I don't know which broker you use; but to determine what happens to your position over the weekend, you must inquire whether they actually execute over the weekend (which could be dangerous as the lack of liquidity widens spreads and increases choppy volatility) and what kind of orders you are working with.

If the broker trades over the weekend, the stop on both lots will be wiped out almost immediately as 20 points is far too small a stop for the very low liquidity and high volatility of the weekend.

More importantly, you need to familiarize yourself with the orders. Most likely, the limit is just a level at which the order will become a market order and thereby is executed at the 'best price'. So, if the market gaps 100 points on the open, it will turn into a market order when price action starts up and then you will be filled at the next viable level. Many people tend to blame the broker when this happens; but gaps happen to banks, professional traders and retail traders down the line. This is why I do not hold short-term positions over the weekend.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

I am quite confused with the current situation. Why is the Dollar so strong amidst the never ending news of bank and insurance collaps, job lost and tight credit? It may be fair if we say that countries in Europe is also facing a downturn, but many Asian countries are still strong and their banking and financial system is stable and credit is available. Countries like Singapore, Malaysia and Korea have seen their currencies drop against the dollar by fantastic margins. We track and see the DJIA/S&P500 drop in figures unprecedented in the past yet on the other chart, the dollar goes up. Seem to go against some of most basic things we learn in the forex course. Do you have any insight as to why this is so? Thank you.

Hi Frank,
Extraordinary volatility in the global financial market paired with the credit crunch has led investors to flee into the safe haven of U.S. Treasuries (which has increased demands for the U.S. dollar). The flight to safety has strengthened the greenback amid falling stock prices, rising job losses, and tightening credit conditions. It will be important to keep a keen eye on investors sentiment as we just saw the FOMC, ECB, BoE, SNB, and the BoC cut their respective benchmark interest rate in a coordinated effort to restore confidence in the global financial market. Hope this helps. As always, comments and questions are appreciated.

Thanks 4 your insight,David. I still find it unusual that people r buying up the greenback as a flight to safety, especially with the DJIA showing a drop like that. If I am not wrong, in the initial stages of the 'crunch' about a year ago,there was a sudden sell off 4 a short period in the shares market and the dollar similarly dropped. Then the price of gold and silver went soaring sky high. I believe it was one of the triggers that also shot the price of oil to the stratosphere. Anyway, I'm not too good at remembering, so I may be wrong. But what you say is true cos' where I am, the retail moneychangers are short of dollar. There just isn't any in the market. Thanks again.

Hi i was wondering what is a gap??? thankyou

Hi Frank,
Remember that U.S. Treasuries are price in dollars so that is why we have seen increased demands for the greenback because foreign investors need U.S. dollars to buy the treasuries. And as for your analysis, you are on the right track, but don't forget that we have seen the financial crisis in the U.S. now spread throughout the global financial market, and has increased fears all over the globe. As I am sure you have heard, the failure of banks and financial institutions from the U.S. to Europe has caused inter-bank lending rate to skyrocket, and has literally dried up the credit market. This is why we have seen the Fed, along with the major central banks of the world, flood the markets with dollars, and we will continue to see them supply as much cash as needed to calm fears. Hope this helps to clear up things.

Hi ChenChen,
FXWords.com is a great resource to learn from, but a gap is basically a term used when you see a gap or a jump (up or down) in the price of any security. Hope this helps.

I feel very "elementary" reading all the posts, and how much so many of you know about currency trading, and I may be completely in the wrong place to ask, but here goes, with a short explanation first:

I am buying a show dog from Switzerland, and the price is 1500 Euro, and the last time I checked, it is going to cost me about $2060 +/- to get him....so, my first question is: what is the outlook of this exchange over the next 2-4 weeks? Am I better off exchanging now, or will I get a better rate if I wait a bit? (I would love to get him for $1500, saving me a good $500.....is that even a possibility any time soon?).

Secondly.....I bank at Well's Fargo, and their exchange rate is higher than all the calculators I have checked, plus, I have to call an 800 number and do it over the phone when the time comes to exchange.....where can I go to make the exchange at the best rate? I understand that the quotes the calculator gives is for much bigger purchases, and I expect to pay more than what is calculated, but I would still like to save as much money as I can.

Lastly......I am not even sure how to ask this intelligently, but......are there any currencies that are worth less than the USD, but worth more than the Euro? I won't mind exchanging currencies twice in order to save the most money, while still ending up with 1500 Euro.

Thanks so much for your time and patience,
Jenn

When I observe the Alert section of the Trade Signals in the FX+ page. How do I know what kind of trade should be placed? There is no buy or sell indications. I'm having a hard time understanding this whole page. Can you enlighten me?

hello can I know how to calculate deviations i see IT as a very important aspect of the market been watching dustin figures for a while and its quite been making sense.

CAN U PLEASE EXPLAIN HOW TO CALCULATE DEVIATION IN DATA REPORTS.

Our last Tuesday THIS LAST WEEK UK Industrial Production report came with a -0.4% deviation, INSTEAD OF 0.5% worse than expected.

PLEASE HOW IS THIS CALCULATED

THANKS

Hi all,

New to the site and forex trading, and with the limited time that I do have to trade, I would like to focus on 1 pair. Is that a good idea to start?

Also, if I am trading 2 to 3 hours at night, eastern time, anywhere from 8 pm to 1 am, what is the best currency pair to focus on, if focusing on pair is wise at all? Also, if it is feasible to trade 2 or 3 hours per day, at what are the best hours to trade at night?

Hello,

I have 2 questions regarding rollover:-

1- I have noted past week that rollover rates on ALL pairs regardless the trader was on the buy or sell side were kept at zero. My reasoning is that it has to do with the current credit crisis. Could you kindly elaborate on exactly why, and how this can be so, given that negative carry trades are earning negative intrest, that at least the broker must be paying for and NOT discounting the client ?

2- If the credit crisis aggrevates, and FXCM continues NOT to grant, or substract rollover. Could that mean that FXCM is considering delevaring on traders' accounts gradually from 1:200, to 1:1 (i.e:- Not granting any credit to traders to open trades), on the presumption that when the current crisis really hits the currency markets in full, all "paper" currencies will be decimated in value, leading to wild swings and slippage between pairs, that will leave many under capitalized traders' accounts closing out spontanouesly in negative territory far exceeding their margin deposits, and thus exposing the broker to unaccounted losses?

Does the assumption that every open trade is offset by another trade in the opposite direction (as in FXCM account forms disclaimer), still holds true in such cases too regardless of market intraday volatility, and therefore makes FXCM imune from such situations ?

__________________
Sincere Regards
Summerset
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* If you have a positive view towards what you are reading. Don’t take that to mean that you should follow it. It could PROVE ALL WRONG. If you have a negative view towards it, then CERTAINLY you won’t bother with it. If you have no idea what its talking about, then please DON’T EXPERIMENT with it !! ! …In SHORT, what THIS disclaimer is telling you IS :-
TRADERS TRADE AT THEIR OWN PERIL – PERIOD

The alerts section shows when a buy or sell indication has been issued, and one may click on the individual currency pair to see more about the trade.

Attached Thumbnails

 

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David Rodriguez is the author of Forex Trading Signals and Forex Trading Weekly Forecast on DailyFX.com.

Good questions Summerset,

1. You are correct, the negative rolls are due to the credit crisis. More specifically, overnight lending rates (which rolls are based open) have soared as banks are growing increasingly hesitant to lend to each other and demand for liquid, short-term funding has soared. As FXCM is NDD, it passes its clients orders directly through to a series of larger banks that fill orders on the interbank markets; so the high interest rates seen on the interbank system are seen by retail traders. (Incidentally, those brokers that have not shown wider spreads or negative rolls are not reflecting true market conditions. This means they are trading against their clients position to try and give the illusion that things are normal or they are eating the losses - both of which could kill a company).

2. Leverage is not impacted by rolls or spreads. Both rolls and spreads are a reflection of the market's health, volatility and access to liquidity. Just like it does for a professional or bank traders, the higher rolls or spreads are a natural discouragement by the market to take more caution as conditions are unusual. In these extremely volatile times, traders can certainly blow up their accounts if they are leveraged to the hilt and don't trade with proper money management; but that doesn't necessarily impact FXCM. A client has to put up margin for every trade (levels depending on the size of the trade) and their position is closed immediately should their balance go to zero.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

Hello,
Here are something that I think will help you. First, here are the trading hours for all the markets: (These times are all in EST)

New York: 8:00am - 5:00pm
Tokyo: 7:00pm - 4:00am
Sydney: 5:00pm - 2:00am
London: 3:00am - 12:00pm

As for focusing on one pair, that is probably your best bet if you are new to currency trading so that you can familiarize yourself with historical movements and trends, but due to current market condition, I would recommend doing your homework first and obtaining some trading exposure(a practice account should be sufficient) before jumping into any trades. Trading 2-3 hours a day in a 24 hour market may be difficult, but is not impossible. Trading currencies involves significant risks, but can offer very feasible returns if done correctly. I would advise that you get yourself familiar with using stops, limits, and maybe even trailing stops which should help you to minimize the downside risks. Hope this helps.