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Sunday, April 13, 2008

Today's Forex And Forex Trading News

Our Featured What Is Forex Article

Forex Broker Guide

Introduction

The following is a list of questions you may like to ask yourself, your broker and other traders about a particular firm you have in mind. You can use this checklist to narrow down your selection of forex companies to fit your requirements. You might also like to read the forex broker ratings page on this site http://www.goforex.net/forex-broker-ratings.htm to see how other traders are rating and reviewing other brokers.

The following links will also give you some background information on U.S. FCMs (Futures Commission Merchants).

* Selected Financial Data for FCMs http://www.cftc.gov/marketreports/financialdataforfcms/
* NFA Background Affiliation Status http://www.nfa.futures.org/basicnet/

1. Word of Mouth

* What do other traders say about the broker?
* What is their customer service/dealing desk like?

2. Safety of Funds

* Is the broker regulated?
* What regulatory organisation are they registered with and what protections does this afford you?
* Are client funds insured against fraud at the firm?
* Are client funds insured against bankruptcy of the firm?

3. Execution

* What business model do they operate? i.e. Market Maker, ECN or NDD?
* How fast is their order execution?
* Are orders manually or automatically executed?
* What is the maximum trade size before you are put on manual execution?
* Are all clients trades offset?

4. Spread

* How tight is the spread?
* Is it fixed or variable?
* Is it larger for mini accounts?

5. Slippage

* How much slippage can be expected in normal and fast moving markets?

6. Margin

* What is the margin requirement? e.g. 0.25% (max 400:1 leverage), 0.5% (max 200:1 leverage), 1% (max 100:1 leverage), 2% (max 50:1 leverage), etc.
* Does it change for different currency pairs or days of the week?
* Is it the same for standard and mini accounts?

7. Commissions

* Do they charge commissions? (Most market makers commissions are built into the spread, whereas ECN's charge a small fee)

8. Rollover Policy

* Is there a minimum margin requirement in order to earn rollover interest?
* What other requirements or conditions are there for earning rollover interest?

9. Trading Platform

* How reliable is it during fast moving markets and news announcements?
* How many different currency pairs can you trade?
* Do they offer an Application Programming Interface (API) for automated trading systems?
* Does it offer any other special features? (e.g. One click dealing, trading from the chart, trailing stops, mobile trading etc.)

10. Trading Account

* What is the minimum account opening balance?
* What is the minimum trade size?
* Can you adjust the standard lot size traded?
* Can you earn interest on unused equity in your account?

Some Forex Ideas

foreign exchange students

For the most part, a reputable broker can look at economic indicators and know which trades will be best. Reports on these indicators are released at scheduled times and can tell if a certain country is experiencing improvement in the economy or if the country's economy is on the decline. When the prices fluctuate, a great deal one way or the other, the price can be affected.
Check out the first commercially available Stock Trading Robot Which Earns $346.77 Per Week

forex chart

When looking at the technical analysis in the Forex, there are three basic principles that are used to make projections. These principles are based on the market action in relation to current events, trends in price movements and past Forex history. When the market action is looked at, everything from supply and demand, current politics and the current state of the market are taken into consideration. It is usually agreed that the actual price of the Forex is a direct reflection of current events.

forex trading

Let�s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask�'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader�s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.

More What Is Forex Information

European Morning Update 10th April 2008

Thu, 10 Apr 2008 01:52:07 -0400
All's quiet ahead of the BOE & ECB rate decisions

Releases from Australia:
Forecast Actual
March Employment Change +10.0K +14.8K
March Employment Rate 4.1% 4.1%
March Participation Rate 65.2% 65.2%
April Consumer Inflation Expectation 4.3%

Australia’s employment data was pretty close to forecast although added more jobs than expected in March but with the participation rate remaining stable it still pushed the underlying employment number to +4.1%. It isn’t a bad report but maybe the first sign that the buoyant labor market may have peaked.

Inflation expectations remain high though have dipped from March’s high level of 4.6%. The Melbourne Institute stated: “April's median expected inflation figure provides some evidence that the effects of tighter monetary policy are feeding into consumer inflationary expectations, with the April figure interrupting three successive months of increases in the median expected inflation rate.”

With crude oil prices hitting a new high at $112.21 overnight there is certainly no sign of a let up in pressures here and this will also keep food prices firm also. Across the board it is bad news for central banks who had been hoping that slower growth would ease inflation. Forecasts are already circulating for oil to reach $120pb over the next few days.

Releases from Japan:

February Forecast Actual
Machine Orders (MoM) -14.0% -12.7%
Machine Orders (YoY) + 0.8% +2.4%
Trade Balance BOP JPY 1110bn 1030bn

March
Money Supply M2+CD (YoY) +2.4% +2.2%
Broad Liquidity (YoY) +3.5% +3.1%

No real news from Japan either with little to generate any movement. The large decline in machine orders was expected as the one-off steelmaker orders from the Shinkansen rolled back off but allowed the YoY pace to edge higher to +2.4%.

Elsewhere CNBC are reporting that Merrill Lynch are planning to write off over $6bn in subprime losses in Q1. No one disputes there are more to come with George Soros backing the IMF estimate of almost $1bn likely to have been wiped off global wealth.

However, the sharp downward revisions in GDP growth estimates has been met with stern statements from officials who dispute that the situation is that bad.

The following economic releases are due today:

February
French Industrial Production (MoM) +0.0%
French Industrial Production (YoY) +1.4%
French Manufacturing Production (MoM) +0.1%
French Manufacturing Production (YoY) +1.2%
Italian Industrial Production (MoM) - 0.5%
Italian Industrial Production (YoY) - 0.8%
U.K. Visible Trade Balance GBP -7.5bn
U.K. Total Trade Balance GBP -4.2bn
U.S. Trade Balance USD -57.5bn

March
U.S. Continuing Claims (29th)

April
U.S. Initial Jobless Claims (5th) 385K

The Bank of England is due to announce its rate decision
The European Central Bank is due to announce its rate decision

At last a break and this does look Dollar bearish. At this point, while I still look for a minimum target around 1.5980 and possibly eventually reaching 1.6065, I do have some doubts about how far this can move. I even doubt that there will be a new low against the Swissie or if there is it will be minor.

Whatever happens I am still pretty bearish for the Pound. As described yesterday, the only way it can move higher is within an expanded flat which would imply a return to 2.0047 again but then we’ll be talking much lower. While it is possible for the Pound to be de-coupled from the rest of Europe I still feel the decline will come along with the rest of Europe.

The only issue I have at present overall with the Dollar is that Euro-Yen looks quite bearish. This could be limited to the 159.40-50 area initially and the pullback can be quite deep. Thus the driver of the subsequent leg lower will obviously come from either the Euro or Dollar-Yen. If it’s the latter then we’ll have to watch supports closely. An intermediate weekly cycle low was seen and this could imply a period of recovery. However, having seen the major cycle low taken out last August/October I have less confidence in their influence right now.

In the end I would like to see the Euro driving the Euro-Yen cross lower. We’ll need to mindful of this relationship while, as I believe, the Euro pushes up to a final high.

Finally, do take care. The market has become rather skittish and it has been hard identifying the Fibonacci relationships while liquidity is so low. The wave structures have taken on more skewed appearances which make interpretation far more difficult. However, I have to say again that I am not convinced that the Dollar’s weakness will be sustainable.

Note important support and resistance areas:

USDJPY EURUSD USDCHF GBPUSD
Res: 102.50-93 1.5949-87 1.0070-10 1.9895-25
Res: 101.50-90 1.5879-01 1.0007-31 1.9790-20

Spt: 100.45-87 1.5780-00 0.9889-12 1.9700-20
Spt: 100.00-20 1.5715-45 0.9787-38 1.9605-46