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Most people who get involved with forex signal service do not realize how significant to the global financial markets the US Non-Farm Payroll happens to be. Many people ask me , "why does the monthly US jobs number cause the market to bounce up and down after it has been released ?" To give you an answer it is important to look at what is represented by the US jobs number . This gives insight into why nothing else can make the markets move in this way.

On the very first Friday of a new month, the US Non Farm payroll is then released. This report is put out by the US Bureau of Labor and Statistics and the things that it does measure, is the number of brand new jobs, excluding farming, created by the US economy in the month prior . This announcement is so important because it reflects the overall health of the US economy and thus the global economy . After all , this economy is the world's largest and consumer spending is the main component driving the economy in the US ; to the tune of no less than 70% !  So , in forex signal service, because the weakness or strength of a currency in a country is mainly affected by the interest rates in the country , you must look at the rates and what is driving them; or the US Federal Reserve policy on interest rates. The jobs report is probably the single most important piece of fundamental data that the Fed uses in order to set their short term interest rates and because of this, this report can and usually does , cause significant volatility across the markets .

Why does this report have anything to do with the short term interest rates set by the Federal Reserve? A wonderful question! If the jobs report is on the strong side this means that many people have jobs and there is high resource utilization. This means workers are being hired by companies and these workers are going out and spending money too on clothing, eating out, and more and all of these things drive the economy ; they make the economy grow or heat up . When the economy is heating up more money is in circulation and inflation must be kept in check by the Federal Reserve . They cool the economy and keep inflation in check by raising the short term rates, or they heat up the economy by lowering the short term rates to help raise inflation . As you can see , so the job number is a huge factor , driving all of this beneath the surface .

When you're getting ready for your forex signal service day or week ahead , remember to take a look at the events calendar for the fundamental information that is scheduled to be released that upcoming day or week . If you're in the first week of the month then you'll have the Non-Farm Payrolls report to look forward to on Friday of that first week since this is always the day of release. If you're planning to take advantage of market volatility that occurs when this jobs report is released, keep in mind this formula: A stronger economy usually is going on if the numbers of jobs are stronger than expected which means short term interest rates will go higher, strengthening the currency . Oppositely, if you find the jobs report is weaker than it was expected to be usually you'll get short term interest rates that are lower, causing weakness of currency . It doesn't always happen this cut and dried, but you can have a leg up on competitors with knowledge of these general parameters .

Forex signal service allows anyone, anywhere, to make a nice amount of money . What better way to do this then getting up each morning , having a cup of coffee , and then setting up the trading day while in your pjs ? Pretty easy ! Well hang on just a second because although it can be relaxing as well as easy most people quickly find out that it is not that easy at all . This is why this is an article about money management basics - because if you have your money management game-plan in place you are more likely to succeed .
So why, if this area of money management is so very important , do many people choose to ignore or overlook this? That is definitely a question that you should ponder on if you intend on succeeding in this market . I think that this aspect of trading is skipped by people, money management basics , because it's not really sexy . After all , how many sexy or interesting accountants do you know ? That's what money management is all about; a lot of boring numbers .
That said , it is only boring if you chose to think about it and approach it as such . If you look at it as a drag then it will be a drag and you're not going to want to get it done . If you look at it as one of the ultimate keys to becoming a forex signal service professional and focus on the huge success that lies just ahead of you if you spend some time thinking your tactics for money management through.... it really can get quite exciting .
Now you're convinced that this area needs to be focused on . Awesome! What is it about ? The following are the keys by importance, follow them and you'll start off great: don't over leverage yourself , be consistent with the amount of leverage you use on every trade , add to winners and do not add to losers . That is all . There are some tributaries of course to all of the aforementioned but even alone they are powerful .
The next time you're wondering why your trading level has not progressed in the way you were hoping, remember the money management keys. Another final thing to keep in mind is this: unimaginable psychological benefits can be provided by good money management. These great benefits will help you improve trading more than you ever thought you could . Why? Because if you're not scared of losing your money , or you know you have a solid plan in place that will ensure you're always around to trade another today , then you can look at markets from a state that is relaxed and clear and this will bring about serious profit .
Forex signal service can be incredibly challenging and rewarding at the same time. Remember that usually the best keys to success are the most uninteresting, simple, and obvious things out there. You've all been searching for the holy grail in trading - and it happens to be money management .

David F Dacosta - Is a private trader using technical analysis to do forex signal service & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.

Forex signal service has been extremely volatile as of late as a result of the sovereign debt crises currently unfolding in Greece . Some are afraid that this problem will spread to other European Union countries that have a lot of debt such as Spain, Portugal and Italy . Because of what has occurred , there has been 11% drop in Euro currency against the US Dollar. When looking at this situation we need to ask ourselves the following questions : Is the Euro sell off complete and is the US dollar strength due to United States strength or Euro weakness ? The questions are very important because the answer to the second one will greatly impact how we answer the first .

I believe that there is a benefit to the US dollar currently only because of the weakness of the Euro . Steam has only been picked up in the spending driven US economy because for some time the rates have been near 0% from the Federal Reserve . What will happen when the Fed is forced to raise rates ? Will this head wind be something the US economy can really withstand? More than likely, no. You also have to remember that currently consumers are spending more because many consumers are simply walking away from other payments, such as mortgage, auto, and credit card payments. This leaves the consumer with extra income that they otherwise would not have and so they can spend more money on things like eating out, shopping for clothes, and buying Apples new i-pad . Again consumers are going at it like crazy. It wasn't sustainable in the last Federal Reserve inflated boom and again, it won't be sustainable. In the next several years, default or inflation are the US Dollar's only options and both of the options will lead to disaster.

When doing forex signal service our goal is naturally to make money . We have no biases. We only want to use our foresight for a profit . So the answer to the second question is that the Euro will hit bottom sometime because it's over sold . It will probably be somewhere about 1.2300-2400. After all , do you think Germany, the third largest economy in the world , will allow the failure of their currency ? Probably not. More than likely they won't. And that is precisely why they are not jumping at the opportunity to print more Euros and bailout Greece . Due to the problems in Greece the Euro will become a currency that is more sound . The investors world wide will realize that the Euro is a safe option because when there is trouble they will deal with a loss in the short term to preserve their health in the long term . So, Therefore, their economy may be taking a beating , but all of this will make their monetary unit better . The opposite is true in the United States situation . Short term problems are being solved by printing more money, but this leads to problems with the health of our economy and the US Dollar.
All that being said, we are getting close to a point where the Euro will be a massive bargain that you can take advantage of in your forex signal service. Not just for the previously mentioned reasons, but you also need only look at market psychology . The professionals buy when there is a free fall and the average person hears about the crisis and comes in to short the move that has occurred already . This is a pattern that has happened repeatedly , and will continue to repeat itself as long as the limbic system plays a part in human physiology .

 

David F Dacosta - Is a private trader using technical analysis to do forex signal service & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.

Forex signal service can be done in so many different forms and for various reasons that is often a daunting task just to figure out where to start . After all, should you open up an account at a brokerage that specializes in FX trading , or is a brokerage that allows you to exchange traded funds, trade options, stocks, and futures a better idea? Not only is this an overwhelming decision , then you have to figure out if you want to use FX trading as a speculative tool or a hedging tool, long term or short term, aggressive or conservative, etc . Before you start there are definitely many things to consider .

While the questions we just mentioned are enough to start up a multi volume response, for clarity's sake we'll look at the basics in this article. The best way to get comfortable with the FX trading world is to simply go with an account with a brokerage specializing in forex trading . Which broker should you go with? That is a whole other topic for a different time . Just ensure you do some research before you deposit any money !

When your Forex signal service is working and you are getting started , you need to get a firm handle on what exactly it is you're participating in . With this example , we're suggesting that because you opened your account with a broker specializing in forex trading, you are going to be starting out by trading spot contracts or cash contracts . Without turning this into something complicated, this just means you are trading the current price as it is in the market at that moment . If the Eur/Usd pair is trading at 1.3200 on your brokerage screen then at this rate you can sell Euros against US Dollars or at this rate you can purchase US Dollars and sell Euros . Of course there will be a small spread built into the price you see and this is your cost of entry for taking the trade . Be sure to choose a broker that has a spread of between 2-3 pips on Eur/Usd and not more than that .

Because it can be challenging to speculate , even for the pros like me , let's say that you are starting out with the goal of hedging your stock portfolio in the United States . Since your stock portfolio is denominated in US Dollars you could make money when the stocks go up in terms of the US Dollar but that gain could be cancelled out by a weakening US Dollar . You want to hedge this part of the portfolio and in the brokerage account you have decided you want to buy Euros against US Dollars. This way as against the Euro the US Dollar weakens and your portfolio starts to suffer because of this weakening, the gains you get from purchasing Euros hedge the downside risk.

The above example is one of the most easy ways that you can add a forex signal service component to the portfolio you have . Other articles in the future will discuss more about global market speculation methods that are more advanced, but this should serve as a good starting place .

When talking to people who have never tried forex signal service before, even those involved in futures, stocks, and bonds , it makes me remember that for this global market, even the very basics must be explained. Let's get started looking at pairings and everything having to do with them in the forex market.

What is a currency pair ? We'll begin with the Eur/Usd this has as the base currency the US dollar against the Euro . So what does that mean when I see a price quote of 1.3200 on the Eur/Usd ? Here is the easy way you can keep the answer in mind : take the base currency pair , which is the US dollar in this case , take a look at the 1.3200 price quote , then tell yourself , "it will take 1.3200 US Dollars for me to buy 1 Euro ." The price quote means exactly that . If you check the price quote a couple of months later and it's become 1.4000 then that means the US Dollar as gotten weaker against the Euro since it now will take you 1.4000 US dollars to purchase just one Euro. Of course , if a couple months later the price quote is then 1.25000 , then the US dollar has gained strenght because you'll only need 1.2400 US dollars to purchae a Euro.

Forex signal service can be especially challenging when you see a price quote of say 100.50 on the Usd/Jpy pair for example . Using the method we discussed, take the Jpy base currency take a look at the price quote that is 100.50 and that is how many Jpy it will take to buy 1 US Dollar . That is fairly simple, isn't it ? In the future you shouldn't have difficulty understanding a pair and its price quote when you see a quote window or chart screen .

Now that price quotes can be read, you may wonder what are the cross pairs and the main pairs? The main pairs are the world's strongest economies agasint the US dollar . Several of the main pairs include the Gpb/Usd, Usd/Jpy, Eur/Usd, and Usd/Cad . Cross pairs do not involve the US dollar which includes the Gbp/Jpy and the Eur/Jpy to name a couple that are popular.

Hopefully this article will be of help to you if you have been intimidated by the forex signal service landscape previously. It can take a while to get used to it with all the time zones, economies, and currency pairs out there. But once you start to wrap your mind around how all of the pieces fit together it really is not too hard - and many of us think it's actually quite fun !

In the first place, forex signal service, like any form of speculation , has one main goal; make some money ! If this is the premise we start out with, that our goals is making money, how is this achieved in our massive global market?

First you must decide whether you are a technical trader or a fundamental trader or both . In the future we'll have more articles regarding this topic, but we'll assume for now that you keep track of current events and world affairs and you are more attracted to fundamental trading . Then you have to ask, what are the most important factors fundamentally driving currency movement ?

If you focus on the fundamentals, one main thing is going to drive the decisions you make in forex trading; the interest rate differentials between various countries. What exactly is an interest rate differential ? Good question ! Imagine that the Australian Dollar has a 4% short term interest rate. This means that if you're a debtor in Australia this will be the base rate that determines what you pay on credit cards, mortgages, and more . If you're a creditor you can use this 4% short term interest rate as your base rate that decides how much your investments make; such as CDs from your local bank . Then imagine that the US Dollar has its short term interest rate , which the Federal Reserve sets , at 1% . So how in the world does what I just said affect currency movements ?

If the short term rate of the Australian Dollar is 4% and 1% is the short term rate of the US Dollar it all becomes this simple: investors want their investments to have a higher yield and because they can get more interest in Australia they move their funds "down-under" or as the Aussies say, "down-unda mate" . The investment shift of capital leaving the United States and moving to Australia weakens the US Dollar since demand is smaller than supply and this strengthens the Australian Dollar because the demand suddenly becomes greater than supply . Basic economic fundamentals at work here ; where there is more demand for something its value will rise .

Next time you think about your forex signal service and what position to put on next , just ask yourself , " what country has the most liklihood of having higher rates moving forward and what country probably will have the lower rates moving forward?" Then buy currency that is the favorite for higher interest rates and sell currency favored for interest rates that are weaker and watch your profits grow as investors flows leave the weaker currency and flock toward the stronger one . This is the essence of forex trading.