Auto Forex Trading

Many who are concerned with auto forex trading that don’t understand the significance of the US Non-Farm Payroll report to the global financial markets . I’m often asked, " why each month does the number of US jobs make the market jump up and down so much after it is released ?" To provide an answer to the question we must realize at what the US jobs number actually represents. Then we will have our insights as to why it makes the markets move like nothing else .

Each month, on the first Friday, the US Non-Farm payroll report is released . It is released by the US Bureau of Labor and Statistics or (BLS) and what it quantitatively measures , is the number of brand new jobs, excluding farming, created in the prior month by the US economy . It is of such importance because it reflects the overall health of the US economy and thus the global economy . After all , in the world, the US economy happens to be the largest and within the US the main component happens to be consumer spending; to the tune of no less than 70% !  This means, in auto forex trading, since the interest rates in a country is the main factor that affects the currency’s strength or weakness, you need to take a look at what actually drives those rates ; or the US Federal Reserve policy on interest rates. Probably the most important data for the Fed to use is this job report in order to set their short term interest rates and because of this, this report can and usually does , cause significant volatility across the markets .
Wondering why the Federal Reserves decision on short term interest rates are related to the jobs report ? A wonderful question! If the jobs report is on the strong side usually it means that people have employment and the utilization of resources is high . This in turn means that companies are hiring workers and these workers are going out and spending money too on clothing, eating out, and more and the economy is driven by these things ; they help to heat or grow the economy. When the economy is heating up more money is in circulation and it is important for the Federal Reserve to keep inflation in check . They cool the economy and keep inflation in check by raising the short term rates, or they heat up the economy by lowering the short term rates to help raise inflation . So it’s easy to see, so the job number is a huge factor , driving all of this beneath the surface .
When you’re getting ready for your auto forex trading day or the next week , take a look at the fundamental information on the events calendar that will be released in the next day or week . If you are still in the month’s first week then on the Friday of that first week you’ll have the Non-Farm Payroll report coming out because that is when it always comes out . If after the release of this report you want to take advantage of the market’s volatility , just remember the following formula : If the number of jobs are stronger than anticipated, it usually means the economy is stronger which means higher short term interest rates that lead to currency strength . Conversely , if you find the jobs report is weaker than it was expected to be then this usually means lower short term interest rates that lead to currency weakness . It’s not always so black and white , but knowledge of these general parameters will give you a leg up on your fellow trading competitors .

Auto forex trading gives anyone, anywhere, the opportunity to make a very nice living . What better way to do this then getting up each morning , having a cup of coffee , and then setting up the trading day while in your pjs ? Sounds great! Well wait a minute because while it really can be so relaxing and easy most people quickly find out that it is not that easy at all . That’s why this article is dedicated to basic money management principals – because if you know the basics of money management you are more likely to succeed .
So why then , if this is such an important area of money management , do so many people ignore or overlook it ? That’s a wonderful question that you should really consider if you’re planning for success in this market. I believe that many people jump over this part of trading , money management basics , because it is not "sexy" . In reality , how many sexy or interesting accountants do you know ? That is what this side of the fence is all about ; more and more boring numbers.
In reality, it is only boring if you chose to think about it and approach it as such . If you look at it as a drag then it will be a drag and you won’t want to do it . If you look at it as one of the ultimate keys to becoming a auto forex trading professional and you keep focused on the possibility of success ahead if you take the time to consider your tactics of money management …. it really can get quite exciting .
Now you’re convinced that this area needs to be focused on . Awesome! What is this all about? Here are the keys in order of importance , you’ll have a great start if you follow them : over leveraging yourself should never be done, on each trade you need to keep the leverage consistent, never add to losers but add to winners . That’s it . Sure there are tributaries to all the above but they are incredibly powerful even all by themselves .
The next time you’re wondering why your trading level has not progressed the way you hoped it would , remember the keys to managing your money . Another final thing to keep in mind is this: managing your money in a solid way will provide incredible psychological benefits . These great benefits will help you improve trading more than you ever thought you could . Why? If you have no fear of losing money, or you are sure your plan is solid and will keep you trading another day, then your view of the markets will be relaxed and clear and this will bring about serious profit .
Auto forex trading can be one of the most challenging and rewarding things ever . Remember that usually the best keys to success are the most simple and probably uninteresting things staring you right in the face . You’ve all been searching for the holy grail in trading – and money management is the key.

Auto forex trading has been quite volatile lately due to the debt crisis Greece has been dealing with . Many fear that this crisis in Greece is going to spread to other EU countries that are deep in debt such as Portugal, Italy, and Spain. As a result of these problems, against the US Dollar the Euro currency has dropped about 11% . When looking at this situation we need to ask ourselves the following questions : Is the Euro sell off complete and is the recent strength in the US Dollar a result of strong fundamentals in the United States or of weakness in the Euro ? The reason these are important questions is because the answer to the first question will be impacted by the answer to the second one .

I believe that there is a benefit to the US dollar currently because of Euro weakness and Euro weakness only . Steam has only been picked up in the spending driven US economy because the Federal Reserve for some time has left the rates near 0%. What will happen when the Fed is forced to raise rates ? Will the economy in the US be able to deal with this ? The answer is likely no . Also, it is important to keep in mind that consumers are spending more right now because they are walking away from their mortgage payments, credit card payments, and auto payments just to name a few . This leaves the consumer with extra income that they otherwise would not have so they are spending more in other areas such as clothing, new electronic items, and meals out . Here we go with the punch-drunk consumer once again . It wasn’t sustainable in the last Federal Reserve inflated boom and it will not be sustainable this time . Inflation or default are the only two options for the US Dollar in the next several years and both will mean disaster .

When doing auto forex trading our goal is naturally to make money . There is no bias . We simply want to profit from our foresight . So the answer to the second question is that the Euro is over sold and will hit a bottom at some point . 1.2300-2400 is probably where it will be . After all , do you really believe that Germany, one of the largest world economies, will allow the failure of their currency ? The answer is, "probably not." This is the reason they aren’t printing out more Euros and helping with a Greece bailout . The Euro will be a more sound currency because of what is happening in Greece . The investors world wide will realize that the Euro is a safe option because when they face problems they will deal with a loss in the short term to preserve their health in the long term . Thus , their economy may be taking a beating , but their monetary unit will be better for all of this . The situation in the United States is just the opposite. Money is being printed to avoid short term problems , but this only causes a problem with the long term health of our money and economy .
All that being said, we are getting close to a point where the Euro will be a massive bargain that you need to jump on as you do your own auto forex trading. Not just for the previously mentioned reasons, but market psychology tells you this as well . Professionals buy when there is a free fall in the market just as the average person is catching wind of the crisis and comes in off the street to go short the move that has already happened . Already this pattern has happened over and over again, and will continue to repeat itself as long as the limbic system plays a part in human physiology .

Auto forex trading can be done in various forms and for so many different reasons that just figuring out where to begin is tough . Do you need to start an account with a brokerage specializing in this type of trading , or is a brokerage that allows you to exchange traded funds, trade options, stocks, and futures a better idea? Not only is this an overwhelming decision , then you have to go on to figure out whether to use FX trading as a hedging or speculative tool, conservative or aggressive, short or long term, and more . Many things must be considered before you start out.

While the questions we just mentioned are enough to start up a multi volume response, in this article we’re going to focus on the basics . The easiest way to get comfortable within this world of FX trading is to simply go with an account with a brokerage specializing in forex trading . What broker should you choose ? That is a whole other topic for a different time . Before depositing money, just be sure to do some due diligence!

Once your Auto Forex Trading is working and you are getting started , you need to get a firm handle on what exactly it is you’re participating in . With this example , we’re suggesting that because you opened your account with a broker specializing in forex trading, you’ll begin by trading cash or spot contracts. Without making this complicated , this simply means that you’re trading current price in the global market right where it is that second. If the Eur/Usd pair is trading at 1.3200 on your brokerage screen then Euros can be sold against US Dollars at this rate or you can sell Euros and buy US Dollars at this rate. The price you see will have a small spread built in and this is your cost of entry for taking the trade . Look for a broker going with a spread of 2-3 pips and nothing more .

Because speculating can at times be pretty tough, even for those that are professionals, let’s say you want to in the United States have the goal of hedging your stock portfolio . Since your stock portfolio is denominated in US Dollars you may make money if your stocks go up in value in US Dollar terms but that gain could be cancelled out by a weakening US Dollar . This aspect of your portfolio is what you want to hedge and you have decided in your brokerage account to purchase Euros against US Dollars . This way as your stock portfolio is suffering when the US Dollar weakens against the Euro , the gains you get from purchasing Euros hedge the downside risk.

The above example is one of the most easy ways that you can add a auto forex trading component to the portfolio you have . Other articles in the future will discuss more about global market speculation methods that are more advanced, but this gives you a great place to start out.

When talking to people who have never tried auto forex trading before, even if they are familiar with th eworld of bonds, futures, or even stocks, I’m reminded that even the basics of this global market need to be explained . Let’s get started looking at pairings and everything having to do with them in the forex market.

What exactly is a currency pair ? We’ll begin with the Eur/Usd this has as the base currency the US dollar against the Euro . What is the meaning of the pari when I have a price quote that is 1.3200 on the Eur/Usd? To remember this answer the easy way, do this: you take the base currency pair, which is the US dollar in this case , take a look at the 1.3200 price quote , then you say, " to buy 1 Euro it will take me 1.3200 US dollars ." The price quote means exactly that . Maybe you look a few weeks later at the price quote and now it is 1.4000 this means that against the Euro the US dollar has become weaker since to buy one Euro you now need 1.4000 US dollars . Of course , if you find the price quote is 1.2500 down the road, then the US Dollar has become stronger since purchasing one Euro will only take you 1.2400 US dollars .

Auto forex trading can become even more challenging when for example you see a price quote on the Usd/Jpy pair for 100.50 . Well, using our method from above , simply take the base currency of Jpy and look at the 100.50 price quote and this is the amount of Jpy it takes to purchase one US dollar. Isn’t that fairly easy? In the future you shouldn’t have difficulty understanding a pair and its price quote when looking at a quote window or even a chart screen.

Since you know can read price quotes , you may wonder what are the cross pairs and the main pairs? You’ll find the main pairs happen to be the strongest world economies paired versus the US dollar. Just a few pairs considered main pairs include the Mzd/Usd, Aud/Usd, Usd/Jpy, Gpb/Usd, and more. A cross pair is a pair not involving the US Dollar which includes the Gbp/Jpy and the Eur/Jpy to name a couple that are popular.

Hopefully this article will be of help to you if you have been intimidated by the auto forex trading landscape before . It takes a little getting used to with all of the different currency pairs, time zones, and economies . But once you start to wrap your mind around how all of the pieces fit together it’s not that difficult – and to many, this is a whole lot of fun!