Forex trading and Dollar Index

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Feb 022012
 

 Why is the EUR weighted so heavily? Because it actually consists of over a dozen countries and their own economies, each with their own strengths and weaknesses. Similar to the S&P 500 index, when the Dollar Index is trending up, the strength of the dollar is increasing vs. this basket of currencies, and when trending down, the dollar is weakening vs. this basket of currencies. My “problem” with the dollar index and using it to help me trade is the weight of the EUR. Because the EUR is so heavily weighted, the dollar could be weakening against all the other currencies, yet if it is strengthening vs. the EUR, the dollar index could still be going up! This may lead a new trader to doubt what could be a great short trade on the USDCHF. A short trade on the USD/CHF means the dollar is getting weaker while the CHF is getting stronger.

If you choose to use the dollar index as one of your indicators, you need to know and use of this weighting.

It can definitely help when trading the EUR/USD pair as the two charts should have an inverse correlation, but when trading the USD/CHF, If you  look at the dollar index at all. Here is a chart showing this correlation on weekly charts from last summer:

Look at the dollar index chart is trending lower, the EUR/USD is trending higher, and when the dollar index is trending higher, the EUR/USD is trending lower. Using this correlation on the time frames, your trade can help as an odds enhancer. Notice the difference of the dollar index vs. the USD/CHF. While there is some correlation, it is not nearly as obvious as the EUR/USD pair. Traders need to learn how to watch this for their trading decisions.What happens if you want to trade the GBP, but want to look at the Pound Index? Do this you have to make your own index by looking at several charts.  In the following set of charts, we have the GBP/USD, GBP/CAD and the EUR/GBP.

In these charts, the trend lines are drawn merely for direction, not as an example of how to draw tradable trend lines! In the first two pairs, the GBP is on the left side of the pair, which is showing GBP weakness on the chart. The third chart has the GBP on the right side, which is showing the GBP getting weaker vs. the EUR. In our imaginary GBP index, what direction would it be going? If you answered down, you would be correct! This will help you make better trades by making up your own index, you should be looking for trades in the directions strength or weakness of the individual currency that your index tells you. By watching the charts if a currency is getting weaker vs. two or three major currencies, it is probably getting weaker vs. all of them. Looking for trades in the general direction of this chart index will help you be right more often an profitable trader.

 Posted by at 5:18 pm  Tagged with: , , ,

How the Glycemic Index Works

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Jan 282012
 

Are you looking for a very simple and extremely effective way to lose weight or maintain your healthy figure? If so, then you need to learn about the Glycemic Index and how to use it in your daily life.

In short, it is a listing of numbers that tell you how fast your blood sugar level will raise after eating particular foods. The faster it spikes the worse that food is for your weight loss and health efforts.

In the recent past everyone was trying out diets that completely eliminated carbohydrates, but luckily that fad has been replaced with more sensible thinking. Your body needs carbs for energy, but not all carbs will do the job. It’s a matter of selecting your carbs wisely, not cutting them out completely.

The Glycemic Index is the only tool that will help you quickly determine how a food is going to affect your blood sugar. This is not only important for those with diabetes, but it is crucial for anyone looking to lose weight.

Thousands of other people have already used this one tool to lose considerable amounts of weight.

Even better: To hear is that most of them kept those eating patterns and the weight stayed off long term.

For starters, it is important to understand how the Glycemic Index is designed. It only covers carbohydrates, so protein sources will not be listed. The carbohydrate category actually includes a wide variety of foods from vegetables, fruits, and whole grain pasta, bread, and rice to refined white bread, pasta, bread, and all types of sugary sweets that are made from any variety of flour.

There are currently just under 2,500 foods listed in the index.

Each food listed in the Glycemic Index is given a value.

The higher the value, the faster that food will raise your blood sugar level. The lower the value, the slower your blood sugar level will be raised.

So, as a guide, it’s best to eat more of the foods with a lower GI rating, and eat less of, or avoid, as much as possible, those foods with a higher Glycemic Index rating.

It is quite mind blowing for most people to realize how much of what they eat on a daily basis is a carbohydrate. Since this one category of food makes up the bulk of most people’s diet, it is obvious why cutting it out completely is so difficult to stick with long term.

While carbohydrates are often criticized because they have sugar content, this sugar is actually not the problem. All carbs have some natural sugars, but not all of them are broken down the same by your body.

Whole grain sources of carbs and vegetables, fruits, and beans are broken down slowly in your system. The fiber must be separated from the natural sugars, which are then slowly released into your blood stream. The result is a slow, steady supply of energy that helps your body function properly.

Refined carbs such as white bread, pasta, rice, and sweets like cupcakes and donuts are processed quite differently. During processing they are stripped of their natural fiber, so your body doesn’t have to do that work. The problem is the sugar goes quickly into your blood stream, creating a huge surge in energy. But, it quickly goes away and leaves you with a drop in energy and a big craving for more food.

If you are trying to lose weight, this spike and drop in blood sugar is going to work against you. Not only is this unhealthy for your body, but it can lead to brutal cravings for more refined carbs which will cause weight gain.

If you choose wisely and eat mainly from lower Glycemic Index foods, you will maintain an even, consistent blood sugar level and avoid those cravings. Your body will also receive more of the nutrients it needs from the natural fiber.

 Posted by at 7:16 am  Tagged with: , ,

Dow Jones Index – General Information

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Jan 242012
 

The main reason for its popularity is simple: it is always liquid. It shows all kinds of individual investors trends in security prices since 1896. Falling and rising prices of Dow Jones index come across with the S&P 500. This two major US stock indices show 95% converge.

Dow Jones Index value is very easy to calculate. The Dow Jones creators offer us to perform a usual operation: add up the prices and to divide them afterwards.

Most other indexes are weighted by market capitalization, which means that the change in the company price is multiplied by its size (ie capitalization). As a result, large companies have s greater influence on the index than those that are smaller. The Dow Jones index is only weighed by cost. A change in the price of a small company is as important here as of a huge company. Not everyone considers this an advantage; many analysts call it a drawback and say that the Dow Jones is less perfect than, for example, its main competitor S & P 500.

However, the Dow Jones enjoys great respect among private investors. And this is easy to understand: people like the fact that this index includes those companies which shares are usually bought for investors portfolios – usually very well-known large companies, which names are always on the rumor. Besides, a non-professional prefers to work with a small number of titles. Typically, private investors create their portfolios from the stocks of 20-25 companies, which is why they use the index which analyzes the activities of 30 companies, and that is the Dow Jones, rather than those composed of 500 or even 2000 kinds of securities.

The Dow Jones indices group is still one of the most popular stock market indicators in the U.S.. Securities of at least one of its thirty industrial companies are, as a rule, included in an average investor’s portfolio, as well as a professional manager portfolio. And its not surprising – because these thirty stocks together comprise approximately 1/5 of the value of all U.S. companies shares (about 8 trillion dollars) and about a quarter of all shares listed on the New York Stock Exchange.

Mini-futures contracts on the Dow Jones stock index are traded on CBOT (Chicago), more precisely, on its electronic division – Exchange eCBOT. A contract is traded on the exchange under one symbol. YM is an electronic contract which is traded on the electronic exchange eCBOT from 03:15 to 01:00 MSK. Contracts are concluded for H (March), M (June), U (September), Z (December).

The underlying asset of E-mini DJIA is an American stock index DJIA. E-mini DJIA – one of the most liquid futures contracts, presented at the international stock exchanges. Its trade volume is up to several million contracts per day.

The contract is very liquid and is one of the most popular speculative instruments. A variety of technical analysis methods can be applied to it. Such a tool is said to be very technical.

Long-term players, of course, will apply fundamental analysis methods to predict the dynamics of the index. The behavior of the DJIA is closely linked with the general state of the U.S. economy. Besides, American stock indices are significantly correlated with each other, so you can trade DJIA, based on the behavior of other indices. In particular, the correlation of this index with the S&P500 is nearly 95%.

DJIA index is extremely technical, because of its popularity among speculators. This index is one of the main instruments for day trading, meaning, for multiple purchases and sales in a single day. We must take into account the fact that with the opening of trade on the NYSE stock exchange liquidity increases, and the index becomes even more mobile. During the first hour of trade the number of fluctuations as a rule increases and afterwards for some time the index is difficult to analyze with standard classical technical analysis tools. Still, the greatest volatility of this instrument is observed in the second half of the trading session, moreover, during the last hour of trade gaps may take place. The liquidity of YM increases dramatically when European players enter the market.

The dynamics of the DJIA is influenced by many factors. Among them are macro-economic indicators of U.S. and world economy, earnings reports of American companies, and authorities declarations. War, terrorism, natural disasters influence not only the currency market but the stock market as well.

From the perspective of macroeconomics the following indicators are important to us:
- State of the foreign exchange market;
- Gross domestic and gross national product;
- Inflation, unemployment and interest rates, exports and imports;
- The value of public spending and borrowing in the financial market.

 Posted by at 1:16 pm  Tagged with: , , ,

The Glycemic Index Food Chart

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Jan 222012
 

To be able to fully understand and benefit from the glycemic index food chart

, you may need to conduct a little research first. Your life may start to change for the better once you fully understand the values indicated in it. The glycemic index food chart may seem to be a little annoying, but you should know that this is an important concept when it comes to choosing the right foods to eat and to maintain a healthy body and a normal weight.

The numbers on the glycemic index food chart

ranges from 0 to 100, and every food rated on it has its own value.

Foods listed higher than 70 has a high GI ranking, which means these foods are quickly digested and converted into glucose. When you have too much glucose in your body, it will then take action and try to clear those excess glucose out which will then cause you to feel hungry again. With very little glucose, you will then be compelled to consume foods with higher glycemic and so on. For you to be able to have a good health, you should find a way to break this cycle.

On the other hand, low glycemic foods are digested slowly which means your blood sugar will not rise quickly. As mentioned above, foods above 70 are high. Foods that range from 55 to 70 are moderate and anything below 50 is low. For this, you may want to focus on the foods which are low on the glycemic index food chart.

What you must remember is that, foods that have high glycemic value should not be totally eliminated.

You can still eat these foods as long as it is combined with something that has proteins and fats that can help slow down the process. For example, bagel may have a very high value on the glycemic index food chart, but you can combine it with peanut butter, cream cheese or eggs to slow down its conversion into glucose.

The glycemic index food chart

concept has lots of benefits. One is that if you are able to find ways to consume foods with lower index score, then you are on your way to healthy eating. Aside from that, it will make you feel full longer after each meal and so you may not need to snack after eating breakfast or lunch since you are already feeling satisfied. For both diabetics and health-conscious individuals, this type of diet can make you feel more satisfied, less apt to craving for unhealthy foods and can make you healthier.

 Posted by at 9:18 pm  Tagged with: , , ,

What is the Glycemic Index?

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Jan 162012
 

The glycemic index, or GI, was developed between 1980 and 1982 by Dr. David J. Jenkins and his associates. They developed it when they were attempting to discern what would be the best foods people who have diabetes should eat.

The glycemic index measures the effect of carbohydrates on the blood sugar level.

If a carbohydrate quickly breaks down during digestion and rapidly releases glucose into the bloodstream it will be assigned a high glycemic index. If a carbohydrate slowly breaks down and gradually releases glucose into the bloodstream it will have a low GI.

Foods that have a low glycemic index usually are digested at a slower rate. They often, but not always, have lower insulin demands on the body.

Currently glucose is used as a reference food and is assigned a GI value of 100. White bread could be used as a reference food, as well.

If white bread were assigned a value of 100 then glucose would have a value of 140.

What are Low G I Foods?

Low GI foods release glucose more steadily and slowly. Their GI range is 55 or less. Most vegetables, fruits, whole grains, legumes, eggs, meat, milk, fructose, and nuts are low GI foods.

What are Medium G I Foods?

Medium GI foods have a GI that falls into the 55 – 69 range. Sweet potatoes, whole wheat products, sucrose, and basmati rice fall within this range.

What are High G I Foods?

High GI foods have a GI of 70 or more. These include white bread, potatoes, most white rice, watermelon, glucose, extruded breakfast cereals, and corn flakes.

If you add vinegar to food you will lower its GI. Also, if there are soluble dietary fibers or fats present in a food they can slow down the gastric emptying rate. When that happens the GI becomes lower.

GI and Weight Control

Recent research with animals indicates that diets that are high in GI carbohydrates will increase an animal’s risk of becoming obese.

One such study involved male rats. They were divided into low- and high-GI groups and subsequently were observed over a four and a half month period.

Over those 18 weeks the rats on the high GI diet ended up with 8% less lean body mass and 71% more fat than the low GI group.

In addition, post meal insulin levels, glycemia, and triglycerides were significantly higher in the high GI group.

How Can You Use the GI?

If half of your calories come from carbohydrates, you can determine which carbs you should eat and thus you can use the GI to enable you to still have lower and more stable insulin and glucose levels.

Keep in mind, though, that the amount of carbohydrates you eat have a greater impact on blood sugar levels than the GI itself. If you want to lose weight then consuming less calories and fewer carbohydrates could benefit your blood sugar level even more.

You will be able to have the most stable blood sugar level if you calculate your carbohydrate intake and eat carbohydrates with a low glycemic index.

 Posted by at 5:18 am  Tagged with: ,
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