Since the beginning of the financial crisis, many less known currencies have been making headlines. Icelandic Krona became a poster child of the global turmoil, with many analysts claiming it was the proverbial straw that broke the camel’s back and pushed financial markets over the edge. Iceland once prominent banking industry was destroyed, together with depositors from many countries.
Most currencies, primarily in emerging economies, but not only, lost as much as 50% of value in relation to the US Dollar. As money was seeking safety, Polish Zloty, Swedish Krona, Brazilian Real and scores of other currencies fell precipitously. Even Australian Dollar and New Zealand Dollar were punished. In the most extreme cases, like Zimbabwe, local currency virtually seized to exist.
Largely overlooked by most analysts and the press was Chilean Peso (CLP). Peso was no exception last summer, following global trends. At the apex of the crisis it lost just above 50% of its value to USD, as measured from the yearly high. This brought an end to a long bull market, which CLP had enjoyed since late 2002.
Fortunes have changed for the Peso since beginning of 2008. While volatility, expressed by daily and weekly price ranges, remains in high historical ranges, CLP has appreciated 20% as compared to a dollar. This is a little more than currencies from other countries deemed as developing, with prospects for the most immediate future also bright.
Peso is not pegged to USD, but its central bank has been following moves of FED, resulting in close resemblance of financial markets performance between the two countries. For starters, in order to stimulate credit markets, benchmark rates have been cut by 7.75% this year. In this respect Chile is a leader among Latin American countries, with the region lowest rates at 0.50% and an all time record level for the country.
While this low rates is a positive sign for the economy, as reflected by recent stock market performance, it could put some pressure on the Peso. Bank dealers have been reporting increase in the demand for dollars as some banks and investors move money to Brazil to benefit from the interest rates differential. The carry trade between CLP and BRL. However, it is not expected to be a major trend because more money is flowing into Chilean equities from abroad.
Main stock indices gained about 25% this year, with the Chile 65 electronic trading benchmark jumping 30%. Being an important producer of raw materials like copper, steel and lithium, Chile stands to benefit even more with any sign of world recovery. This should support CLP, as foreign investors continue to seek above average returns on country stock exchanges. Furthermore, central bank is expected to start raising rates again soon, making any carry trade less appealing.
Chilean Peso is not a mainstream currency. Most Forex brokers don’t offer it and it has to be traded through banks. Also, the spreads are elevated, by currency trading standard, making it rather unsuitable for active trading. That said, anybody who likes exotics or seeks exposure to Latin America, should give CLP second look. Longer term it is appealing currency, especially if compared to others in the region.
By: Mike Kulej
Forex, or foreign exchange, is sweeping the Internet. This money making method is perfect for anyone who wants to make extra money online. Part of the reason forex is so hot is because of trading systems and software that can do a great deal of the work for you. Here is a forex online trading systems review that should make it easier for you to choose the right system.
Forex is when the currency of one country is traded with that of another. The value of a currency can rise and fall dramatically in response to global events. This volatility makes for a huge profit potential. The forex market is enormous. Over 2 trillion a day is traded in this market. That amount dwarfs the 25 billion the NYSE does daily. Forex doesn’t have one central location and is traded 24/5. Because of the volatility and the round the clock nature of forex it is important for anyone who wants to make some money with forex to invest in the best forex online trading system they can get their hands on.
A good forex online trading system will have a few common features. The first one being ease of use. The best software in the world won’t do you any good if you don’t know how to use it. You should have a myriad of support services available to you. A members only forum would also be a nice little perk.
Another nice feature for a good forex online trading system would be the option to have your forex software, or robot, hosted. If you share a computer or are prone to frequent power outages you should consider having your robot hosted on someone else’s server. You would still have unlimited access and control you just wouldn’t have to worry about missing out on a great trade because your computer was accidentally turned off.
To really make money with forex and take full advantage of the amazing opportunity that this market offers you owe it to yourself to invest in the absolute best forex online trading system software available today. I have given you a brief overview of some of the features you should look for in any forex online trading system before you buy it. The right system can help you greatly increase your profit while decreasing your risk. That is a win/win by anyone’s standards!
By: Lisa Grove
Forex trading with a wise twist of leveraged prehistoric humor. It takes more than luck to be good at forex trading. In this hilarious episode, caveman forex trader gets very lucky. This banned commercial has been shown on several programs featuring the world’s funniest commercials, and for a good reason. www.etoro.com Forex trading made simple!
For anybody who has looked into forex investing, it may seem complicated but it really isn’t. You just have to know some of the key important factors that are involved with forex trading. After you get these concepts down, the rest will take care of itself.
Here are some of the keys to forex investing:
Understand Money Management: Unless you’re Nostradamus and can tell when and where a price is going to hit its top or bottom, some trades are going to go against you. You are going to have to understand money management. You should always be aware of your margins. There is no worse feeling in the world than getting a margin call. It’s like saying “I have no control over my trades, so my broker has to close them for me.” Only demo until you feel comfortable: One of the toughest lessons in forex investing is when do I stop demoing? It’s a double edged sword. If you do it too soon, you might not be ready for the real thing. If you do it too late, you are bound to be overconfident, which can lead to trading with more money than you should be playing with. I cannot stress this enough: Demo trading does not prepare you to trade with real money. You cannot simulate the emotion involved with trading with your hard earned money on a demo account. You should just demo until you know what you’re looking at and then start playing live on some mini or micro accounts. Control your emotions: Stop looking at a every tick as if it was life or death. You’ll drive yourself crazy. If you can’t handle your nerves, it could mean you are playing with more money than you can afford to lose. If that’s the case, play with less money and trade micro accounts, until you’re comfortable enough to be relaxed when trading. Get rid of those indicators: When it comes to forex investing, you want to be able to understand price action and movement. What is causing this? Why is the market moving in a certain direction? What is the true support and resistance lines (not using the generic formulas that everybody uses)? These are all questions that cannot be answered when you are trading with lagging indicators. The moment you can see the market at its rawest form, then you’ll be able to see its energy and what the forecast truly holds.
By: Jim Buhs
Forex trading education naturally falls into two parts. First the easy part, learning technical indicators, how to use a trading platform, the terminology, etc.
Secondly Forex trading education must include information on the mindset of a successful trader and the disciplines that need to be learned in order to handle the emotional and mental demands of trading in the market place.
Here we provide a list of 7 guidelines for using trendlines as part of your Forex trading education using technical indicators.
Trendlines may be regarded by some as one of the weaker indicators although still valuable. They can be powerful when used in combination with other factors. That’s why an effective Forex trading education doesn’t rest on a single magic formula but rather involves an investment of time and energy as the new trader learns to combine the input from a number of tools to reach a clear decision.
When using trendlines to identify an optimum entry point for a high probability trade keep the following points in mind:
1. Trendlines on lower time frames such as 5 minute, 15 minute, or 30 minute, do not have much significance by themselves. Take more note of price reaction around trendlines on the higher time frames, specifically the 60 minute, 4 hour, and daily chart.
2. Trendlines on a daily chart carry a high significance as this is the chart many traders of large institutions use. They do not participate in intra day trading but rather look for position trades as they commit large sums of money to a transaction. The daily chart is often their point of reference.
3. Draw general trendlines across the significant lows in an uptrend or the significant highs in a downtrend and use them as a point of reference to show where support or resistance is likely to be found.
4. If you want to get more specific, use the Tom DeMark method of drawing trendlines. This technical advisor recommends using the current swing high or swing low, depending on the trend, and then connecting that to the previous swing high or low (to the left on a candlestick chart). The line is then extended out into the future. These trendlines can be constantly updated as new highs and lows are reached.
5. For trendlines to be effective indicators, they must be used in conjunction with other technical indicators. So if a trendline is crossed by a support/resistance line, or a pivot point, or a Fibonacci retracement or extension level, you now have a combination of factors indicating this could be a suitable entry point.
6. Add these two trendline methods to your Forex trading education:
When price has an upward or downward momentum (as opposed to moving within a consolidation channel), look for times when price will come back to bounce the trendline before resuming the momentum. When price breaks a trendline, rather than enter a trade at that point, choose a more optimal entry point by waiting for price to return and test the back side of the trendline that has just been broken. This will not always happen and you risk missing being taken in. That’s trading! But more often than not this will happen and you get an excellent entry point.
7. Do not use trendline breaks or bounces as an entry signal by themselves. They do not provide a strong enough signal. If you add this crucial piece of information to your Forex trading education you will minimize the number of trades you regret entering.
As part of your Forex trading education, use your demo account to experiment using trendlines.
Remember they have limitations. In themselves they can give a false signal. Used in combination with other technical indicators however, they form a more complete picture, giving you a clearly defined graphical representation of where price is and where it is likely to go.
Keeping the seven point checklist above in mind should help keep you out of troublesome trades when using trendlines!
By: Michael A Jones
This free forex trading seminar is a snippet from the Triple Your Trading Profits workshop. The methods taught suit stocks, options, forex, day trading and more. If you’d like to watch more free clips please visit: www.tripletradingprofits.com
Trade With Sufficient CaptialOne of the worst blunders that forex traders can make is attempting to trade without sufficient capital.
The trader with limited capital not only will be a worried trader, always looking to minimize losses beyond the point of realistic trading, but he will also frequently be taken out of the trading game before he can realize any sense of success trading the method(s) or patterns.
Exercise DisciplineDiscipline is probably one of the most overused words in forex trading education. However, despite the cliché, discipline continues to be the most important behaviour one can master to become a profitable trader. Discipline is the ability to plan your work and work your plan.
It’s the ability to give your trade the time to develop without hastily taking yourself out of the market simply because you are uncomfortable with risk. Discipline is also the ability to continue to trade the methods and patterns even after you’ve suffered losses. Do your best to cultivate the degree of discipline required to be a world-class trader.
Employ Risk-to-Reward RatiosThe following shows you possible risk-to reward ratios, and the win ratios required to break even in a trading system.
Risk-to-Reward Ratio (in pips)and Win Ratio Required to Break Even(%)
40/20 (2 to 1) = 67%, 40/40 (1 to1) = 50%, 40/60 (1 to 1.5) = 40%,
40/80 (1 to 2) = 33.5%,
60/20 (3 to 1) = 75%,
60/60 (1 to 1) = 50%,
60 /90 (1 to 1.5) = 40%,
60/120 (1 to 2) = 33.5%
Important Note
Never risk more pips on a trade then you plan to make. It doesn’t make sense to risk 100 pips in order to make only 10. Why? See below example.
Profit taking level (pips): 10
Stop used or pips at risk: 100
You win 10 times which makes 100 winning pips.
You ONLY lose once and have to give back all profits!!!
This type of trading makes no sense and you will lose on the long term guaranteed!
By: Toby Smitz
Forex trading is not a game, never has and never will be, don’t you agree my friend?
I have seen and heard so many sad stories of traders who lost their socks trading forex.
In reality, forex trading is the same as any other kind of trading, get the signal, follow
the freaking signal and try not to act smart.
Of course, in forex trading there is no such thing as a sure gain but there is such a thing
as overall gain.
Forex Trader Program is designed to help beginner forex traders get the hang of stuff.
By providing definite buy and sell signals, the trader is not lost amidst all the signals. Forex Trader Program is also a good way to learn how the experts really trade.
Most trading programs show profitable trades they made FEW MONTHS AGO but
Forex Trader Program shows you trades as recent as last week so that you will know that they too are following the currency market.
Most new traders make the mistake of thinking they can do it right after reading a handbook or getting “sure-win” tips from a friend. These are the “lambs” waiting to be slaughtered.
A few ways of improving are as follows:
1. Paper Trade- By starting with paper trading, you use no money and therefore you can’t lose money.
2. Strategize – By having a strategy beforehand, you know when is your entry and exit points, which comes in very useful when the numbers start flying out of control
3. KISS – Using the Keep It Simple Strategy means leaving the more complicated strategies to the professionals for the time being. Start trading only using the simplest of the strategies that give minimal wins.
I repeat, forex trading is not a game. Trade wisely,my friend.
By: Mark Foo
I want to share with you some skills I’ve developed when it comes to managing my money when I’m trading Forex. A great way to manage your money is to make sure you’re making trades to put only put a couple percentage points of your money at risk.
If you have $5000 you want to start investing in the forex market, you’re going to have to decide what kind of account you’re going to get to hold onto your money. You can start with the mini accounts which are for new people, or you can get a standard account. The best to start with is the mini account because you can make much smaller trades, instead of doing the larger ones the professionals do.
Before you start making trades, it’s time to decide how much you could risk losing, rather than how much you’re going to potentially invest. If you’re starting with $5000, try doing 10%. That means you would be perfectly fine financially if you lost $500. Make sure you’re okay with that. If not, you shouldn’t be in this business. This means you’re going to trade with $500 this month. There’s no need to risk more money at this point.
Now the next skill you need to develop is assessing the risk per trade. This allows you to gauge the probability that you’re going to win or lose with this particular trade. For this you’re going to need a piece of software, like Forex Killer. All you have to do is input the data feed of a particular currency and it can let you know if it is risky or not. It can also calculate rate of return as well, as it is an automated software. With this tool you won’t be risking anything that could potentially lose more than 5% of your money. You just set up the software to sell at specific points and you’re home free.
These skills will help you manage your money much better with forex trades. Remember that you need to be cool calm and calculating. If you start risking more money because you have a “feeling” about something, you’re bound to lose out.
By: Charles Nash
This is a video overview of how to improve the timing of your trades using moving averages. The goal of the forex trading strategy is to align market and price action for the best chance of success when you pull the trigger. Video produced by FX Bootcamp, LLC (www.fxbootcamp.com … Forex Training Currency Dollar Money FX 4X trader Foreign Exhange MT4 FXCM Bootcamp