The Swiss National Bank left its three month libor target rate without change in line with market forecasts at 0.25%. The statement from the Central Bank outlines their commitment to supplying liquidity and safeguarding the Swiss franc versus the euro.

It seems that after the positive retail numbers the SNB has revised its GDP growth estimates, and now expect Switzerland’s economy to fall between 1.5% and 2%. Although it may not seem like a positive it is because of their earlier forecast of a fall between 2.5% and 3%. Rising unemployment and a deepening recession might convince the Swiss National Bank to return to its previous estimate.

For more Swiss and International Economic data visit FXEconostats

If you decide to try making some quick money, that too fast, forex trading may be the one you should try. This will be an ideal arena for you to enter to try an alternative arrangement for earning some extra income other than your regular job. You can make it your primary job once you master the trading skills.
The forex market is so huge that it may not be possible for an individual to be aware of the crucial changes that occur all over such as exchange rate fluctuations, political influences, and economic factors. Even the experienced bankers and traders can not predict how these changes can affect your trade.

But this step has to be taken very cautiously as the forex trading is highly volatile, it is very, very large that it is easy for you to miss a turn that affect your investment, it is unpredictable, and has high risk involved.

Forex trading involves dealing with the currencies of different countries. It is buying or selling of one currency for another at a rate both parties have decided. This trading involves different parties from different countries all over the world. So the area is very vast and to keep track of every move takes a lot of time, alertness, and a realistic approach to the different strategies. You have to have access to the latest issues and trends that keep changing at very high speed. Your success lies in how fast you can
The fact that forex trading is all about making a fast buck, it posed the danger of you getting addicted to this just like in gambling and it is open to whoever is willing throughout the day, throughout the year.

Only large banks were dealing with foreign currencies previously. Globalization and relaxation of foreign exchange rules make it possible for anyone to enter the forex trade. With this the market achieved more liquidity and more active as the trade is happening all over the world with no time limit.

The dark side of it is that the market became so huge, and the changes are so unpredictable that it is very hard to keep a watch on every move that is happening. Those who are smart enough to understand the market better, do well and the others who can not lose money. So the time management is very crucial here.

Find out which economic factors help shape the short-term and long-term forex landscape. It was written by one of the forex expert Kathy Lien.

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1. Common knowledge about the trading on Forex

1.1. Forex as a part of the global financial market
A brief history about the rise and development of Forex.
The factors that caused Foreign Exchange Volume Growth on Forex (Exchange Rate Volatility, Business Internationalization, Increasing of Traders’ Sophistication, Developments in Telecommunications, Computer and Programming Development). The role of the U.S. Federal Reserve System and central banks of other G-7 countries on Forex.

1.2. Risks by the trading on Forex
1.3. Forex sectors
Spot Market
Forward Market
Futures Market
Currency Options

2. Major currencies and trade systems

2.1. Major currencies
The U.S. Dollar
The Euro
The Japanese Yen
The British Pound
The Swiss Franc

2.2. Trade systems on Forex
Trading with brokers
Direct dealing

3. Fundamental analysis by trading on Forex

3.1 Theories of exchange rate determination
Purchasing Power Parity
Theory of Elasticities
Modern monetary theories on exchange rate volatility

3.2. Indicators for the fundamental analysis
Economic indicators
The Gross National Product
The Gross Domestic Product
Consumption Spending
Investment Spending
Government Spending
Net Trading
Industrial sector indicators
Industrial Production
Capacity Utilization
Factory Orders
Durable Goods Orders
Business Inventories
Construction Data
Inflation Indicators
Producer Price Index
Consumer Price Index
Gross National Product Implicit Deflator
Gross Domestic Product Implicit Deflator
Commodity Research Bureau’s Futures Index
The Journal of Commerce Industrial Price
Balance of Payments
Merchandise Trade Balance
The U.S. – Japan Merchandise Trade Balance
Employment Indicators
Employment Cost Index
Consumer Spending Indicators
Retail Sales
Consumer Sentiment
Auto Sales
Leading Indicators
Personal Income

3.3. Forex dependence on financial and sociopolitical factors
The Role of Financial Factors
Political Crises Influence

4. Technical analysis

4.1. The destination and fundamentals of technical analysis
Theory of Dow
Percent measures of prices reverse

4.2. Charts for the technical analysis
Kinds of prices and time units
Kinds of charts
Line Chart
Bar Chart
Candlestick Chart

4.3. Trends, Support and Resistance lines
Trend Line and Trade Channel
Lines of Support and Resistance

4.4. Trend Reversal patterns
Head-and-Shoulders
Inverted Head-and-Shoulders
Double Top
Double Bottom
Triple Top
Triple Bottom
Round Top, Round Bottom, Saucer, Inverted Saucer

4.5. Trend Continuation patterns
Flags
Pennants
Triangles
Wedges
Rectangles

4.6. Gaps
Common Gaps
Breakaway Gaps
Runaway Gaps
Exhaustion Gaps

4.7. Mathematical trading methods (Technical indicators)
Moving Averages
Envelops
Ballinger Bands
Average True Range
Median Price
Oscillators
Commodity Channel Index
Directional Movement Index
Stochastics
Moving Average Convergence-Divergence (MACD)
Momentum
The Relative Strength Index (RSI)
Rate of Change (ROC)
Larry Williams’s %R
Indicators combination
Ichimoku Indicator

5. Fibonacci constants and Elliott wave theory

5.1. Fibonacci constants
5.2. Elliott wave theory

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Money Management in FOREX Using Pareto Law

How can I manage my money in FOREX?, How can I control my money while trading and direct it in the positive way always and avoid to lose much money in such an aggressive and fast market?

These and much more questions are being asked daily by a lot of traders around the world, most of these questions are focusing on the best ways to get profits, from a long experience trading FOREX I could say that the best way to get profits in FOREX market is to avoid or at least reduce loss and this can be achieved by a good money and risk management technique. A lot f these techniques were studied and published, a lot more are being published daily.

One of the best techniques I studied and used was applying Pareto law to the trading system, this law states “for many events, roughly 80% of the effects come from 20% of the causes.”, this law is also known as the 80-20 rule, the Pareto principle, the law of the vital few and the principle of factor sparsity and it was named after the Italian economist Vilfredo Pareto who noticed that 80% of the lands in Italy was owned by 20% of the population at that time.

How can we use this as a money management technique?, while it is not hard to use this principle for that purpose it’s not easy to keep running in FOREX market “specially for fast traders and scalpers” because it requires to organize and observe trading , writing down every trade you enter and analyzing these trades digitally to get a specific results like which pairs are the best for your trading system and give the best return, what are the best suitable times for trading and which trading systems are the most profitable trading strategies.

Still we have to discuss the mechanism of integrating the Pareto principle into money management system for FOREX trading, as I mentioned above it is not hard to use and apply it to the trading system, it is very flexible so you can apply it in many ways like :

1. Some people will observe trades and will from the result of this observation focus on the most profitable 20% of pairs those gave them 80% of income during exercise period which I recommend it to be at least 3 months.
2. Some others will be focusing time of trading, getting the most suitable 20% time of trading for them “times of successful trades” that they made 80% of successful trades during and of that they can know when the most they are trading successfully.
3. Stop loss and take profit points are important spots to be highlighted by this system, imagine how much will you save if you know the 20% take profit points that gave you 80% of the return and the 20% stop loss points that gave you 80% of your loss, so you can get the best ranges to use when you setup a take profit or stop loss point “i.e. if get 80% of my return of 20% of take profits that ranges 50 pips, I would setup my take profit points around that number always and vice versa in stop loss points case”.
4. Others would be focusing on trading systems, indicating which are the responsible systems for the most of profits or the most of losses in that period of time.

There are a lot of other factors in FOREX trading for achieving gain that can be observed and analyzed based on this principle, combining three to four f them would maximize your profits and reduce your losses dramatically but this is the most hard way to maintain a suitable money management strategy using Pareto law as this requires you to observe your trades and organize them for a long time accurately, this only would affect your trading negatively as you would not be able to enter short term trades easily if you do not have good tools to do.

This is why I recommend you to put every element in a spreadsheet separately and trade in a normal mood, after the examining period over you would be having a lot of data to analyze and get the results for them, hence you would have the ability to combine the results and get the best overall result for the best pairs you are trading profitably, the best take profit and stop loss points ranges and the best time you are trading them, combining these best results you will have a new result which would be for sure the responsible for around 80% of you return.

Once this get done, you are having a suitable FOREX money management strategy that you can depend on, but try to update it always to get the best out of it and notice that “80%” and “20%” are the theoretical numbers, they will differ for sure while keeping just around them.