Wednesday, February 25, 2015

Forex Tutorial: Introduction to Currency Trading

The market (forex or FX for short) is one of the most exciting, fast-paced markets around. Until recently, forex trading in the currency market had been the domain of large financial institutions, corporations, hedge funds and extremelhe foreign exchange market (forex or FX for short) is one of the most exciting, fast-paced markets around. Until recently, forex trading in the currency market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell currencies easily with the click of a mouse through online brokerage accounts. 


Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per day, representing a less than 1% change in the value of the currency. This makes foreign exchange one of the least volatile financial markets around. Therefore, many currency speculators rely on the availability of enormous leverage to increase the value of potential movements. In the retail forex market, leverage can be as much as 250:1. Higher leverage can be extremely risky, but because of round-the-clock trading and deep liquidity, foreign exchange brokers have been able to make high leverage an industry standard in order to make the movements meaningful for currency traders. 

Extreme liquidity and the availability of high leverage have helped to spur the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months. Currency prices are based on objective considerations of supply and demand and cannot be manipulated easily because the size of the market does not allow even the largest players, such as central banks, to move prices at will. 

The forex market provides plenty of opportunity for investors. However, in order to be successful, a currency trader has to understand the basics behind currency movements. 

The goal of this forex tutorial is to provide a foundation for investors or traders who are new to the foreign currency markets. We'll cover the basics of exchange rates, the market's history and the key concepts you need to understand in order to be able to participate in this market. We'll also venture into how to start trading foreign currencies and the different types of strategies that can be employed. y wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell  easily with the click of a mouse through online brokerage accounts. 

Daily currency fluctuations are usually very small. Most move less than one cent per day, rephe foreign exchange market (forex or FX for short) is one of the most exciting, fast-paced markets around. Until recently, forex trading in the currency market had been the domain of large financial institutions, corporations, central banks, hedge funds and extremely wealthy individuals. The emergence of the internet has changed all of this, and now it is possible for average investors to buy and sell currencies easily with the click of a mouse through online brokerage accounts. 


Daily currency fluctuations are usually very small. Most currency pairs move less than one cent per day, representing a less than 1% change in the value of the currency. This makes foreign exchange one of the least volatile financial markets around. Therefore, many currency speculators rely on the availability of enormous leverage to increase the value of potential movements. In the retail forex market, leverage can be as much as 250:1. Higher leverage can be extremely risky, but because of round-the-clock trading and deep liquidity, foreign exchange brokers have been able to make high leverage an industry standard in order to make the movements meaningful for currency traders. 

Extreme liquidity and the availability of high leverage have helped to spur the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months. Currency prices are based on objective considerations of supply and demand and cannot be manipulated easily because the size of the market does not allow even the largest players, such as central banks, to move prices at will. 

The forex market provides plenty of opportunity for investors. However, in order to be successful, a currency trader has to understand the basics behind currency movements. 

The goal of this forex tutorial is to provide a foundation for investors or traders who are new to the foreign currency markets. We'll cover the basics of exchange rates, the market's history and the key concepts you need to understand in order to be able to participate in this market. We'll also venture into how to start trading foreign currencies and the different types of strategies that can be employed. resenting a less than 1% change in the value of the currency. This makes foreign exchange one of the least volatile financial markets around. Therefore, many currency speculators rely on the availability of enormous leverage to increase the value of potential movements. In the retail forex market, can be as much as 250:1. Higher leverage can be extremely risky, but because of round-the-clock trading and deep, foreign exchange brokers have been able to make high leverage an industry standard in order to make the movements meaningful for currency traders. 

Extreme liquidity and the availability of high leverage have helped to spur the market's rapid growth and made it the ideal place for many traders. Positions can be opened and closed within minutes or can be held for months. Currency prices are based on objective considerations of and cannot be manipulated easily because the size of the market does not allow even the largest players, such as central banks, to move prices at will. 

The forex market provides plenty of opportunity for investors. However, in order to be successful, a currency trader has to understand the basics behind currency movements. 

The goal of this forex tutorial is to provide a foundation for investors or traders who are new to the foreign currency markets. We'll cover the basics of exchange rates, the market's history and the key concepts you need to understand in order to be able to participate in this market. We'll also venture into how to start trading foreign currencies and the different types of strategies that can be employed. 

Wednesday, January 28, 2015

2014 Ends - The Dollar is Strong, But For How Long?

I thought I would post a year-end wrap-up in this "long in the tooth" blog to let those who still check it once in a while can see that I'm still alive and trading.  Most of my attention has been focused on my personal trading and supporting some up-and-coming niche hedge funds.  In both avenues my efforts have been successful.

It was a good year in most aspects.  No thanks to current politicians and anti-market types.  Socialism and other "high control" governments are trying to make it as difficult as possible for free markets to operate as they should.

Notwithstanding, we've got some real market trends in place.  The dollar is strong vs. almost any currency out there: AUD, NZD, JPY, EUR, CHF, GBP, CAD, MXN (Mexican Peso) and precious metals.

Trading OneNightStand and trailing a portion of the positions on strong follow-through trades after the beginning of July resulted in very reasonable gains.  At one point in mid-October, the account was at $1,289.21.  With a lot of back and forth towards year-end some reduction in  return was inevitable.  Currently, the forex side of the Challenge account is $1,156.60.

Not so good on the silver side of the Challenge account.  

The 1330 ounces of silver carried over from last year currently have a liquidation value of $20,841.10 (based on the 12/31/14 spot price of $15.67).  

Commodity prices, of which oil is a huge percentage, have all dropped significantly this year relative to the dollar.  Since May, Crude Oil prices have dropped in half.  Which didn't help silver and gold values at all.  It is really amazing that silver didn't fall more with the fallout in commodities.  Maybe it will.  Either way, I have no interest in liquidating any of the silver the Challenge account has accumulated.

Large shifts in value between asset classes and capital inflows into others (like the US stock market as of late) cause new trends to begin and existing trends to continue.  So keep selling that Euro for awhile yet.

Quick summary:

Silver value:         $20,841.10
Forex account:      $1,156.60
----------------------------------
Total:                     $21,997.70

This year I may trade some additional breakout setups to increase returns on some of these trends we're seeing.  I'll post something if/when I start.

ONS is still working of course.  A number of hardy ONS and FirstStrike followers have been in steady contact with me and have also had a decent year.  It is pretty obvious that there are trends going when a currency is falling vs the dollar for 8 weeks like we saw in the Euro.  Still, many traders had a hard time believing the moves were just more than simple corrections.  

A person needs a method that has limited risk and open ended outlier potential to profit from markets primarily dictated by chaos theory.  Which forex and commodity markets most definitely are.

Best wishes on 2015.

I will be thinking of you.

 Josh