In the world of Forex trading, volatility equals big profits. Forex, (which is shorthand for Foreign Exchange) is the largest market in the world. With 3 Trillion dollars in money exchanging hands every day, a trader only has to catch a tiny percentage of that to parlay a small nest egg into significant profits.

And there are significant advantages which trading Forex, or FX, for short, can offer.  One is that there are no “commissions” as you generally think of with stock trading.  The broker is paid by means of the “spread” between the bid and ask prices.  This is really nice, because if you want to get started in FX trading, and you want to start small (which is an excellent idea), all you have to cover is the spread, rather than a spread and a commission.

Here’s how it works….

Because of the various opportunities for leverage and margin in the

by John Eather

Whenever you’re in the marketplace to get some forex software, discerning the most proper forex trading program is extremely important. Since there are such numerous forex trading companies trying to get your business, it’s a gruelling task to decide on the most efficient forex trading program.

Almost all of the forex software products on the market give you access to platforms for trading forex in real-time. Consequently, you’d better think about further factors that allow for certain forex software to stand out from others.

Before purchasing any forex software, you will have to make sure that the software has some very important features. Security is the most essential feature, hence online forex trading software ought to have 128 bit SSL encryption. This guarantees that hackers are unable to get at your crucial personal and financial information, eg. account balances and transaction history.

The best forex software should also be …

Key News• Oil prices fell below $53 to almost a two-year low . (AP)• The yield on two-year US Treasury bonds hit a record low of 1.06 per cent, responding both to the fresh flight to safety and the prospect of lower interest rates. Eurozone government bond futures hit their highest level since March 2006. (FT)

• World stock markets tumbled Thursday, with benchmarks in Tokyo and Seoul losing almost 7 percent each. (AP)• Five years after Federal Reserve Chairman Ben S. Bernanke helped stamp out the risk of deflation, the threat is returning as the financial crisis and a worsening economic slump pull inflation lower. (Bloomberg)• The RBA said in a monthly bulletin today that it bought A$3.15 billion ($2 billion) of its own currency last month, the biggest net purchase on record, as the local dollar posted a record monthly decline. • U.S. options

Key News• Russia Spent $57.5 Billion Backing Ruble in September, October, Bank Says (Bloomberg)• Ireland Planning `Huge' Bank Rescue Plan: Irish Independent Link • S&P 500 Failure to Rebound From `Retest' Points to New Lows, Charts Show (Bloomberg)

Key Reports Due (WSJ): 8:30a.m. Sep Consumer Price Index: Expected: -0.6%. Previous: 0%. 8:30a.m. Sep CPI, Ex-Food&Energy: Expected: +0.2%. Previous: +0.1%. 8:30a.m. Sep Housing Starts: Expected: -2.7%. Previous: -6.3%. 10:35a.m. Nov 14 US Energy Dept Oil Inventories 11:00a.m. Nov 14 API Oil Industry Report 2:00p.m. Oct FOMC Minutes

Quotable “The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed, in view of the silliness of the majority of mankind, a wide-spread belief is more likely to be foolish than sensible.”

     Bertrand Russel

FX Trading – Uninspired Moves in a Meandering Market 

Last week I touched on the

Key News• The Japanese economy entered its first recession in seven years, as growth declined for the second quarter running by a wider margin than expected, raising fears the situation could deteriorate amid the global downturn. (FT)• Mining companies -- which couldn't dig minerals out of the earth fast enough just a few months ago -- now are struggling to climb out of a very deep hole. On Friday, the world's biggest miner, BHP Billiton, said major Chinese customers are trying to delay purchases of iron ore as China's building boom slows sharply. (WSJ)• Australian retail sales rose in the third quarter by less than economists forecast. (Bloomberg)• Key Reports (WSJ):8:30a.m. Nov NY Fed Manufacturing Index: Expected: -27. Previous: -24.6. 9:15a.m. Sep Industrial Production: Expected: +0.4%. Previous: -2.8%. 9:15a.m. Sep Capacity Utilization: Expected: 76.7. Previous: 76.4.

Quotable “It is fascinating to watch politicians come up with

Key News• Europe Falls Into First Recession in 15 Years as Financial Crisis Deepens (Bloomberg)• G-20 Leaders May Agree on Stimulus, Little Else as Bush Prepares His Exit (Bloomberg)

Key Reports Due (WSJ): 8:30a.m. Oct Import Prices: Expected: -4.0%. Previous: -3.0%. 8:30a.m. Oct Retail Sales: Expected: -2.4%. Previous: -1.2%. 8:30a.m. Oct Retail Sales, Ex-Autos: Expected: -1.6%. Previous: -0.6%. 10:00a.m. Sep Business Inventories: Expected: -0.1%. Previous: +0.3%. 10:00a.m. Mid-Nov Reut/U Mich Sentiment Index: Expected: 55. Previous: 57.5. 10:35a.m. Nov 7 Natural Gas Inventories (in billion cubic feet)

Quotable “Progress is precisely that which rules and regulation did not foresee.”

  Ludwig von Mises

FX Trading – Our Euro Comments: A Nasty Head-Fake 

On Tuesday, in Currency Currents, I got into some Elliot Wave Principle in order to discuss why the US dollar correction might have been over, opening the door for sharp appreciation.

Until yesterday afternoon my forecast

…

Key News• A number of deals designed to cure the global financial crisis were in danger of unraveling on Wednesday, with losses mounting at banks and economies showing further signs of serious deterioration. (Reuters)• The World Bank is set to provide up to $100bn in new aid to developing countries. (FT)• Key Reports (WSJ):No economic events are scheduled for today.

Quotable “A monster horrendous, hideous and vast, deprived of sight.”

  Virgil

FX Trading – von Mises doesn’t think much of ZIRP!

Commenting on Bank of England Governor Kings recent utterances, Bloomberg shared this story today:

Nov. 12 (Bloomberg) ``We are certainly prepared to cut bank rate if that proves to be necessary'' to hit the central bank's 2 percent inflation target, said King at a press conference in London. He indicated the central bank would be prepared to push its benchmark to zero if necessary.

Inflation will fall ``well below'' the

Key News• Bad Crop: Commodity Currencies   Currencies of commodity exporters such as Canada and Australia could suffer further as global growth weakens. (WSJ)• Home Inventories Remain Huge (WSJ)• Strains Mount on Bailout Plans  The U.S.'s financial-system rescue plans are coming under strain as an array of distressed companies ratchet up their requests for assistance. (WSJ)

Quotable “The harder you work, the luckier you get.”

  Attributed to Gary Player (among others)

FX Trading – Defining the Correction, and Finding Its End!

Jack’s been running around speaking at various currency tours and seminars this year. And there’s one line he likes to use when conveying the uncertainty of trading in any market ...

“It’s better to be lucky than good.”

In other words, when we’re trading our money and effectively have our clients’ money on the line, we’ll take lucky any day if it means we, and our members, are making money. Being ‘good’ doesn’t always

Key News• Stocks rose in Europe and Asia and U.S. index futures climbed after China unveiled a $586 billion plan to stimulate the economy and world leaders urged more cuts in interest rates. (Bloomberg)Key Reports Due (WSJ):No economic events are scheduled for today.

Quotable “That the sun will not rise to-morrow is no less intelligible a proposition, and implies no more contradiction, than the affirmation, that it will rise.”

David Hume

FX Trading – China to the rescue—maybe!  And ChartViewChina’s new fiscal stimulus package is receiving rave reviews across the board this morning.  Bond prices lower, stocks higher, oil higher, gold higher and the dollar getting whacked—it’s déjà vu all over again for the risk appetite crowd.

Should we rejoice and jump back in to everything once bubble-icious?  Or does China’s action represent a sign of real fear and desperation as it watches its export demand crumble

Key News• Bank of England Cuts Interest Rate by 1.5 Points to Lowest Level Since '55 (Bloomberg)• The European Central Bank cut its main lending rate by 50 basis points. (Bloomberg)

Quotable “Doubt is not a pleasant condition but certainty is an absurd one.”

  Voltaire

FX Trading – Central Banks in Europe Exciting This Market

Today is interest rate day! That is, the Bank of England and the European Central Bank culminate their most recent monetary policy discussions and announce changes to their benchmark interest rates.

The BOE actually just decided to cut rates a full percentage point, i.e. 150 basis points. This was a surprise. The ECB cut 50 basis points and did not surprise. But this still goes very much to the point that things are getting awfully rotten in the UK and European economies.

I started writing today’s Currency Currents before either bank had made their announcement, and here’s what I