How To Have Multiple Instances of MT4 on the Same Computer

Each trader needs to have several instances of MT4 working on his/her computer at the same time. At least one MT4 which is connected to a demo account, for analyzing the market, trying different indicators, trading systems, templates and… and one MT4 for the live account. If you trade several currency pairs and several time frames, you may need to have a few platforms opened at the same time, and have different groups of currency pairs and time frames on each platform, not to overload one platform with so many charts.
If you have some extra monitors, you can connect them to your computer and have each platform displayed on one monitor.
Most novice traders think that they can only have one MT4 working on the same computer. Therefore, they constantly switch between their live and demo accounts through the same MT4, and this makes them make mistakes sometimes and mix up their demo and live accounts.
It is very easy to have multiple instances of MT4 installed and working on the same computer at the same time. MT4 is not a heavy software and doesn’t make your computer slow.
To have multiple instances of MT4 on the same computer, you need to install the MT4 on multiple and separate folders on your computer. For example to run three MT4 platforms at the same time, it has to be installed three times on your computer, but in separate and different folders.
Here is how you can do it:
1. Create a new folder on your computer hard disk (C drive). You can name the new folder MT4. Some people do this on their computer desktop, but it is not recommended, because you should always keep your computer desktop clean and tidy.
Why you should create such a folder?
You really don’t have to do that, because your computer operating system (Windows) installs the software in folders like “Program Files” or “Program Files (x86)” automatically. However, it is a good idea to have your MT4 installations on a separate folder and not to mix them with the other programs. It will be much easier in future when you want to install indicators and EAs to your MT4 platforms.
2. After creating the MT4 folder on your computer C drive, you can start the MT4 installation process. You should have already downloaded the MT4 installation file. So you just double click on it and the installation dialog box will be initiated. You just need to click on the “Next” button, till you reach to the stage that you can determine the installation folder:

It is where you should click on the browse button and choose the MT4 folder you just created:

Then you just need to add a backslash (\) after the folder name and enter the name of the folder of the first MT4 that is about to be installed on your computer. Click on the “Next” after that:

You will have to click on the  “Next”  button for a few more times till the MT4 becomes installed in the C:\MT4\1 folder. Finally, you will get to the last window which has the “Finish” button at the bottom right, but if you click on that button the MT4 will be launched. However, You do not want to do it now, because you still have to install a few more MT4 platforms in the C:\MT4 folder. So you should click on the “x” button at the top right:

So the first MT4 is installed. To have the second, third and… MT4 platform, you can simply copy the folder of the first MT4 inside the C:\MT4 folder. You should open the C:\MT4 folder, right click on the first MT4 folder (which is 1) and click on “copy”:

Then right click on the empty space of C:\MT4 folder and click on “Paste”:

The first MT4 folder will be copied:

You can rename the second folder to “2?. To do that you should right click on the folder and click on “Rename”. Then you can enter the new name (which is 2).
You can repeat this copy/paste process to have all of the MT4 instances that you want:

3. To run the platforms, you have to open each folder and double click on the “terminal.exe” file:

To make it easier to run the platforms, you can right click on the “terminal.exe” file and click on “Create shortcut”. Then you can cut/paste the created shortcut to your computer desktop. If you do this for all of the MT4 platforms you installed in the C:\MT4 folder, you will not have to open the folders each time you want to run the platforms.
Please note that when you run each platform for the first time, you will see the “No Connection” message at the bottom right side of the platform and at the same time the “Open an Account” dialog box is opened where you can sign up for a new demo account. You can either sign up for a demo account using this dialog box, or close it and login to an existing account using the next dialog box that will be opened automatically after closing the ”Open an Account” dialog box.
You can also sign up for a demo account by going to “File>Open an Account” at the top left menu. On the same menu, you can see the login option too and if you click on it, you can login to an existing account.
Further Reading: Before leaving our website, please take a look at the other articles we have published.
fuente: http://www.forexoma.com

Your Questions and Our Answers

As the user or client of this website, your questions sometimes make us think about new approaches or at least write a new post. Like the last two posts we had here and here that were so helpful for many of you and so many other posts we had before. The reason is that a question asked by one of you can be the question and problem of many others. And the answer of your questions can help many others too. At least it can trigger a nice discussion that anybody, including myself will enjoy and learn a lot from.

This made me think that we run a campaign of questions and answers on the site. Everyday or every other day I pick one question and write a post about it and try to answer it. Then everybody participates and shares his/her opinion. I think it is a good idea.

Please go ahead and ask your questions by posting a comment below. You may ask multiple questions, but please organize them and have each question clear and to the point and as short as possible. Your questions can be related to technical or psychological aspects of trading. Please ask any question that you have and do not think that your question might not sound good enough to be asked.

Please do not post off-topic questions or stories. Let this page and category to be focused on pure questions and answers. Thank you.

Off-topic questions and stories will be removed.

Further Reading: Before leaving our website, please take a look at the other articles we have published.

fuente: http://www.forexoma.com

MACD (Moving Average Convergence-Divergence) How to Use MACD in Forex Trading

MACD is one of the most reliable indicators. Although I do not believe in using indicators in my own trading and I always use the price candlestick chart to find the trade setups, I look at MACD direction when I find a signal on the price chart. So I use MACD as a confirmation and it really works for me.
This is a million dollar question. Before I answer this question that why MACD works, I prefer to explain about one of the most important reasons of forex traders’ (and also all other kind of traders’)failure. Maybe you have heard this a lot from us but it has to be reminded in this article too. Lack of patience is one of the most important reasons of forex traders failure. Most traders are not patient enough to wait for a good trade setup. After several minutes, hours or days that they wait for a signal (depend on the time frame or system they use), and they can not find any signal, they lose their patience and force themselves to take a position while there is no sharp and clear signal. So they lose. On the other hand, when they succeed to take a good position, they get out too early with a small profit because they are afraid of losing the profit they have already made. They do not have enough patience to hold a position until it hits the target. So they make their profit limited because of lack of patience. MACD is a solution for this problem because it is so delayed and this delay forces you to wait more, both when you are waiting for a trade setup or when you already have a position. That’s why MACD is recommended both by forex and stock traders.
There are a lot of cases that your other indicators and even the price chart show you a signal but MACD tells you wait and it keeps you from going against the trend and losing money. There are also a lot of cases that you want to follow a trend but MACD tells you it is too late and the trend is exhausted and may reverse very soon. In this article, I will do my best to cover all of these cases and help you use MACD in your trades in the best way.
MACD stands for Moving Average Convergence / Divergence. MACD is an indicator which is used in technical analysis. This indicator is developed by Gerald Appel who was a trader and market technical analyst.
MACD is the difference of a 12 and a 26 exponential moving average. MACD subtracts the 26-period from the 12-period and the result will be displayed in a single line which is the MACD main line. Typical MACD indicators, have one extra line, which is a simple moving average of the main line. This moving average is set to 9 by default. In MetaTrader, the default MACD doesn’t have the main MACD line. Instead, it has bars (histogram). On other platforms, you can see both the MACD main line and MACD histogram.
If you are a trader, probably MACD formula will have no use for you. You will need it, if you are a programmer and want to use MACD in designing and developing an EA (expert advisor) or robot.
The MACD that comes with MetaTrader by default, has only one color with the histograms. If you like to have the same colored MACD we have on our charts, please download and install it to your platform before we start explaining about MACD and the way we use it in technical analysis and forex trading. This indicator works in MetaTrader. You need to copy and paste it to the /experts/indicators/ folder and then restart your platform and apply the indicator on the price chart: Click Here
The below chart shows how colored MACD looks like. It also has the Simple Moving Average (9) but I always set it to 0 because I don’t need it. It doesn’t help. In the indicator you downloaded above, it is set to 0 by default, but you can change it back to 9 if you like.
The MACD bars (histogram) you see below, reflect the difference of the 12 and 26 exponential moving average. On the price chart, you see two exponential moving averages. The green one is the 26 and the red one is the 12. As you see, wherever the distance of these two moving averages is longer, the MACD bars are longer too and wherever these two moving averages cross, the length of the related MACD bar is zero (follow the arrows).
As you see, when there is an upward (Bullish) movement and pressure, MACD goes up and changes its color to blue and when there is a downward (Bearish) pressure and movement, it goes down and changes its color to red.

MACD bars form highs and lows. When we have an uptrend, they form higher highs and when we have a downtrend, they form lower highs and when the bars go under the zero level, they form lower lows:

As I mentioned, MACD is delayed and so when you see a reversal signal with the candlesticks and Bollinger Bands and you want to take a position against the trend, MACD tells you “No”. Of course, if you know about the Elliott Waves and also the cycles, you will not take any position against the trend even if you don’t have MACD on your chart, but as knowing the cycles and Elliott Waves is very difficult, you can use MACD to stay on the right way.
For example, you see the below reversal. A candle is formed completely out of the Bollinger Band and then there are three Bearish candles that are all reversal signals. Three candles before this, you already had another reversal but you should have ignored it because it was fresh and came just after a big Bullish candle. But, the second sell signal (in the yellow zone), assured you that you can go short. Lets say you wouldn’t have MACD on your chart or you wouldn’t pay any attention to it. You could go short and set your stop loss above the highest high.

and guess what? Your stop loss would be triggered:

So going against MACD is dangerous. But, it is not the only mistake you can make. MACD also indicates if market is overbought or oversold. When it is overbought, it is risky to go long and when it is oversold, it is risky to go short. When market is overbought, Bulls (buyers) can start collecting their profit (they sell) at any time and so the price goes down and when market is oversold, Bears can start buying at any time and so the price may go up. Of course, the candles also tell you if market is overbought or oversold, but MACD is also a big help. Lets see an example.
You are a trend trader. You have an uptrend here. You see some reversal signals but you wait for a continuation signal to go long. A strong Bullish candle forms (the last candle) and at the same time the last MACD bar changes it color and shows an upward pressure. This is what you have been waiting for to go long but you don’t consider that market has been going up for a long time and can reverse at any time. Of course it could go much higher, but we never know.

This position goes up only for one more candle and then goes down and triggers your stop loss:

MACD trading is so common among forex traders. They just wait for a fresh MACD movement for a few bars and then they enter. MACD is really good for trend trading. It is also good for confirming the reversal signals. However, MACD has to be used as a confirmation. The main indicator is the price chart and technical analysis. If you use MACD as a confirmation for support and resistance break, it will be a big help.
Look at the below image. There is a trend line with valid and visible support line. You are waiting for the support breakdown to go short. MACD starts going down for several candles before the break down, but you don’t go short because it can bounce up as soon as it touches the support line. One of the candles closes below the support line and at the same time, you see that MACD is going down, BUT it is fresh and it is not oversold. It is above the zero level too. So you go short at the open of the next candle, set your stop loss above the high price of last candle and your target will be the next support level. It goes down and hits the target very easily.

Now look at the below image which is in fact the same as the above image, but it just shows another support break down which happens a while after the above support breakdown. Obviously, it is a new chance to take another short position, but look at the MACD and its difference with the previous position. In the previous position, MACD had started going down while it was way above the zero level. It means, you would go short while market has been overbought which is a good decision. In this position (below), not only MACD is not above the zero level, but it has already started going up and making higher lows. So market is oversold and your sell signal is not fresh. It is a second hand sell signal
and guess what happens if you would go short and would not consider MACD:

So your position triggers the stop loss before it hits the target.
MACD Divergence is one of the most famous and strongest trading signals that MACD generates. MACD Divergence forms when the price goes up and makes higher highs and at the same time, MACD bars go down and make lower highs. The rule says, the price will finally follow the MACD direction and will break down. However, the problem is, you never know when the price will follow the MACD direction. So, if you rush and take a short position right when you see a MACD Divergence, it may keep on going up for several more candles. You should go short when MACD Divergence is followed by a good sell signal by the candles and/or a support break down. This is safer.
MACD Divergence can be seen at the end of uptrends. What does it mean? It means if you are a trend trader, you should not go long when you see that a MACD Divergence is formed. It can collapse at any time.

MACD Convergence is also a famous signal but people trust the MACD Divergence more because when the market goes down and collapses, it goes faster and stronger. Fear is stronger than greed and when market goes down, fear is the dominant emotion.
MACD Convergence forms when price goes down and forms lower highs or lower lows but at the same time MACD bars go up and form higher highs or higher lows. The rule says, the price will finally change the direction and will follow MACD which means it goes up. MACD Convergence can be seen at the end of downtrends. What does it mean? It means if you are a trend trader, you should not go short when you see that a MACD Convergence is formed. It can jump up at any time.

Further Reading: Before leaving our website, please take a look at the other articles we have published.
fuente: http://www.forexoma.com

NZD USD - New Zealand Dollar US Dollar

NZD is a currency abbreviation for New Zealand dollar; it is an ISO 4217 and carries numeric representation 554. It is the officially certified national tender used by public within New Zealand, Pitcairn islands, Tokelau, Niue, and the Cook Islands. It belongs amongst major currencies and enjoys a special weight age amongst the dollar-dominated currencies of the world that fall in the major category. NZD or New Zealand Dollar is commonly and frequently referred to as “kiwi”.

The New Zealand dollar came into existence in 1967 when New Zealand pound was done away with and NZD was declared the official circulating currency of New Zealand. It is officially illustrated with the help of the regular dollar symbol “$” but the only difference is that since this dollar belongs to New Zealand the symbol is prefixed with the alphabets NZ and the whole thing reads as “NZ$”. This helps the NZD get distinguished from other dollar currencies. Besides dollar, “cent”, is also in circulation as a smaller, broken down unit of dollar. We can say it’s a subunit of New Zealand dollar.

Overview of New Zealand Dollar

The New Zealand dollar or Kiwi, as it is commonly known is the 10th most highly traded currencies worldwide – happens to hold a significant stature when it comes to all the dollar-dominated currencies.

New Zealand is a stable and robust economy looking upwards, which makes it a number one choice for investors across the globe. The New Zealand dollar is such a stable unit that independent economies around New Zealand like, Cook Islands have converted or replaced their own currencies with dollar. However Cook Island does have its own independent currency in circulation too, besides the dollar.

Now let us share some peculiar and interesting facets related to the currency of New Zealand. The currency notes bear well-known “:Maori” work or art along with the name of images published on these currency notes, which are written in Maori script and all the names start with a consonant. The notes are available in several denominations however its fifty dollar currency note is the only note where Maori work can be seen on the other side of the note. The pictures of significant historical characters that can be seen on the banknotes includes images of two important people on five and twenty dollar notes who are still alive, but the remaining people whose images we see on these notes are all being dead. On a twenty dollar note Queen Elizabeth II’s image can be seen. This happens to be the image of a personality who is or had never been the citizen New Zealand.

New Zealand boasts of an economy, which has a tendency to spring back to its original firm ground in spite of big and small economic upheavals from inflationary pressure to natural calamities. It is the New Zealand dollar which helps the economy get back on its feet and get closer to its objective of remaining a strong and stable economy. There is no limitation or restrictions imposed by government to import and/or export of the currency however before one does it he/she is required to make an official declaration if the amount exceeds or is likely to exceed $10000.

Structure of NZD

The New Zealand dollar came into being in 1967 when it was planned that the country will shift over to decimalization concept. The responsibility to look after and take control and care of the currency was given to the Reserve bank of New Zealand, which existed and operated at that time. And since 1967 Reserve Bank is the sole supplier currencies comprising both the coins as well as the notes. NZD is broken up or sub divided into 100 cents of equal worth. Coins in New Zealand are issued by the authority in 5 denominations. And they are 10 cents coin, 20 cents coin, 50 cents coin, $1 dollar coin, and $2 dollars coin. The front of the coin comprises an effigy of Queen Elizabeth II. It is the same effigy which is being used in the commonwealth of the queen. The other side of these coins have different images print for each denominations.

Then in the month of July in the year 2006, new adaptation of the coins was issued which weigh less than before but some changes can be seen in the designs which do resemble the old one on many ways. The old coins which were in circulation, before the new version was launched, have been withdrawn from market and it is not legal to use them anymore in the open market. However they can be en-cashed at the reserve bank.

oming to currency notes issued by government, the New Zealand currency notes come in 5 denominations which are; NZ dollar 5, $10, NZ dollar 20, NZ dollar 50 and NZ dollar 100. Paper made cotton was used to manufacture these notes before 1999. As technology advanced the same were replaced with polymer banknotes.  These notes, same as in case of New Zealand coinage show images of different historical and important personalities on the front side and on the reverse side different wildlife images can be seen from a yellow eyed penguin ( on NZ$5 note) to Kokako, a rare bird on the 50 dollar note. Their 100 dollar note shows “Mohua”, a bird on the reverse.

History of NZD

The New Zealand Dollar, as the name suggests is an official tender of New Zealand. It is also known as Kiwi, a name given alter the country’s national bird.  NZD is the officially accepted abbreviation for the New Zealand Dollar. This currency has been in existente since 1967, befote which the official tender was the pound.  The new dollar currency is accepted along with in New Zealand, also in Niue, Tokelau, Cook Islands, and the Pitcairn Islands.

There are some very peculiar as well as interesting facts doing the rounds in market about the New Zealand Dollar. Some of them are; though the NZD is broken up equally into one hundred cents, there is no coin below 5 cents from 1990 ever since one and two cent coinage was withdrawn from market as legal tender. As a result for all cash transactions, values get rounded off to the nearest 5 cents.

New Zealand banknotes have denominations of $5, $10, $20, $50, and $100. BEfore 1991, at the time of introduction of $1 and $2 dollar coins, even bank notes existed for the same denomination but as coins were introduced, notes got withdrawn by officials. From ’99 onwards New Zealand dollars have been getting printed on plastic polymer instead of paper. This new polymer version lasts much Longer (so much so that sometimes they have managed come out alive even after going through a run in washing machines), and also comes with a features which makes the banknotes difficult to counterfeit.

The denominations of coins in New Zealand comprise five, ten, twenty, fifty cents, one and two dollars. The 1 and 2 cent coins were withdrawn from market April 30th 1990 onwards, and as a result of this 5 cents became the smallest transaction possible. But when it came to payment by checks or when funds were trasnferred electronically, these types of transactions had scope for transactions that were not necessarily in multiples of 5 cents.

Various factors impacting the exchange rates between two countries

Uncertainty they say is the only certain when we refer to Forex Market. Different factors affect different economies, and the rate of exchange for their currencies, differently.  Besides regular factors there may also exist unique or peculiar factors which may impact only a select set economies in peculiar situations.

Some of the most common and universal factors which may impact the rate of exchange for any currency may include, flow of imports and exports between the countries; capital flow between the countries; relative price increase percentage; variation limits imposed by the governments of the countries on rate of exchange of currency; trade balance pertaining to commodities; Economy’s Inflation Rate; inter country payment flow against purchases of stock and bond; comparative growth of the counties can also have an impact exchange rate for the currency;  short term and long term interest rate difference or parity;  & finally the borrowing cost.

Suggestions to Trade Forex in New Zealand

New Zealand is an industrially progressive country demonstrating a consistent growth in GDP. It has shown a healthy Per Capita income till as recently as 2010. Majority of their revenue and growth is a result of their import-export of farming resources. Almost 80% of its GDP is a result of their agricultural segment.  New Zealand’s business partners include countries like Australia, China, Japan and the USA.

Forex Trading in New Zealand: An Overview

The Reserve Bank of New Zealand is country’s central bank. Its strategies and guiding principals are developed and implemented with a view to maintain the balance of the fiscal structure and to meet the currency expectations of the public, while maintaining rise in cost of living between one and three percent. This institution is also responsible as Foreign Exchange Regulatory Authority of NZ.

Factors Affecting Forex Trading in New Zealand

Let us discuss some points and issues that will help a trader while he/she is trading in New Zealand. The first thing to remember is that the population of this country is way too very small as a result of which even mildest of movement or increase in relocation is likely to effect on the economy quite harshly. New Zealand’s Gross Domestic Product is heavily dependent upon the agricultural products that it exports. Another important issue is that the weather conditions can have an effect on the economy as a result of which exchange rate may experience a dent or high depending on the situation.

A recent series of droughts did take its toll and ended up damaging and injuring economy of the country. A very crucial thing to keep in mind for a trader is that New Zealand’s economic stability is directly connected to the economic conditions prevailing in Australia, they being the biggest clients. If the markets even slightly show sign of drop in Australia, its impact on New Zealand economy is bound to show. New Zealand Dollar is also known amongst the commodity linked currencies. This means that if an increase in commodity prices is noticed, appreciation in price of the NZD also has to how. Similar to the Australian dollar, the NZ dollar also enjoys the standing of a carry trade amongst trading community. The reason for this is that New Zealand has the highest interest rates applicable.

NZD and Gold Prices

Let us also discuss in the same breath how Gold Prices can impact NZD. When it comes to NZD exporting goods and various other items to Australia, it is considered its top most high light. New Zealand supplies many things to Australia and is one of their major partners and suppliers. So when AUD currency is showing strength because of high gold prices, in such a situation NZD will take advantage and use this opportunity to the optimum. They will export maximum to Australia during such phases. Since AUD enjoys a higher purchasing power at such times. Let us also consider the opposite economic scenario, that when the tables are turned and gold prices are beginning to show a fall and AUD weakening, at such times, the exports will dip. The association becomes rather interesting to watch when it comes to exchange rates because NZD enjoys correlation with pricing of Gold metal which happens to show a lot of strength as compared to what AUD does. However NZD does not turn out Gold Metal in the same quantity as Australia does.

Fundamental and Technical Details about NZD USD

The New Zealand dollar is known as a major as well as a commodity currency in the Forex market. It owes its status of being called the `commodity’ currency to the fact that this economy is highly dependent upon commodity exports. New Zealand also happens to be world’s 62nd leading economy.

While trading NZD as a trader is keeping his eyes and ears tuned to the economic announcements coming out of New Zealand, he should ensure that he/she is not missing on announcement or statements issued by Reserve Bank of New Zealand; he should keep a watch on Official Cash Rate; on Employment figure

Making, Implementing, & sticking to a Trading Plan

Whenever you plan to take currency trading seriously enough to pursue and earn profits from it for at least a few years, make sure that you start right.  Focus on limited number of currency pairs to begin with and don’t start with trading any pair haphazardly without doing your home work and studying the nature of pair you are trading; take one or two pairs initially to understand personalities of these pairs enough which will help you to get on the trace where you can start booking real profits.

Be sure that you are dealing with limited pairs because I have seen friends and colleagues in my trading career who have extend themselves way too much trying to cope with volatility related to currency market for all various currency pairs and in the course not understanding anything about either of them at all.  The best way therefore is make a blue print of the plan.

The first thing is to decide the reason you want to get into currency trading. The reasons could be many. It is likely that the reason behind your wanting to get into Forex trading to supplement your income sources. Earning additional income from a source that is very different from your primary source of income. You could be an accountant, a teacher, physical instructor, working in a store, school etc working full time. But trading is something you can do part time from the comfort of your home on your computer. You can start small time and then when you start understanding and getting a hang of it and are able to take control of situations, you can spend more time and improve your income remarkably. This new income can be used for so many things, to uplift your present standard of living, to pay off old debts, to take vacations or to save for children’s education.

Before you take your plan to next level, analyse your weaknesses and strengths. And the strengths you will require to become a successful trader whether you want to take it as a part of full time profession is that you will have to inculcate the habit of discipline; learn to develop rules and strategies; learn to remain single minded and focused in chasing goals; training your mind and temperament for trading, etc. You should ensure that when you are learning and moving closer to your trading goals, nothing should succeed in distracting you,  what you should also understand is to keep your mind always open for news and knowledge and apply it on financial market and to analyse situations and how finally will it impact the currency you are trading. As a trader It will be important that you learn to manage risk and failure.

Coming to setting up trading goals is the next step. The goals in the first few years should be modest. As someone new in the game, you should try that for your first year in trading you should at the most least have the same money that you started with! Don’t think of profits in the first year, if you manage to earn it, great, if you lose, don’t lose heart, because one must be prepared to lose some money especially when he/she is just starting out. If you can earn twenty percent return on your initial trades consistently for 2 to 3 years, consider yourself progressing on the right path and stick to everything that has reached you where you are in terms of temperament, mindset, analyses skills… and so on…

What your real goal should be is to improve consistently month after month and year after year. But if you lose in a row don’t get stressed over it or you will lose more. Control your anxiety and treat the whole game very logically and keep your mind stable.

Now coming to the big question - which Currency Pairs should you decide to trade as a beginner? This is a crucial question and we will deal with it realistically. Since we are discussing NZD USD.

Let us only look at this major NZD USD. This tip is also for those who live in NZ. NZ traders go with this NZD USD.

Now that the pair is decided lets go on to the job. Let’s see what our daily routine will ideally look like. The important and number one job in the morning is to spend one hour or more carrying out things like, checking, reading, hearing, watching major economic news, then next is to have a look at the charts. Since it’s just the beginning of our long journey we will make sure that our initial strategies will be based exclusively on Knowledge to Action, especially for first few months, therefore we will need to only look at the daily charts and nothing more. Then the next thing is to review all or any existing trades that you may have from previous day, and identify and add new profitable or potent trades for various major currency pairs including NZD USD. Enter and record the new trades in the spread sheet. Remember, we have also promised ourselves to be more organised, so that time has come!

This was about daily work routine, now we will view our weekly trading related routine. This will include checking and watching the Mid-Week Market Focus on webinar footage that is based on Knowledge to Action strategy. Weekly routine is also inclusive of reading various market related news, analyses, and articles. Now it is time studying and analysing the charts and get into dummy or demo trading using various strategies.

After understanding daily, and weekly routine, we shall now look at what will a monthly routine look like. One’s monthly work generally will involve reviewing the trades a trader has got into from the spreadsheet and double check their latest position and calculate average profit or loss.

Should a NZD USD trader treat Negative MACD as Red Signal that is alerting him to be careful with regard to a reversal?

Most experienced traders would generally vouch for the fact that the MACD may be extended and sometimes even in very bearish territory; but there are traders who may still not use this signal as a reason for  not shorting the pair and taking stance and going for a long position.  Actually we can find several traders trading this pair if we really look for them and these are the guys who will be looking at this as an indication or reason to go short on the pair.

As experienced traders we must remember as well as remind ourselves as well as our colleagues that just because a price chart or the indicator is comprehensive, that is, it has spread itself in an area where it has not been earlier or at least has not been for some time, that does not mean that chances of reversal are affected in anyway. No trader can completely deny or reject the idea of a potential reversal lurking around; the greater likelihood does remain and vouches for the fact that the pair will continue in the course where it that it tends to. This may take place following a retracement but to expect a reversal that is based on a downtrend is not what trend traders are expected to do. It will do traders a lot of good to remember an old trading proverb: Don’t try to forecast what might happen, instead deal with what is actually happening.

Stochastic and EMA Cross Strategy Vis-à-Vis NZD USD Pair

Stochastic and EMA are indicators which help trader to help determine a change of course in stocks’ price patterns. These are two indicators that can work independently of each other but as we know two indicators that compliment each other can certainly do better job. If traders learn to identify a bullish MACD crossover along with a bullish stochastic crossover at the same time, it can help him to use it as the entry point to trade which will give him winning trades. For instance to understand the way stochastic is formed is one thing, but to be able to analyse and read how it will react in different economic conditions is crucial. Coming to MACD it is a multitalented trading tool which comes in very useful in identification of price leaning and its potential course. The MACD indicator is strong enough to stand on its own as mentioned earlier, however its prediction is not found to be absolute. But when this tool is used with another indicator like Stochastic, it can really add value in favour of trader.

Let us discuss when it is not advised to use and depend on this strategy:

This strategy should not be used in the beginning of the week which happens to fall on a Sunday. Let us consider a real time example for NZD USD currency pair which will show you why this strategy will not work or should be steered clear of on Sundays if it happens falls on the first day for the forex market.

I have a case study according to which one Friday in Nov 2010 in CA USA Pacific Time zone - the daily chart for the currency pair NZD USD representing candlestick in the chart showed that it closed above ten pips below the lower Bollinger bands. Then hourly chart was observed for the same pair and based on candlestick trend line was formed and it was observed that this was busted by a long candlestick of bullish pattern. This goes to substantiate the fact that the candlestick which broke or busted the trend line can very well offer an entry signal for a trade that will be a long one but if trader decides to enter a long trade there are chances that he might not be able to strike a profit and may go downhill. So this strategy’s use and implementation at the start of day of the week is not recommended.

How to trade the piercing line pattern while trading NZD USD Pair

Piercing line candlestick pattern is considered an extremely dependable and amongst the strong bullish candlestick patterns, however it is advised that it is always complemented with one or two more indicators while taking a decision to enter trading. There are real time instances seen as seen on NZD USD daily charts. When we observe some of these charts we notice formation comprising a pair of piercing lines. Here the Indicators like CCI, Stochastic, Bollinger Bands, and Trend Lines are brought to use.

The observations made in charts are as follows; Piercing Line Candlestick Formation is formed at the start at the bottom of the Bollinger bands; then we can clearly see a support line at the point where it shaped the Piercing Line Candlestick pattern; The CCI we can see, surpasses the -100 line and gets close to around -200 which signifies reversal could be an option or a possibility; and the stochastic crosses below 20 line and at the time when piercing line candlesticks arrangement gets completed the moving average lines of the stochastic too intercept each other. If we consider all the above aspects most of us would agree that it makes for a good entry.

Coming to the other Piercing Line Candlestick Pattern, the same situation is here too but not in a trend that is diving downwards. When traders observe the candlestick indicators they observe that the same is within a market known as the range market. They don’t find CCI also gone below the -100 level; Stochastic is also not found to be below 20 lines. Now when we consider these observations and give it a though and analyze it a little bit, traders will reach conclusion that it is not a good entry.

Timing Your NZD USD Trades

Whether you are Trading NZD USD as a pair or NZD as a component in any pair timing your trade is an all important factor. It will do you a great deal of good if you know which time frame will suit your trading style and pair the best; when is the market most liquid or dull etc.

Traders be aware that that there are no operating hours relating to the New Zealand Forex market. However the New Zealand wholesale banking community follows a mutually agreed 5am Sydney to 5pm NZ time zone.

This hardly means the NZ dollar will stop trading outside of this bracket. On the contrary the NZ banks treat these hours as time in which they will always make prices to customers and other offshore banks. Outside of these hours NZ banks can continue to do so and go on making prices but it is likely that they do not choose to let go on off heir operations to other branches which are working outside of New Zealand. For example Price making of New Zealand dollar may be happening out of London or New York. So even if New Zealand banks may be remain closed on a particular day, foreign exchange trading in the NZ dollar will go on round the clock.

Some traders who are into day trading NZD USD pair are of the opinion that it will stand to their advantage if they take position when a short term trend on the AUD/USD or other major currency pairs appear and NZD USD joins it a little later. Supposing that the trend on the major pairs goes on without any changes, sooner or alter NZD is bound to follow it. But if the trend is stopped, it is advised that the NZD position is closed even if it may mean incurring small loss. Many traders consider it a good idea.  There aren’t any other disadvantages to this but for sudden unexpected spikes that may pop up out of nowhere. Other than this the concept is pretty acceptable.

Some traders choose to trade exclusively during European and US sessions, but everyday before they start their day they sit back and spend time analyzing previous day’s Australian-Asian session. It particularly helps if they can analyze and are able to see through how AUD, JPY, and NZD move during this session.  Traders who are aware of the exact time when serious trading starts are more accurate and successful in drawing right conclusions than those who are merely shooting in the dark with regard to active trading hours.

Spread betting NZD USD

Spread betting enables a trader to do trading based on the price volatility of currencies like NZD USD. A trader puts his/her stakes based on per point euro and in the eventuality of any profits that he is able to book during such a spread betting, stamp duty and any kind of capital gains tax are not levied on them. The application of Tax is based on peculiar circumstances associated with each customer. Laws related to Tax are like to undergo a change or even differ based on jurisdiction barring Ireland. When a trader decides to spread bet on currencies, what he is doing is just deciding if the prices are likely to increase or decrease and depending on his analyses trader fixes his / her stake size on what kind of money he wants to take a chance with. His profit or loss will be the variation between the price at which he manages to purchase it and the rate at which he is able to offload it in market – this amount is multiplied by traders total risked amount.

Applying Pin Bar Reversal Method on NZD USD

This piece of article is written keeping in mind traders focusing on NZD USD pair who are beyond basic learning, and are already trading the pair in real market environment.

It will do them good if they take a step forward and learn the technicalities and workings that go behind what is called the pin bar reversal, especially with a fifty percent retracement entry, which brings a sort of a slight turn of event for a typical pin bar entry. As we discuss this, let us also understand the fact that it is just one of the several ways of trading pin bars available. And as they learn this, they should also find out how they can slot in and include horizontal lines to denote levels of confluence and act as filters. Traders should also understand that what they need in the market is a bias.  They can expect a neutral bias provided market is trading between support and resistance within trading range.

In short traders should learn about the key points in the market; support and resistance levels, and horizontal levels. Then look for and learn about basics of pin bar concept, which is about price action signals with long upper or lower tail. Once they get a clear hang of it, their trading sensibilities will be fine tuned and they have also managed to deal with the market one level better.

Wishing you a happy weekend, safe trading and a reminder “no trading on Sunday”!

Further Reading: Before leaving our website, please take a look at the other articles we have published.

fuente: http://www.forexoma.com

EUR CHF - Euro and Swiss Franc

European Central Bank also referred to as ECB globally is the central bank for official currency of Europe, the EURO. As of current year i.e. 2011; total 17 European Union member states have adopted the currency - Euro. The ECB’s most important function is to uphold the euro’s purchasing supremacy which in turn will help retention of steady price in the areas where euro is an officially circulating mode of exchange or tender.

The process of countries adopting the currency and more countries following the suit, started precisely on 1st January, 1999, when eleven locations in the European Economic and Monetary Union resolved to do away with their own currencies and accepted the Euro (EUR) as their home currency.

In second phase the Vatican City converted to Euro, then next to follow were Greece, Slovenia, Malta and Cyprus, and finally and the most recent one Slovakia which adopted Euro as their currency on January 1, 2009.

EUR CHF is one of the important currency pairs for the forex traders. EUR is the second-highest traded currency on the Forex market. The Euro started trading at around $1.18 and look at how it has managed to grow over past some decades. It’s a stable and robust currency besides being considered as one of the Reserve Currencies of the world.

What are the factors that affect EUR exchange rate?

The first factor that affects the price or exchange rate of EUR is the Eurozone. Eurozone comprises countries that have agreed to accept and approve of the euro as their official currency which according to their GDP standing.

The second factor that can favourably or unfavourably affect EUR exchange rate happens to be the European Central Bank. This institution controls Euro zone’s fiscal policy. The decision making body is made of the Governing Council, which is made of the Executive Board and the National Central Bank’s governors. The Executive Board likewise is made of prominent authorities like the ECB President, Vice-President, with total of four other board members along with governors of Selected National Central Bank.

ECB Policy Targets is the third factor that makes the exchange rates go through changes and movements. It is primary responsibility of the ECB to keep the prices firm and stable. It achieves this with the help of two main principals of monetary policy.

The first principal of monetary policy includes the stance or point of view related to development vis-à-vis the price and dealing with risks against price stability. While the Harmonized Index of Consumer Prices is extremely crucial, a range of indicator and forecasting tools are used to identify the medium term threat to price strength. The next foundation on which the whole thing rests is fiscal growth as calculated by M3. The European Central Bank has been assigned a reference assessment that is four and a half percent annual growth for M3. The European Central Bank convenes a Council meeting every alternate Thursday to release news and make announcements regarding interest rates. In the first Thursday meeting of the month, the Central Bank organises a press meet where gives its viewpoint on fiscal strategy and also for the entire economy.

Rates of Interest

The refinancing rate of ECB is Bank`s chief interest rate for short-duration which is used for supervising liquidity. The variation that exists amid the US Rate of Federal Funds and the refinancing rate is indicative of a favourable leaning for the Euro US Dollar pair.

Ten Year Government Bonds

Another important trigger influencing the movement for the EUR/$ or EUR CHF pair’s rate of exchange is the interest rate difference that exists between the two counties. For evaluating this, under most circumstances the tool used as a yardstick is the ten-year. Under a situation when 10-year Bund rate shows below the US 10-year note, we can expect narrowing of the spread notionally to be happening in favour of the EUR/$ rate. Narrowing of spread in other words means Germany yields going up or US yields taking a hit or both.

Spread expansion, it is said acts against the rate of exchange. Traders also should take note that the trend in the number is more crucial when compared to the absolute value. The interest rate disparity, as we all know generally has more to do with growth stance of the US and eurozone, which is another primary trigger affecting the exchange rate.

Economic Data is another factor that can affect rate of EUR. The key economic data is generating from the largest economy, which is Germany, and from the still at a growing state – the euro-wide statistics. The primary data comprises unemployment, GDP, inflation, Industrial Production, etc. Especially when it comes to Germany, an important data comprises the IFO survey. It is considered to be a highly watched indicator of business confidence. Other important indicators or triggers include specific country’s budget shortfall, which going by the Stability and Growth Pact, should show below three percent of Gross Domestic Product. Countries are asked to reduce their shortfalls in budget and to achieve this they are given targets. If the counties are not able to meet these targets it could be damaging for the euro.

Cross Rate Effect

The exchange rate is also sometimes seen to be influenced by volatility in cross exchange rates i.e. the non-dollar exchange rates like EUR/JPY etc. And lastly there are political factors that impact exchange rates. EUR like any other currency is susceptible to financial or political instability.

About CHF

Info about Switzerland’s Economy & its Currency – CHF:

CHF is an abbreviation for the Swiss franc which is the official tender in circulation in Liechtenstein and Switzerland. CHF is the short form of Confoederatio Helvetica franc. Swiss Franc is used by Switzerland’s Central Bank.

In present times Swiss franc remains to be the only currency in Europe still referred to as franc. One Swiss franc is subdivided into hundred parts, which are referred to be different names in different languages which are used in Europe. The subdivision is a rap in Rhaeto-Romanic, centime in French, Rappen in German, & centesimo in Italy.

Another important thing to note with CHF is that the autonomous and self-governed credit ratings have an important role when it comes to assessing country’s acceptance and admission in international capital markets, and the terms of such admission help in a big way to get closer to growth, achieve firmness, and efficiency in foreign & domestic markets.

The Swiss Govt is known as a federal or centralized republic along with being the closest country at global level to a direct democratic system. Their Central Govt comprises three major branches, executive, legislative, and judicial branch.

The CHF as it has been observed has remained a relatively stable as a currency vis-à-vis the Euro since 2003 mid, slightly above one and a half CHF for every Euro. 1.55 Swiss Franc to be precise. It should be remembered that the CHF moves up or down against the United States dollar keeping in line with the Euro.

Though the trading of CHF revolves within the 80-90 cents range, the currency does seem to be overvalued, especially when considered vis-à-vis its purchasing power uniformity.

Goods in Switzerland cost twice of what they would cost in the US. This makes CHF an expensive proposition and adversely affects people’s strength to buy the currency. And as a result CHF is used as a reserve currency by institutions globally.

Switzerland is known for its stable market economy along with low unemployment, availability of skilled labor and most importantly a healthy GDP per capita compared to any other economies in Western European side.

Another thing is the economic practices of Switzerland’s government which abide by the rules and conditions set by EU’s which help them to improve their competitiveness worldwide. Switzerland is a proven safe haven for international investors for it practices bank secrecy and has been successful in keeping up the franc’s external value on a long term. Also their unemployment level has remained low, less than half of the EU average.

Factors Affecting CHF

The first factor affecting the exchange rate is the SNB, which is the Swiss National Bank.

The Swiss Central Bank enjoys complete freedom and faces minimal hurdles when it comes to devising fiscal policy and policies related to exchange rate. Like majority of Central banks do - the SNB does not follow a specific money market rate to direct fiscal situations.

Liquidity management has prominently influenced the Swiss franc because it uses Foreign Exchange Swaps. If the Bank wants to bring in liquidity, it buys dollars against Swiss francs, which pressurises the currency.

After 1999, the Bank altered its approach from monetarist to inflation-based; a 2.00% annual inflation rate. And to be able to get closer to the goal of achieving 2.00% inflation the Bank uses a three-month range in London Interbank Offer Rate to influence fiscal policy.

SNB personnel can also influence the rate of Swiss Franc by making announcements concerning money supply or the CHF in general.

Interest Rates

The SNB is seen to use the discount rate as a tool to announce alternations in the fiscal policy. These amendments or alterations have a significant effect on CHF. However it should be noted that the discount rate is not used at the Bank’s discount facility frequently.

Three-monthly Deposit Euro Swiss franc

The deposits comprising Euro-dollar are deposited in a foreign country. This country is not the country from where the currency originates. The rate of interest on a three-month deposits which have denomination of Swiss Franc and that are being deposited in banks outside of Switzerland serves as a valuable yardstick or standard in order to determine rate of  interest disparities to help one assess the exact rates of exchange.

Let us try to understand this with the help of a currency pair USD/CHF - the broader is the interest rate differential leaning in favour of the eurodollar deposit as compared to the euroswiss deposit, the chances of USD/CHF to increase go up by several times. Sometimes, this relation does not hold ground because of the coming together of other factors.

Changing Role of Swiss franc – Moving towards Becoming a Safe-Haven Currency

The Swiss franc has traditionally enjoyed an important status, that of a “sturdy and safe” asset. This is because of the independence of SNB and liberties it has enjoyed when it comes to maintaining fiscal stability; the second factor is the secrecy that Switzerland’s banking system maintains; and third one is the neutral stance of Switzerland when it comes to political status of the nation.

Over and above these, the Swiss national Bank`s comparatively robust gold reserves have contributed to the franc’s strength substantially in the past. Even as the currency’s international role started to diminish in the nineties which was also because dollar was emerging and gold prices were falling, that the Swiss franc continued to remain and be known as a steady, solid, substitute in Forex markets.

Economic Data is also an aspect that deserves special mention which impacts Franc’s exchange rate. The most crucial economic and monetary statistics and information released in Switzerland comprise M3- which is the broadest calculator of supply of money, unemployment, balance of payments, CPI, GDP and industrial output.

Cross Rate Effect

Exchange rate of CHF vis-à-vis other currencies sometimes id influenced by volatility in currency cross rates of exchange which is non-dollar currencies’ rate of exchange, like Euro and Franc or or Pound and Franc. May be an example will help us understand this situation better, an upswing in the value of GBP/CHF which is influenced by increase in UK’s interest rate, could broaden franc’s failing or decreasing value as compared to other currencies, like the dollar.

Three-month Futures Contract Euroswiss

The Futures Contract Euroswiss is indicative of the expectations of forex market pertaining to the 3-month future contracts of euro Swiss deposits. The futures contracts on the 3-month eurodollar and euroswiss deposits differential is a vital variable that helps to identify dollar franc expectations.

Due to the closeness of the Swiss economy to that of Eurozone, Germany especially, the Swiss franc has shown a positive leaning and favourable correlation with the euro. This equation is most visible in the acutely negative correlation that exists amid US Dollar Swiss Franc pair and Euro and Dollar pair.

Let us understand the situation with the help of an example – an unexpected movement in the EUR/USD which has been influenced by a fundamental cause is most likely to result in a sharp change in Dollar-Franc in a reverse direction. The equation between the above mentioned 2 Forex pairs is amongst strongest in Forex markets.

Factors Influencing the Rate of Exchange Between Countries

The rate of exchange between any two currencies of any two countries helps to measure or asses the amount of money people are willing to shell out in order to buy goods and services manufactured or belonging to other countries and also the kind of amount they earn in terms of revenue or are likely to earn for their export.

Any country’s rate of exchange is influenced by the supply & demand for that country’s currency in international exchange platforms or markets. This trend is called the floating or buoyant rate of exchange because as the name suggests, it fluctuates or floats based on whether the currency is more in demand or supply. If the demand for specific goods and services in more than the supply of these goods and services, then in this situation worth of the currency will become better. And on the other hand if supply of this currency supersedes its demand, then currency value is likely to hit the bottom.

The impetus and instability in the foreign exchange rates is based on several factors which macro economic in nature that may have varied degrees of significance to different economies across the globe.

There are some outstanding and peculiar aspects may also subsist concerning specific counties which are likely to influence its exchange rates. Now we shall list down some of the features which decide the foreign exchange rate for any country.

The price movements in the Forex rates is based on many big and small sized economic factors which hold importance at various levels for all the different countries and their financial format of the world. Some extraordinary aspects influencing the rates may be present for specific and countries which may have peculiar and unique environment.

Given below is the list of factors that influence exchange rates of economies:

Imports and exports flow between the countriesCourse of capital Flow between the countriesRate of inflation is another factor influencing exchange rates between two countiesFluctuation limits on exchange rate made compulsory by the governments controlling monetary issues of the countriesGoods trade balanceInflation Rate existing within the countryFunds Flow between the countries for the payment of stock & buying of bondComparative growthInterest Rate Disparity – both short & long term

Borrowing Cost

Below listed are some more factors that affect exchange rate of any country. Like, fixed & floating exchange rates. Even technical factors that influence exchange rates should be borne in mind before a trader takes any decision that are likely to have an impact on his present set up or business in whatever proportion.

EUR CHF – Arriving at the Winning Formula

If we can steer clear of the Formulas that people claim to have found in the course of trading and understand once and for all that trading Forex and winning has more to do with evaluating market facts and taking calculated risk than sneaking for a winning formula that guarantees to work irrespective of currency pair or market conditions. This by far is the only formula, mantra, or way to make a success of ourselves as traders.

What traders are advised to do is keep a close watch and study their options and currency pairs from fundamental as well as technical angle, and of course keeping a watch on forex market and charts based on real time.

Suppose dollar gains strength and starts looking in better position than EURO and EURO in turn starts looking in better position than CHF. And the third situation is that CHF starts looking bigger and better placed than JPY. Under this situation, as a trader what do you think will happen of a trader decide to go ahead with USDJPY? Don’t you agree that this should apply when the market movement is strong enough for profits to maximize and trader should make sure that he is dealing in the most lucrative pair.

We can take this a little ahead and actually check out what will we do in real time. The first thing advised under this situation is to set-up four charts in daily timeframe on one’s screen with this pair on the first two charts i.e. the EURO/Franc & Dollar/Japanese Yen; Now the next thing to do is pair the currency that is strong at the EURO/CHF with the Currency that looks stronger at the USD/JPY and similarly the currency that looks weaker to the other extra 2 charts.

If as a trader in this situation we assume that EURO looks stronger than CHF and USD looks stronger than Japanese yen looking at the two charts EURO/USD that are remaining, what we will get is, the most stable currency of the moment which will be indicative of the fact that demand worldwide is on an upswing and as we consider the other chart pair SwissFranc and Yen. And therefore what we will get is the least strong currency whose demand is not high to disembark at the currency that is weakest of all.

If after analyzing and reading the real time chart we can find the real picture and also that that the strongest currency is US Dollar and the weakest is Japanese Yen then what a sensible trader is expected to do is that goes Long and Buys USD/JPY.

See, that is how simple it can get if we think and look straight without filling our mind with information that is not necessary. If you have understood this as a trader you can use the same formula or sequence of logical thinking with more currency pairs that you may be wanting to trade. All you have to do is scheme four charts on your monitor, by subdividing the screen in four equal parts.

As we care coming to close this post some of you may have doubts and want to know the exact situation or point of time when can we identify the strongest currency in pair, or how do can we be so sure that it is really the strongest… is it that it has to be strong compared to last week or last year? You might want to know that after all what does a trader compare it to? The answer is rather simple, try and watch them and notice who is pulling or dragging whom. Obviously the currency that drags the other currency is the stronger one.

Is Volatility a Blessing or a Curse For EUR CHF Traders?

Whichever market across the globe traders might decide to trade in - irrespective of the currency pair - volatility is the only certain feature of the Forex market which runs non stop barring the weekends.

Forex is by far the biggest market where proceeds of the market as observed on a daily basis stands at a figure surpassing some trillions of dollars so you can imagine the trading volume size. If some of you can’t, it is understandable.

This highly unpredictable market is a feature or characteristic where number of investors put their money at stake because they are hoping to profit from the game of speculation. Though volatility may sound unsafe and risky, traders should however remind themselves that without volatility there would be no trading.

When we look at Volatility from the above angle then it looks like a blessing that traders with their sensibilities and experience can capitalize on. Volatility is the result of trades happening randomly and unsteadily by jumping from highs points to/and low points. If there is no market movement in currency prices then in such a situation traders are not likely to see volatility and the final outcome of this flat situation is that no trading can happen in such a flat, no-activity market environment.

Traders should take note that the volatility in currency pair trading is indicated in pips and when traders focus they will know that this volatility is rather mild. This is the reason they give so much importance to leverage and how it is considered so crucial by currency traders, and also signals.

In a market that is showing sharp movements in a big way, there is an opportunity for market losses to be improved with the help of leverage and at such times it is best to get into trading with smaller amounts so that losses can also be minimized at such times.

Though volatile market can be a blessing for traders trading pairs such as EUR CHF or EURUSD, they should however be able to manage trading in this kind of a market. This can be achieved if traders freeze on using tighter stops which will help them by minimizing losses right at the start.

The exact point where stop loss will be placed is based on the currency pair that one is trading. Volatile market conditions often provoke or trigger traders to invest more than what they normally would because they are hoping to book profits in such situations.  This can end up becoming a dangerous situation as the risk associated with volatile market is higher than risks one is facing under normal market environment. A trader should ensure that he is not wavering from his initial trading plan and when the market is running mad and is extremely volatile this caution is all the more essential.

Keeping abreast of fundamental indicators and news breakouts ensure that traders are familiar with the reason for extremely sharp movements. This awareness and knowledge helps the traders to make better trade decisions in the long run especially when they are face to with volatility in the market. As a trader when you learn to trade with utmost care, managing leverage to minimize losses that are likely to occur, then they stand a fair chance to make good even in volatile market.

Is there A BEST Format to Trade EUR/CHF

So many traders are eager to know about the best formula by which they can trade EUR CHF and profit from it time after time. Without meaning to sound rude, I want to tell all fellow traders that if there was any such formula or format – wouldn’t everyone be trading and profiting from EUR CHF?

When you go in the real market, face real market situations, and take a reality check you’d not need anybody to tell you that trading EUR CHF and striking winning deals is about reading and analyzing the market right which may include understanding and applying different strategies, technical, fundamental etc that one learns to apply over a period of time to the pair. The EUR CHF is undoubtedly one of the popular pairs, especially for traders who use scalping because of the liquidity that this pair offers along with the tight spread that it comes with.

For striking winning deals traders should follow technical indicators, better still if they follow more than just one. Some regular traders are known to have 5 and they are not seen to trade even small amounts until all the indicators they have employed start showing a favorable indication.

EUR CHF Scalping Strategy

In this article we will discuss Scalping Strategy with regard to EURCF pair. Trader should understand that some of best of scalping strategies are tuned to work only with a limited number of pairs. There are many pairs that people trade in Forex market to which scalping will never suit.

Some pairs are just not designed to fit well with Scalping. Irrespective of experience and expertise of trader, or peculiarity of market conditions, scalping will not work with some pairs do what you can. And as I say this, I would also like to state that with some Forex pairs the strategy works beautifully, way beyond imagination.

Let us know what scalping really is. It is strategy - a type of trading where traders try to book profits based on small price fluctuations. The main intention of a trader is to be able buy/sell a pair at the bid/ask rate and then immediately contemplate selling it a few pips higher/lower booking a small profit. If this scalping strategy is executed smartly, the small profits earned through it can add up to make large gains. This is possible only if trader sticks to a clearly defined exit policy.

Scalping proves to be an easier and safer option with range bound currency pairs. Volatile Forex pair showing a sharp spikes and movement, resulting in erratic fluctuations which can result in multiple stop losses, things are likely to get out of hand. When it comes to Scalping strategy, EUR/CHF is one the best pairs for a simple reason that EUR CHF is a range bound forex pair; it is a currency cross – because it does not have the USD as one of its currency; scalping is suitable also because both currencies in the pair come from the economic region; they are strongly related & uphold a firm balance.

Then coming to Interest Rates – they aren’t very different from each other in Switzerland and the Euro zone, indirectly working towards facilitating a tight range round the year.

The one thing bound to bring fluctuation in the Swiss Franc is any kind of even slightest geographical or political chaos. Swiss Franc is considered a safe haven same as gold. The EUR/CHF has proved to be a reliable pair helping traders to book profit with the help of steady and proven scalping programs. The losses are of course there but rare.

EUR CHF – Spread Betting & Other Techniques

In this post we shall discuss Spread Betting Vis-à-vis EUR CHF at length. We shall also discuss realistic strategies for the pair which will hopefully help us striking more winning deals.

The Euro is comparatively a stronger and a more stable currency which is used as an official tender by more than 300 million people and when compared to United States Dollar it boasts of higher circulated cash value.

Swiss is amongst extremely stable economies for over last fifty years and this has earned Switzerland the title of Global financial capital. The relation between & movement of Euro & Franc is influenced by the interest rates between the European Central Bank and the SNB with the adjustments, reallocation and fluctuations happening in other currencies.

Now let us come back to Spread Betting strategy which has been gaining more and more attention of traders striking deals online. Irrespective of whether trader is trading Forex pair EURJPY, USD or EUR CHF – Spread Betting facilitates a lot of flexibility making it a chosen strategy for several speculators across the globe.

When it comes to Spread Betting – what traders do is that in the place of opening a position for a specific business deal value, he chooses a risk which reflects the value for each and every pip by which the price undergoes a change. Trader also sometimes opts for stop-loss, by which he puts an outer limit on on how much one is willing to lose.

This is trader’s margin deposit. Just like in the Futures along with Spot trading market, investors here also can capitalize from markets going downhill if they make a decision to go short/long depending on their study of market. The outcome which could be in plus or minus meaning earning profit or incurring loss will be equal to their stake which will be multiplied by the total points by which the value has shifted.

For traders who wish to trade using spread betting are advised to understand price fluctuations and the reasons especially for three pairs, namely – Euro Franc, Dolar Franc, and Euro Dollar

It will help traders to understand the basic pair movement along with its correlation with other pairs and currencies to devise an accurate and concrete winning plan. Some traders may be of the view point that if a trader decides to buy EUR-USD & USD-CHF at one go, it is the same as buying EUR CHF, but in reality that is not the correct way to read the situation. To understand what I am trying to say, the traders should monitor movements and fluctuations of three pairs’ movement format simultaneously to arrive at the correct answer.

What to Do if Market Goes Against You While Trading EUR CHF?

Trader who has traded any currency pair including EuroFranc knows the feeling of alarm and insecurity at the time when the market goes in the opposite direction of the trade he has entered and the trader is going to lose the deal. Traders should keep one thing uppermost in their mind that it is simply not possible to win each time and predict the market accurately even if one is the most advanced, experienced and professional trader .

Though losses can’t be avoided completely, they can definitely be minimized.

The first method is placing of stop-loss order which is recognized at the time of beginning of a trading situation with an objective of controlling losses. The entry’s Stop Order it is advised should be positioned at support level provided the trader begins with a buy option, or at resistance level for a situation that can be explained a sale trading.

This kind of strategy where stop loss order is being used will help a trader dealing in EUR CHF to be able to control or minimize his/her losses in a situation where the market alters its course and decides to move in the course opposite to the trade.

The second type of trading comprises a situation where there is absence of stop-loss orders. When it comes to this style of trading a trader keeps your position open without placing a stop-loss order. When this strategy is put to use it is expected of a trader that he will be patient and deal with the situation without losing his mind even if he ends up finally on the loss side of the game.

That is the reason the trader at times like these is expected to go for a long time scale movements of the currency pairs in the direction of the trend movement. He should be alert while suing this method, as it is unsafe and trader will be required to keep a constant watch on the trades he has entered if they are going with the flow without stop-loss order being placed. This strategy is used by the traders who are experienced in majority of instances. Beginners generally prefer to trade by placing a stop-loss order with each and every trading deal.

Now coming to Hedging positions, its the third choice for traders. This is also called the risk management strategy which provides the start-up or provocation to buy and sell. Majority of traders and brokers provide an occasion when two trading positions can be opened in different directions for one Forex pair.

Going by the hedging Position strategy, once the market starts to move in one direction traders are seen to close the position at the opposite direction and go on trading with the leaning.

This method is suitable for uncertain market conditions and markets are likely to fluctuate in an unpredictable range.

Further Reading: Before leaving our website, please take a look at the other articles we have published.

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AUD USD - Australian Dollar US Dollar

AUD USD is an acronym that stands for or denotes one of the major currency trading pairs - Australian dollar and U.S. dollar currency pair. This currency pair is also called currency cross because it’s a derivative of currencies AUD and USD respectively. And it is also often called by the name Commodity Currency too. The reason is that Australian economy is highly influenced and dominated by commodity.

To a Forex Trader AUD USD currency pair indicates total number of U.S. dollars that he will be required to spend to purchase one Australian dollar.

While putting the pair on paper it is written like this AUD USD. AUD – Australian Dollar is written ahead of the United States Dollar. The Former is known as the base currency, which is AUD in this case and the one appearing latter is the quote or counter currency, which is the United States Dollar.

Let us rephrase the above description in more understandable and simple terms.  The value or worth of the AUD USD cross pair is quoted by Forex traders as 1 Australian dollar per ‘n’ number of U.S. dollars. Say this cross pair is trading or operating at 1.50, it means that the trader or an individual will be required to spend or shell out 1.5 U.S. dollars to be in a position to purchase 1 Australian dollar.

Trading the currency cross AUD USD, amongst the professional and real time trading circles is also known as trading the “Aussie”. Aussie holds sixth position when we talk about the most traded currencies in the world. Aussie enjoys popularity mainly because it offers high interest rates in the country.

Exchange rate of AUD USD cross currency pair can be influenced by several factors that could be geographic, or economic, in nature. These influences can alter as well as manipulate the value of both currencies individually, vis-à-vis each other, and/or also with other currencies.

The factor that is most likely to influence the value of either, or both of these currencies in relation to each other - is the interest rate differential existsent between RBA and FED. Whether this influence will tilt in favour of the trader or will affect the exchange rate of the pair adversely is something that will be based on the fluctuation in Interest Rate.

Let’s assume for instance that the Federal Reserve mediates or arbitrates in open market activities to make the U.S. dollar stronger, in this situation the worth of the Australian vs. United States Dollar (AUD USD) is quite likely to take a drop as a result of strengthening of the U.S. dollar compared to the Australian dollar.

Another thing that traders concentrating on toying with AUD USD pair, need not forget is the correlation aspect of the pair vis-à-vis other currency pairs or crosses because this knowledge will come in useful while making profitable trading decisions or striking winning deals in short as well as long run. This tip is for all types of traders to keep in mind.

The AUD USD shares an unfavorable correlation with USD/CAD, USD/CHF and USD/JPY pair. USD happens to be a quote currency in AUD USD pair where as in USD/CAD, USD/CHF and USD/JPY its base currency.

It enjoys positive or favorable correlation with USD/CAD. And this could be because of the fact that AUD USD shares favorable correlation with the Canadian dollar and the Australian dollar both. Both these economies i.e. Canadian economy and Australian economy are resource or commodity oriented and have more or less a similar economic format or structures.

About AUD USD – Exchange Rate & Popularity Influencers

The Australian Dollar or AUD is also sought by other names like Pacific Peso, and as already mentioned in the beginning on this lesson - the Aussie. AUD is an acronym for Australian Dollar and its official signature is - A$.

Australian dollar is the official; legally certified; & within and outside acknowledged currency belonging to the Commonwealth of Australia.

AUD USD claims of uppermost rate of exchanges against the Japanese Yen and Canadian Dollar.

The explanation for AUD USD to be so much in demand amongst the currency traders is due to (and to a great extent) lack of Australian government’s interference or intervention in the FX market. Second reason for it being a highly sought after tender is, that the Australian economy and government are relatively sound, stable, healthy and robust.

Also, the fact that the Australian dollar offers portfolio diversification advantage when it comes to global currencies in major category is another basis for the currency being traded so widely. This again in turn may be due to factors like exposure of AUD USD to Asian side of market etc.

AUD (Australian Dollar) can be equally divided into one hundred cents. At the time of writing this post, the smallest coin circulating in the market equaled five cents; one cent coin along with two cent coins have been withdrawn by authority from circulation and tendering during the 90s. As far as cash transactions are concerned they are rounded off- up or down depending on the nearest multiple of five Australian cents.

For several years now Australia’s export vs import balance has been highly relying on commodity exports such as mineral resources, agricultural products and so on. This influences AUD’s value, and strengthens the worth of 1 AUD against USD substantially in the course of trade cycle.

AUD has tendency to move forward during the time global markets on the whole are up surging as Australia is a country that focuses on exporting raw materials big time. The AUD likewise shows a prominent drop when prices of minerals fall or when their home spending gets better off the business overseas and their earnings position thereof.

AUD USD currency cross’ movement in the background of the world economy is generally noticed to sway in the contrast direction, which is not how most other major currencies would react in similar situation.

The other major currencies are more sought after at the time of such downturns or slouching economies as this is the time frame when the traders decide to shift the value from falling stocks into liquid cash.

This results in giving rise to some unorthodox flux and highly unstable exchange rates. This particular issue is responsible for making the AUD USD pair typically one of the most highly traded or voluminous currency pairs in the world to an extent.

Dynamics Affecting the Demand for Australian Dollar

If traders start to compare AUD with USD or legal tender of whichever country, they will notice that AUD value will be directly affected by the demand existing for Australian merchandise or products. If their products are in great demand in United States and in other global markets, then in that case their rate of interest is bound to be leaning in favour. This in turn goes to keep the confidence level of investors on the high. And market will present so many situations and so many favourable situations when there is going to be inflow of foreign investment in Australia. This will impact and strengthen the value of A$- Australian Dollar.

The first and foremost reason for an AUD to be affected positively is when demand for Australian goods and services are in high demand amongst foreigners or are in demand by overseas consumers.

To buy goods and services of Australian origin, the costumer or end user will be required to convert his home currency into Australian dollars to be in apposition to pay for goods and services made in Australia. This means that increase in the demand for Australian exports which will increase the value of the Australian dollar.

Factors that have the power to trigger the demand for Australian exports will mainly comprise tastes and preferences of consumers for Australian goods and services and as and when this happens, it will eventually result in inflow of foreign capital.

So it becomes all the more important for Australian economy and economists and consumer behaviour experts to know the pulse of global market and consumers, and have an idea about what kind of things are overseas customer particularly interested in at this point of time, for which they will be willing to shell out money.

An encouraging scene was witnessed and experienced to some extent in Australia in the Tourism arena for some time. Economists were expecting it to grow further and shape up nicely, however the 9/11 accident proved to be a huge and kind of an irreparable setback for the economy.

Thus changes in world economic condition is also amongst factors that can impact demand for Australian dollar.

During recession the A$ demand was hit for a while. On the other hand the upsurge in the resources during the year 2007-08 witnessed  a favourable impact on the value & strength of the AUD which went on to appreciate at a steady pace during the phase when Australia was successful at selling raw supplies of resources to China and Japan that were manufacturing big time and in bulk quantities.

Another dynamic that has the power to improve and increase the demand for Australian Dollar is the worldwide competence in comparison to the cost of goods and services. Upsurge in cost or basic exchange rates can also make a dent and result in loss in markets focusing on export, which will straight away hit the worth of AUD and impact it adversely by reducing AUD’s demand. And due to this Australian dollar’s worth will take a significant hit. Likewise the opposite situation will also hold as true. The lower rates of inflation will increase the demand for Australian exports, and the value of the Australian dollar will appreciate.

Another factor that will help value of AUD to strengthen - is the incoming foreign capital by way of foreign investment. This money will come in Australia via those individuals who are interested in investing in Australia in their home currency.

Here too, interest rate plays a major role and is a key factor that can influence decision of foreign investors who are contemplating investing in Australia. If Australia’s Rate of Interest is higher than prevailing interest rates of investor’s home country at that time, then the foreign investor is more likely to divert his funds to Australia. This in turn will mean improved incoming capital for Australia and rise in demand for Australian currency.

The second factor that the foreign investors will always be watching out for is the elevated level of economic growth. This will lead to many positive reactions. First outcome is that, this economic situation will lead to improved demand for Australian dollar; second, it will improve foreign investment inflow; third, the capital inflow will increase.

If foreigners interested in investing in Australia think that the value of the A$ is likely to increase in the future, they will in all likelihood sell other currencies and buy Australian dollars.

This theory on speculation can also bring in an increase in the demand for Australian dollars which will build upward pressure on the exchange rate as Forex transactions across the world are done with assumption in mind and an objective that one will be right and be able to book profits.

As traders continue on their trading journey, they will continue to learn their own lessons which will help them to sharpen their trading skills and become masters at trading the AUD USD pair.

Despite being such a prosperous sounding structure, Australia kind of suffers a disadvantage because of its geographical location. It is somewhat inaccessible and remote and has a scarce population. It becomes necessary for the country to place bulk import orders for goods which is not possible for them to produce on their own. These imports can also result in unbalancing of trade and shortfalls that put a pressure on the Australian dollar.

Keeping an EYE on Australian Economy

Australia is amongst the world’s most rich country when it comes to natural-resourced along with being a modern industrialized economy. Coming to keeping a watch on the economy, whether it is a beginner or an experienced trader, whether one is a long term trader or a short term trader, irrespective of everything, as long as one is trading AUD USD currency pair, they have to get used to keeping a watch on the economic announcements coming out of Australia and ensure to keep their eyed on Cash Rate announced by Reserve Bank of Australia ; Change in employment & unemployment rate; Consumer price index; Producer price index; the Commodity prices etc.

First Understand, and Then Trade the Australian Dollar

The currency of Australia, AUD is indeed amongst the top activity reflecting currencies but at the same time they are also less liquid as compared to the currencies of the United Kingdom, Japan or the Euro-zone. Also, comparing the economy of Australia, which is a commodity-producing economy to that of the United States, is unfair because they are two very different economies with their own plusses - peculiar and unique to themselves.

Generally investors should learn to concentrate on the trend in commodity prices to decide if the chances of Australian Dollar are more towards rise or fall in the near future. Also traders doing speculation in Australia should keep the comparative interest rates at the forefront, because they make for popular destinations for the carry trade.

When interest rates prevailing in Australia are higher than what is prevailing in countries like Japan, there is a possibility that the traders might employ the carry trade tactic by way of selling the yen and spending on the AUD or New Zealand dollar. This type of trading helps to shoot up the value of the Australian dollar.

When disparities related with interest rates move in opposite direction or market’s unpredictable nature drives traders to go back to their stance, the Australian dollar is likely to take the brunt of it and decline at a fast pace.

Traders beware that investing in AUD may lead to a situation that directly exposes him/her to the commodity prices impact. Although the commodity currencies like AUD typically moves in sync with commodity prices, the currency is also triggered or affected by factors that may not be directly related to it.

These things can avert commodity currencies from becoming an exclusive game on prices based on commodity. People who want to focus on commodity trading should evaluate and be sure whether they actually want to trade this commodity currency or would rather be investing directly in such commodities.

Factors That Weaken / Strengthen the Australian Dollar

There are several factors that can influence the movement of AUD. The most basic determinant of the movement of the commodity currencies however is the price of commodities. As the price of commodities rise - the Australian Dollar strengthens. Likewise when commodity prices fall or become weak, the currency also weakens.

In a situation when the commodity prices are up and AUD is going strong, this is the time during which the country usually grows comparatively at a faster pace, which leads to high interest rates on domestic turf. And high interest rates contribute towards making Australia popular with the carry trades, wherein Forex traders tend to sell currencies that are giving them low return on investment to reinvest the proceeds in currencies that will help them get better returns.

These carry trades can drive the prices of AUD higher than it otherwise might have been. However, when monetary situations undergo a change, the carry trade situation gets upturned within a very short span of time, and there is a possibility of fast decline in the value of currency or otherwise.

History of AUD

Initially AUD was pegged to British Pound, wherein, the British Pound controlled the value of AUD. As a result AUD rose and fell as the pound did. Then in 1946 B Woods system was introduced, according to which AUD got pegged to US dollar, which also backfired after a while and the AUD was brought back to its original status.

After a few years of brainstorming and planning, the Australian dollar was launched on fourteenth of February, 1966 as the new decimal currency. All their coins had image of Queen Elizabeth II on the front and are minted at the Royal Australian Mint.

The deregulation of Australia’s financial system that followed helped to expand the scope for financial advice as demand for advisors grew in financial arena. It impacted exchange rate fluctuations worldwide, becoming recurrent in nature, capital flows attained higher significance; fiscal shortfalls also became bigger.

Another fall out of deregulation was that internally the open-market system was now the focus of the Reserve Bank’s operating system. Then came the tender system for Treasury notes, and bonds, and eventually it resulted in the Australian dollar being launched in 1983.

Then due to intervention on the part of Prime Minister Bob Hawke along with Treasurer Paul Keating during 1983, when de regulation of the system generated momentum, that the AUD USD started showing some strength in the exchange market.

When we speak of AUD USD vis-à-vis the structure of Australian economy, we understand that the exchange rate for AUD USD cross pair depends on the raw material rates. Because of the fact that the Australian interest rate is one of the factors that triggers the investors to go for AUD with an objective to do “carry-trade” operations.

International influences on the AUD - Australian Dollar

During the time period when the world as a whole was addressing the issue of globalization and deregulation, was when value of Australian dollar experienced a great deal of turmoil as well as fluctuation.

Some of the major factors that affected the value of AUD were, Overseas Interest Rate Differential; Global Stock Market flux; Level of Confidence amongst overseas investors; Geographical and Political turbulences that economies faced at that time; and so on.

The first things traders recall while discussing this aspect is the crises market faced by the US in the year 2007 which went on to make a dent in most of the stock markets globally.

Then in the same year, i.e. 2007, RBA took a stand which helped the AUD in its history of 23 years reach its best value against USD.

The other favourable situation for the AUD’s reputation was the projection of scope of expansion of the Federal Reserve as the US economy at that time was clearly showing signs of slowing down.

The AUD presently depends on its commodity and merchandise export like gold, iron, and copper. These commodities account for nearly a billion AUD which makes for more than fifty percent of its overall export.

Any alterations in the market for these commodities tend to bring volatility and movement in the value of Australian Dollar. For almost fifteen years, the Australian Dollar has been showing growth at a stable speed within the fiscal cycle and has introduced quite a few opportunities vis-à-vis world trade.

Australian dollar has managed to consolidate its position due to many reasons.  The first major factor is related to china’s consistent growth curve. China gets lots of things exported from Australia which as a result strengthens value of AUD.

Then another reason for strengthening of Australian economy and its currency is the abundance of Uranium reserves found in Australia. This provides the economy and its currency, the AUD with solid stability.

Uranium has an important role to play in minimizing the energy crises and dealing with global warming - issues we are facing and fighting globally.

About the Domestic influences on the Australian Dollar

Coming to the domestic factors that have an impact on the AUD, they include, level of interest rates, level of economic growth, inflation amongst several economic indicators.

Even the Reserve Bank of Australia has the power to influence the exchange rate level when there is a heavy movement or upheaval by trading in the Forex market as a purchaser and vendor of the AUD currency. This kind of practice is meant to act as a cushion to save it from economic shocks externally before its effects start to become disruptive for the domestic economy.

AUD USD – Pair Correlated With Gold and Oil

The most critical fact about Forex market is that price of gold, crude oil and Forex markets are closely knit and woven. As a Forex trader, if Forex trader’s conditions his mind to keep a watch on fluctuation in gold prices & oil this will Fine tune his analyses further and he will help him to predict price changes that much more accurately.

Gold and oil prices are considered to be leading pointers in Forex trading.  Gold, oil and Forex – these three markets moves are based on the same fundamentals.

Breakout trading in this environment can prove to be highly profitable if done correctly. The problem is it is not always easy to identify a true breakout from a rumoured or false breakout. That’s where d experience and analytical skills of a trader comes into play.

The basic principal is that when USD rises, gold prices take a hit and when USD falls, gold prices shoot up. This is the reason traders often notice this happening with the currency pairs such as the Australian Dollar-US Dollar Pair, New Zealand Dollar and USD and US Dollar-Franc currency pair, which mirror movements and changes happening in gold prices.

The Australian dollar (AUD) is positioned highly amid major currencies category in the Foreign Exchange Trading market. It is also treated as a commodity currency because Australian economy relies very highly on commodity exports and they are used to keeping huge reserves of oil and gold besides other commodities.

AUD & USD Currency Trading

The AUD-USD pair is made of two components, the Australian dollar, appearing first and is the base currency, and the US dollar that appears later is known as the ‘counter’ or ‘quote’ currency. The pair is also popularly referred to as Aussie by traders. The AUD USD rate of exchange is evaluation of one currency versus the other.

Since Forex trading happens when one currency is compared to the other, AUD USD is not a very complex pair to trade irrespective of market situation. AUD USD trading is a preferred pair as it helps to reduce risk on the holdings that he has since it facilitates the trader to book profits in markets that could be moving upwards or downhill. In recent past, it has been often observed and recorded that the AUD USD exchange rate is influenced by rate of interest and prices of various commodities like gold, crude oil etc.

The reason why the Australian dollar trades in such high volume is because of its global recognition and the liquidity which the currency offers.

The Reserve Bank of Australia sets terms and is responsible for maintaining and keeping the exchange rates of the Australian dollar stable and sound. The Forex rates in Australia heavily rely on the exchange rate of Australian dollar vis-à-vis other currencies across the world in all the markets.

The Forex trading market in Australia trails floating exchange pattern.

Trading the Australian Emp Exch - AUD USD

Australia releases its employment figures at regular interval. These all-important figures invariably rock the markets in positive or negative direction depending upon the report.

Best Time to Trade AUD USD Pair

When to Trade is based upon volume and activity of traders. However the most appropriate time to speculate on AUD USD currency pair is during the overlap time-zone. Simply for the reason that during the overlap time, i.e. when one market is about to close for the day and the other warming up and getting ready to open with a fresh day ahead of them, is the time when traders from both countries will be on trading platform.

As one set might be on the verge of closing deals the other set might be looking for fresh opportunities to invest.  Number of active participants is at their maximum at this point of time and this has direct influence on momentum that can fuel breakouts and trends. This situation can also surface during the time of releasing of economic data, providing the triggers for the movements in currencies.

When to Trade Depends on Ones Trading Style

The best or most unpleasant time to trade besides other things also depend upon the trading attitude or style of trader. Let’s consider an example – trading strategies like breakout trading, momentum trading, trends trading are generally seen to deliver better results during active, voluminous market hours whereas what is known as range trading is seen to work at its optimum during what are called the relatively inactive, or slow or sleepy hours.

Range Trading is suitable for day traders. And the best times to Range Trade are; between two trading sessions; just before the market is coming to a close; an hour or two before breaking of an important economic announcement.

There is a difference of timing when it comes to Breakout Trading – it is advised that it is done keeping economic announcement in mind but at the time then the market is opening.

Coming to Momentum Trading, it is most suitable when followed by the breaking of financial news or statistical data; because if the announcement is significant, the market will most definitely show the impact within next few hours.

In this kind of trading it is very typical of AUD USD traders to watch out for stocks that are displaying movement in high volume as well as one direction. This is the situation which will push the traders to hang on to their position starting from a few minutes, to one whole trading day. Length of time will depend on movement of stock and the direction it takes.

AUD USD is the most voluminously trading pair, accounting for nearly forty percent of trading revenue. The pairs that come next to AUD USD are EUR/USD, & USD/JPY with twenty and ten percent share respectively.

When a trader seriously decides to get into trading and making investing in currency market he will always be at an advantage if he/she does it based on knowledge instead of impulse. It will do her a lot of good if she enters the market will full knowledge of the kind of work that goes into it rather than just profit records of some winning trader. And when it comes to Australian the people there have such a clear understanding of their currency and their economy, that they are rarely seen to make mistakes with AUD USD which also happens to be their favourite pair amongst a few others.

Of course, another reason is info released by BIS and is inclusive of all transactions irrespective of whether they are speculative or non- speculative in nature, and for majority of citizens of Australia, any type of Forex trading will comprise one definite component in their preferred currency pair and that being the AUD.

Another feature of the AUD USD pair is that the trading range has a tendency to get widest at this juncture, which indicates that the chances of a breakout are at its peak between the London and New York trading sessions, which fall between 14:00 and 16:00 GMT.

This indicates that the most economically viable time to do range style of trading the AUD USD pair – it falls between three to five GMT, a few hours head of opening of the London market.

When the trading day is coming to a close, the time that one can strike most profitable and winning deals actually has more to do with the individual’s trading style and schedule more than anything else. If the trader prefers to get into range style trading, it will do him good if he decides to trade during Sydney’s peak working hours.

For a working individual who does not have time through the day because of office or any other occupation that he is busy with and it is possible for him to trade, after he is through with his pre-occupation, then it will do him good if he looks for break-out time-zones falling close to the opening of the trading session in London and if he can remain awake and feels at ease to get into active buying and selling during the night, he can take advantage of the time which partly covers the London session and partly covers the New York sessions for trading.

The important thing here is to avoid permutations-combination style of trading, or make an effort to get into range trading during the time when probability of breakout and untamed swings are their peak.

While trading the times of the year can also make a difference Volatility in the Forex market is more settled during the summer and picks up during the autumn and winter as the fiscal year end is coming to a close. Meaning, range trading will work better during June month and July month, and trend trading will fetch better results between October & January.

Taking Cue from GBP/USD & EUR/USD to Trade AUD USD

If investors do this small little exercise, it will help them see thru a lot of things clearly that will eventually help them trade better.  What they should do is refer to their trading chart windows of past two or three days which show the Aussie Dollar in action. IF they observe it carefully, the purpose of taking this exercise up is fulfilled.

While observing EUR/USD and GBP/USD currency pairs, traders will notice that as the two go up, surprisingly the AUD USD too moves in the similar direction. Same holds true under a situation when the two former pairs take a dip, however it is not so random.

Finally, a Quick Glance at AUD USD Trading

The AUD USD is an aggressive currency pair for trading, always ready for action. It is also the 6th highest traded amid the range of international currencies. The pair according to reports releases also accounted for between 6.5% - 7% of worldwide currency trading in the year 2007.

The AUD USD often fluctuates keeping in line with the gold price. Investors and traders know gold as a safe investment against inflation, and therefore gold is one of the most widely traded commodities. Like the New Zealand Dollar, the Australian Dollar is also known by the name of commodity currency, because this economy is also commodity dominated.

In other words, the Australian Dollar’s strength, weakness, swings, spikes, everything depends on the price of commodities which mainly comprise minerals and farms. Traders may be aware that the Australian Dollar sees a fall or crash during the time prices of minerals go down and an upward move during global expansion phase.

For traders who are keen to trade this pair, should get the basic education and training before they jump on the wagon. One should never ever trade on an impulse. Apart from basic education and online and on the job training, they should also get their hands on the Advanced Technologies to trade the pair. Combining the advanced techniques and technologies in the market along with their education and training will take the traders a long way to help them analyze the market accurately as their analytical skills will be nicely fine-tuned.

The AUD USD shows a lot of price movements and fluctuations. Therefore, AUD USD is a good and interesting currency pair to trade. When a trader buys the AUD USD, he/she is helping Australian Dollar go up and American dollar go dowm at the same time. And when the trader goes takes a short position with AUD USD, it means he is selling AUD against USD.

Coming to timing your trade, European session is the most lucrative time to indulge in buying and selling of this currency pair. European session is alive and active between 2am to mid noon EST.

The AUS USD is affected by economic and fundamentals and news released by the USA as well as Australia. These news, are somehow relate to each other. Because of this, traders like to pay attention to the interest rate gap or disparity between the United States Federal Reserve and the Reserve Bank of Australia.

As the U.S. Federal Reserve tends to mediates where the interest rate are concerned, the currency market as a result of this witnesses a situation where the value of AUD USD pair goes down because of consolidation and strengthening of USD.

Traders should also remember that the Aussie shares negative or unfavourable correlation with USDCHF, USDCAD and Dollar-Yen pairs.

The AUD USD enjoys a favourable correlation with the USDCAD, because of the fact that the positive correlation exists between the Canadian Dollar and the Australian dollar since both these economies are similar in structure and also because of their dependence on resources which is a driving force behind the GDP.

Further Reading: Before leaving our website, please take a look at the other articles we have published.

fuente: http://www.forexoma.com