Tuesday, April 28, 2009

Key Software Features (RATES)

Key Software Features (RATES)

The prices on the FX Trading Station are not indications of where the market is trading, but actual prices at which a trader can buy or sell the currency pair. With two clicks of the mouse, GFM clients can execute a trade at the screen price. There are several systems in the market that make a distinction between indicative quotes and executable prices. Although such systems show two-way prices, the client must request a quote to find out the price where trade can be executed. The FX Trading Station is superior, because it takes the mystery out of the price the client can enter or exit a trade.

Introducing Broker Program

Introducing Broker Program

To insure GFM's leading positions in providing high quality online Forex trading all over the globe, GFM offers special program, called Introducing Broker (IB) Program. Our IB (Introducing Broker) program is the program, which makes it possible for individuals who do not want to invest their own money in the Forex market to still take part in the process of trading. It is an extremely successful tool in attracting more traders from all over the world. The program allows our IB partners to participate very successfully in all benefits of a Global Forex Market without bearing extremely high expenses on IT (internet technology), software, expensive equipment, 24 hours/day technical support, highly paid dealers and personnel, opening big accounts in Clearing Houses, etc. We invite to mutually beneficial cooperation Brokers, Banks, and Financial Institutions, even individuals from all over the world, interested in establishing their presence on a Global Forex Market. We will provide you for free with necessary material to build your own web sites, links to our Demo And Real servers, Back Office, necessary software, links and phone numbers to our Dealing Desk.

If your clients open a Real account, you will receive commission on a currency per each trade your client performs (a trade is a round-turn, i.e. entering and exiting the market). You can also charge your clients your own commissions at the rate that you choose. For example, if you charge $10 per trade, then you gain: $5 (from us if 1pip cost $5. Usually it is more.) + $10 (your charge) = $15 just for one trade. We have clients who sometimes perform about 25-30 trades per day, which means you gain $375-$450 per day from just one client!
Also, if your clients open an investment account, you will receive 2% from an amount of his/her investment. You can share his/her profit in returns as well.

We collect those commissions from clients' accounts for our IB's and pay them to the IB's in one transaction once a month, after last business day of the month and no later than 5 business days into the next month

RISK DISCLOSURE STATEMENT

RISK DISCLOSURE STATEMENT


BEFORE PROCEEDING, PLEASE TAKE A MOMENT TO READ AND AGREE TO OR DECLINE THE FOLLOWING INVESTMENT DISCLAIMER.

RISK DISCLOSURE STATEMENT.

The risk of loss in trading foreign exchange can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

Global Forex Market (GFM) does not control, and cannot endorse or vouch for the accuracy or completeness of any information or advice you may have received or may receive in the future from any other person not employed by GFM regarding foreign currency or exchange. The content herein is provided in good faith and believed to be up-to-date and accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by GFM or its affiliates. Accordingly, we accept no responsibility for any use made of the information provided.

Spot Curriencies & metal, Futures and options trading involve substantial risk and is not for all investors. Investment in the currency exchange is highly speculative and should only be done with risk capital. The high degree of leverage that is often obtainable in foreign exchange trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

In some cases, managed foreign exchange accounts are subject to substantial charges for management and advisory fees, as well as a mark-up, above and beyond the ordinary spread generally provided. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets.

For the USA base companies the regulations of the Commodity Futures Trading Commission (CFTC) require that prospective customers of a Futures Commission Merchant receive a disclosure document when they are solicited. These disclosures are incorporated into the Trading Agreement and the Limited Power of Attorney (LPOA), which are readily accessible at this site. This brief statement cannot disclose all of the risks and other significant aspects of the foreign exchange markets. Therefore, you should carefully review the disclosures contained in both the Trading Agreement and LPOA to determine whether such trading is appropriate for you in light of your particular financial condition.

Past performance is NOT indicative of future results. The information contained herein should not be construed as an offer to buy or sell commodities, futures or any investment. The information contained herein is intended for informational purposes only. GFM highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.

High Risk Investment

High Risk Investment

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

GFM Market Opinions

Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. Global Forex Market LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Internet Trading Risks

There are risks associated with utilizing an Internet-based deal execution trading system including, but not limited to, the failure of hardware, software, and Internet connection. Since GFM does not control signal power, its reception or routing via Internet, configuration of your equipment or reliability of its connection, we cannot be responsible for communication failures, distortions or delays when trading via the Internet. GFM employs back up systems and contingency plans to minimize the possibility of system failure, and trading via telephone is always available.

Accuracy of Information

The content on this website is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to make independent investment decisions. GFM has taken reasonable measures to ensure the accuracy of the information on the website, however, does not guarantee its accuracy, and will not accept liability for any loss or damage which may arise directly or indirectly from the content or your inability to access the website, for any delay in or failure of the transmission or the receipt of any instruction or notifications sent through this website.

Why Trade a Mini Account?

Why Trade a Mini Account?

The GFM Mini account is designed for those new to online currency trading and those with limited investment capital. There is a smaller deposit required to open a GFM Mini account and trading sizes are 1/10th the size of a regular account. The smaller trade size greatly reduces the risk associated with currency trading. Although the GFM Mini account provides as much leverage as a regular account, clients have the opportunity to take smaller size positions, taking on less total risk. The GFM Mini is intended to introduce traders to the excitement of currency trading while minimizing risk.

Develop a Disciplined Trading Strategy without Focusing on P/L

The Mini account can be a useful asset in assisting traders to cultivate a disciplined trading strategy without focusing on P/L. When trading larger volumes on the standard account, traders with smaller account balances tend to watch their equity fluctuate and base trading decisions on emotional reactions to these fluctuations. For example, traders tend to resist closing-out trades at a loss, using the rationale that the market will turn around. Traders also tend to immediately take their profits when the market is moving in their direction, rather than maximizing their gains by letting their profits run.

For example, a 20-pip profit on a 100,000 Euro trade is $200. For a $5000 account, this is equivalent to 4% of the account equity, compelling the average trader to take their profit, though the trade has a 100-pip profit potential. On the reverse side, no one wants to realize a $200 loss, so traders tend to hold a losing position until the loss is too much to bear. On the Mini account, this same example would translate to $20, which takes all the emotion out of the P/L, since $20 is insignificant to most traders. A Mini account allows traders to focus on the proper chart points, trade signals, and really learn currency trading without paying attention to their $P/L. In the long run, this will lead to more profits and less losses. Until clients are completely comfortable trading currencies on a highly leveraged basis, trading smaller amounts on The GFM Mini is highly recommended.

Saturday, April 11, 2009

Futures Spread Trading

Futures Spread Trading


How professional traders optimize profits
Futures spread trading is probably the most profitable, yet safest way to trade futures. Almost every professional trader uses spreads to optimize his profits. Trading spreads offers many advantages which make it the perfect trading instrument, especially for beginners and traders with small accounts (less than $10,000).
The following example of a Soybean-Spread shows the advantages of futures spread trading:

Example: Long May Soybeans (SK3) and Short November Soybeans (SX3)
Four Advantages of Futures Spread Trading
Advantage 1: Easy to trade
Do you see how nicely this spread starts trending in mid February? Whether you are a beginner or an experienced trader, whether you use chart formations or indicators, the existence of a trend is obvious. (If you are looking for a concept of how to identify a trend, we strongly recommend visiting http://www.tradingeducators.com/?source=Tradejuicetrading_philosophy.htm). Spreads tend to trend much more dramatically than outright futures contracts. They trend without the interference and noise caused by computerized trading, scalpers, and market movers.
Advantage 2: Low Margin requirements
Many spreads have reduced margin requirements, which means that you can afford to put on more positions. While the margin on an outright futures position in corn is $540, a spread trade in corn requires only $135 — 25% as much. That’s a great advantage for traders with a small account. With a $10,000 trading account risking 8% of your account, you can enter 6 corn spreads, instead of only 1-2 outright corn futures trade. How’s that for leverage?
Advantage 3: Higher return on margin
Each point in the spread carries the same value ($50) as each point in the outright futures ($50). That means that on a 3 point favorable move in corn futures or a 3 point favorable move in the spread, you would earn $150. However, the difference in return on margin is extraordinary:Corn futures - $150/$540 = 27.8% returnCorn spread - $150/$135 = 111% returnAnd keep in mind that you can trade 6 times as many spread contracts as you can outright futures contracts. In our example you would achieve a 24 times higher return on you margin.
Advantage 4: Low time requirements
You don’t have to watch a spread all day long. You do not need real-time data. The most effective way to trade spreads is using end-of-day data. Therefore, spread trading is the best way to trade if you do not want to watch or cannot watch your computer all day long (i.e. because you have a daytime job). And you can save all the money you would have had to spend for real-time data systems (up to $600 per month).So where is the catch?If futures spread trading is so fantastic, why does it seems that hardly anybody trades spreads? Well, it is not true that hardly anybody trades spreads: the professional traders do, every day. But either by accident or design, the whole truth of spread trading has been hidden from the public over the years.The purpose of this website is to inform you about futures spread trading. In the following we will answer the four frequently asked questions:
What is a spread?
Why trade spreads?
What can you expect when trading spreads?
What Is a Spread?
A spread is defined as the sale of one or more futures contracts and the purchase of one or more offsetting futures contracts. You can turn that around to state that a spread is the purchase of one or more futures contracts and the sale of one or more offsetting futures contracts. A spread is also created when a trader owns (is long) the physical vehicle and offsets by selling (going short) futures. Furthermore, a spread is defined as the purchase and sale of one or more offsetting futures contracts normally recognized as a spread by the fact that the two sides of the spread are actually related in some way. This explicitly excludes those exotic spreads put forth by some vendors, which are nothing more than computer generated coincidences which are not in any way related. Such exotic spreads as Long Bond futures and Short Bean Oil futures may show up as reliable computer generated spreads, but bean oil and bonds are not really related. Such spreads fall into the same category as believing the annual performance of the U.S. stock market is somehow related to the outcome of the Super Bowl sporting event. In any case, for tactical reasons in carrying out a particular strategy, you want to end up with:
simultaneously long futures of one kind in one month, and short futures of the same kind in another month. (Intramarket Calendar Spread)
simultaneously long futures of one kind, and short futures of another kind. (Intermarket Spread)
long futures at one exchange, and short a related futures at another exchange. (Inter-exchange Spread)
long an underlying physical commodity, and short a futures contract. (Hedge)
long an underlying equity position, and short a futures contract. (Hedge)
long financial instruments, and short financial futures. (Hedge)
long a single stock futures and short a sector index.
The primary ways in which this can be accomplished are:
Via an Intramarket spread.
Via an Intermarket spread.
Via an Inter-exchange spread.
By ownership of the underlying and offsetting with a futures contract.
Intramarket Spreads
Officially, Intramarket spreads are created only as calendar spreads. You are long and short futures in the same market, but in different months. An example of an Intramarket spread is that you are Long July Corn and simultaneously Short December Corn.
Intermarket Spreads
An Intermarket spread can be accomplished by going long futures in one market, and short futures of the same month in another market. For example: Short May Wheat and Long May Soybeans.Intermarket spreads can become calendar spreads by using long and short futures in different markets and in different months.
Inter-Exchange Spreads
A less commonly known method of creating spreads is via the use of contracts in similar markets, but on different exchanges. These spreads can be calendar spreads using different months, or they can be spreads in which the same month is used. Although the markets are similar, because the contracts occur on different exchanges they are able to be spread. An example of an Inter-exchange calendar spread would be simultaneously Long July Chicago Board of Trade (CBOT) Wheat, and Short an equal amount of May Kansas City Board of Trade (KCBOT) Wheat. An example of using the same month might be Long December CBOT Wheat and Short December KCBOT Wheat.
Why Spreads?
The rationale behind spread trading is one of the best-kept secrets of the insiders of the futures markets. While spreading is commonly done by the market "insiders," much effort is made to conceal this technique and all of its benefits from "outsiders," you and me. After all, why would the insiders want to give away their edge? By keeping us from knowing about spreading, they retain a distinct advantage.Spreading is one of the most conservative forms of trading. It is much safer than the trading of outright (naked) futures contracts. Let’s take a quick look at some of the benefits of using spreads:
Intramarket, and some Intermarket, spreads require considerably less margin, typically around 25% - 75% of the margin needed for outright futures positions.
Intramarket, and some Intermarket, spreads offer a far greater return on investment than is possible with outright futures positions. Why? Because you are posting less margin for the same amount of possible return.
Spreads, in general, trend more often than do outright futures.
Spreads often trend when outright futures are flat.
Spreads can be filtered by virtue of seasonality, backwardation, and carrying charge differentials, in addition to any other filters you might be using in your trading.
Spreads can be used to create partial futures positions. In fact, virtually anything that can be done with options on futures can be accomplished via spread trading.
Spreads allow you to take less risk than is available with outright futures positions. The amount of risk between two Intramarket futures positions is usually less than the risk in an outright futures position. The risk between owning the underlying and holding a futures contract involves the least risk of all. Spreads make it possible to hedge any position you might have in the market. Whether you are hedging between physical ownership and futures, or between two futures positions, the risk is lower than that of outright futures. In that sense, every spread is a hedge.
Spread order entry enables you to enter or exit a trade using an actual spread order, or by independently entering each side of the spread (legging in/out).
Spreads are one of the few ways to obtain decent fills by legging in/out during the market Closing.
Live data is not needed for spread trading, saving you $$ in exchange fees.
You will not be the victim of stop running when using Intramarket spreads.
What Can You Expect?
Here is an example of what you can expect from Intramarket spread trading. We think you may be pleasantly surprised!!

This spread was entered not only on the basis of seasonality, but also by virtue of the formation known as a Ross hook (Rh). The spread moved from -69.0 to -7.5 = $3,075 per contract. The margin required to put on this spread was only $608, thus the return on margin is more than 500%.
Here is an example of an Intermarket spread. Look at the the following chart: Would you want to have been long live cattle from December until February?

But, what about a spread between Live Cattle and Feeder Cattle?

The spread moved from -10,200 to -7,200 = $3,000 per contract. The margin required to put on this spread was only $540. The return on margin is more than 550%.
Lastly, we show you another intermarket spread. This one was made between Euro and British Pound. Although you might have made money on a Euro trade, you would have suffered from serious whipsaw during the entire length of the trade.

What about a spread between the Euro and the British Pound?

You didn’t have to be in this spread for very long in order to take some fat profits: During February the spread moved from $32,500 to $36,187.50 = $3,687.50 per contract.
How do I start trading spreads?
We can barely scratch the surface of what is available in the almost lost art of spread trading. There are times when seasonal spreads, coupled with chart formations, make a lot of sense. Backwardation in any market often provides an excellent signal for entry into a spread.
All the best in your trading,

Forex trading basics

Forex trading basics
Forex Market Basics


The Foreign Exchange market (also referred to as the Forex, FX market, "Cash" Forex or Spot Forex market ) is the largest financial market in the world, with more than $1.5 trillion changing hands every day — 30 times larger than the combined volume of all U.S. equity markets. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
What to trade in Forex Market?
In the forex market, currency trading is always done in currency pairs, such as EUR/USD or GBP/USD. Accordingly, all trades result in the simultaneous buying of one currency and the selling of another. The base currency is the "basis" for the buy or the sell. It is useful to consider the currency pair as an instrument, which can be bought or sold.
Understanding Forex quote
Base currency: The first currency in the pair.
Counter Currency: The second currency in the pair. Also known as the terms currency.
The US dollar is the centerpiece of the Forex market and is normally considered the ’base’ currency for quotes. This includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/CAD 1.1302 means that one U.S. dollar is equal to 1.1302 Canadian dollar.
BID and ASK Prices
When trading forex you will often see a two-sided quote, consisting of a ’bid’ and ’ask’. The ’bid’ is the price at which you can sell the base currency (at the same time buying the counter currency). The ’ask’ is the price at which you can buy the base currency (at the same time selling the counter currency).
Commission-free, but with spreads
Most Forex brokers offer commission-free Forex trading. Spread - The difference between the bid and ask price of a currency. Normally 3-5 pips on the Majors.
Rollover - What happens to my open positions at the end of the trading day?
Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies. Most brokers will automatically roll over your open positions, allowing you to hold a position for an indefinite period of time.
Leverage & Margin
The leverage available in forex trading is one of main attractions for many traders. Leveraged trading, or trading on margin, simply means that you are not required to put up the full value of the position. Forex brokers provide more leverage than stocks or futures. In forex trading, the amount of leverage available can be up to 400 times the value of your account.

Flat Base Chart Pattern

Flat Base Chart Pattern


Stocks that have large price gains typically will stair-step upward and form Flat Bases before resuming their up trend. This action may occur several times as a stock remains in an up trend and could last from a few days to several weeks depending on the situation. Flat Bases are characterized by small daily trading ranges with volume being lower than normal. Although it doesn’t happen every time, the longer a stock remains in a Flat Base, the greater the price appreciation may be when the stock breaks out. Lets look at some examples below.

Here is a chart of EMLX. Notice how it formed a Flat Base (small trading range) from July through mid-August and then broke out of the base in on increasing volume (point A). It then formed another Flat Base in September and broke out of this base in early October and skyrocketed from $80 to $200.

Another example of a stock that had a few Flat Bases was KIDE. Notice in May and June the small daily trading ranges with low volume. Then in early July the stock broke out with increasing volume (point A) and went from $10 to $30 by mid-August. KIDE then formed another Flat Base from mid-August though early October and then exploded out of the base on higher volume (point B). The stock then went from $30 to $90 in four weeks. The total gain from July to November was 800% ($10 to $90).

Another example of a stock that was in a Flat Base pattern for a significant amount of time was MCOM. Notice that it traded sideways for at least 3 months before breaking out of the base on strong volume (point A). In this case MCOM went from $10 to $55 in 4 weeks for a gain of 450%.
As you can see, finding stocks that exhibit certain chart patterns (Cup and Handle, Double Bottom and Flat Base) can lead to strong price appreciation when they breakout on strong volume.
Regards,

Double Bottom Chart Patterns

Double Bottom Chart Patterns


There are three favorable Chart Patterns to look for as an investor. They include the "Cup and Handle", "Double Bottom" and "Flat Base". This article will concentrate on the "Double Bottom" pattern which looks like the letter "W" as it develops. An example of a stock which had formed a Double Bottom pattern before breaking out to new 52 week highs was NVR in 2002.
NVR peaked in the Spring of 2001 and then sold off before making its 1st bottom in June (point A). From there it rallied into July (point B) but then sold off again and made a 2nd bottom in September (point C). After making the 2nd bottom NVR then rallied strongly again before stalling out near its previous Spring 2001 high and completed its Double Bottom "W" pattern. NVR then traded nearly sideways for 6 weeks and formed a Handle (H) before breaking out in late January of 2002 accompanied by strong volume (point D).

Each week we look for stocks which are exhibiting favorable chart patterns that have good Sales and Earnings Growth which may break out in the future and undergo significant price appreciation.
Regards,
Bob Kleyla

Forex Trading: The Perfect Forex Trading System

Forex Trading: The Perfect Forex Trading System


Trading the Forex market has become very popular in the last few years. But how difficult is it to achieve success in the Forex trading arena? Or let me rephrase this question, how many traders achieve consistent profitable results trading the Forex market? Unfortunately very few, only about 5% of traders achieve this goal. One of the main reasons of this is because Forex traders focus in the wrong information to make their trading decisions and totally forget about the most important factor: Price behavior.
Most Forex trading systems are made off technical indicators. But what are technical indicators? They are just a series of data points plotted in a chart; these points are derived from a mathematical formula applied to the price of any given currency pair. In other words, it is a chart of price plotted in a different way that helps us see other aspects of price.
There is an important implication on this definition of technical indicators. The fact that the readings obtained from them are based on price action. Take for instance a long MA crossover signal, the price has gone up enough to make the short period MA crossover the long period MA generating a long signal. Most traders see it as "the MA crossover made the price go up," but it happened the other way around, the MA crossover signal occurred because the price went up. Where I’m trying to get here is that at the end, price behavior dictates how an indicator will act, and this should be taken into consideration on any trading decision made.
Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. For example, again a long signal generated by a MA crossover as the market approaches an important resistance level. If the price suddenly starts to bounce back off that important level there is no point on taking this signal, price action is telling us the market doesn’t want to go up. Most of the time, under this circumstances, the market will continue to fall down, disregarding the MA crossover.
Don’t get me wrong here, technical indicators are a very important aspect of trading. They help us see certain conditions that are otherwise difficult to see by watching pure price action. But when it comes to pull the trigger, price action incorporation into our Forex trading system will definitely put the odds in our favor, it will generate higher probability trades.
So, how to create a perfect Forex trading system?
First of all, you need to make sure your trading system fits your trading personality; otherwise you will find it hard to follow it. Every trader has different needs and goals, thus there is no system that perfectly fits all traders. You need to make your own research on various trading styles and technical indicators until you find a concept that perfectly works for you. Make sure you know the nature of whatever technical indicator used.
Secondly, incorporate price action into your system. So you only take long signals if the price behavior tells you the market wants to go up, and short signals if the market gives you indication that it will go down.
Third, and most importantly, you need to have the discipline to follow your Forex trading system rigorously. Try it first on a demo account, then move on to a small account and finally when feeling comfortably and being consistent profitable apply your system in a regular account.