Apr 16, 2010

Forex Crunch 5 Ways To Identify Fake Forex Broker Reviews

Forex Crunch 5 Ways To Identify Fake Forex Broker Reviews

5 Ways To Identify Fake Forex Broker Reviews

Posted: 16 Apr 2010 04:54 AM PDT


Many traders or future traders shop for a broker to work with and find endless reviews on the web, and not all are genuine. Here are 5 ways ways to separate the good from the bad.

There are lots of sites that specialize in forex broker reviews and lots of talk about brokers in various forums. While a lot of information is comes from real experience of people that have used a brokers’ services, some may have a hidden agenda of promoting the broker. Promoting a broker is OK, as long as it’s done in a transparent way. Let’s see the 5 ways to identify fake reviews:

  1. Look at the site: if this officially a forex news site / education site, but the first thing that you see is a big list of forex broker reviews, then you can take the reviews with a grain of salt – the site’s sole purpose is to make money on affiliates and not necessarily have up to date news. So are the reviews genuine?
  2. Check the link: If you see something like landingID=3 or affiliate=fxsite at the end of the link that leads from the review page to the broker’s site – this is definitely an affiliate link – the reviewer gets paid for referring clients to the broker. Getting paid for referrals is legitimate, but hiding the fact that the reviewer is paid for the service isn’t proper. For site owners, the solution is to write a disclosure about the affiliation. This way, the readers can judge for themselves if this genuine or not, having the knowledge about the affiliation deal.
  3. Option to comment: If the site has an option to add your own comment on the review, actually your own mini-review on the broker, that’s a good sign of openness. But this may be tricky as well. Try commenting and see if your comment really appears on the site, or if it’s held for moderation forever. Sometimes comments are automatically posted, but are later deleted when they aren’t convenient. Such sites’ openness, but it’s fake.
  4. Check the forum member: if a forum member posts a reply with a recommendation about a forex broker, even without an affiliate link, he could be associated with the broker. If he’s officially representing the broker, that’s like a full disclosure – you can judge him for yourself. But if he’s not? Well, check out what else he wrote on the forum. If he’s a regular participant, it could be genuine, but if his main agenda is promoting the same broker, don’t take his word. I must say the Forex Factory is doing a good job at getting such promoters out of the forums.
  5. Search the web for negative commentary: A common check if to search for the name of the broker with the word “sucks” – this will easily bring you to negative reviews, and you can see how bad they are. Getting results for this search doesn’t mean the broker is necessarily bad, but this is how you’ll get some negative words as well.

Do you have additional ideas about how to find false broker reviews?

After you finished reading the review, check out the broker with forex demo account – this is must when starting with a new broker, even if you’re a seasoned trader.

Forex Daily Outlook – April 16th 2010

Posted: 15 Apr 2010 01:00 PM PDT


The last day of this week will be dominated by American housing figures and consumer sentiment. Will the dollar have another bad Friday? Or will it retrace some of its losses?

The Aussie doesn’t receive any figures today, but after advancing on Chinese figures, it must close above 0.9327 to confirm the bullish trend. This is big test. OK, let’s see the events:

In Switzerland, producer prices (PPI) are expected to rise by 0.2% after a drop of 0.3% last month. The Swiss Franc is advancing nicely this week.

In Europe, CPI is predicted to rise by 1.5% annually and confirm the initial result. Core CPI is lagging behind – it’s predicted to be revised to 0.9%, after the initial read of 0.8%.

Also in Europe, trade balance is published for two months, after a technical problem last time. The surplus is expected to dip from 7 billion to 3-5 billion in the two months that are reported now.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Canada, Manufacturing Sales are predicted to rise by 1%, slower than last month’s 2.4%. The Canadian dollar is confirming its strength against the greenback this week.

For more on the loonie, read the Canadian dollar forecast.

In the US, housing figures start the day: Building Permits are predicted to tick down from 640K to 630K, erasing some of the leap last month. At the same time, housing starts will probably rise from 580K to 600K. If both figures go in the same direction, the markets will move. If they offset each other, choppy trading will be seen, but no clear moves will be made.

Later in the US, consumer sentiment is expected to edge up from 73.6 to 75 points, the best score in quite some time. Such a boost, near the end of the week, could make this week somewhat easier for the US dollar.

Also in the US, two speeches are due from FOMC members: Kevin Warsh and Thomas Hoenig will make public appearances, and could follow Bernanke’s cautious words.

That’s it for today. Happy forex trading!

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USD/CAD Feeling More Comfortable with Parity

Posted: 15 Apr 2010 08:29 AM PDT


After USD/CAD reached parity last week, it made a retreat and closed the week higher. This time, the pair went lower, and refuses to run away from parity. If USD/CAD closes the week under 1.0000, it will be set for more losses towards the Canadian rate decision.

USD/CAD is now trading around 1, after another round of struggle around parity. The beginning of the week didn’t shine on the loonie.

While other currencies enjoyed the news about the Greek bailout and celebrated against the dollar with weekend gaps, the Canadian dollar started at the point of the close. When the other currencies relaxed and fell back, so did the loonie. USD/CAD went up towards 1.0100, but stopped short of it, at 1.088, lower than last week’s peak after parity.

From this lower peak, the pair began descending – when it crossed the parity line once again, the drop was deeper – it went as low as 0.9953, lower than last week. Another swing by the greenback already catches the loonie prepared, and it doesn’t give up on parity so fast.

The test will be the close of the week. If USD/CAD closes below 1, this downtrend will probably continue into the next week. If not, the struggle will continue. Friday features Canadian Manufacturing Sales, which are expected to rise by 1%, less than 2.4% last month. A stronger growth there could help the loonie win.

Canadian rate decision coming

Regarding the Canadian dollar, there are bigger challenges next week, with the rate decision being the first and foremost event, due on Tuesday. A hawkish statement could send the pair towards the support line of 0.98, while a dovish statement, together with a close of this week above 1, could send the pair to test 1.01 once again.

According to its own statements, the Bank of Canada is expected to raise the interest rates at the end of June. We’re getting close. In the past, repeating the same statement weakend the C$. Now it will probably leave the price unchanged.

But any change in the statement regarding the interest will rock the pair. If they change the timing of a possible rate hike from the end of Q2 to the end of Q3 or later, the loonie will retreat.

If they omit the words about the interest rates, the market will expect a move to come as early as the next rate decision. There’s also a chance of an immediate rate hike, which could even send USD/CAD towards the next support line of 0.97, but that has a low probability.

This also depends on the price of oil – crude oil fell under $86, and currently doesn’t threat the recent peak of $87.13. Another move upwards there could boost the loonie as well.

All in all, the Canadian dollar is advancing gradually against the greenback. For some traders, these small moves may be annoying, but for the long run, this pair is just making a safe, consistent walk in one direction – down.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

Big Warning Sign from Jobless Claims

Posted: 15 Apr 2010 05:50 AM PDT


American Unemployment Claims unexpectedly jumped for a second week in a row, putting a big warning sign on American recovery. Back to the days of risk aversion?

Jobless claims jumped from 460K to 484K. A drop to 439K was predicted, so this is a big disappointment. But this may not be necessarily bad for the dollar, especially against the Euro:

Unemployment Claims proved to be the best indicator for the all-important Non-Farm Payrolls release. The improvement during March – from 496K to around 440K was well reflected in the recent NFP, that showed a big gain jobs. So

Also last week, jobless claims rose from 439K to 460K. This disappointment was taken with caution, as it could be a one time rise related to Easter. This time, it could already be a trend.

Will the US dollar weaken?

The instant victim of this release was USD/JPY – it fell right after the publication. The yen gained on dollar weakness, but also on risk aversive trading – the yen is also a safe haven currency, enjoying fear and suffering from hopes of global recovery.

The other currencies reacted with caution – they hardly moved, or even dropped against the dollar. At the time of writing, EUR/USD is trading at 1.3538, slightly lower.

A return to global fears could bring back the risk factor through the front door. This means that good American figures cause dollar weakness on fear, and bad American figures, like this one, can send the dollar up. The risk factor never really went away, but it has been in the sidelines since December.

This second rise in jobless claims joins new fears around the Greek bailout program. German professors went to the high court to challenge the government’s decision to support Greece. It’s never over…

We have 3 more releases of unemployment claims before the next NFP on May 7th, but this trend isn’t good.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.
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