When it comes to currency trading there’s no magic ball or mirror for us to look into to see what lies ahead. Instead, we must rely on the current information we have as well as take a look at the past trends so that we can make more informative trading decisions. It’s for this reason that the analysts of DailyFX, the free forex news and research website of leading forex broker FXCM, have taken a close look at both their trades and the economic changes and trends over the past year to come up with their Top Forex Trading Mistakes of 2011 , as well as their Top Trade Opportunities of 2012.

Looking back at last year’s major events which affected the markets include the US losing its AAA rating for the first time, “Operation Twist” making a comeback and the Euro rollercoaster ride as the Eurozone debt swung from crisis to euphoria and back again. The Euro is expected to continue its downtrend and as David Song, Currency Analyst, notes, “The sovereign debt crisis certainly shook up the currency market during the previous year and the Euro rollercoaster will be an ongoing theme in 2012, as the heightening risk for contagion drags on market sentiment.” Additionally, he notes that the US Dollar is a safe haven for the Euro and that the markets are starting to treat the British Pound as one.

In looking for other trading opportunities for 2012, John Kicklighter, Chief Currency Strategist, and David Rodriguez, Quantitative Strategist, are looking to go long USDJPY. They both note that timing may be a bit tricky but as Kicklighter states, “starting small and building up with confirmation is a good strategy.” While Kicklighter and Rodriguez will be looking at the USDJPY, Jamie Saettele, Senior Technical Strategist, will be looking at the USDCHF, AUDUSD, NZDUSD and USDCAD pairs as he sees strong evidence of reversal opportunities. He does not suggest treating reversals as signals but to instead “understand the conditions for the pairs examined are consistent with previous long term reversals.” He notes that though no method is immune to false signals, this information could help construct favorable reward/risk opportunities.

Turning to the biggest trading mistakes of 2011, Saettele notes that “it is impossible to completely eliminate bias from the human mind” and describes a great example of how his human bias affected his trading. He also notes that “one can limit bias and its influence by “strict adherence to a technical, rules based approach.” While Saettele touches on human bias, Kicklighter focuses on a connected topic, our convictions. Kicklighter states that “we should absolutely have our convictions based on sound analysis…but don’t move ‘all in’ on those beliefs until it is clear that the market consensus is on the same page.” Both analysts are pointing out that human bias and our convictions will play a role in our trading; but to also pay close attention to what the markets are telling us so that we don’t allow both to completely take over and allow us to make trading mistakes.

To read all of this year’s forex trading forecasts and lessons, you can check out the complete articles posted on DailyFX.com. There you can also find daily fundamental and technical analysis of the currency market as well as up-to-date economic news and reports from around the world.

About DailyFX

DailyFX, the free news and research website of the leading forex and CFD broker FXCM, delivers up-to-date analysis of the fundamental and technical influences driving the currency and commodity markets. With eight internationally based analysts publishing over thirty articles and producing five video-news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to an extensive economic calendar with breaking economic news and reports from around the world, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who rely heavily on the news for their trading strategies. Additionally, DailyFX serves as a portal to a vibrant online discussion forum in the currency trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk seriously about trading.

About FXCM

FXCM Inc. is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers worldwide.

At the heart of FXCM's client offering is No Dealing Desk forex trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution, and trading from real-time charts. FXCM's UK subsidiary, Forex Capital Markets Limited, also offers CFD products with no re-quote trading and allows clients to trade forex, oil, gold, silver, and stock indices on one platform. In addition, FXCM offers educational courses on forex trading and provides free news and market research through DailyFX.com.

All references to "FXCM" refer to FXCM, Inc. and its consolidated subsidiaries.

Trading forex/CFD’s on margin carries a high level of risk, and may not be suitable as you could sustain a total loss of your deposit. Leverage can work against you. Do not speculate with capital that you cannot afford to lose. Be aware and fully understand all risks associated with the market and trading. Prior to trading any products offered by Forex Capital Markets, LLC, FXCM Securities Limited, Forex Capital Markets Limited, inclusive of all EU branches, FXCM Asia Limited, FXCM Australia Limited, any affiliates of aforementioned firms, or other firms under the FXCM Inc. (NYSE:FXCM) group of companies [collectively “FXCM”], carefully consider your financial situation and experience level. If you decide to trade products offered by FXCM Australia Limited (AFSL 309763) you must read and understand the Financial Services Guide and Product Disclosure Statement. FXCM may provide general commentary which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. FXCM assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on FXCM’s website prior to taking further action.

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