10 Things You Should Beware

* Watch out of those who guarantee large profits.
* Stay away from those who promise no financial free
* Beware of those everything sounds very easy.
* Don’t trade on Margin unless you have been trained
* Please take cautious to online/phony transferring cash in online trading
* Make sure its really interbank market
* Job offer as Account Executive might lead you to use your money for currency trading
* Need to ensure the company background
* Avoid those company who won’t let you know their background
* Don’t fully trust any agency or broker, put some effort to understand currency trading by yourself.


Risks Accessment Consideration

Trading currency exchange will carry certain level of risk which may not be fitting all investors' appetite. Prior to trading, investor should take consideration of their experience level, monetary objectives, financial management plan and risk-bearing.



Credit risk
Due to intended or unintended action by counter party, an outstanding currency position may not be paid off as agreed due to voluntary or involuntary action by counter party.

Replacement risk
When you cannot get refund from the counter party and induce your account deranges, instantly clear off your books to hold the currency price rate.

Settlement risk
Due to different prices at different time zones between you and your counter party, transaction payment might possible to be declared not enough money before payment is executed.

Exchange rate risk
Variation of currency rate is due to the worldwide market supply and demand. Price changes may bring to loss from profitable position.

Interest rate risk
Because of variation of currency rate, in forward spread , there might be some maturity gaps and transaction mismatch.

Dictatorship risk.
Dictatorship (sovereign) risk refers to the government's interference in the Forex activity. Ttraders have to realize that kind of the risk and be in state to account possible administrative restrictions.

USDJPY: A simple trading plan

I like to see the market trading near long term support or resistance levels, this way I can map the short term support and resistance level it needs to break in order to start looking for trading opportunities.

The USDJPY right now trading just above the long term support level at 94.55, take a look at the chart below:



As long as the market keeps trading above the short term resistance level (95.13) I will look for long opportunities. An eventual break should take the market to 96.22

As long as the market keeps trading below the short term support level (94.61) I will look for short opportunities. An eventual break should take the market to 92.14

If the market keeps trading in between the short term range 95.13 and 94.61 I will do nothing.

USDCHF: A Simple Trading Plan

The Swiss Franc is trading at an important support zone (1.0701 – blue line). I like to see the market trading in a little range in the short term charts when it approaches to important long term support or resistance levels… please take a look at the next chart:



Blue line – Long term support zone
Green lines – Short term range

Here is my trading plan for the USDCHF:

If the market breaks the short term resistance up (1.0713) I will start to look for long trading opportunities.

If the market breaks the short term support down (1.0658) I will start to look for short trading opportunities.

EURUSD: A Simple Trading Plan

The EURUSD bounced from a clear long term resistance level (1.4330), but now the questions is, is this the beginning of a THE retracement? We don’t know yet, what we do know is that based on the chart bellow, it should reach at least 1.3877…



Definitely long opportunities are out of play at least for the time being, so what would be the trading plan for the EURUSD?

I will wait for the market to break 1.4107 (green support line) to look for short opportunities, if the Euro breaks this level down it should take it to 1.3868.

EURJPY: Trading Idea

The EURJPY is trading at the previous high, a pretty strong resistance zone. Yesterday the market tried to break that resistance but failed to do so, but what is more interesting is the way it came back… Now, it is trading in a tight range (green lines) and I think it is getting ready to break… but which way?



Right now I’m waiting for the market to break either extreme of the range, but here is my plan:

If the market breaks 137.24 (green resistance line – short term resistance), I will look for long opportunities and it should take it to 139.85 (upper blue line – long term resistance zone).

If the market breaks 135.71 (green support line – short term support), I will look for short opportunities, this should take the market to 128.50.

EURUSD: Long opportunities in Play

In our previous contribution about the Euro we mentioned the EURUSD was going down, at least to the main support zone located around 1.3868. Now that the market reached that level, the market is telling us that it wants to go up again, please take a look at the next chart:



Now that the EURUSD is trading just above all important levels, it should reach the next long term resistance level located at 1.4326.

So our Simple Trading Plan for the EURUSD is:

Just look for long opportunities in the short term charts (and ignore all short signals), as we said, all take profit orders will be placed just below the main resistance level located at 1.4326.

GBPUSD: Short trades in play

The GBPUSD was rejected from the long term resistance zone around 1.6620, this makes me think the market will go short in search for the next support zone, located around 1.5914. Please take a look at the chat below:



As long as the market continues to trade below 1.6327 I will look for short opportunities (already have one short). All take profit orders will be placed 40-50 pips above the main support zone.