Using Intermarket Analysis in Your Currency Trading

Using Intermarket Analysis in Your Currency Trading

Author: Andrew Shiveley

I am going to assume that if you are reading this article then you already have a foundational knowledge of the foreign exchange (forex) market, so I am going to breeze through the basics and go right to the main topic of intermarket analysis.

If you are a financial market junkie like me, the topic of intermarket analysis is a fascinating one because it can applied to making money with forex trading (the main topic of this article) as easily as it can be applied to commodities. As you can probably guess, the term "intermarket" in this context simply means looking beyond normal economic data in order to come to a conclusion about where the price of a certain currency pair is headed. The opposite of intermarket analysis is plain fundamental analysis, usually focusing on major economic data such as employment, labor, and interest rates.

A few of the most significant intermarket relationships have to do with gold, oil, and the 10-year bond yield in the United States. The reason that the 10-year yield is important is because this value can be correlated to the value of a dollar index, or a basket of goods that can reveal the overall strength of the US dollar.

When it comes to gold and oil (which are arguably two of the most important commodities in the world today), the prices of those commodities will most affect the currencies of the countries that produce these commodities. There are two main relationships when it comes to gold and oil: Canada is a large producer of oil, an so the Canadian dollar (CAD) will be affected by changes in oil prices; and Australia produces alot of gold, and there are many companies in Australia that manufacture gold products such as rare coins, so the Australian dollar (AUD) will be affected by changes in gold prices.

These are some of the most profound instances of intermarket relationships in the global economy, but keep in mind that these relationships are *not* exclusive to the currencies I just mentioned. That is to say, changes in gold prices are not going to only affect the price of the Australian dollar and leave the value of every other currency unchanged; changes in the value of these important commodities like gold and oil will affect every currency, it just so happens that a larger part of the Australian economy has business interests in gold, so if gold gets more expensive then it becomes harder to do business.

Though oil and gold each have a "flagship" currency which they affect the most, fluctuations in the price of each of these commodities will also affect every currency in a somewhat predictable manner. When it comes to gold, a basic rule of thumb is that the currency value of all nations will decrease when gold gets more expensive, since this can indicate that more people are buying precious metals because they may not have as much faith in the main governing bodies in the world.

The way that oil affects currency prices is very interesting, since at this point in history (but hopefully not for much longer) nearly every major economy is dependent on oil for transportation and heating. The way that changes in oil prices affect a country's currency depend on whether or not that country is an importer or an exporter of oil. As an example, Canada has traditionally been an exporter of oil, whereas the United States has been an importer. So when oil becomes more expensive, this can be damaging to the United States economy and beneficial to an oil-exporter like Canada.

As a forex or currency trader, it is important to understand these relationships so that you do not derive your trading signals from only one source. It is also good to know how major commodities affect currency prices because you can also use this knowledge to make money in the global stock market, by investing in companies such as a Canadian oil producer or an Australian company the specializes in gold coins.

Article Tags: Currency Trading, FOREX, Currency Market, Forex Intermarket Analysis, Forex And Oil

About the Author:

Trading the foreign exchange market can be a great way to make a living from literally any computer in the world, or as a home business. Learn more about profitable forex trading at http://TheCurrencyMarkets.com/currency-trading-strategy-reports.htm.

5 Important Things To Consider When Choosing A Forex Broker

5 Important Things To Consider When Choosing A Forex Broker

Author: James Woolley

If you go to your favourite search engine and do a search for 'forex brokers', you will be bombarded with endless results of companies all vying for your business, so how do you decide which one to go with? Well here's five important points to consider:

- Location

Always look at where a company is registered. After all if you're going to be sending money to a company in order to start trading, do you really want to be sending it to an offshore company based in some remote part of the world, and can you be sure that you'll be able to successfully withdraw money when the time comes?

- Regulation

Following on from the last point, if they're based in the US or UK, for example, check that they're fully registered with the relevant regulators, such as the NFA and CFTC in the US and the FSA in the UK.

- Reputation

Reputation is another point to consider and again requires a little bit of research. Do a search at your favourite search engine for the company you are researching and see what other people have to say about them. What better way to find out about a company than seeing what other traders have to say about them?

- Trading Platform

If you're going to be using a company's trading platform on a regular basis, then you need it to be easy to use and user-friendly in general so test drive the demo platform if they offer one. Also look to see what extras are included such as charting facilities and news updates.

- Spreads

If you're a short-term trader this is a very important factor. If you're a long-term trader looking for moves of several hundred points each time, then a few extra points spread won't make much difference, but if you're a scalper or short-term trader then it can be the difference between making money and losing money. After all it's obviously so much easier to make money trading the GBP/USD intraday with a 2-3 point spread than a 5-10 point spread.

So there you have five important points to consider when choosing a forex broker. You'll notice I didn't mention margin as a factor. This is because it's far too easy to be attracted to brokers that offer up to say 1:400 leverage, and therefore allow you to take out very large positions with a small margin, but this is a very dangerous game and it's all too easy to over-leverage yourself and wipe out your account completely.

Article Tags: Forex Trading, FOREX, Forex Broker, Forex Advice, Trade Forex, Choose Forex Broker, Choosing Forex Broker

Article Source: http://www.articlesbase.com/currency-trading-articles/5-important-things-to-consider-when-choosing-a-forex-broker-344086.html

James Woolley runs a blog where you can learn forex trading and read his Forex Trading Machine review which talks about Avi Frister's profitable forex trading strategies.

Forex Trading System - a Simple, Free Profitable One for Big Fx Profits

Forex Trading System - a Simple, Free Profitable One for Big Fx Profits

Author: Kelly Price

If you want to buy a mechanical forex trading system there are plenty on the net that you can buy but 99% of them don't work as they have never been traded and come with simulated track records. On the other hand, you can use this free one which is simple and profitable.

The trading system we are going to look at is incredibly simple but don't assume that just because it's simple it doesn't work - it does. You can make big profits with it by incorporating it in to your forex trading strategy.

This system was developed by trading legend Richard Donchian in the late seventies for trading commodities and many traders have used over the years. While it was developed to trade commodities it works well in currency markets because they trend.

The system is called "The four week rule" and it does exactly what its name implies.

Here are the rules:

1) Close short positions and reverse to a long position when a price exceeds the highs of the previous 4 weeks.

2) Close long positions and reverse to a short position when a price falls below the lows of the previous 4 weeks.

That is the system and you couldn't get simpler than that.

The above will work very well in trending markets but in sideways and consolidating markets it will get chopped, so you can consider using a filter. Enter trades on the 4 week rule - but exit the position on a shorter time period and go flat.

1 or 2 week cycles are ones to consider. You would then simply re enter on the next 4 week signal.

I have used this currency trading system as part of my strategy for years and it works -most traders won't use it though, despite the fact its proven and it works - Why?

1. It's too simple.

Most people discount it purely on this, although simple systems always tend to beat complicated ones as they are more robust.

2. It takes discipline to follow, as it is not fussy about exact market timing.

Most traders are obsessed with buying low and selling high (even though it doesn't work!) so can't follow it and most traders lack discipline anyway.

3. Its not trendy.

Most forex traders like trendy or mystical systems Fibonacci, Elliot Wave, Neural networks, artificial intelligence etc which are all a bit more glamorous than a system from the seventies, with one parameter.

Make no mistake though, this system beats most on the net that are sold and it's free!

While it may be simple, keep in mind many famous traders have used it such as, Richard Dennis, the turtles and many more - if it's good enough for them, it's good enough for you.

You can of course just use the general principle in your forex trading strategy as a currency trading system it is based on the 4 week cycle of price and you will be surprised at how important it is.

To get diversification you can trade currencies with other markets as well and diversify. For example -the energies and interest rate markets are good trending markets to combine with currencies.

The 4 week rule is free and if you are serious about your forex education, take a look at it and it will help you enjoy forex trading success.

Article Tags: Forex Trading, FOREX, Forex Trading System, Currency Trading System, Trend Following System

Article Source: http://www.articlesbase.com/currency-trading-articles/forex-trading-system-a-simple-free-profitable-one-for-big-fx-profits-343954.html

Get free essential trading Pdf's on catching the big profits from the big moves and more on Profitable Forex Trading Systems visit our website at: http://www.forextrendfollowing.com

Day Trading - Will Wipe Your Trading Account Out Quickly!

Day Trading - Will Wipe Your Trading Account Out Quickly!

Author: Kelly Price

One of the biggest puzzles of currency trading for me is that anyone takes day trading seriously as a way to enjoy success. You can't win at it and will lose all your money, the reason is obvious and is the subject of this article.

You may be thinking that if no one wins, why are there so many profitable day trading systems for sale?

The answer is:

There all made up in hindsight and simply simulated on paper but have never been traded for real. If you ever see a track record for a forex day trading or scalping system which claims extra ordinary profits, then check for the disclaimer:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Keep in mind "if it looks to good to be true it probably is" in forex trading if it looks to good simply look for the disclaimer! Your sure to find it!

Of course we can all make money when we know the prices and can trade backwards but you don't have that luxury in forex trading, you have to trade not knowing the closing prices and trade forwards.

The people selling these systems know they wont make money in real time forex trading (otherwise they would trade them themselves) but they know that their buyers will not read the disclaimer to closely, as its hidden away at the bottom of the copy and difficult to see and find!

They then make up some exciting copy to sell it and promise the buyer unlimited riches a regular income etc etc. The novice trader buys and the reality of course doesn't live up to the hype

They get a guaranteed profit selling a useless trading system and the trader takes the loss.

Now why doesn't it work - well it's obvious really:

All short term volatility is random in a day or less support and resistance is meaningless and you have no chance of winning because you cant get the odds on your side.

It always makes me laugh, when I see systems that claim you can make a living and scalp 100 ticks a week etc - its lies you can't.

You have countless millions or tens of millions of traders, all over the world that make the price, all have different aims, objectives, skills and there all governed by emotions. You simply cannot measure what this vast diverse, volatile, group will do in just a few hours.

Its amazing how sensible people in other walks of life, think they can make money day trading, the logic it is based upon doesn't add up and it is clear to anyone it doesn't work and the facts prove it.

Want the proof? Well here it is:

Ask any forex trader or forex system vendor who claims that forex day trading works, to show you their track record over the long term of gains, audited with account statements.

A word of warning here - if you do decide to try and find one, get ready for a long a fruitless search.

Forex day trading is a loser's game avoid it and trade longer term, where you can get the odds on your side and pile up some forex profits longer term.

Article Tags: FOREX, Day Trading, Forex Day Trading, Trading System, Currency Day Trading, Forex Scalping System

Article Source: http://www.articlesbase.com/currency-trading-articles/day-trading-will-wipe-your-trading-account-out-quickly-343950.html

Get free essential trading Pdf's on catching the big profits from the big moves and more on forex trading success visit our website at: http://www.forextrendfollowing.com

Forex Trading System - Beware of This When Choosing One!

Forex Trading System - Beware of This When Choosing One!

By: Kelly Price

There are a lot of forex trading systems for sale and most are junk. You can find out if a system is likely to make you money by looking at one key factor which is the subject of this article.

Let me ask a question first:

Would you take driving lessons from someone who hadn't past their test?

Of course you wouldn't!

With forex trading systems however traders buy systems that have never been traded and then wonder why they lose. If you are looking for a forex trading system online they will all give you a track record that's profitable. However the way to discard 95% or more of them is - to look for the disclaimer below or similar one - read it carefully:

"cftc rule 4.41 - hypothetical or simulated performance results have certain limitations. unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

What this means is that a vendor can publish or make up any track record he likes knowing the closing prices and simply put this disclaimer on it. Most traders never question it - buy the system lose and then wonder why they didn't experience the same gains as the track record.

If you are looking for a forex trading system then always be cautious when you see the above disclaimer - you have to ask yourself the question:

If the vendor has not had the confidence to trade it why should you?

This is a very valid point and you need to use common sense.

In forex trading to many people are blinded by greed and see forex as an easy way to riches but of course with the rewards on offer its not that simple. You can make a lot of money but you need to get the right forex education.

The Route to Currency Trading Success

Forex trading requires you to do your homework - no one is going to make you rich only you can do that, so seek out sensible down to earth advice and learn it yourself and you can build your own forex trading system - which we will cover in our next article.

New! FREE ESSENTIAL TRADER PDF's + A Unique Forex Course For a wealth of free Forex education, a currency trading course and 2 x essential FREE currency trading basics PDFs visit our website at: http://www.learncurrencytradingonline.com

Article Source: http://www.ArticleBiz.com

Why Invest in Stock

Why Invest in Stock

By: Frank Vanderlugt

Many people today are watching the stock market go up and down on a regular basis. They hear the terms about the ‘bull’ and ‘bear’ on the evening news and most people know that this means that the market is very good or very bad. With all of the speculation within the stock market why would anyone want to invest in stocks?Today the stock market in the US is trading at over 13,000 and it is at an incredibility high rate and it seems to be staying fairly steady. Many people wonder why they should invest in the stock market when it is so high and the chances are that the numbers will go down. Overall the stock market has been fairly consistent by providing fairly good returns for most investors. There are, of course, people who lose money when they take risky chances with their stock portfolio.So, why invest in the stock market? If you work with a reputable stock broker, he can provide you with an overview of the market. He will work with you to determine how comfortable you are with the risks that are involved when buying stocks. The two of you will come up with a plan that involves the purchase of certain stocks that have been consistent throughout the years. Your purchase price for some basic stocks might seem high, especially when you see what these particular stocks were worth a few years ago. But, if you are serious about investing, you have to start somewhere and it is with some of these basic stocks that you can begin a sound foundation on which to build.Some of your friends and relatives might just ask you the question ‘why did you invest in the stock market’? Yes, it is up right now, but it will go down again. This is definitely a true statement because the stock market does fluctuate—sometimes very dramatically.Remember that it takes time to make money in the stock market—there are very few overnight successes. You might hear about someone who made a million dollars, but chances are this did not happen overnight. There are some very lucky people out there who for some reason seem to have the Midas touch, but that is not the norm.If you are unsure about why you should invest in the stock market, make an appointment with a reputable stock broker and talk to them about your interest and concerns. They will take the time to help you understand what is involved and what the risks are. Knowing all of this information up-front will help you make an informed decision when it comes to investing your hard earned money in the stock market.

Frank j Vanderlugt owns and operates http://www.lazytrader.com Day Trading

Article Source: http://www.ArticleBiz.com

Forex Indicator Software Training

Forex Indicator Software Training

By: Paul Bryan

Forex indicator software training programs are designed to facilitate individual traders and investors in learning the indicator software for using them effectively.

The training software ideally should be available in different levels, for beginners, intermediate, and advanced learners. An experienced conventional forex trader may not have strong computer skill as well. The software, therefore, should have the ease of operation and user friendly instructions.

If you subscribe to some technical indicator software, the vendor may offer you the training material for free. One particular software may have several indicators with detailed instruction on how to use them.

The training material should have step by step installation guide, basic operations, Frequently asked questions (FAQ), back-up support, and many such interactive features, through which you can develop a fair idea of the operations.

The software as well as the training program for forex indicator should work effectively in almost all platforms like Windows 2000/XP/2003/Media Center/Vista etc.

A professional forex indicator training software may also have trading simulator, which allows to make trades using history data, develop and test trading strategies, and check the performance of each and every trading indicators individually.

Through a forex indicator trading software you can acquire and improve necessary professional trading skills based on the technical indicator of your choice.

A good forex technical indicator training software combines traditional technical indicators with state-of-the-art neural network and genetic algorithm technologies to create a full-proof, effective trading models. It should be dynamic, interactive, and innovative method of providing traders with the most comprehensive training in forex technical indicators.

The visual representation of the data derived by the technical indicator is extremely important. The forex indicator training software should clearly explain the parameters with 2-dimensional or 3-dimension charts and graphs, so that you can relate the results to the indicators while making actual trading.

Most of the economic indicators have a marked effect on the forex trading market. Some of them are released weekly, while others are released monthly or quarterly. In advanced forex technical indicator software, common indicators are improvised with new technology.

As all the trading indicators are based on mathematics and computation, one may think learning them is pretty difficult. But this is quite wrong. All you need to learn is to understand the logic on basis of which these technical indicators are developed. Then you can interpret the indicator in your own way to apply it in your trading.

One must remember, buying a forex indicator software and the training material can never ensure your success in trading.

You should have the patience and zeal to learn the software with the help of the training material offered and apply them judiciously and not by following them blindly. Sound knowledge proves to be the key for a successful forex trading with technical indicators.

To start becoming a better trader visit Forex Indicator Software Training

Article Source: http://www.ArticleBiz.com