Archives: 2009 January

Currency trading market conditions remain extremely volatile as the world wide financial crisis continues to grow. The confusion among world leaders was highlighted at this weeks meeting of the world financial elite at Davos, Switzerland.

As best as I can tell from a distance there was a general feeling of dismay at how quickly the Western world’s financial system has come apart and the toxic perhaps near fatal contamination that has been transmitted from the West to the rest of the world.

The financial gurus who largely got us into this messy soup of declining economic activity seem to be throwing a hodgepodge of stimulus ideas at the wall and hoping that at least a few stick. My confidence that any of these reckless, hastily conceived bailout plans will succeed is low.

The desperation of our so called world leaders is best shown by the Obama team and their soon to be one trillion dollar stimulus plan. It looks to me that the Obama crowd has turned back the pages to the FDR 1932 play book. Many aspects of the Obama plan, such as the massive “shovel ready” construction projects, the Baaaaad Bank idea, and the mish mash of spend, spend, spend, on anything plans seem to be completely unoriginal. Unfortunately, these grand spend money you don’t have programs didn’t work in the FDR years and they are unlikely to work now. My opinion is that Obama needs to add a qualified historian to his team.

People often ask the same question – What is really a good investment to make? The point is that when persons ask this question they mostly are not prepared to invest. As everybody knows, you must have money in order to invest. It is obvious you can have no investment if you have no savings.

So, to save some money is the first step in investing.

The second step that should be done or better to say realized is that you must understand that investing is risky business that simply means that you can lose your money. That is the reason why you should only invest from money that you can afford to lose. So, the following formula is really very important, because it separates your savings from your investment funds.

If you have some money to invest, you should know the next things concerning an investment. It is a product outside of stocks and mutual funds that allows you to:

• Make money on your money while diversifying your investment choices.

• Get a guaranteed return on your investment.

• Provide an immediate inheritance for your family.

• Make “risk free” investments by guarantying your principle.

• Continue to provide for your loved ones even after you die.

• Guarantees repayment of loans.

• Make “penalty free” withdrawal of cash.

• Get low interest loans.

• Create future income with minimal monthly contributions.

A Whole Life Insurance policy is the only investment product that provides all these comforts. It is a priceless tool and you should be sure to include it as the foundation of your investment portfolio.

By Gerald D. Greene

When you trade forex you are always trading forex pairs. Let me explain.

Forex trading is the exchange of one currency for another. For example we open an online forex trading account and fund it with US Dollars. In our account we are therefore long US Dollars.

We study the market and decide that the Dollar is over valued against the Euro Dollar. To make a forex trade (foreign exchange) based upon that analysis we must sell US Dollars and simultaneously buy Euro Dollars. How many Euros we receive for our US Dollars is determined by the exchange rate that is prevailing at the time of our forex transaction. The forex dealer quote that we deal at should be very close to the prevailing spot forex price.

A few days later we are pleased that we were correct with our Euro/US Dollar analysis. The price of Euros has advanced compared to the price of US Dollars. We decide to sell our position and exchange our Euros back into our base currency, US Dollars. Since the price of Euros relative to US Dollars advanced during our brief period of ownership we receive more US Dollars as a result of this transaction than we started with. We have made a profit in US Dollars, the base currency of our account, on our trade.

The important concept for the purpose of this discussion is that in both transactions, the buying and selling, forex pairs were involved with Euros and US Dollars being the currency pair. The pair could have been US Dollars and Japanese Yen, or Yen and British Pounds. When you trade foreign exchange that is exactly what you are doing, exchanging one currency for another.

By Gerald D Greene

Scalping forex is a strategy to trade and to profit from very small price fluxuations in the foreign exchange market. Anyone who has traded or even studied forex trading knows that the forex market is very volatile. During almost any trading period of at least a few hours there will be several opportunities to profit by scalping the forex market.

For example, you may buy Euros against the Dollar at 1.2800 and ten minutes later the Euro is at 1.2820. This degree of fluctuation is normal and may occur many times in a 24 hour period. If your trading plan is to use a scalping forex strategy you could immediately sell your position and book a 20 pip profit. Even trading a mini contract of $10,000 this would work out to a profit of $20 for ten minutes work. Hey, that’s $120 an hour.

As attractive a deal as that may seem to be there are a couple of tough problems in adopting a forex scalping strategy that remains profitable. The first is that it is an extremely stressful way to trade. You probably will find yourself glued to a computer monitor screen watching the forex market bounce around for hours at a time. In order to make big money you have to make a lot of accurate trades. This is easier to talk about than to do. If you decide to give forex scalping a go then you should limit your trading time to just a very few hours a day.

You have heard of currency trading but you are just not sure what it is all about? Don’t worry you are not ther only one. Obviously everyone understands the concept of trading goods for money but not everyone has been exposed to the idea of trading money for money.

The currency market is considerably different to any other market. The currency market is not governed by a central body and it is largest most liquid market in the world, with an estimated US$ 2 trillion being traded everyday. Currency trading, also known as foreign exchange, forex or fx trading, is the ratio of one currency in consideration with another. Traders make a profit as a result of slight variations of currency values.

Currency value fluctuates due to two main reasons. The first being the real market conditions as a result of visitors and investors buying or investing within a country. When they do so they need to convert their currency into the domestic currency where they want to buy or invest. Once they leave the country they again need to sell the domestic currency for the foreign currency that they require back home. The second reason is due to speculation. Speculation is when investors feel that a given currency could become strong or weak and they buy or sell accordingly. Speculation in the currency market has a drastic consequence on a country’s economy.

Currency trading has many benefits. 1) Since the spreads for currency trading is very low, the actual cost for the trader is also very low. 2) Since the currency market is volatile the trader can make huge profits on a given currency; and 3) The currency market operates 24 hours a day, unlike other markets that only operate for a stipulated period of time.