Forex Quotes

The AUD, CAD, NZD, and CHF all have solid correlations with gold prices. The AUD/USD, NZD/USD, and USD/CHF currency pairs tend to mirror gold’s movements the closest. The Swiss franc is one of the few major currencies that still adheres to the gold standard. A full 25 percent of Switzerland’s bank issue notes are backed in gold reserves. One interesting incentive to go long the AUD/USD instead of gold is the unique ability of expressing the same view but also being able to earn positive carry. [2009] - Kathy Lien

The only publicly available report on positioning is the “Commitments of Traders” report published by the Commodity Futures Trading Commission, and even that is released with a three-day delay. A useful alternative is to use risk reversals, which are provided on a real-time basis on the Forex Capital Markets (FXCM) news plug-in, under Options. Risk reversals do a very good job of identifying extreme overbought and oversold conditions. [2009] - Kathy Lien

Volatilities can be obtained from the FXCM news plug-in available at www.fxcm.com/forex-news-software-exchange.jsp. Generally speaking, we use three-month volatilities for long- term volatilities numbers and one-month volatilities for the short term. [2009] - Kathy Lien

If your trading strategy calls for a risk of no more than 100 pips on each trade, currency pairs with wide ranges like the GBP/JPY and the EUR/CAD should be avoided. The CHF/JPY, for example, is a great currency pair for a range-trading strategy and a horrible one for a trend-trading strategy. Major currency pairs such as the EUR/USD or the USD/JPY tend to be very sensitive to what is happening in the U.S. dollar. [2009] - Kathy Lien

Short-term traders may find it more profitable to close their trades if they are not working after a certain number of hours or when the market switches into the Asian trading session. As for the weekend, occasionally something big may happen between Friday night and Sunday afternoon. Unless you have stops that can absorb any shocks or you know that there isn’t a significant event risk, closing positions before the weekend may also be something to consider. [2009] - Kathy Lien

The BOJ and MOF are very active participants in the FX markets. Intervention has historically occurred when the yen moves by seven or more yen in less than six weeks. JPY crosses can become very active toward the end of the Japanese fiscal year (March 31). [2009] - Kathy Lien

The Australian dollar has had a very strong correlation (approximately 80 percent) with commodity prices and, more specifically, with gold prices. Australia has one of the highest interest rates among the developed countries. [2009] - Kathy Lien

If you want to make real money trading, trade the major trends. There is probably no better trending market than currencies (Forex). Currencies frequently have consistent trends that last for weeks and months. Using the weekly and daily data are the ideal time frames to enter. [2009] - Robert C. Miner

Average daily movements for three different currency pairs: EUR/USD - between 0.5% and 1% per day; USD/JPY - between 0.5% and 1.5% per day; GBP/USD - between 0.5% and 1.5% per day. [2008] - Markus Heitkoetter

I recommend these basic ideas to new traders: (1) never commit more than one-half of your account balance to open positions, (2) never trade more than two market pairs concurrently, (3) never commit more than 25 percent of your capital to a single position, and (4) never trade over 50:1 leverage. Begin your trading career at 20:1 and work up in increments of 10:1 as you are successful. [2008] - Michael Duane Archer

Start at the lowest, usually 10:1 and move up by the smallest increments possible as you have success. [2008] - Michael Duane Archer

The volatility in the Forex market allows me to profit from powerful trends with the highest accuracy! [2008] - Yeo Keong Hee

Round numbers in the prices of currency pairs present strong psychological barriers in the progress of a trend. Such levels tend to define strong support and resistance areas. [2008] - Yeo Keong Hee

The COT report is released every Friday at 3:30pm Eastern Time. However, it is based on information as of Tuesday. We just focus on the Long and Short commitments in the Non-commercial category. [2008] - Yeo Keong Hee

Whenever the US Non-Farm Payroll economic indicator is released and shown to be more than the forecast, you will see a sharp and quick upward spike in the USD/JPY (or a downward spike in the GBP/USD). After an initial sharp spike, there will almost always be a retracement. I like to wait for the price to retrace by at least 30% of the initial spike before getting in to do a trade according to what the news report says. [2008] - Yeo Keong Hee

I risk no more than 3% of my account size in any one trade. New traders might want to risk no more than 1.5% to 2% of the account size in any one trade. Sometimes, even with good trading strategies, you might suffer three or four consecutive losses. [2008] - Yeo Keong Hee

A consolidation occurs when the exchange rate is trapped in an ever-narrowing area. Consolidations often lead to breakouts. [2007] - Ed Ponsi

Japan is the third largest forex trading center, and comprises about 10 percent of all forex trading volume. London is considered the world’s capital of forex trading. Roughly 30 percent of all foreign exchange volume comes from the trading desks of London. New York is the second most important market in forex trading, and accounts for about 15 percent of the world’s total foreign exchange volume. Trading is especially active early in the U.S. session and usually becomes aimless and choppy after midday in New York. Friday afternoons in the United States are generally the least active. [2007] - Ed Ponsi

Trade a demo account successfully for at least several months before advancing to a mini account. Start with EUR/USD (in a demo account, of course), and when you feel comfortable with the way the pair moves, then branch out and try GBP/USD. You’ll find that this pair trades in a similar fashion to EUR/USD, but with greater volatility. Some traders enjoy this added volatility, while others can’t stand it. [2007] - Ed Ponsi

The Japanese yen pairs have their own “personalities” and are more likely to find support/resistance at round numbers. If you enjoy trading the USD/JPY currency pair, try EUR/JPY. This pair is similar to USD/JPY, but the moves tend to be quicker, with greater volatility. [2007] - Ed Ponsi