How To Win Short Term In Forex Trading | ForexGen

Short term Forex trading can get pretty scary sometimes and good traders are always looking for a way to reduce the risk and increase the profits.Do you have a short term Forex trading style? If so, you need to be aware every day of the data releases, prominent speakers, and other potential big market moving events in the day ahead. Do not forget that the economic data calendar for the Forex market is all encompassing. On any given day it's possible for items coming from several different countries to have an impact on price action. Consider the following example; this is an indicator that moves the market.CCI - Consumer Confidence Indexthe Conference Board; Last Tuesday of each month, 10:00am EST, covers current month's data. The CCI is a survey based on a sample of 5,000 U.S. households and is considered one of the most accurate indicators of confidence. The idea behind consumer confidence is that when the economy warrants more jobs, increased wages, and lower interest rates, it increases our confidence and spending power. The respondents answer questions about their income, the market condition as they see it, and the chances to see increase in their income. Confidence is looked at closely by the Federal Reserve when determining interest rates. It is considered to be a big market mover as private consumption is two thirds of the American economy. If you are looking for an effective Forex currency trading system, then using this report can make it even better.Obviously, long-term traders don't have to be keenly aware of the upcoming data and influential speakers. However, they should, be alert to the happenings in markets which influence Forex. Those include interest rates, commodities, and perhaps stocks at times.

Forex Currencies | ForexGen

Canadian Dollar: End of Month Trading Anomaly - Forex Trading

Did you know that the Canadian dollar has a very unique trading characteristic at the end of every month? According to our statistical analysis, we found that over the past 10 years, USD/CAD tends to fall in the last week of the month with a 95 percent confidence level. A more granular look at the data reveals that this drop is predominately concentrated around the 24th and 25th day of every month. Interested in knowing why this happens?
Settlement of Oil Futures
The trading anomaly in USD/CAD stems from the fact that Canada is one of the world's largest oil producers. Their oil reserves are also second to only Saudi Arabia. Canada is also the top exporter of oil and other petroleum products to the United States, making the US dollar-Canadian dollar exchange rate especially correlated to energy prices and related money flows.
Therefore it is not surprising that the movement of the Canadian dollar is especially sensitive to end-of-month oil contract settlement. It is fairly easy to determine when firms are required to settle outstanding oil contracts and potentially convert US dollars for loonies on a monthly basis. More specifically, it is well-known that oil futures settle in the final week of every month.
Looking at the table below, we see that a 10-year sample of data shows the biggest appreciation in the Canadian dollar against the US dollar happening in the final week of every month. In other words, on average, USDCAD falls 6 points per day in the final week - a result statistically below 0, at a 95% confidence level. Six points is hardly worth getting overly excited about since it is difficult to take advantage of such a small price move on a vague, weekly basis. However when we take a much more granular look of the USDCAD's behavior around specific days of the month, the moves becomes more substantial.

The Canadian dollar can tend to appreciate the most on the 24th and 25th day of every month, with continued gains into the early days of the month that follows. This dynamic is exactly consistent with settlement on oil futures a contract, as the “notice day” - the first day on which the purchaser may be called upon to take delivery - is typically between the 22nd and the 24th calendar day.

Namely, it seems as though the Canadian dollar moves the most following the Notice Day, while the First Delivery Day likewise causes some strong moves in following month. Given that the Notice Day occurs today, August 23rd, it is especially interesting to note that the Canadian dollar has appreciated strongly against yesterday's close.
The statistical relationship showed signs of waning through the early months of the year, but it has clearly picked up from June through August. Given such a relationship, it seems clear that the USDCAD stands to continue declines through the short-term - leaving Loonie appreciation probable in upcoming days of trade.