DOLLARS RISE AND FALL

The dollar rose against rival currencies Monday as investors continue to view the U.S. currency as a safer alternative to more risky assets despite the nation's weak economy.

"We're still seeing a lot of nervousness in the market," said Kathy Lien, director of currency research at Global Forex Trading. "And that's why the dollar is still being bid against other currencies."

Even as the U.S. economy slips deeper into recession, the dollar has managed to maintain its reputation as a safe-haven. As a result, the U.S. currency often rallies when the economic outlook darkens and stock prices fall.

Stocks tumbled in afternoon trade, after an early rally fizzled, as concerns about the economy outweighed news of a $41 billion corporate merger.

The pound fell 2% against the dollar to $1.3816 after the U.K. government took a big stake in Lloyds Banking Group. The euro was down 0.15% versus the dollar to $1.2633.

British regulators struck a deal with Lloyds over the weekend to cap the bank's losses on risky assets at $370 billion. In exchange, the government could take as much as a 77% stake in the troubled bank.

0:00 /1:05UK to increase stake in Lloyds

That news highlighted concerns that the U.S. government could follow a similar path in dealing with troubled financial institutions in America, Lien said.

"A lot more uncertainty lies ahead for U.S. banking sector," she said. "U.S. fundamentals will only come back to forefront when the fear of a major U.S. bank failure evaporates."

Meanwhile, the dollar was up 0.5% versus the yen at ¥98.84, after Japan recorded its first trade deficit in 13 years.

0:00 /0:58Japanese exports plummet 46%

The deficit came as demand for Japan's exports dried up amid the global economic slowdown and a stronger yen undermined profits earned overseas.

The yen's retreat, however, suggests that Japan's currency, which is also considered a safe-haven, is becoming more closely connected with the deterioration in nation's economy.

"The yen is decoupling from risk aversion," said Gareth Sylvester, senior currency strategist at currency brokerage HiFx in San Francisco.

However, even as the yen begins to reflect the downturn in Japan's economy, the dollar is expected to remain strong as investors shun risk, Sylvester said.

"The predominant theme remains risk aversion and dollar strength," Sylvester said. "That correlation is still strong."

DOLLARS FALLS

The dollar weakened broadly Wednesday as investors felt more comfortable buying risky assets such as stocks, modestly dampening the greenback's safe-haven appeal.

European shares rose, with banks leading the way as U.S. stocks edged up, although gains were pared as hopes faded for new details on a government plan to shore up the banking system.

"U.S. stocks are doing better today and we're seeing the euro getting some bids, although equities are a little disappointing considering where stock futures were at the open," said Steven Butler, director of currency trading at Scotia Capital in Toronto.

Gains in emerging market currencies such as the Hungarian forint and Polish zloty versus the dollar also weighed on the U.S. currency, analysts said.

The dollar extended losses against the euro in late afternoon trading, with the euro hitting a session high of $1.2859, its highest since Feb. 25.

The euro was last up 1.2% against the dollar at $1.2836 as investors bet the dollar's gains in 2009 were too far, too fast without some new driver to send it higher.

0:00 /3:20Inflation risk for retirees

John Crooks, president of research firm Black Swan Capital in Florida, said he thinks the euro bounce could have some legs.
Apart from the rally in stocks, he said, the euro was being supported by two other factors: "bond prices under pressure and oil back in the mid-40s despite no real sign that global demand has picked up."

The dollar was also down 1.4% against the yen at ¥97.28.

Some analysts said the euro's gains could be limited as markets got a timely reminder of the sickly state of global economic growth after data earlier in the global session showed a slump in economic powerhouse China's exports in February.

0:00 /1:04Chinese exports decline

"The dramatic deterioration in China's trade balance suggests that caution remains recommended and a lasting reversal in the dollar trend is unlikely,' said Commerzbank in a research note.

Boris Schlossberg, GFT's director of FX research, said the Chinese trade report cast doubts on China's ability to finance the U.S. current account deficit and in the long run could weigh on the dollar.

"The concern is that maybe China will not be able to generate massive amounts of foreign exchange capital which can then be recycled to U.S. Treasury securities. That is the big fear factor that hangs over the dollar."

Sterling, meanwhile, stayed under pressure against the single European currency, which rose to six-week highs above 93 pence, as Britain officially started its quantitative easing program to boost money supply.

The pound hit a six-week low against the dollar at $1.3656. It last traded at $1.3867, up 0.8% on the day. The euro was up 0.3% versus sterling at 92.52 pence. READ MORE..

NEW FOREX UPDATES

NEW YORK (Reuters) -- The U.S. dollar and euro jumped against the Swiss franc Thursday after the Swiss National Bank said it was intervening in the foreign exchange market as it faced the growing risk of deflation.

The Swiss central bank said it was implementing its decision to buy foreign currencies. The SNB also cut interest rates on Thursday by a quarter percentage point to a historic low, offering three-, six- and 12-month funds at 0.05%.

The SNB, which last intervened in August 1995, further said it will buy not only foreign currencies but bonds as well. Switzerland is facing its worst recession in over three decades.

A "very, very strong statement from the Swiss National Bank about what they are doing and about to do," said Karthik Sankaran, Portfolio Manager and Principal at Covepoint Capital Advisors LLC In New York. "They are the first central bank that is actually using the purchase of foreign currency as a means of quantitative easing."

In late afternoon New York trading, the dollar rose 2.96% to 1.1876 Swiss francs, on track for its biggest one-day gain since August 1995, at current prices. It rose as high as 1.1965 francs, a three-month high, according to Reuters data.

The Swiss franc is one of the world's most traded currencies, at times prized as a safe haven for investors.

The euro climbed to 1.5302 Swiss francs, the highest since December. It last traded at 1.5234, up 2.9%, the euro's best day ever against the Swiss currency.

SNB's move to zero rates and quantitative easing was expected, traders said, but the immediate move to intervene was a surprise.

Bank of New York-Mellon senior currency strategist Michael Woolfolk said "the way this was communicated was intended at maximizing its shock value." He said there were no hints from SNB officials ahead of time that intervention would be immediate.

"They changed their economic outlook, they not only lowered interest rates to effectively zero but also announced quantitative easing and currency intervention. This was the full monty," Woolfolk said.

Poland, Hungary benefit

Quantitative easing has been deployed by central banks in countries including Britain, where the central bank is buying assets with newly created money.

Marc Chandler, global head of FX strategy at Brown Brothers Harriman in New York, said the SNB intervention should ease pressure on Poland and Hungary, two European emerging market countries seriously hit by the global credit crisis.

These two countries had taken advantage of ultra-low Swiss interest rates, borrowing heavily in Swiss francs and investing in riskier assets.

"The strength of the Swiss franc compounded their woes. Today's dramatic weakening of the Swiss franc may ease this pressure," said Chandler.

Gains in the dollar versus the Swiss franc boosted the greenback against other major currencies such as the euro and sterling.

The euro fell 0.1% to $1.2871. The euro zone single currency was also pressured by comments from European Central Bank President Jean-Claude Trichet that euro zone interest rates could be cut further.

The ECB cut its benchmark rate to a record low 1.5% last week and economists expect it to cut to 1.0%, most likely in April.

Sterling rose 0.1% to $1.3867.

The SNB news overshadowed all other events and data in the market including U.S. retail sales numbers that were better than expected and weekly jobless claims data that were not far from analysts' forecasts.

Against the yen, the dollar erased early losses, partly because of firmer U.S. stocks, still one of the key drivers in the currency market. Stocks were lifted by energy shares and the U.S. retail sales report. The dollar rose 0.6% to 97. READ MORE..

NEW FOREX UPDATES

NEW YORK (Reuters) -- The U.S. dollar and euro jumped against the Swiss franc Thursday after the Swiss National Bank said it was intervening in the foreign exchange market as it faced the growing risk of deflation.

The Swiss central bank said it was implementing its decision to buy foreign currencies. The SNB also cut interest rates on Thursday by a quarter percentage point to a historic low, offering three-, six- and 12-month funds at 0.05%.

The SNB, which last intervened in August 1995, further said it will buy not only foreign currencies but bonds as well. Switzerland is facing its worst recession in over three decades.

A "very, very strong statement from the Swiss National Bank about what they are doing and about to do," said Karthik Sankaran, Portfolio Manager and Principal at Covepoint Capital Advisors LLC In New York. "They are the first central bank that is actually using the purchase of foreign currency as a means of quantitative easing."

In late afternoon New York trading, the dollar rose 2.96% to 1.1876 Swiss francs, on track for
its biggest one-day gain since August 1995, at current prices. It rose as high as 1.1965 francs, a three-month high, according to Reuters data.

The Swiss franc is one of the world's most traded currencies, at times prized as a safe haven for investors.

The euro climbed to 1.5302 Swiss francs, the highest since December. It last traded at 1.5234, up 2.9%, the euro's best day ever against the Swiss currency.

SNB's move to zero rates and quantitative easing was expected, traders said, but the immediate move to intervene was a surprise.

Bank of
New York-Mellon senior currency strategist Michael Woolfolk said "the way this was communicated was intended at maximizing its shock value." He said there were no hints from SNB officials ahead of time that intervention would be immediate.

"They changed their economic outlook, they not only lowered interest rates to effectively zero but also announced quantitative easing and currency intervention. This was the full monty," Woolfolk said.

Poland, Hungary benefit

Quantitative easing has been deployed by central banks in countries including Britain, where the central bank is buying assets with newly created money.

Marc Chandler, global head of FX strategy at Brown Brothers Harriman in New York, said the SNB intervention should ease pressure on Poland and Hungary, two European emerging market countries seriously hit by the global credit crisis.

These two countries had taken advantage of ultra-low Swiss interest rates, borrowing heavily in Swiss francs and investing in riskier assets.

"The strength of the Swiss franc compounded their woes. Today's dramatic weakening of the Swiss franc may ease this pressure," said Chandler.

Gains in the dollar versus the Swiss franc boosted the greenback against other major currencies such as the euro and sterling.

The euro fell 0.1% to $1.2871. The euro zone single currency was also pressured by comments from European Central Bank President Jean-Claude Trichet that euro zone interest rates could be cut further.

The ECB cut its benchmark rate to a record low 1.5% last week and economists expect it to cut to 1.0%, most likely in April.

Sterling rose 0.1% to $1.3867.

The SNB news overshadowed all other events and data in the market including U.S. retail sales numbers that were better than expected and weekly jobless claims data that were not far from analysts' forecasts.

Against the yen, the dollar erased early losses, partly because of firmer U.S. stocks, still one of the key drivers in the currency market. Stocks were lifted by energy shares and the U.S. retail sales report. The dollar rose 0.6% to 97. READ MORE..

TRADING PLANS

• Learn the psychology behind trading and how using a plan to manage your risk is one key to being successful
• Discuss the different elements of a trading plan and why they’re individually and collectively important
• Understand the reasoning behind trading to a plan and how to use that to create parameters based on your unique trading goals
• Learn about the different types of traders and how you
  line up

TRADING TOOLS

Forex Trading Tools:

To further enhance your trading activities, GFT offers a variety of forex trading tools that cater to different skill levels. If you’re just getting started in the currency markets, FX Mentor™ is an easy-to-use program that provides potential trade setups and regular commentary. If you’re a more seasoned trader, you may want to explore tools such as DiNapoli D-Levels™ or Foresight-A.I.™ to support your existing trading strategy by placing more informed trades.

FOREX EDUCATION

Forex Education and Resources from GFT

Trading forex is an exhilarating venture. But it can be risky if you don’t approach it with the right mindset.
If there is one constant, it’s that trading without a plan is one of the worst mistakes you can make. Our free foundation courses give you a head start in learning about the forex market and how to accommodate your personal trading goals.

FOREX VS STOCKS

Remember that both stocks and forex trading involve risk. Forex trading is not conducted on a regulated exchange and as a result, there are additional risks associated with forex trading.

Though stocks were traditionally viewed as an investment, recent volatility and instability has led to stock trading taking on a more speculative role.
Many stock traders are also trading another speculative market with many differences – forex. Instead of trading stocks of individual companies, traders are switching to trading currencies in the world’s primary market. Greater leverage, sophisticated software and strong market trends have led many former stock traders to explore the benefits of currency trading.

TRADING TIPS

Trading Tips

Rule #1. Learn or Develop a Profitable Trading Strategy.
This is rule #1. Without it, you are not going to go anywhere! For strategies and system ideas, please visit forex ebooks, forex courses, forex books and manual forex systems sections.

Rule #2. Use Low Leverage.
Using excessive leverage may be the most common reason why many traders blow out their accounts. A good rule of thumb would be not
to leverage your account more than ten times its value. For example, if you had a trading account of $1,000, you would not open trades worth more than $10,000. For a more detailed explanation on leverage, see forex basics.

Rule #3. Only Use Risk Capital.
What this means is that you should only use money that if lost, would not affect your lifestyle in any way. Though it has been said many times before, this is a simple rule that can avoid any harsh lessons being learned further down the track if learnt now.

TRADE FOREX

Trade FOREX at your Offshore FOREX Brokers for offshore trading platforms. Trade FOREX 24 hrs a day with a FOREX broker with a unique strategy, the only offshore FOREX broker in Europe to provide a comprehensive choice of independent FOREX trading platforms to trade currencies on the FX Market, the largest financial market
in the world, with a daily average turnover of well over US$1.5 trillion.

investorseurope offers direct access to offshore Forex trading for private and institutional clients over the phone or via our offshore trading platforms.

TRADING THE NEWS

Trading the News

Trading based on fundamental news can be a tricky matter. You can have a situation where the numbers come out very good for the asset that you want to buy, yet the asset will drop in value. This happens because theparticipants in the market have certain expectations of what numbers will be in the report. They will speculate on the outcome before the economic report comes out and place their trades early. If the report does not live up to their expectations, it won’t matter whether the news is good or not, the market can seemingly move in the wrong direction as the early speculators dump their positions. Trading the news is very risky and should only be done after several years of forex trading experience.

ECONOMIC INDICATOR

What is an Economic Indicator?

An economic indicator is an important piece of financial data in relation to the asset. In forex trading, the assets are the currencies of different countries. For countries, some important economic indicators are: interest rate announcements, employment numbers, Consumer Price Index, and Trade Balance numbers. While some reports are constantly valuable in fundamental analysis, others will sometimes be very important and other times, they will be much less important. For instance, if a country is having solid growth and experiencing inflation, the Consumer Price Index will be highly watched and considered important by the market

FOREX COURSES

FibMaster

Learn Fibonacci trading techniques with Neal Hughes, a trader
with nearly 30 years experience. Neal has trained clients for Joe DiNapoli, a well known expert on technical analysis, and offers five downloadable Fibonacci training videos to teach you his Fibonacci trading techniques. Learn More...

TECHNICAL ANALYSIS

Technical Analysis

Technical analysis has long been used in traditional markets like the stock market. Technical analysis methods rely on price history in order to predict the future. There are numerous methods used in the predicting, but the bottom line is that they always rely on price movements of the past. Technical analysis takes a few different forms and many methods of use.

FUNDAMENTAL ANALYSIS

Fundamental Analysis:

Fundamental analysis is an important part of learning to understand the markets. In the short run, the results are not always straight forward, they can even seem backwards. In the long run, currencies will always move along with fundamentals. Learning to use fundamental analysis will help you to understand the reasons behind trends and give you insight into currency movements.

KEY STRATEGIES

Key Concepts in Forex:

How many units can I trade with $5000 in my forex trading account? The topics below are especially important to
understand margin trading in order to answer this question.

1. Margin

Margin is the deposited funds held as collateral to cover any potential losses from adverse movements in prices. Margin requirement is set for each account and affects the number of units you can open and sustain.

Minimum margin requirement offered by MG Financial is 1%. Under the percentage based margin, the required margin for all accounts is a percentage of the numerical value of the Base Currency or the first currency in the pair. For example, 1% of 1 unit USD/JPY is $1,000 (1% x 100,000USD=1,000USD); 1% of 1 unit EUR/USD is $1,439(1% x 100,000EUR x1.4390 = $1,439).*

In theory, with $5000 account equity in your account to trade EUR/USD, you can trade a maximum of 3.4 units ($5000 / $1439 per unit = 3.4 units).*

* Calculated at the market rate of 1.4390 at the time of conversion

In reality, you are not able to trade 3.4 units. There are a few more factors you need to consider...

2. Spread

The spread of any currency pair is the difference between the Bid and Ask rate of the two currencies in the pair. For example, spread for EUR/USD with current Bid rate of 1.4387 and Ask rate of 1.4390 is 3. When a position enters the market, your position immediately reflects the revaluation of market value. Under flat market conditions, when entering the market your position may see a negative P/L equivalent to the spread of the currency pair you are trading.

3. Pip Value

The pip value of 1 standard unit (100,000) for either of the currency pairs of EUR/USD, GBP/USD, and AUD/USD is $10.

Calculation of Pip value of pairs with USD based currency or Crosses, such as USD/JPY, USD/CAD, or GBP/JPY is a bit more complicated. The Profit Loss Calculator is a useful tool to calculate profit or loss of a potential trade.

Pip value can be used to calculate how many pips of movement your usable margin can sustain.

For example, if your usable margin is $200 and you have 1 unit EUR/USD, the account can sustain 20 pips of market movement against you.

4. Usable Margin

The usable margin is the amount remaining to place additional trades or amount to sustain market movement against your position. This value is calculated by taking your Account Equity less the Used Margin. Usable margin in simpler terms is the balance of your account less used margin and +/- Profit/Loss. Please remember that because Usable Margin takes into consideration Profit/Loss, this amount changes with market movement.

5. Possible Scenarios

Now let's try to answer the question...
Beginning Account Equity of $5000 and 1% Margin requirement**

** Calculated at the market rate of 1.4390 at the time of conversion

Scenario 1- Trade 1 unit EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $30 (3 pip spread x $10 per pip) - $1439 (Required margin for 1 unit) = $3531
$3531 (Usable Margin) / $10 (pip value for 1 unit EURUSD) = 353 pips
Your account can therefore sustain 353 pips of movement against you for 1 unit position.

Scenario 2- Trade 1.5 units EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $45 (3 pip spread x $10 per pip x 1.5 units) - $2158.5 ($1439 margin per unit x 1.5 units) = $2796.5
$2796.5 (Usable Margin) / $15 ($10 per pip x 1.5 units) = 186 pips movement
Your account can therefore sustain 186 pips of movement against you for a 1.5 unit position.

Scenario 3- Trade 0.1 unit EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $3 (3 pip spread x $10 per pip x 0.1 unit) - $143.9 ($1439 margin per unit x 0.1 units)= $4853.1
$4853.1 (Usable Margin) / $1 ($10 per pip x 0.1 unit) = $4853 pips
Your account can therefore sustain 4853 pips of movement against you for a 0.1 unit position.

Scenario 4- Trade 3 units EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $90 (3 pip spread x $10 per pip x 3 units) - $4317 ($1439 margin per unit x 3 units)= $593
$593 (Usable Margin) / $30 ($10 per pip x 3 units) = 19 pips
Your account can therefore sustain 19 pips of movement against you for a 3 unit position.

Scenario 5- Trade 0.5 units EUR/USD
Usable Margin= $5000 (Beginning Account Equity) - $15 (3 pip spread x $10 per pip x 0.5 units) - $719.5 ($1439 margin per unit x 0.5 units)= $4265.5
$4265.5 (Usable Margin) / $5 ($10 per pip x 0.5 units) = 853 pips
Your account can therefore sustain 853 pips of movement against you for a 0.5 unit position.

Client can also require margin greater than 1%, e.g. 2% or 3 %, and here is an example of trading 1 unit of EUR/USD at the market rate of 1.4390, with 2% margin requirement.

Scenario 6- Trade 1 unit EUR/USD with 2% margin requirement
Usable Margin= $5000 (Beginning Account Equity) - $30 (3 pip spread x $10 per pip) - $2878(2% x 100,000EUR x1.4390) = $2092
$2092 (Usable Margin) / $10 (pip value for 1 unit EURUSD) = 209 pips
Your account can therefore sustain 209 pips of movement against you for 1 unit position with 2% margin requirement.


From the various scenarios depicted above, you can see there is no definite answer to this question. This is highly dependent on the investor's appetite for risk. The investor must also take into consideration all relevant factors and make sure to keep enough usable margin in his/her account to sustain market movement.

THINGS TO DO...

THESE ARE THE FOLLOWINGS THINGS YOU HAVE TO FOLLOW:

Step 1: "Practice makes perfect"
DEMO TRADE The demo account was designed to help traders gain familiarity with the speed and movements of the market. When you are demo trading, you should learn how to:

1) place market orders to enter a trade, 2) place stop-loss orders to protect your positions, and limit orders to take profits, 3) place OCO orders and IF DONE ORDERS to execute more advanced strategies.

Step 2: "Study, Study, Study".

Forex traders use fundamental analysis, technical analysis, quantitative analysis and sometimes a combination of all three to make their trading decisions. Fundamental analysis involves the use of economic, financial and political news to determine trading decisions. Technical analysis involves the study of Charts to predict future price movements based on past price patterns and trends. Quantitative analysis consists of the use of preset statistical models and properties in quantifying price formations such as averages, retracements as well as identifying oversold and undersold situations.

In order to help novice and experienced traders alike, MG has developed www.forexnews.com, a leading site on foreign exchange analysis, news and education. Comprehensive previews and summaries updated 4 times per day, insightful editorials covering the latest market developments and an open forum for discussing trading tips and ideas, are just some of the many features of Forexnews.com and MG's commitment to educating and informing Forex participants.

Step 3: Manage your money wisely.

You should always be aware of the amount of money in your account before placing a trade. If you think a long-term trend is developing, then you should consider whether you have enough funds to maintain your margin and withstand any movements against your position(s) that may occur. We encourage everyone who opens an account with us to ask themselves the following questions prior to entering each trade:

1) How much am I willing to risk?
2) What is my upside and downside potential?
3) What are the market conditions? (Is the market volatile or calm?)
4) What is the logic behind entering this trade?
5) When can I conclude if the assumptions/logic behind the trade are/is correct or wrong?

Before entering an order, you should consider both your entry and exit points. One of the mistakes most commonly made by traders, especially new traders, is letting emotions get in the way of their strategy.

Step 4: Stay Connected:

It is impossible to follow the forex market 24 hours day, 7 days a week. For better management of your account, we encourage you to use our Wireless Service and alert!FX™.


Step 5: Open a Live Account.

If you feel ready to trade this market, fill out our application forms and submit them today. Since the emotional factor may be higher than it was when you were demo-trading (as you are now committing real money), it is essential that you develop an effective strategy while demo-trading and plan to abide by it when trading your live account.

We hope you enjoy trading with us and wish you the best of luck!

How to Get Started:

People are introduced to the exciting world of foreign exchange in many ways: friends, current events, newspapers, television, and many others.

For those of you who are new to forex, the following guidelines cover the basics of currency trading.

Step 1: "Practice makes perfect"


Step 2: "Study, Study, Study".


Step 3: Manage your money wisely


Step 4: Stay Connected:


Step 5: Open a Live Account.

WHAT IS FOREX

Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined.

Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.

Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets.

MG Financial, now operating in over 100 countries, serves all manner of clients, comprising speculators and strategic traders. Whether it’s day-traders looking for short-term gains, or fund managers wanting to hedge their non-US assets, MG' Deal stations allows them to participate in FOREX trading by providing a combination of live quotes, Real-Time charts, and news and analysis attracts traders with an orientation towards fundamental and/or technical analysis.