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With oil prices seemingly reaching new highs daily, a lot of Forex market participants have been trying to use this fact as a proxy for currency trading. General consensus is that some national currencies are correlated, to some degree, to major commodities and can be taken advantage of. Most experts, however, have never been able to agree on which currency would be the best crude play. Until now.

Number of oil rich countries are small states located around the Persian Gulf. Outside of crude production, their economies are not large, in line with small populations. This countries formed a Gulf Cooperation Council, both economic and, to a lesser degree, military organization. Saudi Arabia is the largest member state, with Kuwait, Qatar, Bahrain, United Arab Emirates and Oman making the list. Yemen is a pending member.

Since oil is priced in US dollars, respective currencies of the member states have been pegged to dollar. Over last few years this arrangement created certain problems for the Council states: very high crude prices and weak dollar caused huge inflation pressures. In spite of that, central banks had to lower rates in line with FED, due to dollar pegs, furthering inflationary threats. For example, Qatar’s inflation exceeded 13% in 2007. Not a welcome development.

After years of discussions and planning, central banks of Gulf Cooperation Council,
have approved a draft of a charter for a central monetary authority. This agreement moved the group closer toward a goal of establishing a single currency for the member states. The launch of the new currency is set for 2010, but most experts expect it to be delayed. In project of this complexity and scope working out all the issues almost always takes longer than expected. We all remember Euro.

For example, Kuwait severed its dollar link last year and started tracking its dinar against a basket of currencies to help ease inflation that was driven in part by higher import costs – a decision that could be a major obstacle to reaching the 2010 target date for monetary union. Kuwait has not disclosed composition of the currency basket used for the new peg. Every member would also have to cap inflation within certain range, before the the union can proceed.

Despite set backs like this, at a recent meeting in Qatar, central bank governors reaffirmed the aim of monetary union in 2010 as Gulf states sought to avert additional unilateral decisions on currency policy that could jeopardize the project. Gulf Cooperation Council countries would “push ahead with the implementation of single currency on time”, stated one official.

Once the new currency is introduced, it would likely become available for trading very quickly. Most brokers would like to capitalize on the initial interest as soon as possible. Cost of trading would be another story, however, with rich spread and some illiquid time periods throughout the trading day. Nonetheless, it is certain there are scores of traders eagerly awaiting this yet unnamed currency.

Gulf Cooperation Council members believe that new monetary union will help curb inflation. Among many other stated benefits are increased economic cooperation in the region, easy in money and goods flow. Single currency should also place Persian Gulf States in better position in increasingly border less world economy. And perhaps help them to prepare them for the next big step – life after oil.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com

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Is you are just starting out in Forex trading then you may well have been lured into the exciting world of currency trading by one of the hundreds of websites that will tell you that for a very low initial investment you can enjoy high returns in a low or risk free market. Unfortunately, like most things in life, it is not quite as easy as these websites would have you believe and Forex trading, while not as complicated as many other forms of trading, is still a reasonably complicated business.

Many novice traders are tempted to open an account, which is a very easy process these days, and to simply dive head first into trading and, in so doing, they make two basic mistakes. Their first mistake is to begin trading without any clear strategy and their second mistakes is to move one trade to the next being driven on purely by emotion.

In many cases a novice trader will buy a currency pair in the certain belief (based upon nothing but a hunch) that it offers the opportunity for an easy profit and is tempted to buy quickly before the opportunity is lost. Shortly after opening the trade however the market will move in what the novice trader perceives as being the wrong direction and he will panic and close the trade taking a loss. However, he will then continue to watch the market for reassurance that his decision to get out was a wise one and to comfort himself with the knowledge that things could have been worse and his loss far greater. Now sometimes this is exactly what happens but, very often, he will simply watch the market reverse and his currency pair climb quickly into a position which would have made him a nice profit if only he had not panicked.

There are many different groups involved in Forex trading today including governments, banks, investment funds, corporation and of course individual private traders. Leaving the individual traders on one side for a moment, the other players in the market all have very specific objectives for their trading and, most importantly, they also have a very clearly defined set of guidelines and rules for their trading, not least because they will be held accountable for their trading decisions. This means that, for the larger players, trading is an extremely disciplined business and this to a very large degree explains why these large players are so successful.

For the private trader there is of course no accountability issue and so no specific requirement to adopt a trading strategy or to follow a set of trading rules. However, if you wish to succeed in currency trading then there is no doubt that this is one area in which you need to follow the example of the larger players.

Success in the longer term will never come from trading based upon a hunch or on emotion, but will only come from a sound knowledge of the workings of the market combined with a clear trading strategy.

LearningForexTradingOnline.com is the idea place to learn currency trading and provides information on everything from the history of the Forex market to how to operate a Forex mini trading account.

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A Forex Brokers scams is any trading scheme used to defraud individual traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market.

In this type of case, investors may be promised many thousands of dollars in profits in just a few weeks or months. Often with an initial investment of $5,000 or less. The investor money is never actually placed in the market through a legitimate dealer, but simply diverted, stolen for the personal benefit of the con artists.

Be aware that there is a unique organization – The United States Commodity Futures Trading Commission (CFTC). This agency regulates the trading of Forex currency, commodity futures and options contracts in the US and fights against companies involved in illegal or fraudulent sell of currency, commodity futures and options.

How do I protect myself?

There are five essential aspects of foreign currency market a beginner trader should be aware of:

Forex Fundamental Analysis

Forex Technical Analysis

Money Management

Forex Trading Psychology

Forex Brokerage

Understanding these five aspects will help you to sucessfully invest in the Forex Market and not get scammed.

Here are five ways to help you find the best forex broker and avoid Forex scams:

1. Find out if the broker’s company is a registered futures commission agent. Get the brokers NFA ID number. Beware of dealing with affiliates who may be associated with legitimate brokers but operate on their own.

2. Make certain the registered FCM has substantial assets. The minimum required by the NFA is $250,000.

3. A 3 to 5 pip spread is normal in liquid markets, such as the major currency pairs, and fees are typically charged on only the buy side.

4. Requotes should be rare. If you get requoted more than a couple of times per year, something is fishy.

5. Get a good information provider, and compare the brokers offer in the open market with others. Is it in step with the market? Or is it off? If it is off, they might be trying to profit from that difference.

Most Forex fraud and commodity fraud is committed by firms located in South Florida, Southern California or outside the United States. Russia is currently a major source of investment fraud. Never make a check or bank wire payable to ANYONE other that a FCM registered with the NFA.

A high number of cases of Forex fraud is instigated by firms located in the United States and brokers of the firm and were at one time registered with the National Futures Association and have had their licenses revoked.

You can spend a lot of money to download programs that have promised to make you tons of money. Do your research and look into what is available.

Today there are many amazing programs that will put your Forex Trading on autopilot. Look into those programs.

If you would like to read about an amazing automatic Forex Trading System: Go here
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Foreign Exchange trading market or forex market is the largest currency trading market place. The market is essentially an over-the-counter trading market. The most important aspect of forex trading is perhaps a proper and detailed analysis of the current and prospective market conditions. Any individual who wishes to trade in the market must keep in mind the past trends and also should carefully look into the future prospects.

The country whose currency is being traded in should be stable in all respects including the gross domestic product of the country, the financial stability of the nation, the foreign relations of the country along with the ongoing rate of inflation of the country all affect the forex market to great extents.

There are various forex trading markets in the world. The 6 major currencies in forex trading market are situated in London, Tokyo, Frankfurt, New York, Zurich, and Paris. The trading is done around the clock due to the various time zones in which these 6 markets are located. This can be understood by the simple example of the contrasting time zones between the European and Asian markets.

The opening of the trade in the European markets generally follows the closing of trade in the Asian markets and vice versa. The markets comprise of various participants including various banks, money managers from across the globe, multinational firms that have a relatively large setup, money brokers throughout the world, private speculators and individual traders. Any one who wishes to start trading must get himself a forex trading account with high balance.

The profits are there to be made but it is strongly recommended that the individual practice with a demo account for a couple of months before getting into mainstream trading to avoid heavy initial losses. With some practice and tactical ability, huge amounts of profits can be made in the forex market.

The Forex Automated Software has revolutionized the trading world by giving the common person the ability to enter the multi trillion dollar world of currency exchange and actually make good money with Forex.

Our team of Forex professionals have created a review site for the best Forex Automated Software on the market.

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Within the past two years there has been an explosion of growth with online Forex trading. More and more people are taking their chances in the Forex market. It is also highly noticeable that there has been a popularity increase in Forex trading commodities. Hedge fund companies are now taking more interest in diversifying themselves by extending their networks into the Forex market. Not only have major companies taken an interest in Forex’s popularity but also small individual traders are coming out of nowhere everyday.

With the use of new robot trading systems just about anyone can accurately determine and assess market trends with minimal knowledge. In doing so you will see a lot of new beginners starting to profit off of a market that took some people more than 20 years to master. The Forex brokers have risen up all around the Internet making it easier than ever for individuals to setup accounts and start trading. The only thing separating these companies are the perks and incentives they provide their potential customers. Some go as far as giving bonuses to their clients exceeding $500.

The Forex market will continue to bring great wealth to some individuals who know the secrets and strategies that others don’t. With over $1.9 trillion per a day liquidated it is the largest trading market in the world and will continue to be so for many years. Forex has been exponentially increasing in popularity across the Internet. According to speculators they believe it has no plans of slowing down anytime soon. It is suggested that Forex will be the next big traded commodity among both the average Joes and the big investment firms.

Unfortunately one of the downsides for most novice traders that they will come across in Forex is that there is a high learning curve. This often means that it will take a while before the novice trader gains the experience and knowledge necessary to enjoy the full prosperity of the Forex market and their investments. Luckily this is no longer the case. Expert traders are now willing to share their advice, knowledge, and help beginning Forex trader’s understand the market and make lots of money. One of the best 20+ year expert veteran Forex trader who is offering his help and is by far one of the best ones out there coaching is Jason Alan Jankovsky at the Forex Brotherhood

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Everybody who even perfunctory follows the news must have heard about the string of terrible financial developments in the United States. More and more investment and banking companies are going bankrupt or are being threatened by spreading credit crisis. This is a spillover effect from excessive lending practices during a prolonged housing bull market, which came to an end as a “bursting bubble” over a year ago.

Now more and more companies find themselves in possession of securities tied directly to mortgages issued during that time. With more and more houses going into foreclosures and loosing value, an increasing number financial instruments are rapidly becoming non performing, or outright worthless. Companies holding them are experiencing losses going into billions of dollars. Some of them are becoming insolvent.

Such was the case with Washington Mutual, which was seized by federal authorities and sold at a bargain price to JP Morgan Chase. Washington Mutual set a sad record, becoming the biggest bank to ever fail in USA. But not the only one lately. So far the crisis has claimed 12 banks, investment banks and even insurance companies, like the industry giant American Insurance Group.

To date US Treasury managed to avoid real disaster by stepping and taking over failing institutions or facilitating financing to keep them alive, by lending money to other companies for purchase of weakened rivals. Intervention has cost Treasury hundreds of billions of dollars, including $25 billion to bailout Bear Sterns, $100 billions each for Fannie Mae and Freddie Mac, $85 billion for AIG. This list goes on and on.

Now FED is asking congress for additional $700 billions in order to bail out entire financial industry, by establishing a market for mortgage backed securities. Federal authorities would purchase instrument from most at risk firms. That would set some kind of pricing guidelines for all other such securities, making it possible for all holders of such notes to start trading in them again, potentially lowering risk of owning them.

Nobody really knows if this is going to be enough, but the price of such action will be staggering. With the money already spent and the funds requested, the total bill will surely top $1 trillion dollar by a wide margin. This would signal new wave of borrowing by Treasury, which would last for years and push the total debt level into record and uncharted level.

Dollar lost value while all this was unfolding, and is likely to continue slide until congress works out details of this massive funds infusion. After that it will take some time to see if the steps FED is taking are having desired effect. US dollar will probably stay under pressure during this time. One might expect this to continue through the reminder of 2008.

In order to finance rising level of debt, we can expect to see interest rates rise on USD, which would make Treasury paper more attractive. Combined with economic slow down in the rest of the world, this might prove very bullish for dollar going into 2009. This will only be the case if the interest increases are done in a slow, measured pace and not due to some market panic. This particular scenario is compatible with very long term dollar charts.

We should be watching with interest what comes out of the chambers of congress. Once the funding is granted, it will be up to the financial authorities to prove it is money well spent. If it works even half as well as promised, we should see steady appreciation of Dollar in 2009 and perhaps a little longer.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com. Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com

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I wanted to share some of my working forex investment strategies that should help you with your trading. This is a very rough market for a lot of people. It is estimated that 95% of individual traders are losing money, so that doesn’t sound like it’s a get rick quick scheme, like a lot of people anticipate. It takes a lot of hard work and dedication to learn how you can get a share of that three trillion dollars that moves around each day. I’m going to share a little about what I’ve learned during my time of trading.

One of the biggest things you’ll notice when you start out is that you have too much choice. Too much choices really just divides your attention. It divides and conquers. That’s why I always advise people to stick with one currency pair. This way, you can spend all your time focused on it. You’ll notice that each pair has it’s own unique behavior that you must learn in order to profit from it. This is the best working forex investment strategy you can implement. As you get good with one pair, move onto another and learn that too. That will increase your profiting power.

You also need to be a little confident in your trading. Most of us can’t choose to be confident, so at least try and pretend. A confident trader isn’t full of anxiety every trade they make. They do it with a belief that they made the right move. This means trades get a chance to play out. That is all you are required to do to be confident or at least pretend to be confident.

The 10 Minute Forex Wealth Builder is an excellent profit making tool. It allows you to automate your profits with only about 10 minutes of your time.

Learn more at the 10 Minute Forex Wealth Builder Review

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I wanted to take the time to talk to you about trading money in the foreign exchange market. This is a very large market with over three trillion dollars a day moving around. This means there is a potential for a lot of profit for a lot of of people, but the fact is that only 5% of traders are making all the profits. Everyone else is losing out. It just shows a really misguided majority that really has no idea what they’re doing in this market place. I’m going to share a little of experiences to help you better prepare yourself to be a good trader in this market.

The news you watch on television everyday is actually quite important for a trader. It may not seem important since they never talk about forex, but they do talk about the things that affect forex traders, the economy. The economy is the foundation that holds up a currency and by knowing how solid the foundation is, you can determine the trend of a particular currency. You’ll hear news about GDP, unemployment, inflation, interest rates, etc. They all paint a picture of the economy. When things are good, it’s good for the currency. When things are bad, it’s bad for the currency.

You’re also going to notice that this market takes up a lot of time. In fact, a 24hr period of time each day for trading. That can really put you at a disadvantage of having to sell down trades at the end of the day, even though if you were capable of watching in for the next 24hrs you’d probably do good. Get a software package to watch it for you. They’re programmed to make the most profitable decision.

The Forex Tracer is a great automated trading tool that can help new and individual traders work in a 24hr market.

Learn more at the Forex Tracer Review.

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Back in 1997 major financial slump rocked number of countries in Asia, an event that became known as “Asian currency crisis”. Effected countries included Taiwan, Thailand South Korea and others. One of the memorable comments of the time came from one of leading Thai politicians. He blamed this whole mess on speculators, with George Soros being the main culprit. The remarks went so far as to public statement of “not being able to guarantee his safety if he visited Thailand”. Quite ominous.

The fallout in South Korea was brutal. The US Dollar has about doubled in value against the Won, with USD-KRW moving from just above 800 in early 1997, to 1600 by the year’s end. Local stock market suffered similar fate, as did all areas of economy. Perhaps most telling was an enormous spike in unemployment, as the jobless rate soared to almost double digits, with about 9 million people out of work.

This author observed the aftermath first hand, during one of his business trips to South Korea at that time. Collapse of once high flying conglomerate Daewoo under burden of debt. The sight of many construction projects suspended or stopped all over Seoul and Pusan. Daily failure of scores of small business. It was good time to visit South Korea, due to low prices, but very difficult period for residents.

The country has rebounded nicely since then and became one of Asia’s most dynamic economies. KRW strengthen considerably reaching level 900 against USD in 2007. The stock market has recorded double digit gains in four of the last five years, gaining 32% in last year alone. Korean companies like Samsung Electronics Co, and Hyundai Motors Co, have established themselves as some of the world’s leading corporations.

Things have changed in 2008. Challenges like high oil prices, inflation, external debt and account deficit have shaken investors confidence. While many countries have seen outflow of funds into the dollar, this process became especially painful in South Korea. The Won has become the Asia’s worst performing currency, loosing 20% to date. Stock market was no better, falling 25%, with farther sell off of equities expected.

These developments created widely spread comparisons to situation from 1997 and were quick to be picked by the press. International Monetary Fund disagrees with this assessment and expressed confidence by saying that South Korea is a mature and resilient economy with country’s fundamentals much stronger than a decade ago. Korean financial authorities, however, felt obligated to act by intervention on Wons behalf in the open market. This seemed to stop the bleeding for now.

What can be expected next? In all reality, 1997 type sell off is extremely unlikely. As South Korean economy is cooling down together with the rest of the world, Seoul might not be able to stop bleeding of the stock market but there is one thing they can do- keep intervening on behalf of its currency. Unlike before, there are huge foreign reserves, about 250 billion dollars worth of, and they can be used to support Won.

Very likely scenario, as of this writing, is continued fall of Korean equities, in tune with broader stock declines. The Won should also keep dropping, but in much more measured and steady pace. Central Bank has not mentioned what the comfortable level for USD-KRW is, but as we noticed over last few years, major trends are very powerful and can go through any “line in the sand’ drawn by anybody.

Current rate is around 1150. Even with expected interventions, Won can easily weaken to 1300 and maybe 1400, but far short of the previous low of 1600. Also, one shouldn’t look for a fast move, but rather steady depreciation, lasting a year or two. This is not a situation for active traders, but for those who prefer longer term positions current development might present good opportunity for farther selling of KRW.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com

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