Introducing Brokers ECN-Electronic Currency Network

Here is currently we will discuss about the broker / ECN broker, what it is and what its advantages ECN? First we start with an extension of the Electronic Currency Network ECN if taken literally is a network / network electronic currency, so it is a network that serves to conduct currency transactions and is done electronically. Still not clear? Well let me ask one question first, have you ever asked what is the real exchange rate pricing for example between Rupiah (IDR) with the U.S. Dollar (USD), how does the mechanism is the price of 1 USD = 9000 IDR can be changed to 9500 IDR or down, how the hell how to determine that price? The mechanism name is the price formation mechanism.
Now we discuss first the mechanism of price formation, the simplest is an example when we want to buy a T-shirt at the Mangga Dua shopping center, for example, I went to a store called Clothes Lester then I saw a black shirt with the words ROCK golden, then I ask the price , was worth 100,000 dollars. I am a buyer then I want is the lowest possible price at Mangga Dua and because there are many clothes shops, I look first to another store, and it turns out not far from the store before I found the Save-shirt shop, there's clothes exactly the same and immediately I asked the price. Apparently the price is 150,000 dollars, the buyer immediately instinct to work and from the mouth of unspoken "Oh, really expensive! On the other stores that expensive nga kok! ". Save-shirt seller in the store responded with ingenious "So in other stores given how much? I love cheaper!".

My Enemy is My Self and Brokers Own Me!

Though admittedly not encouraging, that most who visit Learn Forex hope they will find a website that contains gold are scattered everywhere and they live to take one at a time without having to do anything! Or instructions GBP will go up or down, I have to Buy or Sell GBP now?
Well, once they know that we offer is an educational program, one by one they stepped back and started saying: "Forex trading is hard and like to gamble!" Uh, even many of them do not do anything and just do one or two clicks and then consider the forex is hard to even like gambling arena.
Several other cases are those who come and expect them to get the "golden formula" that adequately studied several minutes and could make them millionaires overnight.
Friend, forex trading once again is not a "rich quick scheme". You can not read one or two articles or purchase a "secret formula" for hundreds of dollars and expect to benefit over time from your secret formula. If it be so, everyone would have been trading forex and forget their job. In fact there is nonetheless a failure and nothing worked. Surely there is a difference between a successful understanding with the failure.

Forex - FOREX: Dollar - Watch the S&P 500 Next Week, Not the April NFPs

It was an appropriate way to end the week and month. The tattered US dollar slid to its lowest level on a trade-weighted basis since July 30th, 2008 – fully erasing the safe haven premium the currency had built up through the collapse of the housing crisis and the subsequent global financial crisis that followed.

• Dollar: Watch the S&P 500 Next Week, Not the April NFPs
• Euro Traders May Come Back to Reality Next Week after the ECB Holds Rates
• British Pound: What Should we Expect from the BoE and How Will Sterling React?
• Australian Dollar Traders Should Limit Expectations for RBA Decision
• Swiss Franc Rallies on SNB’s Hawkishness, Profit on Reserves
• Canadian Dollar Rate and Growth Outlook May Point to Further Gains this Week
• Gold Surges $27 to a Record High and the Dollar Wasn’t the Primary Catalyst

Dollar: Watch the S&P 500 Next Week, Not the April NFPs

It was an appropriate way to end the week and month. The tattered US dollar slid to its lowest level on a trade-weighted basis since July 30th, 2008 – fully erasing the safe haven premium the currency had built up through the collapse of the housing crisis and the subsequent global financial crisis that followed. This return to lows is fully aligned with the diminishing fundamental scope of the greenback over time as the currency slowly loses its reserve status, is nudged out by emerging global powerhouses in the Euro and Chinese yuan, and offers no return alongside its excessive liquidity. That said, the five-consecutive months of decline (we have only seen two other periods as bearish as this in the past eight years) for the dollar should give even the most ardent bear reason for pause. Though there are few sources of true fundamental strength the benchmark can tap; there are still a few catalysts that can offer a temporary recovery. That said, does NFPs fit into that column?

Historically, the US non-farm payrolls report is the most consistent market-moving economic indicator. This employment report is one of the few reports that can be considered a leading indicator for the broader health of the US economy, it is one half of the Fed’s duel mandate for maintaining monetary policy and it is also easy to understand. That said, the indicator has been rendered impotent when it comes to guiding the dollar this year. The positive influence this data imparts on the currency can be found through interest rate expectations. However, after Fed Chairman Bernanke made clear the group’s intentions to keep stimulus in place and the rate ‘exceptionally low’ for an ‘extended period’ this past week; there is little a boost in employment can really accomplish. Interestingly enough, the best opportunity this indicator has to rally the dollar is if it disappoints. A blow to risk appetite trends could trigger an unwinding of carry positions and demand for a safe haven – both paths to the dollar. Browsing the rest of the docket, the ISM manufacturing activity, service sector survey and ICSC chain store sales figures are noteworthy but ultimately lacking for impact. The market will be happy to keep to its trend unless the tone of risk makes a concerted change in bearing.

Related:Discuss the Dollar in the DailyFX Forum, John’s Picks: Still Long GBPUSD Heading into Next Week

Euro Traders May Come Back to Reality Next Week after the ECB Holds Rates

Recently, it seems as if the euro is doing exactly the opposite of what fundamentals would suggest. Over the past weeks, we have seen the financial troubles in the region further entrench themselves and interest rate expectations cool off; while the euro continued its move higher. Yet, this past Friday, a stronger-than-expected Euro Zone consumer inflation reading (a two-and-a-half year high 2.8 percent reading) was met by the first lower close from EURUSD in nine consecutive trading sessions. From a fundamental perspective, this inflation report firms up rate hawks expectations for follow up hikes from the European Central Bank; but the group’s limited scope for an aggressive policy effort seems to be sinking into the market’s expectations.

Rates will certainly be the topic of conversation next week. Thursday’s ECB rate decision may very well be considered a defining point for the euro. A hold is expected by every economist that contributed a forecast to Bloomberg’s survey (45) while overnight index swaps show the market is pricing in no chance of a follow-up 25 basis point rate hike. That said, this event still holds incredible potential for its regular post-announcement press conference. Bulls are still holding out for hawkish commentary; so a disappointment here could usher in genuine selling.

USD Reverses Trend as Market Sentiment Shifts

This week has started with market sentiment turning to risk aversion mood and such sentiment may remain for the rest of the week. This can be both positive and negative for the US currency.

We were seeing some time optimistic mood on markets for some time as the global economy was recovering from the recession, commodity prices going higher and overall picture of the global economy looked nice and fine. And now all of the sudden we are seeing how quickly markets can turn their sentiment from optimism to pessimism. But such change looks not that sudden if we consider that the problems in the various countries haven’t gone away just because there were less talks about them.

Europe again has come to the fore with the question of a bailout for yet another country, this time Portugal. And again an aid isn’t certain. That’s not surprising, considering that almost every member of the European Union has reasons to oppose bailouts, just for different reasons. The nations with healthy economies don’t want to pay for others’ “sins”, while the citizens of the indebted countries don’t want to suffer from tightening measures.

Even more bothering is that countries, that provided excuse for the optimism about the global economy, now also give reasons to worry. While the US had problems with the employment and the housing market for some time, general state of the nation’s economy looked good. The revision of the US credit rating outlook from stable to negative by Standard & Poor’s reminded us that the country has the huge debt and the big trade deficit – and that’s definitely not signs of a good economy. China continues its attempts to rein its impressive economic growth, reducing good faith in the Asian economy and its ability to support the global recovery.

So where the US currency stands in such circumstances? As market sentiment shifts, so the greenback reverses its trend against other currencies. While in past weeks the dollar was weaker against commodity currencies, now it’s expected to perform better against them but weaken against safer currencies, like the Japanese yen and the Swiss franc. And, of course, the fundamentals don’t promise anything good for the euro.

In the longer-term all these can change, of course. The commodity currencies can regain strength if the global recovery would continue, the role of the dollar and the yen as safe currencies may be revaluated if the state of the US and Japanese economies would deteriorate. But for now markets stand in risk-off mode and the dollar remains safe currency. Just pay attention to the news and watch when the mood will change.

For this week we can expect decline of EUR/USD and USD/JPY. Forex Crunch defined the trading ranges in this manner:

Prompted by the positive macroeconomic news, the Swiss franc managed to rise to a new record high against the US dollar and to grow against other major currencies today.
The Swiss currency benefited from today’s leading economic indicator (KOF Economic Barometer) release that showed that its value rose unexpectedly in April. The report shows a growth from 2.25 to 2.29. Not only it’s above the expected 2.20 value, it’s also the highest reading of this indicator since August 2006.
The franc traded near 30-month high against the Japanese yen and appreciated significantly against the euro today. The currency also performed well against the British pound, which is also trading on a bullish side today. Against the US dollar, the franc set its new record high level for the fifth time in April.

Characteristics of Each Pair of The World's Major Currencies

Understanding the characteristics of traded currencies will make you aware of what level of risk and benefit that you can get from such currency or currencies whether it matches the risk tolerance or time your trading. Here we review some popular currency that is often traded.

GBP / USD 

Graph GBP / USD is aggressive all-time charts. Look at the range of price movement is a very fast graphics. The graph below is a graph of 1 hour for the GBPUSD. Within a few hours the movement has reached 100 points more. Fundamental news that often appears to GBP is on at 06.00 AM (medium impact) and 16:30 & 19:45 pm for High Impact. For the USD is on at 19.30 - 22.00 for all categories of Medium & High Impact.

    * Average daily movement: 100 - 200 points
    * Stop Loss ideal Daytrader: 200 points
    * Active trading Hours: 15.00 - 22.00
    * The value per point: $ 1 (mini) or $ 10 (regular)

Premium Flowers / Swap

This time we will learn about the SWAP is also often called the forex trading world as an Overnight interest or the interest premium. Here we will learn how to do calculations swap / the overnight interest rate. The purpose of the Central Bank interest rates are each like to IDR (Indonesian Rupiah) that we see is the interest rate provided by the Central Bank of the Republic of Indonesia, namely Bank Indonesia. As of this writing, the interest rate charged by Bank Indonesia for the currency IDR was 7.75% per annum. As for the USD (U.S. Dollar - the U.S.) interest rates we will consider is the interest rate established by the U.S. central bank, the Federal Reserve (commonly called the Fed) at 0.25% per annum.If you look closely, you can see an opportunity here! Do you think of?What if I borrow from banks in the U.S. amounted to USD 1 million with interest on the loan, eg 3% a year. Then I change USD into INR and I was deposited in a bank in Indonesia with deposit interest rate of 7.5%. I have a difference +4.5% / year. Interesting is not it? Stay lending only;). This technique is known as the Carry Trade a few years is quite widespread in practice. Simplified sekalikah this? In fact doing so is not that easy, risks and difficulties we will not discuss in this article but this became the basis for us to understand why Swap or Overnight Interest exists in forex trading.

Forex Trading Success Tips

Here we conclude a successful tips and seasoned traders who also have undergone professional trader (trading for Living).
1. Create a trading plan and description well. The criteria, you should know when:
    * Open position
    * How many digits Stop Loss & Take Profit is 'ideal'
    * Have a financial management strategy (money management). This is related to how long you are trading in a month, how do you account resistance level against the risk of loss, when the attraction of funds, when adding funds, and allocation of income to savings, investment and consumption.

2. Make the trend as your sidekick (Trend Follower). Do not fight the market trend (though not including mandatory rules). If prices are rising, you can install Buy position and vice versa if the price is down then you can install Sell position. Most people often take the opposite (counter trend) and often wrong - though there is also often true:).

3. Keep well & carefully your capital. Do not allow your capital to $ 0.0. If that loss, try to keep 10-50% of your capital, so that when the time comes to add funds or Injeck, or the dollar amount paid is not too big. Imagine if you had to add big money loss due to Forex trading you.
If in two or three trades already spend 20-40% of the capital due to loss, stop for a moment. Hold yourself to open new positions. Do not obey yourself to "get even" or "want return on investment." Try to calm your mind and your head. Arrange your trading system back in the Demo Account. Spend time 3 days - 1 week to try trading system in the Demo Account.
If already established, please go back to Real Account.