The Greenback declines on concern US recession will worsen

After the Christmas holiday, the dollar continue weakening versus the euro on expectation the US recession will deepen as US housing and manufacturing reports this week may show  the US economy is shrinking and plunging further into recession. Also the greenback drop versus the yen in Asia forex market due to concerns that renewed conflict in the Middle East may disrupt supplies of Oil to the US.

However, liquidity is low as forex traders, who usually very active on in such geopolitical involvement have entered a long holiday on Christmas and the New Year eve. 

USDJPY is likely to continue testing positive trend but will face Resistance at the Dec. 15 reaction high of 91.98; a break through would aim 92.45, ahead of Dec. 8 reaction high of 93.92. First Support lies at Dec. 19 low of 88.40; ahead of the 13-year low of 87.11 reached on Dec. 17.

EURUSD continues the positive bias on higher geopolitical risk in the Middle East what might prompt Oil and other commodities’ prices up. The pair has advanced to 1.4286 now in European forex market up from 1.4062 earlier in Asia. Resistance is at the Dec. 19 high of 1.4310; ahead of 200-day moving average, coming in now at 1.4655. Support is at 1.3805, the 38.2% Fibonacci correction from the Oct. 28 low of 1.2328 to the Dec. 18 high of 1.4720; a breach would target 1.3525, the 50% correction level.

GBPUSD dropped versus the dollar and continue the down trend against the euro reaching another all times low at 0.9723 on speculation the UK economy will continue shrinking. A fall below 1.4465 would expose the downside to the Jan. 29, 2002 reaction low of 1.4039. Resistance is spotted at the Dec. 19 high of 1.5184; a break through would target an upside to the 55-day moving average, coming in now at 1.5471

Risk calculation for FOREX Trader

The most common reason for the quick failure of new forex traders is   “Overtrading”: Too many and too large positions are being executed which makes  the risk is rising very rapidly.

In the bottom of this  page you will find a link to download small free tool to calculate the risk in FOREX trades. It is a spreadsheet that is  using Microsoft Excel or the free OpenOffice  that you can open and use.

The operation is very simple. After entering personal parameters, such as the account size and the maximum risk you want to be the maximum size of a calculated trades. You can predict  your account performance in the loss case. If you have different sizes for your trading risk register, you will soon see what effect it has on your account.
Download Tools

The tool allows you to the current version 1.0 (as of August 2007) to download. If you use the right mouse button click on the link, you can choose.
in the menu “Save Target As …”
Download Forex Tool

License: This tool is a freeware that you can use it free of charge and pass it on. If you are in a freeware collection on your home page or want to use, so please talk to us first.

Operation
Inputs

Forex input mask tool

The blue numbers can be changed by you. First, enter their account size, then the information to leverage your margin accounts. (in this example 200:1). The parameter “maxiumum risk” is crucial for the success of your strategy, with this value, you should play to the impact in the results can be seen.
The next lines give the spread in pips to the value of a pip and the account where you want to pull the emergency brake. The values of 2 pips spread and $ 10 Pipwert come in the picture of the pair EURUSD.

The Use of Auto Trading in Forex Market

The application of algorithmic trading in the Forex market has significantly evolved from its origins in equities algorithmic trading or automated trading, also known as algo. This article examines what this form of trading has to offer.

One of the challenges for any financial institute or day forex trader considering the use of algorithms for foreign exchange (FX) is to understand the evolving definition of algorithmic trading and how algorithms can be used to better exploit Forex market opportunities.  The use of computer programs for execution of forex trading orders employs computer algorithms to decide certain aspects of the order such as the timing, price, or even the final quantity of the order.  This strategy makes sense when you consider that algorithmic trading originated in the equities market to automate trade execution. In other words, the decision as to ‘what’ to trade is made elsewhere (generally by a human trader) and the focus of the algorithm is ‘when’ to trade - how to best execute the trade decision in order to achieve best execution and minimize market impact. Automated or algorithmic trading allows, based on predefined quantitative models, orders without human intervention in the market. It is an attempt to give people experience as a broker and thus directly participate in the buying and selling of securities.

The algorithm executes the splitting and the timing of orders based on predefined parameters. These parameters typically use both historical and updated current market data. Algorithmic forex trading by professional brokerage firms is proprietary; however they often offer this service to clients as a feature of the clients account. This is due to the complexity and tight resource situation of institutional investors who desire the access of a broker.

The use of automated trading enables you to exploit forex market opportunities regardless of your time zone an its relation to the  hours of the forex market.

The advantage of automated  forex trading is the high speed in which they can place transactions, and in comparison to people, the higher quantity of relevant information that they observe and process. Therefore, this also leads to lower transaction costs.

The difficulty in algorithmic trading is based in the aggregation and analysis of historical market data and the aggregation of real-time courses in order to allow the trade. Similarly, setting up and testing mathematical models are not trivial.

A precondition for algorithmic trading is that there is already an order or trading strategy that exists. This is in contrast to auto trade and quota machines regarding an order that intelligently distributes to various markets. It is not a matter of using parameters that automatically checks quotes in the market to exploit.

The development of automated trading has been great. Current exchanges report a 50% share of trading volume being based on automated trading. At Forex, automated trading based increased in the last three years (2004-2006) by 400%. Traditional trading has only slightly increased. The EUREX assumes that currently about 20% - 30% of the total turnover is through automated trading. Within the EUREX it is estimated to have a growth rate of approximately 20% per year.

Automated trading, among other things, can be called Algo, Black Box, Gray Box and Trading Known.

The computer program for this purpose robot is called Rader.

Unlike the online forex market, the market maker acts only as a communication platform for linking matching buy and sell offers.  This service independently places into the system such offers and looks for trading.

Electronic trading systems are subject to certain restrictions. They are responsible for the stock market crash on 19 October 1987; the Black Monday. Their “If-then” statments of the algorithms ensured that more and more shares were repelled after prices had begun to fall - which ultimately led a large amount of panicked sales.

XMl Standarts.

MT4

Integrating forex signals

Forex Market Trends Diagnostics With Bollinger Bands

As one the most useful technical indicators, Bollinger bands are vital to many technically oriented forex traders. By extending their functionality through the use of Bollinger bands, traders can achieve a greater level of analytical performance using this simple yet elegant tool for both their trending and fading strategies.

Forex Market Hours

One of the key features of the Forex market is the opportunity to trade around-the-clock, 24 hours a day.  As an international market that has no central market location there are forex traders constantly available in all time zones, at all times, who are ready to immediately execute a trade and thus enable you to enter or exit the market.  The forex market is divided into four regional trading sessions: Asian, European, American and the Pacific.  Each market session has its own trading period and unique characteristics.  You should be aware of these differences as they can be critical to your trading performance. Read more

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