Something Interesting in Forex Video May 2013 - page 5
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The FTSE 100 index is ironically enough not made up of 100 stocks, it is slightly over 100 stocks; 102 and the number does fluctuate from time to time. The index represents the largest companies by market capitalisation so it represents the 100 largest companies quoted on the London Stock Exchange.
Trading the Natural Gas Price
Natural Gas like crude oil is tied to the USA economy. Natural gas trading took off in the last couple of years; the shale gas explosion only happened recently and this reduces the dependence of the Western Economies and USA on the Middle East. The main users of Natural Gas are industrial factories and power stations which use about 58% of all Natural Gas.
Trading the Nikkei
The Nikkei 225 was first recorded in 1950 and remains one of the most widely quoted Japanese stock indices. As of June 2011, the Tokyo Stock Exchange's (TSE) listings had an overall valuation of $3.7 trillion, trailing only the London Stock Exchange, NASDAQ OMX and NYSE Euronext platforms at $3.8 trillion, $4.1 trillion and $13.8 trillion respectively.
Data Announcements: Non-Farm Payrolls, GDP Figures and Central Bank Interventions
The most obvious one is the USA Non-Farm Payroll Numbers; the unemployment rate, initial unemployment claims and consumer sentiment tend to account for the largest moves in both US and British markets. It is possible to trade this data announcement but it is quite hard to guage the immediate reaction of the market. Other important data include the GDP figures, consumers price index and central bank interventions.
Most Popular Indices: FTSE vs Dax vs Dow
David White, a Spreadex trader: "the most popular index for us would be the FTSE 100 (UK 100); the Dax also tends to attract many traders although it has a higher beta (more volatile) . The Dow Jones is also another popular market with clients".
Trading the USD/JPY Currency Pair
The dollar/yen has been very interesting since the start of the financial crisis. When the equity markets fell, the USA embarked on a huge amount of quantitative easing which served to weaken the Dollar.
Forex Trading and Leverage
For a very small GBP100 deposit traders can effectively trade GBP13,000 positions; as such a cent movement in a currency with such leverage could make moves that much bigger. The more leverage you employ to a product, the more the normal volatility of a market is going to be exaggerated.
This video describes basic factors to help traders determine if markets are trending or are range bound (choppy). Simple visual analysis as well as basic technical indicators are discussed.
Technical Analysis vs Fundamentals: How Reliable are Technicals?
David White, a Spreadex trader:
I think most people try to use a combination of the two - forex traders might look only at technicals, you might have others who use a quantitative strategy. And how reliable are Technical Analysis Indicators in practice?
Trading the Oil Price
Crude oil can be effected by political tensions and people's views on the economy; it is a very volatile market and can easily move 200 to 400 points a day. It is as such one of the more volatile markets out there.