E-Mini S&P 500
Ways to Improve A System's Roll overs & Contract Months
These are some ways to improve a trading system. These ideas could
also be implemented by other systems.
Why not improve the data in particular with regard to roll overs.
I have three suggestions:
1. Provide for automatic "close-to-close" rollover
2. Include all "active contracts for each commodity
3. Revise rollover dates to better coincide with current dates
for switch over to "lead contract" in the pits.
4. Click-here for the Trading Tip of the Day
I've been using this system for almost two years and have developed
ways of "fooling the system" to overcome the first two
deficiencies noted above.
I believe these changes are essential; and I believe most "serous"
system users, e.g., those trading "real money" will not
object to changes which better reflect what is happening in the
real world even if it means an extra rollover or two per year for
After all, my system's automatic roll overs are so quick and easy
that a few more rollovers and rollover dates would be little if
any bother. Certainly this would be a lot less bother than the extra
procedures I now go through in order to assure that the data I use
does not have artificial gaps.
These gaps introduced by the "close-to-open" rollover
adjustments (instead of close-close) can be quite large and also
there's usually artificially reduced levels of volatility associated
with rolling to a more deferred contract rather than the next month.
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What Analyzing Forex Futures Quotes Can Do For Your Trading Success
Trading in the Forex market should not be a spur of the moment decision. You should research and evaluate every move you make to be a successful trader. When you are trying to evaluate what trading moves you should make, it is often necessary to look at Forex quotes to help you decide what to do.
Although this may seem simple to most experienced commodity traders, a surprising number of new forex traders do not really know how to read a Forex price quote. Before you make your first trade, be sure that you are informed on how to read and use Forex quotes. If you are not educated on the matter, you will likely lose money because of lack of knowledge on the subjects pertaining to the Forex market.
Reading a Foreign Exchange Quote
When you first look at a foreign exchange quote, or Forex quote, you will likely be a little confused. It can be very confusing however once you learn how to read the Forex quote; you will gain a lot about the system itself. The first letters listed are the abbreviation for the first currency in the quote. This currency is considered the base currency. The value of this currency is always 1, unless otherwise noted. You may see things such as USD/JPY, USD/CHF, and USD/CAD. When you see these currencies with numbers behind them, such as USD/JPY 112.01, it means that one US dollar is equal to 112.01 Japanese yen. When the base unit and the quote rises, it means the dollar has gotten stronger and the other currency has weakened.
There are several exceptions to this rule however. When dealing with the British pound (GBP), the Australian dollar (AUD), and the Euro (EUR), things are a bit different. You may see something that looks like GBP/USD 1.637. This example means 1 British pound equals 1.637 U.S. dollars. When you are dealing with these situations, remember that when you see the quote rising, the US dollar is weakening. A higher quote typically means the first currency (the base currency) is getting stronger. When the quote is lowering, the base currency is getting weaker.
Where to Learn More
Trying to decipher what Forex quotes mean can be challenging. Quotes can really help you decide what’s going on in the forex market and help you make sound trading decisions. However, you really need to know more about forex futures price quotes than just how to read them. You should learn different trends that are seen via Forex quotes and be able to apply them to the market today. When you can easily do this, you will find it easy to use the foreign exchange market to make profits.
For those of you who actively trade (or desire to learn how to trade) the
financial and futures markets, there are a lot of other things outside the
markets you should be following. But, I guess my bigger message is for those
of you that aren’t in the futures markets, whether you trade them or
not, the futures markets have a significant impact on what happens in the
other financial markets, including forex, currencies, options and stocks.
That’s why you should soak up every piece of good trading knowledge
like a sponge in a quest to clearly see the bigger picture.
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If you are interested in learning more about how to read and use Forex quotes, there are several things you can do. You can first decide to learn on your own. When you decide this, you should visit reputable websites in order to conduct your studying. You can also get new books on the subject and read on what the quotes mean and how they can help you. Many people love to engage in self-study because it gives them freedom. When you are learning on your own, you can do it at your own pace. You can go through things as quickly or as slowly as you need to and really soak up information you need. Self-study can be done during lunch breaks or late at night. Some people would rather have a more traditional approach to learning however.
Forex markets are a large part of the curriculum at most business schools today. If there is a business school in your area, you may want to contact them about taking a commodity training course about the subject of forex currencies trading. If you are someone who has the time to spare, taking a course with others interested in learning is a great idea. The class may cost more than a book you can buy, but hands-on-learning is often the best form of education. You will likely learn about markets, trading, strategy, and more. So, if you are interested in learning with a group, a course is likely the best option for you. When you become more educated on the subject, you will be able to see exactly why knowing all about Forex quotes can be important in successful trading.
Using forex signals to navigate the currency market
There are dozens of international currencies being actively traded at forex trading hours around the clock on the foreign currency futures exchanges, and no one can possibly monitor them all at once. That is why many futures traders rely on forex trading signals to keep them apprised of movement in the market.
Many brokers and other forex-related businesses offer forex signals to subscribers. Forex
signals are simply recommendations to buy or sell based on mathematical algorithms and
professional know-how. Usually these signals include specific entry, stop and target
levels. They might say something like, in essence, "Right now the EUR/USD bid is at
1.2529 and dropping. When it gets to 1.2465, sell."
Forex signal providers usually charge for their service, sometimes as much as $100 a
month. For this the subscriber gets 1-5 signals a day, sent via e-mail, text message or
instant messenger. The trader is under no obligation to do anything with the information,
of course. They are advisory in nature, and the trader is free to ignore them entirely if he
wants to. But most traders generally go along with the advice that comes to them through
forex signals. They wouldn't pay for the service if they didn't find the advice useful.
There are two schools of thought about forex signals. One says that you're a sucker if you
pay for them, with the reasoning that if the people behind them are so good at playing the
market, why do they have to sell signals to make a living? The opposing point of view
says that since signals require analysis and experience to create, why shouldn't the people
who distribute them get paid for their efforts?
If you do choose to pay for a signals service, you should get a trial membership first. Be
wary of a service that won't give you a free trial period before you start paying, or that
only offers a trial period of a couple days. (What do they have to hide? If their service is
good, showing it to you for a week or two will only help sell it to you.)
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On the other hand, one maxim usually holds true: You get what you pay for. Sites that
offer free forex signals may not be as reliable or experienced as the professional sites.
And in either case, you shouldn't blindly follow the advice of forex signals. A smart
investor will look at the trends himself to make sure he agrees with the signals he
received. The decision to buy or sell is ultimately his, after all.
Time line for Daily Forex Trading - When are the Optimum Moments?
In today’s foreign exchange markets, commodity futures traders and investors can literally trade currencies worldwide 24 hours a day, in any trading zone. The top three currency trading is among the currency dealers in London, Japan and New York. These currencies are being traded 24 hours a day and the only time that currencies stop trading is on Friday when Japan closes its doors. There is a one day window after Japan closes before Europe steps in on Monday morning to open for business.
Companies that sell and buy foreign currencies as part of their business, like independent brokers and currency dealers, only make up a small portion of the foreign exchange currency trading. With a majority of trading come from banks, brokerages and investment companies. As even more currency traders become aware of the foreign exchange markets potentiality for earning and raising capital, the forex market will continue to develop and grow at a steady pace. The forex market reaches an average daily turnover of 30 times higher than any other U.S. market.
Along with the drive for supply and demand, the forex market presses on as the enormous scope for profit potential among the currency dealers is steadily rising. The forex market also uses the free floating system that is considered more practical for today’s foreign exchange market which can experience a change in the currency rates at an estimated 4.8 seconds. After developing from connective financial centers to one unified market, the forex market is taking on a prodigious role in the country’s economy. Having expanded worldwide, the forex market is reflecting the constant growth of all international trades and their countries. When you consider the size of the foreign exchange market, it would be important to understand that any transactions that are made with a future trading broker or an independent broker, can lead to more transactions. This can be due to the brokerage businesses as they work to readjust their positions.
In order to be an effective day trader, you must understand your overall portfolio and its sensitivity to market unpredictability. This is especially important when trading foreign exchange currencies, because these currencies are priced in pairs and no single pair will trade completely independently of others. Once you gain an understanding of these correlations and how they can change, then you can use them to your advantage to control your portfolio’s exposure.
There is a reason for the interdependence of foreign currency pairs, for instance, if you were trading the British pound (GBP) against the Japanese yen (JPY) or GBP/JPY pair, then you’re trading a type of derivative of the USD/JPY and GBP/USD pairs. Therefore, the GBP/JPY must be slightly correlated to one or both of the other currency pairs. Even so, the interdependence amongst these currencies will stem from more than the fact that they are in pairs. While there are some currencies that will move one right behind the other; the other currency pairs can move in different directions that often result in a more complex force. In the financial world, correlation is the statistical measure of a relationship between two securities.
Then there is the correlation coefficient that ranges between -1 and +1. The correlation of +1 indicates that two currency pairs can move in the same direction nearly 100% of the time. While the correlations of -1 indicates that two currency pairs are likely to move in the opposite direction 100% of the time. If the correlation is zero, this indicates that the relationships between the currency pairs will be completely at random.
Yet, it’s clear that correlations are not always stable. Correlations do change, as the global economic system and other various factors can change on a daily basis, making the ability to follow the shift in correlations very important. The correlations of today may not be in line with the long term correlations between any two currency pairs. This is why it’s suggested to take a look at the past six months trailing correlation to provide a more clear perspective on the average relationship between the two currency pairs. This change comes from a variety of reasons, with the most common including a currency pair’s predisposition to commodity prices, the diverging monetary policies and unique political and economic circumstances.
The forex market uses margins to increase your profits
Forex is a nickname for the foreign exchange, a vast market of trading in which the
commodity is money itself. In the forex market, traders are buying and selling foreign
currencies -- trading dollars for euros, pounds for yen, and so forth.
Forex is profitable because national currencies fluctuate from day to day based on
predictions of the nation's gross domestic product and other factors. As with the stock
market, the idea with the forex is to buy low and sell high: Buy a lot of a particular
currency when it's weak, then sell it when it becomes stronger.
For example, bad financial news in the United Kingdom means forex futures traders will be selling
off their British pounds as fast as possible, as the pound is about to become devalued.
Once the pound recovers, those traders will sell it for something else, thus turning a
Though we talk of "buying" and "selling" pounds, euros, yen and francs, the transactions
performed in the forex are not literal. That is, if you want to buy 100,000 euros, you don't
have to withdraw the equivalent U.S. dollars from your bank account and swap them out
for a big stack of euros. Everything is done on paper only, though the resulting profits
and losses are real.
Because the transactions are not done physically, there is room in the forex for what are
called "margins" or "leverage." Put simply, this means you don't have to actually put up
the full amount of the position you're taking. Usually the margin is 1%, meaning that
when you put $1,000 into it, you're actually getting $100,000. Of course, margins
multiply your losses as well as your profits, so you have to be careful.
One of the reasons for allowing a 100:1 margin like this is that the major world
currencies in the forex market usually fluctuate less than 1% a day. (In the stock market,
a typical stock might fluctuate as much as 10% in one day.) With changes that small,
your daily loss or gain on an initial investment of $1,000 would be almost imperceptible,
usually less than $10 either way. By multiplying it by 100, the gains and losses in the
forex market are more pronounced.
With leverage implemented that way, the basic "lot" for buying and selling currencies is
usually 100,000 (which of course only costs 1,000). Most firms that handle day-trading
on the forex market don't go any lower than that.
Putting Your Forex Strategy Together
So many people are investing in different situations lately that it is quite easy to forget what is most important. Taking a few moments to refresh on some of the basic requirements and really put together the best plan possible is generally the correct way to proceed though and will allow you to quickly and easily ensure that you get everything worked out the right way. Just jumping off of a cliff is not a wise idea, and just diving head first into the Forex market is not wise either. Taking a small amount of time to really consider all of your options and get started carefully will allow you the best results possible.
Putting together a unique FX trading strategy is not necessarily difficult or extremely technical. You can work out the specifics of your strategy once you have gotten started and begun learning the different terminology. The most important fx market details you absolutely have to remember is keeping in mind the overall goal you have. If you are looking for long-term investments, you need to have these goals in mind so that all of your decisions will help you to ultimately achieve that goal. Never focus on the short term only if you are looking to fund your retirement for example.
The most important thing that you need to remember is you absolutely cannot gamble with your money. If you want to gamble, take a few dollars and go to Las Vegas. If you want to invest, you need to make educated decisions, which will require you to put actual reasons and specific details before your gut instincts or whims. Never make a transaction unless you have good reason for it. Of course, there are the occasional times when you might be lucky and come out great from a gut instinct transaction, but these are usually quite rare.
Another issue that is very important is you must never engage in any transactions because of emotion. This means that you need to learn how to separate how you feel about a particular county, currency, or anything else from the way you actually make trade decisions. You will quickly discover that trading based on emotions will find your bank account empty, you frustrated and the entire experience a loss. Taking the time to instead hold off and just make decisions based on actual facts that can be verified is a much better solution.
If you are careful how you select your transactions, you should be following a trend. This trend will allow you to carefully determine if you are making the right choices and how successful each transaction is likely to be. Of course, there are times when trends help you to fail, but generally following a trend will allow you to be completely successful without serious amounts of trouble. These trends exist for a reason, the market tends to repeat itself and stay on a very similar path. Using this to your advantage can help you to ensure you get the best results possible.
A final suggestion is to always start looking for reliable sources of information. Perhaps what your broker offers is not enough for you. There is nothing wrong with this, but it is best to be fully aware of this before you get started. You can always do a bit of research on your own as well and the more sources you are getting information from, the more informed you will be. This can benefit you significantly since it will allow you to ensure that you make the correct decision based upon your actual needs, rather than just the word of a single person.
As you can see, putting together a sound trading plan with your own forex day trading strategy can be successfully done. Time and effort can have you up to speed soon. Instead of struggling on your own, use the many forex trading tools for your benefit to allow you to make a success at forex futures trading of the Forex market.