Money Management Tips For Forex Traders

There's no doubt that forex trading is a growing industry, but most traders find that it's not easy to become a profitable trader. A major problem encountered by the majority of novice traders is that they do not know how to successfully manage their money.

This can be critical because even if you employ a successful trading strategy, you may still end up losing money if you are playing with high stakes that you can't really afford. The worst thing you can do is to adopt a gambler's mindset and open a large position when you are full of confidence about a particular set-up that may occur.

Sure you may get lucky and enjoy some huge winnings, particularly if you use a lot of leverage when opening the position. However it only takes a couple of losing trades to make a serious dent in your trading capital, and if you don't employ any stop losses you could easily lose all of your money.

So the point is that it's important that you forget about the idea of getting rich quick through forex trading. This is nothing more than gambling and it's definitely not the most effective way of generating sustainable long-term wealth.

A more productive strategy is to try and build your trading pot slowly and steadily. As long as you are employing a tried and tested trading strategy, you should find that your account will grow nicely in the long run simply because the size of your positions will increase in accordance with your trading capital, providing you risk a certain percentage of your capital on each trading position.

For example if you are prepared to risk 5% of your trading capital on each set-up then you will be risking $500 per trade if you start off with $10,000. However if your account does well and goes up to $15,000, for instance, you will then be risking $750 per trade, so as a result your gains will go up as well whenever you experience some winning trades.

I don't personally believe that you should risk as much as 5% on each trade. I think 3% is a more cautious and suitable amount because it then becomes much easier to absorb a handful of losing trades without making too much of a dent in your capital. We all strive to achieve a 100% success rate, but this is simply an unrealistic target, so it's worth bearing in mind that you will have losing trades along the way so risking 3% of your capital is a sound strategy.

A very productive strategy is to let your winning trades run for as long as possible because this will automatically lower your required success ratio and it will also mean that your successful trades will be far in excess of your initial stake. For example if you are risking 3% of your money on each set-up, you may find that a trade that moves heavily in your favour could easily generate the equivalent of 6-10% of your overall bankroll.

So I think it's worth making the point that it's absolutely essential that you protect your trading capital and use a sensible staking plan when trading the forex markets. If you don't do this you will end up gambling your hard-earned money away.

Automatic Forex Trading Robot

 Financial Freedom

If you are looking for a making money opportunity or still contemplating on how you can hit the jackpot to business freedom, then currency trading is the way to go!

To represent a big total of profits with Forex trading, you demand to improve your skills and you want a tool. This essential tool for your success is a Automatic Forex Trading Robot. It is e’er better for new investors to experience and know the basics of Forex trading. Using forex automated software; you do not want to be an proficient to start negotiations.

Dissimilar to stock trading, Forex trading happens 24 hours a day. It would be le or nearly unachievable for you to constantly monitor the market. Forex software automated wonders of trading 24 hours a day for you. You increase your profits and minimize your losses in this job for the software you are using stop loss and gain protocols. The automatic software provides you the vantage of trading multiple systems simultaneously, which you will not be fit to do so using the manual word.

Since the automatic Forex trading software functions suchlike a robot, no manlike engagement is needed at all. Forex traders seasoned this high-tech pattern software, and the chances of incorrectness is marginal since the perfect algorithms are utilized to assure efficiency. This type of automatic Forex trading is suchlike a mechanism, which all programmed to play the instructions. With a Forex robot, Forex dealer does not requisite to physically examine the markets or missed opportunities that proceed during the trading day.

The software can also be customized so that the trade exchange and direction of accounts based on your specialized instructions and the requirements of the change. At any instant during the word, the operator can intercept and modify instructions. If needful, the Forex dealer can achieve its investment from the Forex market.

Forex trading has become a subject of great interest recently, since the automation of trading systems has been introduced. Did you experience that thousands of billions of dollars in transactions take place here around the clock making it the most physical financial markets of the world?

The world market is open all the time to keep your finger on the pulse; you requisite to closely monitor the market. The automated software system lets you determine a currency and its application and the get value before trade. Everything you require is your seed money and a broker, because your get orders and sales may be executed in no instant.

You can hold benefit of Forex trading without becoming an skilled on these automatic systems can do this. When the managed accounts use automated trading systems, the program can easily control everything for you. When you obey the market developments, the automatic convert scheme can help you business multiple accounts simultaneously, which has never e’er been wholely achievable with manual trading. If you to trade in multiple markets with multiple systems, these programs appropriate you to do so.

With these currency-trading systems that work any instant and you do not have to be there. It is inconceivable to miss a lucrative business, even when you’re gone from your computer. The scheme allows you to deploy all the profitable Forex strategies using a variety of systems.

Forex Trading USA

Forex Trading Made Easy

The Best Strategies To Make Money From Forex Trading Easy Or Not!

How do you make money from Forex markets? This article will assess the Forex trading usa made easy guide and give you, the investor, some of the best strategies to make money from Forex. First and foremost, you have to understand the market psychology. Who are the biggest players in the Forex market? Banks, central financial institutions and governments, who use their large stores of currency to influence the market. The rest of the market is made up of individual and part time investors, numbering in the hundreds of thousands, from different regions all over the world.

What we have is a mass market psychology, which reacts based upon rigid boardroom strategies and simple human psychologies. Some might actually call the market predictable of sorts, and it is true - the paper trade has been known to settle into a hyperbole or frequency based upon certain events. You need to understand how the market reacts to economic situations, political problems and upheavals; where the safe zones are in the market and where investors would flock to. Identify the currency pair that you are comfortable with and know what market and external factors are going to affect their behaviour. This is very important in the generation of pips for you as an investor.

Being able to predict market movements means that you can have FX strategies that fit the bill. Also, have some sort of a risk assessment when you do go into a decision. Know what you are getting into, have almost every avenue figured out and prepare to move your money out when the clouds start to turn dark. Take advantage of the full liquidity of the market, being able to change your investment decisions, pull out and change the direction of your strategy.

Understand the quality of the dynamism involved in the currency trade and when you do, you will be able to appreciate how decisions are made and what influences the market most. In the end of the day, it is all about being prepared. Just like any commodities market, literature, study and talking to existing investors are great ways to prepare you for investing in the market. Falling prey to sweeping statements and false promises of online brokerages will not get you anyway.

There is no way that the FX market is the answer to your prayers, nor is it a dream market for these bearish times. Yes, you can make money on the paper trade, and alot of money is to be made. But the simple equation of hard work, diligence and smart strategy are applicable here if you are hoping for any sort of success in the paper trade. This is not making trading easy, as preparing you for what you need to do to make it easier for you. Go in with the mindset that there is no such thing as a free lunch and you will do well. Add to that some good money management and a good head on your shoulders, not to mention a trading robot ( FAP Turbo) and you are sure to do well. And this is forex trading usa.

Choosing the Best Professional Forex Brokers

If you are thinking of getting in touch with USA forex brokers, there are some important factors you need to consider. It’s actually not that tough to find one considering there are lots of these professionals out in the market today. The real challenge however is finding someone who can really bring you results and assure that you are going to get quality services out of your investment. Bear in mind that forex brokers’ rates vary accordingly and they may turn out to be a bit pricey.

The reason why it is important to hire a forex broker that specifically trades in the US dollar currency is that it gives you exposure to experiential and technical aspects. The US currency is one of the most widely used trading money in the market today. It’s like the base where other currencies peg their rates at so when the US dollar fluctuates, it tends to change the course of the trading market as well. Liquidity is something that you must expect when it comes to the trading game.

Here are some important points you might need to consider when it comes to choosing among USA forex brokers.

1. Is the forex broker duly regulated? – The US bank and its related financial agencies have a say on the players in the forex market. Therefore it is important that you get in touch with these types of people. The great thing about using forex brokers who are regulated is that they are quite meticulous with their process. They need to do this because aside from liaising with you and their business spread partners, they also need to submit their financial standing and reports to regulating authorities. This way, you are assured that you are getting in touch with reliable people with a solid reputation.

2. Be the one to specify your trading platform – Although forex brokers are known to employ their own trading platforms, it would still be best if you are the one who will be giving directions for this system. Your trading platform should depend on the amount of time you can devote on the project and your work system. There are many different kinds of trading systems which you can use. You can either choose to have your trading run on autopilot, you may want to purchase a licensed trading software, or simply log online to an open source trading network. If you are not yet familiar with these things then you can also ask the expertise of forex brokers to help you choose the platform that would suit you best.

3. Trading methods used – Aside from the trading platform being used, you should also delve deeper into the specifics of the trading methods being used by your preferred forex broker. Here is where things such as spread, funds safety, and fractional trading would come into picture. All of these key ingredients to facilitate your forex business.

Do not let yourself be overwhelmed with having plenty of choices for USA forex brokers. Make sure you trim them down to qualified individuals whom you feel comfortable to work with.

The Realm of Automated Forex Trading System

Let us first determine how big the Forex Market is before answering the question.

Then it becomes easy to determine the possible importance of forex trading on autopilot.
in terms of the daily turnover or the average trading revenue..Yes, this Forex market is the “highest financial mountain” on earth, the number of participants exceeds all other markets.
Look for your self here:

BANKS – do have an important role, they are in fact the major players on the financial Markets worldwide and serve entrepeneurs by lending capital for their investments or serve private persons with their savings account. The established banks are the big players, they trade an estimated value every day of billions of dollars on foreign currencies. } For Instance , an investment handler holding an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
RETAIL FX BROKERS – they handle a fraction of the total volume of Forex market.
SPECULATORS – these are individuals who buy and sell foreign currencies and benefit through fluctuations on its monetary value as opposed to favorite methods such as interest and dividends. They execute the significant role of transferring the risk to individuals who do not wish to bear it. In Forex market alone, there are already six major players touching on the $1.8 trillion worth of daily dollar volume. With a large amount of Forex players, there is genuinely a need in switching from non-automatic to automated Forex trading system.

Among the aforementioned major Forex players, the automated dealing system is of great vantage to the plungers. Since they focus on the price fluctuations of various foreign currencies in order to profit, the real time data analysis will help them determine trades that will give advantage to them.

There are a number of automated trading systems available for the forex market Also, free automated forex systems are available, mostly they are offered as part of a trading account aqquired from a Forex Agent or Forex Broker. Those packages for trading Forex are just complementary for Thus, if you are looking for more features, you can avail of it through additional payments. There are two types of automated Forex trading system. These are discussed in the following:
Forex Trading system, based on your desk-top computer. All the forex related data are stored on your computer’s hard-drive. This system is unpopular to Forex traders because all data are susceptible to computer virus contamination and other security problems.The bad thing is when your computer is not functioning properly, and your essential information might be corrupted or even lost (worst-case scenario, you don’t have a recent back-up file)
Web-based system – the security of your Forex account and other data are provided by your web-based provider. Hosted on a secure server..
A demo account for automated forex trading, is the right thing to start with, you can choose your preferences and find out what suits you the best.

Fap Turbo VS Mega Droid: Which Forex Bot is better?

We all know that theres a LOT of money to be made in the forex trading market. The newest and easiest was it by using a robot that trades for you 24/7. I’ve purchased the top two rated robots and have been keeping tabs on their progress.

MegaDroid:

Although MegaDroid was recently released to the public on March 28th it has actually been running since 2004. I have great respect for the creators for testing and perfecting the robot for so long. MegaDroid is the first to use RCTPA technology and is considered to be capable of making very fast trades with 95.82% accuracy. One of the leading problems with the older robots was the inability to open and close the trades fast enough. Since megadroid has only been available to the public for 1 month, there is not a lot of feedback as to how the robot is doing for the general public. For myself, I can say that it is making a steady profit day after day.

MegaDroid is my number one choice for beginners who have little to invest and need a place to start. For those with a larger investment see my review on Fap Turbo.

Forex MegaDroid also offers easy installation, an introductory low price at $97 (soon to be $399), 24/7 support, instructions, member-only access, 1 trading license, very fast trading capabilities, and an outstanding robot that will trade for you 24/7. Its never been easier to make money while you sleep!

Summary: MegaDroid is my number 1 choice for beginners, those with a small investment amount, and those that already have Fap Turbo and want to run more than one trading account.
Fap Turbo:

Fap Turbo is my favorite choice when it comes to those with larger investments and those with experience in the forex market. Its been around since 2007 and it immediately blew all of the other robots out of the water within a week of test time. My one rejection to fap turbo is that the installation process could be difficult for beginners. I myself had to use customer support a few times before I got everything set up. If you’re familiar with the installation process, you’ll be fine. Since Fap Turbo has been out for quite some time, there is a large amount of information out there from the general public about its successes. You’ll also have access to the Fap Turbo Forum after purchasing. This is very helpful if you’re curious to see how others are doing.

Fap Turbo offers an average installation experience, a decent price at $140 (sale price), 24/7 support, member-only access, 1 trading license, super fast trading capabilities, tons of proof of success, a 60 day money-back guarantee, dual download options (You can chose the beginner or pro version of the robot)

Summary: Fap Turbo is my number 1 choice for those with larger amounts to invest, those upgrading from MegaDroid, and of course those who just want to have multiple robots working for them. I myself have fap turbo and megadroid running 24/7 for me.

TIP: Fap Turbo is going to recommend using FXDD as your metatrader broker. I do not recommend them. Their spreads are far too high for Fap Turbo to trade well. My fap turbo has been most successful with my Alpari US account.

Forex Robot Trading! Trade Online FX

Has the idea of world trading ever crossed your mind? How about Forex Robot Trading? Well the reality is, you can because right now opportunity is knocking on your door. Sadly though , many of us who have the need to start trading tend to be hesitant, while others may be under the opinion that trading globally would require them to go abroad. Of course this could not be further from the truth, now that the populace has web access. the population has internet access. The bottom line is, you can start trading at this time, and what’s more, you can trade from the comfort of your own home.

Admittedly, the FX market does seem complicated, particularly to new traders and as a consequence, they more often than not have problems in getting started. However, all it takes is a little bit of perseverance and a will to learn and providing you follow through, trading can be intensely profitable.

Depending on your own private circumstances, you can already be finding it difficult to make ends meet with the salary you receive from your regular job. In truth, many of us now depend on an extra revenue to get by and in this situation, currency trading offer a terribly real opportunity.

First and foremost, when you enter into the market, you need to establish a well outlined goal which you can work towards. This is vital as it helps to ensure you remain focused. Remember, once you have set yourself a goal, you need to do everything in your power to attain that goal, within reason of course.

In addition to setting yourself a goal, you also need to accept the fact that success with Forex depends largely on whether or not you have a good investment program.

One of the most typical mistake new comers make is they put the faith and trust in a dubious program. Remember, the FX market is a monumental industry and as a result thereof, there are an abundance of con artists and cons. Sadly it’s mostly beginners who get caught out by these unattractive folk and when this occurs, you understandably become despondent. After all, nobody wants to fail before you have actually had a chance to begin.

Find a reputable Forex even if it might require a bit of looking around, as well as a bit of your time when you get what you’re searching for. Do this and you can be rest assured you’re off to a good start.

Contrary to what you will have heard or what some may tell you, a good program isn’t mandatory always the most expensive program. Similarly , programs that guarantee fast profits with small risk should also be treated with caution and you’d be reasonable to steer clear of them altogether. Basically , one should keep bear in mind that while the FX market definitely provides one with many opportunities, there are always hazards concerned. There is in essence only one path towards changing into a professional, and that is by learning all there is to know.

Ideally, a good program should offer you CD’s, DVD’s, manuals and etc, in order to help you better understand the rules of trading. In reality, over and above the learning materials already mentioned, a good program should even furnish you with daily recommendation. Naturally, by studying the testimonials of other consumers, one can shortly create whether or not a particular company can be trusted, with regards to a good investment program.

While some professional traders view the FX market as an art, other people view it as a science. Either way, one should always remember that as with so many other things in life, practice makes perfect. In reality, I always advise new traders to practice with a demo account until such time they feel cosy. Only then would I recommend you move on to a mini account where you may have the opportunity to do real trades but with a minimum quantity of risk. This of course helps to prepare you for things to come because believe me, you may end up in a position to earn big money and when you do ; you want to be in control of yourself.

What you also have to know is, foreign exchange trading takes place on a margin. To explain, it enables you to trade more money than you actually have. If as an example you wished to trade with 1,000,000 $ , you would be required to have a security deposit worth $10,000. This is naturally primarily based on a rate set at 1% which for the most part is typical.

If you have ever considered Foreign exchange trading, then my recommendation is that you get started. It’s engaging, it’s challenging, it’s enjoyable, and it is extremely rewarding. However, the markets are always full of hazards and in this regard; you must be prepared to be willing to learn all the bits and outs.

FAPTurbo is the software in question and it can trade foreign exchange with uncanny accuracy. The awesome thing is that it will only cost you $149 to get establish. You can get the robot, fund your account and begin trading within a matter of minutes. It really is all in all a forward-looking concept. While many companies have made affirmation that they get hands on the Holy Grail EA, FAPTurbo actually generates. If you would like to trade foreign exchange, why wouldn’t you jump-off with something that can make successfully trade for you. Once you get your feet dirty in the exchange, you can put to the test some manual trades on your own. Till then, let FAPTurbo get it accomplished for you.

Which Forex Pairs to Trade?

Forex pairs are the two currencies involved in currency trading. You exchange or trade one currency say US Dollars for another currency say British Pounds Sterling. The forex pair in this example is USD/ GBP.

Of course it is possible to trade with any pair of currencies from around the world. In practice, however, it is the currencies of the major economically powerful countries which account for most trades. Note that I say economically powerful and not politically powerful. The Swiss Franc is the currency of a small country, physically and politically but because of the special nature of the Swiss banking system it is very economically powerful and therefore a major player in the financial markets.

Around 90% of all forex trading involves just 6 forex pairs, all involving the US Dollar as the most significant trading currency:

1) US Dollar/ British Pound Sterling USD/ GBP (sometimes known as the Cable Pair) 2) US Dollar/ Euro USD/ EUR 3) US Dollar/ Japanese Yen USD/ JPY 4) US Dollar/ Swiss Franc USD/ CHF 5) US Dollar/ Australian Dollar USD/ AUD 6) US Dollar/ Canadian Dollar USD/ CAD

According to a recent study, the US Dollar is involved in 85% of all trades and the Euro 37%, followed by the Japanese Yen, British Pound Sterling, Swiss Franc, Australian Dollar and Canadian Dollar in order of significance.

When first entering the forex trading market, it is advisable to begin with the USD/ Euro forex pair because there is so much more information concerning these currencies which because they tend to me more stable and more easily manageable result in lower costs.

Some currencies can make difficult forex pairs and should be avoided by the beginner to start with. For example, the Canadian Dollar and the Japanese Yen can be a difficult partner in any forex pair because they are both influenced by fluctuations in the price of oil (Canada is a large oil exporter and Japan a large oil importer).

Of course oil as an example is just one of many influences effecting currency movements and the experienced forex trader will know what to look out for. However, for the beginner my advice would be to trade with the USD/ EUR pair for a while to gain experience and then maybe the USD/ GBP pair as an alternative before moving on to the more volatile forex pairs.

Choosing Forex Brokers in USA

The US dollar is one of the most powerful currencies in the forex trading system. It is actually one of the most basic trading values used in this specific market. So if you are new in the market and you would like to learn the ins and outs of the US dollar trading, you might be able to boost your profits with the help of forex brokers in USA. Forex brokers serve as the middle man between two different parties-you and your buyers or sellers. They can also give you their consultancy services in the process.

You can choose to either get in touch with forex brokers in USA as a consultant or you can also choose to employ them as your trading partner. Either way, they can be an asset for you if you know how to use their influence and expertise accordingly. Two of the most important things that you need to understand when choosing your US forex broker is the forex spread which they currently use and the reputation as well as the capital they have to sustain them.

Utilizing the Forex Spread through these Brokers

A forex spread is actually the method of trading in itself. When you trade with people in the currency market, each network you have can be considered as a spread. But when you make use of forex brokers, they use a number of spread methods to make sure that you get more exposure which can also translate into more profits for them. The term is coined as spread because it makes efficient use of scanning the market for potential customers. But one thing you should keep in mind is that its different spread strokes for different forex brokers.

Forex brokers in USA may or may not publish their prices on their site. This is actually an important point to consider because it helps you understand how much profits you can gain out of them when done in comparison with spreads. There are actually two different types of forex spreads-the fixed spread which makes use of a fixed method and currency rates regardless of the trading time and the variable spread which may depend loosely on the current scene in the trading market.

Reputation and the Brokers’ Capital Resources

Of course there’s also the issue of choosing your broker depending on the reputation they have. Reputation is important especially if you want to expand your networks. You will also be surprised how some potential business partners may choose to not deal with you if you have a forex broker who’s professional ethics are questionable. In the world of forex, it may not always be about profits.

Another important consideration is capital resources, because it gives you an idea of the rates and features you will get to enjoy through the forex broker you choose to hire. Some may be able to waive your fees and there are also those who will be able to connect you with other rising forex markets. They may end up to be a wealthy source of vital business information.

Easy Foreign Exchange Trading Tutorial

I wanted to take the time and give you an easy foreign exchange trading tutorial. This is one of the best markets in the world for profit. I think it can be demonstrated by the fact that three trillion dollars a day move around. Not only do I have a tutorial for you I also want to suggest a new forex trading robot called FAP Turbo.

I’m going to talk to you about my easy foreign exchange trading tutorial. The market is very profitable these days. The great thing about forex is that it is recession proof. Since you’re never investing on the outcome of an economy, just the rates in which currency change, this makes it perfect for any economic situation. I’ve been trading for years and I’ve learned so much in my time from it. An important aspect is really learning how to protect yourself from losing money. It can disappear pretty quick. I’ll share a tutorial I came up with that came from years of my experience.

A demo account is an important part of this easy foreign exchange trading tutorial. It allows you to have a simulated trading experience that is practically real, except you don’t have to use any of your money. This makes it easy to get real world experience. I think a very smart thing to do, even if you’ve been trading with real money successfully, is to start your day with the demo account just to get your head in the right place.

Your emotions can be deadly, so an easy thing you can do is just walk away from the computer. Everyone experiences these types of emotions that are bad for profit. The most common are gut feelings and stressed out. Gut feelings have you making trades based on no evidence. Stress, causes us to cut corners and not do enough research and analysis necessary to know if the trade is profitable.

There is also another important thing to factor in when you’re trading and that’s the time. You’re in a global market and that means it is open 24 hrs a day. But that doesn’t mean all times are just as profitable. There are some good times to trade and there are some risky times to trade. If you look at late in the evenings/overnight, the volume is very low. There isn’t much trading. This would appear to be a time that you could dominate, but the fact is that supply and demand is so weak that currency prices can be very sporadic. Stick with the high volume times.

The Forex Breakout System is an excellent software tool to use while you trade. It has the ability to find the most profitable trades at any given time and automatically trade them.

Forex Implications of China-US Economic Codependency

The Economist recently published a special report on China and America (”Round and round it goes“). As the title suggests, the article described the increasing interdependency between the economies of the US and China. In a nutshell, China maintains an undervalued currency, in order to stimulate exports. The resulting overseas (American) demand puts upward pressure on the RMB, which China defuses by buying US Treasury securities. This results in artificially low US interest rates, causing American consumers to import more, putting even more pressure on the RMB, which is further defused by buying more US Treasuries. And the cycle continues ad nauseum.

The article focused primarily on the political side of this precarious relationship, at the expense of the financial implications. It got me thinking about the forex forces at work, and how a disruption in the cycle could have tremendous ramifications for currency markets. It’s clear that in its current form, this system keeps the Yuan artificially low, but does that means that the Dollar is also being kept artificially high.

Given the depreciation of the Dollar over the last six months, this seems almost hard to believe. Over the same time period, though, China (as well as many other Central Banks) have vastly increased their Treasury holdings. This would seem to imply that indeed, the Dollar’s fall has been slowed to some extent by the actions of China. It’s kind of a paradox; as US consumers recover their appetite for Chinese goods, the Dollar should decline. But as China responds by plowing all of those Dollars back into the US, then the net effect is zero.


As the Economist article intimated, there are a couple of developments that would seem to upset this equilibrium. The first would be if the Central Bank of China began diversifying its forex reserves into other currencies. By definition, however, it would be impossible for China to continue pegging the RMB to the Dollar without simultaneously buying Dollars. Thus, the day that China stops recycling its export proceeds into the US, the RMB would start to appreciate, almost instantaneously. In addition, the sudden surcease in US Treasury bond purchases would cause interest rates to rise. Both higher rates and a more expensive currency would presumably result in lower demand for Chinese exports, and hence eliminate some of the need to recycle its trade surplus back into the US. In this way, we can see that China’s Treasury purchases are actually self-fulfilling. The sooner it stops purchasing them, the sooner it will no longer need to purchase them.

I’m tempted to elaborate further on this point, but it seems that I’ve already taken it to its logical conclusion. China must recognize the dilemma that it faces, which is why it refuses to break from the status quo. If it allows the Yuan to appreciate, it will naturally face a decline in exports AND the relative value of its US Treasury holdings will decline in RMB terms. Both would be painful in the short-run. However, by refusing to concede the un-sustainability of its forex/economic policy, China is merely forestalling the inevitable. With every passing day, the adjustment will only become more painful.

Forex Profit System

Nice title "Forex Profit System" ya, but it is depend on you, how smart you using this software, after give you SS2009 V2 Indicator, now i will share you this nice software, simple and make you relax cause we no need extra work, cause like people said "Kerja Keras adalah Energi kita" .


Bolinger Bands stop, heiken Ashi dan SEFC084 # All of this indicators should be on the same trend direction, the probabilities to get false signal is too high if you enter the market without following basic rules.
Forex Profit system can be used in any pair and nice in TF 30 M.

Take Profit : 20pips dan Stop Loss : 40 pips

Forex Books

You can download free Forex e-books from my site. The information in these Forex e-books will help you develop your trading skills, money management abilities and the emotional self-control.

Almost all Forex e-books are in .pdf format. You'll need Adobe Acrobat Reader to open these e-books. Some of the e-books (those that are in parts) are zipped.

Since currently there are more than 80 Forex books in my collection, they are divided into five different section. Each section is dedicated to its own topic and features the download links to e-books as well as the little description of every book.

If you are the copyright owner of any of these e-books and don't want me to share them, please, contact me and I will gladly remove them.

Forex Books for Beginners

Books about Forex Market in General

Forex Books about Trading Psychology

Money Management Forex Books

Books about Forex Strategy

Books for Advanced Forex Traders

How will Foreign Investment Tax Affect the Real?

On October 20, the executive office of the government of Brazil enacted an emergency measure, calling for a 2% tax on on all foreign capital inflows. And with one foul swoop, this year’s 35% rise in the Real had come to an end, right?

The tax certainly took investors by surprise, with the Brazilian stock market falling by 3% and the Real falling by 2%, the largest margins for both in several months. The tax is comprehensive and applies to essentially to all foreign capital deployed in Brazilian capital markets, whether fixed income, equities, or currencies. While the tax doesn’t apply to those currently invested in Brazil, the possibility that it would cause potential investors to stay away was enough to cause a sell-off.

The ostensible reason for the tax levy is to prevent a further rise in the Real. By most measures, the currency’s rise has been excessive, more than erasing the losses incurred during the credit crisis. The concern is that a more expensive currency will derail the Brazilian economic recovery before it has a chance to firmly get off the ground. “Brazil’s currency needs to weaken as much as 19 percent for sustainable economic growth, said Nelson Barbosa, the Brazilian Finance Ministry’s top policy adviser.”

According to cynics, however, the tax is a backhanded effort to raise revenue to fund a growing budget deficit. The government continues to spend money (perhaps to offset the negative impact on exports brought on by the Real’s rise) as part of its stimulus plan, but is increasingly tapping the bond markets to do so. The tax is expected to bring in an impressive $2.3 Billion over the next year, which could go part of the way towards fixing the government’s fiscal problems.

The real question, of course, is how the Real will fare going forward. The initial reaction, as I said, was ‘The Party’s over…‘ But investors with a longer-term horizon aren’t fretting. “In the medium term, the measure will have a limited impact. The fundamentals point to a stronger real, with commodities rising and the dollar weakening globally,” asserted one economist. While investors aren’t happy about paying an arbitrary 2% fee to the government, such pales in comparison to the 10%+ returns that investors still aim to reap from investing in Brazil over the long-term.

Ignoring the possible bubbles forming in Brazilian capital markets (admittedly, a dubious suggestion), Brazil still looks like a good bet, especially on a comparative basis. Interest rate futures point to a benchmark interest rate of 10.3% at this time next year, compared to ~1% in the US. Even after accounting for inflation and the 2% tax levy, the yield spread between Brazil and the US remains impressive. For that reason, the Real has already stalled in its expected fall against the US Dollar, standing only 1.7% below where it was on the day the tax was declared.


It’s unclear how determined the Brazilian government is towards pushing down the Real. The comments by its finance minister suggest that the consensus is that it is not slightly – but extremely overvalued. Thus, it’s likely that the government will enact other aggressive measures to prevent it at least from rising further. It continues to buy Dollars on the spot market, and is trying to make it easier for Brazilians to take money out of Brazil. It is not yet ready to tamper with its floating currency, but by its own admission, the “government was studying additional measures to regulate the heavy inflow of foreign investments and its impact on the country’s currency.”

There are also implications for other (emerging market) currencies. As I wrote earlier this week (”Central Banks Prop Up Dollar“) a number of Central Banks have already intervened or are currently mulling intervention in forex markets, to push down their currencies. You can be sure that other governments will be studying the situation in Brazil closely, with the possibility of implementing such policies themselves.

FOREX-Dollar slips, markets brace for Fed decision

* Dollar slips, retreats from 1-mth high vs FX basket, euro

* Traders brace for Fed, c.bank seen keeping low rate pledge

* U.S. jobs data due in N.Y. trade

(Adds quotes, updates prices, changes dateline prvs TOKYO)

By Naomi Tajitsu

LONDON, Nov 4 (Reuters) - The dollar retreated from a one-month high against a currency basket on Wednesday as traders braced for a policy decision from the Federal Reserve, which was seen keeping its promise to keep interest rates low.

Market participants expect the U.S. central bank will hold fast to its commitment to keep the Fed funds rate low for "an extended period", as it has said in past statements, even as the economy shows signs of improving. Rates have been locked near zero for almost a year.

The Fed will announce its decision around 1915 GMT. Analysts said the dollar may face selling pressure if an unchanged statement boosts stocks on the view that U.S. rates will stay low until at least mid-2010, as the market expects.

"The Fed is unlikely to offer any hints into the timing of an exit strategy and eventual rate rises, which may help stocks to rise and consequently boost euro/dollar," said Antje Praefcke, currency strategist at Commerzbank in Frankfurt.

By 0843 GMT, the dollar index had slipped 0.3 percent to 76.140, pulling away from 76.817 hit on Tuesday, its highest level since early October.

Before the Fed statement, traders awaited U.S. employment reports from the private sector, which are seen as a prelude to crucial non-farm payrolls on Friday.

The ADP national employment figures are expected to show a 190,000 drop in jobs in October, compared with 254,000 lost in September. Such a reading could suggest non-farm payrolls may show the U.S. employment picture is slowly improving after months of weakness.

A reading of the U.S. services sector is also due at 1500 GMT.

The Fed meeting will be followed by policy announcements by the European Central Bank and the Bank of England on Thursday.

Few in the market expect any big changes from the ECB, although speculation has been rising that the BoE may increase its asset-buying programme to keep supporting the ailing British economy.

Disappointing results from several European banks and European Commission estimates of bank losses renewed anxiety over the sector's health on Tuesday, curbing risk appetite and prompting traders to buy the dollar and the yen.

However, stock prices recouped some of those losses in early trade on Wednesday, helping to lift the euro EUR= 0.3 percent on the day. The single European currency pulled back from around $1.4623 hit on Tuesday, its weakest since Oct. 5.

The dollar JPY= rose roughly 0.4 percent to 90.75 yen against a broadly weaker Japanese currency, which gave up gains made on Tuesday versus a range of currencies.

The Australian dollar AUD=D4 rose 0.3 percent to $0.9063, recovering from a fall on the back of an unexpected slide in Australian September retail sales earlier in the day.

The figures had added to doubts that Australia's central bank will raise interest rates in the near term, after lifting them to 3.5 percent earlier this week.

Japan's Currency Hits a 7 Month High

The Yen rose to a 7 month high versus the Dollar as Japan's new government reiterated its opposition to pursuing deliberate currency devaluation strategy. The Sterling dropped to a 3 month low versus the Dollar last week after Bank of England Governor Mervyn King was quoted as saying the Pound's weakness is aiding in stabilizing the U.K.'s economy. Today's trading day will likely experience the markets reaction to the G20 leaders' decisions, mainly their pledge to continue supporting the stimulus efforts.



USD - USD Falls below 90.00 Yen

The Dollar weakened on Friday after a set of mixed U.S economic reports as well as reports that the G20 leaders will continue to provide support for the global economy. The Dollar index fell to 76.774 Friday, down from 76.901 late Thursday. The Dollar remained down more than 1% versus the Japanese Yen after statements by Japan's Finance Minister Hirohisa Fujii that he opposes intervening in the currency markets to curb the rise in the Yen.

Orders of durable goods unexpectedly fell 2.4% in August. Sales of new homes rose 0.7% to a 429,000 pace in August, much slower than the expected 442,000. On the other hand, the Reuters-University of Michigan consumer sentiment index was revised to 73.5 in September, compared to a previous estimate of 70.2 and 65.7 in August, beating analysts expectations.

No news events are expected today form the U.S; therefore, it is likely that Dollar sentiment will be determined by investors' reactions to the G20 concluding statements.

EUR - Sterling Trades at a 3 Month Low vs. USD

The Sterling dropped to a 3 month low below $1.60 last week after Bank of England (BOE) Governor Mervyn King was quoted stating the Pound's weakness is aiding in the recovery of the U.K economy. The EUR traded at $1.4665, up 0.2% from Thursday.

The Sterling slid 2.1% versus the Dollar last week following very dovish announcements by BOE Governor Mervyn King, calling the Pound's recent drop “very helpful.” The Pound fell Friday to $1.5918, the lowest level since June 8, and depreciated to 91.19 per ERU, the weakest level since April 1.

While a rather slow news day is expected today, ECB president Trichet's speech at 2:30 GMT is likely to provide volatility to the EUR as interest rate targets and exit strategies are likely to be discussed.

JPY - Yen at a 7 Month high versus the Dollar

The Yen registered sharp gains Friday, breaching the significant Y90.00 barrier against the Dollar and reaching the highest levels versus the greenback in over 7 months. Japan's currency benefited from supportive comments from Japan's finance minister Hirohisa Fujii who said that he opposes intentional devaluation of the Yen.

The JPY advanced 1.8% this week to 89.64 per Dollar from 91.29 on Sept. 18, briefly touching 89.51 Friday, the strongest level since Feb. 5. The currency also gained 2% to 131.70 per ERU, from 134.33.

Crude Oil - Crude Prices up Slightly on Mixed Data

At the end of a very volatile trading day Friday, Crude Oil futures rose slightly, for the first session in 3, following the release of mixed economic data from the U.S as well as on increased odds of broad based sanctions against Iran, the world's 4th largest Oil producer. Crude for November delivery rose 13 cents, or 0.2%, to end at $66.20 a barrel on the New York Mercantile Exchange, after dropping as low as $65.05, the lowest level since July 30. Overall futures tumbled more than 8% this week, the biggest weekly loss in more than two months.

The unexpected jump in the Reuters/UoM Consumer Sentiment Index to 73.5 in September helped push up Oil prices; however, concerns over weak demand dampened Friday's gains. Furthermore, several worse than expected economic data from the U.S stemmed further Oil's Gains.

With last Wednesday's report by the Energy Information Administration (EIA) stating that inventories of Crude Oil, gasoline and other petroleum products all rose last week and a lack of any significant economic news today, Oil prices will likely continue to stay subdued throughout today's trading day.

Friday Forex Recap

This has by far been my best trading week...

I might have made more in the past but it was admittedly just hit and miss combined with patience. This last week I've been following technical indicators and doing more than just hope for the best at Bollinger boundaries.

Sunday PM through Monday PM -- NAV +3.05%
Tuesday AM through Tuesday PM -- NAV +2.93%
Wednesday AM through Wednesday PM -- NAV +8.2%
Thursday AM through Thursday PM -- NAV +3.9%
Friday AM through Friday PM -- NAV +1.1%

During the business day I've been able to take positions for hours at a time and generally end up ahead. In the evenings the market seems to slow down, but I am now generally able to scalp out dollars using the 1m and 5m in concert.

Additionally, when I am behind in a day trade or a scalping position I am often able to spot a good reversal point and take advantage of that with a second position. Doing this a few times can earn back the losses on the original trade -- assuming it still appears to be a good idea to hold onto it.

Some things I've realized this week:
I now understand what people mean when they talk about not trading on Sunday or Friday. Now that I can begin to get a feel for the market I noticed that movement and opportunity were lacklustre during these periods.

I can scalp! This is awesome. It's powerful to be able to scratch pips out of the markets whether they are rising or falling. It's nice to know I can do this if I have a position I want to hold but that is making me nervous as it accumulates a loss before the expected move.

I don't know if these results will now be typical for me or not, but I do finally understand that it isn't impossible to work the markets and earn money.

As well, I understand that I don't want to be trading around news events. If I'm carefully looking for technical setups, the last thing I want is some huge sudden movement due to news. Not only will this potentially catch me on the wrong side of a trade, but it may throw off my ability to analyze things for a while I should note that my net asset value increases are not compounded. I do skim off most of the gains and push them into a much less risky sub-account. I have no idea whether or not I can trade with the same style when the numbers get bigger. The psychology of seeing larger losses mounting, or higher gains accrue, may throw off my style and keep me from making any money.

Part Time Currency Trader

As I've written before it is quite easy to become a currency trader. The harder part is being a currency trader that doesn't lose money. You see, according to the scuttlebutt on the forums, about 90% of new traders end up losing their money to the market.

Are you thinking about trying your hand?

I'm not here to talk you out of it. I myself am a part time currency trader. By day I work at my office job and by night I fight crime with a mask and cape. Wait, no, that's not right. By night I trade online when family duties allow me to squander a chunk of time.

Trading part time has it's challenges. You will see endless market movements that you did not participate in. You will miss opportunities to open or close a position even though your ideas about what would happen next were proven right. In fact, a very large part of trading well involves being able to deal with the psychological aspects of trading, whether part time or not.

If you read other posts in my blog, such as this one on trading philosophy, you'll see that I recommend working with very small trades. If you take larger trades, relative to your available capital, you'll find the emotional stress greatly magnified. It is very difficult to make good decisions as you watch your capital evaporate before your eyes.

Nothing will drive you from the market quicker than watching your capital shrink, panicking and saving what little you can, and then watching the market reverse leaving you without a stake. Or, perhaps worse, you do get back in after seeing a healthy rise, only to watch the market reverse yet again and wreak havoc on your capital once again.

It happens. I'm sure it happens a lot.

Did I mention that I'm not trying to talk you out of becoming a currency trader? It certainly isn't impossible to trade successfully but you really have to understand that there are many different ways to be unsuccessful. One very easy way to fail is to enter the market during a period in which it is easy to understand market behavior, think that trading is quite easy, and then have the market turn upside down and brutally fleece you.

Let's see. Yes, another painful lesson is developing the discipline to set stops and then have them tripped trivially, while the market does in fact go in the direction that you expected. Of course, this sets you up for the opposite, hanging on to a trade endlessly expecting to go as you expected, while it sucks up more and more capital.

My advice, do become a currency trader. Take your time. Learn with a practice account. Eventually, switch to a micro or nano account and trade with very small amounts of money. Continue to play with very small capitalizations until you have blown up your account once or twice -- this happens when you get a margin call and all your funds (except active margin) are forfeited.

Take the long view. There is always going to be another opportunity. No currency pair moves only up or only down. When trading part time you must either make accurate predictions or tread softly enough that the market can't move far enough to cause a margin call.

Anyway, to get into some information you can act on, if you are totally new to the game you'll want to know the following:
Most, if not all, companies that offer online foreign exchange trading provide free forex demo accounts. These practice accounts are the same as live accounts except of course that you don't trade real money.

A currency trading platform is simply a fancy name for what is usually branded currency trading software. This software will let you view charts for various currency pairs, add indicators and execute trades

Forex trading is global. You can trade starting on Monday moring in Asia until Friday night in New York. Trading is 24 hours a day during this period though each trading session will offer differing market volume and behavior.

If you are looking for a place to open your first forex demo account I'd suggest Oanda. To ensure that you don't think I'm compensated to say that I'll ask you to search Google to find them. They are a reputable company that allows you to trade with very small amounts -- which is great for starting out.
Good luck my friend, I wish you every success.

A Winning Forex Trading Philosophy

I'm starting to believe that being successful trading Forex has more to do with your philosophy than anything else.

You cannot trade based on how much money you want to make. You cannot trade based on how much money you need to make. This means that you can't push money into the market, desperately searching for opportunity, risking a large portion of your net asset value in the process.

You must trade lightly.

When you trade lightly, you simply let the market give you the returns that it is willing to relinquish to you. Quite simply, it is not a process of taking.

If you can change your mindset it will give you a lot of peace compared to the level of stress that many generate. Dip your toes into the market, following your strategy, with a level of investment that simply cannot begin to raise your blood pressure.

A little bit of market wisdom, developed with experience, combined with an appropriate philosophy will generate profits. I know that this is difficult to consider or even believe in today's rational calculating world, but the only way to win is to not fight the market. It is way too big for you.

Stop trying to generate winning positions and simply let the market give them to you.

Getting A Forex Education - Forex Books

market simply jumped in the market and started trading? I know that was my path. I tossed a few dollars in an account and figured losing it would be a paid lesson in how the markets work.

I can't say that this hasn't been a valuable path. I've learned some good lessons along the way:
it's important to let go of losses early so you have enough capital to sink your teeth into an opportunity that does work.
No indicator or strategy has all the answers -- stop looking for the holy grail of trading
The market can easily whipsaw you to tears if you aren't careful
If you place close stops they will often be taken out before the market goes your way
Really, the list of anecdotal learning is endless and difficult to put into words. However, I recognize that this isn't enough to make me a successful trader, though from time to time I'm starting to taste success. It's finally time for me to bite the bullet and learn more about trading.

No, don't worry, I'm not going to buy some silly multi-thousand dollar Forex training course. That would be stupid. Forex trading is very related to trading in general and there is no shortage of information on either subject. To make a long story short I've purchased four books recently:
Currency Trading for Dummies
Swing Trading for Dummies
The 10 Essentials of Forex Trading
Technical Analysis for Dummies
All of these were available at a nearby bookstore -- so I didn't have to order something online and wait for delivery.

More importantly, let me list the credentials of the authors of the above books. Respectively, they are:
Mark Gallant: Chairman and founder, GAIN Capital Group. Brian Dolan: Chief currency strategist, FOREX.com
Omar Bassal, Head of Asset Management, NBK Capital
Jared Marinez, FXCHIEF and founder of The Market Traders Institute, Inc.
Barbara Rockefeller, International economist and trader
My advice? Never, ever, fail to look for the ideas of experts. Even if you don't agree with everything they say, which is appropriate, they should be able to increase your understanding and improve your own thinking.

I've had some days with a NAV appreciation of 10%, 20% or more. I'd like to have a lot more days like that... and I don't think that online sources created for the purpose of flogging affiliate commissions will do that for me.

Forex Brokers

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Bank of Canada Still Mulling FX Intervention

The Canadian Dollar fell from parity with the US Dollar in July 2008. For a minute, it looked as though it would return to that mark in October 2009. Alas, it was not to be, as the currency that had risen 20% since March wasn’t able to rise another 3% to close the elusive gap that would once again bring it face-to-face with the Greenback.


The Loonie’s rise was not difficult to understand. Soaring commodity prices and the fact that the economic recession was milder in Canada than in other economies drove the perception that Canada was a good place to invest. Despite a surging budget deficit and weak domestic consumption, investors bought into this notion. The weak Dollar and rising risk aversion reinforced this perception, and as investors accepted that parity was inevitable, hot money poured in and the Loonie’s rise became self-fulfilling.

That was until Mark Carney, head of the Bank of Canada, used the strongest rhetoric to-date in discussing the possibility of intervention. For the first time in this cycle, the markets took the hint, and sent the Canadian Dollar down by the largest single-day margin in months. “Markets should take seriously our determination to set policy to achieve the inflation target. Markets sometimes lose their focus, we don’t lose our focus,” he said firmly, adding that forex intervention is “always an option.”

Intervention is supported both by economic data, and other Canadian institutions. According to one estimate, every 1 cent increase in the Loonie against the Greenback costs the county $2 Billion in export revenue and 25,000 jobs. The chief economist for CIBC, meanwhile, has warned that many companies are in the process of making long-term direct investment decisions, and could be discouraged from locating in Canada because of perceptions that its currency will remain strong for the immediate future: “If the loonie is overvalued for a few years, we may be sacrificing business plant and equipment on the altar of a strong currency.” He also compared the predicament facing the Bank of Canada to that facing the Royal Bank of Switzerland, which ultimately and successfully intervened on behalf of the Franc. Intervention on behalf of the Loonie, he argued, could be undertaken under the umbrella of fighting speculation and irrational movements in currency markets.
Prior to this outburst, investors had basically concluded that the BOC wasn’t prepared to put its money where its mouth was, so to speak. “The central bank’s shot across the bow has definitely subsided. There’s not much they can do,” summarized one analyst a few weeks ago. The term “jawboning” had become the preference of columnists and investors when discussing the resolve of the BOC. The belief was that the BOC had concluded that intervention was essentially a futile proposition (based on its failed efforts in the late 1990’s), and that it would instead resort to making idle threats.

In fact, it seems investors still are no convinced that the BOC (via Carney) means what it says. “Mark Carney has raised the prospect of intervening in currency markets, but seems reluctant to actually do so,” argued one analyst. “I don’t think they would really like to intervene at all, and they would prefer avoiding it. If they can intervene by jaw boning, they would much rather do that,” added another.

Why did the Loonie fall suddenly then, if the markets still aren’t concerned about intervention? The answer is that they have seen the concrete impact of the expensive Loonie on the Canadian economy. In the words of one analyst, it has moved from being a threat to a bona fide impediment. Especially given the stall in the commodity price rally, investors apparently are willing to acknowledge that they may have gotten ahead of themselves and that parity with the Dollar is not yet justified by fundamentals. Meanwhile, Canadian interest rates are at a comparable level with US rates, which means foreign investors can’t earn a yield spread from investing in Canada. This is likely to be the case for a while, as the valuable Loonie has kept inflation in check and given the BOC some flexibility in tightening its monetary policy.

Personally, I don’t think the BOC will ultimately intervene. Investors have shown that they aren’t afraid of the BOC, which would make any intervention both expensive and unfruitful. In addition, I think investors have accepted their own accesses, and will hesitate to push the Loonie much higher (or past parity, for that matter) until there is more evidence that such is justified. In the meantime, expect the Loonie to hover in the 90’s and perhaps even test parity, before smashing through when the time is right. And this, I do believe, is inevitable.

Central Banks Prop Up Dollar

By all accounts, the decline of the US Dollar has been measured, and without incident. This, despite the fact that most investors reckon the Dollar is doomed, both from a long-term and a short-term perspective. What, then, is preventing an all-out collapse?

Personally, I think the best answer is that Central Banks (and their sponsoring governments) don’t want the Dollar to collapse. In other words, a schism is forming between private investors and public government, whereby investors (on a net basis) are rooting against the Dollar, while Central Banks are rooting for it. That’s not to say that there is a global conspiracy involving Central Banks, designed to prop up the Dollar. Rather, it is that Central Banks are simply trying to protect their short-term financial interests, and long-term economic interests. By this, I mean simply that foreign Central Banks have everything to gain from a strong Dollar, and seemingly everything to lose from its collapse.

From an economic standpoint, foreign Central Banks also benefit from a strong Dollar, especially those whose economies are powered by exports. “A stronger local currency relative to the dollar attracts foreign investment and tempers domestic price pressures by keeping import prices in check, but also cuts into the competitiveness of the country’s export sector.” Given that inflation is currently a moot issue whereas economic growth remains tenuous, Central Banks have made it clear that they currently favor weak currencies. “If (their currencies have) too much strength and the U.S. recovery falters, it’s bad for emerging market growth,” and could even lead to a so-called “double-dip recession.”

In order to alleviate this possibility, many Central Banks have intervened directly in forex markets and depressed their currencies through the purchase of Dollars. During only one trading session earlier this month, “Asian central banks said to be intervening in currency markets overnight by buying dollars included South Korea, Hong Kong, Taiwan, Thailand, the Philippines and possibly, Indonesia, according to analysts.”

Meanwhile, Central Banks in industrialized countries are using increasingly strong rhetoric to try to talk down their currencies. The Banks of Canada and England have achieved modest success in the last few weeks in convincing investors that overvalued currencies would be met with decisive action. The Royal Bank of Switzerland has intervened several times, while the European Central Bank has expressed concerns about “volatility” (code for the rapid appreciation in the Euro) in forex markets. It’s still not clear where the Bank of Japan stands. The newly appointed Finance Minister has already flip-flopped several times, settling finally on a course of action that would prevent the Yen from rising too high and threatening the nascent recovery.

Consider also foreign Central Banks’ collective holdings of US Treasury securities, which increased by nearly $800 Billion over the last year, a large portion of which was accounted for by the Banks of China and Japan. According to the most recent Federal Reserve data, they are collectively adding to their stockpile at a pace of $10 Billion per week. As the WSJ explains, “The inflows highlight the challenges facing nations with large dollar holdings, particularly developing countries. A weaker dollar is, in theory, bad for their investments as it eats into returns when translated back into local currencies.”


In other words, continued foreign Central Bank investment in US Treasury securities is perhaps rooted less in investment strategy, then in the simple desire to prevent their current holdings from depreciating. At the same time, those banks that intervene directly in forex markets often have little choice other than to hold their forex reserves in US Treasuries.

You can see from this that the idea of an alternative reserve currency would actually run counter to the interests of many of these Central Banks. With the exception of a few (i.e. Iran, and to a lesser extent, China) that would like to see the Dollar fail for political reasons, the vast majority of banks have a vested interest in the Dollar remaining where it is. Otherwise, they would witness the value of their Dollar-denominated assets collapse, as well as a collapse in exports to the US.

It looks like, then, there will be a showdown at some point between the Central Banks and investors. If you accept the notion of efficient markets, then it should be obvious who will win in the long-term. On the other hand, you can’t underestimate the determination of some of these banks.

WORLD FOREX: Dollar Dips On IMF Gold Sale, Rebounds On RBA

The dollar dipped Tuesday in Asia after the International Monetary Fund made a big gold sale to India, but the U.S. currency rebounded as Australia's central bank signaled it may pause its monetary tightening next month.

The moves were mostly modest in thin trade as Japanese markets were closed for a national holiday.

The euro and gold gained at the dollar's expense as news that the IMF sold 200 metric tons of gold to the Reserve Bank of India stoked expectations that central banks, especially in Asia, will continue to shift away from their reliance on the U.S. currency.

But the buck got a lift against the Australian dollar, as well as the euro, when the Reserve Bank of Australia--after raising rates by a quarter percentage point for a second month in a row, as expected--said the tightening "will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead."

The euro was at $1.4781 at 0430 GMT, according to EBS via CQG, after rising above $1.4800 on the IMF gold sale. It was quoted at $1.4768 in late North American trading. The euro was at Y133.37 from Y133.44. The dollar was at Y90.24, up from Y90.07. The Australian dollar was at US$0.9011, down from US$0.9090 before the RBA decision.

The IMF's gold sale was at an expected average price of $1,045 an ounce, far higher than the $850 price the institution had projected only a few months ago. It rekindles expectations that central banks will keep diversifying their reserves away from the U.S. currency.

Although this adds to general unease about the dollar's global status, the gold sale itself isn't expected to have major market implications.

"Diversification has been an ongoing story for Asian central banks," said Westpac senior commodity analyst Justin Smirk. "Gold holdings in comparison to dollar holdings are low. But it's not possible for them to change rapidly out of the dollar. This story is one of evolution, not revolution."

Conversely, the dollar likely won't get much lasting benefit from the job-well-done tone of RBA Gov. Glenn Stevens's comments because market participants don't think the central bank is finished raising rates.

There is some chance of a pause in December, but it is all about watching the economic data, said Annette Beacher at TD Securities.

"It does seem to suggest now that they moved in October and November, there is some possibility of a pause," she said. "However, should we get another string of decent labor market data, house prices, inflation--that still leaves December fairly on the agenda."

FOREX-U.S. dollar and yen slip in choppy trading

* U.S. manufacturing sector grew in October -ISM

* U.S. stocks reverse morning's gains

* Fed official says U.S. banks still at risk (Updates prices, adds quotes, details, changes byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Nov 2 (Reuters) - The dollar and yen slid on Monday as reports showing further evidence of an economic recovery around the world dampened safe-haven demand for the U.S. and Japanese currencies.

U.S. data showed sharp improvements in manufacturing, construction and housing, encouraging investors to buy riskier assets with higher yields.

By early afternoon, the three major U.S. stock indexes had turned negative on concerns about banks' soured loans and as investors worried about whether the seven-month rally has run out of steam. Earlier, stocks had climbed about 1 percent on the strong economic data.

Commodity prices, on the other hand, held gains, lifting commodity-linked currencies such as the Australian and Canadian dollars.

"The pattern in which stocks and the euro are correlated is intact. As stocks rise, so does the euro," said Marc Chandler, global head of FX strategy at Brown Brothers Harriman in New York.

"But I don't think we're out of this consolidation and correction in stocks, and even in the euro. I'm not convinced that the downside correction in the euro is over."

For much of the past year, the euro has had a positive correlation with moves in the stock market, falling when good economic data and rising share prices boost risk appetite. The 25-day correlation between the euro and the S&P 500 is at a robust 0.83 on Monday, according to Reuters data.

In early afternoon trading, the euro rose 0.2 percent to $1.4749 after climbing as high as $1.4845 EUR=, according to Reuters data. U.S. stocks have fallen from the session's highs and this has somewhat pressured the euro.

Analysts said the slide in stocks and the euro began after a Federal Reserve official said U.S. banks remained at risk over soured property loans. [ID:nWEQ003541]. That pushed the euro to as low as $1.4728.

Against the yen, the dollar gained 0.3 percent to 90.33 yenJPY=EBS after falling as low as 89.18 yen per dollar on electronic trading platform EBS. The euro rallied 0.5 percent to 133.23 yen EURJPY=R.

The ICE Futures U.S. dollar index .DXY, a measure of the greenback's value against a basket of six major currencies, was up 0.1 percent for the day at 76.378.

Losses in the dollar and the yen accelerated earlier in the session after U.S. manufacturing activity rose to its highest level in 3-1/2 years last month, offering hope the budding economic recovery would be sustained. See [ID:nN02437173].

Other reports showed pending home sales, for homes under contract to be sold, unexpectedly surged in September and construction spending posted its largest gain in a year in September.

“Broco Investments participate in the 5th Middle East Forex Trading Expo & Conference”

Broco Group, the international online broker with branches in Russia, Mauritius and Cyprus, will be participating at the 5th Middle East Forex Trading Expo and Conference 2009 which will be held at Jumeirah Emirates Towers Hotel on the 17th and 18th of November.

Broco Group is one of the most prominent international brokerage companies operating in the field of Internet trading. With the help of modernized products of high quality, diverse services and a competent team, Broco Group manages to cater various needs of traders and investors and facilitates them with all essential tools for successful performance on financial markets.

Broco Group was established by traders for traders, it is one of few trading companies with employees who actively work and earn on global financial markets. Being aware about needs of traders, we manage to launch efficient and cutting edge services.

''The 5th Middle East Forex Trading Expo will be a good opportunity for individuals and investors to see Broco's vast array of trading instruments and customized personal service that suits the needs of all types of investors'' said Broco's CEO Valery Maltsev.