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This is a discussion on Forex Articles within the General Discussion forums, part of the Trading Forum category; Gold Prices Expected To Rise on US Shutdown and Debt Ceiling Fears Gold prices are set for a rebound next ...

          
   
  1. #21
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    Gold Prices Expected To Rise on US Shutdown and Debt Ceiling Fears




    Forex Articles-416327.jpg


    Gold prices are set for a rebound next week as the ongoing US government shutdown has boosted the precious metal's safe haven status, according to a survey.

    As many as 10 out of 21 analysts polled by the Kitco Gold Survey said they expected gold prices to go up next week, as the markets fretted about the shutdown, which has entered a fourth day, and the looming debt ceiling deadline.

    An extended US government shutdown could prop up gold buying, George Gero, vice-president and precious metals strategist with RBC Capital Markets Global Futures, told Kitco News.

    "People would start to take a second look at gold as a (safe) haven," Gero said.

    Spot gold ended 0.7% lower at $1,308 an ounce on 4 October. Prices had risen 1.2% a week ago on renewed buying interest stirred by US budget fears and the uncertainty surrounding the future pace of the Federal Reserve's monetary stimulus programme.

    US gold futures for delivery in December hovered at $1,309.90 an ounce, Reuters data showed. For the week as a whole, US gold futures fell 2.2%.

    The world's largest economy will run out of cash to pay its bills on 17 October if the government's borrowing limit is not raised. The country's laws limit its borrowing to $16.7tn (£10.4tn, €12.3tn). The Treasury would not be able to pay its bills if the debt ceiling is not raised.

    Chinese Off Market

    Gold prices have so far failed to log gains amid the US shutdown. Sean Lusk, director of commercial hedging with Walsh Trading, told Kitco News that the absence of Chinese buying was partly responsible.

    Markets in China were closed the entire week for the National Day Golden Week holidays, which meant that gold buyers in the world's second-largest gold market were off counters.

    For now, it's likely a "case of selling everything when things look bad [as] even the safe-haven assets like gold are not shining in this environment," Ross Norman, chief executive officer at Sharps Pixley told Marketwatch. "Putting a rationale to that is difficult but that is a feature of the 'Frankenstein' economy - man-made and everything a bit weird.

    "We may have another bout of brinkmanship on the debt ceiling which as you may remember, drove gold to an all-time high mid 2011. While we don't expect the same levels, it will certainly put some pressure on those running short positions," Norman added.

    The resumption of gold buying in China and continued buying in India, the world's top gold importer, could also support gold prices.

    India imported 7.24 tonnes of gold in September, more than double August's purchase of 3.38 tonnes, according to government data.
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  2. #22
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    Azerbaijan: Baku Stock Exchange Adopts MT4 to Offer Forex and CFD’s Through its Members



    While most of the recent exchanges that have selected MetaQuotes adopt the MetaTrader 5 (MT5) platform, BSE has chosen MetaTrader 4 (MT4) and will include forex, precious metals traded as Contracts for Difference (CFD), and other commodity CFDs. These instruments will be offered through BSE’s exchange members via MT4, according to the announcement.

    A corporate statement from BSE was included in the release and stated, “The new trading system offered by BSE is equipped with advanced technological parameters and fully adapted to the current needs of the local capital market participants. The advanced technological solutions used in the platform provides information security to protect data and maintain privacy, avails sustainable operation of the system and realization of the settlements within the country.”

    BSE Revenues Mean Much to the Economy

    Although the BSE exchange itself is relatively new in comparison to stock markets in the developing world, it has experienced quite a degree of sustained growth since having the first trade executed during the inaugural September 1, 2000 launch.
    Last year, trading volumes in securities were reported through September 2012 with results of a 34% rise year-on-year (YoY) and reached 8.2 billion manats, or 41 percent of non-oil GDP during the period.

    From a greater perspective, the revenues from the Baku Stock Exchange during the mentioned period represent 15% of total GDP (including oil), which was recorded at $53.9 billion manats (nearly $69 billion USD based on prevailing exchange rates). Clearly the BSE is a significant financial center for the Azerbaijan economy.

    Expansion Plans for Forex

    In a comment to the media BSE said, “Forex was introduced into the trading system options in order to attract new instruments to the market under the State Securities Market Development Program for 2011-2012.” BSE further added, “Individual investors will be able to carry out transactions with currency, commodities and precious metals. At that, transactions with commodities and metals will be available at the contract for difference.”

    According to Forex Magnates’ research, several BSE exchange members have existing forex offerings, including on the MT4 platform (from MetaQuotes) and/or cTrader platform from Spotware Systems. For example, member firms such as InvestAZ and Unicapital have existing offerings. At the time of publication, the BSE has 18 members out of who 12 are active at the moment.
    It’s not entirely clear how the liquidity aspects of the MT4 platform will be propagated via the exchange members, and to what degree – if any – the exchange will standardize the market-making process.

    Adding to the media comment, BSE said, “Liquidity of transactions will be provided by BSE market makers. The advantage of BSE Forex access services is that the settlement of transactions will be conducted in local banks and not abroad as it’s in practice today. Besides, BSE guarantees no delays with transactions and their settlement that couldn’t be provided by other forex brokers so far. We assume that BSE forex services will mostly be in demand at the commercial banks of Azerbaijan.”

    In a comment to Forex Magnates, Dr. Hakan Advan, CEO of InvestAZ, a member on the BSE said regarding this news, “We are delighted to see that Baku Stock Exchange is taking a new step towards the aim of developing capital markets in Azerbaijan by introducing new trading systems, such as the MT4 platform. Actually, BSE is taking an initiative to control and regulate forex transactions, in order to provide a safer environment while expanding available instruments to investors. Since InvestAZ has been active in the forex market for years, we have profound knowledge and experience in such transactions and with MetaTrader platforms. Therefore, we share the vision of the BSE and are determined to remain side by side with them in the development of capital markets in Azerbaijan. We think that the BSE and Azeri investors will become important participants in world’s financial markets in near future.”

    Market Regulation and the Economy

    The BSE is regulated by the State Committee for Securities (SCS) which regulates the capital markets and oversees the National Depository Center of the Azerbaijan Republic. The SCS handles the registration of brokerages in the following categories:

    • Asset management activities
    • Brokerage activity
    • Preparation and sale of all types of security functions on banks
    • Depository activities
    • Dealers activities
    • Stock exchange activity
    • Clearing activities
    • The registration of securities holders


    According to a 2012 year-end report, Azerbaijan has a population of nearly 9.2 million people and ranked 64th globally in exports, which are based on estimates accounted to $39 billion and 90% driven from gas & oil. There has been low unemployment rates in recent years with inflation of 4.8%, and improved economic conditions including a decrease in poverty, as the infrastructure has improved despite existing economic inefficiencies, and an income per capita of 3,784 manats ($4,805 usd).

    Geopolitical Ties

    According to the Ministry of Economic Development, during the first half of 2013, income of per population increased by 5.7 % compared to the same period of the previous year, and reached 1708.8 manat, or on average 284.8 manat per month. Average monthly nominal wage/salary of employees engaged in country economy was 408.8 manat in January-May, 2013. It was increased by 6.8 percent compared to the corresponding period of last year. Average monthly nominal wage/salary was 1555.0 manat in the oil sector, 378.5 manat in non-oil sector, 328.5 manat in state field, and 534.0 manat in the private sector. The YoY GDP figures, January 2013 through August 2013, were also higher as can be seen in the graph below:



    Earlier this week on Tuesday, Azerbaijan assumed the rotating presidency of the UN Security Council for October from Australia. Azerbaijan, one of ten non-permanent members of the Security Council, began its two-year mandate on January 1, 2012, as a representative of Eastern Europe.
    The country maintains close trading ties with Turkey, and the Istanbul Stock Exchange is one of the major shareholders in the Baku Stock Exchange. If growth continues in the country, Forex volumes should pick up assuming that the exchange members and commercial banks being targeted with this offering can attract volumes from their respective clients.

    The Baku Stock Exchange has signed a contract with InvestAZ – one of its member firms – who will provide liquidity provisioning as a market-maker through the new MetaTrader4 (MT4) platform offered by the CJSC Baku Stock Exchange. Initially, Invest AZ will provide buying and selling quotations on 48 currency pairs and three CFD instruments. The contract was signed by the Chairman of BSE Board Amin Muradov and Invest-AZ Chairman Elshan Guliyev.
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  3. #23
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    Europe Week Ahead: ECB BLS, EZ ESI, -HICP, Spain GDP, UK PMI

    The Bank Lending Survey (BLS) of credit conditions in the Eurozone may attract more attention than usual following the announcement of the ECB’s ‘Comprehensive Assessment’ of the banking sector this week. The BLS will likely reveal some further modest improvement in credit availability and demand for private sector credit, in line with the ongoing improvement in consumer and business confidence. Three months ago, the BLS revealed that banks were anticipating a slower net tightening of credit standards on loans to non-financial companies and on loans for house purchases, whereas conditions on consumer credit were expected to remain broadly unchanged. Regarding demand for loans, the outlook has been better for housing than for non-financial companies. In particular, subdued capital investment is likely to remain the main driver behind the weakness in credit demand from companies.

    The European Commission’s Economic Sentiment Indicators (ESI) are expected to record further small gains despite the disappointing flash PMIs published this week. Indeed, ESI tend to be less volatile than PMIs, based on a broader set of countries and sectors, so that the trend of improving business confidence should remain in place, albeit at a much slower pace than in previous months. Moreover, consensus expectations have likely shifted lower after the PMI releases, so that the potential for ESI to disappoint might be smaller anyway.

    Spanish GDP is likely to grow by a modest +0.1% QoQ in Q3, in line with the Bank of Spain’s estimate. This small, albeit positive growth rate would mark the technical end of the Spanish double-dip recession that really started in Q208, with a temporary rebound in 2010. Moving forward, the Spanish economy obviously faces many challenges, not least the ongoing process of deleveraging in the public and private sectors, but those headwinds are likely to fade gradually further moving into next year, and we have maintained a positive GDP growth forecast of 0.6% in 2014.

    We expect Eurozone flash HICP inflation to come in at 1.1% YoY in October, unchanged from last month, as less favourable energy-related base effects should be offset by further disinflationary pressures from other HICP components. Core inflation should remain roughly unchanged as well. While uncomfortably low for the ECB, this 1.1% print might prove to be a local trough for Eurozone inflation, in our view, unless the EUR appreciates much further. If so, the ECB might well continue to “look through the near-term noise in the data” and focus on the medium-term outlook for price stability. At least the latter did not deteriorate significantly in recent months.

    UK PMI manufacturing will likely decrease in October, for the second consecutive month, to a still relatively high level of 56.0. The momentum in British business confidence seems to have turned around now after five straight months of positive surprises. The decline in the forward-looking output and new orders components of the PMI manufacturing survey in September as well as the relatively pronounced falls in the CBI orders and output indices in October point to a moderation in growth in Q4 to a more sustainable level.

  4. #24
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    US Week Ahead: FOMC Meeting, ISM, Retail Sales, IP, CPI, PPI, Cons Conf

    Industrial production likely rose 0.2% in September. Payroll gains in manufacturing were soft, with just 2k new jobs added, while the average factory workweek fell 0.2% suggesting slower activity. If we look at the production index of the ISM survey, activity expanded at a slightly faster pace in September than in August, at 62.6 vs 62.4, suggesting that factory activity remained solid, but on balance the data suggests a more modest gain in industrial production for the month.

    The top-line PPI likely rose 0.2% in September, while the core remained more muted with a 0.1% rise. Residential gasoline prices moved lower between the August and September reference periods, but seasonal factors will offset this, resulting in a moderate increase in the energy index for the month. Food prices rose 0.6% in the PPI last month, but given declining agricultural prices (measured by USDA data on prices received by farmers) a large gain is unlikely to be repeated. Price pressures in the core should also be limited in line with recent trends.

    We forecast weaker September retail sales with a 0.1% decline in top-line sales, while retail sales excluding autos likely rose just 0.1%. Motor vehicle sales came in weaker at a 15.3 million unit annual rate in September, down 5% from August, though largely due to a calendar quirk where Labor Day holiday weekend sales were counted as part of the August sales month. Weaker auto sales should subtract from the top-line retail sales figure – excluding motor vehicles, we look for a 0.1% gain in retail sales. Gasoline prices were lower during the month, which will drag down nominal receipts, and consumer confidence suffered in September. At the beginning of the month there had been somewhat substantial uncertainty about potential US military involvement in Syria, the middle of the month was marked by some financial market volatility around the Fed’s announcement that it would not begin to taper its asset purchases, and the end of the month was topped off with an impasse in Congress over the FY14 budget that, in the end, led to a government shutdown. All of these factors weighed on consumer confidence in September and we are likely to see somewhat softer retail sales as a result.

    The October Consumer Confidence survey will likely decline to 77.5 from 79.7 in September. Declines in the University of Michigan Consumer Sentiment index and other weekly consumer confidence indicators suggest that the government shutdown had a sizeable negative impact on confidence during the first half of the month. While this impact has lessened in the weeks since, it is likely still to be reflected in the Conference Board’s Consumer Confidence survey alongside uncertainty about the federal budget outlook and slower payrolls growth. Rising equity markets may provide some positive sentiment to offset some of this uncertainty, limiting the overall declines in the index. As usual, we will also look closely at the employment-related data in the Consumer Confidence report for early indications on October nonfarm payroll gains.

    We forecast the top-line September CPI rose 0.2% in September, while the core CPI likely posted a softer 0.1% increase. The energy component of the index should be relatively stable. Retail gasoline prices declined about 1% between survey reference periods, and seasonal adjustments in the September energy price index will more than offset that. Moreover, with lower agricultural prices for the past two months, we anticipate that the food index will show that consumer food prices remained stable during the month. In the core CPI last month we saw a somewhat unusual 0.7% increase in the cost of medical services, which is unlikely to be repeated, leading us to look for a more muted increase in the core CPI for September.

    We look for no policy change at the October FOMC meeting. As was evident from the surprise in September to refrain from tapering, the FOMC decision on when to moderate the pace of asset purchases is data-dependent. The Fed wants to see a substantial improvement in the labour market outlook. What’s more, Mr Bernanke would like to be sure that the improvements will be sustained and, for that, a pick-up in growth would be helpful. The September payroll gain of 148k did not meet the substantial employment improvement test in our view, despite the unemployment rate easing to 7.2%. Payroll growth downshifted in Q3 to an average 143k per month vs 195k per month in the first half of the year. Furthermore, data points to a deceleration in Q3 real GDP growth from the 2.5% pace recorded in Q2, and Q4 growth is likely to be trimmed slightly (¼ point) by the direct impact of the government shutdown; however, there may be other longer-lived depressing effects due to increased uncertainty for businesses and households over the fiscal outlook. The amount of fiscal drag on 2014 growth will remain unknown until the negotiations in Washington play out through the end of Q4 and into early next year. While we think the chances of further disruptions (eg, shutdown) are low, they cannot be ruled out. Hence confidence in the sustainability of improvements remains elusive and argues for a cautious approach by the FOMC. We anticipate an initial taper announcement at the end of January. That is based on our expectations for improving economic conditions during the current quarter, with limited fiscal drag in 2014 and no serious disruptions from current Washington budget negotiations. The government shutdown caused data delays that only muddy the analytical waters for the Fed’s near-term assessment. We believe that the Fed’s bias is to end its QE purchases but it needs to be done without undue harm to the outlook

    The October ISM Manufacturing survey will likely show just a small decline to 56.0 from 56.2. Regional surveys have been positive overall throughout the month. The Philadelphia Fed Business outlook survey declined 2.5 points to 19.8, though weighted according to the ISM standards the index actually rose in October as new orders and employment gained. We saw similar strength in new orders in the Empire State Manufacturing survey, though the employment component came in a little weaker. On balance, these indicators suggest just a small decline in the overall ISM manufacturing survey for October.

    October Vehicle Sales likely increased to a 15.4 million unit annual rate from last month’s 15.2 million unit rate. Vehicle sales declined 5% last month mostly due to a calendar quirk where the September sales month was shorter and did not include the Labor Day holiday weekend as it normally does. Some bounce back in October sales is expected as a result, though reports from early in the month suggested that the government shutdown drove buyers away from car dealerships. Industry leaders noted that “anxiety” around the government shutdown prevented people from making large purchases like automobiles. A survey conducted by Kelley Blue Book, the auto industry specialists, suggested that about 20% of consumers who were looking to buy a new car pushed back their plans in response to the government shutdown. As is the case for our consumer confidence forecast, these impacts may have lessened in the second half of the month, but they may still act to limit the size of the bounce-back in October auto sales.

  5. #25
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    Patience in Forex Trading

    By: DailyForex.com

    As the saying goes, “Patience is a virtue.” When it comes to investing, this is especially true. But although even the best traders and investors understand how important patience is, very few have mastered the skill. Patience in trading is a disciplined art and must be practiced intensively before it becomes automatic.
    Whether it’s with stocks, commodities or Forex, holding back from a knee-jerk reaction to trading is difficult to do. Logic takes a back seat to our emotions and we end up making a quick, often non-judicious, decision. Reigning in our need for quick results is an acquired talent.

    Here’s what usually happens: As a trader, you’ve done your due diligence, sought out the best Forex broker and opened an account. Intellectually, you choose the direction in which the currency pair will move, (based on a gut feeling?) and wait. The price starts to move in the opposite direction and you start to panic. You place an order below your planned entry point in a rush to make sure you don't miss the trade. You’ve now diminished some of your potential profit. More importantly, you have broken the rules that caused you to enter the trade in the first place.

    Letting your emotions take over your decisions can be very dangerous in the long run. Emotions can be seen as the trader's worst enemies; they often lead to misjudgment and loss. Learning how to stand back, take time to analyze the situation and then move forward is always the prudent thing to do. Setting yourself rules and keeping to them is a way of holding the emotional side of trading at bay.

    Trading Opportunities


    When it comes to trading, keep in mind that there are always many trading opportunities in the market; the difficulty is not so much in finding trading opportunities, but making sure the opportunities fit your trading rules. Since 80% of all Forex trades end in a loss, the chances losing your money far outweigh those of coming out ahead.

    Learning to use financial graphs and Forex indicators can be beneficial in training yourself in trading patience. Taking the time to read the graphs properly and interpret the indicators provides you with an emotional brake and offers a short interval between the time you make your decision to move and actually placing the trade.

    Patience in trading is also needed after you have placed the trade. If the price moves in the direction anticipated, you must then choose whether to sell and take a small profit or wait till the price moves even higher. Small profit vs. large profit or possible loss. If you wait too long, the price could start to move in the wrong direction and you will lose. If you act too hastily and sell, you haven’t given yourself the chance for the price to move back up.

    Again, this is where your set of trading rules comes into play. If you decided beforehand that your will be satisfied with a small profit, then you will move to sell once the price moves even slightly in the anticipated direction. If you have decided to sit out the trade till it reaches the highest price, then you can stay firm in your trade and wait it out. If it keeps going up and you sell, you have profited; if it turns around, you can lose all your money.

    If you follow your own goals and strategies, then you will have more patience in trading than if you set yourself up without any guidelines. Practicing patience in trading reduces your stress, removes unexpected surprises and makes Forex trading a lot more fun.


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  6. #26
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    Forex Scams

    By: DailyForex.com

    Trading Forex has become very popular of late. Disgruntled stock traders are moving their money out of the equity markets and into Forex markets. Indeed, Forex markets claim to make the investor a great deal of money in a very short period of time.
    Because most Forex traders don’t have any deep understanding of how Forex markets work and what the function of a Forex broker is, it is quite easy for a Forex broker to fool the trader through any number of fraudulent schemes. Even many experienced traders fall for a cleverly formulated and subtly executed Forex broker scam.
    These Forex broker scams can come in many different forms, but the end result is always the same: The trader loses his money; the broker pockets all the funds and usually absconds before he is caught.
    Forex is the largest trading market in the world with an estimated $3 trillion changing hands on a daily basis. Most Forex trades are sold OTC-over the counter-and there is no accountability. Over the years, scams have come and gone. With the serious enforcement actions by the Commodity Futures Trading Commission (CFTC) and the 1982 formation of the self-regulatory National Futures Association many of the old popular scams have ceased. However, new ones are always ready to fill the gap left by the old ones.

    Old Scams


    The Forex broker scam put in place in the past involved computer manipulation of bid/ask spreads. The point spread between the bid and ask basically reflects the commission of a back and forth transaction processed through a broker. The point spreads differ widely among brokers and differ between currency pairs. Since brokers don’t usually offer the normal two- to three-point spread in the EUR/USD, for example, but go for spreads of seven pips or more, any potential gains resulting from a good investment were eaten away by commissions. These commissions found themselves in the broker’s pocket.
    Today, it is unusual to find a broker that claims he takes a commission. Don’t be fooled by this promotion. He is still making his money from the difference in the spread but spreads are now regulated and only smaller spreads are permitted. However, there are still offshore retail Forex brokers who are not regulated by the CFTC, NFA or their nation of origin and it's quite easy for these firms to pack up and disappear with the money when confronted with investigations of irregularities.
    Many U.S. based violators still exist ready to defraud their account holders with this type of scam. Forex broker scams never disappear totally.

    Commingling


    Another subversive scheme used by some Forex brokers is the commingling of funds. Individuals cannot track the exact performance of their investments without a record of their unique accounts. Commingling funds gives Forex brokers the opportunity to pocket much of an investor’s money without the client ever noticing any discrepancy. The broker benefits financially during the trading and eventually disappears with a customer's money.
    Despite the introduction of Section 4D of the Commodity Futures Modernization Act of 2000 which addressed the issue of segregation, there are still innocent traders who get taken in with promises of huge profits by these Forex broker scams.
    If a Forex trader looks carefully and states vigilant he/she can pick up are certain warning signs which can alert him/her when all is not on the straight and narrow. If a broker won't allow the withdrawal of monies from investor accounts or if problems exist within the trading station, the trader should take immediate notice. Additionally, guarantees of high performance levels-some much higher than those offered by other Forex brokers-should be viewed with considerable skepticism.

    EA-Robots


    In order to keep profitable, unethical Forex brokers continue to come up with new scams. Presently, most Forex broker scams are in the form of trading systems. It seems that overnight, brokers have begun ‘selling’ automatic trading systems which can generate automatic trades even when the trader is sleeping. Most of these robots have not been tested by an independent source for formal review. Their trading system’s parameters and optimization codes are usually invalid and at the end of the day, the system generates totally random buy and sell signals.
    The trader almost always loses.
    There are plenty of Forex brokers out there that promise the world and don’t delivery. They perpetuate the already well-established illusion that Forex is simply a form of gambling with no understanding or forethought necessary.


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  7. #27
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    Forex Robot Scams

    By: DailyForex.com

    When it comes to investing, there are endless ways to scam a trader. Many brokers manage to get away with their fraudulent activities for a period of time. Then they are either ‘caught’ by a regulatory organization or they succeed in absconding with their clients’ funds, never to be seen again.
    Broker scams come and go. Some move underground only to pop up again at a later date. There are always unethical brokers looking for schemes to fool investors and it takes only a few big deals to make the whole endeavor worthwhile.
    Still scams must be done in a clever, convincing manner. They must also be convenient for the trader. The easier it is for the trader to seemingly make money, the more a fraud will succeed. The latest entry into the Forex scam market is the Forex robot. Forex robot scams are only now beginning to be uncovered but not everyone concurs that Forex robots are scams to begin with.

    Forex Robots


    Forex robots or Expert Advisors (EAs) are programs that claim to automate Forex trades. It’s like putting a plane on auto pilot. Traders can sleep through the night calmly knowing that their trades will be placed exactly at the times they designated. Sounds easy, right?
    Forex robots are getting a lot of hype of late and Forex robot scams are not far behind. Almost every Forex broker currently offers its account holders the opportunity to use a Forex robot for their trades. They back up the legitimacy of these robots with tremendous profits and lull the trader into a false sense of security only to end up broke.
    Most Forex robot scams are easy to pinpoint and would seem obvious to any investor. But even with blatant false promises of huge profits “while you sleep” millions of dollars are dropped into these Forex robot scams every day. Even those brokers that are successful, exaggerate their numbers to attract new clients.

    Online Robots


    And one needn’t depend on the Forex broker for these robots. Forex Robots are available online. Even Amazon.com sells the software package made available by one Forex company under the heading, “Make Money While You Sleep - Advanced Forex Auto Trading Robot.” Costs for a Robot program hover around $1000 for the package so most traders opt to use the AE provided by the Forex Broker. This is what leads so easily to Forex robot scams.
    Since 99% of traders who purchase a robot end up asking for a refund, most experienced Forex traders recommend never purchasing one. Objective Forex traders suggest never putting a Forex robot on a live, real money Forex account until it has been tested thoroughly through a demo account. If the Forex vendor is genuine, then he should advise his traders NOT to use an EA until they fully understand what the robot is all about.
    Forex traders who have used robots in the past suggest that traders learn enough about the workings of the AE program so that they can place the trades themselves and not through a broker. This will provide them with a sense that they are in control of their money and are not leaving it in the hands of a broker. This may not lead to profits but it will eliminate the feeling of being taken in by a fraudulent Forex robot scam.


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  8. #28
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    Believing in Your Method

    By: DailyForex.com

    Like anything else in life, if you believe in what you are doing, chances are higher that you will succeed in your attempts. Doing something in a lackluster, random manner often brings in dreary, uninspiring results.
    Setting goals and methods of advancement in trading may not guarantee tremendous profits. But it does have more of a chance of success than working with no guidelines at all. A trader must set down in writing what methods make sense to him and then follow them.

    There are several trading methods used in Forex:

    Day trading has become very popular of late. Day trading involves sitting in front of your computer all day and sometime nights as well. You make money by buying and selling on small price movements. Day trading is typically trading that is based on technical indicators with the occasional news thrown in. Day trading requires skill that is honed through experience. Novice Forex traders should not choose to day trade Forex.

    Scalping is another popular method of Forex trading. The main goal of scalping is to buy or sell a number of shares at the bid or ask price and then quickly sell them a few cents higher or lower for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses. You can be successful at scalping for a while, but it is really more like gambling than trading and you can end up losing far more often than wining.

    The most successful method of trading is to look at the big picture. A trader can study the charts, interpret the financial indicators and look for the trends that the Forex currency pairs move in over a few days or weeks. This is the most basic method of Forex trading and one that is the least stressful. Setting targets and trading in small quantities can bring small profits but over time, these can accumulate into larger amounts.

    Today’s most popular Forex trading method of late is the automated trading. There are several automated versions such as using signal providers. But the newest introduction to automated trading is the robot or EA. This allows the trader to set up a system which will run on auto pilot during the night or any time the trader is not physically available to trade. These robot programs are made available by most brokers but can also be obtained by ordering them through Amazon or other suppliers and installing them in one’s computer. Still, it does take a Forex account with a Forex broker in order to place a trade.

    Depending on automation to trade removes much of the excitement of trading and leaves the control in the ‘hands’ of a machine. Still that seems to be the way of the world today and Forex is always one step ahead of the trend.

    Always choose the method that works the best for you. But no matter how you plan to trade, always keep your emotions in check, mange your risk/reward ratio, and seek assistance when you need it. Believe in what you are doing and enjoy the ride.


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  9. #29
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    Increasing Your Probabilities in Break-Out Trades

    By Richard Cox

    If you are new to day trading or have been in these markets for a long period of time, one this is clear: You have been exposed to the term “break-out” as a major market occurrence and a potential opportunity to see significant market gains. Break-outs signify important changes in market sentiment, and this could happen for a variety of reasons. Perhaps an important news release of piece of economic data has changed the market’s perceived value of an asset. This can be represented visually on a price chart, as the underlying activity literally “breaks through” important levels of support or resistance. A break of support would be a bearish break-out. A break of resistance would signify a bullish break-out is in place.

    Watching Market Volumes


    “Once we have an understanding of the mechanics of a forex trading breakout,” said Haris Constantinou, currency analyst at TeleTrade, “we next need to learn how to increase the probabilities in these trades so that we can maximize gains relative to the market majority.” One way of doing this is to look at market volumes as these support or resistance breaks occur. If trading volumes are low, it is a signal that a majority of the market is not behind the breakout move and that there is a possibility of a false break. Because of this, it is generally prudent to wait for breakouts that are accompanied by higher trading volumes. Higher trading volumes will show you that a majority of the investment community is in favor of the direction in which prices are moving. This is a better indication that prices will continue in this direction in the future. Without this confirmation, the probabilities for a successful trade are lower.

    Watching for Follow-through


    In addition to this, forex breakout traders that tend to be successful will also be looking increased volatility (follow-through) after the breakout occurs. After a significant break of support or resistance, follow through will depend on increases in volatility which are usually generated by stop losses that were put in place by traders on the wrong side of the break. So, for example, traders that were bearish when an upside break-out occurs will ultimately be forced to exit those positions. These bearish trades then, in effect, become new buy order that propel prices even higher. The reverse scenario would be true for a bearish break-out. Always remember, without these price extensions and increases in volatility, break-out traders will be vulnerable to a “false break-out” scenario that can quickly result in losses if not managed properly.
    So, when we are looking to employ a well-structured break-out trading strategy, all of these factors need to be taken into consideration. It is not enough to simply look at breaks of support or resistance by themselves. Watching volume and follow-through can help to greatly improve trading probabilities.


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    Is Switching Brokers Ever a Good Idea?

    By: DailyForex.com

    The best reason you will ever have for switching brokers will occur if you ever find that you have a good reason to fear for the safety of your deposit. If you ever ask your broker to withdraw some funds in your account, and they are unreasonably slow or unresponsive, then this is an excellent reason for switching brokers right away. Of course, if you hear any reliable information about the financial or ethical health of your broker, it is something to look into. Consider testing your broker after you have some good results, by asking to withdraw some of your recent winnings. If there is any undue delay, it is advisable to shut the account down right away and, if necessary, threaten to contact the appropriate regulator.

    Moving from crisis mode to some more commonplace reasons, one of the most common factors prompting client to switch brokers is the average level of the spreads being charged. For example, there are still brokers out there charging a 3 pip spread on the EUR/USD. While this was the norm a few years ago, it is rapidly becoming considered to be outrageously expensive. Switching brokers to one offering EUR/USD at 1.5 pips or lower makes sense as the spread is a “cost of doing business”, and over time can really add up to lost revenue for the trader, especially if they are trading frequently using shorter timeframes.

    Another good reason to switch brokers is if the broker has an unstable platform. If you find that the trading platform disconnects quite frequently or that it takes a long time to execute a trade, and it keeps happening, then this is prima facie evidence of incompetence or downright dishonesty. Dishonesty is more likely if these disconnections or freezes happen every time you are trying to enter a trade that would have gone on to be a fast winner. Of course, it is important not to be paranoid and blame your broker for all your bad or losing trades. Nevertheless, as Forex has no centralized marketplace, brokers do have a commercial incentive to “shade” their spread just over levels where a lot of their clients have stop losses set on open trades. You should bear in mind though that during periods of low liquidity, the market often naturally tends to hunt common stop loss levels. The best way to determine whether your broker is acting shady is to see whether these price moves are not matched by other broker’s price feeds. Keep an eye on two or three. If your broker tends to produce sudden unexplained spikes in the price that are not followed by other brokers, it is time to think about getting away from them.

    A good way to get a better understanding of whether a particular broker is best for you is to think about what the brokers are actually doing, and looking at things from their point of view. In order to do this, it is helpful to start with a few facts about the Forex industry:

    1. Most Forex brokers are not actually exchanging any currency on the market. They are simply providing a price feed, the movements of which their clients are allowed to bet on in exchange for two effective fees: the spread or commission, and a small overnight charge that is incurred every night any position is left open. These brokers are in adversarial relationships with their clients: they make money when their clients lose, and lose money when their clients win.

    2. The remaining Forex brokers tend to monitor the trades of their clients that have records of trading profitably, and cover the aggregate positions of these traders with a bank. These brokers have a less adversarial relationship with their clients, but still can face problems in adequately covering themselves in fast-moving markets.

    3. The real Forex market is dominated by four large banks that together make up about 85% of the market’s volume. These banks provide liquidity to smaller banks, which then do the same to smaller banks, who then provide liquidity to brokers, and so on down the chain in size and importance. This tends to mean that the smaller your broker, the worse the price and spread they are probably going to be able or willing to give you, as they themselves will not be able to get first-rate prices and spreads. The trade-off here is that these smaller brokers tend to offer very low minimum deposit and trade sizes. The more money you have to deposit, the better the service that will be available to you. Of course, this does not mean that you have to go higher up the chain than is appropriate for your account size. Generally speaking, it is a good idea to fit your Forex broker to your account size.

    4. Much of the Forex industry has a bad reputation and is poorly regulated. When these facts are combined with the natural human tendency to allow better judgment to be clouded by greed, it creates a profitable vacuum for unscrupulous brokerages that have no reputation to protect. That is not to say that small Forex brokers are all crooked, but do not assume that your deposit will be safe and segregated just because you sent it to a Forex broker. However if that broker has a public reputation and is subject to strong regulation and supervision, you should be able to rest easier.

    There are other good specific reasons that can play a role in determining choice of broker, such as the availability of a specific pair that you want to trade, platform, quality of customer service and other “concrete” things. Now that you’ve covered all of the critical aspects to consider when choosing a broker or switching brokers, it’s time to shift your focus to how you can conquer the Forex markets - with hard work and patience, of course!


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