Trading the Foreign Exchange Market

[dwarfy]

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Trading the Foreign Exchange Market

• idea/opinions
• facts
• news
• charts
• questions
• etc...

[neo4596]

daghan nko naagi-an for the past 2 months: mutual funds, stocks, etc. then karon trading the foreign exchange na pud. taga-e daw ko overview ani bay. unsang klasehas mananap ang forex? hehehe.

[dnhoel]

forex is a double edge sword

[dwarfy]

@bro neo4596
actually bro ni open ko ani na thread kay daghan man gud ni suggest sa thread na "Trading the Philippine Stocks Exchange" to open a separate FOREX thread. Dili pud ko expert sa FOREX kay currently I am still learning PSE trading (10-20% ra no0n ako portfolio kay the rest are for long term investment).

as dnhoel said mas risky jud and FOREX IMO kay sa PSE.

Huwat lang ta sa mga experts mo share.hehe

[neshem]

dili koexpert ha..but share lang

"First of all, currency markets are much larger than equity markets. By most estimates, the daily volume in forex is as much as 10 times larger than the combined volume of ALL of the world’s stock markets. That makes it very liquid. We’re also talking about a market that trades 24 hours a day."

"Secondly, I think the ease of choosing a currency to trade is a big advantage. How many stocks now trade around the world? Between the U.S., European and Asian stock markets, there are several dozen industries -- at least 40 of them, give or take, each with a number of sub-industries, and each one of those with 100+ stocks. So we’re talking about tens of thousands of stocks -- and you have to choose the right one! Even in bull markets, while the rising tide lifts all boats, as the saying goes, it may not lift your particular "boat" -- in fact, your stock may even decline if it’s not the best stock in its peer group, or if you’re in the wrong sector. Often, you see your sector or stock fall even as the general market rises, so you have to be very good -- or lucky -- at your stock picks."

The currency market has far fewer choices..Most forex traders stick to the major pairs; in fact, the bulk of trading is between the U.S. dollar and euro -- by some estimates, up to 70% of the total daily volume. Besides the EUR/USD, we have 5 or 6 other major pairs -- and by watching those, you are basically watching the entire world.

Forex markets have lots of volatility, too -- good for aggressive traders. And if you’re a macro-trader, currencies are well-known for staying with the trend for a long time. Volatile at times, yes, but steadily trending. So, there are several reasons why one might look at forex versus stocks. ...

[dwarfy]

Thanks for the info bro neshem!
- What about for long term investment bro (like 6 months to years)? Ok ba FOREX or Stocks?
- How about traders na dili ganahan cge tutok sa screen? Ok ba FOREX? Or its advisable jud na when FOREX trading, its better to monitor every second?
- I am studying technical analysis but for stocks. Will it be applicable to FOREX? 100%? 90%?
Thanks!

[dnhoel]

TA is applicable to both FX and Stocks and other investment vehicles, but on the FA side, much broader ang FX coz dghan factors mkaffect sa economy sa usa ka country... If u wanna be successful in trading..

Master your Psychology!

Your Psychology: 50%
MoneyMangement: 20%
T.A & F.A Strategy: 20%
Exectution:10%

Highest ang Psychology, coz you are your own worst enemy!
The moment u enter the market, u must learn how to become a rational investor. NO EMOTION!
GREED, FEAR, REVENGE -are your greatest enemies...

[cliff_marvin]

which is better Stocks or forex?
in terms of:
risk?
returns?

[TWINSCAN]

Thanks for the info bro neshem!
- What about for long term investment bro (like 6 months to years)? Ok ba FOREX or Stocks?
- How about traders na dili ganahan cge tutok sa screen? Ok ba FOREX? Or its advisable jud na when FOREX trading, its better to monitor every second?
- I am studying technical analysis but for stocks. Will it be applicable to FOREX? 100%? 90%?
Thanks!

Investment in FOREX definitely works. These are what big institutions, central banks, commercial banks are doing, they do Carry Trade to earn Rollover interest. To become a successful carry trader, understanding the role that interest rates play in FX market is crucial task. A country offering high interest rates will attract more capital as investors seek to capitalize higher returns. As interest rates rise, investment will follow, which can in turn increase the vale of currency. These is how it works by buying curency with high interest rates and selling the lower interest rate. These is the latest Central Banks Interest rate.

AUD 4.75%
NZD 3.00%
CAD 1.00%
EUR 1.00%
GBP 0.50%
CHF 0.25%
USD <0.25%
JPY <0.10%

It is very clear Aussie and Kiwi has the highest interest rate. So it is the favorite pairs for investors, no wonder why there currencies appreciated that much.
Rollover can provide additional stream of income from collecting interest
-For example, you believe that Aussie's interest rate will be around the same one year later. You decide to long 1 mini contract AUD/JPY
-Differential Interest rate = 4.75 - 0.1 = 4.65%
-(V=current value of position in second currency. This is equal to : number of contacts x contract size x spot exchange rate)
-Interest earned for 365 days = (VxR) = (1 x 10,000 x 82.45 x 4.65%) = 38,339.25 yen

-This is approximately USD $464 yearly earnings for a mini contact alone, imagine those central bankers, big institutions, buying standard lots with big voulmes/units how much they earn in interest alone.

[neo4596]

unsa may basics jud anang forex? Sa mga experts, please tell me the step by step process on how to invest in forex. Thanks.