Dollar Falls This Week as Concerns for US Economy Return
The gains of the US dollar at the beginning of this week were outweighed by the losses in the second half as the poor employment data raised the concerns for the US economy and damped the demand for the US currency.At the start of the week the dollar was still supported by the demand for the safe haven, caused by the troubles in Europe and the Korean conflict. Later the greenback was weakened as the demand for the safety was diminished by the hopes that the meeting of the European Central Bank’s policy makers would provide some solution to the Eurozone sovereign-debt crisis. The meeting hasn’t provided the much-needed solution and this could have helped the dollar. But the increasing unemployment and the slow growth of the employment in the US caused the market participants to shun the US currency.
The bad employment data revived the old question: is the quantitative easing good for the economy? Some analysts argue that it can help and point out that so far it hasn’t debased the dollar, as was predicted. But most traders and economists believe that the unending printing of the money can bring nothing but ruin to the economy. And the recent rally of the greenback was caused only by the weakness of other currencies, not by good shape of the US economy itself, according to their opinion.
EUR/USD rose from 1.3280 to 1.3411 after tumbling as low as 1.2969. GBP/USD jumped from 1.5999 to 1.5771, following the drop to the weekly low of 1.5484. USD/JPY went down from 83.81 to 82.71.
If you want to comment on the US dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
3 Ways You Can Use Moving Averages To Trade The Forex Markets
Moving averages are one of the most popular types of technical indicator amongst forex traders. They can be used in a variety of different ways to help find winning forex positions, and in this blog post I want to discuss three of the main trading methods you can use.
1. Moving Average Crossovers
By plotting two moving averages - a short-term moving average and a long-term moving average - you can get strong trading signals when the short-term one crosses the long-term one because this often signals a change in trend.
So to give you an example, I like to use a 5 period EMA (exponential moving average) and a 20 period EMA on the 4 hour chart. I then wait for the EMA (5) to cross through the EMA (20) to provide me with a strong trading signal (using a couple of other indicators for confirmation).
2. Moving Average Confluence
Another way you can use moving averages is by plotting three or four of these on your chart and then waiting for them all to come together. So if you use 5, 20, 50 and 200 period moving averages, for example, you want to wait for them all to be closely bunched up against each other because this often indicates a period of consolidation, and more importantly that a strong breakout is about to occur.
Another way you can use moving averages is by plotting three or four of these on your chart and then waiting for them all to come together. So if you use 5, 20, 50 and 200 period moving averages, for example, you want to wait for them all to be closely bunched up against each other because this often indicates a period of consolidation, and more importantly that a strong breakout is about to occur.
3. Moving Averages As Price Targets
If you are a long-term trader you can also use long-term moving averages as natural price targets, particularly when trading price reversals. The 200 day moving average (simple or exponential) often acts as a magnet as well as a natural support or resistance level, so it makes sense to think about exiting a position close to this moving average.
If you are a long-term trader you can also use long-term moving averages as natural price targets, particularly when trading price reversals. The 200 day moving average (simple or exponential) often acts as a magnet as well as a natural support or resistance level, so it makes sense to think about exiting a position close to this moving average.
Final Comments
You can find out more about how I trade moving average crossovers by filling in the form above and checking out my 4 hour trading system, but you can see what I mean about the other two methods by looking at the daily chart of the GBP/USD pair below.
You can find out more about how I trade moving average crossovers by filling in the form above and checking out my 4 hour trading system, but you can see what I mean about the other two methods by looking at the daily chart of the GBP/USD pair below.
As you can see, the 5, 20, 50 and 200 period EMAs came together at the start of September, indicating a period of consolidation, and then we had a big breakout to the upside where the price went from 1.55 to 1.61, and ultimately all the way up to 1.63.
We then had a strong price reversal and the EMA (200) again acted as a magnet because the price hit this moving average at around 1.56. On this occasion it acted as a support level very briefly, but this was short-lived and the price has since dipped below this level, which is an ominous sign.
Anyway the point is that there are various ways in which you can use these moving averages to trade the forex markets.
Forex Trading – How to make a good living scalping the Euro
In these 2 videos I explain how you can make a nice living scalping the Euro for 2 hours a day. I do it every day between 06:30 and 08:30 AM London time (01:30 – 03:30 NYC time), which would be great for US traders who like a late night followed by a good old sleep in. These videos are in response to my previous videos about scalping the Euro, which were more long term in nature. In these I explain the tiny 1-7 pip trades that I make, sometime over 100 trades to achieve my daily goal of 40 pips. Once the goal is hit I make no further scalp or swings. The only other trades I will make are news related using SNW which make up about 30% of my profits.
As some of you know I used to scalp the DAX a lot more, and I still do occassionally during the NYC pre open and open, but only if I haven’t made my 40 pips scalping the Euro in the early morning. Both methods of day trading are an extreme form of intraday trading and will not suit all, these videos are how I do it, and I know that many have been inspired to do it too, proceed at your own risk mates. To see full size double click on video and watch it on youtube.
How high are the risk in Forex trading?
Forex is often traded in pairs, for example USD/Euro, USD/JPY, Euro/JPY, GBP/CHF, and CAD/USD. You get 'short' in one currency and you will get 'long' in the other one. Unlike conventional stocks market, Forex trading does not have a centralized trade market.
It is considered as Over-the-Counter or Inter-bank as trades are done between two counterparts via electronic network or telephone connections. Forex works truly as a 24-hour market.
Everyday Forex trade begins when the financial centers in Sydney start their day, and moves around the globe to Tokyo, London, and then New York. Traders can always response to the market regardless of the local time.