DailyFX+ forex trading signals have had a reasonably successful week of trade, but sharp countertrend moves in key currencies clearly hurt the accuracy of our momentum-based trading systems. The sheer unpredictability of recent price action has clearly put our trading signals to the test, and we expect conditions to remain challenging through the foreseeable future. We all the same expect that our momentum and breakout-based currency trading strategies will continue to provide good risk-adjusted forecasts. A sharp drop in volatility expectations tells us that currency markets may slow down through the near term, but we are reminded that market conditions can deteriorate with little warning.
This article is from: www.dailyfx.com
Sunday, June 21, 2009
Glossary of FOREX terms
American-style option An option contract that may be exercised at any time before it expires.
Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer,' 'ask price,' or 'ask rate.'
Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.
Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate.'
Bid/Ask Spread The point difference between the bid and ask (offer) price.
Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.
Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.
Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.
Currency pair The two currencies that make up a foreign exchange rate. For example, USD/JPY is a currency pair.
Dealer A firm in the business of acting as a counterparty to foreign currency transactions.
Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.
European-style option An option contract that can be exercised only on or near its expiration date.
Expiration This is the last day on which an option may either be exercised or offset.
Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be usedto refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.
Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.
Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing.
Margin See Security Deposit.
Offer See ask.
Open position Any transaction that has not been closed out by a corresponding opposite transaction.
Pip The smallest unit of trading in a foreign currency price.
Premium The price an option buyer pays for the option, not including commissions.
Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.
Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.
Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Security deposit The amount of money needed to open or maintain a position. Also known as 'margin.'
Settlement The actual delivery of currencies made on the maturity date of a trade.
Spot market A market of immediate delivery of and payment for the product, in this case, currency.
Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.
Spread The point or pip difference between the ask and bid price of a currency pair.
Sterling Another term for British currency, the pound.
Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price.
Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer,' 'ask price,' or 'ask rate.'
Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.
Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate.'
Bid/Ask Spread The point difference between the bid and ask (offer) price.
Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.
Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.
Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.
Currency pair The two currencies that make up a foreign exchange rate. For example, USD/JPY is a currency pair.
Dealer A firm in the business of acting as a counterparty to foreign currency transactions.
Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.
European-style option An option contract that can be exercised only on or near its expiration date.
Expiration This is the last day on which an option may either be exercised or offset.
Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be usedto refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.
Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.
Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing.
Margin See Security Deposit.
Offer See ask.
Open position Any transaction that has not been closed out by a corresponding opposite transaction.
Pip The smallest unit of trading in a foreign currency price.
Premium The price an option buyer pays for the option, not including commissions.
Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.
Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.
Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Security deposit The amount of money needed to open or maintain a position. Also known as 'margin.'
Settlement The actual delivery of currencies made on the maturity date of a trade.
Spot market A market of immediate delivery of and payment for the product, in this case, currency.
Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.
Spread The point or pip difference between the ask and bid price of a currency pair.
Sterling Another term for British currency, the pound.
Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price.
Bold 2009 Prediction for You
Here's my bold prediction for you in 2009!
You will break your trading resolutions by the end of February.
True, statistics cover populations and not individual traders. The fact is, its traders who are outside of th enorm and trade with focused discipline that really achieve their financial goals. When is now the time to re-focus with discipline and dedication and really commit yourself to your trading plan?
Today is January 15, 2009 and February is just around the corner.
Let this be your wake-up call!
Be honest with yourself and focus with the discipline of a seasoned trader on staying true to your trading plan or risk becoming a statistic!
Happy "Disciplined" Trading!!
You will break your trading resolutions by the end of February.
- You will abandon your trading plan
- You will fall into the same destructive trading patterns you resolved to change
- Your account will earn the same or less than in 2008
True, statistics cover populations and not individual traders. The fact is, its traders who are outside of th enorm and trade with focused discipline that really achieve their financial goals. When is now the time to re-focus with discipline and dedication and really commit yourself to your trading plan?
Today is January 15, 2009 and February is just around the corner.
Let this be your wake-up call!
Be honest with yourself and focus with the discipline of a seasoned trader on staying true to your trading plan or risk becoming a statistic!
Happy "Disciplined" Trading!!
Trust Yourself
When you turn on the TV (especially mainstream media) you are inundated with news of the demise of the dollar. Business news, national news and even your local news channels are leading into events with reports of the dollar and the economy. Analysts are featured and opinions are smattered across the airwaves in an attempt to provide an oracle response to current economic events.
Beware the source and follow your system.
In these volatile times it is easy to get caught up in the hype provide by all the news media and analyst. It is natural to want to look for guidance. Remember to trust your system and more important trust yourself. You, after all, are the single largest determinant of your success.
Your approach should remain consistent, almost impervious to the events occurring because you follow your plan with discipline and ruthless detail to executing at optimum performance.
Be disciplined and follow your plan. If market conditions don’t suite your style – sit this one out until conditions provide your with your personal edge!
Happy Trading!!
Beware the source and follow your system.
In these volatile times it is easy to get caught up in the hype provide by all the news media and analyst. It is natural to want to look for guidance. Remember to trust your system and more important trust yourself. You, after all, are the single largest determinant of your success.
Your approach should remain consistent, almost impervious to the events occurring because you follow your plan with discipline and ruthless detail to executing at optimum performance.
Be disciplined and follow your plan. If market conditions don’t suite your style – sit this one out until conditions provide your with your personal edge!
Happy Trading!!
Do you have what it takes to become a successful Forex Trader?
Forex trading, or any trading for that matter, is an occupation that requires experience and the accumulation of proficiency not unlike any other highly skilled profession. Whether you are a leading executive at a major publically traded company, a professional golfer or trading from your kitchen table, there are 5 key ingredients that one must possess in order to become successful.
1. You must be Passionate about what you do.
As Forex traders we all face one unique set of circumstances that does not exist in any other profession. We get rewarded for when we succeed and equally punished when we don’t! Could you image a corporate worker one quarter receiving a significant accomplishment bonus and the next quarter actually getting money taken from their paycheck for missing performance targets? Not on your life!
We do as Forex traders and that is why passion for what you do will carry you through the tough times that are part of your trading business. Asked yourself why you trade currencies and would you still do it if Forex were not potentially lucrative? Your answers will be quite revealing. You’ve got to feel your passion for trading!
2. You have to Apply Yourself and work hard at it.
I talk to so many people that enter into Forex trading with the aspiration of getting rich quick. Without putting the time and energy into really getting good at trading I see them jump from strategy to strategy looking for the goose that will lay the golden egg and eventually quitting while blaming everything else, except the true cause.
I got news for you – you are the goose and your Forex education is the golden egg. The magic has always resided with the magician and not some strategy. Work hard at trading and the rewards will eventually come your way. Remember what Tiger Woods said, “Funny, the harder I work the luckier I get.” Apply yourself as a trader and it will be no accident when your account begins to blossom.
3. You must Focus to really get good at what you do.
Now here is the hurdle most Forex traders struggle to get over. You have the passion and you are applying yourself to your trade, now focus and really get good at just at what you are doing. Be the expert to the experts at just that one thing. Become the master of a strategy or risk management methodologies. Really focus on getting good at it.
Stop jumping around or getting pulled from the last “latest and greatest” into the next “latest and greatest” and focus on one aspect of Forex trading and know it inside out. Know it strengths and weakness. Set your sights on becoming expert on just one aspect of trading and watch it spill over in all other aspects for your currency trading. This is the time to fail forward fast, use every setback as a learning opportunity that will propel you 3-steps ahead!
4. You must Push Yourself beyond the point everyone else might have quite.
In Forex Trading this is simple. Assume there is someone on the other side of your trade that is pushing themselves and sharpening their edge. To be successful you must you must do the same thing. Now is the time to examine your mental edge. Do you know the single most critical factor in any currency trade? It is you, the trader! Sharpening you mental edge is the most difficult aspect of trading, but also the most rewarding.
Start with your Forex education and gain the self-awareness necessary to maximize your strengths and suppress your weaknesses. Any expert will tell you that trading is 80% mental. It’s time to sharpen your trading to the razor’s edge and you do this through Forex education. A constant and never ending process that will become the cornerstone of your Forex experience.
5. You must, without wavering, be Determined and Persist to your objective.
You will fail. I can state that emphatically. However, you will not be defeated unless you allow your failures to control your trading. It is the old adage; failure is not falling of your horse, failure is refusing to get back on. Your success depends on your ability to dismiss the criticism, rejection, self-doubt and pressures associated with Forex trading.
Defining what is a winning trade, losing trade and bad trade will go a long way into developing you as a successful trader. Without the determination and persistence in all aspects of your trading life, obstacle will definitely appear closer and larger than they actually are.
Take a moment and assess yourself and your trading. Do you have the key elements to succeed? Which areas are presents development opportunities? When conducting a self-evaluation it is critical to be totally upfront and honest with yourself. After all, you will only be dishonest with yourself. One of the most interesting observations you can make is that all key success factors are interwoven. One factor supports the other. This is why your Forex education is a continuous journey of forex strategy, money management and self-mastery. Set these factors as your Forex education goals and take your currency trading to new heights.
Happy Trading!!
1. You must be Passionate about what you do.
As Forex traders we all face one unique set of circumstances that does not exist in any other profession. We get rewarded for when we succeed and equally punished when we don’t! Could you image a corporate worker one quarter receiving a significant accomplishment bonus and the next quarter actually getting money taken from their paycheck for missing performance targets? Not on your life!
We do as Forex traders and that is why passion for what you do will carry you through the tough times that are part of your trading business. Asked yourself why you trade currencies and would you still do it if Forex were not potentially lucrative? Your answers will be quite revealing. You’ve got to feel your passion for trading!
2. You have to Apply Yourself and work hard at it.
I talk to so many people that enter into Forex trading with the aspiration of getting rich quick. Without putting the time and energy into really getting good at trading I see them jump from strategy to strategy looking for the goose that will lay the golden egg and eventually quitting while blaming everything else, except the true cause.
I got news for you – you are the goose and your Forex education is the golden egg. The magic has always resided with the magician and not some strategy. Work hard at trading and the rewards will eventually come your way. Remember what Tiger Woods said, “Funny, the harder I work the luckier I get.” Apply yourself as a trader and it will be no accident when your account begins to blossom.
3. You must Focus to really get good at what you do.
Now here is the hurdle most Forex traders struggle to get over. You have the passion and you are applying yourself to your trade, now focus and really get good at just at what you are doing. Be the expert to the experts at just that one thing. Become the master of a strategy or risk management methodologies. Really focus on getting good at it.
Stop jumping around or getting pulled from the last “latest and greatest” into the next “latest and greatest” and focus on one aspect of Forex trading and know it inside out. Know it strengths and weakness. Set your sights on becoming expert on just one aspect of trading and watch it spill over in all other aspects for your currency trading. This is the time to fail forward fast, use every setback as a learning opportunity that will propel you 3-steps ahead!
4. You must Push Yourself beyond the point everyone else might have quite.
In Forex Trading this is simple. Assume there is someone on the other side of your trade that is pushing themselves and sharpening their edge. To be successful you must you must do the same thing. Now is the time to examine your mental edge. Do you know the single most critical factor in any currency trade? It is you, the trader! Sharpening you mental edge is the most difficult aspect of trading, but also the most rewarding.
Start with your Forex education and gain the self-awareness necessary to maximize your strengths and suppress your weaknesses. Any expert will tell you that trading is 80% mental. It’s time to sharpen your trading to the razor’s edge and you do this through Forex education. A constant and never ending process that will become the cornerstone of your Forex experience.
5. You must, without wavering, be Determined and Persist to your objective.
You will fail. I can state that emphatically. However, you will not be defeated unless you allow your failures to control your trading. It is the old adage; failure is not falling of your horse, failure is refusing to get back on. Your success depends on your ability to dismiss the criticism, rejection, self-doubt and pressures associated with Forex trading.
Defining what is a winning trade, losing trade and bad trade will go a long way into developing you as a successful trader. Without the determination and persistence in all aspects of your trading life, obstacle will definitely appear closer and larger than they actually are.
Take a moment and assess yourself and your trading. Do you have the key elements to succeed? Which areas are presents development opportunities? When conducting a self-evaluation it is critical to be totally upfront and honest with yourself. After all, you will only be dishonest with yourself. One of the most interesting observations you can make is that all key success factors are interwoven. One factor supports the other. This is why your Forex education is a continuous journey of forex strategy, money management and self-mastery. Set these factors as your Forex education goals and take your currency trading to new heights.
Happy Trading!!
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