Archive for the ‘Trading’ Category

Forex and State Regulation

Wednesday, January 9th, 2013
Forex is based on free currency conversion; it presupposes a state does not interfere in foreign exchange transactions. Nowadays, there is no fixed exchange rate as there are no restrictions on volume of transactions.

However, some countries establish special rules for brokerage firms. First of all, these rules apply to relationships between brokers and clients.

Financial Services Authority (FSA) exercises control over financial markets in the United Kingdom.

Commodity Futures Trading Commission (CFTC) regulates futures and option markets in the United States. National Futures Association (NFA) is an independent self-regulatory organization and watchdog of the commodities and futures industry in the United States. The NFA elaborates trading rules, conditions for brokerage service, and also provides mediation and arbitration for resolving consumer complaints. Besides, the association collects and analyses reports obligatory provided by brokers and its members.

The Central Bank of the Russian Federation exercises control over the exchange transactions in Russia. However, Russian legislation does not make provisions for free unlimited currency conversions.

Dr. Alexander Elder: psychiatrist in trading

Wednesday, December 19th, 2012
Alexander Elder, one of the greatest specialists in the field of finance, was born in USSR. He graduated from the medical university and when he was 23 in 1974 he emigrated to the U.S., where he lives to this day. Today, Dr. Elder is professional trader and a recognized expert in stock trading, who wrote numerous articles on the subject. He worked as a psychiatrist and taught at Columbia University. In addition, Alexander is an author of several books about stock trading, which received a lot of good appraisals. From there he made his name as one of the most reputable experts in stock trading. It all started with a KinderCare share which he bought at the beginning of his trader’s path.

As a psychiatrist, Dr. Elder is well versed in the intricacies of the human mind, so it could not but influence his understanding of trading. He sees not only the deal details, but the personal attitude of traders before, during, and after the deal. It is of key importance that he successfully applies his knowledge to explain market behaviour.
According to Alexander Elder, there are three types of traders:
  1. The trader who is technically literate but has no skills on analyzing the motives of behaviour.
  2. The trader who realises that technical knowledge is not a guarantee of success. Elder calls this the awakening of a psychological understanding with respect to stock trades.
  3. The trader who understands that successful trading requires control and money management. Rather than letting statistics move him, it is money management and control that causes him to anticipate future positions.

Bright personality and wide experience enabled professor Elder to write a range of best-selling books that won the world’s hearts and minds. Elder’s books “Trading for a Living” and “Come into My Trading Room – A Complete Guide to Trading” are the classical trading tutorials. In 1993 “Trading for a Living” became an international business bestseller which was translated into 9 languages, including Chinese, Dutch, French, German, Japanese, Korean, Russian, and Polish. Elder’s “Trading for a Living” won Barron’s Best Book award in 2002. Dr. Elder takes an active part in free educational projects, which he initiates himself, and also trains the younger generation through his webinars available on the Internet.

In conclusion, Alexander Elder said:

The fear – the main problem for the trader. If you have everything you need – the system of the game, the rules of capital controls, the psychological rules prevent loss, it means it’s time to play the market”.

Why Do We Need Forex Economic Calendar?

Wednesday, December 12th, 2012

The stage of your professional development does not play a significant role. If you are engaged in the work on the international currency market the economic calendar will be an irreplaceable tool for trading. There is no doubt that it is used by different traders to a greater or lesser extent. However, those who take into account fundamental analysis cannot manage without Forex economic calendar.

Firstly, the calendar contains detailed timetable of the macroeconomic data. As a rule, it provides information pertaining to the previous, expected, and current figures of the indices. Economic data has considerable influence on price fluctuations. That is why information presented in the calendar may help to elaborate the most profitable trading strategies. Due to the calendar you can change your trading strategy. Moreover, market data updates in real-time.

Thus, using Forex economic calendar you get the possibility to react timely and immediately to major affecting the international currency market.

How to Make Money Trading Futures?

Wednesday, December 5th, 2012

What does a word “futures” imply? It is a derivative from English word “future”. Futures contract is a certain agreement to make a deal in the future at the fixed price. The main advantage is small start-up investments. Thus, if you buy futures, you can earn even more a bit later than when you buy stocks.

There are three types of futures: commodity, financial and stock index futures. How to make a choice? Better choose the instrument which liquidity is high enough to enter and exit the trade easily.

In order to make money while trading futures, be sure that the price is changing noticeably. Only in this case you can snatch a large sum. If the fluctuations are insignificant, you will not earn a lot.

With every year the demand for futures is increasing. For some futures contracts is a good opportunity to trade actively, for the others (as a rule seasoned traders) – a great instrument which can be used instead of stocks and can help to decrease expenses. Such kind of investment is beneficial for both bulls and bears.

Doubting if you can earn with futures? Do not hesitate, everyone can make a good profit trading futures! But do not be emotional: rely on common sense and do not invest your last penny.

Forex Holidays

Wednesday, November 28th, 2012

Prior to starting trading actively on Forex, the trader should consider many factors which affect the market behavior, including holidays in different countries. When trader knows the dates of major holidays, it helps him to understand the market peculiarities at different periods of time.

To begin with, Forex working schedule is very convenient: it operates 5 days a week, from Monday to Friday. The weekends are set for Saturday and Sunday, but even during these days the trading does not stop, just shrinks significantly and can be carried out mainly on major currency pairs. Apart from the weekends, Forex activity can be interrupted during public holidays which widely affect the work of the market. As far as Forex is subdivided into 4 sessions: the European, the American, the Asian, and the Pacific, and due to public holidays in different countries, the market activity is changing constantly. When there is a holiday in a country or a group of countries, the trade can be performed with a delay and at the end of the weekends the situation may turn against the trader. That is why it is necessary to pay the outmost attention to such deals.

Undoubtedly, not all public holidays are of great importance and can trigger slowdown in activity of several countries. Basically, there are just New Year, Catholic Christmas, and Labor Day. But the work does not stop completely on currency exchange and in the economic world even during such occasions: information and finance flow provide trader with a great volume of information for Forex analysis. Despite that the price of some currency pairs moves much slower, after the break is over, traders expect new changes as Forex, undoubtedly, will react to new events.