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USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 92.30; (P) 93.94; (R1) 94.82; More.

USD/JPY recovers mildly after hitting 92.64 earlier today. Though, at this point, intraday bias remains on the downside as long as 94.25 minor resistance holds. Decline from 100.54 could extend further to retest 90.92 low. On the upside, above 94.25 will turn intraday outlook neutral first. Also, note that the lack of impulsive structure of the fall from 100.54 so far is still arguing that it might be part of the consolidation that started at 90.92. Above 95.74 will indicate that fall from 100.54 has possibly completed. The corrective structure in turn suggests that rebound from 90.92 is still in progress and stronger rally should be seen to 100.54 or above before completion.

In the bigger picture, as long as 103.06 cluster resistance (61.8% retracement of 110.66 to 90.92 at 103.12) holds, medium term outlook remains bearish. Prior break of 95.77 low confirms that whole down trend from 124.13 has resumed and should target 100% projection of 124.13 to 95.77 from 110.66 at 82.3 next. Also, note that the current development clears out the long term picture too. Price actions that started from 79.75 (95 low) has completed in form of a triangle that ended with five waves to 124.13. In other words fall from 124.13 is just part of an even larger scale down trend which could extend further to retest 79.75 low.

On the upside, sustained break of 103.06 cluster resistance will firstly argue that fall from 110.66 has completed. Secondly, it will also argue that a medium term low is in place at 90.92 and outlook will be turned neutral with focus back to 110.66 high.

Find A Forex Broker That Won`t Rob You Blind:

It`s not always easy to know what to look for in a forex broker competition, especially in any market, much less a market as complex as currency. But, if you want to trade in the market you need a good firm to work with. While it might be tempting to simply ask the forex brokers what they can do for you, you can`t always depend on them to give you a straight answer. So instead, I`ve put together a few things to consider when choosing your forex broker competitive. You will want a forex broker competitive that has low spreads. The spread, which is calculated in pips, is the difference between the price at which a currency can be bought and the price at which it can be sold at any specific point in time. Since forex brokers competition don`t charge a commission, this difference is how they make money. Low spreads will save you money.

Along with this, you should be looking for a forex broker competitive attached to a reputable institution. Unlike equity brokers, they are usually attached to large banks or lending institutions. The firm should also be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC).

Once you`ve narrowed your choices down to forex brokers that won`t cost you too much, and that are reputable, consider the trading tools that they are offering you. Forex brokers competition have many different trading platforms for their clients, just like forex brokers competitive in other markets. These often show real time charts, technical analysis tools, real time news and data, and may even offer support for the various trading systems.

Learn Technical Analysis:

When it comes to explaining expectancy in the market, you must first look at financial analysis as well as technical analysis. These two types of analysis are usually combined together to gain information on future trades. The first one is related to supply and demand, while the second is related to the more specific aspects of the market.

Both of these, while related to expectancy, can only be used with some degree of certainty. This degree of certainty is in fact not very big. This is all based on probability. There is a main variable on both of these. This variable can be used in some instances as a tool on the trading market. In fact this technical analysis is a very powerful tool. A lot of people just starting out are afraid to use expectancy, but it is actually quite easy to understand. Expectancy is basically an equation; where expectancy equals the probability of a win or average win minus probability of a loss or average loss.
Technical analysis is the study of share prices. By researching the past performance of a share, we can gain an insight into how it will likely perform in the future.

To fully appreciate the power of technical analysis it is important to understand the basics. There are three key principles upon which technical analysis is based:

Everything is discounted and reflected in market prices.

Prices move in trends and trends persist.

Market action is repetitive.

Let’s examine each principle in detail.

The first and most important principle is that everything is discounted and reflected in market prices. All knowledge, regardless of type (fundamental, political, economical, psychological or other) is already reflected in market prices.

It can be time consuming studying fundamental information such as company financial statements, earnings and P/E ratios in an attempt to determine the potential for a share to rise in value. The real value of a share at any point in time is determined solely by supply and demand, as reflected in trades made at the stock exchange.

Technical analysts do not care what the underlying forces of a shift in supply and demand are; instead he or she is interested in what occurs to the price.

Benefits of Forex Trading with ForexGen

Benefits of Forex Trading with ForexGen

Forex offers great investment opportunities for those wishing to diversify their portfolio. Forex benefits and advantages are many. Here are some of the main reasons why more and more corporate and individual investors choose to trade forex:

• No Commissions, Small Transaction Costs: This is probably one of the most attractive forex benefits. Indeed, when you trade forex, you are not charged any fees or commissions on your deals. The way it works is that brokerage firms get paid through spreads (the difference between the bid and the ask price). This allows for extremely low transaction costs. Thanks to its large number of clients and to the large volume and capital traded through the platform, ForexGen offers very competitive spreads on the main currency pairs.
• Leverage Trading: High Returns with Relatively Small Deposits. this means that even if traders deposit a small amount of money, they can actually trade with a much bigger contract value. ForexGen offers a 200 to 1 leverage. If you make a $100 margin deposit, you can actually trade $20,000 worth of currencies. With a $1,000 margin deposit, you can buy or sell $200,000 worth of currencies. However, you must keep in mind that if leverage allows for substantial profits, it also can lead to equally significant loss. One of the chief forex benefits can thus become a major liability. That's why you need to figure out your own risk management policy before you start trading.
• High Liquidity: This refers to the forex market's ability to quickly convert or liquidate deals through buying or selling and without causing a significant price movement. The high liquidity of the forex market is mainly due to the large volume of currencies traded around the world. That way, currencies are exchanged instantaneously, 24 hours a day and with minimum loss value, since the next trade is usually executed at the same price as the last one. In the forex market, there are always plenty of ready and willing buyers and sellers.
• Open 24 hours a day: The forex market is open 'round the clock, 5 days a week, from Sunday 5 pm EST to Friday afternoon 4 pm EST. This is due to the fact that there is an overlap of different time zones and that there is no physical central exchange that opens and closes at a particular time. Forex works through a global electronic network of corporations, banks and individuals. When you hear that a certain rate closed at particular price, this refers to the price at market close in London or elsewhere. However, unlike securities, currencies are still traded somewhere else in the world. The global scope of currency trading, as well as the high demand for currency, implies that there are always investors somewhere who are willing to buy or sell currencies. This also allows traders to trade on a part-time basis, meaning that they can choose to trade whenever they want.

For more detailed information can be found in

http://www.forexgen.com/

24hrOnline Forex Trading With ForexGen

24^hrOnline Forex Trading With ForexGen

With a volume of $3 trillion traded each day, the foreign exchange market is the largest financial market in the world. While Forex trading was once the exclusive domain of banks and large financial institutions, the rise of Internet technology has made it accessible to all types of investors including individuals with small investment capital. As word of its substantial and quick potential profits is spreading, online forex trading is becoming more popular each day.

Through online currency brokers such as ForexGen, traders can now buy and sell currencies in one mouse click and with no commissions or fees. Online forex trading allows you to take advantage of market fluctuations – even small – in various currency rates. At ForexGen, you get free access to topnotch tools which will help you predict market direction and place your orders.

For more detailed information can be found in

http://www.forexgen.com/

Lowest Spread with ForexGen

If we take no commissions or fees, then how are we compensated for our brokerage services, might you ask? The answer is: the spread. As you may have noticed, a currency pair quote comes with two displayed rates for instance, GBP/USD 2.025/2.028. Those refer respectively to the bid price (the rate at which you may short sell the pair) and the ask price (the rate at which you may buy the pair). The spread is the difference between those two rates. The tighter the spread, the more advantageous it is for you. ForexGen offers spreads as low as 1 pip on the main currency pairs. ForexGen is able to offer such tight spreads thanks to the huge capital traded by its clients each day and the excellent inter-bank conditions thus negotiated.

For more detailed information can be found in

http://www.forexgen.com/

Trading on Margin with ForexGen

Trading on Margin with ForexGen

The key to FOREX popularity is margin. Without margin, the FOREX would be beyond the reach of the average investor. So, what exactly is margin and how does it work? Margin accounts allow FOREX traders to control large amounts of currency with a relatively small deposit.

Establishing a margin account with a FOREX broker enables you to borrow money from the broker to control currency lots which are usually worth $100,000. The amount of borrowing power your margin account gives you is the leverage. Leverage is usually expressed as a ratio – a leverage of 100:1 means you can control assets worth 100 times your deposit.

What this means in FOREX is that with a 1% margin account you can control standard lots of $100,000 with a $1,000 deposit. Trading on margin increases both profits and losses, and the potential exists for the trader to lose more than his original deposit. With proper safeguards, however, loss can be limited, and usually brokers will terminate a transaction that extends beyond the margin deposit.

Benefits

As we mentioned above, trading on margin gives you more buying power and the potential for more profits (and losses). How does this work, exactly? A 1% margin account allows you to control a currency lot of $100,000 for $1,000. When dealing with $100,000 small changes in the price of the currency can result in large profits or losses.

FOREX currencies are traded in much smaller units than cash. The American dollar, for example, is traded in units down to 4 decimal places. Instead of $1.32 FOREX quotes are seen as $1.3256. The smallest unit in FOREX currencies is called the pip, and when you have a $100,000 each pip of your total lot is worth $10 (when trading American dollars).

If the price of American dollars changes from 1.3256 to 1.3356, that's a difference of 100 pips which represents a profit or loss of $1000. Without margin, if you had $1000 of currency, the price change from 1.3256 to 1.3356 represents a difference of $10. Significant to the tourist, perhaps, but not the investor.

So the benefit of margin is increased profit potential.

Risks

As there is increased profit potential, there is also increased loss potential. If you are not careful, your entire margin account could quickly be wiped out. If your margin account is 1% and the currency moves just one cent against you, you lose $1000.

FOREX trading, however, has several methods to limit loss. Stop loss orders automatically close your position if the value of the currency crosses a pre-determined point. Stop loss orders allow you to limit your losses to a specified amount while still allowing potential profit taking.

An often overlooked risk is the possibility that your broker may close your position if your potential losses approach the balance of your margin account. You may be riding out a down trend with the expectations of a market reversal, but unless you replenish your margin account you may find your position has been closed. If this happens, you lose all of your margin.

For example:

You sell EUR/USD at 1.2144 (sell 100,000 Euros and buy 121,440 US dollars) with the expectation that the euro will fall in price. You have a 1% margin account which means the required margin is $1,214.40. You have $1250 in your margin account, so to enter this position your margin account is left with $35.60.

You have not specified a stop loss order, and after you enter this position the euro suddenly rallies, gaining 0.0263 for a price of 1.2407. 100,000 Euros are now worth US$124,070 and your 1% margin requirements have risen to $1,240.70. Depending on the policy of your broker, your position may be automatically closed or the extra funds in your margin account may be used to make up the difference. In any case, if the euro continues to gain value and you wish to ride it out (bad idea) you will have to add more funds to your margin account or risk losing everything.

Another example:

You buy USD/CHF at 1.2623 with the expectation that the US dollar will gain against the Swiss franc. You buy a standard lot of 100,000 American dollars for 126,230 Swiss francs with a margin requirement of 1% or $1,000.

As expected, the US dollar rises to 1.2683 at which point you close your position. You sell 100,000 American dollars for 126,830 Swiss francs for a profit of 600 francs or US$473.08 (600 francs divided by the exchange rate of 1.2683).

For more detailed information can be found in

http://www.forexgen.com/

Forex Trade Sizes with ForexGen

Forex Trade Sizes with ForexGen

FOREX currencies are traded in much smaller divisions than cash. Whereas the smallest division in US cash is the penny ($0.01), US currency can be traded on the FOREX in divisions of $0.0001. This smallest division is called the pip (short for Price Interest Point – sometimes just called 'points').

Since currencies are traded in large lots of (say) $100,000 - small movements in value can generate substantial profits and losses. In a lot of US$100,000 one pip is worth $10 so an increase in 40 pips (4/10 of one cent) can generate a profit or loss of $400.

Currencies are traded in lots of various sizes. The standard lot is 100,000 units of the base currency. A unit is the currency name e.g. one unit of US dollars is the dollar. So a standard lot of US currency is worth $100,000. FOREX trades can have lots of various sizes - a mini lot is 10,000 units, but the most trades are done using standard lots.

Various currencies have different sized pips. The US dollar is expressed in pips of 0.0001 while the Japanese yen is expressed in pips of 0.01. The value of a pip depends on the size of a lot and the currency pair traded. Currency pairs with USD as the quote (second) currency (e.g. CAD/USD) always have a pip value of $10 per standard lot or $1 per mini lot. A pip value calculator can be used to calculate other currencies.

For more detailed information can be found in

http://www.forexgen.com/

Forex Options Trading with ForexGen

A currency option is a contract that gives the holder the right, but not the obligation to buy or sell a specified currency during a specific time period. It can be used to hedge a FOREX transaction and are a favored method of reducing risk in companies that trade goods overseas.

There are two basic types of option: Call options and Put options. A call option gives the holder the right to buy a currency while a put option gives the holder the right to sell.

The worth of an option at expiry is equal to the value realized by the holder in exercising the option. If the holder gains nothing, the option is worth nothing. The value at any other time of the contract duration is the 'intrinsic value' – the value that can be realized if the holder exercises his option.

Intrinsic value is linked to the 'strike price' – the value specified by the option contract. A call option has intrinsic value if the spot (current) price is above the strike price. A put option has intrinsic value if the spot price is below the strike price.

If the option contract has intrinsic value it is said to be 'in the money', otherwise it is 'out of the money' or 'at the money' (at par). Options would only be exercised if they are in the money.

Options are priced according to complex formulas that take into consideration both the spot value and time value. Time value is calculated according to expected market conditions including volatility and the difference in interest rates between the two currencies. Options must be priced low enough to attract potential buyers and high enough to attract potential writers (the sellers or guarantors of the option).

Currency options are used in FOREX to minimize risk against unexpected moves in the market. If you buy an option your losses are limited to the cost of the option. Those who sell options are more vulnerable. They gain the premium but they are exposed to unlimited loss if the market moves against them.

As a hedging tool, there are many different types of options available. They are often used by companies that trade overseas to minimize the potential for loss due to fluctuations in the foreign exchange market.

FOREX trades have a special type of option available known as a Digital Option. This option pays a specified amount at expiration if the criteria are met, otherwise it pays nothing.

FOREX traders who wish to use a digital option first decide which direction the market is moving. They then decide on a payoff amount if the market moves as expected within a certain time frame. With this information the cost of the option is calculated.

For example:

The price of the euro is currently trading at about 1.2400 and you expect it to rise to 1.2800 within 3 months. You decide to buy a put digital option with a payoff of $5000. The cost of the option is $800.

If at the end of the 3 months the euro is more than 1.2800 you get $5000. If the price is less, you lose $800.

For more detailed information can be found in

http://www.forexgen.com/

Different Types of Forex Orders with ForexGen

Different Types of Forex Orders with ForexGen

A trader has at his disposal different types of orders to make FOREX trades. A clear understanding of each type of order is necessary to be a successful FOREX trader. Market Order – is an order to buy or sell at the current market price. They can be used to enter or exit a trade.

Market orders should be used with care because in fast-moving markets there may be a difference between the price seen at the time a market order is given and the actual price of the transaction. This is due to slippage – the amount the market moves in the few seconds between giving an order and having it executed. Slippage could result in a loss or gain of several pips.

Limit Order – is an order to buy or sell at a certain limit. They can be used to buy currency below the market price or sell currency above the market price. When buying, your order is executed when the market falls to your limit order price. When selling, your order is executed when the market rises to your limit order price. There is no slippage with limit orders.

Stop Order – is an order to buy above the market or to sell below the market. They are most commonly used as stop-loss orders to limit losses if the market moves contrary to what the trader expected. A stop-loss order will sell the currency if the market falls below the point set by the trader.

One Cancels the Other (OCO) – this order is used when placing a limit order and a stop-loss order at the same time. If either order is executed the other is cancelled, allowing the trader to make a transaction without monitoring the market. If the market falls, the stop-loss order will be executed, but if the market rises to the level of the limit order, the currency will be sold at a profit.

• Example OCO Transaction:

Buy: 1 standard lot EUR/USD @ 1.3228 = $132,280
Pip Value: 1 pip = $10
Stop-Loss: 1.3203
Limit: 1.3328

This is an order to buy US dollars at 1.3328 and to sell them if they fall to 1.3203 (resulting in a loss of 25 pips or $250) or to sell them if they rise to 1.3328 (resulting in a profit of 100 pips or $1,000).

• Here's another example:

The current bid/ask price for US dollars and Canadian dollars is

USD/CDN 1.2152/57

...meaning you can buy $1 US for 1.2152 CDN or sell 1.2157 CDN for $1 US.

If you think that the US dollar (USD) is undervalued against the Canadian dollar (CDN) you would buy USD (simultaneously selling CDN) and wait for the US dollar to rise.

This is the transaction: Buy USD: 1 standard lot USD/CDN @ 1.2157 = $121,570 CDN
Pip Value: 1 pip = $10
Stop-Loss: 1.2147
Margin: $1,000 (1%)

You are buying US$100,000 and selling CDN$121,570. Your stop loss order will be executed if the dollar falls below 1.2147, in which case you will lose $100.

However, USD/CDN rises to 1.2192/87. You can now sell $1 US for 1.2192 CDN or sell 1.2187 CDN for $1 US.

Because you entered the transaction by buying US dollars (buying long), you must now sell US dollars and buy back CDN dollars to realize your profit.

You sell US$100,000 at the current USD/CDN rate of 1.2192, and receive 121,920 CDN for which you originally paid CDN$121,570. Your profit is $350 Canadian dollars or US$287.19 (350 divided by the current exchange rate of 1.2187).

For more detailed information can be found in

http://www.forexgen.com/