Tuesday, March 24, 2009

Basics of Currency Market Investing

The currency market handles the international exchange of currency on a global scale, ranging from individual investors to large financial institutions. Currency transactions that occur through an accredited board by the CFTC (Commodities Futures Trade Commission) are tracked and recorded. For decades, this market was widely used by banks and large corporations. The market has only recently been available to small and individual investors. The opportunity for big profits with quick turnaround is an incentive that attracts many investors, but this market is not for everyone. It's important to be equipped with the latest currency market information to understand how it operates.

By law, only an accredited exchange broker should conduct transactions on the international currency market. However, there are many market transactions made outside of accredited firms. If you are an investor trading on the market, it's vital that you protect your investment from potential fraud by trading only with accredited brokers.

Dwarfing the New York Stock Exchange, the currency exchange market has an average daily trading volume in the trillions. Compare that with the NYSE, whose trading volume is US$50 billion. The sheer volume of trading on the currency exchange comes from its high volume. This market trades 24 hours a day, 5 days per week, while the NYSE trades from 9am to 5pm EST, 5 days per week.

Trades in the currency market are not centralized, as they are on the NYSE. They can occur in several places simultaneously through any accredited broker in the world. Having the latest and most complete information makes all the difference in profitable investment returns. Global market information and an awareness of international trade can help you increase your profits.

For complete market information and resources, visit the Colt FX website.

Colt FX is a site that helps people get started on the currency market. You can get valuable information on this growing and dynamic field. To get started, visit http://www.coltfx.com/.

Reuters - The top three U.S. exchanges want regulators to adopt a "modified uptick rule" and a "circuit breaker" to curb abusive short selling, a trading strategy that profits from declining stocks.

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A Great Forex Trading Indicator - Try This Strategy

Forex trading can be tough if you do not know what you are doing. That is why I have provided the following simple yet helpful forex trading strategy. The Simple Moving Average (SMA) is an extension of the trend line concept. The SMA is plotted on a graph by the charting program of the forex market data. The SMA takes the average of the close price of a given number of the last few periods. Any number of periods can be selected. You can have a SMA 5 or an SMA 20. An SMA 5 will take an average of the previous 5 close prices on the chart and will plot it on the chart along side the other price data. Each bar will use the previous 5 bars worth of data to calculate a point and plot it on the graph.

If the SMA is generated using a large number of periods (like an SMA 50 or SMA 75), you could interpret it similarly to the trend line. But if you select "faster" SMA's (like SMA5 or SMA20), you need to use a different strategy.

I am about to give you a strategy using the SMA. It is called the SMA Crossover Method. The SMA is one of the most commonly used indicators and can be found on almost any charting package. When you plot the SMA, you will be able to slect a line color to plot it. Make sure to use a different color than the actual prices on the chart.

Step 1: Plot an EMA5 using blue (or any color you like).

Step 2: Plot an EMA20 using red (or any color that is different than step one's color).

You now have two SMAs plotted on the chart. You also have two signals.

Buy Signal: When the SMA5 Crosses the SMA20 moving upward.

Sell Signal: When the SMA5 Crosses the SMA20 moving downward.

The beauty of this method is that the price of the currency pair cannot go up significantly without triggering the buy signal.

This was a very simple and practical indicator that should really improve your trading results as you implement the strategy outlined above. If you are looking for a really good set of forex trading strategies click on the link below. Good luck trading.

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Reuters - Goldman Sachs Group Inc is prepared to pay back the U.S. government's $10 billion Troubled Asset Relief Program investment as soon as allowed by regulators, but some hurdles remain, a person familiar with the situation said on Tuesday.

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