Free forex training has been quite volatile lately because of Greece's debt crisis. Some are afraid that this problem will spread to other European Union countries that have a lot of debt such as Spain, Portugal and Italy . As a result of what has happened , against the US Dollar the Euro currency has dropped about 11% . When looking at this situation we need to ask ourselves the following questions : Is the end of the Euro sell off here and is the recent strength in the US Dollar a result of strong fundamentals in the United States or of weakness in the Euro ? The reason these are important questions is because the answer to the second one will greatly impact how we answer the first .
My take is that the US Dollar currently is benefiting only because of the weakness of the Euro . Steam has only been picked up in the spending driven US economy because the Federal Reserve for some time has left the rates near 0%. What will happen when the Fed is forced to raise rates ? Will this head wind be something the US economy can really withstand? The answer is likely no . You also have to remember that currently consumers are spending more because many consumers are simply walking away from other payments, such as mortgage, auto, and credit card payments. This means that consumers have income that they usually don't have and so they can spend more money on things such as clothing, new electronic items, and meals out . Again consumers are going at it like crazy. It wasn't sustainable in the last Federal Reserve inflated boom and this time is not different . In the next several years, default or inflation are the US Dollar's only options and both of the options will lead to disaster.
When doing free forex training our goal is naturally to make money . We have no biases. We want a profit from the foresight we have. Thus, the answer to the second question is that the Euro is over sold and will hit a bottom at some point . 1.2300-2400 is probably where it will be . After all , do you really believe that Germany, one of the largest world economies, will allow the failure of their currency ? The answer is, "probably not." This is the reason they aren't printing out more Euros and helping with a Greece bailout . The Euro will be a more sound currency because of what is happening in Greece . The investors world wide will realize that the Euro is a safe option because when they face problems they take the short term loss in order to preserve long term health . Thus , their economy may be having a tough time , but all of this will make their monetary unit better . The situation in the United States is just the opposite. Short term problems are being solved by printing more money, but this leads to problems with the health of our economy and the US Dollar.
After looking at all that , we are close to the point where you'll get the Euro for a great bargain that you need to jump on as you do your own free forex training. Not only for the reasons we've talked about , but market psychology tells you this as well . Professionals buy when there is a free fall in the market just as the average person is catching wind of the crisis and comes in off the street to go short the move that has already happened . This pattern has happened many, many times , and this will continue to occur as long as human physiology includes limbic systems.
David F Dacosta - Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.
Tuesday, September 28, 2010
Tuesday, September 14, 2010
Enjoy Portfolio Benefits With Free Forex Training
Free forex training can be done in so many different forms and for so many reasons that is often a daunting task just to figure out where to start . Should you go with an account with a specialized FX trading brokerage, or should you open an account at a brokerage that allows you to trade stocks, options, exchange traded funds, and futures ? Like this decision isn't overwhelming enough, then you have to go on to figure out whether to use FX trading as a speculative or hedging tool, long or short term, etcetera. Before you start there are definitely many things to consider .
While the questions posed in the paragraph above are enough to illicit a multi-volume response , for clarity's sake we'll look at the basics in this article. The easiest way to get comfortable within this world of FX trading is to go ahead and open your account with a fx trading specialist brokerage . What broker should you choose ? That is a topic that is better left for another article. Before depositing money, just be sure to do some due diligence!
Once your free forex training is working and you are getting started , you need to get a firm handle on what exactly it is you're participating in . In this example , we're suggesting that because you opened your account with a broker specializing in forex trading, you'll begin by trading cash or spot contracts. Without getting too complicated , this just means you are trading the current price as it is in the market at that moment . If 1.3200 is what you see the Eur/Usd pair is trading on the screen that means that you can sell Euros against US Dollars at that rate or you can sell Euros and buy US Dollars at this rate. Of course there will be a small spread built into the price you see and when you take the trade this will be the cost of entry. Try finding a broker that only has a spread of 2-3 pips and no more.
Since speculating can be quite challenging at times , even for those that are professionals, let's say you want to in the United States have the goal of hedging your stock portfolio . Because your stock portfolio is in U.S. dollars you may make money if your stocks go up in value in US Dollar terms but a weakening US Dollar could cancel those gains . This aspect of your portfolio is what you want to hedge and you have decided in your brokerage account to purchase Euros against US Dollars . This way as the US Dollar gets weaker against the Euro and your stock portfolio is suffering as a result of the generally weaker Dollar , your forex gains that you are experiencing as a result of buying Euros are serving to hedge your downside risk .
This is probably one of the simplest and best ways to add a free forex training component to the portfolio you have . Other articles in the future will discuss more about global market speculation methods that are more advanced, but this is a great place to start .
David F Dacosta - Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.
While the questions posed in the paragraph above are enough to illicit a multi-volume response , for clarity's sake we'll look at the basics in this article. The easiest way to get comfortable within this world of FX trading is to go ahead and open your account with a fx trading specialist brokerage . What broker should you choose ? That is a topic that is better left for another article. Before depositing money, just be sure to do some due diligence!
Once your free forex training is working and you are getting started , you need to get a firm handle on what exactly it is you're participating in . In this example , we're suggesting that because you opened your account with a broker specializing in forex trading, you'll begin by trading cash or spot contracts. Without getting too complicated , this just means you are trading the current price as it is in the market at that moment . If 1.3200 is what you see the Eur/Usd pair is trading on the screen that means that you can sell Euros against US Dollars at that rate or you can sell Euros and buy US Dollars at this rate. Of course there will be a small spread built into the price you see and when you take the trade this will be the cost of entry. Try finding a broker that only has a spread of 2-3 pips and no more.
Since speculating can be quite challenging at times , even for those that are professionals, let's say you want to in the United States have the goal of hedging your stock portfolio . Because your stock portfolio is in U.S. dollars you may make money if your stocks go up in value in US Dollar terms but a weakening US Dollar could cancel those gains . This aspect of your portfolio is what you want to hedge and you have decided in your brokerage account to purchase Euros against US Dollars . This way as the US Dollar gets weaker against the Euro and your stock portfolio is suffering as a result of the generally weaker Dollar , your forex gains that you are experiencing as a result of buying Euros are serving to hedge your downside risk .
This is probably one of the simplest and best ways to add a free forex training component to the portfolio you have . Other articles in the future will discuss more about global market speculation methods that are more advanced, but this is a great place to start .
David F Dacosta - Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.
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