Forexgen Trading Strategies and Forex Market Volatility

Part of developing a profitable Forex trading strategy involves being able to determine market volatility. The Forex market is open 24 hours per day and you will find it impossible to keep track of all market activities, all the time. You will need to understand the timing of various markets, particularly those in which you are trading and those that influence your trades, so that you are in a position to make the best possible decisions during your trading hours.Different markets are affected by differing market conditions. All currency pairs are subject to market volatility, but most currencies tend to become more or less volatile during certain times of the day.

As a trader, you will need to have some knowledge of the currency trading system, currency pairings in different times zones and the conditions that affect their volatility.The London market is the largest and most volatile Forex market in the world since some of the largest dealing desks of large banks are located there and transactions that take place usually involve large sums of money. The London market share is about 30% of all markets. The market hours are from 2 am to 12 pm EST, which is also the time for which most transactions are completed. The benchmark established for volatility is 80 pips and more than half of the London market currency pairings are likely to reach in excess of 80 pips. It would not be uncommon for the daily range of GBP/CHF and GBP/JPY currency pairs to average more than 140 pips. The ability of these currency pairs to generate huge profits in a short amount of time appeals to traders willing to take risks in the currency trading system.Since most large market participants complete their circle of currency conversions during the London market hours, daily trade activities peak during this time, causing high volatility.

Near the end of the London trading session most large investors will convert their European assets to US dollar assets in anticipation of the opening of the US market. This conversion is responsible for the increased volatility in GBP/CHF and GBP/JPY currency pairs. The New York trading session is the benchmark for US trading and it represents the second largest FOREX market. Trading hours are from 8 am and 5 pm EST. The majority of transactions occur in the US market from 8 am to noon EST. During this timeframe, the European market is still in session, which creates a market of high liquidity. Trading during this period of overlap accounts for about 70% of the currency pair trading in the European session and about 80% of currency pair trading in the US session.

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Economic Factors Impact on Exchange Rate | ForexGen Tips

The delusion conceptually propounds that intraweek and intraday FOREX currency quotes movement is governed byeither improvement or by deterioration of the state’s economic situation. But in reality, even in case the actual Forex newsare superior to the estimated one, the FOREX quotes up/down movement is of 50/50 probability.This statement is thoroughly important. Once the job of Forex trader is gambling on FOREX exchange rates differential(FOREX pairs up/down movement), the following is to be realized to obtain faultless profit:1. FOREX pairs pricing mechanism (say at point X where you are completing the market analysis)2. Factors imparting growth/decline to FOREX rates (up/down from point X).Thus, having understood the FOREX ratesfactors effective at the extra-exchange (book-maker) FOREX market and thegiven currency motive factors, a trader must possess distinct knowledge of whether to buy or to sell the given currencypair.So, what are these factors?FOREX student suggest unambiguous interpretation of factors responsible for the price formation and the fluctuations thereof:1. Forex rate constitutes a demand-supply balance for a given goods (currency).2. Any violation of this balance, (for instance, in case where the estimated news is in disagreement with the issuedofficial one), results in the FOREX rates reciprocation in chase of a new demand-supply balance. Poor demandbrings about decline in a certain currency rate, with a high demand leading to the growth of the latter. Thesituation continues as long as the currency buy/sell demand comes to balance at another level or at another point.Referring to the B. Williams (“Trading Chaos 2” Chapter 1 “The market is what you are thinking of it”):Each world market is dedicated to distribute or share limited amount of something… among those desirous to obtain it mostof all. The market affects it by way of finding out and identifying the exact price? Underlying the buyer’/sellers’ powerabsolute equilibrium point.The above point is readily established by stock, futures, bonds, FOREX and options markets, be it either via an openauction or by virtue of a computerized facility. Markets spot this point prior to any misbalance being detectable by You orby me or even by traders at the exchange floor.With this scenario holding true – and it really does – we are in position to jump at certain simple yet important conclusionsas regards the information being circulated through the market and enjoying doubtless acceptance”.Thomas Demark was more laconic in “Technical analysis - an emerging science”:“Price movement is governed by demand and supply. Should demand exceed supply, there’s a price rally and if visa versa,there’s a price decline. All economists do share these underlying principles”.Hence, the role of fundamental analysis for FOREX market is readily apparent.In scholar fiction one will discover roughly the following explanation, persistently wandering from book to book, from site tosite and suggesting attaining successful trading at FOREX market by way of scrutinizing the country’s economicfundamental data, viz. by tracking the factors reflective of the country’s economy condition as below:• State economy condition dynamics indicators (GDP, trade & payments balance, current account, industrialproduction, etc. It is knowledge, that the higher the above indicators – the faster the economic and the currencyprice growth);• Stock indices, via average arithmetic index of the country’s securities market condition and dynamics. E.g.: 0.3%daily DJI growth in the USA means that this certain day the shares of 30 leading US companies, being pictured byDJU, went 0.3% more expensive. By similarity, DAX30 is the major German index, incorporating the price ofshares of the country’s 30 leading companies.• The country’s interest rate, since the higher the rate, the greater number of investors is eager to invest into thecountry’s economy and hence into national currency strength.• Rate of inflation (the higher the rate, the quicker the National Bank will hike the interest rate). With thisassumption, the CPI constitutes a key factor.• Money supply growth in domestic market, which fact brings about the inflation, leading to the interest rate hike.• The country’s gold and currency reserve assets.• Variation dynamics correlation of: balances of payment, trade balance, state budget, gross domestic product(GDP), etc.• Trade and industry dynamics (industrial production, industrial orders, DGO, capacity utilization, retail sales, etc.)• Construction statistics (construction spending, new home sales, housing under construction, building permits, etc.)• Labor statistics (unemployment rate, new jobs, etc.)• Society investigations (consumer confidence, consumer sentiment, purchase managers and service managerssentiment, etc.)• To be considered additionally are the country’s political stability and tranquility (clearly, any political, natural andother cataclysms are sure to turn investors nervous making them withdraw the investments from the country, thusweakening its national currency). And with the currency being the national economy derivative, changes ineconomic data will inevitably result in the above currency rate movement.Conclusions:1. Progress in economy results in the currency exchange rate rally.2. Decrease in economic indicators leads to the national currency rate decline.To sum it up, critical economic and political news (whose calendar is issued in advance and is familiar to any trader)constitute a standing factor giving rise to misbalance and causing the currency rate fluctuations.In anticipation of important economic and political news FOREX pair crawl to the rates as inspired by the estimates(“rumored trade”), whereas upon actual news there occurs a pulse motion of FOREX pairs in accordance with the schemebelow;• Forex rate grows if actual news are better than the estimated one;• Forex rate declines if actual news are worse than the estimated one.ARE YOU FAMILIAR WITH THESE ABC BASICS OF STUDYING FOREX?Do you accept that one can earn money by way of using these basics, known to every trader?Then why, having absorbed these economic axioms, 90% of Forex traders in the world are losers rather than winners.Where is the delusion of the above ABC truth, nudging traders towards losses? Let us perform sort of point-by-pointanalysis.

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When to Enter and Exit your Trades | ForexGen Tips

This is what your chart should look like. These are the FPS indicators that I use to trade. The EMA 10 should be in pink, the EMA 25 should be in yellow, and the EMA 50 should be in blue. The Parabolic SAR is charted with dots above and below the line.When to ENTER a tradeThe FPS indicators tell you when to get into a trade when the EMA ten crosses the 25 and the 50. If the ten crosses the 25 and 50 up from the bottom, you enter your trade ‘long’ and ‘buy. If the 10 cross the 25 and 50 down from the top you go ‘short’ and ‘sell’. Make sure that when you get into your trade that the Parabolic SAR is on the bottom when you go long and on the top when you go short.In the example above, on October 15th, there was a great opportunity to go long on the USD/CHF pair, where I circled and labeled enter. Notice how the EMA 10 crossed up the 25 and 50 and the Par SAR was on the bottom.*If you are trading the hourly charts like in the above example, make sure that the 15 min charts Parabolic SAR is going the same way. Simply click on the arrow beside the 60 min and change it to 15 min and your studies will automatically adjust to the new time frame. Never trade against the 15 min Parabolic SAR!6When to EXIT a tradeThe best time to exit a trade is when the price crosses back down through all 3 EMA’s on the chart. Notice in the above example that the Dark Blue line—the actual price of USD/CHF on the 20th crossed back down all three indicators where I circled EXIT. If you held this position all week, you could have made a 275 pip profit.With 1 lot traded on a standard account this would have been approximately $1780.00 in profit. With 2 lots--$3560! A mini account would have profited you $178 and $356 respectively.If you profited 275 pips with EUR/USD or GBP/USD you would have made approximately $10 per pip, which you would have made $2750 with one lot and $5500 with 2 lots traded. Not bad for one week!Where to Set the Stop LossWhen you open a demo account you will find on the online trading platform that you will always be able to enter a stop order level that will automatically stop out your trade at the level you set, or a limit order that will close your position at your desired profit level.Using the FPS means that you should always set your level just below the EMA 50. As your position moves in the right direction, you should move your stop accordingly. Then if your position moves against you, you would have locked in your profits by moving up your stop order. It is important that if the prices cross back over the 10, 25 and 50 that you close your position.Here is an example of how the FPS works on the 15 min chartsThis is what your chart should look like. These are the FPS indicators that I use to trade. The EMA 10 should be in pink, the EMA 25 should be in yellow, and the EMA 50 should be in blue. The Parabolic SAR is charted with dots above and below the line.When to ENTER a tradeThe FPS indicators tell you when to get into a trade when the EMA ten crosses the 25 and the 50. If the ten crosses the 25 and 50 up from the bottom, you enter your trade ‘long’ and ‘buy. If the 10 cross the 25 and 50 down from the top you go ‘short’ and ‘sell’. Make sure that when you get into your trade that the Parabolic SAR is on the bottom when you go long and on the top when you go short.In the example above, on October 15th, there was a great opportunity to go long on the USD/CHF pair, where I circled and labeled enter. Notice how the EMA 10 crossed up the 25 and 50 and the Par SAR was on the bottom.*If you are trading the hourly charts like in the above example, make sure that the 15 min charts Parabolic SAR is going the same way. Simply click on the arrow beside the 60 min and change it to 15 min and your studies will automatically adjust to the new time frame. Never trade against the 15 min Parabolic SAR!6When to EXIT a tradeThe best time to exit a trade is when the price crosses back down through all 3 EMA’s on the chart. Notice in the above example that the Dark Blue line—the actual price of USD/CHF on the 20th crossed back down all three indicators where I circled EXIT. If you held this position all week, you could have made a 275 pip profit.With 1 lot traded on a standard account this would have been approximately $1780.00 in profit. With 2 lots--$3560! A mini account would have profited you $178 and $356 respectively.If you profited 275 pips with EUR/USD or GBP/USD you would have made approximately $10 per pip, which you would have made $2750 with one lot and $5500 with 2 lots traded. Not bad for one week!Where to Set the Stop LossWhen you open a demo account you will find on the online trading platform that you will always be able to enter a stop order level that will automatically stop out your trade at the level you set, or a limit order that will close your position at your desired profit level.Using the FPS means that you should always set your level just below the EMA 50. As your position moves in the right direction, you should move your stop accordingly. Then if your position moves against you, you would have locked in your profits by moving up your stop order. It is important that if the prices cross back over the 10, 25 and 50 that you close your position.Here is an example of how the FPS works on the 15 min charts.

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BENEFITS OF FOREX TRADING | ForexGen Tips

There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market as a business opportunity:1.LEVERAGE: In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make extraordinary profits and at the same time keep risk capital to a minimum. Some Forex firms offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on.2.LIQUIDITY: Because the Forex Market is so large, it is also extremely liquid. This means that with a click of a mouse you can instantaneously buy and sell at will. You are never 'stuck' in a trade. You can even set the online trading platform to automatically close your position at your desired profit level (limit order), and/or close a trade if a trade is going against you (stop order).3.PROFIT IN BOTH 'RISING' AND 'FALLING' MARKETS: On the stock markets, you can only make money if shares are rising, but in economic recession and falling 'bear' markets, there is little chance of making big money. Forex is different. One of the most exciting advantages of FX trading is the ability to generate profits whether a currency pair is 'up' or 'down'. A trader can profit by taking a 'long' position, (buying the currency pair at one price and selling it later at a higher price), or a 'short' position, (selling the currency pair and buying it back at a lower price). For example, if you think the US dollar will increase in value vs. the Japanese Yen then you will buy Dollars and sell Yen (go long). If you think the Yen will increase in value against the Dollar then you will sell Dollars and buy yen (go short). As long as the trader picks the right direction, a potential for profit always exists.24. 24HRS: From Sunday evening to Friday Afternoon EST the Forex market never sleeps. This is very desirable for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.5. FREE 'DEMO' ACCOUNTS, NEWS, CHARTS AND ANALYSIS: Most Online Forex firms offer free 'Demo' accounts to practice trading, along with breaking Forex news and charting services. These are very valuable resources for traders who would like to hone their trading skills with 'virtual' money before opening a live trading account.6.'MINI' TRADING: One might think that getting started as a currency trader would cost a lot of money. The fact is, it doesn't. Online Forex Firms now offer 'mini' trading accounts with a minimum account deposit of only $200-$500 with no commission trading. This makes Forex much more accessible to the average individual, without large, start-up capital.

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How to Earn $50 to $500 a day Forex Trading from the Comfort of Your Own Home!

The Foreign Exchange, also referred to as the "Forex" or "Spot FX" market, is the largest financial market in the world, with over $3 trillion changing hands every single day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you see how giant the Foreign Exchange really is. In fact it is three times larger than all of the US Equity and Treasury markets combined!What is traded on the Foreign Exchange? The answer is money. Forex trading is where the currency of one nation is traded for that of another. Therefore, Forex trading is always traded in pairs. The most commonly traded currency pairs are traded against the US Dollar (USD). They are called ‘the majors'. The major currency pairs are the Euro Dollar (EUR/USD); the British Pound (GBP/USD); the Japanese Yen (USD/JPY); and the Swiss Franc (USD/CHF). Because there is not a central exchange for the Forex market, these pairs and their crosses are traded over the telephone and online through a global network of banks, multinational corporations, importers and exporters, brokers and currency traders.Traditionally, currency trading has been a 'professionals only' market available exclusively to banks and large institutions, however, because of the rise of the new E-economy, online Forex trading firms are now able to offer trading accounts to 'retail' traders like you and I. Now almost anyone with a computer and an Internet connection can trade currencies just like the world's largest banks do.

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