If you are a Forex Trader you need to trend follow -there are however different time frames you can trend follow in and here we will look at the three most popular.

We will look at the merits of each, your chances of success and the best method for your personality, so let’s get started.

Day Trading

Fact: The data within a day will not allow you to get the odds in your favor as the time period is to short – you may as well flip a coin.

Support and resistance levels are simply not valid and volatility can and does, take prices anywhere. In

short, all these short term moves are random and that’s why day’s traders lose.

Think about it:

There are millions of traders, trading several trillions dollars daily and what they do cannot be predicted in a period of hours.

Many vendors appeal to the greed of buyers - they make money from selling their forex trading system and the trader loses in the market.

You will see lots of claims and even a track record but that’s done in hindsight knowing the closing prices!

They never have a real time track record of forex day trading success and you should avoid Forex day trading at all costs.

Swing Trading

The aim here is to catch reactions within major trends which normally last around a week and it’s a great way of trading especially for novice traders.

Swing trading forex trends is exciting, there are plenty of opportunities and you know if you are right or wrong quickly – this makes it easy psychologically.

The key to successful swing trading is always to CONFIRM With momentum indicators - before executing a trade.

Do NOT simply buy into support or sell into resistance see the change come first before you enter the market – do this correctly and it can be very lucrative.

Long Term Trend Following

The most profitable form of trading and also the hardest to master not from the point of view of method - but from the point of view of adopting the right mindset.

If you look at Forex charts you will see Forex that last for months or even years yet, only a small minority of traders have the mental discipline to hold these trends and realize their full profit potential.

Forex trend following requires patience and discipline and it’s hard to acquire as most traders are simply not mentally strong enough to accept big gains.

Of course all traders want big gains but accepting them is the hardest bit.
Let’s look at why this is in more detail.

If money is important to you, then your emotions will be present and they will hinder you in your quest to hold these trends.

When counter trend moves come (which they always do) they will eat into your open equity and the losses in open equity can frighten you to take profits early.

Most traders get excited and nervous when they get a profit and the bigger the profit gets the more tempted they are to bank it before it gets away.

They end up banking early and getting a mediocre or small profit when they could have had a large one.
You need to keep your eyes on the longer term profit you are going to bank and accept that you will have to see dips in equity (sometimes of thousands of dollars in the short term) and simply ride them out.

So which method is best for you?

Well we have already said forex day trading will simply see you lose so that’s out so the choice is swing trading or long term trend following.

You can mix both or if you feel you have the right mindset focus on long term trend following and if you don’t feel you can face the large dips in open equity go for swing trading which is the perfect place for novices to get their feet wet.

If you do both correctly you could make some huge forex profits and enjoy currency trading success – Good luck!

This free Currency Trading article is brought to you by http://www.articlevista.com

These tips don’t take long to do and can be implemented in any forex trading strategy and they will cut risk and increase profits so lets look at these 3 simple forex tips in more detail.

Tip 1 Cut Your Trading Frequency

Most traders simply trade too much - they think the more they trade the more chance they will have of making money. Others think if there not in the market they may miss a move and finally, they try trading intra-day which is simply never gong to work.

In forex trading you don’t get rewarded for how often you trade - you earn your money for being RIGHT – That’s the only criteria to judge your trading performance on and most traders forget this

Consider this:

Trading is a game of odds and the really good risk/reward trades simply don’t come around that often and in forex trading you should only concentrate on them.

To give you an example of how powerful cutting your trading can - I know several traders who trade only a few times a year and clear 100 – 200% in profits!
If you cut your trading frequency down, you can then add in the next tip to make huge gains.

Tip 2 Risk More

You will hear a lot of Forex traders tell you that you should risk no more than 2% per trade – RUBBISH!
If you are trading a small account you will never make any money doing this.

Let’s say you are trading $10,000 - 2% is just $200!

Well, if you consider risk goes with reward, you are not likely to make much risking that. Don’t forget the fact you risk 2% on low odds trades, give you less chance of success than if you risk 20% on a good high odds trade.

Many people think their taking low risks - but in reality they are setting themselves up to lose longer term.
Risk is related to the odds not how much you risk.

Keep in mind you are taking a calculated risk at the right time and risking more, is simply the only way you will win big. So how much should you risk of your account size? As rule of thumb do 10 – 20% of your total account.

Tip 3 One At a Time

Diversification is another buzz word that is supposed to restrict risk - but if you spread your trades around, you simply dilute your profit potential. Don’t fall into this trap.

Pick the best trade you have and load it up with as much as you can afford and hit it hard.

BUT
You are probably thinking that the above is not commonly accepted wisdom and that’s correct – but keep in mind the majority make no real money, so being in the minority is no bad thing here!

Today, there are many who will tell you that you can trade forex with low risk – no you can’t. If you restrict risk to much you have no chance of winning. It’s an investment fact:

The bigger the risk the bigger the reward.

If you learn to take calculated risks when the odds are in your favor you can pile up huge gains longer term and that’s what most people want from forex trading.
Finally, the above is very time effective: You are trading only great high odds trades so you are not trading everyday or monitoring levels constantly 15 – 30 minutes are all you need to build huge profits!

This free Currency Trading article is brought to you by http://www.articlevista.com

If you are new to Forex trading if you don’t understand the simple equation we will outline in this article you will join the 95% of traders who lose. The equation is simple but its implications for your currency trading success are huge.

Here is the equation and below are some points you need to take into account when implementing your forex trading strategy.

The equation is

Fundamentals ( immediately discounted) + Investor Perception ( logic greed and fear) = Price Movement

Simple?

Yes - but these are the critical points you need to understand in relation to the above:

1. Trading News Will Not Help You

We live in a world of instant communications and the fundamentals are immediately discounted by the market so you cannot trade them for profit.

2. Prices Do Not Move Logically

If they did we would all make money prices move away from the fundamentals and the price direction can be the exact opposite of what logic tells you. Why?

Because traders all have the same facts to look at but draw their own conclusions about what they mean and when greed and fear come into play prices move in mysterious ways.

3. Markets Do Not Move Scientifically

Ever read about being able to predict markets in advance? You cant! You cannot predict what a broad mass of emotion will do to the markets in advance – trading is a game of odds not science.

If markets were scientific, we would all know the price in advance and there would be no market!

The above points are true, yet most traders simply do not take them into account when developing a forex trading strategy - but unless you understand the above you will never win.

So How Do You Win?

The best way is to let the market tell you which way prices are going - this means simply following price action and using forex charts.

Forex charts take into account the fundamentals (they simply assume they are discounted instantly) but they do something more:

They give you the big picture i.e how the investors perceive them.

While human nature cannot be reduced to science, human nature is constant and price spikes away from the long term fundamentals NEVER last long and these are easy to spot and trade for profit.

Forex technical analysis simply postulates that you should act on the reality of price and the price is right - no matter what you or I think.

By trading the price as it is, you are trading the truth without imposing your opinion.

Most traders try and impose their opinions or try and predict in advance where prices may go - but this is doomed to failure and that’s why 95% of forex traders lose.

TRADE THE ODDS!

There are no certainties when you trade only probabilities and it is these you need to look at and trade when the odds are in your favour – you won’t win every trade just as a successful poker or blackjack player doesn’t win every hand - but by trading the odds, you will win more than you lose over time enjoy currency trading success.

Today, many traders buy rubbish courses and e-books that tell them they can win consistently, because markets move to a set pattern, so they can predict in advance what will happen – they don’t work.

If you want to win, you need to forget the idea that trading is easy, its not - that’s why the rewards are so high.

However, forex trading can be learned by anyone with the desire to get the right forex education and learn to trade the odds.

Currency trading success involves looking at price and calculating the odds of success and you can do this via forex charts - over time if you can spot and trade the high odds set ups and make a lot of money – it really is that simple.

This free Currency Trading article is brought to you by http://www.articlevista.com

Anything that comes free is good. This is common perception of people in the world. Same can be said about Forex Demo account. You get the taste of market without investing your own money. However there is always criticism related to demo account. I still do not understand that why there is criticism when it is free and that's the why it should be taken. Obviously demo's are always much better than the original as the seller wants to convert the prospective buyer into a buyer. If demo's are not good than how can you close the deal.

Let me explain what is Forex Demo account for those who are unaware of the concept. Demo account also known as free practice account lets you practice forex trading for free. So you can actually buy in real market at current cost. Everything is live except your money. Isn't it great for the new investor. This is great for new trader to begin forex trading.

What is the basic interest of broker to give you practice account. In this market where risk is high people want to be sure that they are not going to burn their fingers, and trust anyone who start without proper research and knowledge is going to fail in this market. That's the reason why a broker offer you Free Forex Demo account so that you can judge our decision and make money while using real account.

Forex is game of mind if you think wisely and have patience then you can make money. You may not gain every time but wining ratio should be high. Remember when trading with virtual money risk is non existence but when trade with original cash you can lose it. If you make profit in demo account do not jump to conclusion immediately try as many trades you can. There is always a possibility that you must have made good money with demo account and you lose money on first trade of your real account. Simple always keep a target how much can you afford to loose do not go beyond that. You mave suffer loss on first trade but there are possibilities that you may earn later as you experience the market.

After hitting a new record high at 1.4120 versus the dollar, the euro edged lower versus the dollar on weaker-than-expected manufacturing and services PMI reports from the euro zone. The Euro zone services PMI fell from 58 to 54 in September, below the estimate of 57.5. The manufacturing PMI dropped from 54.3 to 53.2, weaker than the expectation of 53.9. Euro zone current account balance shrank from 11.4 billion euros to 3.3 billion euros in July. The main reason behind the weak figures is the recent global financial market turbulence beginning from August. The dollar remains under pressure after the Fed cut half a percentage-point this Tuesday. Fed Chairman Ben Bernanke yesterday said credit market turmoil may make the housing recession more severe, adding to the worries over the nation’s economy. Interest-rate futures indicated traders bet a 70 percent chance of a quarter-percentage point cut to 4.50% at the Fed’s policy meeting on October 31.

Pound was under tremendous pressure as the news outburst that mortgage lender Northern Rock has had to seek emergency funding from the Bank of England. Even Us market have reacted to retail sales report. The pound fell to new nine month lows against the euro after the Northern Rock news highlighted the ongoing crisis in UK money markets. The 'The pound has come under added pressure in overnight trade after news that Northern Rock had sought help from the Bank of England to help it cope with the ongoing credit squeeze,' said James Hughes, market analyst at CMC Markets.
Analysts noted, however, that sterling's losses have not reached panic levels.
'The reaction does however seem to be something of a knee-jerk one as these emergency credit lines have been tapped by other institutions in recent weeks anyway and cable at least has levelled off for the time being,' Hughes said.
Neil Mellor at the Bank of New York (nyse: BK - news - people ) Mellon said the market's focus will not be on concerns over the potential fate of Northern Rock, but on whether the credit crisis is set to deepen further for already troubled UK financial companies.
'Whether the news of Northern Rock's woes constitutes a final exclamation mark in the whole credit debacle or is the beginning of a more serious phase of problems for the sector is ... a question that we imagine will be most troubling investors as stock trading in the UK gets underway this morning,' he said.
Elsewhere, the euro was pressured by sterling's losses against the dollar but still held up well, remaining just below the 1.39 usd mark after hitting a record high yesterday of 1.3927 usd.
Focus today will centre on the release of key US retail sales data, which should give some indication of the depth of the slowdown in the US after the very poor jobs data earlier this month.
Beyond that, however, trade is likely to remain volatile as speculation continues to grow as to whether the Federal Reserve will step in next week and cut interest rates, CMC's Hughes said.
Elsewhere, the yen recovered somewhat from earlier falls on the back of ongoing political uncertainty following the resignation of Japanese Prime Minister Shinzo Abe on Wednesday and amid talk that the Bank of Japan will not raise interest rates again any time soon.

Stocks advanced Thursday, led by strong gains among the blue chips, after fewer-than-expected workers sought unemployment benefits last week and on word of progress in talks between automakers and workers over health care costs.
The Dow Jones industrial average rose more than 100 points on strong advances by General Motors Corp. and McDonald's Corp. Technology stocks and small-capitalization issues lagged, however, while bond prices fell.
The Labor Department reported claims for unemployment benefits rose by 4,000 last week to 319,000 -- the sixth increase in seven weeks -- but the number was less than the 325,000 claims analysts expected. Low unemployment, at 4.6 percent, has been one of the economy's strengths.
Shares of GM jumped sharply after The Wall Street Journal reported that UAW President Ron Gettelfinger has said he might agree to establishing a trust fund for employee health care costs that would be run by the union. Ford Motor Co. rose as well.
"Whereas U.S. growth may be dented and it may skate near or into a recession it's not going to have a major impact on world growth," said John Merrill, chief investment officer of Tanglewood Capital Management in Houston. He said investors are gravitating toward larger-capitalization stocks because of stock-specific news from GM and McDonald's, but also because of the health of overseas economies where big companies do much of their business.
"If McDonald's was just a U.S. company it would not look as healthy as it does today," he said.
In late morning trading, the Dow rose 144.45, or 1.09 percent, to 13,436.10.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 14.48, or 0.98 percent, to 1,486.04, and the Nasdaq composite index rose 13.08, or 0.50 percent, to 2,605.15.
Government bond prices fell. The yield on the 10-year Treasury note, which moves opposite its price, rose to 4.46 percent from 4.41 percent late Wednesday.
In the commodities market, crude oil prices backed off the all-time high of more than $80 a barrel marked on Wednesday. Light, sweet crude fell 66 cents to $79.25 on the New York Mercantile Exchange.
Gold prices fell as the U.S. dollar bounced off an all-time low against the euro on Thursday. The 13-nation currency fetched $1.388 amid expectations for a U.S. interest rate cut.
The rise in jobless claims follows last week's reading on August payrolls, which declined for the first time in four years and sent stocks plummeting amid worries that credit tightness and market turmoil had hit the labor market. But Thursday's report was temperate enough to assuage investors.
On Wednesday, investors had refrained from major moves ahead of Tuesday's meeting of the Federal Reserve; Wall Street has grown more confident the Fed will cut its benchmark federal funds rate by a quarter percentage point.
The Fed on Thursday also continued its campaign of trying to ensure adequate liquidity enters the banking system. The New York Fed, which carries out the central bank's market operation, on Thursday injected $21 billion in three repurchase agreements. On Wednesday the Fed added $13.5 billion. The central bank has added money to the banking system in recent months and has lowered its discount rate -- the charge on its loans to commercial banks -- as it has sought to alleviate pressures in the credit market.
In corporate news, investors also applauded apparent progress in Detroit over health care costs for autoworkers. GM rose $1.85, or 6.2 percent, to $32.10, while Ford rose 24 cents, or 3.3 percent, to $7.74.
McDonald's advanced $3.20, or 6.3 percent, to $54.40 after increasing its dividend 50 percent a day after reporting stronger-than-expected sales for August.
Target Corp. rose $1.56, or 2.5 percent, to $64.28 after announcing plans to review whether it should retain its $7 billion in credit card receivables.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 400.1 million shares.
The Russell 2000 index of smaller companies rose 2.73, or 0.35 percent, 780.63. Wall Street, still concerned about the effects of an economic slowdown, gravitated toward larger capitalization stocks amid the news from GM and McDonald's but also perhaps because investors often regard big companies as better able to withstand an economic slowdown. Investors cite overseas sales and the ability to get by on thinner profit margins.
European equity markets advanced, recovering from earlier declines. Britain's FTSE 100 added 0.66 percent, Germany's DAX index rose 0.51 percent and France's CAC-40 rose 1.13 percent.
In Asia, Japan's Nikkei stock average ended modestly higher, up 0.15 percent, while Hong Kong's Hang Seng Index rose 0.93 percent.

There was nothing for the traders today from bernanke, no clues for interest rate cut. Market are discounting that there will be a interest rate cut. Bernanke said Countries Must Work Together to Fix Skewed Trade and Investment Patterns. The United States and other countries must work together to right a skewed pattern of trade and investment around the globe, a move that would help worldwide economic stability, Federal Reserve Chairman Ben Bernanke suggested Tuesday.So-called "global imbalances" occur when countries such as the U.S. run up bloated trade deficits, while other countries, such as China and oil-producing nations, produce big trade surpluses. The International Monetary Fund has been leading efforts over the years to reduce lopsided trade and investment patterns.
As for prospects of fixing the problem, Bernanke said, "Signs of progress have appeared but ... most countries have only just begun to undertake the policy changes that will ultimately be needed." He spoke at a conference in Berlin. Copies of his remarks were made available in Washington.
Bernanke's scholarly speech did not address the future course of interest rates in the United States nor the state of the U.S. economy.
Economists increasingly believe the Fed at meeting next Tuesday will slice a key interest rate, now at 5.25 percent, by at least one-quarter percentage point to help protect the economy from the ill effects of a deepening housing slump and a painful credit crunch.
Worldwide long-term interest rates, which had been low for a long period, have gone up recently "in part because of the greater recent volatility in financial markets and investors' demands for increased compensation for risk-taking," Bernanke observed.
Those once unusually low long-term rates in the United States and other countries have puzzled policymakers. Former Fed Chairman Alan Greenspan -- Bernanke's predecessor -- once called the behavior of these low long-term rates a "conundrum." Bernanke once again said a number of factors probably influenced these low rate, including the desire of many countries to save a lot.
So far this year, the U.S. trade deficit is running at an annual rate of $711 billion, down from $758.5 billion in 2006. Last's year trade deficit marked the fifth year in a row where the trade deficit hit an all-time high.
Economists believe the trade balance will finally shrink this year as U.S. exporters benefit from strong economic growth in many countries overseas and a weaker dollar against many currencies. That makes U.S. products cheaper on foreign markets and imports more expensive for American consumers.
The United States larger current account deficit, which includes not only monthly trade figures but also investment flows, would be helped if the country boosts savings and continues to trim its federal budget deficit, Bernanke said.
China, meanwhile, has recognized the need to increase its domestic spending and scale back its reliance on exports, Bernanke said. Those and other measures will help global trade imbalances over time, he added.
The United States' politically sensitive trade deficit with China last year climbed to $233 billion, the highest ever recorded with a single country. As trade tensions with China have intensified, critics in Congress have championed legislation to punish China for what they believe are unfair trade practices by the country.
The Bush administration has been prodding China to let its currency appreciate further in value, a development that would make Chinese-made goods more expensive in the United States and U.S.-made goods less expensive in China.
Some lawmakers, meanwhile, have wondered whether foreigners' massive appetite to invest in U.S. stocks, bonds, Treasury securities and other U.S. financial assets is healthy.
"As best we can tell, the share of U.S. assets in foreign portfolios does not seem excessive relative to the importance of the United States in the global economy," Bernanke said

Mixed Economic Data Makes Likelihood of Fed Rate Cut Less Clear.
NEW YORK (AP) -- The arrival of September was supposed to bring more clarity to the economic impact of the current credit crisis. Instead, each new bit of data coming out seems to be creating more confusion.The first labor market contraction in four years, as revealed Friday in a weaker-than-expected jobs report, shows that the housing and mortgage collapse is putting some strain on the economy. And the continued dislocation in commercial paper markets, where companies raise cash to fund their operations, should be taken as a warning sign -- in flashing red -- that more bad news may be coming.

Yet plenty of good economic news still stands out. Strong August sales results from retailers and manufacturers suggest the painful credit crunch's effect on the broader U.S. economy has been limited so far.

Anyone hoping that Federal Reserve policymakers will reduce the overnight bank borrowing rate when they meet on Sept. 18, should not ignore the positive signs the economy is giving.

Given what we know now, a Fed rate cut is no sure bet; Fed Chairman Ben Bernanke has said he would only lower short-term interest rates if the economy needed a stimulus.

He's not in the rate-cutting business to save financial markets from turmoil, like the volatility we've seen in the last month amid increasing evidence of tightening credit conditions. That knocked stocks down from record highs in a punishing decline.

He also won't use lower rates to bail out hedge funds or mortgage lenders who find themselves facing tough times as credit conditions tightened in recent months.

Plenty of CEOs from companies most troubled by the credit and housing mess -- including the top brass at Countrywide Financial Corp. and Hovnanian Enterprises Inc. -- have done their best in recent weeks to paint as grim a picture as possible about the overall economy. They keep saying a recession will come if the Fed doesn't act.

But Bernanke and his team of central bankers can't rely on such self-interested views to direct monetary policy. They'll be spending the next week or so mulling over as much current data as they can to help them determine how the Fed should proceed.

Right now, the key overnight lending rate, known as the federal funds rate, stands at 5.25 percent. It has been there since last summer after 17 quarter-point rate increases from 2004 to 2006 to keep inflation in check as the economy expanded rapidly.

Financial markets have been rooting for a rate cut soon -- some investors even hope that the Fed knocks off as much as half a percentage point -- to help ease credit conditions. Lower rates would reduce borrowing costs for everyone from potential homeowners to companies looking to finance activities and purchases.

But the Fed won't make a move unless it feels it must. Current data won't make its decision any easier.

The Fed's Beige Book, which describes anecdotal economic conditions in regions around the country, showed that "weakness in the housing market deepened." And four of the 12 districts -- Philadelphia, Richmond, Dallas and San Francisco -- reported that the pace of economic expansion had slowed.

But the report, released on Wednesday, also noted that there has been little spillover from the financial market volatility into the overall economy. The report's first sentence said that the economy "continued to expand."

"It certainly does not rise to the sort of anecdotal deterioration that would require an immediate monetary policy response," noted Goldman Sachs' economics team in a report to clients.

Consumers, in the meantime, seem undeterred by the financial turmoil, given that the latest retail sales figures shows that they went on a back-to-school buying spree last month. Another new report, from the Institute for Supply Management, showed that the credit markets' troubles did little in August to thwart modest expansion in the manufacturing sector.

At the same time, however, other data points released in recent days are more suggestive of deceleration, said Goldman Sachs.

The National Association of Realtors reported Wednesday that its pending home sales index tumbled 12.2 percent in July, the biggest drop on record. And that was even before the credit market tightening seen last month, which Goldman's economists say makes the July decline more significant because it will likely mean an even larger drop will come when the August numbers are reported.

The labor market also appears to be weakening. Employers sliced payrolls by 4,000 jobs in August, the first decline since 2003. That data from the Labor Department on Friday was far worse than economists' estimates of payrolls growing by 110,000 last month.

Such indicators, and others the general public doesn't get to see, are at least out there for the Fed to digest. The potentially big losses in the mortgage securities markets that have yet to be revealed could be more worrisome. They could trigger a broader financial crisis that delivers a more potent shock to the economy.

With hedge funds and mortgage lenders rooting for a rate cut, it's difficult for many investors to see the positive side to the economy. If the Fed's central bankers don't ease rates, their view likely is that the economy seems to be holding up.

Rachel Beck is the national business columnist for The Associated Press. Write to her at rbeck(at)ap.org

LONDON (Thomson Financial) - The pound softened somewhat against other major currencies after the Bank of England announced that it has left interest rates unchanged at 5.75 pct, as expected.

The BoE published a statement, something it does not normally do when it leaves rates unchanged, saying that it was 'too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households'.

It also said that indicators of pricing pressure remain somewhat elevated, although there are tentative signs of a slowdown in consumer spending.

The pound eased to about 2.020 usd from 2.022 usd previously. It lost some ground to the euro, as well, which rose to 0.6760 stg from 0.6750 stg.

Stocks closed off their lows Thursday but still finished with widespread losses. Renewed worries about credit markets and data that failed to fuel rate cut hopes left the major indices looking overbought on a short-term basis, especially after averaging gains of more than 4.0% over the prior four sessions.

Weakness began overseas after a senior Japanese government official reignited worries that losses from U.S. subprime mortgages will spread. That sparked further unwinding in the yen carry trade and contributed to a 1.6% decline on Japan's Nikkei 225.

The major European bourses plunged 1.8% on average as the London interbank offered rate (Libor) climbed for a 10th straight session to 5.72%. That's the highest since the aftermath of the 9/11 terrorist attacks and now stands 47 basis points above the Fed Funds target, more than double the 21 basis-point average over the last five years and lending further evidence of the contagion effect from the U.S. subprime fallout that prompted Lehman to downgrade two European banks (e.g. CS -1.8%, DB -2.1%).

The Wall Street Journal reporting that Citigroup (C 45.99 -1.22) may be vulnerable to SIV losses, since it owns about 25% of the market, also left valuations of financial stocks susceptible to further interpretation. A 2.6% decline in the Dow component, which also ranks among the five most influential names on the S&P 500, is partly why the broader market turned in the worst performance among the majors. The heavily weighted Financial sector tumbled 1.3% right out of the gate, which removed a significant source of market support, and closed down 2.1% to pace all 10 sectors finishing lower.

Not even Technology (-0.9%) was able to shrug off

Now only thing people have on their mind is will this fall effect Forex Market i.e currency

People were concern that Stock market is going down on Subprime mortgage concern . So Bernanke decided to comment on the subprime mortgage. His comment led the stock Market higher and there was reaction in forex market as well Yen gain against dollar where as Euro and Pound fall. Bernanke offered relief to market by assuring that proper steps will taken to avoid in crisis in financial market. People who were thinking of increasing their cash position will be force to take position again. Speaking at the annual monetary policy symposium in Jackson Hole, Wyoming, Bernanke said financial markets can have economic effects 'felt by many outside the markets'. The Fed will 'act as needed to limit the adverse effects on the broader economy' that may arise from the recent turmoil on financial markets. Although there was sufficient evidence that the fed will support the market but also he made it clear that it is 'not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions. Euro was trading at 1.3637 usd down from 1.3666 at 3.17 pm BST.
while the pound fell to 2.0118 usd from 2.0163 previously.
Against the yen meanwhile, the dollar fell to 116.11 from 116.30.

Thomson IFR Markets analyst Rhonda Staskow said the remarks have two aspects to them - on the one hand it is positive for markets that the Fed is ready to provide more liquidity as necessary. However, the comment that it is not the Fed's jobs to protect lenders and investors will 'dampen the hope of those looking for the Fed to bail them out'.

'This has fuelled expectations that the impact of the credit crunch and housing crisis will continue in weeks to come,' she said.

Why do hundreds of thousands online traders and investors trade the forex market every day, and how do they make money doing it?
This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making more money in your forex trading.
Trade pairs, not currencies - Like any relationship, you have to know both sides. Success or failure in forex trading depends upon being right about both currencies and how they impact one another, not just one.
Knowledge is Power - When starting out trading forex online, it is essential that you understand the basics of this market if you want to make the most of your investments.
The main forex influencer is global news and events. For example, say an ECB statement is released on European interest rates which typically will cause a flurry of activity. Most newcomers react violently to news like this and close their positions and subsequently miss out on some of the best trading opportunities by waiting until the market calms down. The potential in the forex market is in the volatility, not in its tranquility.
Unambitious trading - Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any profit and this is much more difficult when you make small trades than when you make larger ones.
Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight stop losses with a retail forex broker is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don't place reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade.
Independence - If you are new to forex, you will either decide to trade your own money or to have a broker trade it for you. So far, so good. But your risk of losing increases exponentially if you either of these two things:
Interfere with what your broker is doing on your behalf (as his strategy might require a long gestation period);
Seek advice from too many sources - multiple input will only result in multiple losses. Take a position, ride with it and then analyse the outcome - by yourself, for yourself.
Tiny margins - Margin trading is one of the biggest advantages in trading forex as it allows you to trade amounts far larger than the total of your deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase your leverage in line with your experience and success.
No strategy - The aim of making money is not a trading strategy. A strategy is your map for how you plan to make money. Your strategy details the approach you are going to take, which currencies you are going to trade and how you will manage your risk. Without a strategy, you may become one of the 90% of new traders that lose their money.
Trading Off-Peak Hours - Professional FX traders, option traders, and hedge funds posses a huge advantage over small retail traders during off-peak hours (between 2200 CET and 1000 CET) as they can hedge their positions and move them around when there is far small trade volume is going through (meaning their risk is smaller). The best advice for trading during off peak hours is simple - don't.
The only way is up/down - When the market is on its way up, the market is on its way up. When the market is going down, the market is going down. That's it. There are many systems which analyse past trends, but none that can accurately predict the future. But if you acknowledge to yourself that all that is happening at any time is that the market is simply moving, you'll be amazed at how hard it is to blame anyone else.
Trade on the news - Most of the really big market moves occur around news time. Trading volume is high and the moves are significant; this means there is no better time to trade than when news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow.
Exiting Trades - If you place a trade and it's not working out for you, get out. Don't compound your mistake by staying in and hoping for a reversal. If you're in a winning trade, don't talk yourself out of the position because you're bored or want to relieve stress; stress is a natural part of trading; get used to it.
Don't trade too short-term - If you are aiming to make less than 20 points profit, don't undertake the trade. The spread you are trading on will make the odds against you far too high.
Don't be smart - The most successful traders I know keep their trading simple. They don't analyse all day or research historical trends and track web logs and their results are excellent.
Tops and Bottoms - There are no real "bargains" in trading foreign exchange. Trade in the direction the price is going in and you're results will be almost guaranteed to improve.
Ignoring the technicals- Understanding whether the market is over-extended long or short is a key indicator of price action. Spikes occur in the market when it is moving all one way.
Emotional Trading - Without that all-important strategy, you're trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When most of us are upset and emotional, we don't tend to make the wisest decisions. Don't let your emotions sway you.
Confidence - Confidence comes from successful trading. If you lose money early in your trading career it's very difficult to regain it; the trick is not to go off half-cocked; learn the business before you trade. Remember, knowledge is power.
The second and final part of this report clearly and simply details more essential tips on how to avoid the pitfalls and start making more money in your forex trading.
Take it like a man - If you decide to ride a loss, you are simply displaying stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Sticking to a bad position ruins lots of traders - permanently. Try to remember that the market often behaves illogically, so don't get commit to any one trade; it's just a trade. One good trade will not make you a trading success; it's ongoing regular performance over months and years that makes a good trader.
Focus - Fantasising about possible profits and then "spending" them before you have realised them is no good. Focus on your current position(s) and place reasonable stop losses at the time you do the trade. Then sit back and enjoy the ride - you have no real control from now on, the market will do what it wants to do.
Don't trust demos - Demo trading often causes new traders to learn bad habits. These bad habits, which can be very dangerous in the long run, come about because you are playing with virtual money. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose.
Stick to the strategy - When you make money on a well thought-out strategic trade, don't go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.
Trade today - Most successful day traders are highly focused on what's happening in the short-term, not what may happen over the next month. If you're trading with 40 to 60-point stops focus on what's happening today as the market will probably move too quickly to consider the long-term future. However, the long-term trends are not unimportant; they will not always help you though if you're trading intraday.
The clues are in the details - The bottom line on your account balance doesn't tell the whole story. Consider individual trade details; analyse your losses and the telling losing streaks. Generally, traders that make money without suffering significant daily losses have the best chance of sustaining positive performance in the long term.
Simulated Results - Be very careful and wary about infamous "black box" systems. These so-called trading signal systems do not often explain exactly how the trade signals they generate are produced. Typically, these systems only show their track record of extraordinary results - historical results. Successfully predicting future trade scenarios is altogether more complex. The high-speed algorithmic capabilities of these systems provide significant retrospective trading systems, not ones which will help you trade effectively in the future.
Get to know one cross at a time - Each currency pair is unique, and has a unique way of moving in the marketplace. The forces which cause the pair to move up and down are individual to each cross, so study them and learn from your experience and apply your learning to one cross at a time.
Risk Reward - If you put a 20 point stop and a 50 point profit your chances of winning are probably about 1-3 against you. In fact, given the spread you're trading on, it's more likely to be 1-4. Play the odds the market gives you.
Trading for Wrong Reasons - Don't trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it's probably because you can't see the trade to make, so don't make one.
Zen Trading- Even when you have taken a position in the markets, you should try and think as you would if you hadn't taken one. This level of detachment is essential if you want to retain your clarity of mind and avoid succumbing to emotional impulses and therefore increasing the likelihood of incurring losses. To achieve this, you need to cultivate a calm and relaxed outlook. Trade in brief periods of no more than a few hours at a time and accept that once the trade has been made, it's out of your hands.
Determination - Once you have decided to place a trade, stick to it and let it run its course. This means that if your stop loss is close to being triggered, let it trigger. If you move your stop midway through a trade's life, you are more than likely to suffer worse moves against you. Your determination must be show itself when you acknowledge that you got it wrong, so get out.
Short-term Moving Average Crossovers - This is one of the most dangerous trade scenarios for non professional traders. When the short-term moving average crosses the longer-term moving average it only means that the average price in the short run is equal to the average price in the longer run. This is neither a bullish nor bearish indication, so don't fall into the trap of believing it is one.
Stochastic - Another dangerous scenario. When it first signals an exhausted condition that's when the big spike in the "exhausted" currency cross tends to occur. My advice is to buy on the first sign of an overbought cross and then sell on the first sign of an oversold one. This approach means that you'll be with the trend and have successfully identified a positive move that still has some way to go. So if percentage K and percentage D are both crossing 80, then buy! (This is the same on sell side, where you sell at 20).
One cross is all that counts - EURUSD seems to be trading higher, so you buy GBPUSD because it appears not to have moved yet. This is dangerous. Focus on one cross at a time - if EURUSD looks good to you, then just buy EURUSD.
Wrong Broker - A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker.
Too bullish - Trading statistics show that 90% of most traders will fail at some point. Being too bullish about your trading aptitude can be fatal to your long-term success. You can always learn more about trading the markets, even if you are currently successful in your trades. Stay modest, and keep your eyes open for new ideas and bad habits you might be falling in to.
Interpret forex news yourself - Learn to read the source documents of forex news and events - don't rely on the interpretations of news media or others.
John Gainesonline trading, currency trading, financial service
A veteran of online trading, John Gaines offers the financial services industry his perspectives and expertise on a variety of trading systems and financial instruments, including forex, CFDs, futures, options and stocks.
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