Posts Tagged ‘b’

How To Trade Price Action In Forex Markets?

July 27th, 2009

If you want to become a successful trader, you should immerse yourself completely in the subject in order to find your edge. In case, you are already a winning trader than you should know exactly what your edge is.

Even the most advanced traders find it difficult to understand, interpret and trade the sharp moves often seen in the forex markets. By learning to read and interpret price action, you can develop a huge advantage for you as a trader.

When the market is going in a steep decline, one should be really careful to measure the reaction of the long positions. You must try to understand if the sharp move has the chance to turn into a rout.

Look at the reaction of the longs as soon as the rate begins to go south, this way you may be able to determine if the market is sitting on a large number of long positions. In case, the spike is followed by a sharp V recovery, you should avoid shorting the pair.

More buyers entering the market at lower levels tells you that the market is not heavily long and traders are seeing it as an opportunity to buy low. These lower prices mean bargain prices for you if you wish to accumulate long positions.

Moving averages (MAs) are among the oldest, true and tested lagging indicators. MAs can be simple as well as exponential. Widely used moving averages are the 50, 100 and 200 day MAs. Many traders use MAs in making trading decisions.

Moving averages are essentially lagging indicators and relate to the past price action. MAs can be used effectively in intra day trading for entering and exiting positions in one way markets.

During times of sharp price moves, it becomes difficult for the traders to enter a position as retracements are far and few. This makes most of the traders confused and forces them to start taking arbitrary decisions.

Moving Averages can be used as dynamic support and resistance levels in such situations. This will give results superior than the static support and resistance levels used by majority of the traders.

The advantages of using Moving Averages this way gives you dynamic levels to trade off and gauge price action taking place. MAs can help you avoid using arbitrary levels in trading a position on when you should take profit.

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Learn To Trade Like A Hedge Fund Manager (Part I)

July 25th, 2009

The difference between a professional trader and an amateur trader is that a professional trader never goes into a trade blindly. You see hedge fund managers have to show good results to their investors in order to solicit their investments into their funds. Hedge fund managers have to convince their clients that they have a battle tested strategy.

As retail or individual traders, our $10,000 account is just as important as any $20 million hedge fund. In fact, our $10,000 account is more important. We are staking our own hard earned money on trading compared to a hedge fund manager. He is most likely trading with other peoples money.

Most of the hedge fund managers follow a step by step process to develop their forex trading strategies. There is no reason why should we as individual traders also not follow that step by step process to develop our own trading strategies. We cant afford to lose our hard earned money in unsuccessful trading.

One thing should be clear; every trader has to find his/her own edge. We can learn from others. But in the end, it is our own methods and insights that will make us succeed as forex traders in the long run. Lets discuss the step by step process of developing our own trading strategy like the hedge fund managers.

Properly define your trading strategy. Every hedge fund manager like every trader follows a different methodology. Some use fundamental analysis. Other use technical analysis.

The first thing that you need to figure out is the style of trading that best suits you and what type of trader you are. Are you a short term trader like most day traders? Are you a long term trader and want to swing trade or position trade?

From the start, figure out whether you want to trade based on fundamentals or technicals or a combination of both. Hedge fund managers develop their trading strategies by defining clear cut trading rules and coding them. This way the hedge fund managers avoid the pitfalls of emotional trading.

Trading based on emotion is dangerous and can and will ruin you as a trader. Make your forex system rule based to make your trading as unemotional as possible.

You need to decide whether you want to be a news trader or you will use technical indicators in your trading. You need to pick a few currency pairs and become master of their behavior. Not all currency pairs are created equal and you need to focus on only a few to become a successful long term trader.

Every currency pair requires a different trading strategy to succeed. You need to understand this. Some strategies work best on one currency pair but dont work on others. Read more in Part II of this article how hedge fund managers develop their trading strategies.

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Using Interest Rate Differentials as Fundamental Trading Strategy

July 24th, 2009

As a forex trader, you should be aware of the role played by the interest rate changes in the general economic and investment climate. You should know that interest rates are an essential part of investment decisions and can drive currency markets as well as the stock and commodities markets in either direction. After the unemployment figures, Federal Open Market Committee (FOMC) rate decisions are the second largest currency market moving release.

The impact of interest rate changes is not only short term but also long term on the currency markets. One Central Banks interest rate decision can affect more than a single currency pair in the interconnected forex markets.

In forex trading, an interest rate differential is the difference between the base currency interest rate and the quoted currency interest rate. In the currency pair, EUR/USD, EUR is the base currency and USD is the quoted or counter currency. The interest rate differential for the EUR/USD pair will be the difference between the Euro interest rate and the USD interest rate.

Understanding the relationship between the interest rate differentials and the currency pairs can be very profitable. In addition to the Central Banks overnight interest rate decisions, expected future overnight rates as well the expected timing for the rate changes can be critical to the currency pair movements.

The reason why this is profitable is that international investors like big banks, hedge funds and institutional investors are yield seekers. They actively keep on shifting funds from the low yield assets to high yield assets.

Interest rate differentials are considered to be the leading indicators for currency prices. London Inter Bank Offer Rate and the 10 year government bond yields are usually used as leading indicators of currency movements.

Lets use an example to make it clear. Suppose the Australian 10 year government bond yield is 5.25%. The US 10 year government bond yield is 1.75%. The yield spread between AUD and USD would be 350 basis points in favor of the AUD.

Suppose the Australian government raises its overnight interest rate by 25 basis points. The Australian 10 year government bond yield would appreciate to 5.50%. Now, the new yield spread between AUD and USD is 375 basis points in favor of AUD. The Australian Dollar will also be expected to appreciate against US Dollar.

The general rule of thumb used by professional traders is that when a yield spread increases in favor of a certain currency that currency is expected to appreciate against the other currency in the pair. This is important information for you as a trader. Interest rate data is available on Bloomberg. Keep track of the currencies in the currency pairs that you trade with that data.

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Vacation Rental Marketing – All You Need To Know

July 23rd, 2009

Apartments and apartment buildings or apartment complexes are income properties and business ventures to landlords everywhere in the world. As is true with any other type of business, landlords need customers to sustain them financially.

Customers in the apartment rental type of businesses are called renters or tenants and they are attracted through a variety of apartment marketing strategies which include but are not limited to apartment rental advertising in the printed media as well as through apartment Internet marketing at the countless websites which provide apartment and house rental advertising services to both side of the equation – the landlords and the tenants.

Because rental apartments are a business and in light of the current weak global economy, most landlords go out of their way to cut costs while at the same time attempting to increase their revenues and preserve the value of their properties.

Children may be viewed as miraculous assets to their families and friends but they are considered to be financial liabilities to landlords for a variety of reasonable, although unfair, reasons:

Children tend to be noisy and make their properties less desirable to other “more upstanding” tenants.As babies they cry; as toddlers they run around banging toys; as pubescents (pre-teens) they are prone to fits of vocal anger; and as teens they play loud music, have wild parties, smoke, drink and talk dirty. Children tend to be dirty and so many other tenants may not appreciate the potential stench. Infants produce diapers filled with poop; toddlers play with chalk, crayons and mud; pre-teens toss rubbish; and teens simply don’t bath. Children tend to attract more children and soon their properties are swarming with little urchins. As if tolerating tenant children is not bad enough, children and parents of children tend to invite other children for playtime, parties and dates.

Vacation rental marketing What You Should Know

There may be some or a whole lot of legitimacy and truth to these harsh allegations.However, we all know that tenants are often part of families which include children and they are every bit deserving as anyone else to have a safe and secure place to live, particularly when children are involved.

To protect tenants with children against discrimination, groups with authority and civil rights organizations have been instrumental in instituting laws that are aimed at preventing landlords from baring families with children into their rental properties.These laws are known as Fair Housing Acts in the United States but other nations have equivalent laws called different things.

Most of such laws define children as individuals who are under the age of 18 and they include children whose relationship to the applying tenants is biological, adoptive or through the legal proceedings of guardianship.These shielding laws also protect tenants who are expecting a child whether through natural birth or proceedings for adoption or guardianship.

For a better experience with all your Advertising rentals needs, use a company well experienced to get the best result.. This applies whether you are renting out properties or are looking to rent.

Regardless of how they are called, these laws make provisions for strict enforcement and punitive consequences for offending landlords. In spite of that, many landlords still continually dismiss tenants or prospective tenants off their properties because they have children. So, many of them end up being reported, sentenced and charged with heavy fines for breaking the law.

Now, if I may be so bold, I would like to offer a few words of advice to landlords and tenants with children.

To the landlords I would like to say: Get over yourselves and remember that you too were children once.

To tenants with children I’d like first of all extend my congratulations for being so lucky. Secondly, I’d like to remind them to be good neighbors by practicing good renting etiquettes and teaching their children to do the same.

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House Rental Advertising -Some Powerful Tips

July 23rd, 2009

It would be terrifically nice if people in relationships (personal and professional) got along just because.Unfortunately, that isn’t what always happens, especially when money is involved. So, governments and all kinds of official groups come in with rules which tell people how to behave under certain circumstances and how not to. Such lists also provide detailed lists which indicate how those who fail to follow the rules get reprimanded or punished.

Take that little bit of extra time with your Apartment marketing plan, because it should not be rushed.

The fact is that world population has been moving steadily upwards while the global economy has been heading downwards in the last few years. So, there are more people who are looking for more apartment rentals because many of them cannot afford to buy real estate. That is how apartment marketing became such a huge business all over the world (after all, people have to live somewhere).

Sets of guidelines have been written into official books as laws and regulations. These all focus on Tenant / Landlord Relations which are intended to protect both sides – the tenants and the landlords – as fairly and justly as is possible.

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Let’s take a quick peek at the process that leads up to the Tenant / Landlord Relations which involves rental marketing and then advertising rentals which is meant to attract the right tenants who will occupy the vacancy and pay for the privilege.

To advertise a rental property, the landlord can place ads in the local, national or international printed newspapers, magazines or periodicals. The landlord can also apply with agencies as well as post “For Rent” signs in front of the vacant property. But, since the World Wide Web (WWW) and the Internet have been invented, apartment advertising can be handled with much more effective.

Today, the Internet is filled with websites that are quick, easy and convenient as they provide beneficial services to landlords and tenants. For landlords, they provide the ultimate exposure to their vacant apartments by getting them listed in many online sites, search directories, social networks as well as video portals. For tenants, these online services are easy-to-get-to sources for listed vacant apartments.

Although the Internet has become the source for everything for many people, some still prefer taking the old fashioned route and that’s OK because it take all kinds to make the world go around.Don’t forget that we’re talking about Relations here.

Whichever method of advertising the landlord chooses, it is up to him or her to investigate the desirability of the want-to-be tenant. In a similar way, it is the responsibility of the tenant to closely consider what is being offered (the apartment) and who is doing the offering (the landlord).

When the two sides are sure that they have found a good match, the Tenant / Landlord Relations begin with the signing of a written contract (or an agreement) which is legally endorsed by the local authorities. Such a contract must spell out the landlord’s obligations, the tenant’s commitments, and the means by which to resolve disputes between the two entities, if and when disputes arise.

As is true with all other relationships, Tenant / Landlord Relations are all about the rights, the obligations and the commitments of the landlord toward the tenant and vice versa, of the tenant toward the landlord.

Because every tenant deserves to live in a descent place, landlords must:

Provide apartment which comply with the minimum codes for the health and safety of the tenants. Do whatever they have to in order to sustain the rental quarters in conditions that are conducive to safety of their tenants. Ensure that the common areas of the rental property are safe. Keep all facilities, appliances and systems (electrical, plumbing, sanitation, heating, air conditioning, ventilation, and so on) in safe working conditions. Establish a well maintained system for removal of garbage. Supply clean running cold as well as hot water.

Because each and every landlord deserves thier property to be treated respectfully, tenants are obligated to:

Keep their rented spaces in compliance with health and safety. Keep their rented spaces clean and damage-free while occupying it. Leave the rented spaces as clean and damage-free upon vacancy as they found them when occupancy began. Use the system provided for removal of garbage safely. Use all provided facilities, appliances and systems (electrical, plumbing, sanitation, heating, air conditioning, ventilation, and so on) reasonably and safely. Refrain from purposely or carelessly damage, destroy, deface or remove any part of the rented space. Display considerate and peaceful behavior toward other tenants, landlords and/or neighbors. Adhere to all the dos and don’ts spelled out within the signed rental contract.

All quarrel or disagreements between tenants and landlords which cannot be peacefully resolved otherwise, are taken up in courts of law which are authorized to issue verdicts that can include monitory fines, jail sentences and a variety of community services.

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Apartments Marketing – What You Need To Know

July 23rd, 2009

Because of the poor economy all over the world, people are losing their jobs which often results in their inability to make the mortgage payments which then leads to foreclosures. And those who have lost their homes still need a roof over their heads and so they look into marketing rentals as a viable and hopefully affordable option.

So, apartments marketing themselves, or rather landlords who advertise apartment rentals are snatched in record time and the industry is thriving more than ever.

Whether the prospective tenants are ones who have recently lost their homes, ones who have just moved into the city or are young persons who are moving out from under their parents’ wings; they are most likely looking at apartments advertising on the various websites that appropriately advertise rental property, including apartments.

Browsing through rental property advertising is all good and well but those who are hoping to make this work must realize that apartment living is not all that easy. Yes, they are separated by walls, floors and ceilings; but living in an apartment is like living in a big house with a bunch of strangers. And every one of these strangers (young and old) have their own different attitudes, peculiar personalities and unfamiliar states of mind.

Feelings can easily be hurt, emotions can quickly be aroused and conflicts can be evoked at a blink of an eye. Therefore, there are certain set of renting etiquettes to be followed or rules to apartment living, if you will. There are no guarantees, but renting etiquettes may prevent or forestall many unpleasant incidents which all too frequently take place between neighbors.

Remember, to Advertise rentals, it always pays to use an professional company.

The walls of apartment buildings are usually thin and the units are not sound proof. Therefore, nose is probably the single biggest challenge when living in an apartment. The most frequent contributors to bothersome noises are:

- Babies that cry. – Toddlers who run around and bang on noisy toys. – Household guests who speak loudly, stomp heavily and so on. – Television sets, radios, stereos, video games and so on which are set to high volumes. – Pets that bark, growl, mew, and chirp too loud, too often and too long. – Vacuuming and using washers, dryers and other machinery too early in the morning or too late at night.

Various types of behaviors in and around the apartment can prove to be problematic when:

- Standing around the windows or doors of other tenants. – Smoking must be limited to well aired areas and as far from other tenants as possible. – Littering common areas and throwing trash outside the allocated bins. – Allowing pets and children to run around common areas to scream, snap, snarl, pooh and pee at will. – Using and / or making drugs on the premises of the apartment complex. – Defacing any part of the apartment complex within the individual apartment or in the common areas. – Taking up parking spaces which have officially been assigned to other tenants or parking in such a way that blocks other tenants’ vehicles from moving in or out of their parking spaces.

It’s always beneficial to use a company well experienced in Apartments Marketing to achieve the best rental outcome, whether you are renting out properties or are looking to rent.

For the most part, renting etiquettes are written into the rental contracts and are subject to eviction if defied.But even when they are not formally presented, renting etiquettes make tenants considerate neighbors which is, obviously, far more desirable than the other kind.

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Using Commodity Prices as Leading Indicators

July 23rd, 2009

Commodities, namely gold and oil, have a strong and substantial correlation with forex markets. By understanding this relationship between gold, oil and currency pairs, you as a forex trader can gauge risk, forecast price changes as well as understand exposure.

Gold and oil prices essentially tend to move based on almost similar fundamental forces that affect a few currency pairs. Four major currencies, the New Zealand Dollar, the Australian Dollar, the Canadian Dollar and the Swiss Franc are considered to be commodity currencies.

The NZD, CAD, AUD, and CHF all have strong connection with gold prices. Natural gold reserves and currency laws in these countries result in almost mirror like movements. The CAD also tends to move with the oil prices.

However, the correlation between CAD and oil prices is not that strong. Each one of these currencies has a correlation with gold and oil and the fundamental factors behind doing so.

Knowledge of the fundamental factors behind these movements, their direction and strength could be a good method to discover trends in both the markets. There is a strong correlation between gold prices and US Dollar as well.

During unstable geopolitical times as well as when global recessionary fears become strong like that presently, investors tend to run away from US Dollar and instead turn to gold as a safe haven for their investments and hoard their wealth.

Therefore, as Dollar loses value, gold prices tend to rise as wary investors become afraid of losing their wealth. As US is going to print more and more dollars to finance its budget deficits, USD will depreciate and gold will appreciate. Many countries are trying to hoard gold keeping in view this anticipated depreciation of dollar. AUD/USD, NZD/USD and USD/CHF are currency pairs that tend to mirror gold movements.

Global energy needs are wholly dependent on oil supplies. Oil prices usually tend to have a huge impact on the global economy. Dont forget, the early part of 2008 when oil and commodity prices jumped skyward taking the global economy to the brink of recession. Oil prices did come down due to the stock market crash but it is being forecasted that it will rise again when the global economy comes out of recession and the demand for oil rises again. USD/CAD currency pair tends to show an oil relationship. The major reason for this relationship is the heavy dependence of US and Canadian economies on foreign oil.

Generally speaking, commodity prices are usually considered to be a leading indicator of currency prices. As such, commodity block traders monitor gold and oil prices to forecast movements in currency pairs. The knowledge of this relationship between gold, oil and currencies can help forex traders to diversity their risk exposure using different products. The combination of gold and forex trading can be very profitable.

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Renting Out Your Home Is A Business

July 22nd, 2009

Those who decide to start renting out their homes, condos, or apartments, need to be aware that renting is not only an investment, but also a business. Whether you are renting to strangers, friends, or relatives, you should maintain the relationship in a business-like manner. KeyRenter is a Utah property management company that handles these business manners for landlords.

The reason you need to keep business records and behave a business-like manner is so you can avoid any legal issues. Landlords who own several rental properties may have the money to hire a lawyer for their case. But many are just owners of one home who got into a legal bind and has to pay for legal fees, lost rent, and other costs, just because they didn’t handle their property in a business way.

KeyRenter helps landlords in homes for rent in Utah keep accurate financial records by providing a monthly accounting statement. They also perform year-end tax summaries where they go through the house to analyze the value and losses for your taxes. This can help you avoid a lawsuit when you have accurate finances, legal contracts, and the right tax information.

Since you are running your rental homes in Utah like a business, this means your tenant is your customer. It is a golden rule to please the customer and help them with their requests. This means you should be friendly with your tenant and keep good communication with each other. The tenant shouldn’t feel scared to call you up if something needs a repair or replacement.

Respond promptly to any requests that require immediate attention. Usually, when you treat your tenants well, they will treat you and your rental property well also. When your tenants are happy and you maintain the property while they live there, they are more likely to want to stay there and renew their contract.

Renewal of a rental contract usually occurs once a year. It is at this time tenants can choose to move out, or to stay on for another contract term. It is best when you have good tenants who decide to stay longer. This way you know they are good and you have already established a relationship with them. This will help reassure you that the monthly bills will continue to get paid and not have to go through a period when the rental home is vacant. Treating your rental home as a business is key to getting and retaining good tenants and avoiding legal issues.

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How Seasonal Patterns Effect Forex Markets?

July 22nd, 2009

Most forex traders analyze and predict the future direction of currencies using fundamental or technical analysis. The craftier among them use the combination of both to predict direction of forex markets.

Fundamental analysis studies the long term effect of economic forces on currency markets whether financial or socio political using various economic indicators. Technical analysis is based on the premise that all available information is already compounded into the prices and the future prices can be predicted based on past prices.

If you have been trading stocks, you must be familiar with the term: The January Effect. It has been observed over a long period of time that stocks tend to perform very well between the last week of December and the first week of January.

The explanation of the January Effect is simple. During the last few days of the year, many investors are concerned about their tax returns. They try to realize capital gains or losses to file their tax returns. Many corporations also use the end of the year to face lift their balance sheets favorably at the end of the year.

Seasonality is not peculiar to the stock markets. In fact forex markets also tend to exhibit strong seasonal effects. Seasonality can be defined as a pattern that occurs at a particular period of the year.

The January Effect also takes place in forex markets because most of the investors who are liquidating their stock positions try to convert their local currencies into dollars at that time.

However, dollar may show stronger January Effect with some currencies as compared to others. It has also been studied that dollar shows a summer seasonality when it tends to rise in USD/JPY and USD/CAD in the month of July and give back its gains in the month of August.

There are other seasonal patterns that have been studied in other parts of the year. Now, it does not mean that these seasonal effects take place exactly the same way every year.

Seasonality in currency pairs only means that there is a strong probability that during a particular time of the year, the chances of a particular currency pair going up or down are high.

Forex traders should keep these seasonal patterns at the back of their minds while trading during that period.

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Economic Factors That Move the Forex Markets in the Short Term

July 21st, 2009
<div style='font-style:italic;' class='byline'>by Ahmad Hassam

Fundamental traders depend on fundamental analysis in trading forex. Technical traders depend on technical analysis in trading forex. But the importance of economic data cannot be underestimated in shaping trading strategies.

Over 90 percent of currency transactions are done against USD. USD is either the base currency or the counter currency in most of the currency trades.

Since majority of the currency trades involve USD, you as a forex trader will also most probably trade USD most of the time. Release of certain economic data has significant and lasting impact on currencies like USD.

With experience, you will understand that currency markets reaction to the release of different economic data with time also changes. A few years back, US GDP figures used to be important for USD but they dont have much impact now.

EUR/USD is the most liquid pair in the forex market and is heavily traded. The release of Nonfarm Payrolls (NFP) data on the first Friday of each month has become important in recent years. These figures makes EUR/USD and other pairs involving US Dollar highly volatile for some time until the markets digest the importance of these figures.

Similarly, the release of US housing sales number every month has become very significant for USD in the recent years. Previously, forex markets used to give more importance to US Trade Balance.

Range traders like to trade when the currency pair they are trading tends to range. If you are a range trader who wants to scalp for a few pips every time you trade, you should avoid the day NFP data is released for trading. This is a highly volatile day for the markets.

However, if you use breakout trading as your trading strategy, understanding which economic data is expected to be released on a particular day can help you in your trading. You should plan your trading strategy in accordance with the significance of the economic data to be released.

In nutshell, understanding that some economic indicators move the forex markets most is very important for you as a trader. It is also important for you to know which economic data the market deems most important at any point in time.

You should also know which data causes knee jerk reaction in the markets and which pieces of data will have lasting reaction in the forex markets.

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