The Best Times to Trade the Forex Market

The forex markets are great because they are open almost all of the time and there are a wide range of currencies to choose from. This brings up an important question.

What are the most active forex trading hours?

Generally speaking, the most active forex trading hours all around are between the London markets opening around 8:00 GMT and end with the markets in the US closing around 22:00 GMT. The absolute busiest time in the forex markets are during the London to US overlap between 13:00 GMT to 16:00 GMT. These are the hours that are the most liquid or when the most traders are in the markets making trades. If your intention is to do daytrading, these are key hours!

What are the major sessions for forex trading?

There are 3 major sessions each day in the forex markets. They are the London session, theUS session, and the Asian Session.

The London Session
The London session starts around 8:00 GMT and winds down around 1600 GMT. The currencies that are the most active during these hours are EUR, GBP, and USD. 

The US Session
The US session starts around 1300 GMT and winds down around 22:00 GMT. The currencies that are the most active during these hours are AUD, EUR, GBP, JPY, and USD.

The Asian Session
The Asian session is a reasonable quiet session on most days. All pairs are pretty slow moving and it is not a good time to day trade. The only real currency that has noteworthy activity is the JPY and the activity is slow unless a major financial event happens. 

Summary

The best hours for trading the forex markets, no matter your method, are during the London and US session overlap. The markets are full of active participants during these hours and the currencies really move. For the most part, even the larger fundamental news comes out during these times. Trading during these hours is your best chance to get in while the market is making decisive moves and it will be your best chance to score quick profits.

Forex and Stock Markets

Forex market and stock market (stock and securities market) are two independent markets with no relation to each other. They differ in trade instruments: currencies are traded on Forex market, and shares, on a stock market. Stock markets are often located at the stock exchanges. The largest stock exchanges are situated in New York, London and Tokyo. Another difference between Forex and stock market is the amount of money required for trading. In order to buy shares on a stock market, one will need a significant amount of money, from $10 thousand to over $100 thousand. On a stock market trading is moderate and steady unlike on Forex market where one can either earn a large capital or sustain significant losses within a short period. Some traders who made a fortune on Forex market then move to a stock market. In its turn, a stock market is divided into primary and secondary markets. The primary stock market plays an important role in a country's economy: the pace of its development and effectiveness depends on the primary market to a great extent. On the primary market the companies usually launch their IPO. Buyers of the securities on this market, as a rule, are individual and institutional (investment funds, insurance organizations, etc.) investors. Securities on the primary market are traded by turning to investors directly and through intermediaries. The secondary stock market includes over-the-counter market and stock exchange. Here investors resell already emitted shares to other investors. Unlike the primary, the secondary market has no influence on the volume of the country’s investment flows. The main participants of this market are speculators who buy securities at a low price and then sell them at a higher price. One of the major regulators on a stock market is a price. It is formed with direct participation of specialists, emitters, intermediaries and investors. The prices on a stock market are formed in accordance with several principles: securities yield, their issuers, demand, situation on the market). These principles are realized through the strategies of price formation on a stock market: to setup the initial high or low price, to quickly gain profit from selling, to enter the market, and to conquer a part of the market. Stock traders have different aims: to get profit in the form of stock rate difference, to receive dividends, etc. Despite stability and safety of a stock market, before trading on it, one is advised to analyze the market to reduce the risks.

3 Live Trades That Were Generated Using The Forex Profit Caster Software

I have been discussing the new Forex Profit Caster software on this blog quite a lot recently, and after watching all of the preview videos, I have to say that I'm very impressed.

The trading method alone looks pretty impressive, but the trade alert software is even better because it plots triangles on the hourly and daily charts of the major currency pairs and tells you exactly where to enter and exit positions.

It also saves you lots of time because you don't have to scan the charts looking for trades, or try and plot these triangles yourself.

(If you haven't yet watched the preview videos, or downloaded the trading blueprints which talk you through the actual trading method step by step, the links to all of these free materials are available at the end of this article, which reviews Forex Profit Caster).

In this blog post I want to let you know that the third preview video is now available for you to watch.

In this latest video Bill Poulos provides you with 3 live trades that were generated recently using the Forex Profit Caster software. It not only shows you how effective it is at finding winning trades, but it also demonstrates how it minimises losing trades when you get the occasional losing trade.

ECN vs. Market Maker Comparison

This article assumes some knowledge of the way the forex market and forex brokers work. If you are not familiar with this, we recommend that you first read our "Structure of the Forex Market" and "How Forex Brokers Work" articles. Contrary to popular belief, ECN's are not superior to Market Makers in every way. There are advantages and disadvantages on both sides.

Minimum Deposits

There are retail market makers out there today that allow traders to begin with $1 in their accounts. That’s not to say that this is a great feature, but it does present options to people who may not have the kind of money it takes to open a Currenex account. It’s a good thing too, because ECN contract sizes are often multiples of $1 million, and some ECNs expect a daily volume of $25 million. Shackled with those types of minimums, you had better be well Capitalized (with a capital “C”).

Leverage

ECNs don’t allow the type of high leverage that is typical of market makers. To most people this is no great loss, since it is generally not advisable to use anywhere near the leverage that is available at most retail market makers. 

Transaction Costs

Whether they call it a spread or a commission is really irrelevant at the end of the day - no matter what, you have to pay to play. ECNs typically give you the prices they are dealt from their liquidity providers, with the exact same spreads, but then charge a commission for every round turn trade. This allows them to give discounts to high volume traders, lowering their costs, but to most traders, it is really irrelevant whether they are made to pay a commission with a tight spread or no commission with a higher spread. It works out to be roughly the same, depending on which brokers you are comparing, and what current spreads are like.

Volatility

The potential volatility is higher on ECNs because of their unfiltered slice of the market. By risking some exposure, market makers can generally mitigate this. Depending on the type of trader you are, volatility may be your friend or your enemy.

Stability of Business Model

The fact that a market maker is the counterparty to many of its clients’ trades, exposes it to market risk. While this risk should be well managed through appropriate hedging with a higher-tier counterparty, this may or may not be the actual case. Furthermore, even if the risk is well managed, it is still a risk. An ECN does not have to worry about this, as it provides only a service for which it charges a commission. At no point is an ECN exposed to market risk. What this means is that the likelihood of an ECN becoming insolvent is much lower than that of a market maker. This has serious implications for client funds which the broker is holding. On the other hand, any market maker worth its salt should keep client funds segregated from the company’s operating capital, itself be well capitalized, and keep risk management tight, therefore keeping clients relatively insulated against the possibility of broker bankruptcy.

Susceptibility to manipulation

While ECNs offer a “truer” participation in the market, the picture there is not necessarily prettier. The added transparency only brings to light the dog-eat-dog world that is the forex market. Trading with a market maker insulates your from that to some degree, but this can also be used to hide things from you. It is nice to have guaranteed stops, though, and you won’t find those on any ECN. Basically, in my view, ECNs are great for experienced day traders and scalpers, while market makers are better for everyone else, as long as they are deemed to be "honest".

Ten Principles of Economics

Economics is the study of the mechanism by which a society allocates its resources. In order to start studying macroeconomics, we must first understand the ten basic principles of economics, as set out by Gregory Mankiw, a well known macroeconomist, and professor at Harvard University. They are further separated into 3 main sections: how people make decisions, how people interact, and how a national economy works as a whole.

HOW PEOPLE MAKE DECISIONS

1. PEOPLE FACE TRADEOFFS
In order to get something, we must always give up something else. If you decide to spend $5000 on a great night in Vegas, that is $5000 less that you have to spend on other things, such as a diamond ring for your girlfriend, or college tuition for your kids. Whether that tradeoff is worth it is entirely up to you, as long as you realize that you can't have your cake and eat it too. As a society, we need to make similar types of choices: there is always a tradeoff between efficiency and equity. A society that chooses a high degree of efficiency can seem Darwinian in the cruelest sense, as the relentless pursuit of efficiency simply ignores the suffering of those who are unable to keep up. A society that instead chooses a high degree of equity, or equal distribution of wealth, is much more humane, but will generally suffer from a high degree of inefficiency. For example, we can choose to enact regulations that protect the environment from industrial waste. This comes at a cost, since the cost of enacting, enforcing and abiding by the regulations can be significant. We also face tradeoffs when it comes to the unemployed: most countries choose to provide some sort of social safety net that protects people that are down on their luck. This has an associated cost, not only because it causes a certain degree of moral hazard (it may discourage members of society from seeking work) but also because resources must be allocated toward this safety net, that could otherwise have been used for more productive purposes. This is of course not to say that we should allow industries to recklessly dump toxic materials into the environment, or that we should let unemployed people starve. It is, however, important to understand that these tradeoffs are real, and that policy makers must try to choose the most appropriate balance between efficiency and equity.

2. THE COST OF SOMETHING IS WHAT YOU GIVE UP TO GET IT
Because of the above-mentioned tradeoffs, people in a given situation need some sort of method to determine which course of action produces the most beneficial tradeoff. The cost of one action versus another may not be immediately clear. A good example would be a high school senior trying to make decision whether to go to college or not. When he thinks about the total costs and benefits of a college education, he may consider the fact that a degree will give him a lifetime of great earning opportunities, but it will cost him tuition, books, and other related expenses to get there. One thing he may not even take into account is the time it takes to complete a college degree, and the wages he could collect if he instead chooses to work for 4 years instead of studying. All the things he gives up in order to go to college, are called the opportunity cost of going to college.

3. RATIONAL PEOPLE ALWAYS CONSIDER THE MARGIN
A marginal change simply means an incremental change to a pre-planned action. For example, say an airline is planning an extra spring break flight to Cancun. It costs the airline a total of $50,000 to make the flight happen with a 200 seat plane. A bit of simple arithmetic shows us that the average cost per seat is $50,000/200 = $250. It may seem reasonable to conclude therefore, that the airline should not under any circumstances sell a ticket for less than $250. This is not the case however, if you consider the marginal costs in case the flight is underbooked (this year, more students than expected stayed home to study instead of joining in the debauchery in Cancun). It is one hour before flight time, and there are 10 empty seats on the plane, when a young man decides that he has had enough studying and he wants to go to Cancun after all. He rushes to the airport and says he has $200 to pay for the flight. Should the airline sell him the ticket? Even though the average cost per passenger is $250, their marginal cost is simply a bag of peanuts and a soft drink (let's say $1) - the total cost for running the flight will be essentially the same whether this young man is on the plane or not. It certainly makes sense for them to accommodate him. After all, $199 is better than $0.

4. PEOPLE DO RESPOND TO INCENTIVES
Most decisions in life are based in some way on a cost and benefit analysis of available courses of action. For example, if the price of tequila rises, the spring break kids may decide that their money will go further if they drink rum, they have an incentive to drink rum rather than tequila. At the same time, since tequila producers see the higher price of tequila as an incentive to produce more of it, they do so. We will see later on in this series, how these market behaviours are a key to understanding how the economy works.

HOW PEOPLE INTERACT

5. TRADE HELPS ALL PARTIES INVOLVED
The common view among people is that the United States and China are competitors in some sort of economic tug of war. While there is some truth to this, insofar as some American and Chinese companies compete for the same customers, there is much more to the relationship. To simplify this rather complex relationship, let's look at an example. When you go shopping, you compete against other shoppers, because you may want the same items that they want, at the lowest possible price. On the other hand, imagine that you get sick of all this competition, and decide to economically isolate yourself from all other people. Do you think you would be better off? Probably not. You would have to grow your own food, because you have isolated yourself from the people who produce food. You would have to make your own clothes, because those terrible people at GAP were competing with you. The list goes on. You would have to be completely self sufficient, which in a complex society, is rather difficult. Time is limited, and there are so many areas of specialized knowledge, that you cannot possibly master them all, nor have the time to engage in all of them. Clearly you gain much by your ability to trade with others. Trade allows people to focus on serving a specialized purpose in the economy, such as food production, textile production, home building, computer engineering, etc... By trading with other people, you get access to a much wider variety of goods than you would be able to produce yourself, and at a better opportunity cost (price). The same principle applies to nations. The US and China are friends with benefits, as much as they are competitors. We will examine this further when we look at the principle of comparative advantage.

6. FREE MARKETS ARE A GOOD WAY TO ORGANIZE ECONOMIC ACTIVITY, AS LONG AS SOME RULES ARE APPLIED
The well-known economist Adam Smith wrote in 1776:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest... Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it  always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

What he meant in plain modern English, is that when people look out for their own best interest, they often inadvertantly also achieve the best possible outcome for society. This is by far the best known principle in all of economics, and is the basis upon which all free market economies are built. It identified several centuries ago, the advantages of decentralized decision making. Free markets are the ultimate democratic tool, where every time a market participant decides to purchase a product or service, he or she is casting a vote for it over its competitors. This principle clearly predicted how and why communism would never succeed - central planners interfere with the natural forces of the market, distorting prices - they achieve sub-optimal results and eventually, systemic failure. Central planners failed because they tried to run the economy with one hand tied behind their back - the invisible hand of the marketplace.

7. GOVERNMENTS CAN SOMETIMES OPTIMIZE MARKET OUTCOMES
As Adam Smith noted, markets are the best way to organize economic activity. The thing about markets is that they still need to follow some rules. Governments need to be there to protect market participants from fraud or other dangerous business practices, and to enforce contracts. Without any rules, we do not have a free market system, but rather anarchy. In order to allow markets to perform their function properly, governments must be on the lookout for two main causes of market failures - externalities and market power. An externality is the impact that one individual, or group of individuals can have on another, without being directly engaged in any market activity. An example of this would be pollution emitted by a factory, which can cause damage to the lives and property of others. Governments can impose regulations directly to such businesses or individuals, or they can ensure that iron-clad property rights take care of such situations. Market power, being the other danger, is the ability of a single economic actor (or small group of actors) to have control of market prices. Examples of market power are monopolies and cartels, which eliminate competition, and thereby disable the invisible hand of the market.

HOW A NATIONAL ECONOMY WORKS AS A WHOLE

8. A COUNTRY'S STANDARD OF LIVING IS DETERMINED BY ITS ABILITY TO PRODUCE GOODS AND SERVICES
In today's world, it is absolutely staggering how standards of living vary from country to country. People in advanced economies, on average, live far longer and more comfortably than their counterparts in less advanced economies. The main reason behind this is rather simple (although the reasons behind the reason are not). These vast differences are attributable mainly to one variable - productivity. A country's productivity is defined as the amount of goods and services produced by an average worker in an hour. The correlation between a country's productivity and the standard of living enjoyed by its citizens, is striking. There has been a lot of noise made recently about the rise of the "emerging economies" and how they are causing economic stagnation in advanced economies. In fact, it is the slowing growth of productivity in advanced economies that is causing the stagnation (we saw earlier that trade actually benefits everyone involved). Productivity growth has slowed largely due to large government deficits, which crowd out investment. We will learn more about this in follow-up articles.

9. PRICES RISE WHEN THE MONEY SUPPLY RISES
There have been a number of spectacular cases of inflation throughout history. The cause, each time, was not some mysterious force that robs money of its purchasing power. The culprit, always, is the government's aggressive increase in the supply of money. The reason governments inflate the money supply can differ somewhat from case to case, but generally they happen because of war or other large expenditure that the government cannot afford, so it devalues the currency in order to lessen the debt burden. This can easily get out of control, and when it does, hyperinflation rears its notoriously ugly head.

10. SOCIETY FACES A SHORT-TERM TRADEOFF BETWEEN INFLATION AND UNEMPLOYMENT
This relationship is best described by the Phillips curve, named after the economist who discovered it. Although not all economists are convinced that this tradeoff has its basis in reality, a majority do. The explanation for this effect is that prices do not adjust immediately to an increase in the supply of money. It takes time for restaurants to print new menus, or for prices of components to filter through to the consumer market. Prices are said to be sticky. What this means then, is that when a government increases the money supply, it increases the amount that people spend, which provides an incentive for businesses to produce, and thus hire, reducing unemployment. It is important to note that this effect is only temporary, because it only works until all prices, in the economy, including the price of labor (wages) have had a chance to adjust. As prices adjust to the new level of money in the economy, the tradeoff dissipates, and the economy returns back its natural state.

The Minimalist Guide To Forex Trading & Life

The inspiration for today’s article comes from something I am currently experiencing in my personal life.  I recently sold my luxury house in Queensland Australia and am currently renting while my family and I decide where we really want to live. Our plans were to eradicate all assets and debt, as my wife and I are both quite young and with my profession as a trader and coach, I have the ability to be mobile. We decided that we wanted to try living a stripped down and nomadic lifestyle for a while and welcomed the freedom it promised.

However, this doesn’t mean all people will want to be nomadic and travel around the world living in different places. The lesson that I want to put forth today, is that as humans we tend to over-clutter our lives with addictions and materialism (houses, cars, so forth). Halfway through 2012 I said enough is enough and I set out to completely remove all clutter and unnecessary possessions, even small things. Basically, I wanted to be free of all these burdens…because I realized I had a bunch of stuff I didn’t need, and I felt it was holding me back. I had more than one car that I didn’t really need, I owned a house I wasn’t happy with and that was too big, etc. I just felt I had too many things that were cluttering my life and my mind; my goal was to set out to only have a suit case, a laptop, and my favorite book.

The reason I’m sharing this story with you, is because I believe that most of you out there can benefit from applying a similar logic to your life, i.e. de-cluttering, liquefy assets and removing debt.  People can interpret it however they want, but the core thing is to keep with you only what you absolutely need in an effort to save time, save money, remove stress, and more.

… So what the hell does this have to do with trading you ask?

What we are setting out to do today is to become ‘minimalists’ as applied to trading, and as we have discussed already, this can apply to other areas  of life too…getting rid of unnecessary things…all possessions that you don’t really need…all unnecessary emotional attachments to things, minimalism is almost a religion of sorts. Many of you know that I take a very stripped down and simple approach to trading the markets, and so if you think about the benefits of being a minimalist in everyday life, it really is no big surprise that it’s also the best way to trade the markets.

To find out more about “Minimalism” as defined by one of the blogs that I follow, click here.

Forget the stereotypical facade of a pro trader

The first step to becoming a minimalist trader is to lose the facade of the cliché trader with his lovely office, big wooden desk and several stacks of monitors with the latest trading software – you only need a laptop, FREE trading software (get it here), an effectiveforex trading strategy and your brain. The reality is that you do not need a big office, multiple monitors and an expensive data feed to be a successful trader.

The stereotypical facade of a “pro trader” is what many of us are addicted too…but it’s not reality…reality is a guy trading from a coffee shop on his PC.

Get rid of all the excess weight you have if you are still learning how to trade or you’re struggling to trade successfully. If you want to add a big trading desk with multiple monitors and all the bells and whistles after you become a successful trader, that’s OK. But don’t think you need to go out and drop 5 grand on your trading office in order to make money in the markets. Some of the best traders in the world just trade off a laptop. You don’t NEED an office with 3 computers or a fancy workstation.

I personally have gone from having a big trading office with multiple monitors back to an Ultra book PC and wireless internet, sometimes I even use my iPhone for my web connection…I realized my ego and greed took over before, and these things negatively impacted my trading.

Minimize what you put on your charts, maximize trading results

Unless this is your first time on this blog, you probably know that I teach what some might call a “minimalist” approach to trading. However, you might not know WHY I trade and teach this approach.

It usually takes every trader a certain amount of trial and error before they figure out that most of their trading mistakes resulted from ‘stupid’ things they did, and not necessarily from the trading method they were using. Most traders lose money because they make emotional trading mistakes; this is something most all of us can agree on.

However, the role that having tons of “crap” on your charts plays as a contributor to your trading problems, is often overlooked. Just as the materialist mentality of needing to buy more things to make us feel happy or fulfilled is a flawed mentality, so is the mentality that adding more technical indicators and analysis tools will somehow make you a better trader. One of the big secrets to success in all areas of life and indeed even to happiness is that less is often better. Just as having less material things in my life has significantly increased my peace of mind, bank account and time spent with my family, it can also help you to become a better person and trader.

I mentioned above that trader error is the main cause of losing money in the markets, not the particular trading method you use. However, most traders naturally assume that it’s their trading system or strategy to blame for their losses in the market. They then set out on a quest to find the ‘best’ trading method, adding indicators, Elliot Waves, super-turbo 5,000 trading robots, and everything else under the sun to their charts. This provides them with a false sense of security and hope for a while, until they realize it’s not doing anything to improve their trading results. The point here is that MORE IS NOT BETTER!

You see, as traders our trading mindset is the most important piece of the puzzle. However, the strategy or system that we use to trade with can and does have a profound effect on our trading mindset. So, when we try trading with 10 different indicators on our charts, we get confused, conflicted, and frustrated and once this happens it’s only a matter of time before these feelings result in impulsive and emotional trading. So, we can see that our mindset is perhaps the key to success in the markets, but because our trading strategy influences our trading mindset heavily, it too is very important.

The next time you want to put an indicator on your chart ask “Do I really need this? Is this really going to help me?”. “DO I REALLY NEED THIS?”….We want to only trade with what we need …..

How to incorporate minimalism into your trading routine (and everyday life)

• Ditch the forex indicators and trading robots and start over with a totally clean price chart. This act alone will do a lot to calm your nerves and your mind while analyzing the markets.

• Learn to trade with simple price action strategies. After you ditch the indicators you will need to learn how to trade off the raw price action of the market. Whilst this might seem different to you at first, I can promise you it’s a lot easier and makes a lot more sense than whatever messy method you were trading with before.

• After you learn to trade with price action, understand that you don’t have to spend a lot of time analyzing the markets each day. You can learn to trade in an end of day manner and fit trading in around your day job.

• Forget about trying to analyze 20 different markets each day. Minimize the markets you trade and this will work to sharpen your focus on the handful that you like the best. I focus on the major forex currency pairs and a few other markets like oil, gold, and the Dow.

• Don’t worry about multiple monitor setups, fancy trading desks, extremely expensive computers, monthly data feed subscriptions, or any of these other ‘luxury’ trading office items. Truth is, you don’t NEED them. They are nice things to have if you can truly afford them, but you really don’t need them to trade successfully. I can afford these things but I don’t have them anymore because I realized they were contributing to feelings of greed and materialism, and most of all I realized I just didn’t need them.

• One of the things I also did was got a P.O. box for my mail. This might seem like a small thing, but it’s all about downsizing and consolidating, and each little thing you downsize or get rid of adds up. Now, I only collect my mail once a week, this saves time and it changes the ‘process’ of your life…I took a minimalist approach to getting my mail, this freed up time and energy each day to devote to other more important things, even if it was a small amount of time each day.

• Make sure your trading room or trading location is clean and simple. Whether it’s in your home or from the local Starbucks, make your surroundings minimal. You don’t need 50 trading books sitting around, instead, pick your favorite 3 and keep them with you (hopefully one of those is my book  ). If you have to, put all the ‘junk’ that you really don’t need in a storage unit, I did that, and it really makes you realize that you don’t need the majority of the things you thought you did.

Conclusion

People like to hoard things; they hoard possessions, money, collectables, you name it. It’s a fact that when most people get a pay raise they simply tend to buy more things (crap) that they really don’t need, thus keeping them stuck in a perpetual cycle of consumerism and materialism. I am telling you that you do not need to live this way. You don’t have to be a slave to debt anymore, and you don’t have to try and keep up with the “Joneses”…who cares about the Joneses, they aren’t that interesting anyway.

You see, there’s a common thread between minimalism as a lifestyle choice, a trading choice, and happiness and success. That thread consists of the fact that material items do not bring you happiness, trading success is not the result of having lots of indicators and fancy office equipment, and success is more easily attainable with a clutter-free and streamlined lifestyle. Have you ever seen that show “Hoarders” on A&E? If you have seen it, you would agree that possessions don’t make you successful or happy. Materialism is a real addiction, buying things satisfies some primitive urge that we need to feel secure. This is very similar to why traders get addicted and dependent on indicators, reading economic reports, trading robots, and you name it. We tend to overlook the most obvious things in life, such as the fact that happiness is readily available for free by just spending time with loved ones, or that the raw and unobstructed price action of a market provides us with all the technical clues we need to develop an effective trading strategy.

From here, you need to take the next step and decide if you are living a cluttered life, and if so, how can you de-clutter it? Similarly, you need to take a look at your trading approach and decide if it’s simple, logical, and effective or full of clutter and confusion. If you want to de-clutter your approach to trading, I suggest you checkout my price action trading course and see just how much taking a minimalist approach to your trading will improve your overall trading results.

I’d love to hear your feedback on today’s lesson, so please leave a comment below & click the ‘like button’ below.

3 Top Gold Juniors on the TSX Venture 50

The TSX Venture 50 is compiled by TMX Group and consists of companies that TMX believes have an impressive track record. The companies on the list generally produce high returns and are highly liquid. The 2012 TSX Venture 50 includes companies whose average return in 2011 was 82 percent. The list is divided into five sections, one of which is mining. Gold Investing News decided to take a look at the top three gold mining companies to see why they made it and how they are holding up.

TMX’s assessment began with numerous filters that reduced over 2,000 possible stocks to 535. This group of companies was further reduced to the TSX Venture 50 using a formula that took four equally-weighted criteria into account: share price, trading volume, market capitalization and analyst coverage

Roxgold (TSXV:ROG) is developing three mining concessions in Burkina Faso. It holds a 90-percent interest in one of the properties and 100-percent interest in the other two properties, including its flagship project, Yaramoko, for which it recently announced high-grade drill results.

Roxgold was not only the leading gold junior, but also earned the top ranking for all 50 companies. The company’s share price increased from $0.32 on December 31, 2010 to $1.54 a year later for a gain of 389 percent for 2011.

The company’s market cap increased 877 percent last year, from $10.6 million to $103.6 million. As of December 31, 2011, the company had over 67.2 million shares outstanding with a trading volume of over 142.6 million shares for the year.

Though TMX Group did not note any analysts, three companies listed on Roxgold’s website are described as “analysts currently covering Roxgold Inc. or have issued a report in the last year.” The list is current as of June 11, 2011.

At last on Tuesday, Roxgold’s daily trading range was $0.78 to $0.88. Its stock price is down almost 50 percent year to date. With over 125 million shares outstanding, the company has a market cap of $103.7 million. Its 52-week price range has expanded from a low of $0.20 and a high of $1.54 in 2011 to a low of $0.44 and a high of $2.27.

Roxgold ended the day 6.98 percent lower at $0.80 on the TSXV.

Prodigy Gold (TSXV:PDG) focuses on gold exploration and mine development in Eastern Canada. It ranked second among the the 10 companies in the mining sector.

Prodigy saw its share price rise 137 percent, from $0.35 on December 31, 2010 to $0.83 at the end of 2011. The company’s market cap rose from $17.9 million to $197.2 million, an increase just shy of 1,000 percent.

Prodigy’s trading volume of 148.6 million shares for 2011 was among the top five for the entire TSX Venture 50. Tuesday the company was trading around $1.06 to $1.08. This year, Prodigy’s stock is up 30 percent. Its trading range is only a few cents broader, though the 52-week low/high of $0.24/$0.88 has changed to $0.45/$1.12. The 237.6 million shares outstanding on December 31, 2011 have increased to 293.2 million shares, and the company’s market cap is currently about $318.6 million.

TMX Group reported that three analysts were covering the company at the end of 2011. Prodigy’s website now boasts seven. However, the task may not continue much longer. Prodigy has entered into an agreement to be acquired by Argonaut Gold (TSX:AR). The deal remains subject to the approval of shareholders, who are expected to vote in December.

Prodigy Gold ended the day 0.93 percent higher at $1.08.

Newstrike Capital (TSXV:NES) is focused on exploration in Mexico. Its share price rose 198 percent over the course of 2011, from $0.90 to $2.68. In 2011, its 52-week low/high was $0.80/$3.34. The range has now narrowed to a 52-week low/high of $1.29/$3.32.

79 million shares were traded in 2011, with 104.1 million outstanding at the end of the year. The company’s market cap at the end of 2010 was $69.9 million, but it had risen to $279 million by the end of the 2011, a 299 percent rise. The company’s stock price is currently down about 23 percent year to date. At last on Tuesday, the stock was trading between $2.06 and $2.21. The company’s share price came under pressure following the release of drill results from Ana Paula, its featured project. Newstrike’s market cap was down to $254 million.

One analyst reportedly covered this company as of December 31, 2011.

Newstriked ended Tuesday with a loss of 6.33 percent, or $2.07.

How to become a Forex broker

Many people interested in foreign exchange market or simply in Forex trading want to know how to become a Forex broker and what skills are required for this kind of occupation. Due to the great popularity of Forex market plenty of interested people are looking for occupations which are related somehow to the international and the most profitable financial FX market.

Most of such job-seekers choose a profession of a Forex trader because they want to earn huge sums of money while the others stick to an idea that a job of a Forex broker is more reliable and provides reduced risks comparing with Forex trading. Each of them is partially right but we want to say that a Forex broker really experiences less amount of risks so if you do not belong to adventurous type of human you better think about choosing an occupation of a FX broker as an alternative to Forex trader profession because awards these guys get are really worth of it. 

So what things you need to have, know and understand in order to become a successful Forex broker?

1) Foremost you need to understand how Forex market works. We mean really understand all those important trifles and nuances concerning complicated and at the same time rather simple scheme of work of the foreign exchange market. That is why never save money and your time on a proper Forex education. Reading web articles, buying and studying every book and special literature you will manage to find, visiting conferences and seminars and listening to educational courses of the Forex experts: all this is the list of educational means you should use in order to become a real pro in this filed. Make sure that you learn the modern slang and nomenclature every contemporary Forex broker should know. Pay heed to the basics: most widespread Forex trading systems, mechanisms, automated Forex trading software and its setting up, functional and technical analyses and so on. Your prospective clients: Forex traders will ask your professional opinion and advice. You have to be ready for explaining certain nuances to newbies and to experienced traders as well. 

2) You need to find a teacher: an experienced Forex broker: who is quite professional and can introduce you in the verse of the Forex market, its trading strategies and explain all requirements this hard and day-to-day routine job brings. Such practical point of view along with theoretical background can help you to reach professional heights and build up a perfect career as a Forex broker. Do not get lazy then and browse in the Web in order to find the announcements in your area concerning seminars leaded by professional Forex experts, visit special discussions groups where traders and brokers with different level of experience can meet and talk about the latest trends and schemes of the Forex market trading.

3) Any Forex broker also should obtain a professional certificate proving his educational degree whether in economics or in business management. There is also an organization which provides all Forex traders with specific certificates in the filed of the Forex trading and brokerage: it is called the National Association of Securities Dealers - and offers a test everyone can fulfill if he or she positions himself/herself profound enough in this sphere. Bear in mind that positive results of this text will make your career as a Forex broker more successful especially if you have a college degree in business or/and economics.

FX Margin trading: How to Understand It?

In a case you have just started as a Forex trader or investor you may need to know what is FX margin tradingand how you can use it to earn few bucks or even more. Read attentively and you will definitely get the main point of how to apply advantages and opportunities of Forex margin.

Taking into account the possibility you don't know what Forex margin is we want to concentrate on its main functions and definition. Forex margin stands for a tool applied by a FX broker into the brokerage accounts to render his/her clients with an opportunity to gain an access to more transactions than are allowed by their current cash holdings. Margin lets both brokers and traders of Forex get only benefits from using this tool. You see, by using Forex margin investors can have larger returns comparing with those which are commonly offered for them while FX brokers in their turn can benefit from extra commissions required by the larger trading positions.

For sure FX margin trading is commonly leveraged on the high level to make it possible for traders to benefit from small fluctuations happening in the currency valuations. Before a FX trader starts a speculative position in the currency's value he/she should be quite aware of the Forex margin origin. In order to find this information you can use the following tips:

1) A trader has to determine foremost Forex leverage which is provided by a FX broker. Simply call your broker or send him/her an e-mail. According to the latest U.S laws Forex brokers can provide for their clients offers suggesting up to 100X leverage opportunities. It denotes you as a trader can get an access to a 100 USD trade by investing only one real dollar. Many traders will notice that in other countries leverage opportunities are even higher : for example the United Kingdom can offer leverage up to 200X.

2) Determination of the minimum FX margin balance is the next step a trader should fulfill. This margin balance is required by your Forex broker for the currency valuations you expect to trade. And again you can find this margin balance by contacting with your broker via e-mail or a phone. 

Suppose, you intend to speculate on the value of EUR against the USD, and suppose that the conversional rate equals 1.33. Your broker will definitely ask you something about 1.5 as the conversional rate for this trade to render not meaningful changes within this rate. The conversional rate is usually changed by a broker if he/she notices fluctuations of the currency value. If we have for a trade the standard leverage of 100X then the minimum Forex market margin balance for a unit of such trade in the pair EUR/USD equals 150 (1.5x100). 

3) The last thing you need to do is to divide your cash holdings within the Forex brokerage account by minimum Forex market margin balance conditions for the currency you want to trade. If you have three thousands of dollars and intend to trade EUR/USD at 150 dollars as the minimum margin you can transact no more than 20 contracts according to your account's size. Keep in mind that the same contract/transaction without any FX margin will require from you 300 thousands of USD at your account.

How to Apply Forex News Information for Benefit?

Even if you are a newbie in the Forex verse you should definitely understand at the moment the importance of the so-called Forex news which stands for political, economical and social issues in a country which currency you have chosen for trading within the Forex exchange market. In order to estimate how a trader can use Forex news: whether bad or good one: to earn money instead of losing it you should read attentively the following issue.

As any other market Forex exchange market is also inclined to prices volatility cause by some financial and political news reports so no wonder many traders have to take into account this news of global and certain country importance. For instance, many FX trading strategies are based on the trading only those currencies that do not fluctuate in any direction according to the latest Forex news releases.

After news coming a trader just needs to move in the direction of the currency movement. Everything is pretty much simple: when the currency is going high you should buy and visa versa when it goes down it will be more reasonably to sell it. In order to stay in the benefits you need to study the list of the so-called Forex news on schedule which appears every trading day at the same time and in such way direct the currency fluctuations. Stability of a certain currency and then a sudden movement of it afterForex news releases denote that a trader has to follow the price movements. 

Surely there are certain alerts of Forex news which can become a real danger for your successful strategy and open positions and that is why you need to consider these alerts of FX news as well. 

To follow this news on a regular base you can read specific financial newspapers and magazines and visit the hugest online portals. However such tendency can bring a negative aspect because everyone gives his point of view and forecasts currency fluctuations and not all people are experts and this means that following every advice is not reasonable at all. And the most dangerous thing is that such Forex 'experts' are very ignorant or just mean and recommend newbies to do something wrong on purpose to get rid of competitors in spite of the fact there is enough of space for all traders within the FX market. Take this human factor as an inevitable part and stick only to those ideas which are spread by many real Forex experts. 

Another alert is that Forex market news can be delivered too late and you won't manage to react properly to derive benefits from your open positions. For example, when news reaches newspapers many employees of banks and other financial situations are quite aware of it and can use it as they want to stay in the profits. While you are reading FX news in a magazine or on a website as well as millions of other traders you can't expect to get an advantage and just follow this news because most of other traders will behave the same. That is why it is useful to have a middle-man in some huge financial organization and pay him if it is necessary to get really fresh news of the FX market. 

There is always a risk that someone will give you wrong tips so check more carefully with whom you are going to do your business and by means of what people to provide Forex transactions.

What Factors Can Impact on the Forex Market?

As far as every Forex beginner knows the Forex financial market’s main purpose is to involve trading of different international currencies to get profits from the fluctuations which occur within the limits of the exchange rates between two international currencies which form a pair a trader chooses to buy or sell gaining money from such transactions. No wonder that Forex market moves so quickly and frequently because the changes within the exchange rates of certain currencies pairs happen all the time due to a number of reasons.

These reasons make trading at the Forex very inconsistent and vulnerable meaning you can whether earn a lot of money or lose everything at once simply because of unexpected changes which will affect the open trades and cause wrong decisions a trader can make. In a case you are going to stay in the profits than losing your money we advise you to read further in order to take into account certain outside the Forex market factors that influence on this financial marketplace no matter of your desire and a well planned trading strategy. 

So, what factors can make you whether a rich or a poor man at the Forex market?

1) Economic and Political News Reports

The most obvious factors which can impact on your trade positions are economic news concerning the Forex market on a global level. When a country which currency you chose as a base one in your currency pair releases the latest economical news these updates can whether negatively or positively impact on the exchange rates in general and on your open trades in particular. This factor should be foremost taken into account when you start planning your own Forex market trading strategy. The same concerns the latest political news a country releases.

2) The Housing Info

Such kind of information should be considered either. What does the housing information mean? For instance, each month the United States of America releases the info concerning houses which are under contract and which were sold. You should also find the information about how many houses were built every month. Using such a strong indicator you can figure out whether economy of a country is stable or not. If a country’s real estate market is ok, you can suppose that the economic condition of a country is good as well.

3) Interest Rates

Maybe you think them unimportant but in fact the worldwide interest rates provide a huge impact on the Forex market fluctuations because they influence foremost on the currency values. For example, in the USA the so-called Federal Reserve provides certain fixed interest rates on bank loans. And if they announce a change of the interest rates this fact impacts on the value currency (in this particular case – the USD). Consequently the changes in the value of a currency can cause changes of the Forex market exchangerates between different international currencies.

To conclude, we should say that these are the most obvious and important factors which impact on the Forex market and the exchange rates fluctuations. Lots of other not so important factors but still impacting on the Forex should be considered as well.

How Can One Develop and Sell a FX Robot?

Ask yourself how many times you have seen the ads in the Web offering to Forex traders to visit a website and buy/try or at least read about a new Forex robot. For sure, at least few times everyone has seen such ads but have you ever thought about making money by designing and selling your own Forex robots. If such a great idea visits your mind from time to time then you should definitely read further because we will tell you the secrets of how you can design and sell your own FX robot software.

Do we even have to say why FX robots are so popular nowadays? Because everyone is a bit crazy about those innovative automated and autopilot FX trading programs which are a real bliss especially for those Forex traders who like an idea of a successful trading without having reliable theoretical background and practical skills and relying only on expensive Forex software. We can’t approve such method but still confirm that Forex robots can be very useful especially if your Forex education was quite good from both theoretical and practical points of view.

Add to this fact such functions as constant controlling and managing your trades according to these parameters 24/5 any FX robot can provide and you will get an assistant that can help you without breaks because it doesn’t require sleeping and eating. Relying on a robot you can stick to your habitual schedule even providing a parallel working in the office being distracted from time to time thanks to the integrated tools which can send to a trader alerts about the upcoming changes at the Forex market so a person could respond in a proper way. So, if you are highly interested in making your own Forex robot because you want to earn money by selling its copies to other traders or simply because you want to have Forex robot software tuned up especially for oneself then follow the next advices.

How to design and then sell a FX robot?

Many new Forex robot builders and designers simply don’t know where to start to create really cool and which is more important a well-working program containing all necessary and maybe few additional and unique tools which can help investors, traders and brokers follow and manage their trades by means of your robot. This is not an easy task to do.

For sure, you have to be a programmer, this issue is not even worth of discussion because without certain practical and theoretical knowledge you won’t manage to build and run a robot in a proper way. From this point of view we can only recommend you to program your robot with an opportunity to gain profits which will be equal to a half or a bit less of the stop loss (your robot’s win-lose ratio should be about 66,7 percents).

Instead of the technical side we want to focus on the functions this robot should fulfill – it has to be designed to work fast, reacting quickly to all commands and is to be very customizable when it concerns tracking the latest Forex trends and displaying them as Forex charts. Besides you robot should be designed for mass exploiting which should be taken into account as well. Do not forget to build your own website where you can offer and enumerate all advantages of your robot software for automated trading.

Make sure that you use all means to promote your robot offer a subscription for a constant customers and free trial version in eager to attract more potential customers. Ask for an expert’s advise in order to organize and run your website and ad campaign properly.

Forex exchange & market introduction

Foreign Currency Exchange (Forex) Trading allows an investor to participate in profitable fluctuations of world currencies. Forex trading works by selecting pairs of currencies and then measuring profit or loss by the fluctuations of one  currency's market activity compared to the other. For example, fluctuations in the value of the U.S. Dollar are measured against another world currency such as the British Pound, Euro, Japanese Yen etc. Being able to discern price trends in forex market activity is the essence of all profitable forex trading and this is what makes foreign currencies so exciting, currencies are the world's 'best trending' market. This gives Forex investors a profit making edge that is unavailable in most other markets.

Forex trading is being called 'today's exciting new investment opportunity for the savvy investor'. The reason is that the Forex Trading Market only began to emerge in 1978, when worldwide currencies were allowed to 'float' according to supply and demand, 7 years after the Gold Standard was abandoned. Up until 1995 Forex Trading was only available to banks and large multinational corporations but today, thanks to the proliferation of the computer and a new era of internet-based communication technologies, this highly profitable market is open to everyone. The Forex Trading Market's growth has been unprecedented, explosive, and continues to be unequaled by any other trading market.

Unlike traditional trading which brings buyers and sellers together in a central location (trading floors) in Forex Trading there is no need for a centralized location. Forex is a market where worldwide traders conduct business by high-speed Internet connections with the Interbank Foreign Currency Exchange via Forex Clearinghouses (also called Forex Brokerage Firms). Forex has not only become the fastest growing trading market, but also the most profitable trading marketplace in the world.

Simply stated, Forex is the most profitable because it is the world's largest marketplace. The Foreign Currency market as a whole accounts for over 1.2 trillion dollars of trading per day (as determined by the fourth Central Bank Survey of Foreign Exchange and Derivatives Market Activity, 1998. This figure is understood to be significantly higher today). To put this into perspective, on any given day the Foreign Currency Exchange Market activity is vastly greater than the Stock Market. It is 75 times greater than the New York Stock Exchange where the average total daily value (using 1998 figures) of both foreign and domestic stocks is $16 billion, and much greater than the daily activity on the London Stock Exchange, with $11 billion.

Furthermore, in addition to being the world's largest and most profitable market, The Foreign Currency Exchange Market (forex) is the world's most powerful and persistent trading market regardless of negative economic indicators. This is because currencies 'trend' better than every other market due to their macro-economic nature. Unlike many commodities whose supply and demand fundamentals can literally change overnight (as we found in the sudden dot com 'market adjustment' and even more abruptly on September 11, 2001), currency fundamentals are much less random, and far more predictable. This is well illustrated in the way interest rates are changed gradually and only in small increments.

Other examples of fundamental predictability are illustrated by the following statistics. Of the $1.2 trillion day trading in Foreign Currency Exchange, 83% of spot foreign exchange activity and 95% of swap activity involves US Dollars. The Euro is the second most active currency at 37%. The Japanese Yen (24%) and the British Pound Sterling (10%) are ranked third and fourth. The Swiss Franc is 7%, and the Canadian and Australian Dollars account for 3%.

Spot Forex is the type of forex trade in which self-traders concentrate most of their investment activity for reasons that are self-explanatory. By definition, a Spot Forex transaction is a currency trade transaction that has a settlement (liquidation) within a maximum of 2 working days following the closing of the trade. Therefore Spot Forex allows the self-trader high liquidity. Another popular feature for well-advised Spot Forex self-traders is the strong profit potential from continual market fluctuations by buying a specific currency when it is weaker and selling it when it is stronger, and the continual pairing of strong currencies against weak ones. This potential for profit or loss is amplified by the effect of leverage. Leverage is a term that describes what can be achieved when a smaller amount of money controls a much larger amount of money. With regards to Forex Trading for example, a leverage-factor of 100 can allow the trader to hold a 100,000 US Dollar position with a modest 1,000 US Dollar margin deposit. Online Forex day trading focuses its investment activity largely on Spot Forex because of the 'risk manageability' of in-and-out trading plus the potential to generate excellent and highly liquid profits.

"Few financial industries generate as much excitement and profit as currency exchange. Traders around the world enter trades for weeks, days or split seconds, generating explosive moves or steady flows, and money changes hands quickly at a staggering daily average of a trillion US dollars. Forex profitability is legendary. George Soros of Quantum Fund realized a profit in excess of 1 billion dollars for a couple of days work in September 1992. Hans Hufschmid of Soloman Brothers, Inc. netted $28 million for 1993. Even by Wall Street standards, these numbers are heartstoppers".*

Despite its high trading volume and its fundamental role in the world, the Forex Market is rarely in the media limelight because its method of trading transaction is less visible than the Floor of a Stock Exchange. However, trading on the Foreign Currency Exchange Market is today surging into the public awareness, as flocks of internet traders are attracted by the market's inherent profitability and risk manageability. Add to this the absence of geographic or temporal boundaries and vibrantly active Forex market is open to all players.