What are the best reliable websites for online forex trading and what are your helpful tips for the one who just started to get acquainted to this? Thanks a million!

Forex quotes are always listed in pairs, these quotes reflect the exchange rates of the currencies. These pairs look like this: GBP/USD = 1.9714. The currency listed first is known as the base currency (being the base of the trade), the second is called the counter, or quote currency.

All well and good, but what do these numbers mean? The value of the pair is a ratio of one unit of the base currency to it’s equivalent in the quote currency. Supposing that you expect the value of the base to rise against the quote, buy the base currency and sell the quote currency, and vice versa. As an illustration, say that the value of the Euro (EUR) is expected to rise against that of the US Dollar (USD). In this case, buying Euros and selling US Dollars at the same time is what you would normally do. This is called going long.

Further, take the Forex quote CHF/USD = 0.8944 as an example. Say that the Swiss Franc (CHF) is expected to fall as compared to the US Dollar (USD). You would sell US Dollars and buy Swiss Francs – this would be going short.

Now, in an actual Forex trading situation, the exchange quotes will be listed at two slightly differing prices, for instance: EUR/USD = 1.7420/1.7425. The left quote is the Bid price, the right is the Asking price. The difference between these is call a Bid/Ask spread, or just Spread for short. The Bid price is the price you can sell your currency for, while the Ask price is the price at which you can purchase the currency.

This spread means that if you were to buy a great deal of currency, then sell it before there had been any change in the relative values of the two currencies, you would lose money on the trade, but the dealer would make money from the trade. A Forex dealer makes their money from the Ask/Bid Spread. They are in a good position, as they stand to make money whether or not you do well with your trade.

Forex quotes are typically quoted to four decimal places – for example:

USD/EUR = 0.6793

EUR/GBP = 0.7468

GBP/CHF = 2.2041

CHF/AUD = 1.0095

The exception to this rule, at least among the major currencies, is the Japanese Yen (JPY) . If the Yen is being quoted, then the Forex quotes are just to two decimal places, as in these examples:

USD/JPY = 109.32

EUR/JPY = 160.95

This is due to the value of the Japanese Yen being only about one hundredth of the value of one U.S. dollar.

A change of 1 in the last decimal place in a quote is named a Pip. this is the smallest amount by which the relative values of two currencies will change. Normally, a Forex brokers commission (the Ask/Bid Spread) will be somewhere between 2 and 5 Pips.

A movement of 20 to 50 Pips is a typical shift in the value of a quoted pair on any given day of Forex trading. The market can sometimes experience greater volatility though, with much larger movements being seen. In November 2007, there were some bigger shifts in the relative values of the US Dollar (USD) and the UK Pound (GBP), when the change in relative value of the two currencies was as much as 200 Pips on some days.

Usually, the daily changes in the Forex market are very small – so trading with very large amounts of money is the way to go if you are to make a sizable profit.

Let’s say that the Euro (EUR) is expected to rise against the U.S. Dollar (USD). Based on this, you buy 100 Euros at a quote of EUR/USD = 1.4720/1.4725. A hundred Euros would cost you $147.25. If the Euro rises fifty Pips against the dollar the quote is now EUR/USD = 1.4770/1.4775.

Then say you sell your hundred Euros and buy U.S. Dollars. Your Euros would then fetch $147.70, or a profit of only $.045. Not much – even had you purchased a thousand Euros, you would still only have $4.50 to show for a day’s trading. This is why Forex trading is generally done with much larger amounts of money.





By: Ian Armstrong

There may be dozens of strategies in Forex trading. Let’s just talk about the roots.

Nature Of Market:

Every thing in the universe has its NATURE. So is Forex market. So is every currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and dance at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.

Once we find this kind of “Nature of Market”, we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.

Fundamental Trading:

In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called “Fundamental Analysis”. Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.

If you like to try Fundamental Trading, you need learn and understand a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA’s GDP or employment report is strong, you begin to get a fairly clear picture: the general health of America’s economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading may not answer this question very accurately. You may need to come up with other precise tools as to how best to translate this information into entry and exit points for a particular trading strategy.

Hedge:

In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.

In FOREX, there are two kinds of similar “hedging” strategies:

1, Buy and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can wait for the loser turning around. In a yo-yo market, this method works well.

For example, buy 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the buy order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let’s wait for the rate falling down, it will fall down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don’t forget the 50 pips we have taken at the buy order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let’s say down to 2.0027, we can take 50-30=20 pips, etc.

Some people would doubt it… doesn’t this “strategy” sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders say that this method helps them screening false signals out.

This kind of “Yo-Yo Hedge” can work at any currencies pair.

2, Buy (or sell) unequal lots of special currencies pairs and buy unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a “Semi-Hedge” trading strategy. It is created based on “Correlation” between some particular currencies pairs. So it is not suitable for every currencies pair.

Actually, this kind of hedge has another feature: earning SWAP! You earn interest daily on the held position which can yield up to 50% per year of your full account balance.

There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.

Let’s take the EUR/USD and the CHF/USD pairs.

These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage account (as high as 400:1 or 500:1), you could earn 50% SWAP interest in a year. How? Let’s say you have $5,000 in your account and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.

And, this return does not include the buy low/sell high profits.

But, if the base of this kind of hedge collapses, it means the “Correlation” does not exist any more, for example the “Correlation” drops under 50% or lower, there will be a disaster.

Arbitrage:

Some people call “Arbitrage” as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:

1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.

In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.

More pairs:

AUD/CAD CAD/JPY AUD/JPY

AUD/CAD GBP/CAD GBP/AUD

AUD/CAD USD/CAD AUD/USD

AUD/CHF CHF/JPY AUD/JPY

AUD/CHF GBP/CHF GBP/AUD

AUD/CHF USD/CHF AUD/USD

AUD/JPY EUR/JPY EUR/AUD

AUD/JPY GBP/JPY GBP/AUD

AUD/JPY USD/JPY AUD/USD

AUD/USD GBP/USD GBP/AUD

AUD/USD USD/CAD AUD/CAD

AUD/USD USD/CHF AUD/CHF

AUD/USD USD/JPY AUD/JPY

CAD/JPY EUR/JPY EUR/CAD

CAD/JPY GBP/JPY GBP/CAD

CAD/JPY USD/JPY USD/CAD

CHF/JPY EUR/JPY EUR/CHF

CHF/JPY GBP/JPY GBP/CHF

EUR/AUD AUD/CHF EUR/CHF

EUR/AUD AUD/JPY EUR/JPY

EUR/AUD AUD/USD EUR/USD

EUR/AUD GBP/AUD EUR/GBP

EUR/CAD AUD/CAD EUR/AUD

EUR/CAD GBP/CAD EUR/CAD

EUR/CAD USD/CAD EUR/USD

EUR/CHF AUD/CHF EUR/AUD

EUR/CHF GBP/CHF EUR/GBP

EUR/CHF USD/CHF EUR/USD

EUR/GBP GBP/AUD EUR/AUD

EUR/GBP GBP/CAD EUR/CAD

EUR/GBP GBP/CHF EUR/CHF

EUR/GBP GBP/JPY EUR/JPY

EUR/GBP GBP/USD EUR/USD

EUR/JPY GBP/JPY EUR/GBP

EUR/JPY USD/JPY EUR/USD

EUR/USD GBP/USD EUR/GBP

EUR/USD USD/JPY EUR/JPY

GBP/JPY USD/JPY GBP/USD

2, Hedging Arbitrage:

This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.

One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main idea about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will gain the interest or SWAP that is credited to your account, risk-free.

3, Netting Arbitrage:

The main idea behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.

For example, suppose you had opened the following positions:

buy 1 lot EUR/USD at 1.4867;

sell 1 lot EUR/GBP at 0.7600;

and sell 0.76 lot GBP/USD at 1.9586.

The netting/clearing gives the following results:

Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.

Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.

Short position from the first pair ($148,670.00) in USD and long position from the third pair ($195,860.00*0.76) in USD gives you $183.60 profit without open positions and exposures.

Simple? Not really for small traders, may be for those “big brothers” only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.

Carry Trading:

Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.

JPY is currently considered to be the most popular currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world almost at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.

When we buy these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF;

Or sell: EUR/AUD, EUR/GBP, AUD/NZD;

Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.

The big risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.

Martingale:

Originally, martingale referred to a class of betting strategies popular in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after every loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you bought 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, “double down”, buy two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you may lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.

EUR/USD Lots Average or Breakeven Price

1.4650 1 1.4650

1.4630 2 1.4640

1.4610 4 1.4625

1.4590 8 1.4605

1.4570 16 1.4588

1.4550 32 1.4569

The Martingale strategy needs a very strict money management and you must understand that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you may not hang on to the end to see the turn-around.

Anti-Martingale:

The anti-martingale strategy is the opposite of the better known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.

Grid:

Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, …) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then every 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of “grid”. It is simple and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts say we do not need stop loss, but will you take the chance to hold your all positions till “Margin Call?”

Day trading:

This refers to the practice of buying and selling currencies pairs such that all positions will usually be closed within the same Forex the trading day. The day trading idea comes from stock market. Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed “pattern day traders” must have at least $25,000 in their accounts and can only trade in margin accounts.

But in Forex market, every one can be a day trader to do day trading. Actually, more than day trading, they can do “scalping”.

Scalping:

Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market every time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is closed and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is ideal for Forex scalping. Every time you enter the market, wait 10 or 20 minutes, once you have several pips gain then cash it and go.

Scalping has some features:

1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.

2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.

3, Large volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade large in order to add up the profits. Scalping is not suitable for small-capital traders.

But be careful, not every broker welcomes this kind of scalping strategy. If you scalp it too quick and thin, let’s say you just hit 1 pip every 2 or 3 minutes then run, and repeat it again and again within a day, every day, you must feel high, eh? But the broker may be not happy and bans you. You will be kicked out because of your successful scalping!

Break-Out:

Using the Bollinger Bands indicator on a chart, we will find every Forex currencies pair is waving in a “band”, or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will buy this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.

Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The idea of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. So buy it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.

Pivot:

Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to analyze and predict currency pairs’ price changes, it is so-called: the Pivot Point. To calculate and analyze pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to buy or sell.

Classical Pivot Point, Support and Resistance Formulas are as follows:

Look at any one chart, the pivot is an average of the previous bar’s high, low, and closing prices. In the following formula, “H” represents the previous bar’s high, “L” represents the previous bar’s low, and “C” represents the previous bar’s closing price.

Current Bar’s Pivot Point (P)=Previous Bar’s (H+L+C)/3

First level of support and resistance can be calculated as follows:

First Resistance Level (R1)=(2*P)-L

First Support Level (S1)=(2*P)-H

Likewise, the second level of support and resistance:

Second Resistance Level (R2)=P+(R1-S1)

Second Support Level (S2)=P-(R1-S1)

Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to qualify as a breakout.

News Trading:

The system is developed based on economic news events from around the world. Nearly half of those announcements have moved the market significantly. Before a big news is coming, we can buy and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the big one, both sides of buy order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner’s gain minus the loser’s loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report – The NFP is the most influential news release of every month. It’s announced on the first Friday of the month at 8:30am EST for the prior month. We can put a buy order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don’t forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a big one! Then the sell order jumps over 100 pips, and the buy order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your gain could be 100-30=70 pips. Quick and easy, cool enough?

Trend Following:

It is so simple, just follow the trend. Buy it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.

The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or “waves,” that recur in market price data.

Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the “market time factor”, which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with $300 and one with $150. It turned out to be wildly successful: Gann was able to make $25,000 profit with his $300 account in only three months; meanwhile, he made $12,000 profit with his $150 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.

Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?





By: Victor Mars

There is no assurance for accomplishment where productive is concerned.  Taking into account how essential money is in the world, jeopardizing it is filled with peril, and engaging in FOREX trading is unquestionably not without risk.  However here are some guidelines that can lend you a hand to make certain you have a rewarding FOREX trading system.

* Get hold of an automated FOREX trading system

While still learning the ropes of the game, getting a hold of an automated trading system is highly recommended. From guiding you, it will also give you the opportunity to learn what works best. FOREX robots as what we popularly address them, runs convoluted statistical algorithms to distinguish the most advantageous moments to make trades. Best part, after configuring them, they automatically run to autopilot.

* Initiate putting your instinct to use

Once you have experienced the gains and losses, you will be able to understand how it all works, not just the numbers, but of how the different currencies fluctuate. Do watch some current events and pay attention. Watchfully put into operation your instinct based on the facts that you have recently gathered.

* Train yourself

FOREX can be exceedingly intricate.  Prepare yourself with the precise information sooner than beginning to use your actual cash.  Use training accounts presented from most, if not all, broking companies.  Continue to study as you go.

* In no way risk much more than you can afford

If you cannot afford to lose it, then you cannot play the game. Losses are pretty normal in FOREX trading, it is expected, but you are capable of minimizing the damage, and bring only the amount that you can afford to lose.

* Trade on popular currency duo

Stick to the specifics: if you are clueless as to whatever you are doing, hunt for advices or hang about with the safe options.  By trading on the popular currency duo, you will locate yourself in a reassured zone, in which you can learn and grow.  The five most accepted duos are USD/EUR, USD/JPY, USD/GBD, USD/CHF and EUR/JPY.

* Intend for long-term commitment

If you assume that FOREX can bring huge profits in a short span of time, you are very mistaken. The currency changes ever so often. The lows and highs can be massive, or leveled out depending on the event that is happening world wide. Look at it as something that you are interested on committing for a long time, so that you will understand how it will work in various situations and unstableness.

FOREX trading entails a practical concentration span, on details, on understanding of currency markets.  You also have to have a plan.  Do not involve yourself in  FOREX trading lacking a trading system.





By: jason bb han

I have heard a lot about Forex Trading recently and how you can start with a small amount of cash. Is there any free online courses or more information available?

I am interested in doing some trading with FOREX TRADING have any of you ever dealt with them?

As a novice what does it require to know about forex before you begin trading.

We all have heard the saying “Old is Gold” and in the recent past when there was boom in every sector it did appear that “Gold” has become “Old”, and there was no point in going for something that old. We had so many sectors to look at where the returns we just fab. Buy today hold for a few weeks and sell it you make a good 15%-20% margin on that. What more do we wanted. I know friends who have made some killing returns on real estate and commodities like this. But…., no body thought in the wildest of their dreams that all that boom period is short lived and there will be a burst.

“Boom” went the economies and now nothing gives any return. Oil which was around $150 is $45. So is copper, corn and what ever you name. Value of currencies is the same. I am not talking about the Zimbabwean Dollar…., I read somewhere that they are introducing a Zimbabwean Dollar Trillion note. Sorry to say but the guys there (authorities) look crazy to me, what are they trying to prove, a Trillion Zimbabwean Dollar note. I have a 100 Billion one which I bought as collection item and that itself looks quite stupid.

Any way, we were talking about the stable currencies, the likes of USD, EUR and GBP. Look at our dear British pound which was 1£= $1.89 and is about 1£ = $1.30 today. Against the Euro it is one-to-one. Reports are saying that the pound might go one-to-one with the dollar.

I live in UK and what does this mean to me. I have to confess here that I am no financial / economic expert but my plain and simple mind says that British economy is heavily dependent on imports, almost all the things which we have are imported from various countries and I am sure that the majority of payments are made in USDs. What would that mean if the pound goes one-to-one to the USD. I think it means super duper expensive products, the veggies, the meat almost everything. It really make me nervous to think that the import costs will be so high if the pound becomes equal to the US dollar.

Now…, I have been reading a lot of articles form various experts about what to do in this time of crises and how to save the money. The devaluation of pound is so rapid that very soon all the fun of going to New York for shopping will be gone (if it has not already) and shopping in UK itself will be tough. Various experts have been suggesting various ways to save money. I have also done my calculations and have the following in mind. The oldest method which has been adopted for centuries by humans to fight inflation has been Gold. People have always found that no matter what comes, Gold always remain the most precious of all and in the time of crises people look at gold as a saviour. I have calculated gold with the sliding pound is mind and have the following…..today the Pound is $1.30 which means that for every pound I get £1.30. Now if I buy gold which is $900 per Troy Ounce I will be spending £692 (900/1.30). Now, lets presume that the pound and US dollar have become equal. What would that mean to Gold which is $900, won’t it be £900 also since a pound will buy an equal amount of dollars.

This in fact means that the value of my Gold becomes to what it will be in Dollars. Supposing the Gold price is still $900. Since pound and dollar are equal wont the Gold price be £900. If this is true what does it mean….the Gold which I bought for £692 will be worth £900 although in the international market the value of the pound has diminished but locally I will be getting more pounds, isn’t it? Even if the Gold prices remain stationary which is highly unlikely to happen, just the sliding pound will give me a good return.

Analysts are saying that the Gold should be touching the four figure per Troy Ounce mark very soon. No wonder there is such a heavy rush in the shops that sell Gold coins, try getting one and you will see what I mean. I have been in touch with a few friends who have bought or are trying to buy gold coins and I am amazed to learn that they just can’t find any. Apparently there is a premium on some !

Therefore friends its time to get a bit worried about the pound and start thinking about where to invest so that we don’t reach a negative equity status. I think in the current scenario we can easily say that “Gold is Gold”, lets get some as an investment.

Hey, by the way, Valentine Day’s around, why not buying a Gold Coin for your loved one. You know we women just love Gold anyway !





By: Emma

I am looking for some legal Forex Trading companies to open account with. There are so many fraud companies in this field which are working without registration and loots the public money.. Also I want to know which is the authority giving regestration for these companies where the list of these regestered companies are published. Any body please help me out!

Is forex trading worthwhile as a second income generator?