GBP/USD: Trading the U.K. Consumer Price Report

The Downside

Producer prices in the U.K. rose at the slowest pace in sixth-months, with the gauge falling back to an annualized rate of 4.7% in August from 5.0% in the previous month. Lower costs could lead businesses to keep a lid on prices, and a slower-than-expected pace of price growth could trigger a sell-off in the British Pound as interest rate expectations falter. As a result, a dismal inflation report could lead the GBP/USD to test range support around 1.5300, but a break below this level would expose the 100-Day SMA at 1.5131.
How To Trade This Event Risk
Forecasts for a slower inflation certainly favors a bearish outlook for the British Pound, but a higher-than-expected CPI reading could set the stage for a long Cable trade as investors weigh the prospects for future policy. As a result, if inflation expands at an annualized pace of 3.1% or greater, we will need to see a green, five-minute candle to generate a buy entry on two-lots of GBP/USD. Once these conditions are fulfilled, we will set the initial stop at the nearby swing low or a reasonable distance to the downside, and this risk will establish or first target. The second objective will be based on discretion, and we will move the stop on the second lot to breakeven once the first trade reaches its target in order to preserve our profits.
On the other hand, lower input prices paired with the ongoing weakness within the real economy could lead businesses to keep a lid on consumer prices in an effort to boost consumption. At the same time, a slower pace of inflation would allow the BoE to support the real economy going forward, and a dismal CPI report could stoke a sell-off in the sterling as interest rate expectations falter. Therefore, if the headline reading for price growth falls to an annualized 3.0% or lower, we will favor a bearish outlook for Cable. We will then look to implement the same setup for a short pound-dollar trade as the long position mentioned above, just in reverse.

Principal House Forex

The Foreign Exchange (currency, forex or FX) market is where currency trading takes place. FX transactions typically involve one party selling a quantity of one currency in exchange for purchasing a quantity of another. The FX market is one of the largest most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global FX and related markets is continually growing. Traditional turnover was reported to be over US$ 3.2 trillion in April 2007 by the Bank for International Settlement. Since then the market has continued to grow. According to Euromoney's annual FX poll, volumes grew a further 41% between 2007 and 2008.

The FX market is unique because of:
Its trading volumes
The extreme liquidity of the market
The large number and variety of, traders in the market
Its gregraphical dispersion
Its long trading hours: 24 hours a day except weekends
The variety of factors that affect exchange rates
The low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
The use of leverage
The top 7 currency traders % of overall volume, May 2008
21.70% (Deutsche Bank)
15.80% (UBS AG)
9.12% (Barclays Capital)
7.49% (Citigroup)
7.30% (Royal Bank of Scotland)
4.19% (JPMorgan)
4.10% (HSBC)
Principal House aims to bring the money making power of the FX market to the average investor. Such a complicated market can be broken down into simple fundamentals which can be taught to anyone, allowing them to benefit from the unique characteristics of the FX market as outlined above. Many Principal House clients have progressed from not knowing of the FX market to live trading in less than one month.

Reasons proving Necessity of Forex Education

The most common mistake practically all Forex newbies make is elimination of Forex education means and methods and starting a live trading without practicing their skills by means of Forex demo accounts offered by many websites and platforms supporting Forex market. Neglecting Forex education can cause loses of huge sums of money and disappointment along with false imagination about Forex trading every rookie experiences if he/she begins unsuccessfully.

To prevent yourself from such sad destiny as a Forex trader you need to realize the major reasons proving the necessity of Forex education for beginners. Many experts will say to you that you can achieve a lot only by choosing the right Forex trading strategy and even a strong background and knowledge got during your education can't replace Forex strategy importance. There is for sure a grain of sense in such statement but still you can take your Forex education as the first strategy, the first step on the road leading to your success at Forex market.

In addition the last argument that can convince you Forex education is a necessary thing to do before starting an actual trading is that most of means and tutorials presented in the Web are free of charge and require only your time and patience to be found and used properly. Practicing and understanding the key Forex terms and schemes can help you to become a proficient trade

Savvy Financial Traders

Enthusiasm for currency trading is great but it should never come at the expense of getting an excellent forex education. Yes, there may be a desire for getting out there and into the thick of things since some have mentioned they have earned enormous sums of money with foreign currency trading. However, it is necessary to also point out here that mostly all the people that have made money at forex have a deep understanding of it. Sure, there will be those that succeed solely due to dumb luck. But, the vast majority will be those that truly know what they are doing. Take this into consideration prior to jumping into forex trading.

At the core of successful forex trading is the ability to read and predict the market. Granted, it is impossible to make any predictions with 100% certainty as the market is known to be a flux and unpredictable one. Yet, the odds of succeeding in the market increase when you develop a much more logical and realistic insight into how to read the market. This can only be achieved through a proper forex education.

Never lose sight of a very important fact. You are entering into forex trading because you want to make profits with your venture. This is why developing a good foundation in the fundamentals of such trading is so very necessary and of paramount importance.

Market Traders Institute Forex Education

As an Advanced Forex dealer you've the power to invest your personal Forex deals and predict marketplace courses. You're a successful dealer and savour working in the Forex. Market Traders Institute helps thousands of customers each week who are active dealers. Our informative system provides a lifespan of live support and marketplace analysis. Utilise our expert cognition and trading techniques to add to your personal expertness and become more flourishing in the Forex.

You'll be coached to utilize diverse strategies, indices and patented graphing software system that will take your Forex trading to the following level. Such things as:
Trading Pennants
Trading the Kings Crown or market reversal
Customization of preferred indicators
Utilizing the Gartley
And much more!

Make a Living Trading Forex

Yes, it is possible. With the right Forex education and training, a large enough Forex trading account, and the discipline to stick with a Forex trading system, anyone can make a significant living Forex day trading.

So how does one go about getting started in Forex you may ask? I have included below some simple steps towards trading Forex full-time.

1) Learn Forex Trading – This may sound obvious but it is the first and one of the more difficult steps. Unlike most professions, there are no “accredited” Forex schools to my knowledge to teach you how to specifically trade the Forex market. There are, however, Forex training courses online. However, many of these “learn Forex on your own” courses are written by individuals who don’t know much more about Forex than your novice Forex trader. Others are written by Forex Brokers with a financial interest in seeing you lose (Google: “five types of forex brokers” to understand what I mean). It is difficult, but not impossible to find a reliable source for quality Forex education. Do your research. Compare multiple education alternatives and choose someone who has your best interest in mind.

2) Practice, Practice, Practice – When I was a kid, my Mom decided she wanted me to play the Piano. I was forced to attend weekly lessons and then asked to practice 15 minutes per day between lessons. This was extraordinarily embarrassing for the sport-enthusiast boy that I was and so I vowed not to practice. Well, for two years I went to every Piano lesson because I was forced to but rarely if ever practiced because I was only asked to. Over 100 lessons and nearly $3000 later my Mom gave up. In spite of the many lessons I attended, because I never practiced, I was never able to play the Piano. So it is with Forex (or anything for that matter). Learn EVERYTHING you can about Forex and then practice what you learn. One of the great things about Forex is that anyone, free of charge, can open Demo trading accounts and practice. Practice your trading system. Practice money management techniques. Practice order entry and exit techniques. Practice until you are profitable. Practice until you are ready.

Forex Education - The Scientific Theory of Market Movement

Human nature is constant and humans decide the price in any market and many new forex traders as part of their forex education look to follow one of the many scientific theories to help them predict market movement and enjoy currency trading success, let's look at them...

You will see lots of forex trading systems say they can predict market tops and bottoms with scientific accuracy but how accurate are they?

The major scientific theories are those based upon the works of Fibonacci, W D Gann and Elliot.

The above theories and any others that claim that markets move to science are wrong markets don't and cant by there very nature.

Why?

Because humans are not logical and do not conform to a universal ideal and this should be pretty obvious as if there was a scientific theory of human nature we would all know the price in advance and there would be no market.

It's a fact that if any of the so called scientific theories worked everyone would follow them and of course they don't. Fibonacci, Gann and Elliot made no money with their theories but that still doesn't stop the far out investment crowd claiming they work when they quite obviously do not.

Trade to Win By Trading the Odds

If you want to win at forex trading, don't look for something that doesn't exist and look at the right way to trade forex markets to win and that means trading the odds.

An essential part of your forex education should be that, forex is a game of odds NOT certainties. Don't let this dishearten you though - if you learn how to trade the odds and use a simple soundly based forex trading strategy you can win and win big.

The fact is markets move based upon the supply and demand fundamentals and human perception of them. At certain times greed and fear take hold and humans push prices to far from fair value and a price spike occurs.

These short term price spikes are easy to see on a forex chart and can be traded for profit. Sure you won't win every trade- but if you win more than you lose, keep your profits small and run your profits you can make huge profits.

Today science has enriched our lives and we marvel at some of the advances that are made. You can however only apply science in certain areas and forex trading is not one of them.

Keep It Simple!

Forex trading remains and always will be, odds based game and if you think about it 95% of traders lost 50 years ago and 95% lose today despite all the advances in science and forecasting.

Forex trading relies on a simple method and your ability to execute it with discipline through periods of losses to achieve currency trading success.

If you get the correct forex education and learn how to do this, you may not be perfect with every trade - but you will make a lot of money.