Why?

Well there are a few reasons for this.

Firstly, if you visit any forex forum you will nearly always find that there are some posters who love broadcasting their trading positions to the other forum members and enjoy the attention they get from their loyal followers. It’s basically an ego trip. If they make a few good calls, then they seem to get instant adoration and inexperienced traders will start to follow them and even copy their positions.

This is a trap that you really don’t want to fall into. The minute you find yourself copying other peoples’ positions is the time when you should take a step back and have a good look at yourself.

You may not even realise you’re doing it. For example, you may consider taking a position but decide to go to the forums to see if other traders are taking the same position, for confirmation. It’s important to note that just because lots of people on the forum are all taking long positions, for example, the price will not necessarily go up.

I was on a forum last week and nearly all of the regular forum members were going long on the GBP/USD. However all of my indicators were indicating that we were heavily overbought, and despite being in the majority I traded using my own tried and trusted system, took a short position, and as I write this article the GBP/USD is about 210 points lower.

So always make your own trading decisions and then you only have yourself to blame. Don’t look to others for advice or confirmation.

Similarly, on the other side of the coin, you don’t want to be the one who goes onto forums and boasts about how good a trader you are and announce your positions to everyone. This may boost your ego but it can affect your trading.

For example, if you announce your latest position to the forum and it quickly moves against you, you may disregard your normal stop loss policy and stay in a position longer than necessary in order to justify your position to your loyal followers. This could lead to even further losses.

So please don’t become one of these people. After all do you really think the best traders in the world hang around on forex forums? No of course they don’t, they’re too busy making money.

Finally there is one other way in which forex forums can damage your wealth and that’s by following systems given on forums. Sure you can pick up some great ideas, but be careful about jumping in and blindly following the latest new trading system.

Always be sure to thoroughly back-test any system you may come across and either use a demo account to test it out for a period of time or use very small stakes.

Forex forums can be a very valuable resource for learning new trading ideas and strategies, but be careful about blindly following any one system or poster, and try not to start broadcasting your positions as soon as you achieve any level of success.

James Woolley runs a blog at http://theforexarticles.com where you can learn forex trading. You can also read his review of Avi Frister’s Forex Trading Machine by visiting http://theforexarticles.com/forex-trading-machine-review

In a casino there is only one game where history has proven that the player can beat the casino, and that game is blackjack.  Using a technique of counting cards, the payout rate goes from anywhere from a .97:1 ratio to a 1.05:1, depending of course on how much is wagered and how many high cards are left in the deck compared to low cards.

Lets take a look at forex pairs now:
Forex pairs are sold with a spread ranging from 2 pips all the way up to 7 pips on the GBPJPY but we’ll use 3 pips as the universal spread in order to make things less complicated.

Long term trading of currencies benefits greatly from the influence of nations to affect monetary policy and is mathematically the best way to beat the odds of the market.  With a 3 pip spread, and investor must make 13 pips on a trade in order to lock in a 10 pip proft.  That sets the commission for the trade at 23%; no amount of institutional manipulation will add 23% to the foreign exchange pool.

However looking long term, seeking 500 pips from a trade, the commission drops to just .59% of the of amount invested, a number that can easily be
beaten. Long term trading benefits most from the economic outlook over a time of 3-5 years.  The input of money by government can easily top the negative
payouts of the foreign exchange.

The Australian Dollar is flying to new highs due to increased demand and
prices in the natural resources arena.  The Australian export list is half
natural resources, the remaining is made up with the booming Cotton
markets.

As prices rise greatly in metals such as gold, which is a top Australian
export, the dollar moves to near parity against other currencies like the
US dollar.   Australia’s oil exports are also bringing in more money than
ever expected.

The Australian dollar is following a near perfect trendline straight
towards probable parity with the US Dollar over the long run.  Experts
believe strong fundamentals will bring a thriving economy to Australia
which has benefited greatly from the growth of Asia, specifically China.

The only thing left in the way of the extreme growth rates is China’s
currency, the Yuan, and its ties to the US Dollar.  As the dollar
devalues, so does the Yuan which is heavily tied to the US Dollar while
still being valued against a basket of other currencies.

The commodity markets are thriving due to the rebuilding of places such as
Louisiana, Indonesia, Mexico and other places affected by natural
disasters.  Expect the Australian dollar to take a short fall during
profit taking but then continue its upward swing.  The prices of
commodities wont be going down any time soon.  The $89 barrel of oil has
confirmed this.

Technical Analysts Predict end of Euro Bull

According to some technical analysts ,the euro’s record setting run may not extend until the end of october.
The euro’s appreciation is putting pressure on the European Central Bank to find a way to curb the gains.

The currency may drop as low as $1.367 by the end of October, according to Citigroup and Zurich-based UBS AG, the biggest currency traders after Frankfurt-based Deutsche Bank AG. A Bloomberg survey of 45 banks and brokerages set the euro at $1.40 by January and $1.34 at the end of 2008.

Carry Trade is Back

The carry trade seems to be back is favour with rising share prices in Asia making the yen look weak again.

In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate. The risk is that currency moves erase those profits. More on this story

I am not normally inclined to follow fundamental analysts but JP Morgan is

the dollar will fall to 112 yen at the end of this year, compared with a previous forecast of 116 yen. Against the euro, the dollar will drop to $1.45, weaker than an earlier forecast of $1.40

Good luck trading everyone this week and keep the above information somewhere in your head especially if you are trading long term.