JPY

JPY

Japanese Yen (JPY)

Several small European states (The Vatican, Monaco, and San Marino), although not EU members, have adopted the euro due to currency unions with member states. Andorra, Montenegro, and Ko Japanese Yen (JPY) . The yen or en is the currency of Japan. It is also widely used as a reserve currency after the United States dollar, the euro and the pound sterling. The ISO 4217 codes for the yen are JPY and 392. The Latinized symbol is ¥ while in Japanese it is also written with the kanji .

The yen was introduced by the Meiji government in 1870 as a system resembling those in Europe. The yen replaced the complex monetary system of the Edo period, based The New Currency Act of 1871 stipulated the adoption of the decimal accounting system of yen, sen, and rin, with the coins being round and cast as in the West.

While not a usage specific to currency, large quantities of yen are often counted in multiples of 10,000 in the same way as values in the United States are often quoted or rounded off to hundreds or thousands. The yen was legally defined as 0.78 troy ounces (24.26 g) of pure silver, or 1.5 grams of pure gold. The same amount of silver is worth about 1181 modern yen while the same amount of gold is worth about 3572 yen. The Act also moved Japan onto the gold standard. (The sen and the rin were eventually taken out of circulation at the end of 1953.)

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U.S. dollar regained some ground

U.S. dollar regained some ground

The U.S. dollar regained some ground versus major rivals in otherwise range-bound action Wednesday, boosted by safe-haven flows as U.S. equities faltered.

"The market is vexed with uncertainty and uncertainty is one of the main ingredients of a range-bound market," said Jessica Hoversen, a Chicago-based currency strategist at MF Global Research, in a strategy note.

"Today's trade continues to focus on earnings and the economics calendar," she said.

The dollar index (DXY), which tracks the greenback against a trade-weighted basket of six major currencies, rose to 79.141, up from 78.863 in North American action late Tuesday. The index slipped to a new 2009 low below 78.40 earlier Tuesday.

One euro bought $1.4103, down from $1.4160 late Tuesday. The British pound bought $1.6366, down from $1.6433.

The dollar rebounded from earlier losses Tuesday as U.S. stocks lost ground. Asian shares saw a mixed finish early Wednesday. European shares were higher, while U.S. stock index futures pointed to further weakness for Wall Street.

U.S. June durable goods orders data are scheduled for release at 8:30 a.m. Eastern, and are expected to post a decline after a 1.8% rise in May. The Federal Reserve's "beige book," a compilation of anecdotal economic observations from regional Fed banks, will be released at 2 p.m.

The European Central Bank's quarterly lending survey showed banks continued to tighten credit conditions in the second quarter, although at a milder rate than in previous quarters.

Meanwhile, consumer price inflation data from German regions indicate the euro-zone's largest economy likely saw negative inflation in July.

"While a rebound in inflation is expected towards the end of the year, for now it seems likely that the ECB (European Central Bank) will maintain its policy of generous liquidity provision," wrote Jane Foley, head of market research at Forex.com.

Lending data from the Bank of England showed lending to the U.K. household sector and non-financial corporations continued to slow in June.

June mortgage approvals continued to rise, however, to total 47,600, up from 44,200 in May.

The U.S. dollar bought 95.03 yen, up from 94.51 yen in late North American trading on Tuesday and erasing a small loss seen earlier Wednesday.

"Improving risk appetite should tend to foster [U.S. dollar] drops versus European and commodity currencies and broad [Japanese yen] declines on Japanese capital outflows," said Tomoko Fujii, a rates and currency strategist at Bank of America Securities-Merrill Lynch Japan.

"However, given sharp [Japanese yen] gains in the risk asset correction phase in the first half of July as well as global investors' continued reductions of the net underweighting of Japanese equities and a bottoming of Japan's external surplus, we now expect a more moderate downward path" for the yen, she said in emailed comments.

The bank now expects the dollar to rise to 100 yen at the end of the third quarter of 2009, compared with a previous estimate of 105 yen. It forecasts the greenback to buy 105 yen at the end of the fourth quarter, down from a previous forecast of 110 yen, and 110 yen at the end of the first quarter of 2010, down from 112 yen.

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USD/CAD Spotlight: Indicator of the Day

USD/CAD Spotlight: Indicator of the Day

Usd/Cad: The recent break back above the 50-Day SMA for the first time in several weeks is viewed as a bullish sign and could potentially open the door for more significant upside over the medium-term. As such, we look for any pullbacks inter-day to now be well supported on a close basis by the SMA which currently resides by 1.1400. We do not see any setbacks below 1.1400 as sustainable, and would recommend looking for opportunities to buy any dips below the 50-Day SMA on Tuesday. Ultimately, only a close below the 50-Day SMA would give reason for concern.

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SigmaForex Explains The Concept Of Fair Value

SigmaForex Explains The Concept Of Fair Value

SigmaForex devotes serious effort to serve the emerging retail segment of the Forex community. Its commitment to providing an excellent customer service, innovative currency trading technology, and dealing practices, establishes SigmaForex as a notable force that traders look forward to for an advanced Forex charting, Forex news, and fund safety.

If you want to understand forex markets and trade them for bigger profits, then you need to understand the concept of fair value. Most traders don’t - but if you do, you can turn this to your advantage and make huge long term profits.

So what moves forex markets? Here is a simple equation:

Forex Fundamentals + Investor Perception of them = Price.

It’s a fact that the fundamentals are unimportant by themselves - it’s how investors perceive them, that is vital to understanding price. We all have the same facts to look at but we all draw our own conclusions about them, colored by the emotions of greed and fear.

Over the longer term prices tend to respond to the long term fundamentals - but in the short term traders always push prices to far up or down with there emotions and we see prices spike away from fair value.

You can see them easily on a forex chart and these forex price spikes never last and prices eventually come back to more realistic levels. This is simply the way any free market works not just forex markets but how do you take advantage of fair value and how do you judge it?

One of the simplest ways to judge fair value is to use a longer term moving average.

In big bull trends the 40 ma will normally act as great support for the longer term trend and dips back to the 18 day ma, are normally a good area to load in positions in the direction of the prevailing trend.

Look at any trend and you will see how effective these averages are to buy or sell into, after a surge up or down.

When prices dip to these averages you don’t just buy into them, you wait for momentum to turn up in the direction you wish to trade. Here you should use some momentum indicators to time your trading signal.

There are a lot of them and we have written frequently about them - but the stochastic and the RSI, are good ones to use so check them out.

The trend is your friend, as the old saying goes and a trend in motion is more likely to continue than reverse.

This is why this strategy works. Check a forex chart and you will see how often buying back to key moving averages supported by momentum works. Forex trends last for months or years and by buying back to these areas of fair value, you can make a lot of money.

A forex trading strategy that buys back to fair value can make you a lot of money.

This is a simple forex trading strategy and it’s highly effective, when a market is trending and you want to get in on the direction of the major trend at the best price in terms of risk to reward.

In part 2 of this article series, we will look at how to take advantage of price spikes to initiate counter trend trades which, can offer spectacular profits with low risk.

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Newbie As A Forex Trader

Newbie As A Forex Trader

Day by day, week by week, month by month and year by year there will always be a new comer for forex trading. Lately the forex trading market are full with newbie traders. All of them notice that they can earn a handsome earning by involving into forex trading online. I have ask some senior forex trader that have being involved with forex market so many years. He asked me to learn and understand about forex market first. Forex market is so big and it is so difficult to predict the forex market. The forex market is so active and we must always notice how the forex movement. I want to advise some newbies same as me, we should read more books about the forex market or attending classes and personal coaching with the senior forex trader that really knows about forex market and currency. Otherwise, we will suffer on forex trading online.

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Fading False Forex Breakouts

Fading False Forex Breakouts

In this article I will share a simple strategy that many professional traders use with a great deal of success. There are a lot of variations of this strategy that, combined with proper risk management, can give a particular trading system an edge.

Simple Trading Strategy

I run an fairly large introducing brokerage company. By observing the successes and failures of my clients and interacting with them, I am able to pick up on what successful traders use to make money and the mistakes that unsuccessful traders make to lose money. This is all backed up by hard numbers, since I am able to view the performance of my clients.

After talking to a lot of my forex clients, it became evident to me that they use pivot points quite a bit in their trading. Two particular areas that traders like to focus on is the previous day’s high and low.

A crowd usually has the psychology that if the previous day’s high is crossed up the general price move is up and they are more likely to buy than sell. The opposite is true for when the previous day’s low is crossed down.

To add to that many traders use the previous day’s highs and lows as their stops. So if the price crosses below the low traders will be stopped out and the price will drop. The opposite is true for the previous day’s high.

Taking this information into consideration, I feel that I will have an edge in the market by going long if the previous day’s high is crossed up and going short if the previous day’s low is crossed down. I feel that the price move will continue to go in the direction of the cross for at least a little bit.

Many traders however play this trade completely the opposite way. They look at these price points as support and resistance and they dollar cost down into their trades. In other words if the price crosses below the low of the previous day they will go long and add to their positions until their average entry price is lowered. It is for this reason that I give these trades a little wiggle room by placing my stops around 30 pips away.

By using this edge and back-testing it I have developed some simple rules.

Basic Rules for trading EUR/USD:

Price Action Strategy

To us a trading day is from 5pm EST to 5pm EST in forex.

1. Enter long on a stop order if the previous day’s high was crossed.

2. Exit on a limit if the trade gains approximately 10 pips. Exit on stop if the trade looses approximately 30 pips.

3. Enter short on a stop order if the previous day’s low is crossed down.

4. Cover your short position if the trade gains approximately10 pips using a limit order. Exit on a stop if the trade goes approximately 30 pips against you.

5. Only take the first high/low cross of the day.

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Forex Made Easy for Everyone

Forex Made Easy for Everyone

Forex made easy is as simple as you would want it to be. The foreign exchange market is a worldwide market and according to some estimates is almost as big as thirty times the turnover of the US Equity markets. That is some figure to chew on. Forex is the commonly used term for foreign exchange. As a person who wants to invest in the forex market, one should understand the basics of how this currency market operates. Forex can be made easier for beginners to understand it and here's how.


Foreign exchange is the buying and the selling of foreign exchange in pairs of currencies. For example you buy US dollars and sell UK Sterling pounds or you sell German Marks and buy Japanese Yen. Why are currencies bought or sold? The answer is simple; Governments and Companies need foreign exchange for their purchase and payments for various commodities and services. This trade constitutes about 5% of all currency transactions, however the other 95% currency transactions are done for speculation and trade. In fact many companies will buy foreign currency when it is being traded at a lower rate to protect their financial investments. Another thing about foreign exchange market is that the rates are varying continuously and on daily basis. Therefore investors and financial managers track the forex rates and the forex market it on a daily basis.


Those who are involved in the forex trade know that almost 85% of the trading is done in only US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. This is because they are the most liquid of foreign currencies (can be easily bought and sold. In fact the US Dollar is most recognizable foreign currency even in countries like Afghanistan, Iraq, Vietnam etc).


Being a truly 24/7 market, the currency trading markets opens in the financial centers of Sydney, Tokyo, London and New York in that sequence. Investors and speculators alike respond to the ever-changing situations and can buy and sell simultaneously the currencies. In fact many operate in two or more currency market using arbitrage to gain profits (buying in one market and selling in another market or vice versa to take advantage of the prices and book profits).

While dealing in forex, one should have a margin account. Quite simply put if you have US$ 1,000 and have a forex margin account which leverages 100:1 then you can buy US$ 100,000 since you only need 1% of the US$100,000 or US$1,000. Therefore it means that with margin account you have US$ 100,000 worth of real purchasing power in your hand.

Since the foreign currency market is fluctuating on a continuous basis, one should be able to understand the factors that affect this currency market. This is done through Technical Analysis and Fundamental Analysis. These two tools of trade are used in a variety of other markets such as equity markets, stock markets, mutual funds markets etc. Technical Analysis refers to reading, summarizing and analyzing data based on the data that is generated by the market.

While fundamental Analysis refers to the factors, which influence the market economy, and in turn how it would affect the currency trading. Of course there are other economic and non economic factors which can suddenly affect the trading of the forex markets such as the 9/11 tragedy etc. One needs to have a shrewd acumen and a few number crunching abilities to strike gold in the forex market.

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Three Concepts All Forex Traders Must Know

Three Concepts All Forex Traders Must Know

There are three important concepts inForex trading that you must understand in order to find your way in the currency markets. These concepts are “Pips”, “Volume”, and “Buying” and “Selling Short”. They may look more like four concepts but buying and selling are like the two faces of the same coin so we can consider them as a single concept.

Lets first talk about what Pips are. It is common when reading literature about forex trading to find statements about how many pips a day you can make using some trading system or the other. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3458 then an increase to 1.3459 would be a “one-pip” increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pair you are trading. And depending if you have a regular or mini account, each pip will have a value of $10 or $1.

Now lets talk about what Volume is; the Trading Volume is a quantity that tells forex traders how much money is being traded at one particular moment in the market. The currency markets are known by their high trading volume during most of the time markets are open. Usually there are spikes in the volume during some type of news breaks and during the time New York stock exchange is open. The volume of transactions in Forex, even in a slow day, will always be much higher than the volume traded in other large exchanges at their full capacity.

Perhaps the most obvious of the concepts in forex is that of Buying. It refers to the acquisition of a particular currency pair to open a trade. Selling short refers to the selling of a particular currency to open a trade. When you Buy, you do this because you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high. In the case of Selling short, it’s a bit more complicated, but just at the beginning. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. It may seem kind of tricky for new traders to grab this concept of earning by Selling but once you are in front of your trading station it will look much simpler.

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How and Why Investors Short Bonds

How and Why Investors Short Bonds

We have advocated a long term, diversified approach as the investing methodology that will produce the best results for the majority of your portfolio for a long time. However, mixing some shorter term positions, options strategies and even a few speculative bets into your portfolio can often have the affect of improving your overall returns and reducing portfolio volatility. The current market environment is the perfect example of why investors need to be thinking about investing strategies beyond a generic buy-and-hold methodology.

The economy in late 2008 and early 2009 has been a tug-of-war between the threats and serious risks of deflation and the disadvantages of high inflation. The extraordinary deficits planned by the U.S. Government and the massive intervention in the U.S. treasuries market by the Fed to fight deflation has shifted investor expectations more towards high inflation over the next several quarters.
Savvy traders observing this shift towards inflation expectations are likely getting their inflation-based investing plans ready to deploy. When traders talk about opportunities in a market like that they will often mention short bonds or treasuries positions. A short bonds position has the potential to produce big profits during high inflationary periods but how does a individual trader do any of that within their regular stock account?

Shorting an actual bond is complicated and probably outside the scope or interest of most individual traders. However, shorting a bond ETF could accomplish the same thing with a lot less hassle. As bond prices drop (due to inflation) bond ETFs will also decline in value. There are many bond ETFs to choose from but the iShares 7-10 year treasury bond fund (IEF) is an ideal instrument for this short strategy.
However, what if you are not even interested in the complexity of shorting a stock? There are even easier ways to take advantage of a decline in bond prices by buying a short bond ETF. That means that the ETF itself is investing in short bonds and by buying the ETF you will profit when bond prices drop. There is a leveraged ETF that has become very popular as a way to execute this strategy called the ProShares Ultra-short 7-10 year treasury ETF (PST).
There are some inherent risks in shorting bonds that you should be aware of.
1. Bonds are mean-reverting, which means that they don't "trend" for long periods of time. This makes your holding period fairly short term.
2. Leveraged positions using margin and leveraged ETFs include higher costs.
3. Leveraged funds will underperform in the long run because they lose some of the benefits of compounding.

You will notice that the disadvantages of this strategy mostly concern the fact that a short bond strategy is a short-term strategy. Short term trading costs more and is more difficult than longer term investing. However, when faced with an extraordinary market and an evolving economic environment, looking outside the long-term box for new opportunities can be quite attractive.

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Learn how to make consistent forex profits

Learn how to make consistent forex profits

It was a bitter cold Friday morning and I was just about to place my 32nd trade of the week. I remember the trade and that particular morning very well, I had every reason to, because the previous 31 trades had all been losing trades. I remember thinking how on earth is this possible? How could someone take 31 losing trades even if they were trying?

With shaking hands and a sick feeling in my stomach, I picked up the telephone to call my broker. (yes we still had to use telephones in those days) I placed my order, and my 32nd trade was live in the market.

Ten minutes later my world caved in

Less than 10 minutes later I was stopped out and took another trading loss. That was it! I had wiped out yet another trading account, yet again I would have to explain to my wife where all the money had gone. It was devastating. I sat with head in hands in the depths of despair. Learning to trade properly had to be number one priority.

Six months later I was living in Spain on the Costa del sol, in a beautiful house with views out across the clear blue Mediterranean Ocean, paid for in cash! Today I live in spectacular New Zealand and spend a great deal of my time playing golf with my sons and fishing the world famous Mataura river. Its paradise all over again.

From failure to success in such a short time

What happened? How did I go from complete trading failure to living in Spain on the Costa del Sol (Coast of Sunshine) without a financial care in the world, in such a short time? How was it that 6 months ago I was a just another failing trader and now 6 months on I was sought out by the media to get my story of trading success. Here is a link to a major feature article in Futures and Options World Magazine that came out in 1999.

So.. In 1999 I had a trading methodology that predicted *Note. predicted trending days better than 8 times out of 10.
Just what did I discover about trading that turned me from trading failure into trading success, so fast?

I discovered something that was blatantly right under my nose

And its right under your nose, right now. Most can't see it because they are to busy looking at totally misleading candle or bar chart patterns, instead of learning to trade professionally. They are continually developing trading strategies that completely ignore what really drives the market, and they are listening to the blind leading the blind.

The biggest time and money wasting experience for many traders is that they get caught up, and buy into the false believe that there is a failsafe automatic computerized trading system out there.
This elusive and mystically trading solution is nonsense, pure nonsense, but it doesn't stop some traders wasting years of their lives, and a whole heap of money in search of it.

Just how do you make money trading forex?

The first thing is to stop spending money on forex trading nonsense, second you give up on the pipe dream that you are going to send someone (normally $97.00) for a newly discovered forex trading secret. Third you do not get suckered into the belief that say 'the more something cost the better it must be.

Many would be traders spend a few hundred on $97.00 secrets, find out they don't work and then create a completely irrational belief within themselves, that the latest offering costing several 1,000's just HAS to be good, as that is why it's so expensive. There is a whole heap more daft things that traders do, but hey lets leave that behind and get to the core of how to make money trading forex.

Ok so now we know exactly what not to do. If you have already done the above then kiss the money goodbye, its gone and its not coming back. Its time to move on, its time to turn this all around by learning what really moves the market and how you are going to profit from that knowledge.

The Route to Trading Success

• The complete understanding of what really moves a market.
• The ability to use that knowledge to make profitable trading decisions.
• A set of reliable trading tools
• Acceptance that its your responsibility.
• A complete appraisal of just what your trading is for and who it is effecting.
• Use the single force that drives every market in any direction.

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Forex Brokers -Quality of the Institution

Forex Brokers -Quality of the Institution

Unlike equity brokers, forex brokers are usually attached to large banks or lending institutions because of the large amounts of capital that is required. Also, forex brokers should be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC).

You will want to make sure that your forex broker is registered and backed by a reliable institution.

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Forex brokers --Low Spreads

Forex brokers --Low Spreads

The spread, which is calculated in pips, is the difference between the price at which a currency can be bought and the price at which it can be sold at any specific point in time. Forex brokers don't charge a commission, so this difference is how they are going to make money.

When you are comparing brokers, you will find that the difference in spreads in Forex trading is as large as the difference in commissions in the stock arena. What this means is that lower spreads will save you money and therefore, look for forex brokers that offers low spreads.

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