Taking Advantage of Euro/Swiss Franc Relations in Forex

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As far as Forex trading is concerned, there exists one relationship between currencies of which every Forex trader should know before actually to start trading. It is the correlation between Swiss franc and euro currency pairs – the relationship extremely strong to ignore. According to the Forex market studies, it becomes obvious that the correlation between these currency pairs may be negative 95%. It is called a contrary relationship meaning that – by and large – in case EUR/USD gains in value, USD/CHF loses value in general. The opposite is also truth.

It is generally known that during the longer periods of time, like one year, the majority of currencies traded against the US dollar have over 50% correlation. It happens since the US dollar is a leading currency included in 90% of Forex transactions. Though the strong correlation between USD/CHF and EUR/USD occurs partly thanks to the general dollar impact in the two currency pairs, the explanation why the relations are much stronger than in other currency pairs comes from the tight links between Switzerland the Eurozone.

Switzerland borders on other Eurozone countries and, as a result, enjoys very close economic and political links with its bigger neighbors. The agreements between Switzerland and the Eurozone signed in 1972 and in addition to more than a hundred further mutual agreements that followed later enabled the free influx of Swiss citizens into the labor force of the EU as well as the slow but sure opening of the Switzerland employment market to citizens of the European Union. However, the links do not finish at this point. 60% of Swiss export is intended for the Eurozone, and 80% of imports are from the European Union.

As far as Forex trading is concerned, if EUR/USD and USD/CHF are long, two strongly offsetting positions are obtained or, on the whole, EUR/CHF. In the meantime, if one currency pair is long and another one is short, the same position is actually doubled up, albeit it can look like two different Forex trades. It is essential to realize for the suitable risk management since if something is skewed when one currency pair is short and another is long, losses can be multiplied easily.

The relations between the USD/CHF and EUR/USD decouple when there are different political or fiscal policies. For instance, if elections cause insecurity in Europe while everything is all right and stable in Switzerland, EUR/USD can decrease more in value than USD/CHF increases. On the contrary, if the Eurozone lifts interest rates assertively and Switzerland does not, EUR/USD can gain in value more than USD/CHF loses in value. On the whole, the fact that ranges of the two currencies may diverge more or less than the point difference, is the main reason why interest rate arbitrage in the Forex market applying these two currency pairs doesn’t work. The ratio of the range is measured by dividing USD/CHF range by EUR/USD range.

Provided by A. Collins who is a creator of simple forex trading system which is available on Forexeasystems. Also you can find there mt4 plugin Fx Pulse which can automatically collects Forex market information and displays it directly on the trading chart in real time.

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How To Turn $500 Into $150 Million Trading Forex And Commodities?

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Can you turn your $500 into $150 million trading Forex and commodities in the next few years? You might say it is impossible. Well, this is exactly what Richard Dennis did in 1970s and 80s. Richard Dennis once upon a time was a small time trader. He started with only $500 and over the next decade turned that small amount into a fortune of $150 million. Today, he is considered to be a trading legend.

Let’s take another example. Bruce Kovner was once upon a time a NYC Taxi Cab Driver. He wanted to trade Forex and commodities but didn’t have any money. So, he borrowed $3,000 on his master credit card and made his first trade in soybean futures contracts. He made $40,000 in that trade and then watched that amount drop to $23,000.

This was his first trading lesson that taught him the importance of risk and money management. He once said that the most important thing in trading is risk and money management. Over the next few decades he made a fortune of around $4.5 billion. Today, he runs his own hedge fund Caxton Associates, LLC that is ranked amongst the top 10 in the world.

These two stories illustrates one simple fact that is plainly overlooked by most. You don’t need a large sum of money to succeed at trading. What you need infact is proper training, the right methods, patience, persistence and of course discipline. What you should do is start small and over time compound that small amount into a fortune.

If you have been thinking about learning Forex and futures trading but postponing it because you didn’t have large sums of money, then you must know this fact that you can start trading with even $200 on micro lots and over the next few months turn that into a few thousand dollars. Then turn those few thousand dollars into a few hundred thousand dollars.

But to do that you will need the right training and the right trading system. Most of the info is now freely available online. Some of the free Forex trading systems are real good. First practice that trading system on your demo account. Market will be always there waiting eagerly for you to attack them. So don’t rush! First prepare yourself by getting proper training and then practice what you have learned. Once, you have mastered your trading system, start with not more than $500 and trade micro lots. Grow that $500 into $4,000 in the next few months. This will be the best Forex training you will ever get! Once, you have done that. The road is all open for you to make a fortune trading forex and commodities.

Mr. Ahmad Hassam has done Masters from Harvard University. Watch these Forex Income Engine Trade Alert Software FREE Forex Training Videos. Try the Macro Millionaire Coaching Program RISK FREE for 90 days!

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4 Principles of Choosing Automated Forex Trading System

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Charts, graphs, tables, analysis… If you start online trading forex, all these things come into your life immediately. A smart forex trader quickly figures out that it is impossible to make money on forex without a good trading strategy. And creating such a strategy can be very time-and-effort-taking, since currency trading demands always keeping a watchful eye of the forex market and currency prices. And this means charts, graphs… and you know.  Is there a way out to spare you all these “delights” and to make a profit at the same time? Yes, with the advent of computers and the Internet it became possible for everyone, and this way out is called automated forex trading systems, or forex robots.

If you search on the web, you’ll find out that there are a number of forex trading systems on offer.  But how to choose the best forex robot that would suit your needs?  That would become your helping hand and a reliable advisor in the tough world of currency trading?

Let’s review some points that will help you not to get lost in the diversity of forex trading systems.

  1. Chose your type of control
  2. Generally, there are two types of forex trading systems, which differ on the level of control they provide the trader with for making operations. The first is an automated signal system which makes a forex signal for the trader to enter or exit the trade. It is based on a set of market conditions prearranged in an algorithm. This type of system provides more control, since it leaves the decision whether to make an order or not to the trader. Second type of forex robots is fully automated forex trading system, where the trader even doesn’t have to enter the orders – it will be done by the system itself in case it “decides” that this is a profitable deal. It doesn’t leave much control to the trader.

  3. Search for reliable and tested software
  4. It’s better to choose the forex EA which has been successfully used for live account trading for a year or at least three months. It means that the system has proved its effectiveness in currency trading.

  5. The more currency pairs – the better
  6. Focus on a system that is optimized for dealing with at least 5 currency pairs – in this case you have more trading opportunities.

  7. As easy as can be

Your forex robot is supposed to be easy to install and set up, which means that it will be user-friendly and not complicated at all! To use such a robot is as easy as can be both for the novices and experienced forex traders.

 

Article was written by Alexander Collins. Founder and creator of forex expert advisor which works profitable sicne launching in 2007.

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Canadian Dollar is a Commodity Currency Profitable for Forex

To start with, Canada is considered one of the ten largest crude oil exporters in the world, and this makes its currency, Canadian dollar, very lucrative for Forex traders who like to speculate on the oil prices. This speculation appears to be very profitable, since the loonie (as the Canadian dollar is often called) is a classical commodity currency.

The essence – when the oil prices are rising, Canadian dollar strengthens respectively (against US dollar in particular), since price for oil is denominated in the greenback. Accordingly, forex trades prefer to go long for the US dollars and to go short for Canadian ones when the oil prices are falling. It must be mentioned that this strategy appears to be very beneficial for the Forex traders in the majority of cases.

Every Forex trader willing to make profit on the Canadian dollar should keep in mind that one of the key factors supporting the strength of the Canadian dollar is the closeness of the two major stable buyers of Canadian oil – the USA and Japan. What is more, Canada is said to have the second largest reserve of oil in world, which is important in the context of constant flourishing demand for this commodity that is most likely to continue in future. This results in the fact that Canada and Canadian dollar are ready to meet and satisfy the world demand for oil.

As far as Forex market analysis is concerned, when using technical charts in order to spot the correlation between the Canadian dollar performance in relation to the oil, it becomes obvious that this correlation is very tight. It means that if the Canadian oil takes the leading positions, its dollar’s value rises, too. Thus, oil movements turn out to be a reliable indicator which prompts a Forex trader whether to sell or to buy the Canadian dollars.

Another thing to remember is that one more way to speculate on the correlation between Canadian dollar and oil is exchange-traded funds concentrated on the Canadian currency.

However, the main conclusion is that relations between Canadian dollar and such commodity as crude oil which is Canada’s major export are very profitable for forex trading. In particular this refers to the USD/CAD currency pair. In addition, the price action of the oil indicates to the trading opportunities as far as Canadian dollar is concerned.

 

This guest post is written by Alexander Collins who is a founder of Forex company. Forexeasystems can offer every trader wide range of forex trading systems that work since 2007.

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eToro Forex Trading System

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If you are looking for a Forex trading system, make sure to look at eToro by clicking on one of the links provided here. Their revolutionary Forex trading system will make trading Forex simple and intuitive.

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Exchange Money Conversion to Foreign Currency (Photo credit: epSos.de)

eToro’s online trading system is one of the best available for Forex trading. Access real-time Forex rates for all the currencies.

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The charting features and innovated trading tools available with eToro make trading foreign exchanges simple for all levels of experience.

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Enjoy eToro’s online trading community to stay in touch with others day trading the foreign markets. Know what others are thinking and doing within their accounts while making your own day trades through the community forums.

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Begin trading currency with your free online eToro account. Try out the system before making your first $50 deposit and trading the markets for profit.

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Finally, easy Forex trading. Simple and intuitive. Try the system today with a free download of their great software.

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Other Popular Forex Trading Systems

Other Popular Forex Trading Systems: Forex Global Trading Group

Make money by trading money with this unique and exciting Forex product!

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International Currency Money for Forex Trading (Photo credit: epSos.de)

eToro Free Forex Trading Account

eToro is one of the worlds largest online Forex Trading sites. With eToro users are taught how to earn thousands, if not millions of dollars, in the foreign currency market especially in times of volatility.

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Author, professional trader Peter Bain is an authority in Currency Trading education. His Forex Course teaches the same system used by banks, financial institutions and professional Forex traders alike to trade currencies on the foreign exchange. For the first time, Peter’s making his “Commercial Forex Trading” system available to the public in the form of a video currency trading course.

 

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