Year: 2008

Recently, the Department of Labor released the US Producer Price Index, showing that there was a steep drop of inflation during the month of October, as the indicator posted a 2.8% decline in prices; almost a full basis point below analysts’ forecasts. The price drops can be attributed to falling energy prices, gasoline prices, and food prices. The reduction in prices was the larges seen in the history of the index.

As a part of the report, core producer prices, which exclude the volatile energy and food prices rose 0.4%.

The PPI is a Fed favorite for measuring inflation. We can now assume that inflationary concerns have all but vanished in the U.S. economy, possibly setting the stage for further interest rate easing by the Fed.

But markets may have another reason to worry. The combination of continually falling prices and negative returns in equity markets may lead to deflation. A general drop in prices can intensify the global economic downturn. If consumers and businesses estimate prices may continue to decline, they may delay purchases of large ticket items.

Solving the problem of deflation can be a much more difficult task then when dealing with it inflation. To alleviate the pressures of rising prices, the Federal Reserve must raise interest rates, slowing economic expansion until a prices fall. With deflation, interest rates must be cut to stimulate economic growth and force a rise in wages.

Currently the Fed Funds Rate stands at a low of 0.25%. This leaves the Fed very little room to maneuver interest rates in order to raise price levels. Until an economic recovery ensues, the danger of deflation may remain.

FOREXYARD Maintains fixed spreads during normal market conditions.

Trade Size
All trades through the FOREXYARD trading platform are executed in standard sizes of 10,000 base currency per one lot. However, the maximum allowed trading volume is $5,000,000.
Here are some examples of a one unit trade size:
U.S. Dollar/Japanese Yen (10,000 U.S. Dollars)
Euro/U.S. Dollar (10,000 Euros)
Euro/Great Britain Pound (10,000 Euros)
Euro/Japanese Yen (10,000 Euros)
Smaller trade sizes are available via the FOREXYARD SuperMini account. Learn more through our website: www.forexyard.com, or through this blog.

Margin
FOREXYARD enables currency trading to be conducted on a highly leveraged basis. Every trader is able to select the degree of leverage or gearing that the trader wishes to employ in trading. Unless the trader specifies otherwise, FOREXYARD sets the leverage levels to FOREXYARD’s default margin level. The leverage may be changed from time to time at the sole discretion of the dealing desk, based on market conditions.

1:200 Leverage
Clients must have approximately 1/2% of the value of the positions they hold in their account for each lot of currency being traded (approximately 200:1 leverage). This amount does not change after 5:00 pm New York time, which is the rollover cut off, but stays constant at approximately 1/2% per lot the entire day and overnight.

Margin Watcher
There is also an important safety feature embedded in this system that prevents clients from losing more money than they have in the account. Should the account equity – meaning the total floating value of the account – fall below the margin requirement of approximately 20% of the used margin, the dealing desk will close all positions. This protects the trader from losing more than the funds deposited into the trading account.

Rollover / Interest Policy
At 5:00 pm New York time, funds are subtracted or added to accounts with open positions because of the automatic rollover.
Note: On Wednesdays, the amount added or subtracted to an account as a result of rolling over a position tends to be around three times the usual amount. This “3-Day” rollover accounts for settlement of trades through the weekend period.
Why does Rollover take place? In the spot forex market, trades must be settled in two business days. If a trader sells 100,000 Euros on Tuesday, the trader must deliver 100,000 Euros on Thursday, unless the position is rolled over. As a service to our traders, FOREXYARD automatically rolls over all open positions to the next settlement date at 5:00 pm New York time. Rollover involves exchanging the position being held for a position expiring the following settlement date. The positions being exchanged are usually not valued at the same price. The amount of the difference varies greatly based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day with the movement of prices.

Types of Orders
The trading platform provides sophisticated order entry and tracking of market orders, entry orders, stop/limit entry orders, stop-loss orders and trailing-stops orders. All of the above orders are Good Until Cancelled (GTC), which is valid until the order is executed or cancelled.

Margin: Managing your Risk in the FX Market
By trading on margin, traders have the ability control positions much larger than their deposit. The margin deposit for leverage is not a down payment on a purchase of equity, as many perceive margins to be in the stock market. Rather, the margin is a performance bond, or good-faith deposit, to ensure against trading losses. This is very useful to short-term day traders who need the enhancement in capital to generate quick returns. Traders should be aware that leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains. If the equity in your account drops below the margin required to maintain your open positions, the dealing desk will close all open positions. This guarantees limited risk. Once your used margin reaches 20% of the equity, a margin call will lead to all open positions being closed by the dealing desk. To learn more about the margin watcher feature please contact the FOREXYARD staff, which is available 24-hours a day to walk you through the trading station.

ForexYard enables you to trade with amounts as small as $100! Starting to trade with such small amounts is the best way to get acquainted with the Forex marketplace. After familiarizing yourself with the ForexYard system and establishing a trading strategy, you may increase the level and scope of your activity, as you see fit.

There is NO MAXIMUM trade volume on the ForexYard Super-Mini Account. Although the standard trade size is 1,000 units, you are not limited to trading just one lot! For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more seasoned and build up confidence, you can slowly increase the size of your positions to maximize profits. In fact, the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade enabling better risk management.

ForexYard recommends that all traders with account balances less than $1,000 trade using a Super-Mini Account. This gives you more staying power in the market and the ability to take advantage of multiple opportunities without over-leveraging your account. If you over-leverage your account, you will not give yourself enough room for error. Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.

Of course, Forex traders are more than welcome to begin with a Standard Account.

The minimum funds required to deposit in order to open a Standard Account are $1,000, and will allow traders certain benefits like commodities trading.

The ForexYard Super-Mini Account was designed for those who are new to the Forex market. Trades through the Super-Mini Account are in smaller contract sizes of 1,000 units, 1/10th the size of the Standard Account. The smaller trade size gives our clients the opportunity to trade live with less overall risk, or exposure, to the market. In addition, the Super-Mini Account allows traders to become familiar with ForexYard, more specifically the quality and reliability of ForexYard dealing practices and the stability of the Forex Trading Platform.

Instant Deposit with Credit Card
ForexYard allows customers to fund their account with their credit card, so they can start trading immediately. ForexYard cares about protecting your credit card security as well as protecting your privacy to the highest standards. To achieve this, we use the latest technologies and comply with all relevant regulations. Please read our terms & conditions.

Start Trading in Minutes
With ForexYard you can start trading in minutes. Choosing our JAVA-based trading platform means that there is no software to download and you have the option to use your credit card in order to fund your account (depositing the margin required for the trading). Please note that due to security measures, the scope of deals on the first week of new users trading with ForexYard is limited. Such restrictions will be removed after making a phone contact with our team.

Establish Margin Trading Account with as Little as $100
ForexYard enables you to trade with amounts as small as $100! Starting to trade with such small amounts is the best way to get acquainted with the Forex marketplace. After familiarizing yourself with the ForexYard system and establishing a trading strategy you may increase the level and scope of your activity as you see fit.

No Software Download Needed
When you choose the ForexYard JAVA-based trading platform you have no software to download as it enables users to start trading immediately upon receiving a username and password. And with no software download required, you may log into your account and trade anytime, anywhere!

Develop a Disciplined Trading Strategy
Ask any successful trader and they will tell you that the key to trading success is discipline. Everyone has heard the expression “cut your losses and let your profits run” yet how many traders actually practice this?

Many traders will hold on to losses hoping they will reverse eventually, only to see the loss get progressively larger. These “irrational” trading decisions are based on emotional reactions to fluctuating profits and losses, a common pitfall for new traders.

Losses CAN and WILL occur, a trader’s ability to limit his losses is just as important (or even more important) than determining entry points.

Because the pip value on the Super-Mini Account is just 10 cents ($0.10) per pip, traders can focus on developing a disciplined trading strategy, basing their decisions on pip movement and market conditions instead of on profits and losses.

Consider the Following Example:
When trading on a ForexYard Super-Mini Account, a 30 pip floating loss over a $1,000 position is approximately $3. That same 30 pip move against you on the $100,000 position, becomes a $300 floating loss. By starting with a Super-Mini Account a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Generating larger losses on the Standard Account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss.

Start Small. Build Up Confidence
There is NO MAXIMUM trade volume on the ForexYard Super-Mini Account. Although the standard trade size is 1,000 units, you are not limited to trading one lot! For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more seasoned and build up confidence you can slowly increase the size of your positions to maximize profits. In fact, the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade enabling better risk management.

The Super-Mini Account is ideal for accounts under $1,000

ForexYard recommends that all traders with account balances less than $1,000 trade using a Super-Mini Account. This gives you more staying power in the market, and the ability to take advantage of multiple opportunities without over-leveraging your account. If you over-leverage your account you will not give yourself room for error. Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.

The Currencies Exchange Rate has many names. For example the “foreign exchange rate”- Forex rate FX rate and so on. Ultimately, no matter what name it goes under, the Currencies Exchange Rate refers to one thing: the exchange rate between two currencies.
You have probably asked yourself many questions about the Currencies Exchange Rate. How do I read a Currencies Exchange Rate quotation? Which is the Base currency and which is the Term currency? Why the Currencies Exchange Rate fluctuates? We will answer these questions for you in the following paragraphs.
How do I read a Currencies Exchange Rate quotation? The quotation is given by stating the number of units of “term currency” or “price currency” that can be bought in terms of 1 unit “base currency”. That is in a quotation that reads EUR/USD 1.5 (i.e. 1.5 USD per EUR), the “term currency” is USD and the “base currency” is EUR.
Which is the Base currency and which is the Term currency? To determine this there is a market convention. The order is: EUR > GBP > AUD > USD. Thus if you are converting from EUR into AUD, EUR is the Base currency, AUD is the Term currency. This exchange rate tells you how many Australian dollars you would pay or receive for 1 Euro. There are some exceptions to this rule; one example is in Japan, which always quotes its currency as the base to other currencies.
Why the Currencies Exchange Rate fluctuates? The exchange rate is market based and prices will change whenever the values of either one of the two component currencies change. More importantly a currency will appreciate whenever demand for it will increase beyond available supply.

To access ForexYard’s market analysis center, click here.

Forex, FX, or Foreign Exchange, is the simultaneous exchange of one country’s currency for that of another. FOREXYARD offers a leading online trading platform for individuals that desire to profit from the exchange rate between two currencies. To accomplish this inventors buy or sell one currency for another, with the hope of profiting when the value of the currencies changes their favor as a result of local events around the globe. The Forex Exchange has more daily volume – total transactions- than any other market in the world.
In the FX market you can buy or sell different currencies. When you buy a currency, you are said to be going “long”. And when you sell a currency, you are said to be going “short”. As the value of one currency rises or falls relative to it complementary, traders decide to buy or sell currency pairs in order to gain a profit. Placing a trade in the foreign exchange market is simple and the mechanics of a trade are virtually identical to those found in other public markets.

For more information about opening an account with FOREXYARD, click here.

In the finance world leverage has many different meanings. But the basic idea is to use a small sum of money you hold to acquire a greater amount of money (usually in the form of a loan). ForexYard offers its clients leverage up to 1:200. For example, let’s say you have recently opened a live account, and deposited the sum of $10,000. Using leverage, it will be possible for you to open new positions at the amount of $2,000,000! The first thing that might cross your mind is that you can profit 200 fold your deposit. Yet you should be aware that this 200 fold as well means you can lose your deposit just as rapidly. This is why Forexyard does not recommend using leverage higher than 10 times your balance. Using leverage exaggerates both gains and losses, even when market conditions are relatively calm. In the case where a trader surpasses the maximum leverage permitted (this happens when account equity shrinks as a result of trading losses), the trading system will close all effected positions in the account. This safeguard prevents a client’s account from falling into a negative balance, even in the highly volatile and fast moving forex market.

For more information on forex terms, click here.