Seven Facts about the Khaleeji

The Khaleeji, an Arabic term that can be translated as “of the Gulf”, is the proposed common currency of the members of the Gulf Cooperation Council or GCC. Although it was officially turned down by the International Monetary Fund or IMF in 2009 and again in 2010, the moniker, along with its adoption, is slowly getting re-developed. And, as it appears, there may be hope for it once more.

Aside from the basics, here’s more information about the proposed common currency:

  1. When the name (but not the idea of a GCC common currency) was rejected by the IMF due to being a rather unfamiliar term even for some Arabs, dinar was considered a substitute; for one, dinar is a used word in the Arab world and for another, dinar is included in the Quran.
  2. There were speculations about it being a currency that was intended to be backed by gold; this is brought about by the strong opposition, headed by the Islamic economic jurisprudence, against riba (i.e. the Arabic term for interest).
  3. Chief members of the GCC stated that it was proposed to be associated to the US dollar; for a currency trader, it is an attractive investment.
  4. Among the signals that its official adoption is underway are: (1) policies in the financial sectors and government laws converged and (2) GCC member countries are gradually establishing financial independence (i.e. paying back their central bank loans).
  5. According to a May 05, 2009 agreement during a GCC consultative summit that was held at Riyadh’s Daraeya Palace, it was the responsibility of Saudi Arabia; if it were eventually circulated, a Gulf Central Bank will be stationed in the Middle Eastern country to overlook relevant concerns.
  6. Granted official adoption, it becomes the only legal tender in Bahrain, Kuwait, Qatar, and Saudi Arabia; although they are GCC members, United Arab Emirates and Oman have announced that they will not adopt the common currency.
  7. It was Nasser al-Kaud, GCC’s deputy assistant for economic affairs, who released the statement in 2010 that due to two reasons, its official adoption on the specified date will not push through; the two reasons include: (1) lack of support from member countries of the GCC and (2) financial crisis in the Middle East.

 
Content References:  https://en.wikipedia.org/wiki/Khaleeji_%28currency%29 , http://www.admiralmarkets.ae/education/knowledge-base/

7 Secrets behind Moving Average Trading

Whether you’re a novice, intermediate, or advanced trader, chances are, you’re already familiar with Moving Averages. It’s no surprise since betting your odds in the foreign exchange market with them is rather effortless; using them reveals versatility and freedom from a series of challenging computations. With them, the first step is to keep your knowledge on technical analysis (i.e. be ready to read charts like a pro) handy.

# 1 – Moving Averages have a variety of flavors. The list includes: (1) Exponential Moving Averages, or averages of the previous prices in relation to the current prices, (2) Simple Moving Averages, or averages of the previous prices, and (3) Weighted Moving Averages, or averages of the previous prices in relation to linear weighting.

# 2 – Moving Averages are responsive. In the event of an immediate change in market trends, they tend to be influenced easily. They’re extra-sensitive and have a history of signaling premature entry or exit in a trade.

# 3 – Moving Averages are known to smooth market trends. For correct assessment, paying attention to their direction is the key. If they point upward, they’re indicating a bullish trend. Conversely, if they point downward, a bearish trend is incoming.

# 4 – Moving Averages indicate price exhaustion and market strength. If there’s a change in price on one side, steep lines are produced. Therefore, if they’re moving in a flat line, it’s a sign of a dormant market.

# 5 – Moving Averages serve as support and resistance levels. If a price bar is spotted, it’s useful to observe their interaction with the current prices. In the event that movement is rapid, it’s unlikely to identify support and resistance levels. Conversely, if it’s quite slow, it’s a sign that support and resistance levels will soon be identified.

# 6 – Moving Averages can lag; a mistake of beginner forex traders is the assumption of their stability. Since they are lagging indicators, it’s common for them to show a reaction once the prices have moved. Therefore, it’s recommended that they’re used with price action indicators.

# 7 – Moving Averages are known to maintain a familiar distance between prices. Typically, this is seen in three instances: (1) a fair distance is maintained below in a healthy bearish market, and above in a healthy bullish market, (2) a short gap is maintained in sideways markets, and (3) a grand distance is maintained in over-extended trends.

 

Content references: https://en.wikipedia.org/wiki/Moving_average , http://www.mtrading.in/education/knowledge-base/

The Eco Currency: Facts about the Proposed West African Currency

 

West Africa’s Eco is the name that WAMZ, or West African Monetary Zone has proposed to ECOWAS, or Economic Community of West African States for a common national currency. It was intended to be merged with the CFA Franc (i.e. a currency used by French-speaking member nations) eventually, but the plan has yet to be finalized. Since the currency’s development is rather interesting, you may want to learn trivial and even rare information about it; for a currency trader, especially, the facts may come in handy.

Six facts:

  1. It is regulated by WAMI, or the West African Monetary Institute – a group that was set up solely for the establishment of a West African currency.
  2. Its conception was first discussed by the Multi-lateral Surveillance Commission of ECOWAS under the authority of Lasssane Kabore; since the department head expressed dismay over the average inflation rates of all African currencies as a whole, he, along with his committee, made it a goal to establish a common currency.
  3. The plan was to introduce it in 2003, but for a number of times, its official distribution was postponed; international financial markets were supposed to be informed about its existence in 2005, 2009, 2010, and 2014.
  4. For its successful implementation, completion of the FPCC (or the Four Primary Convergence Criteria) needs to be achieved. The list includes: (1) maximum 10% deficit-financing from the central bank, (2) three months’ cover of GER, or Gross External Reserves, (3) low inflation rate at the year’s end, and (4) maximum 4% fiscal-deficit of the GDP, or Gross Domestic Product.
  5. As supplement for its successful implementation, completion of the SSCC (or the Six Secondary Convergence Criteria) needs to be achieved. The list includes: (1) stability of the real exchange rate, (2) positivity of the real exchange rate, (3) liquidation of existing domestic default payments or prohibition of incoming ones, (4) maximum ratio of 35% for wages to taxes, (5) minimum ratio of 20% for public investments to taxes, and (6) minimum ratio of 20% for taxes to the GND.
  6. A reason why its establishment has yet to be approved is that support from the majority of the fifteen member nations of ECOWAS wasn’t received. The list of member nations includes: Ghana, Guinea, Liberia, Mali, Nigeria, and Senegal.

 

 

References:   https://en.wikipedia.org/wiki/West_African_CFA_franc  , http://www.mtrading.ph/education/

The Forex Beginner Survival Kit: Know What to Do as a Rookie

You read success stories about forex trading, and you think to yourself that you can be the next success story. You read guides and see how investing in foreign exchange can turn out to be a rewarding experience. As a newbie, the potential perks are more than enough to make you dive headlong into this venture. However, success is rarely given in this field, and you can easily fall into your ass if you make the wrong choices. If you are new to forex, what should you do? Consider this article as your beginner’s survival kit.

 

  1. Get the right broker– The broker you work with is a huge factor in evaluating your ceiling as a forex investor. Affiliate yourself with a fake or unreliable broker and you might as well kiss your investments goodbye. Make sure to check what a prospective broker has to offer and if this aligns to the best interest of investors. See if you belong in the clientele they are searching for and if the trading software they provide works satisfactorily. You can also ask around or read reviews to help in your decision-making process.

 

  1. Start with modest investments– It is a fact that you don’t earn your way to riches overnight. If you are new to forex, it is recommended that you start with small investments. This will help you avoid major losses as you feel your way into this field. This will give you financial significant cushion as you learn how to correctly invest. As your profits start to grow, you can start investing more in that account. However, should you feel that investing there is actually costing you money, you must stop making investments there as soon as possible.

 

  1. Focus on a single currency first– One of the most compelling reasons for trying foreign exchange is the wealth of options. With virtually every country in the world having their own stock exchange, you have the opportunity to select different markets and currencies. However, if you are new to forex, it is best to save the globetrotting experiments for later. It’s best to focus first on a single currency as it will help you familiarize with all trading activity. For starters, either go for your local stock market or choose a currency pair that’s highly liquid.

 

  1. Never add to a losing position– While there is no concrete way to predict the future, it is common sense that you must not stay in an investment where you are losing really bad. The worst thing you can do is to invest more money on position that’s already losing. While continuing to hold on to an investment in the red can potentially pay off (assuming the value turns around), adding investment on such investments is not a very good idea.

 

 

References: http://www.investopedia.com/articles/forex/ , http://www.mtrading.eg/education/

5 Reasons Why Forex Trading Is the Best

 

For many people around the world, forex trading is one of the best ways to make a living. With the rise of online foreign exchange modules, being involved in this form of trade has become easier and more accessible than ever before. There are so many reasons why this venture can potentially work to your advantage. Here are just 5 of the many reasons why forex trading is the best.

 

  1. Maximum time flexibility- Because forex markets operate at different parts of the globe, you can choose to invest at stock markets that best fit the profile of your schedule. You can also choose to trade virtually 24 hours a day by tapping into different markets. An underrated feature of forex trading is you’ll have your weekends, as stock markets only operate from Monday-Friday (local time). Not only can you have superior time flexibility, but you can also make money in a full 24-hour cycle.

 

  1. Low transaction costs– Getting into forex takes minimal investment. It won’t hurt even if you can only invest a little money for stocks at the moment. At the same time, there is a relatively low chance of you losing significant amount of money, except when you invest a ton of money in stocks that ended up losing (that is, with selling prices that are much lower than the price of acquisition). This relatively low cost of investment makes it a compelling choice for start-ups.

 

  1. Allows for leverage– Leverage is one of the most important elements in stock market trading. It is defined as the ability to trade more money than what is currently available in the person’s account. This allows you to trade large sums of cash at a fraction of your investment. Of course, there is a risk associated with having too much leverage, but you can make it your advantage if you know how to use it correctly (by making the right trades).

 

  1. High liquidity– Liquidation is a term used for turning properties into cash. Stocks are properties that have high liquidity, meaning you can easily convert your stocks to cash by selling it into the market. What’s more, compared to other forms of property, you are not compelled to make a discount on stocks, as the market is the one that dictates its ultimate price tag. What’s more, since price movement in forex is usually not dramatic, it’s a relatively stable investment.

 

  1. High profit potential– Most properties are notable to have relatively static income potentials, meaning the expected profits are more or less fixed at a specific amount. In stock exchange, while there’s an equal risk of losing out in trades, it is offset by the high potential of making earnings. This is mainly dictated by the constantly fluctuating values of stocks. Read thesefluctuations correctly and you will get significant profit.

 

 

References: https://en.wikipedia.org/wiki/Foreign_exchange_market  , http://www.mtrading.my/start-trading/