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Best Time Frames to Trade FX

Day charts! No, 1 Hour charts! No, 4 Hour Charts! If you’re a person who likes to get trading advice from FOREX forums, then we’re sure you’ve read something along those lines before. These declarations are, in fact, answers to one of the most frequently asked questions from new traders.

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Forex Strategies

Definition

Forex Strategies are a pre-defined set of trading tools that are used to analyse, interpret and successfully implement while trading on the forex markets. Continue reading

Forex markets daily review

The yen weakened across the board on Monday, opening with a negative gap of more than 1% versus most majors before recovering its losses.

The weakness in the yen was followed by the victory of Shinzo Abe of the Liberal Democratic Party, who will be sworn in as the next prime minister of Japan for a second term. His first stint as prime minister lasted only for a year. The newly sworn prime minister has promised to increase Government spending to bring the economy out of deflation.

forex daily analysisThe Bank of Japan is due to announce its policy decision on the 20th of this month and analysts are expecting the Central Bank to increase monetary stimulus amid pressure from the newly- elected prime minister.

Against the US dollar, the yen opened at 84.35, down 1.05%, compared with the previous day’s close of 83.47, before scaling down its losses to close at 83.88, a 0.49% decline.

The yen settled lower versus the EURO, at 110.41, down 0.48%, after recording an intra – day high of 111.30. The currency pair is currently trading at a nine- month low. The yen was also lower against the pound sterling and ended the session at 135.84, a 0.7% decline and the sixth in succession.

The euro on the other hand rallied to its sixth consecutive winning session versus the US dollar, settling at 1.3163, a flat close day- on-day, but not before extending its gains to a new seven and a half month high. Versus the sterling, the euro closed slightly in the negative at 0.8123, a loss of 0.2%, day-on day.

The Canadian dollar rose versus the US dollar after attempting and failing to break the 0.9900 mark, finally settling at 0.9833. The CAD has gained almost 2.2% from the lows of 1.0056 since the mid of November

The Australian dollar too was strong versus the USD. The currency pair had rallied to a three- month high of 1.0568 before settling flat for the day, at 1.0551.

The Swiss franc also continued its gains and closed at 0.9175, a seven and a half month high versus the USD.

All in all, the US dollar along with the Japanese yen remained weak versus most of the majors.

Fundamental data from the Americas

The TICS data, which is an indication of foreign investments in US financial instruments rose less-than-expected in October, according to official data. In a report, the U.S. Department of the Treasury said that net foreign purchases of long-term securities totalled USD1.3 billion in October, compared to USD3.2 billion in September.

The empire state manufacturing index, which measures the manufacturing conditions declined to -8.1% in December from -5.2 in November, declining for the fifth successive month

The Australia’s Reserve Bank released minutes from its previous policy meeting which revealed policymakers are expecting the Australian job market to remain weak.

European Central bank – Functions, policies, members and the EURO

About the European Central bank

The European Central bank (ECB), established in June 1998, is the Central bank for the euro, comprising of 17 European Union (EU) member states with euro being their national currency since 1999.

The ECB was formed by the Treaty of Amsterdam and is headquartered in Frankfurt, Germany, with the shareholders comprising of the Central banks of the 27 Central banks of the member states of the European Union.

The main objective of the ECB is to maintain the purchasing power of the euro and price stability in the euro- area.

The ECB has been responsible for conducting monetary policy measures since 1st January 1999, on behalf the countries representing the euro- zone. The legal basis for the single monetary policy is the Treaty establishing the European community and the Statute of the European system of Central banks (ESCB) and the ECB.

The ESCB comprises of the ECB and the national central banks (NCB’s) of EU member countries and also includes those that have not adopted the euro while the euro-system includes the ECB and the NCB’s of the euro countries that have adopted the euro.

The Governing Council is the main decision making body of the ECB and comprises of six members of the Executive board in addition to the governors of the national central banks of the 17 countries constituting the euro- zone. The governing council meets twice a month to chart out its monthly monetary policy and other issues related to the ECB and the euro-system.

The euro- system is functionally independent and the ECB and the NCB’s are prohibited from seeking and taking instructions from other EU institutions and governments of EU- member states. The ECB has its own budget and all financial arrangements of the Central bank are maintained separately from those of the European Union. The euro- system is prohibited from granting loans to EU bodies and public sector entities to prevent the system from any influence of public authorities.

The ECB is highly transparent and shares information about its assessments, policy decisions and strategies with the markets and prioritises effectively communicating the framework openly. In addition, the Central bank facilitates public scrutiny of its monetary policy actions, its policy strategies and assessment of the economic developments.

The accountability of the ECB is characterized by its decision to go beyond statutory obligations by publishing monthly bulletins rather than the expected quarterly report, press conferences of the ECB’s assessment of the prevailing economic climate, rationale beyond monetary policy decisions and publicly discussing general concerns related to the economy.

Present and past Presidents of the ECB-

The European Central bank has been governed by three presidents till date

Wim Duisenberg- 1998- 2003

Was the first President of the ECB and took over the role during the transition of the European Monetary Institute (EMI) where he was serving as the President

A former Dutch politician in the labour party, he was a successful economist who later went on to become the President of the Central bank of Netherlands, before presiding over the ECB.

Jean- Claude Trichet- 2003- 2011

Trichet took over the reins of the ECB in 2003 after charges of irregularities at Credit Lyonnais, when he was in charge of the French treasury. His term at the ECB was contentious and was criticised for his policies by none other than the French President Sarkozy, who wanted the ECB to adopt a growth- oriented policy. He was also targeted for purchasing Government bonds of the member states of the European states during the financial crises.

Mario Draghi- November 2011- till date

Is currently the President of the ECB. He earlier served as an Italian banker and the Executive Director at the World Bank. As the governor for the Bank of Italy, Draghi was a member of the Governing and general councils of the ECB in addition to being on the board of Directors for the Bank of International Settlements (BIS)

Member states of the European Union

  • Austria
  • Belgium
  • Bulgaria
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Slovenia
  • Spain
  • Sweden
  • United Kingdom

ECB monetary policy and the outcome of the EURO

The chart below illustrates the monetary policy action of the European Central bank over the years and the corresponding EUR/ USD exchange rates.

ECB monetary policy and the outcome of the EURO

Online Trading Technologies

Several decades ago trading was mostly practiced only by institutional investors and high net worth individuals. With an advent of online trading, financial markets became accessible from every part of the world. Contemporary trading technologies, or should we say trading platforms, have provided great opportunities right in the hands of retail investors.

In this article, we will focus on the concept of the trading software and define various types of trading platforms thereafter.

Online Trading Technologies

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Forex Trading Machine – Nothing Else Like It

Forex-Trading-Machine – Nothing Else Like ItForex-trading-machine.com is the website that Mr. Avi Frister uses to promote his three Forex trading systems. Avi is an experienced Forex trader and educator, who has been doing so for 11 years and claims to have tried and tested more than 150 methods of Forex trading. His main point seems to be that in order for you to be successful at Forex trading, you need to trade differently than everyone else is, that is, be trading like 1% of everyone doing this, instead of like the rest (99% of other traders). Among other things, Avi tells us that his method is new and revolutionary. He says he can teach you how to make a 5 figure income with his Price Drive Forex Trading system, or PDFT.

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Tips on Avoiding Trading Risks in Forex

Tips on Avoiding Trading Risks in ForexAnybody with experience in the foreign exchange market can attest to the fact that it is not a risk free endeavor. Anyone can easily enter the foreign exchange market without the proper tools and ultimately end up losing some, most or even all of their initial investment. Trading risks in Forex are many but with expert counseling and detailed preparation the risks can be avoided. This article presents the overview of the common mistakes in trading and would help you to avoid those risks in the near future.

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Rollover Transactions in Forex As A Tool for Extending the Settlement Date  

Rollover Transactions in Forex

The foreign exchange market attracts many traders and brokers for its rapid pace of transactions. Typically, most transactions can be done as a Forex spot transaction or the alternative Forex forward transaction. Forex spot transactions allow for an almost instantaneous transaction which typically occurs within two business days. The option of rollover transactions in Forex allows traders to extend their settlement date past the typical two business days.

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A Guide to Pips in the Forex Market

A Guide to Pips in the Forex MarketThe first step to understanding the Forex market is to simply understand the lingo used by traders and brokers. One of the most commonly used terms by traders and brokers alike is known as a ‘pip’. Often, you will hear that a certain trade lost ten pips or gained a certain number of pips. Once you understand pips in Forex currencies, then you will have a better grasp of navigating the market.

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North American Session’s Role in the Forex Market

North American Session’s Role in the Forex Market It is without a doubt that the North American session in Forex is one of the most important sessions for traders around the globe. The US Dollar remains as one of the biggest currency contenders in the financial market, especially the currency market. Many Forex players rely on the announcements made related to the United States economic data before progressing with currency trades later in the day.

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