The US Non-Farm payroll report is released on the first Friday of every new month . It is released by the US Bureau of Labor and Statistics or (BLS) and what it does is measure, quantitatively , is the number of new jobs, outside of farming , created in the prior month by the US economy . This announcement is so important because the health of the US and global economy are both reflected . Just remember, the US economy is the largest in the world and consumer spending is the main component driving the economy in the US ; actually making up 70%!  So , in forex trade signals, because a country’s interest rates is the number one factor affecting the strength or weakness of its currency , one must look to what drives the actual interest rates themselves ; or the US Federal Reserve policy on interest rates. Probably the most important data for the Fed to use is this job report in order to set their short term interest rates and because it works this way, often the Non Farm Payrolls report actually can, can lead to market volatility.
Wondering why the Federal Reserves decision on short term interest rates are related to the jobs report ? A wonderful question! If the jobs report comes out strong usually it means that people have employment and the utilization of resources is high . This means workers are being hired by companies and these workers are going out and spending money too on clothing, eating out, and more and the economy is driven by these things ; they help to heat or grow the economy. There is more money in circulation when the economy is growing and inflation must be kept in check by the Federal Reserve . The way they keep inflation in check is that they raise short term rates to lower inflation and cool down the economy , or they heat up the economy by lowering the short term rates to help raise inflation . So it’s easy to see, the jobs number is one of, if not the primary factor , driving all this right under the surface.
When you’re getting ready for your forex trade signals day or week ahead , look closely at the information that is going to be released on the events calendar. If you are still in the month’s first week then you’ll have the Non-Farm Payrolls report to look forward to on Friday of that first week since this is always the day of release. If after the release of this report you want to take advantage of the market’s volatility , simply keep the following formula in mind : If the jobs numbers are stronger than expected this usually means a stronger economy which means short term interest rates will go higher, strengthening the currency . Oppositely, if you find the jobs report is weaker than it was expected to be usually you’ll get short term interest rates that are lower, causing weakness of currency . It doesn’t always happen this cut and dried, but knowledge of these general parameters will give you a leg up on your fellow trading competitors .

My take is that the US Dollar currently is benefiting only because of the weakness of the Euro . Steam has only been picked up in the spending driven US economy because the Federal Reserve for some time has left the rates near 0%. What will happen when the Fed is forced to raise rates ? Will the economy in the US be able to deal with this ? The answer is likely no . You have to keep in mind that there is more spending right now by consumers because they are not paying credit card payments, automobile payments, mortgage payments, and more . This means that consumers have income that they usually don’t have and so they can spend more money on things like eating out, shopping for clothes, and buying Apples new i-pad . Here we go with the punch-drunk consumer once again . In the last boom inflated by the Federal Reserve it was not sustainable and this time is not different . The only options for the US Dollar in the next few years are default or inflation and both will mean disaster .

When involved in forex trade signals making money is naturally the goal . There is no bias . We only want to use our foresight for a profit . So the second question’s answer is that there will be a point when the Euro bottoms out because it has been over sold. It will probably be somewhere about 1.2300-2400. Really , do you really believe that Germany, one of the largest world economies, will allow the currency to fail? Probably not. More than likely they won’t. And that is precisely why they are not jumping at the opportunity to print more Euros and bailout Greece . The problems in Greece will cause the Euro to become even more sound as a currency. The investors world wide will realize that the Euro is a safe option because when there is trouble they take the short term loss in order to preserve long term health . So, Therefore, their economy may be having a tough time , but all of this will make their monetary unit better . The opposite is true in the United States situation . Here, we print money to stave off our short term problems , which in the end will only exacerbate the longer term health of our economy and our monetary unit .
All that being said, we are getting close to a point where the Euro will be a massive bargain that you can take advantage of in your forex trade signals. Not just for all of the reasons outlined above , but you also need only look at market psychology . The professionals buy when there is a free fall just as the average person is catching wind of the crisis and comes in off the street to go short the move that has already happened . This is a pattern that has happened repeatedly , and will continue to repeat itself as long as the limbic system plays a part in human physiology .

Forex trade signals can be done in so many different forms and for so many reasons that just figuring out where to begin is tough . After all, should you open up an account at a brokerage that specializes in FX trading , or is a brokerage that allows you to exchange traded funds, trade options, stocks, and futures a better idea? Not only is this an overwhelming decision , you then need to decide whether to use your FX trading as a speculative or hedging tool, long or short term, etcetera. Before you start there are definitely many things to consider .

Although the above questions alone can start a big response , in this article we’re going to focus on the basics . The easiest way to get comfortable within this world of FX trading is to simply go with an account with a brokerage specializing in forex trading . Wondering what broker to choose ? Well, that is an entirely different subject altogether and well beyond the scope of what I’m prepared to go into here . Before depositing money, just be sure to do some due diligence!

Now that your Forex Trade Signals is working and you are getting started , you need to get a firm handle on what exactly it is you’re participating in . With this example , we’re suggesting that because you opened your account with a broker specializing in forex trading, you’ll begin by trading cash or spot contracts. Without turning this into something complicated, all this means is that you are trading the current price as it sits in the open, global market at that very second . If the Eur/Usd pair is trading at 1.3200 on your brokerage screen then at this rate you can sell Euros against US Dollars or you can buy US Dollars and sell Euros at that rate . Of course there will be a small spread built into the price you see and this is the cost of entry when you take the trade . Be sure to choose a broker that has a spread of between 2-3 pips on Eur/Usd and not more than that .

Because it can be challenging to speculate , even for professionals such as myself , let’s say you want to in the United States have the goal of hedging your stock portfolio . Since your stock portfolio is denominated in US Dollars you may make money if your stocks go up in value in US Dollar terms but a weakening US Dollar could cancel those gains . You want to hedge this part of the portfolio and in the brokerage account you have decided you want to buy Euros against US Dollars. This way as the US Dollar gets weaker against the Euro and your stock portfolio is suffering as a result of the generally weaker Dollar , the gains you get from purchasing Euros hedge the downside risk.

The above example is one of the most easy ways that you can add a forex trade signals component to the portfolio you have . In future articles we’ll talk about more advanced methods of speculation , but this is a great place to start .

What is a currency pair ? First we’ll look at the Eur/Usd which has the US Dollar as the base currency in the pair against the Euro . What is the meaning of the pari when I have a price quote that is 1.3200 on the Eur/Usd? Here is the easy way you can keep the answer in mind : take your currency pair base , which is the US dollar in this case , look at the price quote of 1.3200 , and then say , " 1.3200 US dollars are needed to purchase 1 Euro." This is what that price quote really means. Maybe you look a few weeks later at the price quote and it is suddenly 1.4000 this tells you that the US Dollar is now weaker when compared to the Euro because it now takes 1.4000 US Dollars to buy 1 Euro . Of course , if you find the price quote is 1.2500 down the road, then the US dollar is getting stronger since purchasing one Euro will only take you 1.2400 US dollars .

Forex trade signals can become even more challenging when for example you see a price quote on the Usd/Jpy pair for 100.50 . Well, using our method from above , you take the Jpy base currency take a look at the price quote that is 100.50 and this is the amount of Jpy it takes to purchase one US dollar. Pretty easy huh ? Now you will have no difficulty understanding the price quote on any pair the next time you look at a chart screen or a quote window .

Now that price quotes can be read, you may wonder what are the cross pairs and the main pairs? Well the main pairs are usually the strongest economies throughout the world versus the US Dollar . Several of the main pairs include the Gpb/Usd, Usd/Jpy, Eur/Usd, and Usd/Cad . A cross pair is a pair not involving the US Dollar such as Eur/Jpy, Gbp/Jpy or Eur/Gbp to name a few of the more popular ones .

Hopefully this brief article will be helpful to you if you have been intimidated by the forex trade signals landscape before . It takes a little getting used to with all the time zones, economies, and currency pairs out there. But once you start to wrap your mind around how all of the pieces fit together it really is not too hard – and many actually find it exciting and fun !

Forex Trade Signals Time Zones – What Are They?

For an average trader, forex trading time zones can be intimidating and difficult . Like most traders , when I first got involved in this cash 24 hour global market , the time zones issue never made a whole lot of sense to me . Over time that would change and in this article I will share some basic insights on how the 24 hour market is handled by me and hopefully that will help you the next time you’re preparing for your next big day of trading .

You first need to think about where you’re living , or the place where you do your forex trade signals trading from. This is the most important factor that affects the way you look at this 24-hour market. For an example let’s say that California is where you life which is on the West Coast in the U.S. and on Pacific Standard Time which is three hours behind East Coast time in New York.

Now that we know that California is where we’ll be doing the trading , which is 3 hours behind New York , we can start planning our forex trade signals trading day. In this 24 hour market that never sleeps ( while it quiets down on weekends and big international holidays) the trading day stops and resets with the New York financial centers closing at 5pm or close to that in Eastern Standard Time and the banking centers in the Far East like Hong Kong and Tokyo open and start a new day at roughly the same time. Keeping this in mind it’s best to have your trading charts set up so that the candle or daily bar you use will close every day at about 5pm Eastern Standard Time.

Now that we have figured out we’re trading from the United States West Coast which is 3 hours behind NY’s Eastern Time and we know when the market resets and stops to start a new day . The next thing to consider is when you will get ready and plan for the next day . If you happen to be in California , as in our example here , and you like staying up late then the London session is what you may want to prepare to trade which is from 1am-4am PST or 4am- 7am PST. Perhaps you like sleeping and you want to sleep through the session in London but have no problem getting up early , at around 4am Pacific Standard Time so you’re able to see the London session end and get prepared for the session in New York which will really get going around 5:30am PST (8:30am EST) . Or, finally, perhaps you hate waking up early and the middle of the day is when you prefer to trade; this is not a problem. Just wait for 2pm PST or 5pm EST when the new day in Tokyo starts and you can trade FX during that major market session .

Now you clearly have knowledge of the major forex trading time zones and your days can be planned accordingly. And remember , preparation and planning are the most important yet overlooked factors of success in all businesses, including this one.  Making plans can be easy for your forex trade signals day.