Trading In Forex

Australian Forex Broker Mt4

The South African rand was the world’s second best performing currency in 2009. The rand rallied 28% versus the US dollar. In addition, the South African rand paid out 7% in interest income. In a leveraged forex account, that’s 700% in leveraged interest income alone. Australian Forex Broker Mt4

King of Bling
South Africa is the King of Bling. It is among the world’s leading exporters of gold, diamonds, platinum, palladium, silver, ferrachrome, maganese, and gemstones.

As bling prices go up, so does the South African rand. As platinum and gold prices appreciated in 2009,the rand and the Australian dollar (AUD) soared along with them.

Like South Africa, Australia is a leading gold miner.

The outstanding performances by gold, the South African rand, and the Australian dollar were not a coincidence. South Africa holds the world’s largest gold reserves, estimated at 40% of the world’s total. Australia is currently the world’s leading exporter of gold. As a result, the rand’s and AUD price moves in tandem with gold prices. One study found the ten-year price correlation was in excess of 80%

Better than owning Gold
When bullish on gold, I prefer owning the South African rand and the Australian dollar versus owning gold for the following reasons:

Leveraged Interest Income: Leveraged interest income is a beautiful thing. You deposit ,000 with your forex broker. With that deposit you purchase a standard 0,000 South African rand currency position.

The South African rand pays 7% interest on the 0,000 currency position. If the rate remains unchanged for a full year, you can earn ,000 in interest income on your ,000 original investment. Australian Forex Broker Mt4

Leveraged Appreciation: This one can work for good or bad. In 2009, when the South African rand appreciated 28%, that was roughly a ,000 profit on your leveraged position. Add that to your ,000 in leveraged interest income, and you could have earned ,000 on a ,000 investment. Conversely, if gold prices and the South African rand would have fallen 28% in 2009, your leveraged position would have lost ,000 less your ,000 in interest income for a net loss of ,000. Since you had deposited only ,000 in your account, your account would have went into debit, except for your no-debit guarantee.

No-Debit Guarantee: Like leveraged interest income, the no debit guarantee is a beautiful thing. The no debit guarantee turns the two-edged sword of leverage into a superior speculative investment structure that resembles a limited-risk long call option position. You have unlimited upside from the rand’s leveraged appreciation and interest income. But your downside loss is limited to the amount of your deposit in your forex account.

Choice of Funding Currency: When you buy stocks, gold, or other assets you pay with USD. When you buy a currency, you pay for it with the currency of your choosing. To buy the rand (ZAR), you can sell USD/ZAR or you can sell EUR/ZAR, or JYP/ZAR. You can greatly enhance your return by choosing the weakest currency. In 2009, the USD was the biggest dog. So far in 2010, its the EUR-this pig has fallen almost 10% in the last month alone. So even if the rand does not have a good year, you can earn great returns by purchasing it with a weaker currency.

Although the South African Rand pays higher interest and continues to outperform the Australian Dollar, if you are betting on higher gold prices, you should own both currencies. The diversification reduces your exposure to country specific risk (earthquakes, national strikes, etc). Australian Forex Broker Mt4

The Australian dollar has little standing in its path other than a possible flat, to positive move in the USD on the back of a survey by Reuters stating 14/15 primary dealers think it likely the US Federal Reserve will announce Quantitative easing round 2 at their Nov 3 Federal Open Market Committee meeting. The effect of QE2 is to bring real rates in the US towards -2% in an attempt to stimulate business lending, however as excess reserves show this money is not helping the man in his mechanic shop in Kansas and an increase in supply of US Dollars will ultimately lead to USD depreciation. With Australian domestic terms of trade only looking rosier and the possibility commodities skyrocket on the back of this USD depreciation we feel it unlikely unless the RBA intervenes that the AUD will not hit parity soon. Technically the 30 minute chart has found support at the 38.2% retracement for the move between 0.9541 and 0.9918, in the ultra-short term price has also found support at the 382 for the recent range between 0.9918 and 0.9710. This confluence combined with the higher low formed above resistance turned support at 0.9700 gives us confidence the move can be sustained on a break of 0.9920 where this level becomes support for a move to 0.9967 and onwards to the big parity figure and through to next resistance at 1.0046. Our emergency stop is placed below 0.9650 with our upside target now placed at 1.0046.

These recommendations are current as at the date of issue. Past performance is no guarantee or reliable indication of future results. Trading in derivatives may involve a high degree of risk and significant loss, and is appropriate only for persons who can assume risk of loss in excess of funds deposited. This recommendation is of the nature of general information only and must not in any way be construed or relied upon as legal, financial or professional advice. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of any investment for your circumstances. Although the information in this recommendation has been obtained from sources considered and believed to be both reliable and accurate no responsibility is accepted for any opinion expressed or for any error or omission that may have occurred herein Alpha Equities and Futures Limited AFSL 327075 | ABN 76 131 376 415. Alpha Equities & Futures Pty Ltd AFSL: 327075 ABN: 76 131 376 415AFSL 327075 Alpha Equities and Futures Limited AFSL 327075 | ABN 76 131 376 415 Alpha Equities and Futures Limited AFSL 327075 | ABN 76 131 3

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Australian Forex Market Hours

The one thing that marks a forex market is its dynamic nature. Here fortunes change in seconds and minutes. If taken positively, this feature also allows a trader to enter the market many times in a single day and garner some profit for himself. Australian Forex Market Hours

Timing is one thing that would actually determine your success in the forex market and that is why it is essential to find the best time to trade the forex market, the best time with regards to activity, volume of trade etc.

There are some salient features of forex market and until and unless these are understood one cannot find out the best time to trade the forex market.

Forex markets work 24 hours.

It starts from Sunday 5 pm EST through Friday 4 pm EST and rollovers at 5 pm EST. Forex trading starts from New Zealand and then is followed by Australia, Asia, the Middle East, Europe and America. The most prominent forex market is undoubtedly the US and the UK. They account for more than half of the total market transactions.

If it comes to major forex markets, London, New York and Tokyo would win hands down. Around 75% of market activities in the New York markets are witnessed in the morning hours while the European markets are still open. And if you want to know when the forex trading is the heaviest, well look for the time when the major markets overlap.

One thing must be evident from this discussion. There is never a cease down in the forex market.

When its day for you, its night for someone else. Markets close somewhere and simultaneously, markets open somewhere else. That is what offers traders this tremendous opportunity to make some serious money.

Forex market is characterized by high liquidity and high flexibility and as such traders get the freedom to make choices as per their wishes. They are not bound by the whims of the markets. Australian Forex Market Hours

So, when you try to determine the best time to trade the forex market this information would prove very useful. Trades have almost always the same relative frequency and until the forex market remains open, the probability of finding a trade whenever you look is almost the same. This is all about volume of trade. It is determined by the number of markets that are open and the number of times each of these markets overlap with each other.

Keeping in mind the forex volume is extremely essential. It is generally seen that the volume of transactions remains high all through the day but when does it peak? The answer is when the Asian markets with Australia and New Zealand, the European markets and the US markets open simultaneously. This is the best time to trade the forex market.

Let’s have a look of the timings of some of these markets.

New York Market : 8 am – 4 pm EST

London Market : 2 am – 12 noon EST

Great Britain Market : 3 am – 11 am EST

Tokyo Market : 8 pm – 4 am EST

Australian Market : 7 pm – 3 pm EST

Just have a look at the above schedule carefully. What do you see? Yes, there are two times when two of the major markets overlap during the trading hours-between 2 am and 4 am EST (Asian/Europe) and between 8 am to 12 pm EST (European/N. American). This is the time you have to target to make profits, the best time to trade the forex markets. Australian Forex Market Hours

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Best Australian Forex Broker

Selecting the correct day and time to trade can play a major role in your forex success. Although forex market seems to be available 24/6, not all the days of the week will bring profits. A trader not only has to choose the right day to trade, but also know the best hours. When not to trade? What is the absolute best time for forex? When can you get most earnings? Best Australian Forex Broker

Let’s go over the basics – 3 major forex trading sessions:

1. New York market opens from 7:00 AM to 4 PM

2. Japan/Australia market opens from 7:00 PM to 3 AM

3. London market opens from 3:00 AM to 11:00 AM

Seems like forex market never sleeps, however the trading volume and price movements are not the same during all the mentioned sessions.

There are times when you should jump in and there are times when it is better to keep out.

The main idea is to get involved when the forex markets are the busiest. Each currency reacts differently during each session. For example:

During London market – Euro, US dollar, British Pound and Swiss Franc are most active currencies involved.

During New Year market – Us dollar, Euro, British Pound, Australian dollar, Japanese Yen, Canadian dollar and New Zealand dollar are the most active currencies.

A great time to trade is the first 3-5 hours of each opening session mentioned above, especially when your fundamental analysis points on new economic releases.

However, the best time to trade is between 3 AM and 11 AM. Best Australian Forex Broker

The overlap between New York and London markets (3 AM – 11 AM) creates an intense trading momentum full of trading opportunities enhanced with frequent price movements, and therefore is the best time to make money. With the right trading plan, money management and system, you can make thousands of dollars within minutes.

The currency pairs that are most active during the overlap are:

1. USD/ CHF

2. GBP/USD

3. EUR/USD

4. USD/JPY

Many economic releases are made around 8:00 AM, therefore the 3 hours between 8 AM and 11 AM are extremely profitable for very quick and significant profits.

Keep in mind that volatility is very fast and if you aren’t careful, instead of making money, you can lose most of it! Therefore, the use of stop/loss and the discipline are crucial for you success. Also, don’t cry over the spilled milk – if you missed a trend, get over it. There will be more opportunities, trust me!

Now, when is the best day to trade? Which days should be avoided? Although the market is available 5 days a week, there are certain days which are better avoided:

1. Fridays should be AVOIDED, since the end of the week is extremely unpredictable.

2. Sundays should be AVOIDED, since there is almost no action in currency rates.

3. Holidays should be AVOIDED, since the market is in most cases motionless.

The BEST days to trade are Tuesday and Wednesday, since the peak of trades happen during this time of the week. Best Australian Forex Broker

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