FACTORS AFFECTING FOREIGN EXCHANGE RATES

Foreign Exchange being a commodity likes any other commodities the exchange rates tend to fluctuate from time to time. There are various factors that cause the fluctuation in the rates of exchange. These factors can be divided into several following groups. These groups can affect the exchange rates on a short term as well as long-term basis.

1. Fundamental Factors:

The fundamental factors include all such events that affect the basic economic and fiscal policies of the concerned government. These factors normally affect the long-term exchange rates of any currency. On short-term basis on many occasions, these factors are found to be rather inactive unless the market attention has turned to fundamentals. However, in the long run exchange rates of all the currencies are linked to fundamental causes. The fundamental factors are basic economic policies followed by the government in relation to inflation, balance of payment position, unemployment, capacity utilization, trends in import and export, etc. Normally, other things remaining constant the currencies of the countries that follow the sound economic policies will always be stronger. Similar for the countries which are having balance of payment surplus, the exchange rate will always be favourable. Conversely, for countries facing balance of payment deficit, the exchange rate will be adverse. Continuous and ever growing deficit in balance of payment indicates over valuation of the currency concerned and the dis-equilibrium created can be remedied through devaluation.

2. Political and Psychological factors:

Political and psychological factors are believed to have an influence on exchange rates. Many currencies have a tradition of behaving in a particular way for e.g. Swiss franc as a refuge currency. The US Dollar is also considered a safer haven currency whenever there is a political crisis anywhere in the world.

3. Technical Factors:

The various technical factors that affect exchange rates can be mentioned as under:

(a) Capital Movement: The phenomenon of capital movement affecting the exchange rate has a very recent origin. Huge surplus of petroleum exporting countries due to sudden spurt in the oil prices could not be utilized by these countries for home consumption entirely and needed to be invested elsewhere productively. Movement of these petro dollars, started affecting the exchange rates of various currencies. Capital tended to move from lower yielding to higher yielding currencies and as a result the exchange rates moved.

(b) Relative Inflation Rates: It was generally believed until recently that one prima-facie direction for exchange rates to move was in the direction adjusted to compensate the relative inflation rates. For instance, if a currency is already overvalued, i.e., stronger than what is warranted by relative inflation rates, depreciation sufficient enough to correct that position can be expected and vice versa. It is necessary to note that exchange rate is a relative price and hence the market weighs all the relevant factors in a relative term, (in relation to the counterpart countries). The underlying reasoning behind this conviction was that a relatively high rate of inflation reduces a country's competitiveness in international markets and weakens its ability to sell in foreign markets. This will weaken the expected demand for foreign currency (increase in supply of domestic currency and decrease in supply of foreign currency). But during 1981-85 period exchange rates of major currencies did not confirm the direction of relative inflation rates. The rise of the dollar persistently for such a long period discredited this principle.

(c) Exchange rate policy and intervention: Exchange rates are also influenced in no small measure by expectation of changes in regulation relating to exchange markets and official intervention. Official intervention can smoothen an otherwise disorderly market but it is also the experience that if the authorities attempt half-heartedly to counter the market sentiments through intervention in the market, ultimately more steep and sudden exchange rate swings can occur. In the second quarter of 1985 the movement of exchange rates of major currencies reflected the change in the US policy in favour of co-ordinated exchange market intervention as a measure to bring down the value of dollar.

(d) Interest Rates: An important factor for movements in exchange rates in recent years has been difference in interest rates; i.e. interest differential between major countries. In this respect the growing integration of the financial markets of major currencies, the revolution in telecommunication facilities, the growth of specialized asset managing agencies, the deregulation of financial markets by major countries, the emergence of foreign exchange trading etc. having accelerated the potential for exchange rates volatility.

4. Speculation

Speculation or the anticipation of the market participants many a times is the prime reason for exchange rate movements. The total foreign exchange turnover worldwide is many a times the actual goods and services related turnover indicating the grip of speculators over the market. Those speculators anticipate the events even before the actual data is out and position themselves accordingly in order to take advantage when the actual data confirms the anticipations. The initial positioning and final profit taking make exchange rates volatile. These speculators many a times concentrate only on one factor affecting the exchange rate and as a result the market psychology tends to concentrate only on that factor neglecting all other factors that have equal bearing on the exchange rate movement. Under these circumstances even when all other factors may indicate negative impact on the exchange rate of the currency if the one factor that the market is concentrating comes out positive the currency strengthens.

5. Others

The turnover of the market is not entirely trade related and hence the funds placed at the disposal of foreign exchange dealers by various banks, the amount which the dealers can raise in various ways, banks' attitude towards keeping open position during the course of a day, at the end of the day, on the eve of weekends and holidays, window dressing operations as at the end of the half year to year, end of the month considerations to cover operations for the returns that the banks have to submit the central monetary authorities etc. - all affect the exchange rate movement of the currencies.

(b) Demand and supply: The demand for a foreign currency to pay for imports, etc, and the supply of a foreign currency by way of receipts on account of exports, etc. vary at various rates of exchange. The rate which equilibrates the demand and supply should be the rate of exchange.

(c) Purchasing power parity: This theory maintains that free international trade equalises prices of tradable goods in different countries. So, a product will sell for the same price in common currency in all countries. Different rates of changes in prices i.e. different inflation rates must eventually induce off-setting changes in exchange rates in order to restore approximate price equality. Mathematically, the rate (or the expected rate) of change of the exchange rate should equal the rate (or the expected rate) of change of the inflation rate. Evidence shows that there do exist disparities between changes in observed exchange rates and those in inflation rates in the short-run. But, the theory should hold in the long-run.

(d) Interest rate: Interest rates are often highly related with inflation rates, and interest rate differentials between countries may be the result of inflation rate differentials. Therefore, interest rate differentials are also used as an important determinant of exchange rates.

Interest rates in a country are determined, under free market conditions, by supply of and demand for money. Funds flow across countries in search of opportunities for higher returns. These flows between any two countries cause opposite changes in demand of and supply for their respective currencies. According to the theory of International Fisher Effect, the exchange rate of a currency with higher interest rate will depreciate to offset the interest rate advantage achieved by foreign investments till an equilibrium is achieved.

Investments abroad have to be converted into home currency on maturity. Exchange rate may have changed in the meanwhile. An investor may make a forward sale of funds to be rapatriated on maturity. The process of investing abroad for higher returns and making a forward sale of the proceeds is known as covered interest arbitrage. An investment abroad will be undertaken if the return from interest rate differential exceeds the forward margin (difference between the forward and spot exchange rates). In general terms, the forward rate of the foreign currency will contain a discount (premium) if its interest rate is higher (lower) that that of the home currency. Covered interest arbitrages will go on fill the market forces realign the forward margins with the interest rate differentials.

(e) Relative Income Levels: If income level in a country raises and that in her trading partner remains unchanged, the demand by the former for the goods of the later may increase. That is, the former would need more units of currency of the later, while their supply remains unchanged. This would put upward pressure on the exchange rate of the later. There can be different configurations of the relative income levels and of corresponding exchange rates.

(f) Market expectations: Like other financial markets, foreign exchange markets react to any news that may have an effect on exchange rates in future. Expected developments regarding polity, economy etc. of a country are used to figure out how exchange rates would move. These peeps into future impinge on the present as well as the future spot rates.

GDP Revision Doesn’t Happen — EUR/USD Gains

EUR/USD reacted with a small drop immediately after the GDP release today but then retraced and is now trading with a considerable daily gain. The Q2 2009 GDP change value was expected to be negatively revised today but since the revision didn’t happen, traders react on a positive signal for the U.S. (and global) economy. EUR/USD is currently trading near 1.4269.
U.S. real GDP decreased at an annual rate of 1.0% in the second quarter of 2009 according the latest estimate report. Previous estimate report also showed a -1.0% change. Traders expected a revision of the estimate to a drop by 1.5%. The GDP fell by 6.4% in the first quarter of 2009.
Initial jobless claims declined to 570k last week, down from 580k a week before (revised from 576k). A decline to 565k was expected from this report.
Tags: GDP, initial jobless claimsNo Comments »
EUR/USD Down on Good U.S. NewsAugust 26th, 2009
After posting a clear doji candlestick yesterday, EUR/USD is now falling down despite the good fundamental reports from U.S. accompanied by the stock market growth there today. It’s a rather uncommon case for the dollar to gain with the good macroeconomic reports, but it looks like the traders are interpreting these positive factors as the signals that the U.S. interest rate will be raised soon. EUR/USD is now trading near 1.4238.
Durable goods orders increased by 4.9% in July after falling by 1.3% in June. Median forecasts by the market analysts pointed at 3% gain for the report.
Seasonally adjusted annual rate of the new home sales in U.S. went up from 395k to 433k in July. A further drop to 390k was expected by the traders.
Crude oil inventories increased by 0.2 million barrels last week, which is quite a insignificant change. Total motor gasoline inventories dropped by 0.7 million barrels during the same time.

Consumer Confidence Above 50 Boosts EUR/USD Up

The dollar is currently losing against the euro on the Forex arena after falling slightly yesterday. The European currency gains from the improved outlook for the global economy on positive consumer confidence and home price index in U.S. EUR/USD currency pair is now trading near 1.4324.
S&P/Case-Shiller home price index for 20 U.S. states reached a seasonally adjusted rate of 141.31 in June — that’s a 15.45% drop compared to June 2008 but at the same time it’s the first gain in the index in more than two years. This indicator was expected to be reported at -16.4% year-to-year change.
Richmond Fed manufacturing activity index for August was reported at the same unchanged level as in July — 14, while it was expected to grow up to 16.
Consumer confidence went up from 47.4 in July to 54.1 in August, signaling generally positive expectations of the consumers in the United States. A decline to 45 was forecasted by the economic analysts.
Tags: consumer confidence, Richmond Fed manufacturing index, S&P/Case-Shiller home price indexNo Comments »
How Long Have You Been Trading Forex?August 24th, 2009
I had begun to trade Forex back in August 2005 when I first heard about the company (Marketiva) that offers free $5 bonus to start trading Forex with them. It was interesting for me to try and at that time free $5 sounded like a lot to me, so I’ve opened an account. Since then I’ve been losing and wining and I have also changed my broker a lot of times but Forex trading has been a great part of my life since my first opened position. I believe that experience is one of the greatest teachers in Forex and that new traders rarely can start to win consistently without years of real on-line trading. So, in this new poll I’d like to know how long have you been in Forex.
How long have you been trading Forex?
Just started.
Several weeks.
Up to 1 year.
More than a year.
2+ years.
3+ years.
4+ years.
5 years or more.

BMFN — Regulated Forex Broker

BMFN (Boston Merchant Financial) is a Forex broker with a rather strict regulation over it, because it’s registered with NFA, FINRA, PolyReg and Russian FFMS. It’s a MetaTrader broker, but it offers several other trading platform, one of which is Currenex — a rather advanced and powerful trading tool. BMFN is quite a new on-line broker but they are already becoming popular. Other highlights of this broker include:
Gold, oil, CFD and futures trading
No-interest accounts on request
Payments via WebMoney, credit cards and wire transfer
$100 minim account size, 0.01 lot minim position and 2 pip spread on EUR/USD
Tags: Currenex, Forex broker, gold, MetaTrader, oilNo Comments »
EUR/USD Floats Near Open After Small Rise in Jobless ClaimsAugust 20th, 2009
The euro is trading slightly below its open level against the greenback after the initial jobless claims report showed a small rise today. EUR/USD is currently floating near 1.4219 after opening at 1.4233.
Initial jobless claims went up from 561k to 576k during the last week, while they were expected to go down to 550k.
Philadelphia Fed index increased from -7.5 to 4.2 in August. A rise to -2 was expected by the market analysts. Positive value of the indicator suggests that the business conditions in the region are improving.
Leading economic indicators index rose by 0.6% in United States in July. That wasn’t much of a surprise to the Forex traders as this indicator is based on already known values.
Tags: initial jobless claims, leading indicators, Philadelphia FedNo Comments »

Forex Justice - The Fair Forex Trading Forum

Don’t Get Eaten Alive

Foreign exchange currency trading is a risky business with much to lose and much to gain. As a professional forex broker and personal trader, I have realized the fast profits this market can reap, while witnessing the dog-eat-dog nature of the beast, in which buyers lose their shirts every minute.

Whether you are a forex trader or just curious about forex currency trading, you owe it to yourself to separate the wheat from the chafe. The Internet is awash in foreign exchange currency trading websites whose sole existences are dependent upon ignorant forex investors. From get-rich-quick forex software schemes to free forex training, forex educational seminars, free forex signals, forex forums, and more, the fraudulence that surrounds the fx trading market is frightening.

Forex trading is very different from the U.S. stock market. The major differences include:

• Forex has no central exchange
• Forex trading can be done around the clock
• Forex has no overseeing regulatory commission, such as the SEC

The forex market is a wild, open arena without rules, laws, or a governing body. No one cares if your money is taken. No one will lose any sleep if you’ve been lied to. There are no repercussions if you’re treated unfairly. Investors trade at their own risk and have no legal recourse to enforce justice.

I know. I’ve been there. The scammers have burned me more than once. In an attempt to further my own knowledge, I fell for the magical software sales pitches and followed the crooked paths to the stolen treasures, only to be let down ad nauseam.

I served my time as a forex broker, which was an eye-opening experience. I heard and saw the manipulation of client profits that was business as usual. It quickly shifted my interest in trading and brokering forex to that of protecting forex traders. I redirected my efforts from studying daily forex signals to researching forex websites. I was determined to devise a resource on which forex investors could rely for honest, fair information exchange.

Know the Scammers

The best advice I can give is don’t trust anyone whose reputation you cannot validate and whose association is not legitimately tied to the actual forex market. This is especially important when selecting your forex broker.

The allure of trading forex can be overwhelming. It attracts many eager fx traders willing to gamble away their life’s earnings. Unscrupulous forex brokers, signal providers, fx educators, software peddlers, and forex frauds are waiting, with baited breath, to take your money and turn it into a profit for themselves – all at your expense!

The good news is that many forex professionals are honest and reliable, capable of assisting the most inexperienced fx trader succeed. Following forex signals and making profitable currency trades happens 24-hours a day, all around the world. The philosophy behind Forex Justice is to even out the playing field so everyone has a fair chance at winning.

Straight Shooting, Unedited Forex Reviews

Many Forex review websites are thinly veiled as informative, unbiased forex opinion forums. In actuality, they’re doing little more than championing their own causes. These supposedly neutral pages give the broker, forex trader, and interested parties a skewed view of reality.

Alternatively, Forex Justice is a revolutionary idea in forex trading. An open, two-way patented forex exchange system, reviews are considered from both the broker’s perspective and the trader’s. This unconventional method of publishing truthful forex stories to the investor and anyone else interested in forex has proven beneficial in reducing the number of forex scam websites and helped traders establish ethical business relationships.

This valuable tool, Forex Justice, doesn’t allow peer bashing yet encourages honest communication. Content is always reviewed but never edited so you get straight facts from real experiences. Learn about the way forex trades are conducted and quickly size up the scam artists. The more reviews we receive, the clearer the picture will become.

How the Two-Way Forum Works

Participants, including forex traders and others who have valuable information to contribute, submit reviews for consideration. Once approved, reviews are posted almost immediately. Vendors and professionals reply with comments in the aggregate to the reviews, addressing specific points or with general answers. The communication is limited to one reply per vendor or professional with a limitation on length. This encourages a fair, open forum, without back-and-forth bickering and unnecessary criticism.

Sign-up now and join the Forex Justice Forum. Only with the help of real-life forex scenarios and two-way communication, can we turn forex trading into an ethical, trustworthy investment option.

My New Forex E-book

I didn’t really write an e-book but most of the e-books I’ve seen out there should be combined into a big pile and burned. If I were to write a forex e-book, it would probably be less than a page long. Here is my e-book replacement.

If you’re a beginning trader, then go out an invest in a currency related book on technical and fundamental analysis. There are tons out there that cover both and they’re a lot cheaper and easier to read than an e-book. If the book doesn’t go in depth enough on a particular subject you’re interested in, do a Google search and you’ll find all the information you will ever need.

After getting some book smarts on the subject of forex trading, jump right in and start trading. Trade a demo or put a small amount of money that you can afford to lose at a broker that offers variable sized lots. Being able to trade in variable sized lots or micro-lots is critical. If you don’t have the ability to do this, most likely you’ll be overleveraging which will most likely lead to ruin. Try different strategies, either ones you’ve picked up on forex forums or ones you’ve created on your own. Experimentation is key and success will only come with experience. Consistent profitability isn’t going to happen overnight. The goal is to stay in the game for as long as you can without getting discouraged. I hate to sound like a walking cliche but there will be many bumps in the road. You’ll have to prepare yourself to take the punches and keep getting up. Take a break when you feel overwhelmed by the market with the intention of jumping back in when you feel like you’re ready.

My brother is a pilot for a major US airline so I know how many hours he had to have flying an airplane before he was considered proficient enough to fly a large passenger jet. Why would trading be any different? Get those trading hours. Even then, there is no guarantee that you will be successful but you’ll never know if you don’t get the experience.

If you trade long enough, you’ll start to see consistencies in the forex market. Your style of trading will also appear even if you weren’t trying to find it. You’ll also start creating trading systems that match your trading style.

With this experience and increased ability, I’d like to think the rest is this simple.

1. Size your position. Keep your risk low on each and every trade. I like the risk per trade to be less than 2% of my total account balance. Use my position size calculator at http://www.forexcalc.com if you don’t know how to calculate it.
2. Execute your trading system(s) knowing their criteria for trade entry and exit.
3. Tune and tweak your trading system if needed. Continue to search for additional trading systems that you feel may give you an edge in the market.
4. Repeat step #1.

Maybe I have a case of trader muscles but I don’t think it should be much more complicated than this. There may be a time when you decide to look into carry trading or more exotic trading strategies which complicate things a bit more but even then, I feel the basic principles still apply.

Money Management Checklist

UPDATE (January 2008) I’ve created an AJAX forex position size calculator that performs the calculations for you. You can find it at http://www.forexcalc.com

Here is a complete checklist to determine the most important aspect of money management, position sizing.

1. What is my account balance? $4234.58

2. What percentage of my account balance will I be risking? 1.0%

3. What is my stop loss on this particular trade? 50 pips

4. What currency pair am I trading? GBP/USD

5. How much is a pip worth on a 10K (mini) account? $1

6. CALCULATION What is my dollar risk amount? (Account Balance x Percentage Risk) $42.35

7. CALCULATION What is my position size (Dollar Risk Amount x 10000) ÷ (Stop Loss x Pip Worth)

NOTES

1. None.
2. It’s up to you to determine what percentage of your account balance that you want to risk. I’ve heard traders risking from 1.0%-5.0% per trade. I risk no more than 1.0%.
3. It’s important to determine what your stop loss will be before continuing with the checklist.
4. None.
5. This is the hardest to determine by hand with the exception of currency pairs with the USD in the quote currency such as the GBP/USD, EUR/USD, and AUD/USD. These currency pairs always have a pip worth of $1 on a 10K (mini) account. For other currencies, it’s easiest to use a pip value calculator. Make sure you use the pip value from the "Lot 10,000" column.
   
6. This is easy. Take the account balance and multiply it by .01 (1.0%), .02 (2.0%), etc. to obtain your dollar risk amount.
7. This is the most important calculation. Do it right.
   

EXAMPLE #1 (Answer questions 1 - 7)

1. $4234.58
2. 1.0%
3. 50 pips
4. EUR/USD
5. $1
6. USING A CALCULATOR-> ($4234 x .01) = $42.35
7. USING A CALCULATOR-> ($42.35 x 10000) ÷ (50 x $1) = (423500) ÷ (50) = 8470 units
   

What you might be thinking… I can only trade a mini-lot which is 10,000 units. This is more than my calculated position size. This means that you are under-capitalized. You need more capital to trade mini-lots. Another option is to use a variable-lot size broker like Oanda where you can specify 8470 units. Another option is to risk a smaller percentage per trade (use 0.5%.)

EXAMPLE #2 (Answer questions 1 - 7)

1. $10582.26
2. 2.0%
3. 75 pips
4. USD/JPY
5. $0.8829
6. USING A CALCULATOR-> ($10582.26 x .02) = $211.65
7. USING A CALCULATOR-> ($211.65 x 10000) ÷ (75 x $0.8829) = (2116500) ÷ (66.22) = 31962 units

In this example, you could enter a trade in the USD/JPY with 3 mini-lots or 30,000 units. If you have a variable-lot size broker like Oanda, you can enter a trade with 31,962 units.

There may be a better or quicker formula for calculating position size. This method works but if you know of a more efficient way, let me know.

Popularity: 10%

ook My First Trade In Months

October 27, 2007

I took my first trade in months this past Thursday. I have been slowly trying to get back into the forex market by cautiously watching the GBP/USD. It's been a while since I followed any currency pair so I wanted to be sure that I watched the GBP/USD for a couple of days before taking any trade. I've decided to start referring to my profits/losses in terms of expectancy. Expectancy is "simply the mean or average R-multiple generated." (Source:http://www.iitm.com/sm-Expectancy.htm)

The "R" in R-multiple is short for risk. The best way to understand it is to either read the source above or continue reading. Let's take my first trade as an example. I knew my total dollar risk before entering the trade, that amount being $650.94. (yes, that exact) I exited half of my position when I had profited $329. I moved my stop to breakeven on the remaining position. Unfortunately I was stopped out on the rest giving me a total profit of $329. To figure out the R-multiple, you would take (profit / amount risked) which in this case was $329/$650.94 = .5R. Ideally, the higher the R in a profit situation, the better. For instance, a 2R multiple would be obtained in a 2:1 reward/risk trade and a 3R multiple in a 3:1 reward/risk trade. In a loss situation, a higher R is actually worse. Ideally, if you lose on a trade, the R-multiple should be 1R or less. If it's 1R, it simply means that you lost the amount you were expecting to risk. So in my above example, if I lost $650.94 on the entire trade, my R-multiple would have been 1R. Let's just say that I got stupid and decided to stay in the position and not honor my stop loss setting. Because of this stupidity, let's also say that I wound up losing $1301.88, twice as much as my initial risk. Calculating using (loss / amount risked) I would have an R-multiple of $1301.88/$650.94 = 2R.

So what does all of this mean? Well, I only have 1 trade to calculate my expectancy which would currently be .5R. I'll get more into calculating mean expectancy once I've compiled more trades. But having .5R isn't desirable because it basically means that I risked twice as much as the reward I obtained. This is exactly why I want to try to use R-multiple when I talk about my trades because even though I had a $329 profit on my first trade, it isn't as rosy as it may seem. The R-multiple was only a .5R and although it was profitable, if I trade this way in the long haul, I'll surely lose

What Am I Studying?

March 12, 2007

I have definitely been sidetracked for some time now, preoccupied with only particular GBP/USD forex trading systems. Due to this fact, I feel like I've disregarded other aspects of technical analysis that may one day turn out to be useful. This started about 6 months ago after my first full year of trading, where I found myself sitting in front of my computer staring at charts for what felt like forever. I don't know if it was burn-out or if I just felt like these other forms of technical analysis required discretion, something that I wasn't successful at. it could also have been that I was looking for instant gratification after months of hard-core learning.

I'm not sure where my trading will be next year or this year for that matter but I feel the need to start concentrating on some of these neglected areas. It's strange that I spend so much time optimizing and organizing this website but I don't translate this over to my forex trading and studies. I feel very disorganized and sometimes behind in what others have learned in an equal or shorter period of time. I've said this before but I'm going to try to put together a list of things that I want to study and learn more about. I want to continue with my GBP/USD trading systems but I also want supplement other things into the fray. Just off the top of my head are:

1. Ichimoku specifically on the USD/JPY. I'm still reading the new ichimoku book that was sent to me but I've always been interested in this indicator and I want to explore it further
2. Chart patterns
3. Money Management
4. Carry Trades
5. Divergence
6. Fibonacci

These are only a few but I think the key as I said previously is to get organized and try to create a learning schedule so that I can become more adept at forex technical analysis.

Popularity: 8%

Is Rob Booker Forex Training Any Good?

This is a question I receive often and unfortunately I can no longer give an honest answer which is the only answer that I ever want to give. This is due to the fact that I haven’t dedicated myself to Rob Booker’s training since 2006 making my experiences outdated. The good news is that over the coming months, I will be able to give you an honest opinion because I am in the initial phases of giving his tutelage another go. This is possible because he has no expiration date on his training. According to his training contract, "You have as long as you need. You never have to pay me anything again…."

At first glance, there have been many changes to his training. His chart school, which are Rob’s trade ideas for students in video format appear to be more interactive. He provides a web conferencing platform where any of his students can attend and ask questions via messenging or voice. Other basic course materials seem unchanged such as the course introduction, FX basics, backtesting, support and resistance, moving averages, and similar topics. These are really basic though and I don’t see any reason why these would ever change. The course materials are also for the totally inexperienced forex trader, someone who has really never explored Forex outside of this course.

His primary trading system which has many components to it is called the Arizona Rules. He was just developing this system back when I lost interest in his training so I haven’t really explored it. If anything, it seems like Rob’s attempt is to provide his students with a well tested and possibly profitable trading system while also providing a comprehensive trading plan and system that one can take knowledge from to develop their own forex trading system.

I’m just getting involved again so I cannot comment further at this time but keep checking back here in the upcoming days and weeks for more details on Rob Booker Training. You can also read my previous and new experiences at http://www.forexproject.com/category/rob-booker-training/.

Features

Trustee When a debenture issue is sold to the investing public, a trustee is appointed through a deed. The trustee is usually a bank or an insurance company or a reputable firm of attorneys. Entrusted with the role of protecting the interest of debenture holders, the trustee is responsible to ensure that the borrowing firm fulfils its contractual obligations.

Security Debentures are typically secured by a charge on the immovable properties, both present and future, of the company by way of an equitable mortgage, which is effected by deposit of the title deeds relating to mortgaged assets in favour of the trustees. Debentures not protected by any security are called unsecured or naked debentures.

Redemption Debentures are generally redeemable-perpetual debentures are very rare. The redemption takes place in a pre specified manner. Typically, it occurs between the 5th year and the 9th year. Companies are now required to create a debenture redemption reserve to facilitate timely redemption. A major requirement is that the company should create a Debenture Redemption Reserve equivalent to 50 per cent of the amount of debenture issue before debenture redemption commences.

Interest The interest payment on debentures is a fixed obligation, irrespective of the financial situation of the issuing firm. Typically payable semi-annually, it is a tax-deductible expense.

Right Debentures for Working Capital

Public limited companies can issue "rights" debentures to their share-holders with the object of augmenting the long-term resources of the company for working capital requirements. The key guidelines applicable to such debentures are as follows

• The amount of the debenture issue should not exceed (a) 20 percent of the gross current assets, loans and advances minus the long-term funds presently available for financing working capital, or (b) 20 per cent of the paid-up share capital, including preference capital and free reserves, whichever is the lower of the two.
  

• The debt: equity ratio, including the proposed debenture issue, should not exceed 1:1.

• The debentures shall first be offered to the existing Indian resident shareholders of the company on a pro rata basis.

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  Planning and control are inter-linked and consecutive steps for the successful implementation of any programme. Planning done for incurring capital expenditure is followed by control devices to assess the divergences between the expected and achieved...

• Planning of Capital Expenditure:

  Posted on Sunday May 10th, 2009 at 22:53

  Capital budgeting is concerned with activities ranging from planning the availability, allocation and control of expenditure or long-term as well as short-term investment funds.Planning of capital expenditure could be done to finance the capital expe...

• Foreign-Exchange Risk Management

  Posted on Sunday May 10th, 2009 at 22:47

  Foreign-Exchange Risk Management in the older NCR:Prior to 1991, NCR was organized differently than it is now on a geographic basis. However, it was still considered one of the world’s premier MNEs in terms of the amount of foreign to total revenue

Trade the News

In volatile or fast moving markets, such as news trading events, it is imperative to be completely focused and care about how much margin you have to support the fluctuations that may result against you and possibly "eat" your account. Certain news releases consistently move 30 to 50 pips and more in a predictable direction not in all cases. You only need to know the following strategies. First, news releases (Category I), which come directly from government agencies and other research departments that study and monitor economic trends, consistently move the market when released. You may exit the market before these news releases. The first category of releases consistently results in strong moves, be careful when activating the EA within these events so may result in peaks that can affect you margin as previously advised. These numbers can change from time to time as market trends shifts. Reports for USA Reports for UK Reports for Canada Dev. Category I Dev. Category I Dev Category I +/- 50k +/- 1.5B +/- 1.5 +/- 0.4% +/- 0.2% +/- 1.5% +/- 0.7% NonFarm Payrolls Trade Balance ISM Manuf. GDP CPI Durable Goods Retail Sales +/- 500M +/- 0.2% +/- 0.4% +/- 0.4% +/- 0.5% Trade balance CPI Retail sales GDP Ind. Production +/- 15k +/- 0.2% +/- 0.3% +/- 0.3% +/- 0.5 Labor Change CPI Retail Sales GDP Merch. Trade The second category is comprised of releases that can move the market and are good to watch. However, the like hood of a trade is lower than those releases in the first category. Category II – US Reports Category II – UK Reports Personal Income and Outlays FOMC announcement Michigan final consumer sentiment NAPM Chicago Philly fed survey Michigan Preliminary Consumer Sentiment FOMC Minutes Treasury International Capital (TIC) Nationwide house price index CIPS Services PMI Halifax House price Index MPC interest rate decision PPI RICS housing price index MPC minutes GFK Consumer confidence Use our news indicator to keep track of the news releases and the effect on the market, we suggest to be careful in having the EA running during events with high impact on the market, and we strongly suggest to have the enough margin to trade during such events or exit the market. Alternatively simply trade during low volatility market conditions. There are some trading pairs with low volatility. Furthermore, some USD pairs do not move a lot during Asia session. We will be mailing some pairs settings for our EA. Market Timing:

Forex Price Charts

Written by John Velvedere

Wednesday, 12 August 2009 15:09

Tags: currency trading | finance | forex | forex courses | forex videos | technical analysis There are two kinds of Forex traders- the traders who use fundamental analysis and the traders who use technical analysis. I prefer the technical analysis, which ignores fundamental factors. Technical analysis is applied to the price action of the market. By using technical analysis traders can make short-term forecasts, which are very difficult with fundamental analysis, more suitable to making long-term forecasts. Technical analysts use different technical studies and interpret them to predict market direction or to generate buy and sell signals. By using charts in Forex technical analysis we can predict price movements. Read More Add Comment (0) Hits: 109

FOREX Fundamental Analysis

Written by John Velvedere

Tuesday, 21 July 2009 13:33

Tags: forex | forex online | forex system | Forex Trading Most FOREX traders rely on analysis to make plan their trading strategy. This article will discuss fundamental analysis. The other common form of analysis is technical analysis. After reading this article you should have a better understanding of fundamental analysis and how to use it as part of your FOREX strategy. Political and economic changes are the basis of fundamental analysis. These can frequently affect currency prices. Traders that take advantage of fundamental analysis will gather their information from a variety of news sources. They are looking for information about unemployment forecasts, political ideologies, economic policies, inflation and growth rates. Read More Add Comment (0) Hits: 298

Forex Case Study: The Canadian Dollar

Written by John Velvedere

Foregin Exchange is one of the most popular investing markets, and with a proper understanding of the markets and factors influencing it it is possible to enjoy great success in terms of returns. A case study which highlights all of the areas and considerations when it comes to Forex investments is not hard to come by- in fact, recent years have shown that even countries which may be overlooked by traditional investors may provide the greatest opportunities when it comes to investment. A good example of the success that can be had in the foreign currency exchange is that set by the Canadian dollar. Most Americans pay little mind to Canada- it is the big country up North, most of the time it creates no problems and can be a compliant ally. Taking a nation and its economy for granted can be a huge mistake when it comes to foreign exchange, however.

Important Facts about Bollinger Bands PDF Print E-mail
Written by John Velvedere

Tags: forex | forex article | forex broker | forex education | forex trade | forex trader | Forex Trading | moving averages

Forex trading is nowadays one of the most looked after occupation for many persons of all ages around the world. This is due to its great advantages over other capital markets and its high profitability potential; among these advantages you will find that is extremely easy to access a trading platform from the best forex broker firms thanks to the internet; and also you will notice that Forex has a high liquidity along with a high leverage.
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FOREX: Exiting positions at a right time PDF Print E-mail
Written by John Velvedere
Sunday, 05 July 2009 14:54

Tags: forex | management | Money | strategy | trading

The presented article covers one of the most important (in my opinion) aspects of trading in general and FOREX trading in particular – managing of orders and positions. This includes choosing entry points, making decisions about exit points, stop-loss and take-profit of the trader. I hope this article will help new traders, who just began to work with FOREX, and also to experienced traders who trade regularly and regularly make or loose their money to the market.
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FOREX, A Trending Market PDF Print E-mail
Written by John Velvedere
Friday, 03 July 2009 08:34

Tags: forex | forex articles | forex broker | forex education | forex trade | forex trader | Forex Trading | moving averages

The Forex market is widely known by its high liquidity and high volume of transactions occurring during most of its long trading week. These characteristics highly contribute to make the Forex market a very trendy market with few trend-less periods during the whole trading period.

But what does this mean to the Forex trader? Mainly this trendy characteristic of the currency markets means that there will be plenty of opportunities for the trader to find profitable trades during the day.