Currency Trading Basics - The Best Currencies to Trade

What are the best currencies to trade? Here we will answer this question and also look at a few over looked currencies and in particular one of the best for novice traders.

Here we are going to look at the best currencies against the US Dollar.

Perhaps the most important consideration is turnover and liquidity of the currency traded. and these currencies also offer the tightest pip spreads which reduce your cost of doing business. You can trade the majors for just 2 or 3 pips and the currencies with the highest volume against the dollar are.

- The Euro

- The Japanese Yen

- The British Pound

- The Swiss Franc

Any trader should consider the above 4 and the euro and the yen are favorites for most traders and will work well for swing traders or trend followers.

I trade the euro, yen and Pound but not the Swiss Franc - nothing against it, it's a great trending currency but it tracks the euro to a degree now as the country has become more integrated with Europe so I have picked the euro.

Two other great currencies to trade are, the Australian and Canadian Dollar.

They don't have the volume of the big 4 and spreads are a little wider but for trend followers they offer some excellent trends and with both being commodity currencies, they have given some great trends over the last few years with the recent surge in commodity prices.

If I was to pick a currency that is good for novices, it wouldn't be the euro or the yen - but the Canadian dollar.

It works well on any technical system and offers reliable trends and the major advantage is it lacks the frequent volatility spikes you see in the big two

Of course any list of best currencies to trade is going to be subjective but if you are a novice trader or trading the majors and want a change, check out the Canadian dollar - it really is a great currency to trade.

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AFP - European stock markets surged in early trading on Monday, mirroring sharp gains won across Asia after the US government seized control of ailing mortgage giants Fannie Mae and Freddie Mac.

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Forex Fundamentals

The Forex market is quite new to the investment world as compared to the stock market. The model which is used these days was built around 1970's. now, it is one of the biggest markets around, way ahead of the stock market. The estimated trading is around $2 trillion per day. The Forex is attracting more and more investors each day.

Before trading on Forex, one should know the fundamentals of Forex. Let us start with exchange rates. Exchange rate is the rate of exchange of two currencies of two countries. Though many currencies are traded, but the most popular include US dollar, Japan's Yen, the Euro, the British Pound, and the Swiss Franc etc. Other currencies like Australian dollar, the Hong Kong Dollar and the Canadian Dollar are also quite popular.

The exchange rate is calculated by dividing the numerator by the denominator where the numerator is represented by the currency quoted and the denominator being the base currency.

Let us take an example to make things more clear. If you want to exchange dollars for euro, here dollar is the quote currency. Quote currency specifies the amount of currency that you want to exchange. The base currency is euro here. First you have to find out the current exchange rate either through newspaper, internet etc. Now you multiply the exchange rate with the amount of dollars to exchange. If the exchange rate is 0.5, it means that you get one dollar for 0.5 euros. So multiply 1000$ with 0.5. which equals 500 euros.

Once an investor has understood these concepts, he will be able to start with currency exchanges.

While it may seem a little complicated on the surface, Forex trading can be simplified by using Forex trading software. Many of these programs, such as Forex Tracer, require no previous experience. Check out the Forex Tracer software and see how you can begin trading today.

Reuters - Russia aims to extend its control over energy deliveries to the West and it is important that European countries push forward on efforts to diversify routes for oil and gas supplies, a senior U.S. official said on Monday.

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FOREX Trading Signal Subscription Services - To Use Or Not to Use

Novice and expert traders agree that trading signal subscription services are useful trading tools. Using trading signals to help with buy and sell decisions eliminates some of the guesswork. However, the foreign exchange market (FOREX) is always unpredictable. Even the most skilled analysts sometimes make errors in judgment. Or, the market takes a turn so unexpected that analysts and traders are taken by surprise. Generally speaking, however, trading signals tend to produce more profits than losses.

"Trading signals" are simply advice and recommendations on buying or selling on FOREX. They are delivered electronically to traders when they open an account with a trading signal company. These signals are based on algorithms developed by experts. The algorithms analyze an individual trader's profile and criteria. They compare these against the current market status and prices. They then make buy and sell recommendations based on this data. The subscriber receives e-mail notifications outlining these recommendations.

Each buy and sell signal consists of two price data. They are "take profit" and "stop loss." A "take profit" indicates that the price of a currency is trading higher than it was at the time an order was placed. Using the euro as an example, a trader may see an upward swing in the price. The higher it rises, the more it will be traded. The investor decides his target price and places the order. When the euro reaches the "take profit" level, the profit is automatically transferred to his account.

A "stop loss" is based on a trader's own criteria for minimizing the risk of loss. The trader pre-sets this target based on his own comfort level. It is an order given to a broker to buy or sell a stock when it reaches a particular price. The "stop loss" is the trader's hedge. The investor's euros will be sold when their value falls below the price at the time of order.

There are several advantages to using trading signal subscription services:

* It takes much of the guesswork out of trading on FOREX. It's like having a panel of experts working for you. Trading signal services relies on data and market analysis gathered by those who know FOREX. Financial professionals, mathematicians and computer programmers contribute to the development of the software. The algorithms make determinations based on this information plus the trader's criteria and the current market status. The result is a trading signal delivery system tailor-made for each individual trader.

* It's possible to make multiple trades simultaneously. A lone trader cannot be tied to a computer screen all day long watching the market. The market also changes quickly and frequently. What was true of a currency's value in the morning may be old news by noon. Instead, the investor can watch for his trading signals as they flow in. He can make multiple trades and be assured that his criteria are followed.

* You can "try before you buy." It can be daunting to place money on a system that you've never used before. That's why most trading signal subscription services recommend demo or practice accounts provided by FOREX brokers. Traders are given virtual credit. The investor can set his criteria and then play the market virtually. It usually takes only a few weeks to understand the signals. The trader can gauge his virtual success and decide whether a subscription would be worthwhile. People who use practice accounts typically find the experience educational, insightful and valuable.

There are numerous trading signal subscription services to choose from. Most range in price from $50 to $100 per month. Most offer the same basic services. Packages vary slightly from company to company. To name a few, Forex Trend System and Forex Winning Signals are well known subscription services with trial membership. Comparison shopping and trying demo accounts from several services can help you choose.

Kote Dylan is a beginner of FOREX trader. He has traded the market with a demo account. For those who are new to FOREX, it is recommended to visit Forex Trading System Product Reviews and find out which trading software, tutorial or trading signal subscription service fits your need and budget.

Reuters - Treasury Secretary Henry Paulson said in an interview with U.S. radio broadast on Monday that a plan to take control of Freddie Mac and Fannie Mae had been structured in a way to protect U.S. taxpayers.

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Forex Currency Trading Systems - The Fibs Ain't No Lie - A Systems Approach to Trading the Forex

When it comes to trading the Forex having a trading system is the number one key to success. Making currency trades as "mechanical" as possible is the only way to sanely trade a market where the traders fear and greed are always in play.

This is where a trading system shines. Having a system that says when "A" happens you automatically execute trade "B." This kind of system has a great effect at removing much of our emotional trading.

How The Systems Work

As you probably know, Forex trading is based on the relationship of one currency to another - called pairs. And these pairs are used to create a trade. For instance you believe that the Euro is due to rise against the Dollar - or said another way - you believe the Euro is strong and the US Dollar is weak. Based on this assumption you would expect to see the Euro rise in value over the dollar and if it did you would profit.

So the pair you would be trading is the EUR/USD pair where the first currency listed, in this case the Euro is called the base currency. The second, in this case the US Dollar, is called the counter or quote currency. Each pair is quoted with a single number that expresses the relationship between the pairs. So if a quote of 1.4525 were quoted that would mean that it would take 1.4525 Dollars to exchange for a single Euro.

The Fibs

Fibonacci, often called the fibs, are a method of gaining some measure of predictive pricing in the Forex markets. They are based on the famed number sequence developed by a mathematician named, you guessed it, Fibonacci. The sequence that he developed is a sum where each of the two preceding numbers are added to form the next in the sequence. So a sequence starting from the number 1 would look like 1,1,2,3,5,8...and so on.

The Forex is especially sensitive to the fibs. If you spend any time with your currency charts you will notice how prices turn at or near Fibonacci numbers.

Now of course then numbers are not as neat and clean as 1,1,2,3,5 etc. In the currencies they look more like. .236, .50, .382, .618, etc., Using this type of number sequence you will find that you can use the Fibs as a price point to enter or exit a trading position. They offer a seasoned trader a certain measure of predictive capability.

They can be used in you trading system as the response to other market signals so if you get a market signal that tells you to enter the market long the Euro, then your mechanical response would be to wait until the prices broke through the next Fibonacci resistance line and then enter your position. Waiting for this type of movement would help prove that the price was on the rise.

Of course this is assuming that you expect the price of the Euro to go up, and that is not the only way the market could move, but this is the beauty of the Forex, you can trade the market up or down. It lets you make money in both directions.

For more Forex currency trading systems visit http://ForexTradingRobot.info a site dedicated to trading systems for seasoned traders and beginners alike.

Reuters - Treasury Secretary Henry Paulson said in an interview with U.S. radio broadast on Monday that a plan to take control of Freddie Mac and Fannie Mae had been structured in a way to protect U.S. taxpayers.

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