Poll: Forex Traders Expectations for 2013

Generally, people prefer to expect an upcoming year to be at least slightly better than the current year. But “better” is a different kind of beast for the Forex traders. If you are a short-term investor and benefit from market volatility, you would want less stability in 2013. If you are a long-term currency trader, you would probably want some important shifts in international foreign exchange policies to engage in new positions.

Some of the biggest questions of the next year will be whether the eurozone would continue struggling for its integrity, whether new fiscally troubled countries would require considerable bail-outs and whether any country would leave the monetary union. At the same time, other traders would be more worried with the “fiscal cliff” situation in US, which may trigger as early as January 1.

Swiss National Bank is also in the focus of many FX traders as the institution may either raise the current EUR/CHF floorfrom the current 1.2 level to some higher rate or abandon the floor completely. Both decisions would mean a lot for all the CHF-based currency pairs as well as to many euro- and yen-related ones. Though it is not very probable, some central banks may decide to follow SNB’s trend and peg their currency to another one. This would lead to unexpected and potentially profitable consequences in the foreign exchange market.

Other major central banks may surprise the trading community by initiating interest rate increases. It is currently a kind of consensus that the rates will remain unchanged (or occasionally lowered in some developed countries) at least until 2014. Another potentially interesting regulatory decision could come out of China, which could rule out a less restrictive policy for its renminbi (yuan) exchange rate.

While not all conditions are currently favorable for carry trade, its full-scale re-emergence could well be one of the most influential events of the future year. Catching the right moment here could mean nice profits to many risk-hungry traders. On the not so bright note, 2013 could also become a year of a new Forex tax. Governments of several countries have already voiced an opinion that such tax would be a good idea. Definitely not for traders. Of course, there is little chance for such a tax or fee to work in real life at all, yet it might become of the unpleasant surprises of the approaching year.

Some part of investors always believe that the basic commodities (like grains, food, industrial metals and energies) are undervalued. They would expect 2013 to show a significant rally in such instruments due to the rise of consumption and stagnation in output. On the other hand, there are investors betting on gold/silver appreciation. With no new record highs since 2011, it is quite natural to expect something interesting from these precious metals in 2013. And, of course, there is oil, which still has not recovered from its 2008 fall. Five years could be enough time for a rest before a new rally.

Unfortunately, not all events that significantly move the currency rates are positive. In fact, they rarely are. A major financial crisis could hit the market again in 2013. While some developed countries are still experiencing recession caused by the crisis of 2008, some powerful economic and financial turmoil could cause a real panic in Forex. Nature may alsoaffect the markets. Another Katrina or Indian tsunami (similar to one in 2004) could lay waste to one currency and spur up others. Then, there is always a danger of some major terrorist attack, which is rarely ignored by the financial world. A full-scale war would have even more profound and long-term effect on the markets. If the current situation in the Middle East escalates to an international armed conflict level, the foreign exchange market would react with a lot of violence of its own.

Do you believe anything of such extent may happen in 2013?

Spot forex trading

These days, people hardly use cash for anything anymore. It is always a credit card or debit card, which is a charge card where money is taken directly from a person's account. So, it becomes difficult if they are asked to pay cash or worse still when they are asked to make a cash investment.

Sometimes people are flummoxed with such requests, but these are not make believe, they do exist. There is the spot forex trading where people trade in cash and the market is called spot market. Since foreign exchange trading does not have any office space, the deal is made over the counter between the two parties involved. Earlier when there were only big companies and multi-national banks, they had only trading that went on for a couple of days. But with the advent of new companies and many more people being interested in investing in this forex market, the spot forex trading has come into being. And this is where most of the new companies or smaller organizations make their investments and get good returns.

Most people are very cautious when it comes to parting with their money, and more so if the person is scared of taking risks and losing out what they have earned over the years. So, if a person is not keen on taking risks, they need to stay away from the spot forex trading. One must evaluate their financial standing, and calculate how much risk they can take and the amount of loss that they will be able to handle or manage.

This will let them know what their investing abilities are and decide if they qualify to invest in the spot market. Also one must not invest money unless it is disposable and a surplus, because any unexpected losses could set them back quite a bit and it could take them a long time to get back on their feet. In this market, the traders have the liberty to control the trend and they can close or open the deal whenever they want.

Choosing a strong currency pair is the first lesson one learns when they enter the forex trading arena, and if a person is willing to enter the spot trading scene, they must have adequate knowledge. And they should follow the market trend so they can make an entry and stay with the same for a while, instead of pulling out right away. The longer a trend is, the more their returns are likely to be, and if it is a short one, they will end up making multiple investments and entries into the trade. For seasoned players, the indicators act as signals keeping them informed of the market and its flow, giving them the choice to pull out whenever the flow is going against their predictions. Since one trades on currency pairs, they need to keep watch on both the currencies and not just theirs. This will determine where their money is going and the returns they can earn.

Nick Schultz is a Forex Trading expert who recently developed an eCourse that details a step by step process for success Forex investing. If you are interested in learning more about his "9 Steps to Better Forex Investing" eCourse and learning how to make greater profits from your Forex Trading, please go here right now! : http://www.forexinvestingcourse.com

Online Investing and Forex Trading

Online trading has caused a major paradigm shift in investing. At the turn of the millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new Economy, and the clear winner is the customer.

The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy.

On-line trading will revolutionize the currency markets by making it accessible to the small and medium sized investor. For the first time, these investors have the ability to execute transactions of between $100,000 and $10,000,000 at the same prices the Interbank market offers for deals well over $10,000,000. This benefits both those who wish to speculate on the direction of the currency markets for profit, as well as the money manager or corporate treasurer looking to hedge against unwanted exposure to future price fluctuations in the currency markets. I am going to discuss the Benefits of Trading Forex.

Very few on-line brokers are able to offer their clients real-time bid/ask quotes, which facilitates instantaneous deal execution - no missed market opportunities. Real-time prices also allow investors to compare an on-line broker's dealing spread with that of other pricing services, to ensure they are receiving the best possible price on all their Forex transactions.

Many on-line Forex brokers require their clients to request a price before dealing. This is disadvantageous for a number of reasons, primarily because it significantly lengthens the execution process from just a few seconds to possibly as long as a minute. In a fast paced market, this could make a significant difference in an investor's profit potential. Also, some of the more unscrupulous brokers may use the opportunity to look at an investor's current position. Once they have determined whether the investor is a buyer or a seller, they 'shade' the price to increase their own profit on the transaction.

Timing is everything in the fast-paced Forex market. On-line trades are executed and confirmed within seconds, which ensures that traders do not miss market opportunities. Even the incremental extra time it takes to complete a transaction over the phone can mean a big difference in profit potential. Introduction simply, executing trades electronically reduces manual effort, thereby lowering the costs of doing business. On-line brokers are then able to pass along the savings to their client base. The fast-paced nature of the Forex market compels traders to execute multiple trades each day. It is vital for each client to have real-time information about their current position in order to make well-informed trading decisions.
Access to timely and relevant information is critical. Professional traders pay thousands of dollars each month for access to major information providers. However, the very nature of the Internet affords users free access to reliable market information from a variety of sources, including real-time price quotes, international news, government-issued economic indicators and reports, as well as subjective information such as expert commentary and analysis, trader chat forums etc.

The main advantage of the Forex market over any exchange-traded instruments is that the Forex market is a true 24-hour market. Whether it's 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading Forex so that investors can respond to breaking news immediately. In the currency markets, your portfolio won't be affected by after hours earning reports or analyst conference calls. The ECNs (Electronic Communication Networks) exist to bring together buyers and sellers when possible.