What Does Trading Plan Mean?
A systematic method for screening and evaluating stocks, determining the amount of risk that is or should be taken, and formulating short and long-term investment objectives. A successful trading plan will also involve details like the type of trading system to be used. Most plans require the use of various types of technical analysis tools.
Wednesday, December 2, 2009
Investopedia explains Forex Scalping
Forex scalping generally involves large amounts of leverage so that a small change in a currency equals a respectable profit. Forex scalping system strategies can be manual or automated. A manual system involves a trader sitting at the computer screen, looking for signals and interpreting whether to buy or sell. In an automated trading system, the trader "teaches" the software what signals to look for and how to interpret them.
It is thought that automated trading takes human psychology out of trading, which is important in forex scalping because the fast-paced environment can be hard for traders to stomach.
It is thought that automated trading takes human psychology out of trading, which is important in forex scalping because the fast-paced environment can be hard for traders to stomach.
Advanced Bond Concepts: Bond Pricing
It is important for prospective bond buyers to know how to determine the price of a bond because it will indicate the yield received should the bond be purchased. In this section, we will run through some bond price calculations for various types of bond instruments.
Bonds can be priced at a premium, discount, or at par. If the bond's price is higher than its par value, it will sell at a premium because its interest rate is higher than current prevailing rates. If the bond's price is lower than its par value, the bond will sell at a discount because its interest rate is lower than current prevailing interest rates. When you calculate the price of a bond, you are calculating the maximum price you would want to pay for the bond, given the bond's coupon rate in comparison to the average rate most investors are currently receiving in the bond market. Required yield or required rate of return is the interest rate that a security needs to offer in order to encourage investors to purchase it. Usually the required yield on a bond is equal to or greater than the current prevailing interest rates.
Fundamentally, however, the price of a bond is the sum of the present values of all expected coupon payments plus the present value of the par value at maturity. Calculating bond price is simple: all we are doing is discounting the known future cash flows. Remember that to calculate present value (PV) - which is based on the assumption that each payment is re-invested at some interest rate once it is received--we have to know the interest rate that would earn us a known future value. For bond pricing, this interest rate is the required yield. (If the concepts of present and future value are new to you or you are unfamiliar with the calculations, refer to Understanding the Time Value of Money.)
Here is the formula for calculating a bond's price, which uses the basic present value (PV) formula:
C = coupon payment
n = number of payments
i = interest rate, or required yield
M = value at maturity, or par value
The succession of coupon payments to be received in the future is referred to as an ordinary annuity, which is a series of fixed payments at set intervals over a fixed period of time. (Coupons on a straight bond are paid at ordinary annuity.) The first payment of an ordinary annuity occurs one interval from the time at which the debt security is acquired. The calculation assumes this time is the present.
You may have guessed that the bond pricing formula shown above may be tedious to calculate, as it requires adding the present value of each future coupon payment. Because these payments are paid at an ordinary annuity, however, we can use the shorter PV-of-ordinary-annuity formula that is mathematically equivalent to the summation of all the PVs of future cash flows. This PV-of-ordinary-annuity formula replaces the need to add all the present values of the future coupon. The following diagram illustrates how present value is calculated for an ordinary annuity:
Each full moneybag on the top right represents the fixed coupon payments (future value) received in periods one, two and three. Notice how the present value decreases for those coupon payments that are further into the future the present value of the second coupon payment is worth less than the first coupon and the third coupon is worth the lowest amount today. The farther into the future a payment is to be received, the less it is worth today - is the fundamental concept for which the PV-of-ordinary-annuity formula accounts. It calculates the sum of the present values of all future cash flows, but unlike the bond-pricing formula we saw earlier, it doesn't require that we add the value of each coupon payment. (For more on calculating the time value of annuities, see Anything but Ordinary: Calculating the Present and Future Value of Annuities and Understanding the Time Value of Money. )
By incorporating the annuity model into the bond pricing formula, which requires us to also include the present value of the par value received at maturity, we arrive at the following formula:
Let's go through a basic example to find the price of a plain vanilla bond.
Example 1: Calculate the price of a bond with a par value of $1,000 to be paid in ten years, a coupon rate of 10%, and a required yield of 12%. In our example we'll assume that coupon payments are made semi-annually to bond holders and that the next coupon payment is expected in six months. Here are the steps we have to take to calculate the price:
1. Determine the Number of Coupon Payments: Because two coupon payments will be made each year for ten years, we will have a total of 20 coupon payments.
2. Determine the Value of Each Coupon Payment: Because the coupon payments are semi-annual, divide the coupon rate in half. The coupon rate is the percentage off the bond's par value. As a result, each semi-annual coupon payment will be $50 ($1,000 X 0.05).
3. Determine the Semi-Annual Yield: Like the coupon rate, the required yield of 12% must be divided by two because the number of periods used in the calculation has doubled. If we left the required yield at 12%, our bond price would be very low and inaccurate. Therefore, the required semi-annual yield is 6% (0.12/2).
4. Plug the Amounts Into the Formula:
From the above calculation, we have determined that the bond is selling at a discount; the bond price is less than its par value because the required yield of the bond is greater than the coupon rate. The bond must sell at a discount to attract investors, who could find higher interest elsewhere in the prevailing rates. In other words, because investors can make a larger return in the market, they need an extra incentive to invest in the bonds.
Accounting for Different Payment Frequencies
In the example above coupons were paid semi-annually, so we divided the interest rate and coupon payments in half to represent the two payments per year. You may be now wondering whether there is a formula that does not require steps two and three outlined above, which are required if the coupon payments occur more than once a year. A simple modification of the above formula will allow you to adjust interest rates and coupon payments to calculate a bond price for any payment frequency:
Notice that the only modification to the original formula is the addition of "F", which represents the frequency of coupon payments, or the number of times a year the coupon is paid. Therefore, for bonds paying annual coupons, F would have a value of one. Should a bond pay quarterly payments, F would equal four, and if the bond paid semi-annual coupons, F would be two.
Pricing Zero-Coupon Bonds
So what happens when there are no coupon payments? For the aptly-named zero-coupon bond, there is no coupon payment until maturity. Because of this, the present value of annuity formula is unnecessary. You simply calculate the present value of the par value at maturity. Here's a simple example:
Example 2(a): Let's look at how to calculate the price of a zero-coupon bond that is maturing in five years, has a par value of $1,000 and a required yield of 6%.
1. Determine the Number of Periods: Unless otherwise indicated, the required yield of most zero-coupon bonds is based on a semi-annual coupon payment. This is because the interest on a zero-coupon bond is equal to the difference between the purchase price and maturity value, but we need a way to compare a zero-coupon bond to a coupon bond, so the 6% required yield must be adjusted to the equivalent of its semi-annual coupon rate. Therefore, the number of periods for zero-coupon bonds will be doubled, so the zero coupon bond maturing in five years would have ten periods (5 x 2).
2. Determine the Yield: The required yield of 6% must also be divided by two because the number of periods used in the calculation has doubled. The yield for this bond is 3% (6% / 2).
3. Plug the amounts into the formula:
You should note that zero-coupon bonds are always priced at a discount: if zero-coupon bonds were sold at par, investors would have no way of making money from them and therefore no incentive to buy them.
Pricing Bonds between Payment Periods
Up to this point we have assumed that we are purchasing bonds whose next coupon payment occurs one payment period away, according to the regular payment-frequency pattern. So far, if we were to price a bond that pays semi-annual coupons and we purchased the bond today, our calculations would assume that we would receive the next coupon payment in exactly six months. Of course, because you won't always be buying a bond on its coupon payment date, it's important you know how to calculate price if, say, a semi-annual bond is paying its next coupon in three months, one month, or 21 days.
Determining Day Count
To price a bond between payment periods, we must use the appropriate day-count convention. Day count is a way of measuring the appropriate interest rate for a specific period of time. There is actual/actual day count, which is used mainly for Treasury securities. This method counts the exact number of days until the next payment. For example, if you purchased a semi-annual Treasury bond on March 1, 2003, and its next coupon payment is in four months (July 1, 2003), the next coupon payment would be in 122 days:
Time Period = Days Counted
March 1-31 = 31 days
April 1-30 = 30 days
May 1-31 = 31 days
June 1-30 = 30 days
July 1 = 0 days
Total Days = 122 days
To determine the day count, we must also know the number of days in the six-month period of the regular payment cycle. In these six months there are exactly 182 days, so the day count of the Treasury bond would be 122/182, which means that out of the 182 days in the six-month period, the bond still has 122 days before the next coupon payment. In other words, 60 days of the payment period (182 - 122) have already passed. If the bondholder sold the bond today, he or she must be compensated for the interest accrued on the bond over these 60 days.
(Note that if it is a leap year, the total number of days in a year is 366 rather than 365.)
For municipal and corporate bonds, you would use the 30/360 day count convention, which is much simpler as there is no need to remember the actual number of days in each year and month. This count convention assumes that a year consists of 360 days and each month consists of 30 days. As an example, assume the above Treasury bond was actually a semi-annual corporate bond. In this case, the next coupon payment would be in 120 days.
Time Period = Days Counted
March 1-30 = 30 days
April 1-30 = 30 days
May 1-30 = 30 days
June 1-30 = 30 days
July 1 = 0 days
Total Days = 120 days
As a result, the day count convention would be 120/180, which means that 66.7% of the coupon period remains. Notice that we end up with almost the same answer as the actual/actual day count convention above: both day-count conventions tell us that 60 days have passed into the payment period.
Determining Interest Accrued
Accrued interest is the fraction of the coupon payment that the bond seller earns for holding the bond for a period of time between bond payments. The bond price's inclusion of any interest accrued since the last payment period determines whether the bond's price is "dirty" or "clean." Dirty bond prices include any accrued interest that has accumulated since the last coupon payment while clean bond prices do not. In newspapers, the bond prices quoted are often clean prices.
However, because many of the bonds traded in the secondary market are often traded in between coupon payment dates, the bond seller must be compensated for the portion of the coupon payment he or she earns for holding the bond since the last payment. The amount of the coupon payment that the buyer should receive is the coupon payment minus accrued interest. The following example will make this concept more clear.
Example 3: On March 1, 2003, Francesca is selling a corporate bond with a face value of $1,000 and a 7% coupon paid semi-annually. The next coupon payment after March 1, 2003, is expected on June 30, 2003. What is the interest accrued on the bond?
1. Determine the Semi-Annual Coupon Payment: Because the coupon payments are semi-annual, divide the coupon rate in half, which gives a rate of 3.5% (7% / 2). Each semi-annual coupon payment will then be $35 ($1,000 X 0.035).
2. Determine the Number of Days Remaining in the Coupon Period: Because it is a corporate bond, we will use the 30/360 day-count convention.
Time Period = Days Counted
March 1-30 = 30 days
April 1-30 = 30 days
May 1-30 = 30 days
June 1-30 = 30 days
Total Days = 120 days
There are 120 days remaining before the next coupon payment, but because the coupons are paid semi-annually (two times a year), the regular payment period if the bond is 180 days, which, according to the 30/360 day count, is equal to six months. The seller, therefore, has accumulated 60 days worth of interest (180-120).
3. Calculate the Accrued Interest: Accrued interest is the fraction of the coupon payment that the original holder (in this case Francesca) has earned. It is calculated by the following formula:
In this example, the interest accrued by Francesca is $11.67. If the buyer only paid her the clean price, she would not receive the $11.67 to which she is entitled for holding the bond for those 60 days of the 180-day coupon period.
Now you know how to calculate the price of a bond, regardless of when its next coupon will be paid. Bond price quotes are typically the clean prices, but buyers of bonds pay the dirty, or full price. As a result, both buyers and sellers should understand the amount for which a bond should be sold or purchased. In addition, the tools you learned in this section will better enable you to learn the relationship between coupon rate, required yield and price as well as the reasons for which bond prices change in the market.
Bonds can be priced at a premium, discount, or at par. If the bond's price is higher than its par value, it will sell at a premium because its interest rate is higher than current prevailing rates. If the bond's price is lower than its par value, the bond will sell at a discount because its interest rate is lower than current prevailing interest rates. When you calculate the price of a bond, you are calculating the maximum price you would want to pay for the bond, given the bond's coupon rate in comparison to the average rate most investors are currently receiving in the bond market. Required yield or required rate of return is the interest rate that a security needs to offer in order to encourage investors to purchase it. Usually the required yield on a bond is equal to or greater than the current prevailing interest rates.
Fundamentally, however, the price of a bond is the sum of the present values of all expected coupon payments plus the present value of the par value at maturity. Calculating bond price is simple: all we are doing is discounting the known future cash flows. Remember that to calculate present value (PV) - which is based on the assumption that each payment is re-invested at some interest rate once it is received--we have to know the interest rate that would earn us a known future value. For bond pricing, this interest rate is the required yield. (If the concepts of present and future value are new to you or you are unfamiliar with the calculations, refer to Understanding the Time Value of Money.)
Here is the formula for calculating a bond's price, which uses the basic present value (PV) formula:
C = coupon payment
n = number of payments
i = interest rate, or required yield
M = value at maturity, or par value
The succession of coupon payments to be received in the future is referred to as an ordinary annuity, which is a series of fixed payments at set intervals over a fixed period of time. (Coupons on a straight bond are paid at ordinary annuity.) The first payment of an ordinary annuity occurs one interval from the time at which the debt security is acquired. The calculation assumes this time is the present.
You may have guessed that the bond pricing formula shown above may be tedious to calculate, as it requires adding the present value of each future coupon payment. Because these payments are paid at an ordinary annuity, however, we can use the shorter PV-of-ordinary-annuity formula that is mathematically equivalent to the summation of all the PVs of future cash flows. This PV-of-ordinary-annuity formula replaces the need to add all the present values of the future coupon. The following diagram illustrates how present value is calculated for an ordinary annuity:
Each full moneybag on the top right represents the fixed coupon payments (future value) received in periods one, two and three. Notice how the present value decreases for those coupon payments that are further into the future the present value of the second coupon payment is worth less than the first coupon and the third coupon is worth the lowest amount today. The farther into the future a payment is to be received, the less it is worth today - is the fundamental concept for which the PV-of-ordinary-annuity formula accounts. It calculates the sum of the present values of all future cash flows, but unlike the bond-pricing formula we saw earlier, it doesn't require that we add the value of each coupon payment. (For more on calculating the time value of annuities, see Anything but Ordinary: Calculating the Present and Future Value of Annuities and Understanding the Time Value of Money. )
By incorporating the annuity model into the bond pricing formula, which requires us to also include the present value of the par value received at maturity, we arrive at the following formula:
Let's go through a basic example to find the price of a plain vanilla bond.
Example 1: Calculate the price of a bond with a par value of $1,000 to be paid in ten years, a coupon rate of 10%, and a required yield of 12%. In our example we'll assume that coupon payments are made semi-annually to bond holders and that the next coupon payment is expected in six months. Here are the steps we have to take to calculate the price:
1. Determine the Number of Coupon Payments: Because two coupon payments will be made each year for ten years, we will have a total of 20 coupon payments.
2. Determine the Value of Each Coupon Payment: Because the coupon payments are semi-annual, divide the coupon rate in half. The coupon rate is the percentage off the bond's par value. As a result, each semi-annual coupon payment will be $50 ($1,000 X 0.05).
3. Determine the Semi-Annual Yield: Like the coupon rate, the required yield of 12% must be divided by two because the number of periods used in the calculation has doubled. If we left the required yield at 12%, our bond price would be very low and inaccurate. Therefore, the required semi-annual yield is 6% (0.12/2).
4. Plug the Amounts Into the Formula:
From the above calculation, we have determined that the bond is selling at a discount; the bond price is less than its par value because the required yield of the bond is greater than the coupon rate. The bond must sell at a discount to attract investors, who could find higher interest elsewhere in the prevailing rates. In other words, because investors can make a larger return in the market, they need an extra incentive to invest in the bonds.
Accounting for Different Payment Frequencies
In the example above coupons were paid semi-annually, so we divided the interest rate and coupon payments in half to represent the two payments per year. You may be now wondering whether there is a formula that does not require steps two and three outlined above, which are required if the coupon payments occur more than once a year. A simple modification of the above formula will allow you to adjust interest rates and coupon payments to calculate a bond price for any payment frequency:
Notice that the only modification to the original formula is the addition of "F", which represents the frequency of coupon payments, or the number of times a year the coupon is paid. Therefore, for bonds paying annual coupons, F would have a value of one. Should a bond pay quarterly payments, F would equal four, and if the bond paid semi-annual coupons, F would be two.
Pricing Zero-Coupon Bonds
So what happens when there are no coupon payments? For the aptly-named zero-coupon bond, there is no coupon payment until maturity. Because of this, the present value of annuity formula is unnecessary. You simply calculate the present value of the par value at maturity. Here's a simple example:
Example 2(a): Let's look at how to calculate the price of a zero-coupon bond that is maturing in five years, has a par value of $1,000 and a required yield of 6%.
1. Determine the Number of Periods: Unless otherwise indicated, the required yield of most zero-coupon bonds is based on a semi-annual coupon payment. This is because the interest on a zero-coupon bond is equal to the difference between the purchase price and maturity value, but we need a way to compare a zero-coupon bond to a coupon bond, so the 6% required yield must be adjusted to the equivalent of its semi-annual coupon rate. Therefore, the number of periods for zero-coupon bonds will be doubled, so the zero coupon bond maturing in five years would have ten periods (5 x 2).
2. Determine the Yield: The required yield of 6% must also be divided by two because the number of periods used in the calculation has doubled. The yield for this bond is 3% (6% / 2).
3. Plug the amounts into the formula:
You should note that zero-coupon bonds are always priced at a discount: if zero-coupon bonds were sold at par, investors would have no way of making money from them and therefore no incentive to buy them.
Pricing Bonds between Payment Periods
Up to this point we have assumed that we are purchasing bonds whose next coupon payment occurs one payment period away, according to the regular payment-frequency pattern. So far, if we were to price a bond that pays semi-annual coupons and we purchased the bond today, our calculations would assume that we would receive the next coupon payment in exactly six months. Of course, because you won't always be buying a bond on its coupon payment date, it's important you know how to calculate price if, say, a semi-annual bond is paying its next coupon in three months, one month, or 21 days.
Determining Day Count
To price a bond between payment periods, we must use the appropriate day-count convention. Day count is a way of measuring the appropriate interest rate for a specific period of time. There is actual/actual day count, which is used mainly for Treasury securities. This method counts the exact number of days until the next payment. For example, if you purchased a semi-annual Treasury bond on March 1, 2003, and its next coupon payment is in four months (July 1, 2003), the next coupon payment would be in 122 days:
Time Period = Days Counted
March 1-31 = 31 days
April 1-30 = 30 days
May 1-31 = 31 days
June 1-30 = 30 days
July 1 = 0 days
Total Days = 122 days
To determine the day count, we must also know the number of days in the six-month period of the regular payment cycle. In these six months there are exactly 182 days, so the day count of the Treasury bond would be 122/182, which means that out of the 182 days in the six-month period, the bond still has 122 days before the next coupon payment. In other words, 60 days of the payment period (182 - 122) have already passed. If the bondholder sold the bond today, he or she must be compensated for the interest accrued on the bond over these 60 days.
(Note that if it is a leap year, the total number of days in a year is 366 rather than 365.)
For municipal and corporate bonds, you would use the 30/360 day count convention, which is much simpler as there is no need to remember the actual number of days in each year and month. This count convention assumes that a year consists of 360 days and each month consists of 30 days. As an example, assume the above Treasury bond was actually a semi-annual corporate bond. In this case, the next coupon payment would be in 120 days.
Time Period = Days Counted
March 1-30 = 30 days
April 1-30 = 30 days
May 1-30 = 30 days
June 1-30 = 30 days
July 1 = 0 days
Total Days = 120 days
As a result, the day count convention would be 120/180, which means that 66.7% of the coupon period remains. Notice that we end up with almost the same answer as the actual/actual day count convention above: both day-count conventions tell us that 60 days have passed into the payment period.
Determining Interest Accrued
Accrued interest is the fraction of the coupon payment that the bond seller earns for holding the bond for a period of time between bond payments. The bond price's inclusion of any interest accrued since the last payment period determines whether the bond's price is "dirty" or "clean." Dirty bond prices include any accrued interest that has accumulated since the last coupon payment while clean bond prices do not. In newspapers, the bond prices quoted are often clean prices.
However, because many of the bonds traded in the secondary market are often traded in between coupon payment dates, the bond seller must be compensated for the portion of the coupon payment he or she earns for holding the bond since the last payment. The amount of the coupon payment that the buyer should receive is the coupon payment minus accrued interest. The following example will make this concept more clear.
Example 3: On March 1, 2003, Francesca is selling a corporate bond with a face value of $1,000 and a 7% coupon paid semi-annually. The next coupon payment after March 1, 2003, is expected on June 30, 2003. What is the interest accrued on the bond?
1. Determine the Semi-Annual Coupon Payment: Because the coupon payments are semi-annual, divide the coupon rate in half, which gives a rate of 3.5% (7% / 2). Each semi-annual coupon payment will then be $35 ($1,000 X 0.035).
2. Determine the Number of Days Remaining in the Coupon Period: Because it is a corporate bond, we will use the 30/360 day-count convention.
Time Period = Days Counted
March 1-30 = 30 days
April 1-30 = 30 days
May 1-30 = 30 days
June 1-30 = 30 days
Total Days = 120 days
There are 120 days remaining before the next coupon payment, but because the coupons are paid semi-annually (two times a year), the regular payment period if the bond is 180 days, which, according to the 30/360 day count, is equal to six months. The seller, therefore, has accumulated 60 days worth of interest (180-120).
3. Calculate the Accrued Interest: Accrued interest is the fraction of the coupon payment that the original holder (in this case Francesca) has earned. It is calculated by the following formula:
In this example, the interest accrued by Francesca is $11.67. If the buyer only paid her the clean price, she would not receive the $11.67 to which she is entitled for holding the bond for those 60 days of the 180-day coupon period.
Now you know how to calculate the price of a bond, regardless of when its next coupon will be paid. Bond price quotes are typically the clean prices, but buyers of bonds pay the dirty, or full price. As a result, both buyers and sellers should understand the amount for which a bond should be sold or purchased. In addition, the tools you learned in this section will better enable you to learn the relationship between coupon rate, required yield and price as well as the reasons for which bond prices change in the market.
Forex Rates (Pakistan)
Updated on: Wed, December 2, 2009, 18:25 (PST)
Courtesy : ECAP
Remittance Buying Selling
USD 83.45 83.75
GBP 137.20 138.30
SR 22.00 22.27
UAE 22.48 22.77
AUS 1.58 1.68
EUR 124.80 125.80
CAD 78.51 79.83
IND 1.58 1.68
JPY 0.9470 0.9570
Courtesy : ECAP
Remittance Buying Selling
USD 83.45 83.75
GBP 137.20 138.30
SR 22.00 22.27
UAE 22.48 22.77
AUS 1.58 1.68
EUR 124.80 125.80
CAD 78.51 79.83
IND 1.58 1.68
JPY 0.9470 0.9570
Wednesday, October 7, 2009
Dried shelled vegetables L/C cash margin waived
KARACHI (March 10 2009): The State Bank of Pakistan has waived the condition of cash margin on import Letters of Credit (L/Cs) of leguminous vegetables and dried shelled. SBP on Monday announced this relaxation referring to BPRD Circular Letter No 05 of 2009 dated March 3, 2009. "It has been decided to waive the condition of cash margin requirement on HS Code 0713 (Leguminous Vegetables, Dried Shelled)", SBP said in circular.
Banks have been advised to comply with the above mentioned instructions immediately. However, the other instructions on the subject will remain unchanged, the circular added.
Banks have been advised to comply with the above mentioned instructions immediately. However, the other instructions on the subject will remain unchanged, the circular added.
SBP likely to keep rate unchanged
SBP Diary - SBP News
KARACHI: The State Bank of Pakistan is likely to keep interest rates on hold for the next two months to the end of November on policymakers fears of rising inflation and fiscal slippages, economists said on Monday. The central bank is due to announce its monetary policy for the next two months on Tuesday. It cut the policy rate by 1 percentage point to 13 per cent in August. With the fiscal framework unravelling, keeping rates on hold would be the right thing to do at this point, said Sayem Ali, an economist at Standard Chartered Bank. Pakistan s budget deficit for the 2008/09 fiscal year to the end of June was 5.2 per cent of gross domestic product, higher than a government target of 4.3 per cent of GDP.Economists fear there may be further slippages because of government borrowing and also because there is no indication of when pledges of aid from Pakistan s allies would come through. Donors pledged $5.7 billion in aid at a conference in Tokyo in April but only a fraction of that has trickled in. With no immediate disbursement of Tokyo pledges, we believe the appetite for government borrowing will continue to put pressure on market interest rates and hence liquidity, said Muzzamil Aslam, economist at JS Global Capital Ltd.
Pakistan s allies met in New York last week in a show of support but the timing of aid flows is unclear.The country s finances have been propped up since last November by a $7.6 billion loan from the International Monetary Fund over two years and the IMF increased the loan by $3.2 billion in July. The IMF said this month interest rates were at the right level for inflation, but could come down further if economic and financial conditions permit. Inflation had eased from record levels set last year but fears remain of commodity prices rising again, economists said. Annual consumer price inflation slowed to 10.69 per cent in August, its slowest in 20 months, though with higher food and fuel prices, upward inflationary pressures are likely to build again. The fiscal stance of the government seems more expansionary than what is mandated under the IMF programme and this increases the risk to the inflation outlook, said Asif Qureshi, director at Invisor Securities Ltd. Although nominal interest rates in Pakistan are still fairly high, the central bank may adopt a more measured approach towards easing because of fiscal and inflation considerations, Qureshi said.
KARACHI: The State Bank of Pakistan is likely to keep interest rates on hold for the next two months to the end of November on policymakers fears of rising inflation and fiscal slippages, economists said on Monday. The central bank is due to announce its monetary policy for the next two months on Tuesday. It cut the policy rate by 1 percentage point to 13 per cent in August. With the fiscal framework unravelling, keeping rates on hold would be the right thing to do at this point, said Sayem Ali, an economist at Standard Chartered Bank. Pakistan s budget deficit for the 2008/09 fiscal year to the end of June was 5.2 per cent of gross domestic product, higher than a government target of 4.3 per cent of GDP.Economists fear there may be further slippages because of government borrowing and also because there is no indication of when pledges of aid from Pakistan s allies would come through. Donors pledged $5.7 billion in aid at a conference in Tokyo in April but only a fraction of that has trickled in. With no immediate disbursement of Tokyo pledges, we believe the appetite for government borrowing will continue to put pressure on market interest rates and hence liquidity, said Muzzamil Aslam, economist at JS Global Capital Ltd.
Pakistan s allies met in New York last week in a show of support but the timing of aid flows is unclear.The country s finances have been propped up since last November by a $7.6 billion loan from the International Monetary Fund over two years and the IMF increased the loan by $3.2 billion in July. The IMF said this month interest rates were at the right level for inflation, but could come down further if economic and financial conditions permit. Inflation had eased from record levels set last year but fears remain of commodity prices rising again, economists said. Annual consumer price inflation slowed to 10.69 per cent in August, its slowest in 20 months, though with higher food and fuel prices, upward inflationary pressures are likely to build again. The fiscal stance of the government seems more expansionary than what is mandated under the IMF programme and this increases the risk to the inflation outlook, said Asif Qureshi, director at Invisor Securities Ltd. Although nominal interest rates in Pakistan are still fairly high, the central bank may adopt a more measured approach towards easing because of fiscal and inflation considerations, Qureshi said.
SBP lowers GDP growth forecast to 2.5-3.5pc
KARACHI:The State Bank of Pakistan (SBP) lowered on Saturday its gross domestic product (GDP) growth forecast for the 2008/09 (July-June) fiscal year to 2.5-3.5 percent from an earlier target of 3.5 percent to 4.5 percent. The original target was 5.5 percent. Pakistan achieved GDP growth of 5.8 percent in the 2007/08 fiscal year.
The State Bank also said inflation would slow sharply in the final quarter of this fiscal year.
The State Bank also said inflation would slow sharply in the final quarter of this fiscal year.
No bar on opening bank branches in Iran: SBP governo
KARACHI: The State Bank of Pakistan (SBP) has not barred any bank from opening its branches in Iran for carrying out normal operations including trade finance, SBP Governor Salim Raza said on Saturday.
“Banks have to follow international guidelines, which do not allow undertaking business transactions with Iranian institutions,” he said here in a meeting with the Rice Exporters Association of Pakistan (REAP).
“There are international sanctions (on Iran) and banks have to work under those guidelines,” he said, adding “but certainly we have not stopped any bank from opening its office in the neighbouring country.”
Banks around the world including those operating here are affected by the US government’s Office of Foreign Assets Control (OFAC) which bans every commercial activity with the Iranians.
The SBP governor’s response followed appeals by REAP members to encourage banks to open their branches in Iran, which imports large quantities of Pakistani rice. They also highlighted the indifference of commercial banks to enhancing finance to the trade lobby.
Admitting that he was unaware of the reasons hampering financing to a trade which fetched $2.2 billion in exports last year, Salim Raza said he would sit down with the exporters and personally review the matter.
“There is a lot of room for corporatisation and brand building when it comes to rice export,” he said, adding “logistics and warehousing also need to be strengthened.”
He also acknowledged that the government should play its role in removing supply-side bottlenecks rather than interfering in the market.
Earlier, members of the Rice Exporters Association of Pakistan pointed out that banks had not endeavoured to develop new financing products for rice export as still loans were extended on the basis of collateral and equity.
They said there was a need to understand the whole value-added chain involved in the trade as its improvement could bring dividends by increasing exports. Out of over one thousand exporters 20 per cent contributed 80pc of exports, indicating the need to increase the share of small traders, they said.
Between July and January 2008-09, export of rice has been to the tune of $1.39bn against a full-year target of $2.4bn.
“Banks have to follow international guidelines, which do not allow undertaking business transactions with Iranian institutions,” he said here in a meeting with the Rice Exporters Association of Pakistan (REAP).
“There are international sanctions (on Iran) and banks have to work under those guidelines,” he said, adding “but certainly we have not stopped any bank from opening its office in the neighbouring country.”
Banks around the world including those operating here are affected by the US government’s Office of Foreign Assets Control (OFAC) which bans every commercial activity with the Iranians.
The SBP governor’s response followed appeals by REAP members to encourage banks to open their branches in Iran, which imports large quantities of Pakistani rice. They also highlighted the indifference of commercial banks to enhancing finance to the trade lobby.
Admitting that he was unaware of the reasons hampering financing to a trade which fetched $2.2 billion in exports last year, Salim Raza said he would sit down with the exporters and personally review the matter.
“There is a lot of room for corporatisation and brand building when it comes to rice export,” he said, adding “logistics and warehousing also need to be strengthened.”
He also acknowledged that the government should play its role in removing supply-side bottlenecks rather than interfering in the market.
Earlier, members of the Rice Exporters Association of Pakistan pointed out that banks had not endeavoured to develop new financing products for rice export as still loans were extended on the basis of collateral and equity.
They said there was a need to understand the whole value-added chain involved in the trade as its improvement could bring dividends by increasing exports. Out of over one thousand exporters 20 per cent contributed 80pc of exports, indicating the need to increase the share of small traders, they said.
Between July and January 2008-09, export of rice has been to the tune of $1.39bn against a full-year target of $2.4bn.
SBP gets Rs26 billion from banking system
KARACHI: The State Bank of Pakistan (SBP) has withdrawn an additional amount of Rs26 billion from banking system for six days at an interest rate of 9.15 per cent through the open market operation.
The central bank launched an open market operation here today to absorb the additional amount from the banking system.
Banks offered Rs32 billion for buying six-day treasury bills but the central bank obtained Rs26 billion at an interest rate of 9.15 per cent.
Today, the banking system received an amount of Rs30 billion through maturities.
The central bank launched an open market operation here today to absorb the additional amount from the banking system.
Banks offered Rs32 billion for buying six-day treasury bills but the central bank obtained Rs26 billion at an interest rate of 9.15 per cent.
Today, the banking system received an amount of Rs30 billion through maturities.
US Dollar daily report
Thursday, 20 August 2009 15:34
Forex Research - Daily US Dollar Report
Yen Lifted Mildly as China Tightens Bank Rule, But Lacks Follow Through Momentum
Yen was lifted higher in Asian session today by news that China is setting rules to tighten bank capital requirements and made a new higher against dollar, but lacks follow through buying so far. Indeed, yen crosses are generally kept above this week's low and it looks like some more consolidation would be seen. Similar situation is found in dollar as the recovery earlier today lacks sustainable momentum so far and recent consolidation is likely still in progress. One thing to note is that Sterling is still the biggest loser this week. Today's break of 0.8652 resistance in EUR/GBP suggests that another round of selling in the pound might be underway which will make sterling crosses vulnerable.
Eurozone PMI data will be the main focus today as both Manufacturing and services PMIs are expected to improve further in Aug. Nevertheless, both data are expected to be kept below 50 level, suggesting that the manufacturing and services sectors are still in mild contraction. From US, Existing home sales is expected to rise slightly to 5.00M in July. Main focus will be on Bernanke's speech at the Jackson Hole Conference.
Looking at the dollar index, despite edging lower to 78.30, downside momentum in the index is diminishing and the index quickly settles back into prior tight range. With 78.23 cluster support (61.8% retracement of 77.43 to 79.51) intact, there is no change in the near term bullish view that rise from 77.43 is still in progress. Above 78.82 will flip intraday bias back to the upside and break of 79.51 will confirm rally resumption. Also, note that break of 79.66 resistance will have the index sustaining above medium term falling channel and in turn will solidify the case that whole fall from March's high of 89.62 has finished at 77.43 already. Focus will then be shifted to 81.47 resistance for confirmation. However, note that sustained break of 78.23 support will seriously dampen this view and open up the case that down trend from 89.62 is still in progress for another low below 77.43 before completion.
USD/JPY
USD/JPY's fall resumes and edges lower to 93.47 earlier today. At this point, intraday bias remains on the downside as long as 94.54 minor resistance holds. The break of 61.8% retracement of 91.73 to 97.77 at 94.03 suggests that whole rebound from 91.73 has completed at 97.77 already and further fall could now be seen to retest 91.73 low next. On the upside, above 94.54 will turn intraday outlook neutral and bring consolidation. But risk will remain on the downside as long as 97.77 resistance holds.
In the bigger picture, the break of mentioned 94.03 fibo support suggests that rebound from 91.73 has completed already. Also, it indicates that prior break of falling channel resistance was a false break. The failure below 98.87 resistance also keeps the lower high pattern since 101.43 and thus argue that such down trend is possibly still in progress. A break of 91.73 will confirm this case and bring deeper fall towards 87.12 key low. On the upside, break of 97.77 resistance, though, will revive the case that USD/JPY has bottomed out at 91.73 and will turn outlook bullish again.
GBP/USD
GBP/USD's consolidation from 1.6274 is still in progress and another rise cannot be ruled out. But after all, upside is expected to be limited by 1.6663 resistance and bring fall resumption. Below 1.6375 minor support will flip intraday bias back to the downside and further break of 1.6274 will indicate that decline from 1.7043 has resumed. Prior break of 1.6338 support serves as an important alert that a medium term top is in place at 1.7043. Below 1.6274 will target 1.5983 support to confirm the bearish case. However, note that sustained break of 1.6663 will firstly suggest that whole fall from 1.7043 has completed and will open up the case for stronger rally to retest this high.
In the bigger picture, the sharp reversal from 1.7043 argues that whole rise from 1.3654 has possibly completed with five waves up already, on bearish divergence condition in daily MACD and RSI. Break of 1.6338 support affirms this case and turns focus to 1.5983 support for confirmation. Also, note that, whole rise from 1.3503 is treated as correction to down trend from 2.1161 only is expected to conclude inside resistance zone of 1.6428/7332 (38.2% and 50% retracement of 2.1161 to 1.3503). Completion of rise from 1.3654 will also indicate that such correction from 1.3503 has completed too. In such case, deep decline should be seen to send GBP/USD through 1.3503 low eventually. On the upside, in case of another rise, we'd continue to monitor for reversal signal as GBP/USD approaches 1.7332 fibo resistance.
Content Departmen
Forex Research - Daily US Dollar Report
Yen Lifted Mildly as China Tightens Bank Rule, But Lacks Follow Through Momentum
Yen was lifted higher in Asian session today by news that China is setting rules to tighten bank capital requirements and made a new higher against dollar, but lacks follow through buying so far. Indeed, yen crosses are generally kept above this week's low and it looks like some more consolidation would be seen. Similar situation is found in dollar as the recovery earlier today lacks sustainable momentum so far and recent consolidation is likely still in progress. One thing to note is that Sterling is still the biggest loser this week. Today's break of 0.8652 resistance in EUR/GBP suggests that another round of selling in the pound might be underway which will make sterling crosses vulnerable.
Eurozone PMI data will be the main focus today as both Manufacturing and services PMIs are expected to improve further in Aug. Nevertheless, both data are expected to be kept below 50 level, suggesting that the manufacturing and services sectors are still in mild contraction. From US, Existing home sales is expected to rise slightly to 5.00M in July. Main focus will be on Bernanke's speech at the Jackson Hole Conference.
Looking at the dollar index, despite edging lower to 78.30, downside momentum in the index is diminishing and the index quickly settles back into prior tight range. With 78.23 cluster support (61.8% retracement of 77.43 to 79.51) intact, there is no change in the near term bullish view that rise from 77.43 is still in progress. Above 78.82 will flip intraday bias back to the upside and break of 79.51 will confirm rally resumption. Also, note that break of 79.66 resistance will have the index sustaining above medium term falling channel and in turn will solidify the case that whole fall from March's high of 89.62 has finished at 77.43 already. Focus will then be shifted to 81.47 resistance for confirmation. However, note that sustained break of 78.23 support will seriously dampen this view and open up the case that down trend from 89.62 is still in progress for another low below 77.43 before completion.
USD/JPY
USD/JPY's fall resumes and edges lower to 93.47 earlier today. At this point, intraday bias remains on the downside as long as 94.54 minor resistance holds. The break of 61.8% retracement of 91.73 to 97.77 at 94.03 suggests that whole rebound from 91.73 has completed at 97.77 already and further fall could now be seen to retest 91.73 low next. On the upside, above 94.54 will turn intraday outlook neutral and bring consolidation. But risk will remain on the downside as long as 97.77 resistance holds.
In the bigger picture, the break of mentioned 94.03 fibo support suggests that rebound from 91.73 has completed already. Also, it indicates that prior break of falling channel resistance was a false break. The failure below 98.87 resistance also keeps the lower high pattern since 101.43 and thus argue that such down trend is possibly still in progress. A break of 91.73 will confirm this case and bring deeper fall towards 87.12 key low. On the upside, break of 97.77 resistance, though, will revive the case that USD/JPY has bottomed out at 91.73 and will turn outlook bullish again.
GBP/USD
GBP/USD's consolidation from 1.6274 is still in progress and another rise cannot be ruled out. But after all, upside is expected to be limited by 1.6663 resistance and bring fall resumption. Below 1.6375 minor support will flip intraday bias back to the downside and further break of 1.6274 will indicate that decline from 1.7043 has resumed. Prior break of 1.6338 support serves as an important alert that a medium term top is in place at 1.7043. Below 1.6274 will target 1.5983 support to confirm the bearish case. However, note that sustained break of 1.6663 will firstly suggest that whole fall from 1.7043 has completed and will open up the case for stronger rally to retest this high.
In the bigger picture, the sharp reversal from 1.7043 argues that whole rise from 1.3654 has possibly completed with five waves up already, on bearish divergence condition in daily MACD and RSI. Break of 1.6338 support affirms this case and turns focus to 1.5983 support for confirmation. Also, note that, whole rise from 1.3503 is treated as correction to down trend from 2.1161 only is expected to conclude inside resistance zone of 1.6428/7332 (38.2% and 50% retracement of 2.1161 to 1.3503). Completion of rise from 1.3654 will also indicate that such correction from 1.3503 has completed too. In such case, deep decline should be seen to send GBP/USD through 1.3503 low eventually. On the upside, in case of another rise, we'd continue to monitor for reversal signal as GBP/USD approaches 1.7332 fibo resistance.
Content Departmen
Forex Rates (Pakistan)
Updated on: Wed, October 7, 2009, 15:30 (PST)
Courtesy : ECAP
Remittance Buying Selling Trends
USD 83.00 83.30
GBP 134.30 137.50
SR 22.04 22.14
UAE 22.48 22.65
NEWZ 43.5 43.8
AUS 73.25 74.09
EUR 121.60 122.60
CAD 77.83 78.72
HONG 10.49 10.73
IND 1.58 1.68
JPY 0.9300 0.9400
Forex Open Market Analysis More Currencies
Courtesy : ECAP
Remittance Buying Selling Trends
USD 83.00 83.30
GBP 134.30 137.50
SR 22.04 22.14
UAE 22.48 22.65
NEWZ 43.5 43.8
AUS 73.25 74.09
EUR 121.60 122.60
CAD 77.83 78.72
HONG 10.49 10.73
IND 1.58 1.68
JPY 0.9300 0.9400
Forex Open Market Analysis More Currencies
Thursday, October 1, 2009
FOREX Is Tough But Potential Money-Making Opportunity
Trading foreign currencies is a tough task; however, it is potentially a money-making opportunity for those who are educated and are knowledgeable about their investments.
Nevertheless, prior to choosing to participate in trading in the Forex market, you should:
* Cautiously judge the purpose of investment
* Your familiarity with risk factors
Forex is meant for the money you put aside and are prepared to loose. It might not be a wise idea to Forex trade to pay your regular bills.
Forex (Foreign Exchange market) is an inter-bank market that got a form in 1971; this was the period when the international trade transited from fixed exchange rates to floating rates. This transition paved way for the set of transactions between forex market brokers relating to the exchange of specific sums of money in a currency unit for the currency of some other country at an approved rate for any specified date.
During any trade day, the exchange rate of one currency to another currency is decided basically by supply and demand – to which both parties will be in agreement. The price of a currency is mentioned in terms of one more currency.
The possibility of transactions in the international currency market is frequently increasing, which is due to growth of global trade and eradication of currency limits in many countries.
Online Forex is the one of the most innovative forex trading method of Foreign Exchange trading over the Internet. You can start trading with a basic account. Beware of margin trading because unless you are a careful market watcher trading with borrowed money can be risky.
The online forex trading method gives fast implementation of foreign exchange (Forex) trading through the Internet, with cutting edge software and well-organized trustworthy service guarantying an excellent trading experience.
Nevertheless, prior to choosing to participate in trading in the Forex market, you should:
* Cautiously judge the purpose of investment
* Your familiarity with risk factors
Forex is meant for the money you put aside and are prepared to loose. It might not be a wise idea to Forex trade to pay your regular bills.
Forex (Foreign Exchange market) is an inter-bank market that got a form in 1971; this was the period when the international trade transited from fixed exchange rates to floating rates. This transition paved way for the set of transactions between forex market brokers relating to the exchange of specific sums of money in a currency unit for the currency of some other country at an approved rate for any specified date.
During any trade day, the exchange rate of one currency to another currency is decided basically by supply and demand – to which both parties will be in agreement. The price of a currency is mentioned in terms of one more currency.
The possibility of transactions in the international currency market is frequently increasing, which is due to growth of global trade and eradication of currency limits in many countries.
Online Forex is the one of the most innovative forex trading method of Foreign Exchange trading over the Internet. You can start trading with a basic account. Beware of margin trading because unless you are a careful market watcher trading with borrowed money can be risky.
The online forex trading method gives fast implementation of foreign exchange (Forex) trading through the Internet, with cutting edge software and well-organized trustworthy service guarantying an excellent trading experience.
Exploit Profit With Forex Trading Tactics
By using a particular set of FOREX trading tactics, you will be able to exploit the profit of trading. With forex trading, you can work in so far for as high as hundred times the total in your deposit account into the trade. So, with a $100 deposit, you will be able to leverage $10,000 into your transaction. With this type of cash backing in a deal, it is easier to finance the transactions that will manipulate healthier results.
Forex trading strategies, like leverage, are employed most of the time to get benefit of short upward turns in currency values. Inspecting closely on how the U.S. dollar balances with the Euro for more than 3 months’ duration might possibly not swank dollar to euro conversion results.
Though, within a particular day or week there could be massive upswings or downswings in value. Applying leveraged funds permit investors to get benefit of these temporary rises and falls.
One more important tactic for forex trading is the stop loss order. This defends the investor by determining and putting a point at which one you will not trade. It allows the investor put a check point for losses. You run the threat of ending a trade that could probably move yet higher, but you as well wrap yourself from a trade that falls far lower the existing value.
Opening up an automatic access order is as well one of the forex trading approaches that will make sure the investor can go into a trade while the price is right. A prearranged price for the foreign currency exchange is set so that the investor automatically goes into the trade at that point.
Forex trading strategies, like leverage, are employed most of the time to get benefit of short upward turns in currency values. Inspecting closely on how the U.S. dollar balances with the Euro for more than 3 months’ duration might possibly not swank dollar to euro conversion results.
Though, within a particular day or week there could be massive upswings or downswings in value. Applying leveraged funds permit investors to get benefit of these temporary rises and falls.
One more important tactic for forex trading is the stop loss order. This defends the investor by determining and putting a point at which one you will not trade. It allows the investor put a check point for losses. You run the threat of ending a trade that could probably move yet higher, but you as well wrap yourself from a trade that falls far lower the existing value.
Opening up an automatic access order is as well one of the forex trading approaches that will make sure the investor can go into a trade while the price is right. A prearranged price for the foreign currency exchange is set so that the investor automatically goes into the trade at that point.
Popular pairs in Forex
Without a doubt the EUR/USD and GBP/USD, as currency pairs, receive a great deal of attention by online Forex traders.
Each provides tradable patterns almost every day. Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns.
If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EUR/USD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report.
Clearly, it is hard to develop an argument of which pair is better to trade. But there is more that the online Forex trader can do with these pairs. online Forex traders can generate totally new trading opportunities by dropping the US dollar component of the pair and, thereby, creating a Cross-pair known as the EUR/GBP Before we take a look at the EUR/GBP chart, let’s try to understand what makes this pair a good source of trades, particularly, in the coming year.
The best way to understanding this Cross-pair is to realize that it generates a picture of the battle between two different economies- the EU vs. the British economy.
The EU countries experience different levels of economic growth and expectations of growth than that of Great Britain.
As a result, there is a constant flow back and forth of capital between these regions and this flow results in frequent range like behavior and price swings as can be seen in the day chart below.
Each provides tradable patterns almost every day. Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns.
If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EUR/USD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report.
Clearly, it is hard to develop an argument of which pair is better to trade. But there is more that the online Forex trader can do with these pairs. online Forex traders can generate totally new trading opportunities by dropping the US dollar component of the pair and, thereby, creating a Cross-pair known as the EUR/GBP Before we take a look at the EUR/GBP chart, let’s try to understand what makes this pair a good source of trades, particularly, in the coming year.
The best way to understanding this Cross-pair is to realize that it generates a picture of the battle between two different economies- the EU vs. the British economy.
The EU countries experience different levels of economic growth and expectations of growth than that of Great Britain.
As a result, there is a constant flow back and forth of capital between these regions and this flow results in frequent range like behavior and price swings as can be seen in the day chart below.
Forex automated trading system
Forex automated trading system, it calls Prophet1 Forex Expert Advisor. It is design for the Metatrader 4 (MT4) and to work for GBP/USD currency pair and they have good results, over 90% profitable trades, growing the balance from $1,000 to over $42,000 …see results on this link…
Forex trading platform with oil, gold and silver spot trading
Hi Forex visitors,
FOREXYARD offers unique forex trading platform with possibility in the same platform for spot trading of oil, gold and silver.
You could learn and test you forex and commodity trading skills before step in investing with FOREXYARD’s demo platform…......
FOREXYARD offers unique forex trading platform with possibility in the same platform for spot trading of oil, gold and silver.
You could learn and test you forex and commodity trading skills before step in investing with FOREXYARD’s demo platform…......
Wednesday, September 23, 2009
Pakistan Open Market Rates in Pak Rupee (PKR)
As on Wed, Sep 23 2009, 19:51 PST
Currency Symbol Buying Selling Charts
Australian Dollar AUD 70.49 71.99
Canadian Dollar CAD 75.79 77.42
Japanese Yen JPY 0.89 0.91
Saudi Riyal SAR 21.75 22.11
Singapore Dollar SGD 57.4 58.4
U.A.E Dirham AED 22.33 22.62
Currency Symbol Buying Selling Charts
Australian Dollar AUD 70.49 71.99
Canadian Dollar CAD 75.79 77.42
Japanese Yen JPY 0.89 0.91
Saudi Riyal SAR 21.75 22.11
Singapore Dollar SGD 57.4 58.4
U.A.E Dirham AED 22.33 22.62
Sunday, September 20, 2009
5 Tricks of Trend Trading
Default The Tricks Aren’t Secret at All
Everything you’ll read in this eBook is probably available elsewhere. For free. But I’m going to try to incorporate the most important elements of a profitable trend trading system. I am not going to talk about entry and exit rules – you can find those in the links above, and share more ideas with each other in the forex factory forum that has been created.
But what I do share – the information below – is truly what has made the difference for me and hundreds of other traders around the world.
Trick #1: Verify First, Then Trade
Most people totally ignore me when I talk about testing. When I train people to trade, I focus most of the training on helping them do their testing. I have developed spreadsheets, methodologies, statistical models – all designed to help traders realize that they must verify that a system works before they commit to trading the system with real money.
Don’t ever trade anything you’ve not tested first.
What does it mean to test? It means that you propose some simple rules for trading. Then you go back in time, manually or mechanically, and you find out how those proposed rules would operate over the course of hundreds of trades. That’s right: hundreds of trades.
Think about it for a moment: if you are not confident about your trading, it’s most likely because you have doubts about the outcome of the trades you are taking. And if you are doubtful about the outcome, then you need to do more testing until you have a better sense for what’s going to happen when you open a trade.
Trick #2: Become Obsessed with One Area of Focus.
Discipline yourself to focus. Diversification is good for your portfolio. It is not good for your career.
Let’s look at some examples. Think of the very best attorney or doctor that you know.
Does that person specialize in one area, or does she practice law or medicine across a huge subject area? My guess is that she is known for one type of legal specialty, or as a doctor, she is a cardiologist (hearts), radiologist (treating cancer), or something else.
The highest paid professionals are specialists. Why should that be any different for you?
You are wise to diversify the investments that you can’t watch closely. You don’t want to commit your entire life savings to forex. You might have money saved in the equity in your home, some in a retirement account, some money in a bank savings account, and then some in a forex trading account.
But if you are going to be a forex trader for a living, then it makes sense – with respect to your currency trading, to focus on a currency pair, a system for trading that pair, and a time frame for watching that pair. If you focus on one currency pair to start, you can become as much of an expert as possible in that one area. How does this relate to trend trading? It is the heart of the issue, it is the foundation for you to become successful as a trend trader.
Let’s say that you read my 5/13/62 eBook and you decide that you’re going to focus on that system. Becoming obsessed with one area of focus means that you set aside time every day to test 50 historical trades. And that you only watch one currency pair to start. And that you only watch one time frame. And you become an expert in that system, on that one currency pair, in that one time frame. If you look at 1,000 trades with those parameters, you are going to become an expert. If you become an expert, you are going to trade profitably.
Trick #3: Different Trends on Different Time Frames
The EUR/USD can be trending upwards on the daily chart, but on the 5 minute, it can be trending downward.
Really? Is that possible? Absolutely!
Think about it for a moment – if you have a long term, daily, dominant move upwards on the EUR/USD, it’s possible that in the shorter term we could see a movement in the opposite direction. So remember, if you want to be a trend trader, you can choose to follow the trend on a variety of different time frames.
If you have a full time job, you might look at trends on the daily and weekly charts. These trends take much longer to start and finish – but they are worth a lot of pips – even more than 1,000 pips.
If you are able to trade during the day, you might look at the very short term charts. I have been testing a new trend following system that works even on the 1 minute charts. I don’t trade from the 1 minute charts (at least right now) but I would be willing to follow a trend on just about any time frame. The point is that each time frame can have its own trend.
Trick #4: Trend Trading Requires Courage & Money Smarts
If you want to become a trend-trader, you are going for the big moves. You are NOT going to be trying to get 10 pips on each trade (I talk about that here: http://www.robbooker.com/books/Strategy10.pdf). You’re going to want to get 50 to 500, and maybe even many more pips, when you are trend trading.
To do this you are going to have to commit yourself to a patient process of waiting for a trend to develop, and then to stay in your trades. Most currency traders are focused on the short term – and there are lots of jumps up and down in the short term. Have you ever noticed that after a major economic release, a currency pair will initially move in the direction you expect it to go, but then all of the sudden it will move the opposite way?
Take, for instance, a Non Farm Payroll report where the number is low, or in other words, “bad” for the US Dollar. And then, all of the sudden, the US Dollar grows stronger anyway! This infuriates traders. I get at least 50 emails every time a major economic report comes out, with questions just like this. It’s a great question. And the answer is often that the trend was more dominant than the news.
Trick #5: TV People are Wrong
Watch out for the news. Be wary of commentators on CNBC or Bloomberg that say things like “the trend on the USD is certainly up,” or “traders would be wise to scale back their long dollar positions because the trend is going to be down.” These people don’t trade your account. They have no idea what chart time frame you are watching or what trading system you follow.
In the past 4 years, I have worked with approximately 1,060 traders from around the world (as of October 31, 2006). Most of them, at one time or another, were scared out of a really good trade because they heard something on television, received an email, or were influenced by a friend.
If you watch TV and you see some windbag get fanatical about one trade or another, then run away from your television as fast as you can. It is better to smash your television than it is to base your trade ideas on what you learn there. Keep in mind that I didn’t say that you should NOT watch business news. I just said that we need to be careful about what we allow ourselves to listen to.
Conclusion
You can get rules for entering and exiting trend trades from all over the Web. They’re easy to find. What makes the difference in trend trading is doing the little things right – the stuff that most traders overlook. For me, it’s all about discipline in your testing, in your trading, in your money management.
I try to give a lot of material away for free. I hope you’ll stop by the Web site, and I hope that you’ll stay in touch. Remember, the free audio and video versions of this ebook are available on my blog, at this address:
http://www.piptopia.com/2006/10/30/5...ading.php#more
Keep in touch!
Everything you’ll read in this eBook is probably available elsewhere. For free. But I’m going to try to incorporate the most important elements of a profitable trend trading system. I am not going to talk about entry and exit rules – you can find those in the links above, and share more ideas with each other in the forex factory forum that has been created.
But what I do share – the information below – is truly what has made the difference for me and hundreds of other traders around the world.
Trick #1: Verify First, Then Trade
Most people totally ignore me when I talk about testing. When I train people to trade, I focus most of the training on helping them do their testing. I have developed spreadsheets, methodologies, statistical models – all designed to help traders realize that they must verify that a system works before they commit to trading the system with real money.
Don’t ever trade anything you’ve not tested first.
What does it mean to test? It means that you propose some simple rules for trading. Then you go back in time, manually or mechanically, and you find out how those proposed rules would operate over the course of hundreds of trades. That’s right: hundreds of trades.
Think about it for a moment: if you are not confident about your trading, it’s most likely because you have doubts about the outcome of the trades you are taking. And if you are doubtful about the outcome, then you need to do more testing until you have a better sense for what’s going to happen when you open a trade.
Trick #2: Become Obsessed with One Area of Focus.
Discipline yourself to focus. Diversification is good for your portfolio. It is not good for your career.
Let’s look at some examples. Think of the very best attorney or doctor that you know.
Does that person specialize in one area, or does she practice law or medicine across a huge subject area? My guess is that she is known for one type of legal specialty, or as a doctor, she is a cardiologist (hearts), radiologist (treating cancer), or something else.
The highest paid professionals are specialists. Why should that be any different for you?
You are wise to diversify the investments that you can’t watch closely. You don’t want to commit your entire life savings to forex. You might have money saved in the equity in your home, some in a retirement account, some money in a bank savings account, and then some in a forex trading account.
But if you are going to be a forex trader for a living, then it makes sense – with respect to your currency trading, to focus on a currency pair, a system for trading that pair, and a time frame for watching that pair. If you focus on one currency pair to start, you can become as much of an expert as possible in that one area. How does this relate to trend trading? It is the heart of the issue, it is the foundation for you to become successful as a trend trader.
Let’s say that you read my 5/13/62 eBook and you decide that you’re going to focus on that system. Becoming obsessed with one area of focus means that you set aside time every day to test 50 historical trades. And that you only watch one currency pair to start. And that you only watch one time frame. And you become an expert in that system, on that one currency pair, in that one time frame. If you look at 1,000 trades with those parameters, you are going to become an expert. If you become an expert, you are going to trade profitably.
Trick #3: Different Trends on Different Time Frames
The EUR/USD can be trending upwards on the daily chart, but on the 5 minute, it can be trending downward.
Really? Is that possible? Absolutely!
Think about it for a moment – if you have a long term, daily, dominant move upwards on the EUR/USD, it’s possible that in the shorter term we could see a movement in the opposite direction. So remember, if you want to be a trend trader, you can choose to follow the trend on a variety of different time frames.
If you have a full time job, you might look at trends on the daily and weekly charts. These trends take much longer to start and finish – but they are worth a lot of pips – even more than 1,000 pips.
If you are able to trade during the day, you might look at the very short term charts. I have been testing a new trend following system that works even on the 1 minute charts. I don’t trade from the 1 minute charts (at least right now) but I would be willing to follow a trend on just about any time frame. The point is that each time frame can have its own trend.
Trick #4: Trend Trading Requires Courage & Money Smarts
If you want to become a trend-trader, you are going for the big moves. You are NOT going to be trying to get 10 pips on each trade (I talk about that here: http://www.robbooker.com/books/Strategy10.pdf). You’re going to want to get 50 to 500, and maybe even many more pips, when you are trend trading.
To do this you are going to have to commit yourself to a patient process of waiting for a trend to develop, and then to stay in your trades. Most currency traders are focused on the short term – and there are lots of jumps up and down in the short term. Have you ever noticed that after a major economic release, a currency pair will initially move in the direction you expect it to go, but then all of the sudden it will move the opposite way?
Take, for instance, a Non Farm Payroll report where the number is low, or in other words, “bad” for the US Dollar. And then, all of the sudden, the US Dollar grows stronger anyway! This infuriates traders. I get at least 50 emails every time a major economic report comes out, with questions just like this. It’s a great question. And the answer is often that the trend was more dominant than the news.
Trick #5: TV People are Wrong
Watch out for the news. Be wary of commentators on CNBC or Bloomberg that say things like “the trend on the USD is certainly up,” or “traders would be wise to scale back their long dollar positions because the trend is going to be down.” These people don’t trade your account. They have no idea what chart time frame you are watching or what trading system you follow.
In the past 4 years, I have worked with approximately 1,060 traders from around the world (as of October 31, 2006). Most of them, at one time or another, were scared out of a really good trade because they heard something on television, received an email, or were influenced by a friend.
If you watch TV and you see some windbag get fanatical about one trade or another, then run away from your television as fast as you can. It is better to smash your television than it is to base your trade ideas on what you learn there. Keep in mind that I didn’t say that you should NOT watch business news. I just said that we need to be careful about what we allow ourselves to listen to.
Conclusion
You can get rules for entering and exiting trend trades from all over the Web. They’re easy to find. What makes the difference in trend trading is doing the little things right – the stuff that most traders overlook. For me, it’s all about discipline in your testing, in your trading, in your money management.
I try to give a lot of material away for free. I hope you’ll stop by the Web site, and I hope that you’ll stay in touch. Remember, the free audio and video versions of this ebook are available on my blog, at this address:
http://www.piptopia.com/2006/10/30/5...ading.php#more
Keep in touch!
Saturday, September 19, 2009
Exploit Profit With Forex Trading Tactics
By using a particular set of FOREX trading tactics, you will be able to exploit the profit of trading. With forex trading, you can work in so far for as high as hundred times the total in your deposit account into the trade. So, with a $100 deposit, you will be able to leverage $10,000 into your transaction. With this type of cash backing in a deal, it is easier to finance the transactions that will manipulate healthier results.
Forex trading strategies, like leverage, are employed most of the time to get benefit of short upward turns in currency values. Inspecting closely on how the U.S. dollar balances with the Euro for more than 3 months’ duration might possibly not swank dollar to euro conversion results.
Though, within a particular day or week there could be massive upswings or downswings in value. Applying leveraged funds permit investors to get benefit of these temporary rises and falls.
One more important tactic for forex trading is the stop loss order. This defends the investor by determining and putting a point at which one you will not trade. It allows the investor put a check point for losses. You run the threat of ending a trade that could probably move yet higher, but you as well wrap yourself from a trade that falls far lower the existing value.
Opening up an automatic access order is as well one of the forex trading approaches that will make sure the investor can go into a trade while the price is right. A prearranged price for the foreign currency exchange is set so that the investor automatically goes into the trade at that point.
Forex trading strategies, like leverage, are employed most of the time to get benefit of short upward turns in currency values. Inspecting closely on how the U.S. dollar balances with the Euro for more than 3 months’ duration might possibly not swank dollar to euro conversion results.
Though, within a particular day or week there could be massive upswings or downswings in value. Applying leveraged funds permit investors to get benefit of these temporary rises and falls.
One more important tactic for forex trading is the stop loss order. This defends the investor by determining and putting a point at which one you will not trade. It allows the investor put a check point for losses. You run the threat of ending a trade that could probably move yet higher, but you as well wrap yourself from a trade that falls far lower the existing value.
Opening up an automatic access order is as well one of the forex trading approaches that will make sure the investor can go into a trade while the price is right. A prearranged price for the foreign currency exchange is set so that the investor automatically goes into the trade at that point.
FOREX Is Tough But Potential Money-Making Opportunity
Trading foreign currencies is a tough task; however, it is potentially a money-making opportunity for those who are educated and are knowledgeable about their investments.
Nevertheless, prior to choosing to participate in trading in the Forex market, you should:
* Cautiously judge the purpose of investment
* Your familiarity with risk factors
Forex is meant for the money you put aside and are prepared to loose. It might not be a wise idea to Forex trade to pay your regular bills.
Forex (Foreign Exchange market) is an inter-bank market that got a form in 1971; this was the period when the international trade transited from fixed exchange rates to floating rates. This transition paved way for the set of transactions between forex market brokers relating to the exchange of specific sums of money in a currency unit for the currency of some other country at an approved rate for any specified date.
During any trade day, the exchange rate of one currency to another currency is decided basically by supply and demand – to which both parties will be in agreement. The price of a currency is mentioned in terms of one more currency.
The possibility of transactions in the international currency market is frequently increasing, which is due to growth of global trade and eradication of currency limits in many countries.
Online Forex is the one of the most innovative forex trading method of Foreign Exchange trading over the Internet. You can start trading with a basic account. Beware of margin trading because unless you are a careful market watcher trading with borrowed money can be risky.
The online forex trading method gives fast implementation of foreign exchange (Forex) trading through the Internet, with cutting edge software and well-organized trustworthy service guarantying an excellent trading experience.
Nevertheless, prior to choosing to participate in trading in the Forex market, you should:
* Cautiously judge the purpose of investment
* Your familiarity with risk factors
Forex is meant for the money you put aside and are prepared to loose. It might not be a wise idea to Forex trade to pay your regular bills.
Forex (Foreign Exchange market) is an inter-bank market that got a form in 1971; this was the period when the international trade transited from fixed exchange rates to floating rates. This transition paved way for the set of transactions between forex market brokers relating to the exchange of specific sums of money in a currency unit for the currency of some other country at an approved rate for any specified date.
During any trade day, the exchange rate of one currency to another currency is decided basically by supply and demand – to which both parties will be in agreement. The price of a currency is mentioned in terms of one more currency.
The possibility of transactions in the international currency market is frequently increasing, which is due to growth of global trade and eradication of currency limits in many countries.
Online Forex is the one of the most innovative forex trading method of Foreign Exchange trading over the Internet. You can start trading with a basic account. Beware of margin trading because unless you are a careful market watcher trading with borrowed money can be risky.
The online forex trading method gives fast implementation of foreign exchange (Forex) trading through the Internet, with cutting edge software and well-organized trustworthy service guarantying an excellent trading experience.
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Some daily summary
Hello Traders,
This week come up with some results w/o any surprise as:
- Japanese Yen: The bad GDP sinks the yen, -0.3% instead of the forecast -0.2%
- Australian Dollar: Demand for housing gradual as rates rise, -4.1% instead of the forecast -2.0%
- Euro: French Industrial production recovers, 1.3% better of the forecast 0.4%, but still down for this year
- Pound: PPI remains in the range, -0.5% instead of the forecast -0.3%
Please note: The G10’s Central Banks appear to have some mutual agreement on a rate hikes until the credit market turmoil subsides, and that position is unlikely to change anytime soon.
Be patient and trade wise!
This week come up with some results w/o any surprise as:
- Japanese Yen: The bad GDP sinks the yen, -0.3% instead of the forecast -0.2%
- Australian Dollar: Demand for housing gradual as rates rise, -4.1% instead of the forecast -2.0%
- Euro: French Industrial production recovers, 1.3% better of the forecast 0.4%, but still down for this year
- Pound: PPI remains in the range, -0.5% instead of the forecast -0.3%
Please note: The G10’s Central Banks appear to have some mutual agreement on a rate hikes until the credit market turmoil subsides, and that position is unlikely to change anytime soon.
Be patient and trade wise!
FOREX History
On FOREX markets buying and selling currency is made on a speculative basis by most traders. It is the same like stock market, when traders buy (stocks) currencies holding to get stronger and sell when will get weaker. Most of this trading is doing by investment companies, hedge fund, banks and brokerages. In last couple years the currency trading became open for individual investor with small financial steak. Companies use the currency market for purchasing some amount of foreign currency for there obligations and commitments with other international companies.
The short retrospective for foreign exchange market life will be:
Currency markets were relatively quite until World War 1. Speculation ever made was unknown and was with negative sentiment by institutions. After war ending foreign exchange markets became volatile and shows the first signs of speculative activity, but any further changes and progress was interrupt with great depression. The forex markets were quiet and stable during World War II, when the market started with many important changes and improvements.
The short retrospective for foreign exchange market life will be:
Currency markets were relatively quite until World War 1. Speculation ever made was unknown and was with negative sentiment by institutions. After war ending foreign exchange markets became volatile and shows the first signs of speculative activity, but any further changes and progress was interrupt with great depression. The forex markets were quiet and stable during World War II, when the market started with many important changes and improvements.
Popular pairs in Forex
Without a doubt the EUR/USD and GBP/USD, as currency pairs, receive a great deal of attention by online Forex traders.
Each provides tradable patterns almost every day. Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns.
If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EUR/USD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report.
Clearly, it is hard to develop an argument of which pair is better to trade. But there is more that the online Forex trader can do with these pairs. online Forex traders can generate totally new trading opportunities by dropping the US dollar component of the pair and, thereby, creating a Cross-pair known as the EUR/GBP Before we take a look at the EUR/GBP chart, let’s try to understand what makes this pair a good source of trades, particularly, in the coming year.
The best way to understanding this Cross-pair is to realize that it generates a picture of the battle between two different economies- the EU vs. the British economy.
The EU countries experience different levels of economic growth and expectations of growth than that of Great Britain.
As a result, there is a constant flow back and forth of capital between these regions and this flow results in frequent range like behavior and price swings as can be seen in the day chart below.
Each provides tradable patterns almost every day. Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns.
If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EUR/USD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report.
Clearly, it is hard to develop an argument of which pair is better to trade. But there is more that the online Forex trader can do with these pairs. online Forex traders can generate totally new trading opportunities by dropping the US dollar component of the pair and, thereby, creating a Cross-pair known as the EUR/GBP Before we take a look at the EUR/GBP chart, let’s try to understand what makes this pair a good source of trades, particularly, in the coming year.
The best way to understanding this Cross-pair is to realize that it generates a picture of the battle between two different economies- the EU vs. the British economy.
The EU countries experience different levels of economic growth and expectations of growth than that of Great Britain.
As a result, there is a constant flow back and forth of capital between these regions and this flow results in frequent range like behavior and price swings as can be seen in the day chart below.
Exploit Profit With Forex Trading Tactics
By using a particular set of FOREX trading tactics, you will be able to exploit the profit of trading. With forex trading, you can work in so far for as high as hundred times the total in your deposit account into the trade. So, with a $100 deposit, you will be able to leverage $10,000 into your transaction. With this type of cash backing in a deal, it is easier to finance the transactions that will manipulate healthier results.
Forex trading strategies, like leverage, are employed most of the time to get benefit of short upward turns in currency values. Inspecting closely on how the U.S. dollar balances with the Euro for more than 3 months’ duration might possibly not swank dollar to euro conversion results.
Though, within a particular day or week there could be massive upswings or downswings in value. Applying leveraged funds permit investors to get benefit of these temporary rises and falls.
One more important tactic for forex trading is the stop loss order. This defends the investor by determining and putting a point at which one you will not trade. It allows the investor put a check point for losses. You run the threat of ending a trade that could probably move yet higher, but you as well wrap yourself from a trade that falls far lower the existing value.
Opening up an automatic access order is as well one of the forex trading approaches that will make sure the investor can go into a trade while the price is right. A prearranged price for the foreign currency exchange is set so that the investor automatically goes into the trade at that point.
Forex trading strategies, like leverage, are employed most of the time to get benefit of short upward turns in currency values. Inspecting closely on how the U.S. dollar balances with the Euro for more than 3 months’ duration might possibly not swank dollar to euro conversion results.
Though, within a particular day or week there could be massive upswings or downswings in value. Applying leveraged funds permit investors to get benefit of these temporary rises and falls.
One more important tactic for forex trading is the stop loss order. This defends the investor by determining and putting a point at which one you will not trade. It allows the investor put a check point for losses. You run the threat of ending a trade that could probably move yet higher, but you as well wrap yourself from a trade that falls far lower the existing value.
Opening up an automatic access order is as well one of the forex trading approaches that will make sure the investor can go into a trade while the price is right. A prearranged price for the foreign currency exchange is set so that the investor automatically goes into the trade at that point.
Regulate Your Day Trading Orders With Forex Brokers
Day trading in Forex is the process of completing the buying and selling within the changes that take place in the exchange rates of currencies in a day. The buying and selling can occur within minutes or between hours in the same trading day. This is particularly a very risky business and it requires a lot of concentration in the happenings of the market.
High profits in Forex are necessarily associated with a degree of risk and any business which has a risk factor can lead to probable tragedy too. However, there are related advantages in day trading.
The capability to regulate your trading orders with respect to the changing forex market volatility is a major requisite for a Forex trader who is in to regular day trading. In reality, there are very few skilled day traders. A majority of them work via brokers rather than market watching and working on their own. Best decisions in day trading can be accomplished if you work for yourself, you are likely to focus on the work more because it is your own money; however, when you do not have the time to be doing it, the best resort is to have a broker do it on your behalf.
Technical analysis is one of the consistent and gainful methods to carry on with your trade in Forex. Sometimes you are likely to be in a hurry to purchase a stock some times too impatient to sell. Trading online is at par with trading in any direct stock exchange market place.
High profits in Forex are necessarily associated with a degree of risk and any business which has a risk factor can lead to probable tragedy too. However, there are related advantages in day trading.
The capability to regulate your trading orders with respect to the changing forex market volatility is a major requisite for a Forex trader who is in to regular day trading. In reality, there are very few skilled day traders. A majority of them work via brokers rather than market watching and working on their own. Best decisions in day trading can be accomplished if you work for yourself, you are likely to focus on the work more because it is your own money; however, when you do not have the time to be doing it, the best resort is to have a broker do it on your behalf.
Technical analysis is one of the consistent and gainful methods to carry on with your trade in Forex. Sometimes you are likely to be in a hurry to purchase a stock some times too impatient to sell. Trading online is at par with trading in any direct stock exchange market place.
STARTING FOREX TRADING
The best and most efficient way for the traders to make money is through the internet in the Forex Trading by using the online forex trading system. The forex market is the most liquid trading market and an unpredictable market in the world. But still this forex market is the best for expert traders to amass huge profits. But it doesn’t mean that a trader should be an expert to make profits in the forex markets, it is enough if he knows the basics of forex trading and a little common sense along with the knowledge of the present economy of the countries world wide. Getting started with forex has become easy, due to the advances in technology.
1. The first and foremost aspect is that a person who wants to do forex trading should choose a good Forex Broker, the forex broker should help the forex trader to have a practice account, great customer support, good charting packages and news feeds. To analyze the forex brokers, there is a report called CFD FX REPORT which reviews forex brokers and give its rankings.
2. The second aspect is that, the forex trader must fund and deposit money in his newly acquired account. Due to modernity, these days many Forex Broker Platforms make it very easy for transactions, the trader can deposit via Credit Card, direct debit, check. It is always recommended by most advisors to start with only little amount of money and after a little experiences the forex trader can increase his leverage rates later.
3. The third step is the forex broker should help to move in the right direction that suits the trader’s trading style. There are several quality Free forex charts available to indicate the trend and also there are many sites that update the Fx Rates everyday. It is important to use them regularly.
1. The first and foremost aspect is that a person who wants to do forex trading should choose a good Forex Broker, the forex broker should help the forex trader to have a practice account, great customer support, good charting packages and news feeds. To analyze the forex brokers, there is a report called CFD FX REPORT which reviews forex brokers and give its rankings.
2. The second aspect is that, the forex trader must fund and deposit money in his newly acquired account. Due to modernity, these days many Forex Broker Platforms make it very easy for transactions, the trader can deposit via Credit Card, direct debit, check. It is always recommended by most advisors to start with only little amount of money and after a little experiences the forex trader can increase his leverage rates later.
3. The third step is the forex broker should help to move in the right direction that suits the trader’s trading style. There are several quality Free forex charts available to indicate the trend and also there are many sites that update the Fx Rates everyday. It is important to use them regularly.
PROLOGUE TO FOREX
Forex rates is the most important aspect that a trader should know. It is better to know the basics of forex before jumping into the trading. Forex has the biggest market world wide when compared to others generating about US$4 trillion trade every day.
Forex is operating worldwide round the clock with governments, national and central banks, hedge funds, corporate companies, various financial institutions, brokers, and currency speculators all participate in the forex trading to make money and upheld their economy. The forex market is closed only during the weekends and opened in all the weekdays. Forex plays an important role in foreign trade and foreign exchange rates.
Forex is also referred as Forex exchange trading or as FX and this involves only the buying and selling of one currency, according to its established value against another currency. Example, a trader buys the US dollars with the euro currency when the US dollar value is weak and sells the US dollars when its value is high against the euro currency. By this a trader can make profits.
Knowing the foreign exchange rate forms the cornerstone factor to predict forex trends and online forex brokers should essentially know this to efficiently practice their skill.
The established value of one currency to another is called exchange rate, which can rise or fall anytime owing to many factors like the stability of the government, stability of the economy, security of the country, etc. However market is also affected by market psychology, political factors, and economic factors like house prices and employment figures etc.
A forex trader will be able to benefit in this forex trading only when he does it in high volumes because the profit margin is always small and when high volumes of forex trading is done in the forex markets, then only the forex trader will be able to amass huge profits
Forex is operating worldwide round the clock with governments, national and central banks, hedge funds, corporate companies, various financial institutions, brokers, and currency speculators all participate in the forex trading to make money and upheld their economy. The forex market is closed only during the weekends and opened in all the weekdays. Forex plays an important role in foreign trade and foreign exchange rates.
Forex is also referred as Forex exchange trading or as FX and this involves only the buying and selling of one currency, according to its established value against another currency. Example, a trader buys the US dollars with the euro currency when the US dollar value is weak and sells the US dollars when its value is high against the euro currency. By this a trader can make profits.
Knowing the foreign exchange rate forms the cornerstone factor to predict forex trends and online forex brokers should essentially know this to efficiently practice their skill.
The established value of one currency to another is called exchange rate, which can rise or fall anytime owing to many factors like the stability of the government, stability of the economy, security of the country, etc. However market is also affected by market psychology, political factors, and economic factors like house prices and employment figures etc.
A forex trader will be able to benefit in this forex trading only when he does it in high volumes because the profit margin is always small and when high volumes of forex trading is done in the forex markets, then only the forex trader will be able to amass huge profits
Information About Margin In Forex Trade
Several forex traders are doubtful while applying the margin. But after that, they have small option and the majority of them have to employ the margin to do foreign trade.
One single lot includes 100,000 units of a currency in a normal account. One lot in Mini account may possibly include 10,000 units of a particular currency. This, as most of you would optimistically have the same opinion, is important cash to keep in an account. As well, the majority of people have been look to trade above one lot at a time.
And nearly all Forex trading firms need traders to have admission to margin funds. All in all there is just no options which will aid us turn clear of applying the margin in currency trading.
Significant aspect for a forex trader to bear in mind is that there are reasonable ways to employ the margin gainfully in addition to sensibly.
Margin is customizable: Margin is bendable and can be applied till the level at which the trader is comfy and thinks the requirement to exercise it. If the trader desires to play it protected, 5% to 10% of margin is measured comfy. For a trader who is start to taking a few risks, 40% to 50% percent of margin is measured standard or strong.
Therefore, the margin sum for every trade can be customized opening from zero to 100 percent. A person has to think every trade independently and has to create it a division of his long term forex currency trading strategy and create a well-versed verdict about how lot the margin is most appropriate for him.
One single lot includes 100,000 units of a currency in a normal account. One lot in Mini account may possibly include 10,000 units of a particular currency. This, as most of you would optimistically have the same opinion, is important cash to keep in an account. As well, the majority of people have been look to trade above one lot at a time.
And nearly all Forex trading firms need traders to have admission to margin funds. All in all there is just no options which will aid us turn clear of applying the margin in currency trading.
Significant aspect for a forex trader to bear in mind is that there are reasonable ways to employ the margin gainfully in addition to sensibly.
Margin is customizable: Margin is bendable and can be applied till the level at which the trader is comfy and thinks the requirement to exercise it. If the trader desires to play it protected, 5% to 10% of margin is measured comfy. For a trader who is start to taking a few risks, 40% to 50% percent of margin is measured standard or strong.
Therefore, the margin sum for every trade can be customized opening from zero to 100 percent. A person has to think every trade independently and has to create it a division of his long term forex currency trading strategy and create a well-versed verdict about how lot the margin is most appropriate for him.
Use Of Forex Trading System
While several novel forex trading systems are dependent on difficult mathematical market analysis forms, a few of the most successful forex trading strategies are as well the simplest. One of these easy and very much successful strategies is trend trading, where you just observe which way the forex market is trending in and next you trade in that trend.
If you were trading the euro to dollar currency pair, the method that you could recognize the course of the trend is to start up the daily forex charts and cover an easy moving average on the chart. If the way of the moving average is high, next the pair is placed in an uptrend; if the moving average line is downward, there is a downtrend; and if the line is horizontal next there may possibly be no trend.
Trend trading is a verified method to make profits in the forex market as it is a recognized truth supported by decades of market investigation that currency pairs go in trends.
If the trend is on high next it creates logic to purchase, if the trend is downward next it creates logic to sell, and if there is no trend after that it may possibly not be a best time to trade. The most excellent method to obtain an exact sense of the on the whole trend is to glance at a long-term price chart like a daily, weekly, or monthly chart and observe which way the moving average line is pointing.
If you were trading the euro to dollar currency pair, the method that you could recognize the course of the trend is to start up the daily forex charts and cover an easy moving average on the chart. If the way of the moving average is high, next the pair is placed in an uptrend; if the moving average line is downward, there is a downtrend; and if the line is horizontal next there may possibly be no trend.
Trend trading is a verified method to make profits in the forex market as it is a recognized truth supported by decades of market investigation that currency pairs go in trends.
If the trend is on high next it creates logic to purchase, if the trend is downward next it creates logic to sell, and if there is no trend after that it may possibly not be a best time to trade. The most excellent method to obtain an exact sense of the on the whole trend is to glance at a long-term price chart like a daily, weekly, or monthly chart and observe which way the moving average line is pointing.
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Customized Shopper's Currency Converter™ for Your Site Free! Information for webmasters on how to integrate the Shopper's Currency Converter™ (SCC), into a website. The SCC allows users of a web page to perform currency calculations directly on the page without leaving the site. You can even pre-select the currencies or amounts!
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Link to Us Free! Linking to any of our services is fast and easy. This page explains how to establish links, and even provides source HTML code for you to use.
Free Customized Converter for Your Site Free! Information for webmasters on how to include a customized version of the XE.com Universal Currency Converter ® on their own site.
Advanced Converter Customization Information for webmasters on how to license a fully customized, adless version of the XE.com Universal Currency Converter ® for their own site.
Customized Shopper's Currency Converter™ for Your Site Free! Information for webmasters on how to integrate the Shopper's Currency Converter™ (SCC), into a website. The SCC allows users of a web page to perform currency calculations directly on the page without leaving the site. You can even pre-select the currencies or amounts!
Free Customization of the Personal Currency Assistant™ Free! Information for webmasters on how to make a customized version of the XE.com pop-up Personal Currency Assistant™.
Link to Us Free! Linking to any of our services is fast and easy. This page explains how to establish links, and even provides source HTML code for you to use.
Currency Trading and Forex Tips
Currency trading is when you buy and sell currency on the foreign exchange (or "Forex") market with the intent to make money.
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How Forex Works
The currency exchange rate is the rate at which one currency can be exchanged for another. It is always quoted in pairs like the EUR/USD (the Euro and the US Dollar). Exchange rates fluctuate based on economic factors like inflation, industrial production and geopolitical events. These factors will influence whether you buy or sell a currency pair.
Example of a Forex Trade:
The EUR/USD rate represents the number of US Dollars one Euro can purchase. If you believe that the Euro will increase in value against the US Dollar, you will buy Euros with US Dollars. If the exchange rate rises, you will sell the Euros back, making a profit. Please keep in mind that forex trading involves a high risk of loss.
Why Trade Currencies?
Forex is the world's largest market. With about 3.2 trillion US dollars in daily volume and 24-hour market action, we believe it is a true "step above" the equities market for the serious trader. Some key differences are:
Many firms don't charge commissions – you pay only the bid/ask spreads.
There's 24 hour trading – you dictate when to trade and how to trade.
You can trade on leverage, but this can magnify potential gains and losses.
You can focus on picking from a few currencies rather then from 5000 stocks.
Forex is accessible – you don’t need a lot of money to get started.
Why Currency Trading Is Not For Everyone
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose. If you have any doubts, it is advisable to seek advice from an independent financial advisor
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How Forex Works
The currency exchange rate is the rate at which one currency can be exchanged for another. It is always quoted in pairs like the EUR/USD (the Euro and the US Dollar). Exchange rates fluctuate based on economic factors like inflation, industrial production and geopolitical events. These factors will influence whether you buy or sell a currency pair.
Example of a Forex Trade:
The EUR/USD rate represents the number of US Dollars one Euro can purchase. If you believe that the Euro will increase in value against the US Dollar, you will buy Euros with US Dollars. If the exchange rate rises, you will sell the Euros back, making a profit. Please keep in mind that forex trading involves a high risk of loss.
Why Trade Currencies?
Forex is the world's largest market. With about 3.2 trillion US dollars in daily volume and 24-hour market action, we believe it is a true "step above" the equities market for the serious trader. Some key differences are:
Many firms don't charge commissions – you pay only the bid/ask spreads.
There's 24 hour trading – you dictate when to trade and how to trade.
You can trade on leverage, but this can magnify potential gains and losses.
You can focus on picking from a few currencies rather then from 5000 stocks.
Forex is accessible – you don’t need a lot of money to get started.
Why Currency Trading Is Not For Everyone
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose. If you have any doubts, it is advisable to seek advice from an independent financial advisor
Friday, September 18, 2009
FOREX RATES
Pakistan Open Market Forex Rates
Updated at : 18/9/2009 10:51 PM (PST)
Currency Buying Selling
Australian Dollar 70.30 71.30
Canadian Dollar 75.30 76.30
China Yuan 12.00 13.50
Euro 119.50 120.50
Japanese Yen 0.8960 0.9060
Saudi Riyal 21.75 21.90
U.A.E Dirham 22.33 22.50
UK Pound Sterling 136.30 137.30
US Dollar 82.60 82.80
Updated at : 18/9/2009 10:51 PM (PST)
Currency Buying Selling
Australian Dollar 70.30 71.30
Canadian Dollar 75.30 76.30
China Yuan 12.00 13.50
Euro 119.50 120.50
Japanese Yen 0.8960 0.9060
Saudi Riyal 21.75 21.90
U.A.E Dirham 22.33 22.50
UK Pound Sterling 136.30 137.30
US Dollar 82.60 82.80
FXHistory®: historical currency exchange rates
FXHistory is the easiest tool to access the largest foreign exchange database on the Internet. To obtain the historical exchange rate for any currency pair, select the language, the range of dates and the currencies you would like to obtain exchange rates for. You can obtain the historical exchange rates with the desired rate (cash, interbank, credit card), in ASCII, CSV or HTML format. Click on "Get Table" to obtain the historical currency exchange rates from our exchange servers.
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