like trading only within short periods of time, which automatically narrows their potential profit.

By definition they intentionally limit their profits and go along with unlimited losses. No wonder that so many come up with poor results in short-term trading. They have locked themselves into a hopeless situation, thinking that it is possible to make money during the day just by catching market ups and downs. And this theory seems to be rational, because when you trade within one day and don’t ever leave positions open for a night, you simply don’t rely on news events and major changes, and therefore narrow your risks. And this is incorrect for two reasons.

First of all, your risk is under your control. The only control you have in that business is the control over stop loss points – the point where positions close. Yes, there is a probability that next morning the market will open with a gap exceeding your stop (slip over your stop) even though it is a very rare case, but even then you can limit your losses, having stop loss points and willing to close loss-making trades. Losers stick to losses but not winners.  

As soon as you set positions with stop-loss points, you can lose a fixed amount of money. Without any reference to the time your position opens, since your stop-loss point limits your risk. Your risk is the same whether you buy at the all time high point of market or at the all time low point.

Refusing to set positions overnight limits the amount of time that brings investment growth. Sometimes, although the market may open against us, we are still in the right direction, as the market is to open in favor of us in most cases.

And what is more important, when you finish trading at the end of the day, or worse at some made-up moment, let’s say, 5 – or 10-minute intervals, you radically narrow your profit potential. Remember, a big difference between winners and losers was mentioned, and that losers stuck to their losses? Well another distinction is that winners hold their winning positions, while losers go off the market way too soon. As for losers, they don’t wait for winning positions: they are so happy to make any profit that they leave the market too soon (mostly during the day).

You’ll never make big money, until you learn how to stick to winning positions. And the longer you stick to them, the bigger your potential profit can be. When farmers sow fields, they don’t dig the plants up every few minutes to see how they are growing. They let those plants grow and sprout. Traders can learn from this natural process. Trader success is not any different from successful farming. To cultivate successful trading, traders need time as well.

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No Deposit Bonus

No Deposit Bonus Etoro

Use This Coupon Codes And Get $20 Free to Trade

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freecopy412
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