Wednesday, March 11, 2009

What is Exchange Rate in Forex World

After reading other article, you have known that Forex is traded in pairs. Have you got the idea about the term of exchange rate? What is exchange rate? How you can benefit from exchange rate? The exchange against each other when traded, therefore, the rate at that bargaining event is called exchange rate. Exchange rate should become your focus of the Forex trading activity. You will get much profit by paying so much attention to this important little number. Pay attention to details can benefit you to make profit in the Forex trading. If you fail to perform this task, you will lose your chance to generate more profit from Forex trading.
Exchange rate for every currency pair may be different on from another. Update your information by accessing the trusted financial information. Finding the trusted financial information source is not an easy job. You have to do various researches. One of the common ways is to read the review. Why I recommend this type of research? By reading review, you can get information from others which you can make your very own consideration about particular information source.
Let me guide you with a practical day to day example. Imagine that you want to buy weight loss pills. You will not buy the pills right? The first step you may perform is searching for the information related to this product. You may ask your friend, colleges and relative about the weight loss pills. You will remember about the brand recommended by your cousins and your close friends. Based on that information you search the web about the particular product. On the internet, you can find lots of review about that product. Moreover, you can discuss your opinion in certain forum. This is a great way to get the product which you do not even recognize without getting scam.
Things apply the same in searching for the trusted information source. The point is asking. You can ask the professional in Forex trading about the financial information source they use to fulfill their need about exchange rate. If you have friends which involve in the financial market, you can ask for their recommendation.
U.S. Dollar (USD), Euro (EUR), Japanese Yen (JPY), The British Pound Sterling (GBP), The Swiss Franc (CHF) and the Australian Dollar (AUD) are considered as the most traded currencies. Those are the most active currencies in the Forex Trading.

Tuesday, March 3, 2009

Forex Forcasting Method

In the Forex trading there are two common analysis methods which you as the investor can use to forecast the Forex Market. The first one is technical analysis and the second one is Fundamental analysis. This article will cover the technical analysis which can be very useful in your daily activity to deal with the Forex Market. The technical analysis gives the approach from the technical point of view while the fundament analysis presents the analysis about the market movement cause.
Let me explain in a simple word using a day to day example. Imagine that you are a salesman who sell high end product, sport car. You may wonder how to sell this product. You think who might spend their money to buy this expensive product. So, you start looking for ay possibilities to sell this luxurious car. Finally you know that your consumer will be a high class people who have lots of money to spend for fancy cars. Unfortunately, you get nervous seeing the fact because you think that you have not ready to sell due to your sales skill. After all, you find a great sales workshop and seminar. You join in that great program and start learning about how to sell. From this story we can conclude that, as the salesman, you learn the technical thing in the workshop and seminar which will give you the technical skill. At the beginning when you do the research, you have performed the fundament analysis about yourself and about the market landscape.
Technical analysis in Forex trading is used to predict price movements and market trend in the future. It studies the history about the market. It pays a great attention at the analysis chart. The technical analysis analyzes the real thing which has happed on the market. There are three basic concepts about this analysis.
The first one is the actual price is the price itself without involving the market condition such as political issues, supply and demand matter, and so forth. That is the pure technical analysis. The second one is the trends shows the real data about the price. You should remember that price has its trend. Price will form a curve in the graphic trend where it has its own pattern. The last concept is about the history. The trend can be drawn in a curve. By looking at the curve you will recognize that history will be repeated.
By understanding this analysis method, you can maximize your Forex Revenue.

Technical Analysis for Forex Trading

Financial market involves lots of data graphic. One of them is financial chart. It is used to show the trend of the market. Market trend describe the particular activity which happened in the market on the particular period. The ability to read this chart will boost your financial profit and improve your business sense. Sense is very important in this high risk financial market. Market trend also describe the market preferences to buy groups of products. From this chart you will know exactly what to do to increase your profit. This chart is your tools to make the right decision.

To understand Forex trading chart, you need to master the tools. Without having proper knowledge about this particular tools you will fail to fully use the chart as your technical analysis tools. Therefore, you should really understand the technical analysis tools.
1) Gann numbers. It name after an Investor which gain success in the old time. He links the relationship between, time, price and movements.
2) Relative Strength Index (RSI). The RSI is used to measure the up a down-moves ratio and put the calculation into a normal line and cause the index stick on the range of 1-100. There are some assumptions for this tool. The first assumption is overbought. It is the condition when the RSI numbers touch the 70 or greater. The opposite is the oversold condition where the RSI numbers touch 30 or lower.
3) Stochastic Oscillator. This tool is used to tell the condition or overbought or oversold. It is describe the amount in the scale of 0-100%. Stochastic Oscillator has two lines, the %K and the %D which will tell you the overbought or oversold.
4) Number Theory. It is based on the theory of Fibonacci number which has a sequence which builds by adding the first two numbers so it will form the third number.
5) Waves. This is based on the theory of one named Elliot. It is lays the concept on the wave patterns and the Fibonacci number. To use this tool you should follow five-wave incline pattern and three-wave decline pattern.
6) Moving Average Convergence Divergence (MACD). It is basically a line which exposes the differences between exponential moving average and the signal line. Signal line also called trigger. You might wonder what the use of it. You can read that there will be a change on the trend if the MACD lines cross over the signal line.

Those are the most common tools you have to understand.

Sunday, March 1, 2009

Fundamental analysis of Forex trading

In Forex World, Though you successfully use the technical analysis method, you can not gain optimum success without using Fundamental analysis method. It is an external analysis of the Forex Trading.

In business we remember the SWOT analysis. It is an analysis which involves the deep investigation about internal and external factor that contributing success to the business itself. SWOT stand for Strength, Weakness, Opportunity and Thread. If you analyze the Strength, it means you do an analysis for the internal factor of your business. You may ask the question like “what is strength of my business” and so forth. The Weakness analysis let you analyze the weak point of your internal business which you need to upgrade. Here comes to the external factor. The external factor involves the analysis about opportunity and thread. So, what is the connection between this with the internal one? You use your strength to get every opportunity available while you also have to be aware of the thread which may be caused by your weakness.

My purpose of telling you the overview about the SWOT analysis is giving a bright description about the fundament analysis of Forex Trading. Fundament analysis is the external analysis which has the same function as the opportunity and thread in the SWOT analysis. You have to look the external factor which has any implication to your Forex business. It has to be relevant with your Forex business. If you fail to perform this analysis, you will be facing trouble which you can not solve with the technical analysis. They both have to be used one after another.

So, what is it exactly? The fundament analysis is used to forecast the future price of a financial instrument. This require the analysis of political, economic and environmental which have the possibility to directly or indirectly affect the demand and supply. This analysis focuses on the possibilities of things which might happen in the future. By referring to this possibility, we can make the forecast which may reflect the real future condition. This is possibilities, which mean that it can not have 100% validity. Though in some cases it is not quite what we expected, we can still count the possibilities. They key to approach this analysis is to watch closely to the political and economic life. Be prepared to any new political or economic policy as it will make you money or loss you some.