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FOREX Trading Articles

The Principles of Successful Forex Trading

Why do successful forex traders keep making money year after year, while the inexperienced forex traders lose everything within the first few months? What is it that most beginner forex traders get wrong? How do successful forex traders traders know what’s right?

I am often asked on a weekly basis how to succeed in forex trading. I have been asked these questions so many times, that I finally decided to write it all out. CandleForex will give you straightforward and easy to follow advice on how to become a better trader.

The advantages of Forex trading

The foreign exchange market, commonly known as Forex or simply FX, is an international financial market where foreign currencies are traded with the intention of making money on the difference in exchange rates. One of the largest markets in the world, the Forex market operates 24 hours a day (excluding weekends) and defines the comparative value of currencies across the globe.

Market Meltdown!

There’s really only one story to discuss today and that is Italy. Italian bond yields are soaring and I mean soaring and the market reaction is not pretty. In a story of “be careful what you wish for”, Italian Premier Berlusconi is said to be stepping down next week but today’s crisis may actually reverse those wants and return him to power.

Since the announcement that he would step down after austerity measures were implemented, bond yields jumped to above 7% for the first time in the Euro-era. This is an unsustainable level and the uncertainty over the new Italian government is weighing heavily on the market.

Forex Market Outlook 11/3/11

Once again all eyes are on Greece this morning as we are running the gamut of Greek theater. First we saw the drama unfold during the painstaking debt crisis resolution and now we’re watching the comedy of errors that is taking place with misstep after misstep. Will we eventually see the tragedy? And whom would it end up being tragic for: the Euro zone or Greece itself.

Forex Market Outlook 11/2/11

How does one get invited to that ultra-ritzy resort town of Cannes, France? Apparently by upsetting G-20 leaders as you potentially re-neg on a deal that may be the most important economic event of the past year. Yet that’s where Greek PM Papandreou will be as he has been “summoned” to the G-20 meeting to explain what the heck is going on in Greece.

Forex Market Outlook 11/1/11

Do you remember last week when I said that with regard to the Euro debt crisis resolution, the devil is in the details? Well it looks like that prognostication was prescient as new information is coming to light. At the time I noted that while the plan sounded good, how they would actually enact it would be more important. Now there is sentiment that the process could be derailed as unforeseen issues are starting to materialize.

Forex Market Outlook 10/31/11

This Halloween is turning out to be more trick than treat as the market digests the events of the past week, particularly the Euro debt resolution. This week is starting out in risk aversion mode with US dollar strength and stock market and commodities weakness.

One of the “tricks” from over the weekend was the unilateral currency intervention by the Ministry of Finance in Japan, who took action to weaken the Yen citing excessive speculation and one-sided moves that don’t reflect the underlying economic fundamentals. This has caused the Yen to fall some 4% vs. USD and is the third intervention this year undertaken by the Japanese. It must be noted, however, that this intervention was taken by the government itself and not the Bank of Japan.

Forex Market Outlook 10/28/11

Yesterday’s meteoric ride higher in risk assets is emblematic of the overall state of the global economy in that it is government and not business that is holding us back. With the “resolution” of the Euro debt crisis having been established, let’s not forget that the debt problem is not going to go away, but rather now they have a coherent plan to deal with it. That is, until something happens.

Forex Market Outlook 10/27/11

Well the Euro debt crisis is finally over, or is it? So what happens next? That folks, is the million dollar question but first we should take a look at the events of the last 24-hours and what was revealed as the definitive resolution.

Yesterday there was some market volatility and initial risk aversion as the rumors were making the rounds and we were expecting the announcement to take place some time near the end of yesterday’s trading session. When it appeared as thought this process would be delayed into late last night, the markets reversed and risk appetite increased in anticipation of the announcement.

The announcement finally came late last night and here are the highlights of the plan of action:

Forex Market Outlook 10/26/11

Today is the day of reckoning for the Euro as the market is expecting the final resolution to the Euro debt crisis. At this point it is still uncertain at exactly what time the details of the plan will be released so stay on your toes today and pay attention to the news!

Yesterday’s risk aversion and subsequent sell-off non-withstanding, the markets have been moving markedly higher since early October and it looks like we have put in a bit of a “V-bottom”, which I identified in yesterday’s chart of the day. It will be interesting to see if the market can sustain this rally in the face of the Euro announcement.

Forex Market Outlook 10/25/11

By Mike Conlon, on Oct 25, 2011

Well it looks like the market is unaware that there is major risk potential in the marketplace as stocks and commodities took off yesterday and it was “game on” for risk appetite. As a result, the Euro as well as the commodity bloc currencies moved higher despite the Euro debt decision due out tomorrow.

Does the market know something that we don’t? As often is the case, the answer is simply “no”. What the market does know is that it wants to take on risk and wants to buy stocks (especially large fund managers who have posted less than stellar returns) as corporate earnings have been largely better than expected. Throw in higher Chinese PMI data that showed that they aren’t slowing entirely and you have a recipe for gains.

Forex Market Outlook 10/21/11

By Mike Conlon, on Oct 21, 2011

The market has been range-bound headed into the weekend, but man, those ranges are pretty big! I was surprised as I thought we’d see the ranges tighten up but that hasn’t been the case. Yesterday, the markets made huge moves as various news trickled out regarding the Euro debt crisis.

It is times like these when I tend to be more cautious, as it is difficult to know when news may hit or what its impact may be. Yesterday, the markets were selling off as risk aversion picked up throughout the early US session, only to completely reverse after “news” came out that the size of the rescue plan is going to be in the magnitude of $1.3 Trillion, with a “T”. That is encouraging news for the market, as in this case more is better.

Forex Market Outlook 10/20/11

By Mike Conlon, on Oct 20, 2011

This morning all eyes are on Athens where the Greek rioters are protesting against further austerity measures which are to be voted to ensure that Greece is taking the steps necessary to continue the bailout discussion. The Troika will be reporting the economic state of affairs in Greece but so far the sentiment has been that that was Greece has done is insufficient to date.

EU summit/G20 to kick off the final phase of Maximum Intervention

EU summit/G20 to kick off the final phase of Maximum Intervention

Going into this weekend’s EU summit, the market is still making the bet that Germany will choose solidarity over fiscal discipline, the recent lowering of expectations from German government sources notwithstanding. This looks increasingly like an “all in” round of betting in a hand of poker – the market better hope it is right.

FOMC meeting flash: Bernanke does the twist

The Federal Reserve has just announced, after an unusual delay, that it will undertake a programme to flatten the yield curve, the famous Operation Twist, as was expected by most analysts ahead of this week's FOMC meeting.

• Fed will buy USD 400 billion long-term securities (6-30 year), sell 400 bln short-term securities (3 year and less); average maturity will be extended.
• Fed Funds Rate stays at 0-0.25 percent, as expected. Also the pledge to keep it steady until mid-2013 was repeated.
• The Fed does not change the Interest on Excess Reserves (IOER) of 0.25 percent.
• The Fed changes its view of the economy as well, saying that "[t]here are significant downside risks to the economic outlook, including strains in global financial markets".

Forex Market Outlook 10/19/11

By Mike Conlon, on Oct 19, 2011

Yesterday’s market turn-around exemplifies the type of market action we may continue to see until the Euro debt crisis is finally resolved to the satisfaction of the world. Yes, I said the world. Markets yesterday were selling off on lowered expectations that this weekend’s European summit would produce that resolution, but a rumor hit the tape from a newspaper in Euro that said that France and Germany had agreed to expand the size of the ESFS to 2 trillion euros, much larger than had been previously agreed upon.

Gold margin increase triggers rout

The past week in metals has been one for the record books. Silver dropped by 34 percent in a matter of days, its sharpest drop in 30 years. Gold meanwhile corrected by 20 percent from its peak, which has only happened twice before during the last decade. Copper corrected by one third from the February high as hedge funds reversed their positions into shorts for the first time in more than two years.

Forex Market Outlook 10/18/11

By Mike Conlon, on Oct 18, 2011

With the overhang of the realization that indeed Euro zone leaders will not have a resolution in place by next week like the G-20 leaders asked for, it is now questionable what exactly Merkozy were referring to when they claimed to be able to have something ready by early November. Is their timetable still in play? From where I sit, it doesn’t seem likely.

Forex Market Outlook 10/17/11

By Mike Conlon, on Oct 17, 2011

Over the weekend, G-20 leaders re-iterated their desire that EU leaders pick up the pace and come up with the solution to the Euro debt crisis, essentially giving them a week to finalize the plan. This provided the market with some optimism to start out the day, but that optimism was short-lived as Merkel’s reps sought to lower expectations.

The message was that essentially the “dream” of solving the crisis in the next week was not likely, essentially dousing risk appetite lower. While European leaders believe that they have identified 5 areas that need to be addressed, as always, the devil is in the details.

Forex Market Outlook 10/14/11

By Mike Conlon, on Oct 14, 2011

It looks as though the European rescue plan is starting to take shape as a meeting of G-20 leaders is likely to produce a framework for the resolution. It is then likely that whatever emerges will be discussed at a meeting next week of European leaders and if that is agreed to, then we could have the final resolution by early November as promised by Merkel and Sarkozy.

Forex Market Outlook 10/13/11

By Mike Conlon, on Oct 13, 2011

Yesterday’s release of the FOMC meeting minutes was a complete dud and market hopes that the Fed was close to QE3 went unrealized. Part of that hope came from Bernanke’s speech to the Joint Economic Committee earlier this month, but it seems as though that mention of further easing was intended to keep the markets from falling off a cliff.

Yet they are no closer to QE3 then previously thought, so the “free money trade” will have to wait for another day or for the economy to worsen dramatically, which is not out of the realm of possibility if the EU fails to meet their deadline on the debt crisis resolution. The clock is ticking.

Forex Market Outlook 10/12/11

This morning has started with risk appetite driving markets higher, with Dollar and Yen weakness acting as either a by-product or catalyst of the move. Regardless of who or what is leading the charge, a sense of calm is starting to return to the markets and they looked poised for a 4th quarter rally into the end of the year.

Forex Market Outlook 10/11/11

By Mike Conlon, on Oct 11, 2011 01:26:22 GMT

This morning all eyes are on the tiny nation of Slovakia who is wielding enormous power in that they are voting on whether or not to ratify the expansion of the EFSF in the Euro zone as part of the July 21st agreement. There must be unanimous agreement among all 17 Euro nations or the process could be derailed. While the market is expecting this vote to pass, there is some trepidation until it is a done deal.

So the markets have started the morning in mild risk-aversion mode after yesterday’s tremendous move higher in stocks and commodities. The S&P 500 had its largest daily gain in nearly 2 months on a light-volume session due to the Columbus Day holiday here in the US with the bond market closed.

Trading Psychology - Staying Calm Under Pressure

Trading Psychology - Staying Calm Under Pressure

Ten Great Forex Websites

Ten Great Forex Websites

With the rise of the internet in the forex trading world, many forex traders have been choosing to go online. Being able to get free education, webinars, news and guides so easily has meant that a lot of traders are effectively pulling away from books and seminars and going digital instead.

Here’s a list of some great forex websites for you to check out, all of which aim to sate a different niche, be it forex news, forex statistics or forums to help you get in touch with other traders.