Presently, there are various kinds of financial market, it is divided into: Stock market, interest market (including bond, commercial bill and so on), gold market (including gold, platinum, silver), futures market (including grain, cotton and kapok, oil and so on), option market and foreign exchange market or forex market and so on.
The foreign exchange market is a place to trade foreign exchange currency, or it is also a place for the transaction of all foreign currency. The foreign exchange market therefore is existence, because of:
Trade and investment
Import and export business, people pays one kind of currency when doing business, but when earns another kind of currency when receive the commodity. This means that, when settling account, business people will pay and receive different currencies. Therefore, they must convert the currencies that they received into the currencies that they could buy commodities. With this similar, when buying a foreign property a company must use the concerned country's currency to make payment, therefore, it needs to convert the domestic currency is concerned country's currency.
Speculation
Currencies exchange rates could fluctuate according to the demand and supply between two currencies. A Forex trader buys up one kind of currency in an exchange rate, but up casts this currency in another more advantageous exchange rate, he may gain. Speculation has occupied most of the Forex market.
Hedging
Due to the fluctuation between two currencies, those companies who owns foreign asset (for example factory), when these companies convert these properties into cost country currencies, there consist of certain risks. When the value of a foreign asset which is estimated based on foreign currencies remained unchanged, if the exchange rate changes, when converting this property value according to the domestic currency, there could be profit and loss. The company may eliminate such hidden risk through hedging. This carries out a foreign currency trading, its transaction result just counterbalances the foreign currency property profit and loss which produces by the exchange rate change.
Forex Market Development
The history of the Forex market as an international capital speculation market is much shorter compared the stock, the gold, the stock, the interest market, but it is developing in an astonishing speed. Today, the foreign exchange market daily trading volume has amounted to 150 billion US dollars, it’s scale has gone far beyond the stock, the stock and other finance commodity markets, it has became the world's most biggest sole finance market and the also the speculation market. Since the birth of the foreign exchange market, the fluctuation of the exchange rate of the Forex market is becoming bigger. In September 1985, 1 US dollar exchanged 220 Japanese Yen, but in May 1986, 1 US dollar only could exchange 160 Japanese Yen, in 8 months, the Japanese Yen has revalued 27%. In recent years, the foreign exchange market wave amplitude has been bigger, on September 8, 1992, 1 pound exchanged 2.0100 US dollars, on November 10, 1 pound exchanged 1.5080 US dollars, in the short two months, the pound exchanged US dollar exchange rate to fall more than 5,000, depreciated 25%. Not only that, presently, everyday the fluctuation of the exchange rate of the Forex market enlarges unceasingly, within a day the rise and drop 2% to 3% is commonly seen. On September 16, 1992, the pound exchanged US dollar from 1.8755 to fall to 1.7850, the pound on first lowers 5%.
Due to the large fluctuation of the Forex market, it has created more opportunities for the investor, attracted more and more investors to join this ranks.
Saturday, 3 July 2010
UJ strength is broken
From the way i see it. Usd/Jpy strength is broken but the uptrend is still intact. Anyone care for a high risk entry??
Short UJ @ 123.70 or better
Stop Loss : On your own
Target : This is going to be a big one
And before i forget, EurJpy and GbpJpy is riding on the trendline. Not broken yet but if all goes well we will see it broken by tonight. Then we have the usual ranging market before a new trend is born.
Happy trading.
Short UJ @ 123.70 or better
Stop Loss : On your own
Target : This is going to be a big one
And before i forget, EurJpy and GbpJpy is riding on the trendline. Not broken yet but if all goes well we will see it broken by tonight. Then we have the usual ranging market before a new trend is born.
Happy trading.
Sunday, 27 June 2010
NOW I KNOW WHY PEOPLE USE APPLE MAC
I was doing some graphic editing these days. Just as a hobby. It seems that everytime I try to render in Photoshop, my pc will shutdown. It just switch off the power and everything is blank.
So I decided to investigate on the cause of the shutdown. After monitoring the temperature while doing some Photoshop rendering. My CPU temperature climbed up to 94C and my north bridge chipset is at 124C and the system will shutdown.
Imagine the component of your PC is reaching 124C. That is higher than point of boiling for water. It is scary sometimes thinking that the pc is under my table, just beside my leg and it is burning hot. Hopefully nothing will ever explode and take my leg with it. Im typing this with one leg on the chair just in case.
If you are using a pc, there is nothing to worry about. Under normal usage, the cpu is always below 40C. Mine is sleeping at 33C now. Its just that when you do some heavy calculation stuff that everything turns up red hot. So you can just surf the net, play some 3d games, watch dvd etc. Those normal usage do not require heavy calculation and your PC is half awake. Btw, 3d games is not a heavy usage. My pc can run Quake Wars with everything turned to max for hours. No problem there.
I will not use photoshop again on this pc. This is my power pc and it is running hot. I am using my 2nd pc to render all my photoshop graphic. Its been an hour and my 2nd pc still not finish rendering a 14Mega Pixel picture. This pc however can do it in 10 minutes. Talk about difference in power.
Next I am going to buy an Apple Mac for all my rendering needs. So my house will be full of computers. Btw I have 3 desktop and a laptop now working in the house. So if I add another Mac, I can turn my house into a cyber cafe.
As for Forex, its going up but at the moment the direction is down. So be on the look out for a sell but keep in mind, the long term trade is a buy. Forex is not a straight road and I feel like Yoda speaking right now. How can I say sell but at the time look for buy. You know it when its there. I assure you.
So I decided to investigate on the cause of the shutdown. After monitoring the temperature while doing some Photoshop rendering. My CPU temperature climbed up to 94C and my north bridge chipset is at 124C and the system will shutdown.
Imagine the component of your PC is reaching 124C. That is higher than point of boiling for water. It is scary sometimes thinking that the pc is under my table, just beside my leg and it is burning hot. Hopefully nothing will ever explode and take my leg with it. Im typing this with one leg on the chair just in case.
If you are using a pc, there is nothing to worry about. Under normal usage, the cpu is always below 40C. Mine is sleeping at 33C now. Its just that when you do some heavy calculation stuff that everything turns up red hot. So you can just surf the net, play some 3d games, watch dvd etc. Those normal usage do not require heavy calculation and your PC is half awake. Btw, 3d games is not a heavy usage. My pc can run Quake Wars with everything turned to max for hours. No problem there.
I will not use photoshop again on this pc. This is my power pc and it is running hot. I am using my 2nd pc to render all my photoshop graphic. Its been an hour and my 2nd pc still not finish rendering a 14Mega Pixel picture. This pc however can do it in 10 minutes. Talk about difference in power.
Next I am going to buy an Apple Mac for all my rendering needs. So my house will be full of computers. Btw I have 3 desktop and a laptop now working in the house. So if I add another Mac, I can turn my house into a cyber cafe.
As for Forex, its going up but at the moment the direction is down. So be on the look out for a sell but keep in mind, the long term trade is a buy. Forex is not a straight road and I feel like Yoda speaking right now. How can I say sell but at the time look for buy. You know it when its there. I assure you.
Thursday, 17 June 2010
Introduction to Foreign Exchange Markets
Being the main force driving the global economic market, currency is no doubt an essential element for a country. However, in order for all the countries with different currencies to trade with one another, a system of exchange rate between their currencies is needed; this system, is formally known as foreign exchange or currency exchange.
In the early days, the system of currency exchange is supported solely by the gold amount held in the vault of a country. However, this system is no longer appropriate now due to inflation and hence, the value of one’s currency nowadays is determined through the market forces alone. In order to determine the value of a currency’s exchange rate, two main types of system is used which is floating currency and pegged currency.
For floating exchange rate, its value is determined by the supply and demand of the global market where the supply and demand is bound by all these factors such as foreign investment, inflation and ratios of import and export. Normally, this system is adopted by most of the advance countries like for example UK, US and Canada. All of these countries have a similarity where their market is well developed and stable in economic terms. These countries choose to practice this system due to the reason where floating exchange rate is proven to be much more efficient compared to the pegged exchange rate. The reason behind this is because for floating exchange rate, the market itself will re-adjust the exchange rate real-time in order to portray the actual inflation and other economic forces. However, every system has its own flaw and so does the floating exchange rate system. For instance, if a country suffers from economic instability due to various reasons such as political issues, a floating exchange rate system will certainly discourage investment due to the high risk of suffering from inflationary disaster or sudden slump in exchange rate.
Another form of exchange rate is known as pegged exchange rate. This is a system where the value of the exchange rate is fixed by the government of a country and not the supply and demand of the market. This system is called pegged exchange rate because the value of a country’s currency is fixed to another country’s currency. As a result, the value of the pegged currency will not fluctuate unlike the floating currency. The working principle behind this system is slightly complicated where the government of a country will fixed the exchange rate of their currency and when there is a demand for a certain currency resulting a rise in the exchange rate, the government will have to release enough of that currency into the market in order to meet that demand. However, there is a fatal flaw in this system where if the pegged exchange rate is not controlled properly, panics may arise within the country and as a result of that, people will be rushing to exchange their money into a more stable currency. When that happens, the sudden overflow of that country’s currency into the market will decrease the value of their exchange rate and in the end, their currency will be worthless. Due to this reason, only those under-developed or developing countries will practice this method as a form to control the inflation rate.
However, the truth is, most of the countries do not fully practice the floating exchange rate or the pegged exchange rate method in reality. Instead, they use a hybrid system known as floating peg. Floating peg is the combination of the two main systems where one country will normally fixed their exchange rate to the US Dollars and after that, they will constantly review their peg rate in order to stay in line with the actual market value.
The Foreign exchange market, or commonly known as FOREX, is the largest and most prolific financial market because each day, more than 1 trillion worth of currency exchange takes place between investors, speculators and countries. From this, we can deduce that the actual mechanism behind the world of foreign exchange is far more complicated than what we may already know, and that, the information mentioned earlier is just the tip of an iceberg.
In the early days, the system of currency exchange is supported solely by the gold amount held in the vault of a country. However, this system is no longer appropriate now due to inflation and hence, the value of one’s currency nowadays is determined through the market forces alone. In order to determine the value of a currency’s exchange rate, two main types of system is used which is floating currency and pegged currency.
For floating exchange rate, its value is determined by the supply and demand of the global market where the supply and demand is bound by all these factors such as foreign investment, inflation and ratios of import and export. Normally, this system is adopted by most of the advance countries like for example UK, US and Canada. All of these countries have a similarity where their market is well developed and stable in economic terms. These countries choose to practice this system due to the reason where floating exchange rate is proven to be much more efficient compared to the pegged exchange rate. The reason behind this is because for floating exchange rate, the market itself will re-adjust the exchange rate real-time in order to portray the actual inflation and other economic forces. However, every system has its own flaw and so does the floating exchange rate system. For instance, if a country suffers from economic instability due to various reasons such as political issues, a floating exchange rate system will certainly discourage investment due to the high risk of suffering from inflationary disaster or sudden slump in exchange rate.
Another form of exchange rate is known as pegged exchange rate. This is a system where the value of the exchange rate is fixed by the government of a country and not the supply and demand of the market. This system is called pegged exchange rate because the value of a country’s currency is fixed to another country’s currency. As a result, the value of the pegged currency will not fluctuate unlike the floating currency. The working principle behind this system is slightly complicated where the government of a country will fixed the exchange rate of their currency and when there is a demand for a certain currency resulting a rise in the exchange rate, the government will have to release enough of that currency into the market in order to meet that demand. However, there is a fatal flaw in this system where if the pegged exchange rate is not controlled properly, panics may arise within the country and as a result of that, people will be rushing to exchange their money into a more stable currency. When that happens, the sudden overflow of that country’s currency into the market will decrease the value of their exchange rate and in the end, their currency will be worthless. Due to this reason, only those under-developed or developing countries will practice this method as a form to control the inflation rate.
However, the truth is, most of the countries do not fully practice the floating exchange rate or the pegged exchange rate method in reality. Instead, they use a hybrid system known as floating peg. Floating peg is the combination of the two main systems where one country will normally fixed their exchange rate to the US Dollars and after that, they will constantly review their peg rate in order to stay in line with the actual market value.
The Foreign exchange market, or commonly known as FOREX, is the largest and most prolific financial market because each day, more than 1 trillion worth of currency exchange takes place between investors, speculators and countries. From this, we can deduce that the actual mechanism behind the world of foreign exchange is far more complicated than what we may already know, and that, the information mentioned earlier is just the tip of an iceberg.
Wednesday, 16 June 2010
EURGBP DROP
Yesterday I wrote about EG connection. Guess what, I took the whole EG drop and run away with it. Right now all live post on EG is closed, profit in the bag :).
I was so confident on EG drop I was betting 50% of my capital on it on 1 post only. Quiet a risk and really worth it. I feel like I just won a horse race :))
EU still up there and there is a killer spike up to 1.3537. Atm I on sideline watching for opportunity.
Fing lol email me on your progress. Really like to hear how you are doing.
I was so confident on EG drop I was betting 50% of my capital on it on 1 post only. Quiet a risk and really worth it. I feel like I just won a horse race :))
EU still up there and there is a killer spike up to 1.3537. Atm I on sideline watching for opportunity.
Fing lol email me on your progress. Really like to hear how you are doing.
EURGBP CONNECTION
Here is a homework for some of you. Your task is to find the connection between EurGbp with Eur pairs (EurUsd, EurJpy) and Gbp (GbpUsd, GbpJpy) pairs. You can post in comments about your findings so that we can discuss. Discussion is always a good learning method since you are required to think and not spoon fed.
EURUSD has finally reached its top. Entry point for me is between 1.3450 - 1.3500. You can find a suitable entry point or wait for the pair to really go down and take your entry. At the moment that entry is still a high risk entry. I am giving an early heads up so you guys can prepare.
Btw dont post link or whatever you want to promote in comments. I will not allow it and there is no such thing as 100% accurate forex signal. When are you guys gonna get it. There is no such thing as 100% in life.
EURUSD has finally reached its top. Entry point for me is between 1.3450 - 1.3500. You can find a suitable entry point or wait for the pair to really go down and take your entry. At the moment that entry is still a high risk entry. I am giving an early heads up so you guys can prepare.
Btw dont post link or whatever you want to promote in comments. I will not allow it and there is no such thing as 100% accurate forex signal. When are you guys gonna get it. There is no such thing as 100% in life.
A TRADER'S TOOLS
A mechanic has many tools. Each tools with its own usage and purpose. It is only down to intelligence and creativity that separates a good mechanic and a bad one.
Like a mechanic, a trader has many tools as well. Each indicator is a tool for the trader and a combination set of tools with rules is a trading system. A good trader has not 1 but many system. Each system has different purpose. It is down to knowledge and creativity that separates a good trader and a bad one apart from portfolio.
The best time frame to trade is the lower time frame but due to noise and spikes it is difficult to trade using lower timeframe. It is the reason why most trades fail in short time frame.
EurUsd has been ranging for the past few days and due to it, has hit my stop loss twice. Being a trend trader myself, I just cannot trade during these ranging period. So I stopped trading and try to make a new trading system using lower time frame to catch these ranging market.
It seems with a new set of tools (not new actually, had not used them for a while), I have manage to create an almost perfect trading system for all time frame but with the target of 15m chart. The only thing that this new system doesnt show is when not to trade which i made up with a new set of rules.
If any of you would like to try the new trading system please leave your email. I will try to get back to you ASAP.
Like a mechanic, a trader has many tools as well. Each indicator is a tool for the trader and a combination set of tools with rules is a trading system. A good trader has not 1 but many system. Each system has different purpose. It is down to knowledge and creativity that separates a good trader and a bad one apart from portfolio.
The best time frame to trade is the lower time frame but due to noise and spikes it is difficult to trade using lower timeframe. It is the reason why most trades fail in short time frame.
EurUsd has been ranging for the past few days and due to it, has hit my stop loss twice. Being a trend trader myself, I just cannot trade during these ranging period. So I stopped trading and try to make a new trading system using lower time frame to catch these ranging market.
It seems with a new set of tools (not new actually, had not used them for a while), I have manage to create an almost perfect trading system for all time frame but with the target of 15m chart. The only thing that this new system doesnt show is when not to trade which i made up with a new set of rules.
If any of you would like to try the new trading system please leave your email. I will try to get back to you ASAP.
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