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DECEMBER 14, 2007
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NOVEMBER 30, 2007
How will the market react?
A few words about euro. According to data released by the United States Commerce Department US GDP has increased 4.9% in the third quarter of 2007, a bit higher than initial estimation (4.8%).
As the Commerce Department said, The US economy in the third quarter grew at the fastest pace in four years, revised higher by growing exports and inventory building by businesses. At the same time in the second quarter the economy grew at a 3.8% annual pace. And today Government economists cut their estimate of personal consumption expenditures to a 2.7% rise from their first estimate of a 2.3% gain.
Total final sales in the US economy were also higher in the latest Q3 GDP report, rising 3.9% instead of the 3.2% growth estimated a month ago.
And as a result the euro moved lower.
NOVEMBER 20, 2007
New week brought new record highs
The Dollar declined against the Yen on Monday, but held steady versus the Euro and a basket of major currencies. In yesterday trading, USD/JPY fell 1.12% to 109.60, edging back toward the 18-month low of 109.12 hit last week.
EUR/USD remains in a positive trend. How long? It set new record high this morning at 1.4813. Last week it found support on 1.4520 and consolidated around 1.4640. Now only a return below 1.4500 and further drop to former resistance at 1.4280 will threaten the uptrend. This can open the way down toward 1.4125 trend line support. Initial support is at 1.4645 (strong).
USD/JPY remains bearish. Last week pressure pushed the pair toward the August low at 111.60 and then dropped it to a new record low at 109.12. Initial support is at 109.60. To undermine the current downtrend market needs a return over 114.00 and 116.00. This may open the way toward the 117.63 resistance. Initial resistance is at 111.75.
NOVEMBER 2, 2007
Meet the highly successful trader (part 2)
We are continuing our chat with this successful trader. We really enjoyed talking with Nikray about how he manages risk as well as getting a feel for how he approaches the markets.
We would remind you that Nikray is a full time, professional trader and has more than 5 years of experience trading Forex. In March 2006 he joined "Global Forex Signals" web site as a Forex signals provider. He also manages a forex fund and for now he is the best one in a money management service at Global Forex Signals.
This is the second and the final part of that interview.
5. How do you treat losses and how do you go about establishing risk tolerance?
For sure it is the main and most important problem. Sometimes I even think that knowledge of fundamental analysis and technical analysis is not so much important for successful trading as risk management. I believe that it is a key factor to successful trading.
There were always traders who make extraordinary gains taking extraordinary risks. The legends are surrounding them. But this way is not acceptable for everybody because mean suffering inconsistent trading performance that often leads to large losses.
I believe that it is proper and right not to risk more than 10% of a trading capital, but better if it would be closer to 5%. Due to such policy there is a possibility to wait till unfavorable market movement is over and don't expose the account to excessive risk. As for the level of risk tolerance I can't give any unique solution here. I myself make a decision based on my own experience.
6. What is your most memorable trend on the market for this time?
Probably it is a total the US dollar plunging down against a basket of major currencies.
In the Year 2002 when I used to work in a bank currency dealing department I was warning my clients of possibility of such scenario development. Then EUR was cheaper than USD. I was suggesting my clients to convert their savings in United States Dollars (USD) to Euros (EUR). I don't want to hurt anybody, but I guess that my contemporaries and I will be eye-witnesses of the end of the U.S. Dollar's Reign. And it is not actually important how it will happen, either a long, slow, excruciating decline in value of the dollar or great default. But there are lots of facts which point to that.
This situation remains me the Enron Corporation which shares has fallen so fast. Though, many people believed that its global reputation couldn't be undermined.
Top Government Officials understanding current situation take their assets out of the American currency such as the Enron's top management. At the same time they keep on arguing for the U.S. dollar's reign continuing to the rest of the people. This is something of a "put up job" at a high-level. And then when a moment of truth appears it will be too late, we know it from the history.
7. What is the main quality that you feel is most important for a trader to have steady profit over a long period of time?
There are several of them such as pedantry, punctuality and the most important is strict German discipline. Discipline is most important.
Don't allow yourself to break your trade system. It occurred to me that I didn't follow my trade system myself and every time I regretted for it.
If your system shows an entry point for the trade you should use it without any fear. If your system shows an exit point from the trade you should exit immediately irrespective of the result.
8. What do you think are the greatest misconceptions beginning traders have about trading the markets?
When I started trading at the Forex market my first dreams were all about a yacht drifting on the Atlantic. But that myth was shattered promptly. NO ONE SELLER CAN INFLUENCE THE MARKET PRICE. NO ONE FINANCIAL MARKET COULD BE VIOLATED.
If someone makes trades dreaming about a new house or just a car HE IS DOOMED TO FAILURE. It is an out-of-court settlement.
9. What kind of advice would you give a person just now beginning in trading the markets?
First of all my advice is only "my advice". Any person who wants to start trading Forex should learn the A B C of successful buying and selling.
Then he should develop his own trade system and follow it strictly.
A piece of advice which I would like to give is not to listen to any analysts or gurus who are mostly newcomers themselves and don't bring any responsibilities for your result.
Try not to read too much literature concerning to any master classes for traders. It will not bring you to success.
And remember that the system which wasn't developed by you wouldn't bring you success!!!
Thanks Nikray for sharing trading approach with our Global Forex Signals Blog reading audience.
OCTOBER 29, 2007
Weekly forecast for USD/JPY
October 29, 2007 - November 02, 2007
View on USD/JPY: consolidation.
GFSignals team provides a week forecast for USD/JPY
+ 419 pips - this is the trading result our forex signals providers made for the last week.
More details at our web-site: Forex Signals Service.
The pair shows some consolidation at the 114-shape area. After touching 113.20 level on Monday USD/JPY currency pair recovered a little until the broken out September triangle - a little bit lower than the 115-shape. And now the pair is ready again for the next decline which may lead towards the August low at 111.60.
Last week our second script was fulfilled (30%): Correction fluctuations in the range of 114.00-116.00, though there was a short term break-out down from the range on Monday. But then the course recovered rapidly and was almost back to the 115-shape again. Thus the pair has classically tested the bottom triangle lines from below and now is ready for the next decline. So in the very close future we expect a downward trend towards the August low at 111.60 and probably lower to the 110-shape area. But first a breakout of the local September-October lows at 112.50-113.20 is necessary for that.
Script 1 (40%): A decline towards 111.50-112.50 area (the target is 110.00).
This script is possible after a breakout of the local September-October lows at 112.50-113.20. And it is quite possible a deeper decline.
Script 2 (30%): Correction fluctuations within the 113.20-115.00 range.
It is also very possible to expect correction fluctuations within the 113.20-115.00 range this week. This script development is possible just like the next course rising.
Script 3 (30%): A rising up to 117.00-119.00 area.
If the pair does not go down we will expect it up. After the next rising upper the triangle lines we expect a movement towards the 118.00 area (October high). Then further rise as well as a new rebound down are both possible.
Resistances
115.00 - the triangle lines.
117.90 - October high.
119.90 - August high.
124.10 - June year 2007 high.
Supports
113.20 - October local support.
112.60 - September low.
111.60 - August year 2007 low.
109.00 - May year 2006 low.
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