FOREX TRADING AND ANALYSIS

Forex History

2012-08-05T20:25:00.004-07:00

The History of Forex Trading

Old people say: “Only those who know their past can create good future”. Well, what a great proverb! Do you agree? And, looking back to the world history – it really works! So we can use it to nearly every part of our life. Including our business of course. Every person who is serious in his intentions to get to the top with Forex should definitely know the foreign exchange market – or simply saying Forex history. Do you know Forex History well? If no, than you’re on the right track to find out all of the Forex History just for you here.

Exchange Market Started in Babylon

Let’s go back into the past. I mean, really back – to the times of Babylon, where first trades started their existing. Of course, no money! Can you imagine that the Forex history started there and then? Barter system worked ok for ancient people, like, you bring the hog from hunting and your family already has something to eat. So you can give the hog to someone and get… Uhmm, for example the arrows - to protect your home. It’s hard to imagine, but, things like feathers, teeth and stones were exchangeable too. So, the little exchange market in the ancient times! Like, you are from one tribe and changing your teeth for feathers from other tribe. Hey, that’s already a foreign exchange market! Right? You may not agree but it really started like this.

Then, when materials like silver, gold, bronze were found and considered as the item of exchange, the market made the first step to start becoming just like one nowadays. Then, it went into making the coins out of those materials. They came before paper money in Middle Times. Now look what picture do we have? From exchanging hog for arrows, to having the paper money and coins as the objects of exchange. What a travel! Now, you sit right here – cause we’re gonna go further, straight to nearly First World War times where Forex History continues.

List of South Asian stock exchanges

2012-08-05T20:17:00.000-07:00

This is a list of South Asian stock exchanges. South Asia consists of the following territories:

Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
British Indian Ocean Territory

Bangladesh has two stock exchanges; Dhaka Stock Exchange (DSE) is the largest of the country which is incorporated in 1954 as East Pakistan Stock Exchange Association Ltd and another one is Chittagong Stock Exchange (CSE) founded in 1995. India has many stock exchanges; the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), both in Mumbai, could be classified as being "national level". There are over 20 regional stock exchanges (RSEs).

Market shows signs of uptrend

2010-06-05T03:33:00.000-07:00

The share market fluctuated throughout the week and gained a minimal 0.61 percent in the index value to close at 482.34 points. Despite volatile performance of Nepal Stock Exchange (Nepse) index, investor confidence rose as compared with previous week as investors traded freely without skepticism, which is reflected by the overall market turnover.

The market volume, excluding the bulk trade of Sanima Bikash Bank´s promoter shares, increased by 88.4 percent as compared with last week.

The Development Banking sector (+4.11 percent) posted the highest gain among the sub indices as share price of Ace Development Bank (+Rs 55), and Clean Energy Development Bank (+93) surged. The Insurance sector (+2.42 percent) followed the rise as share prices of Life Insurance Company Nepal (+ Rs 136) topped the gainers´ list.

The Commercial Banking sector (+1.02 percent) continued to boost the overall market with increases in share price of Kumari Bank (+Rs 29), and Nepal Industrial & Commercial Bank (+Rs 39). However, the ´Others´ sub-sector (-1.7 percent) slid because the share value of Nepal Doorsanchar Company´s (-Rs.8) tumbled for the second consecutive week.

The Finance sector (-0.81 percent) was another sector to decline, primarily due to Butwal Finance Company (-Rs.252) that resumed its transactions after a long interval with a substantial drop in its price.

The Hydropower sector (-0.69 percent) also shed points as share prices of Arun Valley Hydropower (-Rs 14), and National Hydropower Company (-Rs 1) declined.

Amongst other highlights, the International Monetary Fund (IMF) has approved a loan disbursement of US$ 42.05 million under its Rapid Credit Facility (RCF) to ease the current Balance of Payment (BOP) deficit which in turn has eased the current liquidity crisis prevailing in the banking sector.

Likewise, the inter-bank lending rate has decreased from an alarming 15 percent to around 7 percent. No review on need to disclose source of income for bank deposits over Rs 1 million will be possible before the next budget.

On the declaration front, Sahayogi Bikas Bank is closing its book on June 8 for 3:1 right shares while Sunrise Bank is closing its book on June 11 for 10:3 right shares. Purwanchal Grameen Bikas Bank has declared 20 percent cash dividend.

On the IPO side, application for Unique Financial Institution starts on June 6 and IPOs of Alpine Development Bank and Diyalo Bikas Bank IPO have been oversubscribed.

Economy of Nepal

2010-04-29T19:29:00.000-07:00

Nepal ranks among the world's poorest countries, with a per capita income of around $470 in 2009. Based on national calorie/GNP criteria, an estimated 31% of the population is below the poverty line. An isolated, agrarian society until the mid-20th century, Nepal entered the modern era in 1951 without schools, hospitals, roads, telecommunications, electric power, industry, or a civil service. The country has, however, made progress toward sustainable economic growth since the 1950s and is committed to a program of economic liberalization.

Nepal launched its 10th five-year economic development plan in 2002; its currency has been made convertible; and fourteen state enterprises have been privatized, seven liquidated, and two dissolved. Foreign aid accounts for more than half the development budget. The Government of Nepal has shown an increasing commitment to fiscal transparency, good governance, and accountability. Also in 2002, the government began to prioritize development projects and eliminate wasteful spending. In consultation with civil society and donors, the government cut 160 development projects that were driven by political patronage.

Agriculture remains Nepal's principal economic activity, employing over 71% of the population and providing 32.12% of GDP. Only about 25% of the total area is cultivable; another 33% is forested; most of the rest is mountainous. Rice and wheat are the main food crops. The lowland Terai region produces an agricultural surplus, part of which supplies the food-deficient hill areas. Because of Nepal's dependence on agriculture, the magnitude of the annual monsoon rain strongly influences economic growth.

In FY 2007/2008 Nepal's exports increased by 2.4%, compared to a decrease of 1.4% in FY 2006/2007. Imports grew by 16.1% in FY 2007/2008 as compared to 12% in FY 2006/2007. Exports constrained by political turmoil and a poor investment climate in the last fiscal year grew marginally owing to improvement in the political situation. The trade deficit for FY 2006/2007 was $1.9 billion, which widened to $2.5 billion in FY 2007/2008. Real GDP growth during 1996-2002 averaged less than 5%. According to the revised estimates of the Central Bureau of Statistics, GDP grew 4.68% in FY 2003/2004 and slipped to 3.12% in FY 2004/2005, but again increased marginally to 3.72% in 2005/2006 and slipped to 3.19% in FY 2006/2007.

Despite its growing trade deficit, Nepal traditionally has a balance of payments (BOP) surplus due to remittances from Nepalese working abroad. In FY 2007/2008, Nepal recorded a balance of payments surplus of $452.9 million (0.4% of GDP), as compared to $83.58 million in FY 2006/2007 (0.01% of GDP). Significant rise in workers' remittances and grants assistance contributed to a record level of BOP surplus in FY 2007/2008, however, the BOP surplus covered import trade credit amounting to $232 million in 2007/08, reflecting a rather fragile base. In the previous year, import trade credit was at a lower level of $ 25.95 million. Nepal receives substantial amounts of external assistance from India, the United Kingdom, the United States, Japan, Germany, and the Scandinavian countries. Several multilateral organizations--including the World Bank, the Asian Development Bank, and the UN Development Program--also provide significant assistance. On April 23, 2004, Nepal became the 147th member of the World Trade Organization (WTO).

With eight of the world's ten highest mountain peaks--including Mt. Everest at 8,848 m (29,000 ft)--Nepal is a tourist destination for hikers and mountain climbers. However, the decade-long insurgency and a global economic slowdown threatened the tourism industry. But 2007 witnessed a renewed wave of tourism. Figures from the Department of Immigration showed a 37.2% increase in arrivals in 2007, which surpassed the numbers of tourist arrivals during 1999, the peak tourism year prior to 2006. Since the political parties and Maoists brokered a comprehensive peace agreement in November 2006, renewed tourist arrivals have given relief to the tourism-based hotel, trekking, mountaineering, and aviation industries.

Swift rivers flowing south through the Himalayas have massive hydroelectric potential to service domestic power needs and growing demand from India. Only about 1% of Nepal's hydroelectric potential is currently tapped. Several hydroelectric projects, at Kulekhani and Marsyangdi, were completed in the early to late 1980s. In the early 1990s, one large public-sector project, the Kali Gandaki A (144 megawatts--MW), and a number of private projects were planned; some have been completed. Kali Gandaki A started commercial operation in August 2002. The most significant privately financed hydroelectric projects currently in operation are the Khimti Khola (60 MW) and Bhote Koshi (36 MW) projects.

The environmental impact of Nepal's hydroelectric projects has been limited by the fact that most are "run-of-river," with only one storage project undertaken to date. The planned private-sector West Seti (750 MW) storage project is dedicated to electricity exports. An Australian company signed a power purchase agreement with the Indian Power Trading Corporation in September 2002 and has the lead on the project. Negotiations with India for a power purchase agreement have been underway for several years, but agreement on pricing and capital financing remains a problem. The Government of Nepal has taken up the issue of project financing for the West Seti project with the EXIM Bank of China. Starting in December 2006, the Department of Electricity Development obtained proposals from 14 foreign companies for survey licenses of three projects--600 MW Budhi Gandaki, 402 MW Arun III, and 300 MW Upper Karnali. The Ministry of Water Resources, after delaying the evaluation process for more than a year, finally awarded the 300 MW Upper Karnali to Indian private sector developer GMR Energy Ltd. In March 2008, the 402 MW Arun III was awarded to India's state-owned Sutlej Jal Vidyut Nigam (SJVN). The Department of Electricity Development had invited fresh global tenders for the 600 MW Budhi Gandi project in December 2007, but it failed to attract investors. Currently, domestic demand for electricity is increasing at 8%-10% a year.

Population pressure on natural resources is increasing. Overpopulation is already straining the "carrying capacity" of the middle hill areas, particularly the Kathmandu Valley, resulting in the depletion of forest cover for crops, fuel and fodder, and contributing to erosion and flooding. Additionally, water supplies within the Kathmandu Valley are not considered safe for consumption, and disease outbreaks are not uncommon. Although steep mountain terrain makes exploitation difficult, mineral surveys have found small deposits of limestone, magnesite, zinc, copper, iron, mica, lead, and cobalt.

Progress has been achieved in education, health, and infrastructure. A countrywide primary education system is under development, and Tribhuvan University has several campuses. Although eradication efforts continue, malaria has been controlled in the fertile but previously uninhabitable Terai region in the south. Kathmandu is linked to India and nearby hill regions by an expanding highway network.

GDP (2007/2008): $12.69 billion.

Annual growth rate of real GDP (FY 2007/2008): 4.7%.

Per capita income (gross national product, FY 2007/2008): $470.

Avg. inflation rate (Consumer Price Index, mid-October 2008 est.): 14.1%.

Natural resources: Water, hydropower, limited but fertile agricultural land, timber.

Agriculture (32.12% of GDP): Products--rice, wheat, maize, sugarcane, oilseed, jute, millet, potatoes. Cultivated land--25%.

Industry (7.6% of GDP): Types--carpets, pashmina, garments, cement, cigarettes, bricks, sugar, soap, matches, jute, manufactured goods, hydroelectric power.

Trade (2007/2008): Exports--$892 million: carpets, pashmina, garments. Major markets--Germany and the U.S. Imports--$2.79 billion: manufactured goods. Major supplier--India.

Central government budget (FY 2008/2009): $3.14 billion; military allocation $163.43 million.

Official exchange rate (as of September 19, 2008): NPR 75.00 = US$1.00.

Fiscal year: July 16-July 15.

courtesy: Nepal economy

Non-Farm Payrolls Disappoint!

2010-01-10T09:28:00.000-08:00

The US Non-Farm Payrolls Report (NFP) is usually one of the biggest market moving numbers in the currency markets. Today’s number is no exception. The report came in for December at -85K, a very disappointing figure. Estimates were expecting this number to be flat, that we neither gained or lost jobs for the month. Although I had seen some pretty wild numbers tossed around, anywhere from +/- 200K. The revisions for the prior two months showed a net loss of 1K jobs, a negligible but encouraging figure.

So what does this all mean? Well in a word: trouble.

The US economy is not adding jobs nearly as quickly as the government had hoped. With all of the enormous amounts of stimulus spending, we have little to show for it. As a result of this figure, the US dollar reversed course and immediately began to weaken. If anyone had any delusions about a US rate hike in the first quarter of the year, they can pretty much forget about it as its now off of the table. Unless the dollar tanks so badly that Bernanke HAS to do something.

Close to 100 pips in a few minutes!

This could make an interesting year for the US dollar. There are 2 basic ways that we will see dollar strength this year; either through interest rate hikes or risk aversion plays. So while this logic may be a bit counter-intuitive to some, it’s going to be very important to take our clues from the other markets to see which theme is playing out.

And of course don’t forget that the dollar can continue to weaken well into this year, the question is going to be that if things don’t get better on the employment front, at what point does that filter through to the other markets?

Japan’s Fujii Still Confused about Intervention

2009-12-07T07:11:00.000-08:00

Since then, two things have happened. [Well really only one thing, since the second is more of a "non-happening."] Anyway, the first is that the Yen broke through the important technical/psychological level of 85 Yen/Dollar for the first time in 14 years. The second is that Mr. Fujii is still no closer to articulating a coherent approach to managing the Yen. Last week, alone, he referred to movements in the Japanese Yen as “extreme” and suggested that now was the time to remain vigilant and that “appropriate measures” are “possible.” A few days later, however, he called intervention “unthinkable.”

Given this nearly uninterrupted record of waffling, one might think to accuse Mr. Fujii of deliberately trying to confuse the markets. After all, how else can one explain the hourly changes in his forex policy. It’s ironic that Fujii himself has told reporters that, “It’s wrong to fuss over the currency market’s daily movement,” considering that his feelings on intervention seem to fluctuate in accordance with the Yen.

Thankfully, we may not have to deal with this carnival of uncertainty for much longer, as the Bank recently told reporters that “The government, not the BOJ, decides whether to intervene in currency markets.” At the same time, intervention would ultimately be carried out only under the auspices of the BOJ, which would presumably have the authority to determine a targeted valuation.

As for the million-Dollar question of whether intervention is more likely now that the Japanese Yen is closing in on a post-war record, it’s a bit more nebulous than it was in October. It seems that the political will now exists to intervene. The main obstacles are Fujii, himself, who had earlier pledged to administer a free-market approach to managing the Yen, and the international community.

Given that Japan still runs a trade surplus, it would be difficult to justify forex intervention. In addition, the Democratic Party of Japan (DPJ) made election promises to wean the Japanese economy off of its dependency on exports to drive growth and instead to cultivate a domestic consumer base. This promise was apparently reiterated to US President Obama during his visit to Japan earlier this month, and would be greatly embarassing if Japanese economic officials reneged so soon thereafter.

At the same time, politicians (of any nationality) are not exactly known for their integrity and their consistency, so it wouldn’t be surprising if they decided that in the context of the Yen’s continued strength that they decided to take action. “The sense of caution over the possibility of intervention is definitely higher now after the breach of Y85.00. We are all watching for any more comments from the authorities.” Given the political implications, however, it seems the more likely course of action would involve a tweaking of monetary policy – quantitative easing, under the guise of deflation fighting – rather than outright intervention. Such would be less awkward than intervention, and probably more successful.

Bank of Canada Still Mulling FX Intervention

2009-11-01T05:49:00.000-08:00

The Canadian Dollar fell from parity with the US Dollar in July 2008. For a minute, it looked as though it would return to that mark in October 2009. Alas, it was not to be, as the currency that had risen 20% since March wasn’t able to rise another 3% to close the elusive gap that would once again bring it face-to-face with the Greenback.

The Loonie’s rise was not difficult to understand. Soaring commodity prices and the fact that the economic recession was milder in Canada than in other economies drove the perception that Canada was a good place to invest. Despite a surging budget deficit and weak domestic consumption, investors bought into this notion. The weak Dollar and rising risk aversion reinforced this perception, and as investors accepted that parity was inevitable, hot money poured in and the Loonie’s rise became self-fulfilling.

That was until Mark Carney, head of the Bank of Canada, used the strongest rhetoric to-date in discussing the possibility of intervention. For the first time in this cycle, the markets took the hint, and sent the Canadian Dollar down by the largest single-day margin in months. “Markets should take seriously our determination to set policy to achieve the inflation target. Markets sometimes lose their focus, we don’t lose our focus,” he said firmly, adding that forex intervention is “always an option.”

Intervention is supported both by economic data, and other Canadian institutions. According to one estimate, every 1 cent increase in the Loonie against the Greenback costs the county $2 Billion in export revenue and 25,000 jobs. The chief economist for CIBC, meanwhile, has warned that many companies are in the process of making long-term direct investment decisions, and could be discouraged from locating in Canada because of perceptions that its currency will remain strong for the immediate future: “If the loonie is overvalued for a few years, we may be sacrificing business plant and equipment on the altar of a strong currency.” He also compared the predicament facing the Bank of Canada to that facing the Royal Bank of Switzerland, which ultimately and successfully intervened on behalf of the Franc. Intervention on behalf of the Loonie, he argued, could be undertaken under the umbrella of fighting speculation and irrational movements in currency markets.

Prior to this outburst, investors had basically concluded that the BOC wasn’t prepared to put its money where its mouth was, so to speak. “The central bank’s shot across the bow has definitely subsided. There’s not much they can do,” summarized one analyst a few weeks ago. The term “jawboning” had become the preference of columnists and investors when discussing the resolve of the BOC. The belief was that the BOC had concluded that intervention was essentially a futile proposition (based on its failed efforts in the late 1990’s), and that it would instead resort to making idle threats.In fact, it seems investors still are no convinced that the BOC (via Carney) means what it says. “Mark Carney has raised the prospect of intervening in currency markets, but seems reluctant to actually do so,” argued one analyst. “I don’t think they would really like to intervene at all, and they would prefer avoiding it. If they can intervene by jaw boning, they would much rather do that,” added another.

Why did the Loonie fall suddenly then, if the markets still aren’t concerned about intervention? The answer is that they have seen the concrete impact of the expensive Loonie on the Canadian economy. In the words of one analyst, it has moved from being a threat to a bona fide impediment. Especially given the stall in the commodity price rally, investors apparently are willing to acknowledge that they may have gotten ahead of themselves and that parity with the Dollar is not yet justified by fundamentals. Meanwhile, Canadian interest rates are at a comparable level with US rates, which means foreign investors can’t earn a yield spread from investing in Canada. This is likely to be the case for a while, as the valuable Loonie has kept inflation in check and given the BOC some flexibility in tightening its monetary policy.

Personally, I don’t think the BOC will ultimately intervene. Investors have shown that they aren’t afraid of the BOC, which would make any intervention both expensive and unfruitful. In addition, I think investors have accepted their own accesses, and will hesitate to push the Loonie much higher (or past parity, for that matter) until there is more evidence that such is justified. In the meantime, expect the Loonie to hover in the 90’s and perhaps even test parity, before smashing through when the time is right. And this, I do believe, is inevitable.

US Dollar: Same Old Story

2009-10-19T10:08:00.000-07:00

These days, it’s hard to offer a fresh perspective on the Dollar. The factors driving its short-term momentum – namely low interest rates and its perception as a financial safe haven – have been in place for nearly a year. It’s long-term prognosis, meanwhile, also hasn’t changed much. Since the beginning of the decade, the Greenback has been in a state of perennial decline as a result of its twin deficits and the related notion that it will be soon be replaced as the world’s pre-eminent currency.

Since the last time I posted about the Dollar (October 6: Dollar’s Role as Reserve Currency in Jeopardy), then, there haven’t been many developments. Fears that oil will one day be priced and settled in an alternative currency – such as the Euro – continue to reverberate through the markets. Several ministers from OPEC countries have already officially dismissed such claims as baseless. A parallel debate is now taking place on the sidelines as to whether or not such a shift even matters.

Dean Baker argued in a recent article for Foreign Policy magazine, that pricing oil in Dollars represents a mere “accounting convention,” adopted by most simply by default, since the US is the cornerstone of the world economy. Argues Baker, “World oil production is a bit under 90 million barrels a day. If two-thirds of this oil is sold across national borders, then it implies a daily oil trade of 60 million barrels. If all of this oil is sold in dollars, then it means that oil consumers would have to collectively hold $4.2 billion to cover their daily oil tab.”

Unfortunately, Baker’s “simple arithmetic” is both erroneous and slightly irrelevant. Assuming a price of only $100 per barrel (pretty conservative if you believe the notion of peak oil), current consumption of 85 million barrels per day implies a daily turnover of $8.5 Billion per day, or $3+ Trillion per year. If the price doubles to $200 per barrel….well, you get the point.

Taking this line of reasoning further becomes somewhat problematic, however. First of all, while OPEC members currently hold the majority (70%+) of there reserves in Dollar-denominated assets, it’s unclear how this would change in the event that oil was no longer priced in Dollars. It’s conceivable that just as many of these Central Banks currently diversify their Dollar-denominated proceeds into other currencies, that they would “diversify” Euro-denominated proceeds back into the Dollar. Of course, it’s also conceivable that a combination of inertia and investment strategy would cause them to hold a larger portion of there reserves in Euros.

If OPEC Central banks continue to prefer Dollars, than Baker is right in arguing that the currency in which oil is priced has no implications outside of accounting. If, on the other hand, he is wrong, and a change in pricing causes/coincides with changing preferences, then the implications for the Dollar would be disastrous. [Consider that $3 Trillion/per year which is at stake currently represents more than 15% of total foreign ownership of US assets.] The problem is that we just don’t know.

Regardless, the status quo favors the Dollar, since creating a new reserve currency would take at least a decade, if not more. For that reason, the World’s Central Banks (we’re not just talking about OPEC anymore) continue to prefer Dollars. “In the five weeks through Oct. 7, foreign central banks bought more than $48.55 billion in Treasury securities, an average of $9.71 billion per week, according to the latest data from the Federal Reserve.” In addition, “Finance Minister Hirohisa Fujii said he expects the dollar will remain the key reserve currency for some time to come.” Private foreign investors, meanwhile, are dragging their heals a bit, perhaps waiting for the Dollar to fall further before jumping in. Asks one columnist rhetorically, “Why buy now if the dollar might be even weaker in six months’ time?”

What else is new? The US budget deficit came in at $1.4 Trillion for the fiscal year, the highest level since World War II. On the bright side, the deficit was $200-400 Billion less than earlier estimates. Meanwhile, members of the Federal Reserve’s Board of Governors restated the unlikelihood of higher rates in the immediate future. “Richard Fisher, president of the Dallas Fed and thought to be a rare hawk on the Fed’s Open Market Committee, chimed in that no one at the Fed thinks this is the time to raise interest rates.” Finally, the US trade deficit is once again narrowing, due in no small part to the declining Dollar.

At this point, it seems reasonable to assume that much of the bad news has already been priced into the Dollar. Sure, the Australian rate hikes came as a surprise and forced many to rethink their calculations. Investors have already begun to separate the healthy currencies from the sick (to borrow an analogy from a previous post), but that the Dollar would be grouped with the “sick” currencies has long been anticipated. Given that the currency has already fallen by double digits in 2009 and is nearing the record lows of 2008, some are wondering how long it can continue.

Types of Forex Charts

2009-10-12T08:04:00.000-07:00

Types of Forex Charts

There are several types of the Forex charts that are used by the currency market traders. Perhaps, the most popular among them is the Japanese candlestick chart, which offers a lot of information about the price, which, at the same time, is easily understandable and can be used to analyze the chart patterns. Other chart types include: OHLC bars (which aren’t too different from the candlesticks but aren’t so visually informative), chart lines and point-and-figure charts. Here are the examples of all the four types:

Japanese Candlestick

OHLC Bar

Line

Point-and-Figure

I prefer to trade using the Japanese candlestick charts, sometimes I also look at P&F charts but that happens quite rare. And how about you?

Pound, Dollar are ‘Sick’ Currencies

2009-10-12T07:55:00.000-07:00

A theme in forex markets (as well as on the Forex Blog) is that as the Dollar has declined, virtually every other asset/currency has risen. The rationale for this phenomenon is that the global economic recovery is boosting risk appetite, such that investors are now comfortable looking outside the US for yield. However, this market snapshot may have to be tweaked slightly, in accordance with a recent WSJ article (Sterling Looks Ready to Join the Sick List).

According to the report, “Similar to how investors sorted good banks from bad banks earlier this year, foreign-exchange buyers are starting to sort strong currencies from weaker currencies. The pound appears to be joining the dollar in the weak camp. Both countries have near-zero interest-rate targets, an aggressive policy aimed at boosting the economy, and yawning deficits.” In contrast, the article continues, the Yen and the Euro have risen, as have so-called commodity currencies.

While there’s no question that British economic and forex fundamentals are abysmal, it’s a bit hard to understand why the markets are picking on the Pound now. After all, the Euro, Swiss Franc, and Yen, for example, are plagued by some of the same fundamental problems: growing national debt, sluggish growth, low interest rates, etc. Investors can borrow in Yen nearly as cheaply as they can borrow in Dollars or Pounds, and the Bank of Japan is likely to keep rates low at least as long as the Bank of England (BOE), if not longer. Meanwhile, price inflation remains practically non-existent, which means that any capital that investors stash in the UK should be safe.

Perhaps, then, investors are zeroing in on the BOE’s Quantitative Easing program, which is the point of greatest overlap with the US Dollar. Relative to GDP, both currencies’ Central Banks have spent by far the most of any industrialized countries, in pumping newly printed money into credit markets. The BOE, in particular, is actually thinking about expanding its program. At a recent meeting, Mervyn King, Chairman of the Bank, led the opposition in voting for a 15% expansion, but was voted down by a majority of the bank’s other members. “The ‘next decision point‘ will be the Nov. 5 meeting,” said a former Deputy Governor of the Bank, at which point “Bank of England policy makers will consider expanding their bond purchase plan….on concern the economy’s recovery may be a ‘false dawn.’ ”

The government meanwhile has demonstrated a certain ambivalence when it comes to the program. The head of the UK Debt Management Office indirectly encouraged the BOE to continues its purchases of bonds, for fear that stopping doing so could cause yields to skyrocket and make it difficult for the government to fund its activities. “A rapid sell-off could create a downward spiral of gilt prices which would make life harder for both it and the DMO.” On the other hand, one of the leaders of Britain’s conservative party – which is projected to take office after next year’s elections – has criticized the program on the grounds that it will lead to inflation.

From the BOE’s standpoint, it’s a no-win situation. Continue the policy, and you risk inflation and further invoking the ire of politicians. Wind it down, and you could tip the economy back into recession. For better or worse, it seems the BOE will err on the side of the former: “If we stopped supporting the economy now it would crash. Every country in the world and just about every informed commentator is saying the same thing. The job is not finished.” Given that inflation is projected to hover around 0% for the next two years, the BOE still has some breathing room.

As for the charge that the surfeit of cash flowing into markets is weakening the Pound, ‘So be it,’ seems to be the attitude of Mervn King who suggested that, “The weaker pound was ‘helpful’ to efforts to rebalance the British economy toward exports.” While he backtracked afterward, it still stands that the BOE hasn’t made any efforts to stem the decline of the Pound, and is at best indifferent towards it.

Regardless of where the BOE stands, the Pound is not being helped by the weak financial and housing sectors, which during the bubble years, comprised the biggest contribution to UK growth. Exports are weak, and domestic manufacturing activity has yet to stabilize. As a result, “The British economy will contract 4.4 percent this year before expanding 0.9 percent in 2010, the International Monetary Fund predicts.”

Dallas Fed Sep Production Index

2009-09-28T08:03:00.000-07:00

Dallas Fed Sep Production Index -0.5 Vs -9.7 In Aug

NEW YORK (Dow Jones)--Texas-area overall manufacturing activity was still contracting in September but production was close to neutral, according to a report released Monday by the Federal Reserve Bank of Dallas.

The bank said its production index for the current month rose to -0.5 from -9.7 in August, while its general activity index improved to -6.4 from -9.1.

In the report, readings below 0 indicate contraction, and positive numbers indicate expanding activity.

The Dallas Fed said hiring also showed some progress, though the index remained in negative territory. The employment index stood at -8.1 from -15.7 in the prior month.

The new-orders index turned positive in September, rising to 8.0 from -1.7 in August. The shipments index also turned positive, increasing to 0.3 from -11.2 in August.

The prices-paid index, at 9.8, was near the 9.9 reading of August, while the prices-received index was -17.9 from -21.4.The gap between prices paid and prices received indicates that, while energy prices may by pushing up input costs, companies still have little power to mark up the prices of their own products.

In August, the Dallas Fed began to include data based on seasonal adjustments.

What is a Carry Trade

2009-09-25T08:41:00.000-07:00

Additional Information

What is a Carry Trade

All that is needed to understand the carry trade concept is a basic knowledge of foreign exchange and interest rates differentials. Each currency has a different interest rate attached to it determined partly by policy authorities and partly by market demand. When taking a foreign exchange position a trader holds long position one currency and short position in another. Each day, the trader will collect the interest on the long side of their trade and pay the interest on the short side. If the interest rate on the purchased currency is higher than that of the sold currency, the result is a net inflow of interest. If the sold currency’s interest rate is greater than the purchased currency’s rate, the trader must pay the net interest.

Carry Trade As A Strategy

For many years, money managers and banks have utilized the inflow and outflow of yield to collect consistent income in times of low volatility and high risk appetite. Holding only one or two currency pairs would invite considerable idiosyncratic risk (or risk related to those few pairs held); so traders create portfolios of various carry trade pairs to diversify risk from any single pair and isolate exposure to demand for yield. However, even with risk diversified away from any one pair, a carry basket is still exposed to those conditions that render this yield seeking strategy undesirable, such as: high volatility, small interest rate differentials or a general aversion to risk. Therefore, the carry trade will consistently collect an interest income, but there are still situation when the carry trade can face large drawdowns in certain market conditions. As such, a trader needs to decide when it is time to underweight or overweight their carry trade exposure.

What is the DailyFX Volatility Index:

2009-09-25T08:34:00.003-07:00

What is the DailyFX Volatility Index:

The DailyFX Volatility Index measures the general level of volatility in the currency market. The index is a composite of the implied volatility in options underlying a basket of currencies. Our basket is equally weighed and composed of some of the most liquid currency pairs in the Foreign exchange market.

In reading this graph, whenever the DailyFX Volatility Index rises, it suggests traders expect the currency market to be more active in the coming days and weeks. Since carry trades underperform when volatility is high (due to the threat of capital losses that may overwhelm carry income), a rise in volatility is unfavorable for the strategy.

What are Risk Reversals:

Risk reversals are the difference in volatility between similar (in expiration and relative strike levels) FX calls and put options. The measurement is calculated by finding the difference between the implied volatility of a call with a 25 Delta and a put with a 25 Delta. When Risk Reversals are skewed to the downside, it suggests volatility and therefore demand is greater for puts than for calls and traders are expecting the pair to fall; and visa versa.

We use risk reversals on USDJPY as global interest are bottoming after having fallen substantially over the past year or more. Both the US and Japanese benchmark lending rates are near zero and expected to remain there until at least the middle of 2010. This attributes level of stability to this pairs options that better allows it to follow investment trends. When Risk Reversals move to a negative extreme, it typically reflects a demand for safety of funds - an unfavorable condition for carry.

How are Rate Expectations calculated:

Forecasting rate decisions is notoriously speculative, yet the market is typically very efficient at predicting rate movements (and many economists and analysts even believe market prices influence policy decisions). To take advantage of the collective wisdom of the market in forecasting rate decisions, we will use a combination of long and short-term, risk-free interest rate assets to determine the cumulative movement the Reserve Bank of Australia (RBA) will make over the coming 12 months. We have chosen the RBA as the Australian dollar is one of few currencies, still considered a high yielders.

To read this chart, any positive number represents an expected firming in the Australian benchmark lending rate over the coming year with each point representing one basis point change. When rate expectations rise, the carry differential is expected to increase and carry trades return improves.

Japanese Elections and the Yen

2009-09-15T08:24:00.000-07:00

In what could be be called an “earth-shattering” election, Japan’s incumbent Liberal Democratic Party (LDP) was finally unseated, after a 50-year stretch in power (excluding an 11-month “hiatus” in 1993). Given both the historic nature of the defeat and the margin of victory, it’s surprising that the election took place with so little fanfare. This is perhaps because the defeat was grounded more in opposition to the LDP than in support for the victorious Democratic Party of Japan (DPJ), of which little is surprisingly known. For that reason, it’s extremely difficult to assess/predict the implications of the election, and I should preface this post by noting how speculative its conclusions are. Still, a few meaningful observations can be made.

First, the DPJ appears to be somewhat liberal when it comes to economic policy. “Yukio Hatoyama, who is poised to be named prime minister, has railed against ‘unrestrained market fundamentalism and financial capitalism.’ ” It’s not clear exactly what was meant by this pronouncement, although it’s certainly connected with the LDP’s pledge to increase spending on social programs: “It says it will improve health care, expand payments for the unemployed and provide a minimum monthly pension…and remove the tuition fees for public high schools of around ¥120,000 a year.”

It also aims to spearhead a change in the structure in Japan’s economy, away from big government projects and export-dependent industries, in favor of consumers and small businesses. Through a combination of tax cuts, transfer payments, and certain spending initiatives, it is intended that consumers will feel a greater sense of financial security, and open up their wallets. “If they succeed, firms that cater to domestic consumers, from clothing retailers to restaurants, are expected to prosper.” Given that the unemployment rate just touched a record low and that deflation has now set in, it certainly has its work cut out for it in this regard.

Second, a crisis is looming in Japan’s public debt, and it’s not clear if/how the DPJ can solve it. The spending measures approved by the LDP while its leaders were still in power are projected to bring Japan’s national debt to 200% of GDP, by far the highest in the industrialized world. Some analysts have ascribed a fiscal hawkishness to the DPJ, and believe that despite its campaign promises, it will actually move to rein in spending.

Other analysts are skeptical, and have argued that unless (consumption) taxes are raised, Japan will soon face a crisis of epic proportions. “We have a government coming in that’s committed to spend even more than the previous government at a time when increased borrowing to spend is just not a plausible option…A catastrophic breakdown of Japan’s public-sector finances will be the biggest story ever to hit the world economy in our times, eclipsing the current financial crisis,” said one economist. Given that the the DPJ has promised not to touch the consumption tax rate for at least four years, such a crisis could come sooner rather than later.

Third, DPJ leadership has pledged not to intervene on behalf of the Japanese Yen, as part of its program to re-structure the economy away from exports. This marks a huge shift from the previous LDP administration, whose policies and rhetoric were consistently geared towards helping exporters and holding down the Yen. “I basically believe that, in principle, it’s not right for the government to intervene in the free-market economy using its money, either in stock or foreign-exchange markets,” declared Hirohisa Fujii, Japan’s soon-to-be-appointed finance minster, who has voiced support for a strong Yen policy on the grounds that it will boost Japanese purchasing power. This contradicts his exchange rate policy during his first stint as finance minister, during which he managed repeated interventions on behalf of the Yen. Still, it should be noted that during his tenure, the Japanese Yen rose against the Dollar.

What do the markets think? The Japanese Yen rose on the news of the DPJ victory, which suggests that investors are inclined to give the new administration the benefit of the doubt when it comes to its pledge not to intervene in forex markets. At the same time, Japanese equities sank, consistent with expectations that the DPJ will be less supportive of big business then its predecessors. In the end, nothing is written in stone, and if the Japanese economy fails to revive, don’t be surprised if the DPJ does an about-face and decides that maybe a weak Yen isn’t so bad after all.

Week of Strong Bullish Rally for EUR/USD

2009-09-14T10:07:00.001-07:00

EUR/USD was rising every single trading day this week despite rather poor dynamics of the U.S. macroeconomic indicators. We received a series of important reports this week and they mostly failed to support the dollar. EUR/USD is now trading near 1.4591 after opening at 1.4304 on Monday.

U.S. export and import prices report for August was released today. Import prices gained 2% compared to July after decreasing by 0.7%. They were expected to go up by 1%. Export prices were up by 0.7% after being down by 0.3% in July.

Wholesale inventories decreased by 1.4% in July in U.S. after 2.1% drop in June. The forecasts by the analysts projected a drop by 1%.

Other important reports this week included:

U.S. consumer credit was down by $21.6 billion in July after decreasing by $10.3 billion during the previous month. This indicator suggests a strong deterioration of the U.S. consumer sentiment.

Commercial crude oil inventories declined by 5.9 million barrels last week in the United States, meanwhile, total motor gasoline inventories rose by 2.1 million barrels. Nevertheless, the inventories are above the upper boundary of the average range for this time of year.

U.S. trade balance deficit reached $32 billion in the month of July — up from $27.5 billion in June. Forecasted value of the deficit was near $27.3 billion for July.

Initial jobless claims were down from 576k to 550k last week — even better than the median estimate of 560k.

Do you have what it takes to become a successful Forex Trader?

2009-09-14T09:58:00.000-07:00

Forex trading, or any trading for that matter, is an occupation that requires experience and the accumulation of proficiency not unlike any other highly skilled profession. Whether you are a leading executive at a major publically traded company, a professional golfer or trading from your kitchen table, there are 5 key ingredients that one must possess in order to become successful.

1. You must be Passionate about what you do.

As Forex traders we all face one unique set of circumstances that does not exist in any other profession. We get rewarded for when we succeed and equally punished when we don’t! Could you image a corporate worker one quarter receiving a significant accomplishment bonus and the next quarter actually getting money taken from their paycheck for missing performance targets? Not on your life!

We do as Forex traders and that is why passion for what you do will carry you through the tough times that are part of your trading business. Asked yourself why you trade currencies and would you still do it if Forex were not potentially lucrative? Your answers will be quite revealing. You’ve got to feel your passion for trading!

2. You have to Apply Yourself and work hard at it.

I talk to so many people that enter into Forex trading with the aspiration of getting rich quick. Without putting the time and energy into really getting good at trading I see them jump from strategy to strategy looking for the goose that will lay the golden egg and eventually quitting while blaming everything else, except the true cause.

I got news for you – you are the goose and your Forex education is the golden egg. The magic has always resided with the magician and not some strategy. Work hard at trading and the rewards will eventually come your way. Remember what Tiger Woods said, “Funny, the harder I work the luckier I get.” Apply yourself as a trader and it will be no accident when your account begins to blossom.

3. You must Focus to really get good at what you do.

Now here is the hurdle most Forex traders struggle to get over. You have the passion and you are applying yourself to your trade, now focus and really get good at just at what you are doing. Be the expert to the experts at just that one thing. Become the master of a strategy or risk management methodologies. Really focus on getting good at it.

Stop jumping around or getting pulled from the last “latest and greatest” into the next “latest and greatest” and focus on one aspect of Forex trading and know it inside out. Know it strengths and weakness. Set your sights on becoming expert on just one aspect of trading and watch it spill over in all other aspects for your currency trading. This is the time to fail forward fast, use every setback as a learning opportunity that will propel you 3-steps ahead!

4. You must Push Yourself beyond the point everyone else might have quite.

In Forex Trading this is simple. Assume there is someone on the other side of your trade that is pushing themselves and sharpening their edge. To be successful you must you must do the same thing. Now is the time to examine your mental edge. Do you know the single most critical factor in any currency trade? It is you, the trader! Sharpening you mental edge is the most difficult aspect of trading, but also the most rewarding.

Start with your Forex education and gain the self-awareness necessary to maximize your strengths and suppress your weaknesses. Any expert will tell you that trading is 80% mental. It’s time to sharpen your trading to the razor’s edge and you do this through Forex education. A constant and never ending process that will become the cornerstone of your Forex experience.

5. You must, without wavering, be Determined and Persist to your objective.

You will fail. I can state that emphatically. However, you will not be defeated unless you allow your failures to control your trading. It is the old adage; failure is not falling of your horse, failure is refusing to get back on. Your success depends on your ability to dismiss the criticism, rejection, self-doubt and pressures associated with Forex trading.

Defining what is a winning trade, losing trade and bad trade will go a long way into developing you as a successful trader. Without the determination and persistence in all aspects of your trading life, obstacle will definitely appear closer and larger than they actually are.

Take a moment and assess yourself and your trading. Do you have the key elements to succeed? Which areas are presents development opportunities? When conducting a self-evaluation it is critical to be totally upfront and honest with yourself. After all, you will only be dishonest with yourself. One of the most interesting observations you can make is that all key success factors are interwoven. One factor supports the other. This is why your Forex education is a continuous journey of forex strategy, money management and self-mastery. Set these factors as your Forex education goals and take your currency trading to new heights.

Happy Trading!!

Forex Charts

2009-09-13T10:21:00.001-07:00

Real Time Forex Charts for Successful Trading

Access to real time chart information is crucial to success in forex trading. Accordingly, Global Forex Trading (GFT) has made it a central focus to provide customers with the leading information available in the form of comprehensive, dependable forex charts. Real-time forex charts keep the investor informed because they are an analysis tool used for delivering up-to-the-second trends in the value of many widely traded foreign currencies. Additionally, with the forex charts supplied by Global Forex Trading, you can trade directly from the charting interface. Please follow the link to learn more about how you can benefit from the Real time forex charts in DealBook® 360.

Simply possessing the information, however, is only half the battle. You need to be able to instantly take advantage of favorable currency fluctuations. Our robust forex trading software allows you to trade directly from forex charts; indeed, all the necessary tools are only a right click away, and forex trades require a mere two clicks. With our DealBook® 360 software, a forex broker or day trader simply has to click their mouse twice to make a foreign currency trade, which translates into greater opportunity to capitalize on developing trends without ever moving away from the crucial information contained in the real time forex charts. To try our software for yourself, and to experience trading directly from our up-to-the-second forex charts, sign up for a free $50K demo account with a DealBook® 360 trial and discover how utilizing Forex charts can benefit your foreign currency trading.

DealBook® 360 & Tools Traders Need

With DealBook® 360, GFT delivers access to the global forex market previously enjoyed solely by large traders, such as banks and hedge funds. Our leading-edge real time forex charts and powerful tools allow you to trade at the same rates and price enjoyed by major dealers, and enable you to capitalize on developing trends in the forex market. In addition, DealBook® 360 Mobile provides access to your forex trading account anywhere, anytime. For more information about our full range of forex products and services, please visit our homepage at GFTForex.com.

Global Forex Capital Markets

2009-09-13T10:18:00.000-07:00

Forex Capital Market Opportunities

There are very few investment opportunities that hold the kind of potential that can be found in the foreign exchange, or forex market. The past decade of robust growth have fashioned the forex capital market into the largest financial market in the world with over $2 trillion USD traded daily. Tracing the history of the forex capital markets back in time, several efforts were made to stabilize the world economy in the wake of World War II with varying results. One well-known attempt, the Bretton Woods Accord, pegged all other currencies to the value of the U.S. dollar, which, at the time, was the most stable currency in the world. Additionally, the U.S. dollar was pegged to the value of gold and the combination of these two efforts brought relative stability back to the forex market and the world economy for awhile.

The Forex Capital Markets

In 1978 the free-floating system was officially mandated largely due to the break down of two independent agreements, which like the Bretton Woods Accord, sought to keep currency values pegged at a more constant level. Thus the forex capital markets was enlivened by the fact that foreign currency values could now fluctuate to a greater degree. These days, the major currencies are allowed to move independently of other currencies and this new approach is really responsible for the host of new opportunities that now exist in the forex capital market.

Forex Market Supply and Demand

Like any other market, the forex market is driven by the principles of supply and demand. There are times when a particular country will intervene to move currencies to their desired levels, however, the free-floating system is the rule of the day for most of the major world economies. This situation creates great opportunities in the forex capital market, which you can take advantage of with help from Global Forex Trading. Start exploring the opportunities the forex market has to offer with a free demo Forex trading account from GFT.

Additional Forex Market Information

If you would like to learn more about the long and vibrant history of the forex market, or if you would like to begin benefiting from the foreign currency trading opportunities available today, please use the following link: Global Forex Trading Forex Market.

US Dollar: Will a Recovery in Liquidity Usher in a Breakout?

2009-09-07T10:49:00.000-07:00

US Dollar: Will a Recovery in Liquidity Usher in a Breakout?

Fundamental Outlook for US Dollar: Bullish

- Nonfarm payrolls contracted at a slower pace in August, but the jobless rate jumped to a new 26-year high

- Fundamental dollar traders will have to look to market sentiment rather than fundamentals for direction

- Majors tax dollar support as the threat of a breakout looms next week

Liquidity has been the bane of currency traders’ existence this past week; but a gradual return to normalcy may finally allow the dollar and general risk appetite to find its bearings once again. Even a perfunctory glance at a EURUSD chart conveys exaggerated congestion. This pair – and indeed all of the majors – has been relegated to a controlled range or gradual channel for the better part of three months. Now, passing through the extended Labor Day weekend holiday in the US, we are encountering the worst of the unusual market conditions. It wasn’t by chance that the dollar tumbled to test its lows through this past Friday’s close. At critical levels, the speculative ranks could either attempt a break against the dollar while most of the American market is offline or wait for the liquidity pool to deepen and instead work to reconcile the divergent outlook between fundamentals and risk appetite.

The immediate concern heading into the new week is Monday’s holiday. While US markets will be offline, Asian and European traders can act upon any potential breakouts as there is time (though not necessarily momentum) to forge significant follow through. This leads us to consider what the primary driver for the dollar is. Did this past week’s data tip the fundamental scales and now we are just waiting for enough market depth to sustain a rally? Are interest rate expectations shifting against the FOMC pursuing interest rate hikes in the opening months of 2010? Have risk trends once again pegged the dollar as a key liquidity currency? In such a complex market, you can be sure that all of these themes are factoring in; but it is likely the whims of speculators and their appetite for risk that is truly at the helm.

Where will the fuel for a surge in optimism or the spark to a spate of panic come from? Generally, it can come from anywhere as long as the market is susceptible enough – and sentiment certainly seems primed for a dramatic shift. The comments coming from Finance Minister and other policy officials ahead of the G-20 meeting in London tomorrow has been largely supportive of keeping stimulus in place; but being prepared with an exit strategy when the right conditions were met. This is very likely to be the consensus tomorrow – and it would send the market a somewhat bearish outlook as it would reinforce the notion that the global recovery will be gradual. What’s more, with the full summit scheduled for the 24th 25th in Philadelphia, this pre-game meeting will be more for setting out framework.

Since investor sentiment in its simplest form is the balance of risk and reward, interest rate decisions from key policy bodies next week could in turn affect the dollar as a safe haven. The BoE is scheduled to announce rates on Thursday; but it is the commentary and outlook for growth as well as the size of the asset purchasing program that is truly remarkable. On the opposite end of the spectrum, we have the RBNZ’s deliberation. As a representative of what high yields global investors can reasonably expect, this benchmark will be used to set expectations for growth. The disparity between dim growth potential and the capital market’s steady rally over the past six months has only grown with time. It is already clear that the recovery will be slow; so it is not likely that market optimism can hold up long enough for data to catch up. But, as John Maynard Keynes said, “the market can stay irrational longer than you can stay solvent.” – JK

For more timely FX market analysis, visit our newly-launched Forex Stream Service.

GBP/USD Short Looking Good!

2009-09-03T21:16:00.000-07:00

Just wanted to post a quick update on this trade that triggered yesterday. We actually closed out a portion at 1.6175, for a 175 pip gain. This pair is the biggest loser of the day so far (-1.04%), so it appears that other traders may have recognized the H&S pattern as well. The reason we closed a portion was because of the doji that occurred on the 5-minute chart, and the stochastic cross that occurred as well. See chart (click to enlarge)

While this trade started out as a pattern on the daily chart, we chose to drop down to the 5-minute chart to manage the trade as our first profit target was hit. Our trailing stop for the rest of the position is now at 1.6275, which is just above the most recent area of resistance, and also represents a 75 pip gain. So basically this is now a risk free trade!

To learn how you can spot trades such as this one, check out our inexpensive currency course!

Flight to Safety!

2009-09-03T21:14:00.001-07:00

It looks like the flight to safety trade is in full effect today, with the Japanese Yen crosses and US Dollar leading the way, especially against the commodity currencies (AUD, CAD, and NZD). The US equity markets are down today but hopes are that the “September Effect” is not upon the equities markets. The September Effect says that historically this month has been the worst month for US stocks.

Because of the correlations between the equities and currency markets, this could mean gains for the Japanese Yen and US Dollar. It looks like AUD/USD was not able to close above resistance at .845 and we could be in for a double-top reversal at that level.

So keep your eyes on the US stock market, because if the September Effect does take hold, then it could be a wild ride for the commodity currencies.

Is Rob Booker Forex Training Any Good?

2009-09-03T21:12:00.001-07:00

This is a question I receive often and unfortunately I can no longer give an honest answer which is the only answer that I ever want to give. This is due to the fact that I haven’t dedicated myself to Rob Booker’s training since 2006 making my experiences outdated. The good news is that over the coming months, I will be able to give you an honest opinion because I am in the initial phases of giving his tutelage another go. This is possible because he has no expiration date on his training. According to his training contract, "You have as long as you need. You never have to pay me anything again…."

At first glance, there have been many changes to his training. His chart school, which are Rob’s trade ideas for students in video format appear to be more interactive. He provides a web conferencing platform where any of his students can attend and ask questions via messenging or voice. Other basic course materials seem unchanged such as the course introduction, FX basics, backtesting, support and resistance, moving averages, and similar topics. These are really basic though and I don’t see any reason why these would ever change. The course materials are also for the totally inexperienced forex trader, someone who has really never explored Forex outside of this course.

His primary trading system which has many components to it is called the Arizona Rules. He was just developing this system back when I lost interest in his training so I haven’t really explored it. If anything, it seems like Rob’s attempt is to provide his students with a well tested and possibly profitable trading system while also providing a comprehensive trading plan and system that one can take knowledge from to develop their own forex trading system.

Economic Data Could Provide Basis for Higher U.S. Dollar

2009-09-03T21:11:00.001-07:00

Dollar forex trading forecast

Economic data being released today could provide the basis for a higher U.S. dollar on the currency market. The U.S. dollar forex trading forecast has been linked to risk a great deal in the past months since the global financial crisis.

Right now, there is speculation that economic data will soon be showing some concerning information about where we are headed. GFT’s Boris Schlossberg reports on FX360 about the focus today:

In North America today, the focus is on ADP employment report with markets anticipating a -250K print. Although the ADP numbers has been notoriously spotty in matching the NFP results, any material deviation from consensus could still produce a meaningful impact on equities and risk FX. Yesterday’s sharp drop in stocks suggests that traders are beginning to have second thoughts about the recovery trade and if today’s ADP data disappoints we could see an acceleration of risk aversion flows as the day progresses.

So far, the U.S. dollar has been mixed in forex trading. The greenback is down against the pound, but up against the euro. Right now, gold prices are moving with the U.S. dollar against the euro in forex trading. Gold is gaining as safe haven investments become popular again.

Diggings: Tax credits earned for insulating home

2009-08-30T08:54:00.000-07:00

Aug 30, 2009 (The Montana Standard - McClatchy-Tribune Information Services via COMTEX) -- Hidden deep inside the multi-billion dollar federal bailout and economic stimulus package are a few tax credits that can be useful for homeowners -- not just multi- million dollar business owners.

Many home energy investments, including insulation for your home, are eligible for a 30-percent federal tax credit.

But the window of opportunity closes quickly.

The upgrades must be completed within the 2009 or 2010 tax years to qualify for the credit.

Those who complete the work on time can qualify for federal credit up to $1,500 per taxpayer, which is subtracted from net taxes owed.

This has increased considerably from the 10 percent offered in previous years. Nationally, the tax credits are expected to be worth well over $500 million.

To further sweeten the deal, private energy suppliers such as NorthWestern Energy sometimes offer additional incentives and rebates on certain products.

Eligible expenses In some instances, old exterior siding can be stripped and an insulated sheathing put up and covered by new siding. It's a good approach and keeps most of the construction commotion outdoors. The cost of insulated sheathing is an eligible expense for the federal credit, as is the air barrier sheeting commonly called "home wrap." The replacement siding, however, is not.

Insulation can be blown into the exterior wall stud cavities of many older homes, even those with brick veneers.

Keep in mind that only the actual insulation product costs can be applied to the 30 percent federal tax credit, and not the installation costs. Comparatively low-cost insulation products such as cellulose, fiberglass and even open-cell foam can be expensive to install because of ancillary labor and installation costs. For example, the costs to strip and replace exterior siding or interior lath and plaster are not eligible.

Montana Tax Credit The 25 percent Montana tax credit for insulation of the building envelope is somewhat more forgiving. For example, the labor to install insulation may be included. The state encourages homeowners to insulate to the 2009 IECC standards, but the $500 Montana credit can be captured without regard to the amount of insulation installed.

Weatherstripping and sealing the building envelope against air infiltration are eligible costs for state but not federal credits.

GBP/USD Short Looking Good!

2009-08-30T08:45:00.000-07:00