MONEY MAKING SHOW WEEK TWO

HOW TO TRADE THE NEWS
One of the reasons why traders love the Forex market is due to the impact simple news events and economic indicators have on currencies. News trading is one of the simplest and most affective ways to trade in the Forex market. News trading involves the analysis of simple major economic indicators and timing positions upon their release in the market. With this in mind, I hope to narrow down the most important economic indicators and review the process to go about news trading.

The biggest question that lies in every traders mind is which pairs to follow while news trading. The most liquid pairs to base news trades on are as follows: EUR/USD, USD/JPY, AUD/USD, NZD/USD, and USD/CHF. Now that we have narrowed down the currency pairs to follow, it is extremely important to understand what drives these pairs and how to react upon a certain news release.

In the Forex market, not only is it important to pay close attention to release these indicators, but it is equally important to pay close attention to the “forecasted” figures and the previous released figures. Often times, it is not the actual release of the indicator that drives the currency rather the speculation of a possible positive or negative indicator. In most cases, speeches and news articles about a certain release may also drive the currency more than the release; from my trading experience, the actual release has moderate impact on a certain currency, but it is the speculation before the release is what the currency moves the most.

Since there are numerous indicators released everyday for most currencies, not every indicator has a major impact. The following are the Top 8 market moving indicators: Interest rate decision (speculation), Retail sales, Inflation (consumer price or producer price), Unemployment (Non-Farm Payrolls), Industrial production, Business sentiment surveys, Consumer confidence surveys, Trade balance, manufacturing sector surveys.

These indicators almost always have some immediate impact on a certain pair, as they are known as the “market movers”. The profit lies in how quick a trade can be executed and when to exit the pertaining position to retain profits. In most cases, every release has the “spike” effect. If a trader is to truly make money off a release, he or she must be able to catch the “tide” or the “spike” before the price begins to retain back to its natural position. Most up or down trends from new releases (depending on the importance of the indicator) last between 30 minutes to 2 days. It is extremely easy to get carried away with the constant hope of more profits, but every good trader must comprise and close a position before it’s too late. Most traders who try to hold on to a certain position for too long might end up losing money from the drop back after the news release. In order to assess how long to hold a position, traders should look at past results from the release of that indicator.

Another key to attaining profits while news trading is how fast a trader is able to react to the release; It is extremely crucial to act as soon as a figure is released as one’s success as a news trader is very much dependent on the ability to act on an indicator before the market. I recommend forexfactory.com, dailyfx’s economic calendar, or paid services such as Bloomberg or Reuters as a way to attain insight on the various economic indicators as well as receive the figures as soon as they are released. Being alert and informed is the best way to beat the market.

Lastly, a key feature when news trading is the type of broker a trader chooses to execute his or her trades with. Choosing the right broker is a very important aspect to being a successful news trader as there may be many negative consequences resulting from choosing an incorrect broker. Things to look for when choosing a broker: No dealing desk, FCM regulated institution, Low spreads, minimum slippage during high activity, and great access to tools and research. Looking for a broker that has minimum slippage and no dealing desk can be critical in being a successful during a news trade.

All in all, the Forex market offers a great opportunity for non-technical traders and economic enthusiasts a chance to be successful in such an event driven market.



BIOGRAPHY OF THE WEEK



Name: Maxim Blazhko
Age: 39

Fortune: self made

Source: real estate

Net Worth: $1.4 bil

Country Of Citizenship: Russia

Residence: Moscow , Russia, Europe & Russia

Industry: Engineering/Construction

Marital Status: married, 3 children

Education: Moscow Institute of Geology

MONEY MAKING SHOW WEEK ONE

TOPIC FOR THE WEEK: FOREX TRADING ON THE INTERNET

Foreign exchange, Forex or just FX are all terms used to describe the trading of the world's many currencies. The Forex market is the largest market in the world, with trades amounting to more than USD 3 trillion every day.

A currency trade is the simultaneous buying of one currency and selling of another one.

Benefits of Trading Forex
24 hour trading
One of the major advantages of trading Forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.

Superior liquidity
The Forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. The liquidity comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.

No commissions
The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.

100:1 Leverage
Leverage (gearing) enables you to hold a position worth up to 100 times more than your margin deposit. For example, a USD 10,000 deposit can command positions of up to USD 1,000,000 through leverage. You can leverage the first USD 25,000 of your investment up to 100 times and additional collateral up to 50 times.

Profit potential in falling markets
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the US dollar gets stronger against the euro and vice versa. So, if you think the EURUSD will decline (that is, that the euro will weaken versus the dollar), you would sell EUR now and then later you buy euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates.

TO BE CONTINUED IN OUR NEXT WEEK SHOW!

BIOGRAPHY OF THE WEEK


NAME: Mark Elliot Zuckerberg
BORN: May 14, 1984 (age 25)
OCCUPATION: Founder and CEO of Facebook
NETWORTH: $1.5 billion
In 2008, Forbes Magazine declared him "[the] youngest billionaire on earth and possibly the youngest self-made billionaire ever," with an estimated net worth of $1.5 billion USD.