U.S. Interest Rates on Tap

Crude Oil:

The high volatility of Crude Oil continues, as yesterday a barrel of Oil was traded for over $71.50. However, a bearish cross on the 4-hour chart’s Slow Stochastic suggests that a bearish correction might take place today. This might be a good opportunity for forex traders to catch the trend at its beginning.

Market Expects Low Volatility Today

EUR/GBP:

This pair’s sustained upward movement has finally pushed its price into the over-bought territory on the daily chart’s RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

Find The Right Forex Trading Course for You

Finding a top rated forex trading course is wise when you decide to get involved in currency trading. You’ll want to start making money as soon as possible but because forex trading is risky, it’s important to know what you’re doing or you could easily be losing money instead.

Forex trading involves being able to predict which way currency prices will go. There are many factors to take into account. On top of that, it is vital to open and close your trades at the right moment to get maximum profit from any price change. If you try to figure everything out for yourself it will take a long time. It’s smart to find a forex trading course that you like and not try an rebuild the wheel.

The course you choose needs to cover all of the basics so you will be well prepared when you begin trading. Here are five important points that you will need to understand. Make sure that your course covers all of these before you sign up.

1. Principles of currency trading

Any good currency trading course will explain the basic principles of the forex market including leverage and margins, pips, spread and other costs, and what to look for in a broker.

2. Technical analysis

Technical analysis includes interpreting charts and indicators to identify trends, swings, breakouts and other factors that could be signals for you to open or close a trade. Different systems rely on different indicators. In the beginning, you only need to master the indicators for your own chosen system. Trying to cover them all could be confusing. Later, you might want to refer to other indicators to tweak your system for better profitability, so it’s good if you have access to a course that you can dip into again further down the line.

3. Fundamental analysis

Fundamental analysis relates to the economic news, announcements and other events which affect currency prices. In the end, it is each country’s economic performance which causes the value of its currency to change. You do not necessarily need to be able to predict these events. In fact many traders stay out of the market completely around the time of a forex news announcement. But it is important to understand how the process works and keep an eye on the alerts for anything that might affect your trading.

4. Risk management

Risk management concentrates on minimizing your losses through the use of stops, and protecting your funds by limiting the position size. In general your risk on any one trade should never be more than 5% and many traders work on 2%, 1% or even less. Broadly speaking you should expect to reduce the risk for larger fund sizes, simply because it will be more important to protect a fund of several million dollars than one of only a few hundred dollars. But you are pretty sure to crash and burn if you exceed 5% so make that your limit. You may feel like taking a chance for quicker growth on a small fund but wiping out your funds is not a good way to go!

5. Mindset

We put this last because it is usually the last thing that beginning traders want to hear about, but it is possibly the most important of all. In the end, if you do not master the mindset of a successful trader you will not be able to profit from the forex market.

You must develop a cool headed approach and work on your discipline so that you can follow a trading system without letting fear, excitement or other emotions get in your way. You also need to understand how to handle losses on the psychological level. Risk management techniques can help but if you let your emotions get the better of you, it is easy to fall into a pattern that will guarantee more losses. A good forex trading course will include teaching and exercises to help you master the art of self discipline and keep your emotions off the trading floor.

How Online FX Trading Works

Online FX trading, trading also known as forex, currency trading, or foreign exchange, is a speculative form of investment trading. A Means of making money by trading on the almost constant fluctuations in currency prices. If you are interested in trading currency online, it is very simple these days and can be done on your own computer from your home or office.

If you are not sure how you could make money from currency price changes, it is very simple to explain. You probably already know that different countries use different currencies and these have a value that changes. For example you may hear about the dollar strengthening, which means that the value of the dollar is rising compared with other currencies. The value of the dollar usually rises when the American economy is strong compared with other countries.

Currency prices are constantly changing, going up or down in response to news, economic reports or market activity. This means that a forex trader can deal in currency to make a profit, just a stock trader would do. You buy when a currency is rising and sell when it is falling, in just the same way.

The difference from stock trading is that currencies do not have an absolute value but are always priced relative to another currency. When you buy or sell, you are in fact always exchanging one currency for another. This means that you will always deal in a pair of currencies, which might be the euro and the US dollar. This pair is usually written EUR/USD and it has the highest trading volume of any forex pair.

Online FX trading uses leverage and margins to increase the value of trades. This means that you only need a small balance in your trading account to control very large sums. The most common leverage used by forex brokers is 100 times. This means that $100 in your account can control a position size of $10,000, or $1000 can control $100,000. As you can imagine, when you are dealing with these kinds of figures a small percentage change in the price can come out to a big profit or loss.

Because of the risk of loss, it is important to understand how and why currency prices change and to follow a good system which will give you clear signals on when to open and close a trade. Most of these systems rely on analyzing charts and mathematical indicators which you can access from inside most broker accounts.

Alternatively you may choose to use an automated forex trading system to trade for you. These are the forex robots which have become very popular over the past few years as they have become more and more accurate. There is still room for error and it is important to understand the settings of your robot thoroughly and test it in a demo account before you start online FX trading for real.

Weaker Oil, Stronger Dollar

Metals are beginning the new trading week on a lower note reflecting weaker Oil, stronger Dollar, and in reaction to talks of the International Monetary Fund (IMF) selling Gold. Talks of the IMF selling Gold occurs like clockwork every year.

Stock an metals traders are also standing on the sidelines in advance of today’s Leading Economic indicators report. With that said we find silver 30 cents lower at $16.73. Gold is $11.00 lower at $997.00 per ounce. Palladium remains unchanged at $299.00. Platinum is $1310.00 off $10.00.

Over in the currency markets the Euro slipped 53/100ths of U.S cent to $1.4662. Energy traders are facing lower Oil this morning with the last trade at $70.53 down $1.51 per barrel. Oil gained $2.75 for the whole of last week.

In the stock market the Dow is indicating a 44 point lower open after last week’s total gain of 214 points. Traders are once again showing signs of worry regarding the extent of the stock markets run up relative to the underlying economic fundamentals. The question looming is; are we getting ahead of ourselves? While today’s Leading Economic Indicators are pointing to a rise of .7% compared to the prior reading of up .6%, traders are not so sure that the next 6 months will continue to show economic improvement.

In world matters President Obama is signaling yet another military strategy shift. In a TV interview the President voiced skepticism that more troops in Afghanistan would make a difference. Up until now the military officials expected a rubber stamp endorsement for added troops by the administration.

Today’s economic calendar:

Canadian Retail Sales

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