Trading Forex - Best Currencies to Trade

The explosion of over the counter Forex trading led to increased competition on part of brokers. Over last few years trade execution has become much better, spreads went down and trading platforms have seen dramatic improvement in performance and functionality. Another area of brokers services that witnessed huge changes is the number of currency pairs available for trading.

As recently as 5 years years ago there were platform offering only 4 major pairs for trading, all of them US dollar denominated - EUR/USD, USD/JPY, GBP/USD and USD/CHF. Not much choice there. Vast majority of brokers would provide 8 to 12 currency pairs. That was the staple. Only very select group could boast availability of 20 or more crosses.

Those times seem like ancient history. These days broker which offers 20 or so currencies is, well, services deficient. New norm seems to be availability of 50 + pairs on a trading platform, while few leaders provide over 70 or even close to 1000 currency based financial products. If swaps and options are included, this number can easily breach 300. Quite a difference over just few short years.

Does it mean that all these instruments are suitable for an average trader? The answer is resounding "NO". Some currency pairs are better than others, especially for beginning and less experienced traders. Some should be all out avoided or left for true professionals. That said, which are the best currency pairs to trade?

Trading instrument, should be liquid, have low cost of trading and have enough volatility to present profit opportunities as often as possible. Volatility, of course, is a double edged sword and can be detrimental, as well as desirable. Most of USD and, these days, EUR crosses fit into this mold.

Beginners should generally concentrate on the old stand byes, the 4 majors. EUR/USD and USD/CHF should the the first to consider. Both are very liquid, have low spreads (minimal trading costs) and move quite a bit. Incidentally, under current market conditions, USD/CHF is less volatile, and probably better for new comers, while still providing very good opportunities.

If you prefer fasting moving currency, GBP/USD is for you. The "cable" can move with surprising speed, but that works both ways- losses can be just as swift. Last one of the 4 majors is USD/JPY. Despite its much vaunted status, it is also a currency most susceptible to political influence. That can lead to more unpredictable behavior than the before mention pairs, but it has extremely low spreads and huge volume.

At present some of EUR denominated pairs are just as liquid as USD crosses. Most notable are EUR/CHF, EUR/JPY and GBP/USD. All of them are among the very best currencies to trade. EUR/CHF, for example, is far from being the boring instrument of years past. Daily trading ranges are very similar to USD/CHF, spread is the same and , by some accounts, volume is even higher.

Rounding up the best currencies to trade is AUD/USD. This pair has also experienced tightening spread, increased volume and widening daily trading range. On the contrary, the remaining dollars, USD/CAD and NZD/USD, should probably be left alone by less experienced traders. One of their less desirable characteristic is significant luck of liquidity pool at certain times of the day.

While it is good to have wide range of choices when it comes to trading options, it is not necessary, or even possible, to master all of them. There is nothing wrong with trading only the most popular currencies. They are most accessible and most information is available about them. Some of the best traders around specialize in only or two of these pairs. So can you.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com Spectrum Forex LLC offers numerous services to individual traders. You can also follow his trading blog at http://www.fxmadness.com With questions and comments e-mail him at kulej@spectrumforex.com

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The Only Thing You Need to Read For Forex Trading Success

I promise that when you are done reading this you will know exactly what to do to make money while trading forex. This is what I personally do myself and I am making enough money to live at home and do whatever I want, whenever I want. I didn't write this to brag but to inspire you that you can do the same, and hopefully better!

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What Kind of Trading Strategy Is Best For YOU?

The biggest mistake that most beginning forex traders make is made before they even place their first trade. In fact, they usually make this mistake before they even open their trading account!

Most traders begin by learning the mechanics and terminology of trading.

They study charts and look for trends. They try to find predictable patterns and how to profit from them.

They learn the meanings of the words "pip", "cable", "swissie", "shoulder", "flag", etc.

They study how the "Aussie" behaves when the Royal Bank of Australia lowers rates or what the impact on the EUR/USD will be after Jean Claude Trechet says the word "vigilant" three times during the ECB rate announcement or what the rising price of oil will do for the Canadian dollar.

But the one thing most traders don't do before they begin their careers in this "sport" is to properly assess their own temperament and how that will effect their trading.

The cute E*Trade commercial which shows a talking baby placing a trade is accurate. It's easy to place a trade. The mechanics are easy enough to learn. And many traders, even adults, feel like barfing right after they pull the trigger!

Are you going to barf every time you place a trade? Will you be afraid of losing? Will you become angry when you do lose on a trade - even if it's a small amount? When you close out a trade, will you feel elated (on a win) or humiliated (with a loss)?

These are all questions that you need answered before you place that first trade.

When you have answered the tough questions about yourself, you will be well on your way to determining what kind of trader you will be.

Many of those who hold educational seminars and write books on forex traders talk about 3 types of traders: the day-trader, the swing-trader, and the investor. However, I believe there is a viable fourth category: the non-trader.

The day-trader goes for the quick gain. Successful day-traders have nerves of steel and don't mind sitting in front of their computers watching the up-ticks and down-ticks of their favorite pair(s). They can easily stomach many small losses knowing that they only need a successful trade or two to put them ahead. The day-trader depends heavily on the charts and technical analysis. But they really only care about what's going on with the 5-minute, 10-minute, or 15 minute charts. A daily chart represents an eternity for a day-trader.

The next type of trader is the swing-trader. This type of trader is a bit more patient then the day trader. The swing-trader will read the weekend papers and websites and study the fundamentals of their favorite pair. They'll then take a look at the yearly and daily charts, looking for good entries and then decide on their target. Then they'll set up their trade on Monday morning, which may or may not be triggered. When the entry for the trade is triggered, the swing-trader is patient to then wait until either their stop or target takes them out. The swing-trader's trades will run for days, weeks, or months, typically - and that's plenty fast for them.

The third type of trader is the investor. And the investor is the most patient of them all. The investor trades off of very long term trends. He places his trade and forgets about it. It may be months or years before he exits his trade. The investor relies mostly on fundamentals and long-term economic trends.

The last type of trader is the non-trader. Although, the dealers wouldn't agree, it's actually ok to not trade. For some people, trading is just going to be too stressful for them. Even though education can relieve a lot of this stress it won't eliminate for everyone.

What category am I in? Right now, I'm in category four. But, soon, look for me in category 3.

What is the best category to be in? Again, it all depends on who you are.

Visit http://www.learnforexdirect.com for more Forex Trading secrets and claim your no-cost subscription to 'Learn Forex Direct' e-letter ($198 VALUE).

Reuters - Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

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Forex Funnel requires no real human interaction, and will make decisions by itself, based on forecasts and previous facts and figures. During testing of the product, the average winning in-a-row was 19, and a maximum achieved of 53!

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The Forex Funnel has previously bought a $50,000 account up to $462,000 on autopilot alone. The more time you spend learning around the area, the more you can understand how the software works, and adapt it to maximum profitability. I am new at trading, and without disclosing too much personal information, I have seen my investment triple since purchase, all on autopilot whilst I do nothing.

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Reuters - With Wall Street veering close to the November bear market lows, the market is likely to be awash with caution next week as investors look for clarity on how the government plans to shore up banks, housing and the economy.

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200 EMA Forex Strategy - Easy For Beginners

Are you a relatively new trader looking for a solid 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.

The 200 EMA (Exponential Moving Average) can solve the problem.

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 200EMA Strategy

To use this very powerful Forex strategy, create charts on 3 time frames:

• 4 hour
• 1 hour
• 15 minute

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.

They are:

• 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.

If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.

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

Using the fundamental trading principle of "buy the dips in an uptrend", "sell the rallies in a downtrend", look for a suitable entry point.

In the example given above you would look for an opportunity to buy the EUR/USD, perhaps watching for a candle signal that price has exhausted it's downward momentum, bucking the 15 minute chart 200 EMA and will soon resume it's upward momentum.

This is an easy exercise and it can be done once or twice a day, taking just a few minutes.

Watch For Price Bucking The Trend

Once you see price bucking the 200 EMA on the 15 minute chart, whereas it is on the opposite side on the 4 hour and 1 hour charts, sit up and take note. Watch carefully and grab the opportunity to get in and make some pips.

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

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Reuters - Goldman Sachs Group Inc denied a CNBC television report on Thursday that it had convened an "emergency" meeting of top investors earlier this week, prompted by worries Treasury Secretary Tim Geithner's bank rescue plan was not viable.

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