Archive for October, 2009

Daily Review 30/10/2009

USD Dollar (USD)

The Dollar fell against most of its counterparts after better than expected GDP increased investor\’s appetite for risk. The Gross Domestic Product was released at 3.5% vs. the 3.1% expected. Initial Jobless Claims came out slightly worse than expected at 530K. After 4 straight days of drops Wall Street headed for a steep rise after the GDP showed that the U.S. economy expanded at a 3.5% annual pace in the 3Q and fueled stocks. Dow Jones jumped by 2.05% to 9,963 and the NASDAQ rose by 1.84%. Crude oil jumped by 3.19% closing at 79.93$ a barrel as the surprising US economy expansion signaled for a potential increase in oil demand. Gold (XAU) trades at $1,047. Today, Personal Spending is expected at -0.4% vs. 1.3% previously and Employment Cost Index is expected unchanged at 0.4%.

EURO (EUR)

The Euro continued towards its fourth monthly rise against the Dollar as the U.S.’s return to growth renewed optimism a global recovery will quicken, aiding demand for higher-yielding assets. German Unemployment Change came out better than expected at -26K vs. expected 15K. European markets rose more than 1%. Commodities recovered from previous losses and posted important gains. Overall, EUR/USD traded with a low of 1.4682 and with a high of 1.4857. Today, European CPI Index is expected at -0.1% vs. -0.3% previously.

EUR/USD – Last: 1.4830

Resistance

1.4880

1.4925

1.4970

Support

1.4770

1.4720

1.4680

British Pound (GBP)

The Pound climbed against the Dollar for a fourth day after reports showed U.K. mortgage approvals increased more than forecast last month and the U.S. returned to growth in the third quarter. Overall, GBP/USD traded with a low of 1.6337 and with a high of 1.6602. Today, Nationwide Housing Price Index is expected at 0.7% vs. 0.9% previously.

GBP/USD – Last: 1.6560

Resistance

1.6640

1.6700

1.6765

Support

1.6475

1.6410

1.6350

Japanese Yen (JPY)

The Japanese currency fell during the European session and continued its plunge after the release of a government report that showed Japan’s jobless rate unexpectedly dropped for a second month, reducing demand for the relative safety of the Japanese currency. Overall, USD/JPY traded with a low of 90.24 and with a high of 91.60. Today, The Bank of Japan (BOJ) Press Conference is expected. The interest rate is expected unchanged at 0.1%.

USD/JPY-Last: 91.30

Resistance

91.80

92.20

92.30

Support

91.05

90.83

90.50

Canadian dollar (CAD)

The Canadian Dollar climbed from a 3 week low against the Dollar as stocks and commodities rallied after the US GDP report showed the American economy grew in the third quarter for the first time in a year. Overall, USD/CAD traded with a low of 1.0654 and with a high of 1.0820. Today, Canada\’s The Gross Domestic Product (GDP) is expected at 0.1% vs. 0% previously.

USD/CAD – Last: 1.0670

Resistance

1.0750

1.0820

1.0865

Support

1.0630

1.0585

1.0545

Research by http://www.ufxbank.com

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Trade Bungee Digital Options in Forex

A Forex Bungee Options, also referred to as a Digital Options Trading or a fixed return option, is an option in which payout is determined at the onset of the agreement. It pays a fixed amount of cash if the option expire in-the-money. It is a cross between traditional buy-and-sell options of fixed returns in Forex business. One of the chief differences between trading the stock market and trading the binaries is that with bungee options, you do not actually own the share, you just bet on the performance of the share price.

Forex Bungee Options is a type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money or nothing at all if the option expires out of the money. These types of options are different from plain vanilla options and they are also referred to as “Fixed Return Options”, “all-or-nothing options” or “digital options” in Forex business. A Bungee Option cannot be traded, once you buy one, you can’t change your mind and then sell it, the same way as in a European option.

The advantages of Bungee options are many as such their Potential short-term returns, limited risk, a wide range of underlying assets, a low commission structure. The only charge is the dealing spread and their ease of use, you either win or you lose. Another advantage is that in times of high unpredictability you can buy them without worrying that you are paying a premium arising from inflated implied volatilities. These options allow the trader to limit his risk while increasing his profit and that is why the foreign exchange market offers the opportunity to trade these unique derivatives. Forex digital options let you wager on whether the exchange rate will trade above or below the strike price, at the expiration date or time of the bungee option.

Bungee Commodities Options are bought and sold on commodities exchanges around the world and are also known as raw Materials. Raw materials are vital to the production process of any given country. Commodities digital options let you wager on whether the price of any given commodity will trade above or below the belt price, at the expiration date of the option in Forex.

Bungee options come in various types only if the investors some flexibility according to their needs. The most common types are the one-touch, double one-touch, no-touch and the double no-touch options. In one-touch option, the expiration date and detailed price target are set to be achieved by the primary security to receive the payout. With a double one-touch option, two price points are selected by the trader and then the profit amount is determined which can be received by the trader is any one of the price points is hit. This type of bungee option is usually used in a highly unpredictable market where the direction of the market is difficult to predict.

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GoLearnForex Daily Technical Analysis

AUD/USD:

The AUD continues its recent retrace.  Many traders use different time frames for different currency pairs.  The longer the time frame the more valid the pattern you are charting is.  Moving Averages are basic tool that even the most sophisticated trader needs to always be cognizant of.  The markets tend follow the moving averages generated off of the daily charts.

In Chart below I use a moving average from an 8 hour chart.  I strongly encourage traders to be vigilant of at least checking a weekly, daily, 8 and or 4 hour chart and then any time frame less than 4 hours that you may want to look at.

INSERT CHART

You can see that the yellow line representing the SMA 50 was breeched and prices continued a steady fall (The Red line is the 100 SMA).  There are also a number of near candle formations that support this price depreciation.

Circled in blue is a near Falling Three Candle pattern.  Typically you have a red candle followed by 3 or so small green candles that are contained by the original red candle.  Following the last green candle is another red candle with price closing below the original red.  The Falling Three pattern is nearly followed by Three Black Crows.  This candle pattern forms when you have the candles each open in the midsection of the proceeding candle but also close lower than the proceeding candle.  This pattern nearly forms between the 2 white lines.

GBP/USD:

This pair has been range bound since May.  When a pair trades in a range, price is confined to a narrow margin of highs and lows.  In the Chart below the 2 red lines represent the range support and resistance lines.

The 2 red boxes indicate when minor breakouts have occurred.  The tops and bottoms of the boxes would be your absolute stops depending on the handle you entered the trade at.  Another point of consideration is the 50 SMA and 100 SMA.  You can see that the SMA’s are also moving sideways.  Price typically pops when it passes above/below a significant SMA.  With SMA moving into a sideways march we are approaching congestion on this pair and that should signal another breakout.  Obviously if the dollar continues to strengthen as it has GBP should be headed south.

INSERT CHART

Analysis by http://www.golearnforex.net

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Daily Review

USD Dollar (USD)

The Dollar rose across the board. A rise in risk aversion following an unexpectedly drop in New Home Sales sent stocks lower worldwide. The Dow Jones fell for the 4th consecutive session and ended at 9,763.The Standard & Poor’s 500 Index dropped 2% on concern a rally in equities this year outpaced the prospects for economic growth. New-home sales unexpectedly fell last month to an annual rate of 402K, from a revised 417K pace in August. Crude oil fell from $79 a barrel to $77.20 on stronger Dollar. Gold (XAU) continues to move away from the highs of the year and fell to test levels below $1,030 an ounce. Today, The Gross Domestic Product (GDP) is expected at 3.1% vs. -0.7% previously. The Initial Jobless Claims are expected at 520K vs. 531K previously.

EURO (EUR)

The Euro kept weakening versus the Dollar for the 4th day in a row. The currency slumped against Dollar and Yen, reaching a 2 week low against both safe havens. The German Consumer Price Index (CPI) came out as expected at 0.1%. Overall, EUR/USD traded with a low of 1.4690 and with a high of 1.4840. Today, The German Unemployment Change is expected with 15K vs. -12K previously. The German Unemployment Rate is expected at 8.3% vs. 8.2% previously.

EUR/USD – Last: 1.4700

Resistance

1.48

1.4842

1.489

Support

1.471

1.4675

1.465

British Pound (GBP)

The Pound failed to hold above 1.6400 versus the Dollar finding support only at 1.6360 following economic data in the U.S and Dollar\’s strength. GBP/USD peaked at the highest price for the current week but it was unable to hold versus the strengthening Dollar. Overall, GBP/USD traded with a low of 1.6285 and with a high of 1.6466. Today, Net Lending to individuals is expected unchanged at 0.7B. The Mortgage Approvals also expected unchanged at 52K.

GBP/USD – Last: 1.6368

Resistance

1.651

1.6575

1.6640

Support

1.6355

1.6285

1.6240

Japanese Yen (JPY)

The Yen rose sharply versus most majors as weak economic data sent world stocks lower fueling risk aversion. The Yen reached the highest in 2 weeks against the Euro amid signs the global economic recovery is losing steam, damping demand for higher-yielding assets. Industrial Production came out 1.4%better than 1.1% expected. Overall, USD/JPY traded with a low of 90.54 and with a high of 91.80. Today, Household Spending is expected lower with 1.2% versus 2.6% and Tokyo Core CPI is expected with -2.0% versus -2.1% prior.

USD/JPY-Last: 90.42

Resistance

91.3

91.75

92.1

Support

90.5

90.1

89.9

Canadian dollar (CAD)

Canada’s currency depreciated against its U.S. counterpart to the lowest level in more than three weeks as declines in crude oil, the nation’s largest export, and stocks damped demand for higher-yielding assets. Overall, USDCAD traded with a low of 1.0636 and with a high of 1.0810. Today, The Raw Materials Price Index (RMPI) is expected at 1% vs. 3.7% previously.

CAD/USD – Last: 1.0790

Resistance

1.08

1.0855

1.0898

Support

1.068

1.063

1.0587

Research by http://www.ufxbank.com

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Binary trading using mathematical advantage trading strategy

Not many are aware of the fact that, binary trade is referred to a trade with the strategy of mathematical advantage. Now before starting to do Forex trade it is essential to have a look at the mathematical advantage that it offers and how it changes the entire trading scenario.

This trading strategy is based on the works that has been done by the famous mathematician Jean le Ronda d’Alembert from the 8th century. This trading strategy is considered to be helpful as it will produce the right profitability advantage which creates a strategy in the market.

When it comes to Forex trade, the binary trading strategy will help the traders. This helps them get an overview of the exchange rate of the major currencies in the world will go in the certain direction or not. For example, if on the specific day, when the US dollar goes less than 1.3000, then the binary trade will help you in getting the knowledge on whether the exchange rate will be higher than the above or lesser than that.

This will help the trader to purchase in the binary trade, when the US Dollar exchange rate goes more than 1.3000. If this is not the scene then the trader can sell if it comes down or equal to 1.3000.

When it comes to practicing binary trade in the Forex market, it is fully based on the mathematical principles, so the traders have to identify and interpret the given situations. The traders use such interpretations and come to a conclusion which they have to decide when it comes to binary trades. Sometimes the traders may use the trading practices which are fully based on the already given binary equations this will end as a fool proof. The binary trading strategy has some rules and logics which are designed to give some positive results.

When it comes to Forex market, using the binary trading strategies has given success and has helped in making more money. Following and practicing this will help in the real trade as there is no idol theories followed. These will be helpful in creating optimized systems which will be helpful in bringing up special rules with different parameters that helps in making few trades in the Forex market.

These trading strategies are supposed to be used with the right binary trading system, sometimes it can be used with other systems too. If one is really looking forward to make profit then one should build a proper strategy and follow it properly. The fact is that the trading strategy that comes with the mathematical advantage will help one to improve the liquidity. The strategy even includes lots of calculations which will help to avoid the risks involved. The binary trading will be helpful in the Forex market for the traders to avoid taking false steps which will give a heavy loss.

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GoLearnForex Daily Technical Analysis

USD/CAD:

We have noted several times a formation we refer to as a Step pattern.  More commonly this is identified by Lower Lows and Lower Highs and vice versa.  We picked up on this pattern emerging on a 4 hours chart.  We identified the possible start of this pattern shortly after the BOC  publicly declared it’s sentiment for a “weak Canadian Dollar”.  We assured you that there would still be time to catch this move even if you could not trade the actual news.

We suggested that you wait for the Step to appear and buy on the dip which was a confirmation of our pattern formation. On the graph that it is depicted near the 3 and a yellow circle. The exit for taking PNL we had at 1.0660 a prior support resistance point.

INSERT GRAPH

EUR/USD:

The Squeeze Play.  We talked about this move where we are seemingly forced into a breakout.  In one of our earlier pieces we mentioned that our experience told us not to bet on the Squeeze Play, meaning trade against the direction of the existing trend.  I must admit we got carried away by the hoopla of crossing 1.50.

So the question you all should pose” is why in this case do you bet against the trend when one of the number one rules of technicians is never bet against the trend”.  The answer is based on the number two rule of technicians and that is; trade for the outcome that has the highest statistical probability of occurring.  To explain this further lets pose a question.  Why didn’t the market make this move a while ago similar to the recent strong moves in CHF  & AUD?

INSERT CHART

The answer is the Strength of the move was deteriorating in advance of 1.50.  Every trader had their   eye on  1.50, but obviously no one was a real buyer (for now) otherwise at 1.4830 when momentum started to stall we would have had traders continuing to bid up the EUR.  Lastly, when price action was negligible on the big cross of 1.50 that should have been another tip that there were no big orders lined up to continue buying north of 1.50.

We added  a MACD to indicate when the momentum started to wane. There are number of overbought tools on your platforms that you can use, from Stochastics and Oscillators to something as simple as the RSI.

Analysis by http://www.golearnforex.net

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Daily Review

USD Dollar (USD)

The Dollar strengthen during yesterday trading session as Confidence among U.S. consumers unexpectedly fell in October for a second month. The Conference Board’s confidence index dropped to 47.7 from a revised 53.4 in September. NASDAQ decreased by 1.2% and Dow Jones slightly rose by 0.14%. Crude oil rose by 1% closing at 79.55$ a barrel after a volatile trading session as investors wait for the oil inventories today. Gold (XAU) weakened by 0.7% closed at 1035.4$ an ounce. Today, Core Durable Goods Orders are expected at 0.6% vs. -0.3% prior, New Home Sales are expected to rise from 429K to 443K.

EURO (EUR)

The Euro weakened versus the Dollar for the third day in a row on concern a rally in stocks and commodities can’t be sustained. M3 Money Supply came out worse than expected at 1.8% vs. 2.1% forecast. Overall, EUR/USD traded with a low of 1.4770 and with a high of 1.4926. Today, German Prelim CPI is expected at 0.1% vs.-0.4% previously.

EUR/USD – Last: 1.4811

Resistance

1.4824

1.4927

1.5046

Support

1.4770

British Pound (GBP)

The Pound strengthened against the Dollar after the Confederation of British Industry\’s distributive trade\’s survey reported sales balance rose to +8 in October from +3 in September, better than economists\’ forecasts of a rise to +5. This is the fastest pace of growth since December 2007. Overall, GBP/USD traded with a low of 1.6285 and with a high of 1.6438. No economic data expected today.

GBP/USD – Last: 1.6358

Resistance

1.6438

1.6636

1.6693

Support

1.6286

1.6250

Japanese Yen (JPY)

The Yen rose against the Dollar for the first time in 6 days as a plunge in Treasury yields after the record $44 billion auction in two-year notes made the Dollar less attractive to Japanese investors. USD/JPY traded with a low of 91.70 and with a high of 92.32. Retail sales came out at -1.4% vs. -1.5% forecast. No economic data expected today.

USD/JPY-Last: 91.18

Resistance

91.57

92.19

92.32

Support

90.77

90.48

Canadian dollar (CAD)

The Canadian Dollar appreciated from a three-week low, gaining for the first time in four days amid speculation its decline was too big to be sustained after it reached a key technical level. Overall, USDCAD traded with a low of 1.0626 and with a high of 1.0716. Today, BOC Gov Carney Speaks.

USD/CAD – Last: 1.0664

Resistance

1.0696

1.0717

Support

1.0630

1.0500

1.0450

Research by http://www.ufxbank.com

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Forex trading through bungee options trading

Now, what are bungee options trading? This is often referred to the fixed return option, digital options trading and option in which the pay is determined on the contract. This will pay a fixed amount of cash when the option expires. For this, the Forex trade should be in the type of option where the payoff is structured to be the fixed amount of compensation. Such bungee options are completely different from those of the vanilla options and also will be referred as the fixed return options, digital options or all-or-nothing options. Once you buy, the bungee option cannot be traded or changed and can’t sell it.

Many are not aware of the advantages of the bungee options. When it comes to bungee trading options, the most advantage is that potential short term returns, wide range of underlying assets, limited risk, a low commission’s structure and the only option here is either win or lose. Forex trade would be incomplete without mentioning simple forms of trading. Here not many know about this type of investment.

Now how does this work? In the Forex market, the investor with the bungee options trade will pick one of the securities that are traded and decide on how much to earn. Once you decide on which amount to take. After choosing the investment amount the investor will have to choose the direction in how everyone goes. Here the trading software will compete the payouts.

The final thing is that it is part of the transaction and it really doesn’t matter how much the stock moves but what matters is the direction. One can pay at the end of contract. When it comes to options the trader will have to limit to risk and increase the profit and hence called as Forex market. The trade offers derivatives. Here in the Forex market, the bungee options will let you know whether the trade will be done above or below the strike price at the time of the bungee option. The bungee commodities are sold here and referred as raw materials. It is understood that raw materials are essential of the production process of any country.

Here the contracts have fixed hourly expiration which cannot be sold before. In the Forex trade, the traders will help the investor to choose how much to invest, where and how. Bungee option is nothing but, a trade with two possible results. Bungee option is considered to be more popular when it comes to European exchange. But in US there is only limited space to trade. If you are looking for a place then one should be really careful. These options are much easier to understand compared to the other methods in the trading.

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Binary Option

Most of the investors who are dealing in retail discover that these trading of currency options have always been made available to them or to the other traders via a platform of binary options trading.

Options of Currency are the one which is Available to the Investors who are dealing with Binary Option. The FOREX traders, who are investing their hard earned money into trading market, play this game really very safely.
This type of trading which has opened up to a fully whole new field or world of investors with the designing of a new type of transaction is described as a binary option. In the past days the only people who are able to take full advantage of the direction of trading in currency option were the big time investors who are having millions of capital and who deal with millions of dollars in capital in order to trade and use it as collateral. But this type of condition is not so common now days. And as you all know recession is prevailing in all the economies of world, dealing with millions has become a dream now. And in today’s generation anyone can trade with these trading markets, be it a big trader or be it a small time investor.

Traders of the Small Cap Day usually believe in Trading with the Same Cross Rates which are as popular as Global Financiers.
Now People who are having much smaller portfolios have the great ability to make all their investments in the direction of cross rate of currency and this all changes using the option of binary trading transaction as I have mentioned earlier. With as little as some hundred dollars, an investor can open up his or her trading account and can begin really very quickly making all the transactions that are happening on the major options of  currency trading with their cross rates. Any person who has ever wanted to make a trade with Yen/Dollar, or with Dollar/Euro, or with Dollar/Pound now can make an access to the same sorts of trading options that is being traded by the FOREX trader’s long time ago.

Some of the major companies like NASDAQ Index, or like Microsoft, Yahoo, or like Google also follow the Options of Day Trading and that too on Binary Platform. These are some of the very famous companies which make use of this trading option.
However, Trades of the kind which is mentioned above are not only limited to the option of currency cross rate options. It is a very large scale trading process. Making big time investments in these kinds of trades which promise you of giving high return, and securities of short horizon are usually used.

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The Functioning of Binary Options

Binary Option trading in Forex market has been a common practice for long but many Forex traders still do not know about Binary options. This article will explain everything that you need to know about binary options and its working in Forex market.

Binary option works by presenting the Forex traders with two choices of payout. In binary option trading, you either get everything or nothing. It means that such options have such a payout configuration that you get a fixed compensation amount on expiration of the option in the money and if it expires out of the money, you get nothing. Due to such a nature, these are options are also called Spot, meaning single-payment options trading or Digital options.

In binary options, to get the preferred payout the investor is needed to meet certain circumstances. Now we will discus how a binary options actually functions. The investor picks ant underlying security into which he wishes to invest his money.  A trading scenario is then determined by the trader on the basis of his market analysis. This means, that if he feels that the market value of the underlying will go up in a certain time period, he will fix this prediction as the condition for the binary option contract.

Once the circumstances are set, the broker verifies the probability of occurrence of the scenario and accordingly proposes a premium amount to the investor which he will have to pay to the broker to buy the binary option. Unlike some other options, here the investor is not obligated to buy the contract. If he fells to back out from the deal he is free to do so. If the set conditions are met, the investor gets the payout money and if they are not met, he loses the full finest to the broker.

Binary options come in various types only if the investors some flexibility according to their needs. The most common types are the one-touch, double one-touch, no-touch and the double no-touch options. In one-touch option, the expiration date and detailed price target are set to be achieved by the primary security to receive the payout. With a double one-touch option, two price points are selected by the trader and then the profit amount is determined which can be received by the trader is any one of the price points is hit. This type of binary option is usually used in a highly unpredictable market where the direction of the market is difficult to predict.

In no-touch option, if the underlying fails to reach a preset value before a particular time, then only the trader makes the profit set by him. The double no-touch option is exactly opposite to double one-touch and trader gets the profit if none of the set price values are hit. These are used in comparatively less volatile market.

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