An Easy Forex Strategy For New Traders

By Michael Jones

Are you new to trading, seeking out a reliable Forex strategy?

A challenge facing many new traders when developing their forex strategy is the ability to identify the overall trend for intra-day trading.

Using an Exponential Moving Average, specifically the 200 EMA can provide the solution.

The 200 EMA is one of the most popular indicators of all time with Forex traders the world over, and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around the 200 EMA.

Using The 200 EMA Strategy

This Forex strategy requires you to set up 3 different time frame charts:

4 Hour Chart

A 1 hour chart

A 15 minute chart

Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.

Preferably tile the 3 windows containing your 3 charts into a vertical fashion so you can see the 3 time frames next to each other. It will squeeze up the information on the charts somewhat but for the purpose of this strategy that doesn't matter.

Now scroll through the various currency pairs you like to trade.

If you prefer to trade only pairs with a smaller pip spread, they amount to about 9.

Here's a list:

EUR/USD | GBP/USD | USD/CHF | USD/JPY | EUR/JPY | USD/CAD | AUD/USD | NZD/USD | EUR/CHF

What you are looking for is any currency pair that bucks the 200 EMA on the 15 minute chart.

So for example, look at the EUR/USD pair and note the position of price relative to the 200 EMA on the 3 time frames.

Price is what we call 'bucking the trend' if it is well above the 200 EMA on the 4 hour and 1 hour charts but below it on the 15 minute chart.

The overall trend is up, price has temporarily gone against the trend and is currently in a retracement.

Look for a good point to get into the market in harmony with the basic trading maxim of selling rallies in a down trend or conversely, buying dips in an up trend.

Say you were trading the EUR/USD pair, you would look at candle formations to see if there is a doji, or hammer, or any pattern that indicates price is exhausted and that it is about to resume the direction of the overall trend as shown on the 4 hour and 1 hour charts.

This simple exercise only takes a few minutes and can be done a few times during the day.

Watch For Price Bucking The Trend

As soon as you see price crossing the 200 EMA on the 15 minute chart whereas it is well beyond the 200 EMA in the opposite direction on the 4 and 1 hour charts, FOCUS! Snatch the opportunity to get into the market and make a profit.

After a little practice you will see how extremely powerful this simple Forex strategy is - certainly deserving a place in your trading tool kit. - 23200

About the Author:

Get a useful free tip on how to use the MACD indicator for safe trading here: Forex Strategies Learn an important lesson from Mohammed Ali regarding Forex Training: Forex Online Trading

Carry Trading in Forex

By Hass67

In currency markets, carry trading is done by many investors to take benefit of the basic economic principle that money flows where the returns are high. This constant flowing in and out of capital between the different markets is what makes carry trading profitable.

Carry trading is one of the fundamental trading strategies employed by professional forex traders. Leveraged carry trading is one of the favorite strategies employed by hedge fund and investment banks. You as a forex trader can also benefit from carry trading.

Carry trading means taking benefit of the interest rate difference between two currencies. Carry traders take benefit of the interest rate differential between two currencies by buying or going long on the high interest rate currency and selling or going short on low interest rate currency.

Lets use a simple example to make it clearer: lets assume, New Zealand dollar is offering an interest rate of 4.75% whereas the Japanese yen is offering an interest rate of 0.25%.

In order to carry trade, an investor buys New Zealand dollars (NZD) and sells Japanese Yens (JPY). As long as the exchange rate between the NZD and JPY does not change, the investor will earn a profit of 4.75-0.25=4.5%. Using a leverage of 5:1, this 4.5% return will be leveraged into 22.5%.

Another thing that can go in favor of the investor is if the currency pair NZD/JPY appreciates, he/she can get capital appreciation as well as a yield. Many times, appreciation will also happen as many other investors also jump on the bandwagon when they see a good carry trading opportunity.

However, carry trading depends a lot on the mood of the investors as a group. When investors have low risk aversion, carry trades will be profitable. But suppose the investors as a group suddenly develop high risk aversion and run to take refuge in safe haven currencies. In this scenario, carry trading will become unprofitable.

However, if the low interest currency appreciates to some extent for different reasons, carry trade will become unprofitable. In such a scenario, the more the low interest currency appreciates, the more unprofitable carry trading that currency pair will become.

So it essential when you determine a currency pair for carry trading, you also identify the current trend of the currency pair to see whether it is moving in the right direction.

MACD (moving average convergence divergence) indicator can help you in this regard. You should enter the trade when MACD crosses the zero line from below. You should exit the trade when it crosses the zero line from above. - 23200

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading; stocks and forex. Read about Trend Forex System. Best Forex Signal Service. Learn Forex Trading.

Why There is a Need to Keep a Forex Trading Log

By Mark Thomas

Traders find keeping a forex trading log very important. The word "log" is understood by many as something similar to creating a diary. A "trade log," on the other hand, is something that the majority of individuals believe as something that you do if you want to have a record on the trade details. In this way, you must have a piece of paper and a pen or even a pencil and then you will write down the trade logs that you are watching over for quite a few days now. This is only one method but there are some traders who use this one. This is not really the best technique because there are inevitable instances that you will misplace the information that they have recorded or there may be times when another person will get the data accidentally.

Keeping a trade log is easy if you know how to do it properly. Obviously, one of the best ways that you should do is through the use of computers. This is very useful since you can be sure that what you have jotted down will not be lost and it will be easily retrieved. You will be able to access the information in no time at all. Additionally, you can even bring it with you at all times without worrying that you will lose the data. Although there are some people who save it in a word document form, it will be a lot easier if you will utilize Excel or other similar programs.

If you would like your document in word format, this would allow you to write down all the additional information or other notes if you want to write down some more essential details. For Excel users, we all now how suitable this is if you have lots of data entries but this is not really appropriate if you want to jot down comments and similar remarks. Be able to decide which one of the two you will have to use but you have to make sure that the program you have picked is something that you are very familiar with.

For Excel users, this is very appropriate if there are lots of data entries since it will look very organized but this is not really suitable when it comes to writing down remarks and other related things. You should be able to decide which one of them is the one that suits you but make sure that you are comfortable with the program that you have chosen.

Whether you go for manual forex trading log, recording or using the computer, you have to make sure that you are consistent with your method. This is because all the notes you have produced will only end up all over the place. - 23200

About the Author:

Mark Thomas, a Professional Software Developer have been in Trading for several years and have developed a Forex Trading Software Tool which helps the Traders to keep track of all their Trades in a Disciplined Manner. Get complete details about Trade from Mark Thomas . Visit his website http://www.tradeontrack.com

The HOG2 EURUSD-USDCHF Custom Indicator - Forex Hedge Trading

By Sonja Schuyler

The latest entrant into the popular world of Forex Hedge trading methods will be reviewed in this article. We will examine a manual system designed to trade the EURUSD-USDCHF Hedge. This Hedge is one of the most popular Hedges in the world of Forex in large part because of its high degree of negative correlation. In other words, most of the time, when the EURUSD trends in one direction - the USDCHF heads the opposite way.

The advantage of trading a Hedge is that it tends to reduce your risk. The challenge is that trading more than one currency pair at a time is difficult to track. Without the ability to track multiple pairs, you are at a definite disadvantage.

What Gary at 4x-rox.com did is create a set of custom indicators that track the total value of the EURUSD-USDCHF Hedge. This will enable you to trade these two currency pairs as if they were one pair. His indicators also track five market parameters outside the Forex market that gauge the value of the EURUSD-USDCHF Hedge and plot the predicted value relative to the current market value. This arrangement shows you the push or pull pressure on the Hedge and gives you an early warning when large reversals are likely to occur.

This Hedge trading system is called The HOG2 Custom EURUSD-USDCHF Hedge Indicator or HOG2 for short. The HOG2 runs inside the Metatrader 4 trading platform. It is composed of four indicators in three indicator windows.

The HOG2 tracks the EURUSD-USDCHF Hedge in real time. Before you place your trades, it will show you exactly what this Hedge is doing. The HOG2 features a color-coded custom histogram that gives you the buy or sell strength of this Hedge and indicates good entry and exit points. This arrangement shows you when this Hedge as a whole is over sold or overbought at a glance.

Learning to trade with the HOG2 will be very straightforward if you are accustomed to reading indicators. If you have never traded Forex before, or never manually traded Forex, then you will want to go slowly and not live trade until you are completely comfortable. The HOG2 comes with good instructions and the company offers excellent support.

The HOG2 is not a robot. The HOG2 is not for you if you are looking for a Forex robot. If what you're looking for is a solid, effective manual trading system for trading the EURUSD-USDCHF Hedge then you won't find an easier or more workable system than the HOG2.

The HOG2 combines formulas for inter-market analysis with a unique compound indicator. The result is a highly effective manual trading system for this Hedge. The unique combination of the HOG2's one of a kind trend lines and Custom Histogram provides that all-important 'bird's eye view' of your Hedge trade.

Why not try out the HOG2 for yourself? When it comes to trading the EURUSD-USDCHF Hedge, the HOG2 combines formulas for inter-market analysis with a unique compound indicator and the result is a highly effective manual trading system for this Hedge. The unique combination of the HOG2's one of a kind trend lines and Custom Histogram provides that all-important 'bird's eye view' of your Hedge trade. - 23200

About the Author:

Sonja Schuyler and the team at www.4x-rox.com make it easy for you to flatten the learning curve and also get you on to the Forex trading Profit curve. To receive your copy of the FREE eBook Successful Forex Trading Secrets Revealed, head on over to Forex Trading Today

Leverage Your Investments For Greater Rewards

By Gnifrus Urquart

Leverage is simply investment jargon for borrowing. Its called "leverage" because you use the value of an existing investment to underwrite, or as security for, the borrowing.

This article covers the general principles of leveraging your investments. If it is something you are considering but have never done before, discuss your ideas with a licensed financial adviser. They will ensure you are structured correctly and can minimise your risk and exposure.

When I started investing, my borrowing habits where the same as most peoples. I had a floating credit card debt which varied to my whims. I had a small personal loan for some household items and a bigger one which enabled me to buy my car.

There are 2 problems with this type of borrowing. Firstly, all the assets I bought with the borrowed money were depreciating assets. This means that as I paid off the debt, the value of the things I bought decreased. Secondly, as I purchased "consumables", the interest I paid on these loans was not tax deductible. This makes for a very expensive borrowing.

Things have changed over the years. I learned that debt is much more efficient when spent on investments. So now my credit card debt is negligible and paid off every month. My personal loans are completely paid off. Despite this, I have a lot more debt. I have a massive debt on an investment property. I have a margin loan for share trading. And I have a FOREX investment account which is leveraged at 400:1 (Which means I borrow $400 for every $1 I put in)

What is the logic then of borrowing to invest?

When you borrow to invest, you increase your investment earnings potential. As you borrow money, you have more to invest. Therefore, the returns on your investments increase by the net returns on the borrowed money. Obviously the basic key here is to ensure your investment return rate is higher than the interest rates on the loan. If this is the case, you will always make money with the money you have borrowed.

Generally speaking also, interest payments on investment borrowing are tax deductible (get advice from your accountant on this point). As the borrowings have been made to increase your income, the interest payments on the loans are a direct cost of your income production. This typically makes the interest payments a tax deduction. For example, as my investment property creates a rental income, the borrowing are a cost associated with producing that rental income.

This works exactly the same in the margin loan I am using to help with my stock market investments. I have borrowed some money in a margin loan (I usuall try and keep the leverage here at about 1:1, so every dollar of my own I invest gives me another to invest) and pay interest every month on that loan. My stock market strategy pays me my consistent income every month, which is more than the interest on the margin loan. And then, at the end of the tax year, I deduct the interest payments from the money I earned, gaining a tax advantage.

Those are some of the benefits you can gain by borrowing to invest. There are risks too though, so it is very important to get independent financial advice if you are thinking about leverage.

So what are the risks associated with borrowing for investment purposes? One of the obvious risks relates to your financial capacity. There is the risk you over-extend yourself and cannot meet the repayment obligations on your loans. When taking out a loan, you need to be sure you can pay the loan repayments.

A margin loan is treated a little bit differently. If you borrow too much or the value of your investments drops suddenly, you will be at risk of paying margin calls. This means your lender will ask you to pay off a portion of the loan, so that the outstanding loan is in a reasonable level when compared to the reduced level of collateral. This can be quite a large issue if your investments drop by a long way. If you cannot meet the margin call obligations, your lender has the right to sell your investments.

Finally there is the investment risk. When you borrow to invest, you do so with the intention that the income earned from the money you invest, exceeds the interest the borrowing accrues. If the interest is higher than the investment earnings, you are losing money.

There are strategies to protect yourself against these risks though which your financial advisor can help you with. In my experience, it is definitely worthwhile borrowing to invest, but only if you manage your risk and cashflow responsibilities properly. So the one piece of specific advice I will give you here, is speak to a licensed financial advisor or accountant about whether this is an appropriate strategy for you. Only then should you work out how to structure it to match your personal circumstances. - 23200

About the Author:

Gnifrus Urquart has had impressive success investing over the years. As such, he enjoys discussing investment strategies and giving trading tips to others interested in investing