How to Use Economic Calendar in Forex Trading

Sep 232011
 

All financial markets, including Forex, always respond to the important economic news and events. That’s why many Singapore Forex traders are looking for important economic news in order to open trading positions. Usually before the release of the news, some well-known economists and analysts give their forecast. When news came out and the forecast coincided with the fact, the market’s reaction is insignificant. If the forecast and the result are different the market usually reacts violently to this mismatch.

For example, a decrease in unemployment rate in the USA was expected or it should have remained unchanged from the previous value. But according to the newly released data the unemployment rate has increased by 1%. As a result, it weakened the Forex currency and the USD fell in price. The greater the difference between the forecast and the fact (which was published in the news), the stronger is the Forex market’s reaction.

It is clear that when we are talking about the news Forex trading, so every Singapore trader has his own trading approach. The basic rules of trading on the news are buying a Forex currency during a situation when the data (news) is better than its forecast, sell when the actual data is worse than the forecast and stay out of the market when the forecast and the actual data are the same. Even knowing these rules, unfortunately the most of traders lose their investments.

Beside knowing the basic rules, a good trader must understand and consider the following points:
1. Forex market always reflects the forecast and actual data.
2. The movement of a currency pair, whether it is weak or strong, after the news release will depend not only on the value of the data, but also on the technical analysis.
3. If the news data is different from the results of technical analysis, most likely this is a strong signal that soon there will be a big change in the Forex market’s direction.

We recommend all Forex Singapore traders avoid trading only on terms of fundamental analysis but combine it with technical analysis. Work only with important news and ignore the minor data that you can find in many economic calendars.

Place orders properly. Remember that very often a Forex trader gets into a “trap of experts”, when the market shows a strong move in one direction which breaks the stop-loss and then recoils in the opposite direction. Before placing orders analyze historical data of the Forex currency during the release of similar news. Plan your actions half an hour before the news release. You should have a pattern indicating the points of entry and exit of the market.

Using the economic calendar you can know the time of the important news release. Basing on this data you can analyze, schedule and plan your Forex trading strategy.

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Social Trading – A New Trend In Forex Trading

Jul 152011
 

It is a fact that today Forex Trading is one the fastest growing markets in the word that reached over $110 billion volume this year. Its rapid growth developed a social trading trend that shows a great popularity among Forex traders. Social trading networks such as eToro OpenBook provides the users with the real-time information of trading positions, strategy and profits of other traders. Every eToro user is able to watch, share and automatically copy the trading actions of his/her favorite real-time traders.

In order to take an advantage of the social trading, a Forex trader must know how to identify the top traders in the eToro investment network and follow them. Newbie traders don’t need to spend years of learning and practicing their trading strategy in order to start making profit. With eToro social trading network, everyone can start trading like a pro by copying the strategy of their favorite traders.

Here are few tips that can help every new trader successfully benefit from the social trading.

1. Find the list of the eToro’s best traders by visiting the OpenBook Rankings page. You can find the best traders sorted by 1 week, 1 month, 3 months, 6 months and 1 year total gain.

2. Decide which traders you would like to follow and copy. Looking at the portfolio of the traders you will have an idea about a trading strategy of each trader. Whether it is a long term or short term trader, does his trading strategy make him a stable income or not, what risk level (leverage) he/she is using, what currencies does he/she trade. All these factors are very important when choosing the traders to follow and copy. You must trust the strategy of a trader you will copy as he/she is the one who will manage your investment.

3. Pay attention on the number of followers every guru trader has. It is a great indicator of the trader’s popularity and trust among other eToro users. The gurus who have 500 – 1000 followers are more likely to be highly successful, with extensive experience and sharing their expertise with others.

4. Decide on the amount you want to invest per trader you have chosen. The eToro copytrader feature allows you to invest maximum 20% of your initial deposit per trader. You can start from a small amount and increase it any time when you feel confident in the trading strategy of the traders you copy.

Social trading opens a door to easy and successful Forex trading for every person interested in financial markets.

Click here to open eToro trading account and start using this amazing tool.

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