Day-by-day trading

July 9th, 2009

Everybody knows that Forex does not sleep and does not close. Since the rise in Asia till the sunset in New York bargains are made on Forex. Here is the question: what does Forex intraday trade constitute, if, in fact, trading sessions are held without breaks during the whole week? That is why technically intraday trade is a deal closed when trader does not sleep. Also a deal can be considered as intraday if it is sealed or closed during the trading sessions at the Asian, European or American stock markets.

Informally intraday trading is an indicator of trader’s mastery and experience level. Thus, for example, a newbie trader wants to jump into the market, win and go out. More experienced intraday trader prefers wait till the market comes to him. The newbie player takes intraday trade as alternative of the deep market analysis. Whereas, the experienced trader knows that intraday trade itself is a result of its analysis.

A history of your intraday trade plays an essential role. You see, starting analysis, probing a position where a price is testing a trading pattern, the key support or resistance levels of Fibonacci, trend line or moving average. In the ordinary sense, your next trading day takes its trading models reasoning from the previous days if not weeks.

Finding of your next intraday deals is the result of some decision-making rules application. The actual condition for trade signal receiving is waiting till the right confirmative moment. The next important step consists in deciding what direction the next deal will have. Will it be “buy” or “sell”? Choosing the direction of your next deal you do not try to forecast the market at all. You wait till the market comes to you itself.

The attractive feature of Forex market is concerned with plenty of opportunities for trading during a day.

Let’s try to determine how many good trading chances does intraday currency trader have during one day. Sensitiveness analysis would show that we have 6 major currency pairs (EURUSD, GBPUSD, USDCHF, USDJPY, USDCAD, AUDUSD), and at least the 2 most widespread cross pairs (EURGBP и EURJPY). This provides us with 8 pairs for intraday trade.

When we look closely at every graphical interval of a currency pair for getting a trading signal, we greatly increase potential for deals. Intraday trading at Forex market can often provide more trading opportunities than in a medium-term outlook. A market participant doesn’t has to catch any deal, he/she should choose carefully from the number of existing chances. A trader must sift out potential bargains, searching for patterns and choosing the key time interval. A great idea is to focus on the trend lines and channels in any time frames.

The newbie trader can make it a rule to determine trading opportunities using 4-hour time frame. This period is rather long so that the price could develop wider ranges acceptable for trading. During 4-hour time frame currency pairs often show ranges that provide the distance apart the resistance and support levels enough for reaching intraday trading goals.

In that way if we evaluate that we can intend on 2 trading chances for a currency pair during the given 4-hour period, then we can await in common 16 trading opportunities that can justify closing of the deal.

If we closely analyze these opportunities and choose only 1 deal during the 4-hour span of time, then we have more than enough to consider Forex intraday trading as serious chance.
There is nothing unordinary in cluster effect advent, when an operation with one currency pair is accompanied by operations with all other pairs, and suddenly nearly the same time numerous opportunities appear. Otherwise, distribution of the trading chances is not accidental, that is why patience in waiting of the best chance is the determinative skill.

Eventually, bargaining is a logical conclusion of analysis, but it is not spontaneous action. Whereas, there is no one common rule regarding what trading signal is to choose, we can diminish conditions in such a way that a deal will be rational and supported by combination of the technical factors.

Any day trading models, that can make you wish to arrange a deal, appear on Forex market. The experienced traders wait for deals with a high probability, if they are sure the deal will work. The mental state and optimism also can support trader’s confidence.

In the long run, profit and losses statistics will show if you follow up the deal or if you trade for win. Either you seek after grasping a quick gain for paying for your dinner at a restaurant or trade for mortgage payment, intraday payment on Forex has a potential for achieving different trading aims because of its market patterns.

Forex intraday trading offers a wide spectrum of trading opportunities, but it requires a lot from the trader. Currency exchange trader who wants to be successful, must be armed with the arsenal of technical instruments and have a set of the distinct rules.

The article was added by Evgeniy Galaev,

InstaForex Chief Manager of the Client Relations Department

The future of the currencies

July 7th, 2009

The crisis has led us to a revise of the dollar as the international reserve currency. The rumors about making the common currency which will unify the Middle East countries, particularly the main oil-producing participants of the world raw material market, brought oil into fire. Russia loudly announces about ruble strengthening and about a wish to operate with its international trading partners using the national currency at least in a part of mutual exchanges. The same does China, which export and confidence to yuan need to be increased. And recent regular SCO meeting in Ekaterinburg looked like a funeral of the US dollar as the world reserve currency in the eyes of American financial reporters. The motion was set up, but nevertheless, it was provoked by the crisis. If the crisis is not so prolonged in respect of optimistic forecasts, these movements will not be so dynamic. In case of recession slows down and the world consumption and the industrial output growth, the dollar will take its position again and will not look like disposable paper.

Otherwise even according to the most pessimistic forecasts for dollar, the USA have their answer (by the way, it is comparable to the appearance of the Euro in the international exchange market arena), this answer is Amero.

Amero is the name of a supposed currency of the North American Union (NAU) that will include The USA, Canada and Mexico. In other words, the question is foundation of a new state similar to The European Union. Conversations regarding this have been carried on since 1999 and insensibly, are going beside approach. Thus, in March 2005 the summit of presidents Bush and Fox and prime-minister Martin took place. There were discussed ideas of the interregional political and economic union forming that will put together The USA, Canada and Mexico in reference to The North American Free Trade Agreement.

In the joint sentiment that was published in follow-up of the summit was manifested about the first step of the alliance’s forming, it was named “The Security And Prosperity Partnership”.

Don’t rush to celebrate the world’s unification. Unfortunately, exactly this union threatens not just with simple financial economic crisis, but with a global economic catastrophe. Almost for every country, except The United States.

Exactly such opinion is expressed by different experts, they confirm it with figures. And what is more, it is affirmed that setting up of The North America Union, dollar’s decline and Amero’s leading in is an “exporting of inflation” in the countries all over the world and “the most smashing strike on the global economy during the whole history of the current civilization existing”.

The article was added by Ekaterina Vydrina,

InstaForex personal clients manager

Exhibition totals

June 23rd, 2009

It is time to sum up the results of InstaForex participation in the exhibition World Forex Expo which took place on June 12-13, 2009 in Kuala Lumpur (Malaysia). We remind that World Forex Expo is a great event that is held in different countries all over the world with the aim of promotion and developing Forex market services. Moreover it is a great opportunity for participants to meet and share experience, discuss prospects and tendencies of Forex market development and also present some of their services and goods. Exhibition in Kuala Lumpur was attended by several thousands of people from Malaysia and neighboring countries (Singapore, Indonesia, Thailand, etc.)

Stand of InstaForex Company became one of the most attended at the exhibition. Within the Forex exhibition InstaForex raffled 3 laptops Acer Extensa 7630G which were presented to three accidental customers. However there were much more surprises from InstaForex Company: numerous bonuses are being credited already for the clients who made requests during the Forex Expo.

Visiting Southeastern Asia Company’s management held many meetings concerning InstaForex development in Asian region. Also InstaForex Company organized range of presentations of company’s services to public at large.

InstaForex Company expresses its thanks to World Forex Expo organizers in Kuala-Lumpur and also all guests and partners of the exhibition.

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Added by Ekaterina Abramova,

PR-manager of InstaForex

Fundamental technical research

June 5th, 2009

Plenty of forums about Forex-trading are full of threads where traders try to answer the same question: what is better? Fundamental or technical analysis?

In my opinion the answer to this question even does not exist. In many respects it is because the question as itself does not contain a correct comparison of two equivalent issues. That is why I would like to take up both types of analysis separately. Of course I will not be able to avoid oblique compares.

Fundamental analysis is based on the information of one kind, and technical one considers another data. There are also differences in fields of application of each analysis’s types. Fundamental research is made during a long-term period, and technical analysis – short-term.

It is not a secret, that fundamental factors are crucial macroeconomic indicators of the national economy state. These indicators influence on participants of exchange market and on currencies’ rates. Looking it another way, fundamental analysis studies all the economical indices, which affect the price of an investment object of in distinction with the technical analysis of trend patterns on graphics. However, not each adherent of fundamental analysis remember, that it is necessary to note one and all the economical indicators. Basic among them are:

- Interest rates

- Money supply

- Unemployment

- Non farm Payrolls

- Gross National Product

- Gross Domestic Product

- Consumer Price Index

- Producer Price Index

- Trade Balance

- Jobless Claims

- Industrial Production

- Capacity Utilization

- ISM

- Personal Income

- Car Sales

- Retail Sales

- Durable Goods Orders

- Consumer Confidence

- New Home Sales

- Construction Spending

- Factory Orders

- Business Inventories

It is necessary to understand that to interpret economic indexes is not an easy job. The person should have good economic education, analytical mind in order to make qualified conclusions on the basis of fundamental analysis. Interpretation of indexes by newbies in the way like “the level of industrial production in USA increases that is why US dollar rate rises” has nothing in common with qualified analysis and forecast. Only professional analytics who read regularly records and press-releases, communicate with people from trading and investing fields are able to examine all indexes in complex. However, do not give your attempts to master fundamental analysis up for lost. Even basic fundamental analysis based on small experience and common knowledge in economic may help to “catch” trend, sometimes even long-term one. Unlike fundamental analysis, technical analysis studies predictable events inside of trading process with the help of trend indicators which are seen among lines at chat. Trend models and figures of technical analysis are formed from these lines. It is possible to forecast prices movement at chats with the help of trends method.

Adherents of the technical analysis hold by an opinion that fundamental analysis has already taken into account by the market and included to the price. That is why price chat studying is enough for technical analysis forecast. In other words technical analysis is a part of fundamental analysis.

In spite of some simplifying of the real situation – time shift from the moment of information receipt to the moment of its influence on a price is not taken into consideration – this is difficult to question. Technical analysis is a short-term analysis and price always moves in one direction. Three types of trends are distinguished:

“Bullish” trend – prices move up. The definition “bullish” was arisen in a similar way to a metaphor “a bull which raises a price on his horns”. This is situation on price chat when assets’ prices take support level as starting point and set new price maximum. Support and resistance lines are directed up.

“Bearish” trend – prices move down. In this case, a bear crushes a price down falling on it by its body. The situation is reversed to the previous one, prices go to the resistance level, push themselves away from it every time set new minimum, so trend will be directed down.

Sideways trend – there is no definite movement of the price. In this situation the prices are “closed” in some range and go from the line of resistance to the support line and back without new maximum or minimum set. Usually such movement is called “flat”, rarer “whipsaw”.

It should be mentioned that long “flat” is an indicator of price storm at the market – strong movement of the price to some direction.

As a rule prices do not move linearly up or down. However, trend line is directed up when we have bullish trend and prices grow quicker than fall. Quite opposite thing happens when we have bearish trend.

Consequently basic laws of trend construction may be deduced:

- “active trend with more possibility will continue when change its direction”, or

-  “trend will move in one and the same direction till becomes weaker”.

However, do not use oscillators during heavy trend because they are designed for short trends, when long-term fall takes place oscillators signal about resell and advise to buy but the fall is far from bottom. That is why it is more reasonable to trade trends and oscillators use during sideways trends.

Technical analysis is based on unchanging laws of physics, economy and psychology in different historical periods. Other words those rules which work in the past work in the present and will work in the future. That is why this statement gives traders, who use technical analysis, basis with a big likelihood ratio forecast future while trading trend.

Summing up, I must say that there is no need to divide fundamental and technical analysis into correct and incorrect, effective and ineffective, useful and useless. Both types of analysis complement one another. Fundamental lets count the perspectives of the movement main direction and technical lets start and finish trading in time.


The article was added by Vladimir Syrov,

InstaForex Chief development manager

FX EXPO harvest

April 20th, 2009

Manager and representatives of InstaForex Company have returned from the two-day indefatigable exposition at MOSCOW FX EXPO 2009.

This exposition brought not only positive emotions and great impressions but also great number of new contacts, acquaintances and ideas. There were partnership and friendship relations born with companies-participants of FX EXPO, also negotiations about future opening of the InstaForex introducing office in Moscow were carried out. InstaForex representatives also met with partners from St. Petersburg, Novosibirsk, Georgia, and Malaysia.

More than a hundred new clients opened trading accounts in InstaForex right at the exposition to certain of profitability of trading instruments in InstaForex comparing with other brokers. Accounts of new clients will be credited with 30 USD of the welcome bonus as primary deposit according to the campaign offer.

Moreover, exposition urged the company to develop new directions of business running, such as trust trading accounts’ managing, bank guarantee for trading accounts, bringing into service of the segregated accounts.

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Added by Vladimir Syrov,

InstaForex Chief development manager