Economic Calendars For Forex Traders,forex trading strategies

Economic Calendars For Forex Traders

Links to good economic calendars for the forex market.

It is best to compare the figures on a few calendars as substantial differences can occur in consensus.

1) Daily FX Economic Calendar

2) Forex News

3)Today FX

4)Forex Factory

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You need technical analysis and fundamentals to trade currencies profitably.There is a need to understand the basics of economics so you can think for yourself and learn who the market participants are and which reports and statements drive the market.

It is important to know exactly when these announcements will be made so you can take advantage of the big moves that follow or avoid losing through a sudden surprise reaction.Economic calendars show in advance what time the economic data release will take place.

If traders are expecting an interest rate to rise and it does,there usually will not be much of a movement because the information will already have been discounted by the market.However, if the interest rate does not rise as expected, then the market may react violently.

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Provided by: ForexPros.com | Forex

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Investment in Forex Trading

By: Sarah Brown

Investment in various businesses is neither a fashion statement nor a lifestyle of modern world; but it is due to the necessity of strengthening our financial future. But question arises why and where one should has to really invest his hard earned money. There are infinite options and Forex (Foreign Exchange) trading is one of them and there are reasons for it too.

i. This is one of the largest financial markets with trades touching Trillion marks daily. Its domination has been increased for the last three decades. Initially Forex Trading was limited to professionals only but gradually average investors showing interest in it because of its amazing capacity which is the key behind its sudden surge.

ii. This is the only one investment area which ably provides leverage more than others. Though there is both bad and good effect of leverage. Without a proper risk management high leverage could cause either high loses or gains. In Forex Trading there is no hidden formula or strategies involved. As an investor you do not need any professional knowledge and what you need is an application of technical analysis and logical money strategies.

iii. Investors are not charged for commission for their profits in Forex. All the cent percent profit belongs to the investor. For regular investors this is attractive and lucrative field to invest.

iv. For investors Forex trade provides 24 hour opportunity of trading. The investor has the chance to trade anytime in between from Sunday 5:00 pm (ET) to Friday 4:30 pm. One can trade at his own convenient time and at the best trading time in the market.

v. The fact which attracts crowd to invest in Forex trading is it gives high liquidity. Forex Trading deals with seven major currency accounting 90% of all the transactions. This indicates that these currencies have price stability, high levels of liquidity and smooth trend. The liquidity is due to the cash flow from banks to average investors, organizations and professionals who trade with Forex.

vi. The forex trade is always moves ahead and never stops as it involves buying and selling of currencies. The operation is easy for traders no matter the market is rising or falling. The rise or fall of a currency depends upon other currencies and does not matter for successful trading as the market is always busy.

Investors only need a good marketing strategy to profit in forex trading. In Forex trade large transactions operated within few seconds due to its amazing speed. Huge profit along with these advantages make Forex trading a sought after investment hub.

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China Wont Cave to EU Pressure - Forex News

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The Job of the Successful Forex Day Trader

By Avi Frister

Being a forex day trader can be very lucrative. The currency market is by far the most liquid and volatile market in the world and with this come various opportunities. No matter what type of market you chose to day trade you must know the “personality” of the market you are trading. Every market has it’s own characteristics and it is important to know what they are before attempting to profit from it. The forex market is no different. In this article we will go over very important general day trading principles/rules and then we will see what a daytrader has to recognize when specifically day trading the forex market.
As the term implies, day traders are concerned with what happens in the market today. Not tomorrow, not next week and not next month, but today.
The day trader’s job is to capture intraday price swings. Depending on the system or trading method employed, this can mean capturing one intraday swing or various intraday swings.

The general job of a day trader is:
To control risk

One of the most important jobs as a day trader is to control your risk exposure. Sure, controlling risk is a concept you must use in any type of trading, however in day trading you must look at this issue from a different angle. Since your job is to capture various price swings during the day naturally your profit objectives will be much smaller then of a swing trader (who places a single trade aiming for a much larger profit objective).
So, when placing several trades during the day it can be easy to “drift” away from your pre-determined stop losses. A common (very common actually!) day traders thought is “if I extend my stop loss just a bit I hope the market will turn around”! Hope is one of the trader’s biggest enemies.
These little extensions of stop losses add up and suddenly without noticing you are losing more dollars per trade than planed making your risk/reward ratio turn against you.

To be disciplined

This principle is key for any type of trading but particularly for day trading. If I had to name one single aspect of a day trader that can make him or her a winner or a loser it is discipline. You can have a so-so system but still make money if you are disciplined. However, you can have the best trading system in the world but if you are not disciplined I guarantee you will not be a successful trader.
So, what is all this discipline everyone talks about when discussing trading? Very simple, it’s respecting and strictly following your trading plan, your trading system, your money management rules, and your commitment to the business. Being disciplined with regard to each and everyone of these components is essential for your success.

It is so easy to deviate from your trading plan, the rules of your trading system or any of the above mentioned components, especially when day trading. Why? Two reasons. First, because the trader is trading very frequent and does not have time to cool down, think, and evaluate. Second, because reality is replaced by hope. Your trading system rules (reality) says: “get our of the trade” hope says “hang in there, maybe it will still be profitable”. Your money management rules (reality) say “risk only 2% of your account on this trade” hope says “since I lost on the last trade I will risk 4% on this next one so I can make up for the loser and also be profitable”. Your trading plan (reality) says “trade each day 4 hours, give yourself Wednesday or Thursday a vacation to rest” hope says “Since I am not doing very well now I don’t need this rest day, and I will also trade 7 hours per day to make up”. I know (not hope!) you now understand the point!

To focus on the appropriate time frame

As a day trader your primary concern is to catch intraday swings. Your trades start and finish the same day. Your world is the day you are trading in. You don’t care what will happen in the market tomorrow or the day after tomorrow.
Your objective when trading is focusing on the appropriate time frame chart. My opinion is that day trading should be done on a 1, 5 or 10 minute bar chart. Remember, you are looking to capture several fast moves during the day and hence you must focus on the charts that best illustrate events as they happen in a short period of time.

However, the fact that you are day trading on a 1,5 or 10 minute bar chart does not mean you can’t use a larger time frame chart for the purpose of analysis. This however, is very subjective and depends very much on the traders strategies and methods of trading. As an example, many day traders would look at one hour bar charts in order to have a view of how the market has been behaving in the last week. Is it moving sideways (and so maybe I should only place trades between support and resistance areas)? Is it trending (and so maybe I should only be looking at placing trades in the direction of the higher time frame trend)? Are there any major support and/or resistance levels I should be aware of (areas where I should refrain from placing trades since it is uncertain how the market will react when reaching them)? Did the market brake out of a congestion area?

Again, it is very subjective. Some day traders believe that with proper larger time frame analysis they can select better their day trades. My personal opinion is that the more you analyze the more conflicts you will have and the more uncertainties will appear (especially if you are new to trading). I like making things simple and I found it very useful when trading (proof of this is that all of the trading systems I use are 100% mechanical). Don’t get me wrong, this is not to say that larger time frames should not be used at all for analysis purposes. But, try to keep it simple and if you see that looking at larger time frame charts interferes with your correct decision process when placing day trades then simply stop.

To trade volatile and liquid markets

Since your job as a day trader is to capture intraday swings it is crucial that the market you are trading has enough movement to allow you to do this. It is also important that the market you are trading has enough liquidity so that order fills do not suffer from excessive slippage.
You have to select a market that it’s volatility is permanent and not a temporary occurrence. Since you are basing your trading method on catching intraday price swings you have to know that you are trading in the right place. As a day trader volatility is your allay and you have to know that you can count on it every single day (or at least 90% of the days). Liquid markets will provide you with good order fills. As a day trader this is very important since you are aiming at smaller profit objectives and hence larger slippage will eat away more of your profits. When trading several times a day this adds up and can be the difference between success and failure.
As a forex day trader you have to apply all the above rules and principles plus other criteria that are unique to the forex market.

Time of day trading

The forex market is a 24 hour market. Never stops except on weekends. Within this 24 hour period different currencies behave in different manners. As a day trader it is very important to know the “personality” of the currency you are trading. For example, the GBP/USD is more volatile in early to mid European session then any other liquid pair. For a day trader trading in these hours it would be wise to take advantage of the price swings the GBP/USD pair offers instead of trading some other currency pair that constantly shows no movement.
The USD/CAD pair is “silent” in the early to mid European session but starts to have more price movement toward the start of the US session.
Every time Non Farm Payroll is released most if not all currency pairs have a very small price range up to release time. As a day trader it wouldn’t be wise to trade during these pre-announcement hours with trading strategies that are based on breakouts. It would probably be smarter to use strategies that are based on range support and resistance.

Spread and liquidity

Forex brokers don’t charge you a commission for every trade you make (at least most forex brokers). Instead, they make their profit on the bid/ask spread which is measured in pips.
As a forex day trader you are aiming at capturing small price swings sometimes several time per day. Also, your profit objectives are obviously much smaller than the swing trader’s profit objectives. All this means one thing: every pip counts. You cannot afford to trade currency pairs with large spreads, if you do your profit will get eaten up to a point where you will not be trading with an adequate risk/reward ratio.
Forex day trading must be done with liquid pairs. Most forex brokers will provide you with a very narrow spread for the most liquid currency pairs. As an example, many brokers are now offering a 2 pip spread for EUR/USD and USD/JPY and a 3 pip spread for USD/CHF and GBP/USD. These are the most liquid pairs and the ones a day trader should focus on.

Volatility

As a day trader volatility is you friend, a friend you cannot afford to trade without. In it’s basic definition, volatility is simply the amount of price change with relation to time. Volatile currency pairs have various price swings (price changes) during a small period of time (one day). These price swings are what a day trader lives on.
In the forex market volatility many times comes hand in hand with liquidity. The most liquid pairs are the ones that are the most volatile. The big 4: EUR/USD, GBP/USD, USD/JPY and USD/CHF are the most liquid pairs that provide the best volatility and hence opportunity for the forex day trader.
Within these four pairs, the GBP/USD is the most volatile. Although it’s not the most liquid (the EUR/USD is), but it’s the most volatility. This pair, traded with the right broker (one that provides a 3 pip spread) can present many profitable opportunities for the astute day trader.

Specific news announcements

Currency rates are affected by rumors, news, economic indicators and government reports.
As a day trader you must always be aware of what economic reports are scheduled on the day you are trading and at what time. Why? Simply because many of these reports can have a strong momentary impact on the market once they hit the news wires. This impact can be of 10 pips or 100 pips depending on the report and it’s difference from the market consensus.

The most important and impacting economic indicators and government reports are issued by the US government. They affect every USD/X or X/USD currency pair. Again, always know what are the release times and the importance of the economic report.

For example, suppose you are in a EUR/USD trade at 8:25 a.m. You know that an economic report is scheduled for release at 8:30 a.m. You might consider either exiting the trade before the release (in order to avoid unnecessary speculation as to what impact the report will have on the market) or entering your profit objective and stop loss into your deal station (for risk exposure reasons).

In conclusion, the forex day trader has to be prepared not only with the basic day trading rules, skills and principles. His job is to incorporate into his trading the characteristics and uniqueness of the forex market.
Remember, every currency pair might present different opportunities and it is your job to always focus on the ones that best fit the purpose and objectives of day trading.
I hope to have contributed to your forex trading education and I thank you for taking the time to read this article.

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Forex Trading Strategies

The advantage of this strategy is that you already know your max loss and max profit potential before you enter the trade, which allows you to choose your risk reward level.

The first step is to figure out the maximum number of lots you can trade on your account (the max deal). To find the max deal, simply multiply the total dollar amount of your account by 100. (EX: a $1,000 account has a max deal of $100,000 or 1 standard lot). This would not even be enough to trade this strategy since you need at least 1 lot per side or 2 lots total.

Let’s say you start with a $10,000 standard lot (100K) account. You will be able to deal $1,000,000 worth of currency (1 standard lot = $100,000) so you can trade 10 lots at a maximum. (1,000,000/100,000)

Since you are placing 2 trades at the same time in this strategy, the maximum number of lots you could trade is 5 on each side of the market, for a total of 10 lots.

The max loss is 50 pips (25 stop loss on both sides) which equals a

$1,250 loss per side of the trade (5 lots x $10 per pip x 25 pip stop) or a total of $2,500.

If you decided to take the max risk on this trade you could lose $2,500 or 25% of your total account value ($10,000 - $2,500 = $7,500).

Profit would be $1000 or 10%. This offers you the highest risk/reward ratio. However, be careful with trading the maximum leverage because if you do lose the 25%, you will only be able to trade on $7,500 next time (max deal of $750,000 or 7 lots total).

So, if you hit three trades for the month at the max leverage, you would make $3,000 ($1,000 max profit x 3 trades) for a monthly gain of $3,000 or 30% ($3,000/$10,000).

This strategy will also work on a mini account. A mini account trades the same way a standard (100K) account does but it uses 1/10 th the contract size. So, basically, the dollar amounts would be divided by 10.

This is what I mean by “choose your own risk/reward”. Since you