Articles

Forex brokers are financial companies that provide access to the Foreign exchange market by linking retail and institutional capital and the network of banks that offer liquidity.

How to Choose a Forex Broker?

These are the key issues to keep in mind when choosing Forex brokers:

ENSURING THE SAFETY OF FUNDS

• Is the Forex broker regulated by a trustable authority such as FCA UK, ASIC, or CySEC?
• Is the Forex broker headquartered in a safe country?
• Does the Forex broker operate for more than 3 years in the market?

Key Cross-Asset Correlations

A cross-asset correlation measures the degree to which the price of a financial instrument is affected by a change in the price of another instrument of a different asset class.

Introduction to Cross-Asset Correlations

The globalization of the economy and the unification of the world financial markets into a common area of investment opportunities are the drivers of the increased cross-asset correlations we have witnessed over the past 20 years.

Defining Correlation:

In general, a correlation between two variables expresses an average relationship that is backed by historical data. The correlation coefficient receives values between -1.0 and +1.0, and that means:

• +1.0 is the perfect correlation reflecting identical movements/directions

• -1.0 is the perfect negative coefficient reflecting identical opposite directions

  Read more: Cross-Asset Correlations

The Euro against the US Dollar (EURUSD) is the most active and liquid pair in the whole market. The aggregate size of these two economic areas is huge and it gets reflected to the daily turnover of the exchange rate.

• EURUSD accounts for 28.5% of the total Foreign Exchange market volume
• Historically, the exchange rate moves in a range between 0.80 and 1.60

■ EURUSD TRADING

The American/European sessions overlap accounts for 70-80% of the total average range of trading. » More on Forex Market Overlaps

• Best Time to Trade: between 13:00 GMT and 16:00 GMT (as both markets are active)

• Best Months to go Long: JUNE | DECEMBER

• Best Months to go Short:  MAY | OCTOBER

• Positive Correlations: GBPUSD | AUDUSD

• Negative Correlations: USDCHF

■ EURUSD STATISTICS

Important statistics regarding EURUSD.

Table: EURUSD statistics

Source: CurrenciesFx.com (G.P.)

Key Macroeconomic Indicators for Currency Trading

A list of some of the most important economic indicators when trading Forex currencies:

1. Interest Rates

• US: US interest rate decisions are made by FED 8 times per year

• ECB: The European Central Bank meets monthly to decide about its interest rates policy (Between the 10th and the 14th day of each month)

2. Gross Domestic Product

• US: US Advance GDP is released 1 month after the end of the quarter by the Bureau of Economic Analysis (BEA). The final GDP is released 3 months after the quarter’s end. GDP is released during the last week of each month.

•  Europe: Monthly by Eurostat