While reading a recent CNBC article about current events something clicked for me.Here is the passage:The dollar rose broadly on Thursday as yields on 10-year U.S. government bonds jumped more than 50 basis points in the last two weeks, drawing Japanese investors into overseas assets like global semi-conductor stocks, banks and U.S. junk bonds, according to Reuters.Do you remember the massive

Have you been following people involved in fx trading on twitter?Have you noticed how many people are happy to tell you what happened? While macroeconomic news and previous day post analysis can be useful, it certainly doesn't help you make a trading decision based on current charts. I have a little proposal to make.Instead of tweeting that you've opened a long or short position provide some

The AUDJPY currency pair is currently trading around the 76.00 mark.Over the last twenty days, from May 7 through May 27, I've been experimenting with a concept I've been calling microtrading.I don't intend to close all of my positions at the moment, but if I did my account NAV would increase by more than 10% over that period.While I realize that active trading can return spectacular results

I've become a little frustrated with most of news sources out there. If you've been an active forex trader for any length of time you'll notice that talking heads are always trying to tell you why something happened.That's really nice, and might possibly help you learn about various financial interactions, but it's absolutely useless from a trading point of view. If you are trading you need to

In short, there isn’t any. Not like the Forex trading is completely unregulated, but there isn’t such thing a SEC (Securities and Exchange Commission) for the Forex market. There is no central location and the company that would own the market (like NYSE Euronext owns New York Stock Exchange). Decentralization of the modern foreign exchange market is its greatest advantage and one of its biggest problems. And while the market itself remains unregulated the market participants are, in fact, regulated by various authorities, depending on the country where the given participant resides or does his business.

NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission) are obligatory regulating organizations for the Forex brokers that are based in United States or want to legally deal with the U.S. residents. While spot Forex trading has nothing to do with the futures or commodities, these organizations set the rules for how the retail Forex market should work in United States. Some of the rules protect the traders (e.g. by setting high own capital requirements for the brokers) and some just make traders’ life harder (e.g. the tons of documentations required to register with a broker and the latest no-hedging rule). Anyway, traders (even those from U.S.) still have the option not to trade with the NFA-registered brokers, so, there’s nothing bad in having such institutions as NFA or CFTC.

FSA (Financial Service Authority) regulates the Forex brokers that are based in U.K. or are dealing with the British traders. The  U. K. regulation is much lighter than the one in U.S., so traders usually find no difference when they are dealing with the FSA-registered broker. If you want a regulated U.K. broker, just look if it’s registered with FSA. But don’t expect it to be much more reliable than the unregulated brokers.

SFBC (Swiss Federal Banking Commission) requires all Forex brokers that are based in Switzerland to obtain the real Swiss banking license and thus become a regulated banking institution. That’s a good thing for those traders that are registered with the Forex brokers that got such license, because Swiss banking regulation is one of the best in the world and those institutions that fulfill all the requirements can be certainly considered reliable. On the other hand, obtaining such a license is a long and expensive way; this fact is making some of the Forex brokers to move out of Switzerland.

Some Forex brokers are regulated by the European and other banking laws as they are registered as the banking institutions in the respective countries. Such brokers can be considered the most reliable ones, but for the common retail trader dealing with them isn’t easy as they usually require high minimum account deposit and a lot of paperwork.

The majority of other regulatory bodies provides almost no strict requirements for the Forex brokers and is plainly nominal. If you see a broker registered on Seychelles or British Virgin Islands, or some other «offshore zone» it doesn’t mean that it’s thoroughly checked and audited. Of course, it doesn’t also mean that it’s a scam broker. Some Forex brokers prefer to stay offshore for a lot of advantages and some traders prefer those brokers for their own reasons. When you choose your broker, be sure to select the one with the appropriate type of regulation that fully fits your trading needs.

If you have your own opinion or questions on Forex market regulation, feel free to leave it in a comment to this post.

I blogged about this idea not too long ago. The concept is to use very small trades relative to your available margin and net asset value (NAV). I'm doing this with the AUDJPY pair so that when I accumulate positions I am earning a positive carry trade return.My trade size over the last week has been such that the margin involved in each trade is 0.2% of my NAV. That's tiny. Twenty five

As I often do, especially when the markets are excruciatingly slow in determining when to make the next significant move, I've been thinking about Forex.Take a mental walk with me...The DOW falls from 10,000 to 5,0000 and loses 50% of it's value. It returns from 5,000 to 10,000 and gains 100% of it's value.Wait, think about that for a minute. In the normal world having the ability to gain

While I don't have any pictures to show, yet, I am working on an EA that trades AUDJPY based on the market price relative to the average price of positions held.The first few passes at this type of system were pitiful. My testing starts from September of last year to now while only opening long positions. As you can imagine this is a difficult period of time for a long only system!However, late

I've been thinking about grid based strategies designed to take advantage of volatility without incurring great risk.The idea is that the strategy be followed using a carry trade pair in the event that you do inevitably end up holding some positions. You'll want a platform with a decent spread. Oanda often has about a 3.0 pip spread on the AUDJPY pair -- my current pair of choice.So, let's