How To Choose A Share Dealing Service

Real Source: http://www.stocks-and-options.com/How-To-Choose-A-Share-Dealing-Service.html

Nowadays many people like to make their own decisions when you comes to share dealing, and so execution-only stock brokers are extremely popular. These share dealing services allow you to buy and sell shares for a small flat-rate fee, regardless of how many shares you actually buy or sell per transaction.

For example, TradeKing, one of the very best discount brokers, charges just $4.95 per trade, and Zecco, another popular discount broker, charges $4.50 per trade with the first 10 trades per month being completely free (providing you have over $2500 in your account).

So as you can see the cost of actually buying and selling shares yourself is now extremely small. This is important, particularly if you are only looking to invest a small amount of money, because it means that the percentage rise you need before you are in profit is minimal.

So what should you be looking out for when choosing a share dealing service?

Well cost is clearly a major factor in most people's decisions, but with so many online discount brokers to choose from, this should not be the only factor. You should also take into account your own personal needs and requirements.

For example, if research is important to you you would want to look for share brokers that have excellent research tools, and similarly you may want to go with a broker that has good charting facilities so you can see if a particular company you are interested in is oversold, or in a strong upwards trend, for instance.

You may also require additional services such as the capability of placing options trades. This is a riskier, but potentially more lucrative way of trading shares but if you are a more advanced share trader, then it may be something to consider because not every execution-only broker offers this service.

You may also want to go with a share dealing service that offers additional services such as the option of trading ETFs and mutual funds, in addition to shares in individual companies. Individual share traders are becoming much more ambitious in the kinds of instruments they invest in, so these additional services are now extremely popular. Also a lot of stock brokers now enable you to trade your own Roth IRA accounts so this is also another excellent feature to look out for if this is of particular interest to you.

Finally another two factors to consider when choosing a stock broker are reliability and customer service. These are extremely important because during the more volatile periods of the day some of the lesser brokers can become extremely unreliable and in fact you will find that it can become impossible to actually execute any trades during these times.

So you want to look for a reliable broker and one that also takes customer service very seriously in case you encounter any problems. This information can be hard to find out beforehand but by reading customer reviews on various financial websites, you will soon discover which brokers are better than others. For example, TradeKing is considered by many to be one of the most reliable brokers and has in fact won a top award recently for it's excellent customer service.

In fact overall TradeKing is, in my opinion, the best online share broker because it is reliable, has low fees and great customer service, and offers a wide variety of services including many of those I've mentioned previously such as the capability of trading ETFs, mutual funds and options as well as your own Roth IRA account.

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Forex Training and Currency Profits go Hand in Hand, Like Sugar and Spice to Make Everything Nice

Real Source: http://bestarticlesforex.com/forex-training-and-currency-profits-go-hand-in-hand-like-sugar-and-spice-to-make-everything-nice

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Columbian Currency

Real Source: http://bestarticlesforex.com/columbian-currency

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Pathway to sustainable forex success

Real Source: http://bestarticlesforex.com/pathway-to-sustainable-forex-success

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Currency Pair and Price

Real Source: http://www.fxfisherman.com/forex/forex-education/a114-part-2-learn-forex-trading-currency-pair-price/

Currency pairs are financial instruments traded in forex markets. Every pair of currency traded in the forex market is considered as an individual product (or financial instrument). A set of two currencies always constitute a currency pair, of which one currency is being bought by the other. The buying and selling of currencies from around the world constitute currency trading.

Currency Symbol

Each currency has its own symbol as for example:

For the Euro, it is EUR
For the Japanese, it is JPY
For the Pounds Sterling, it is GBP
For the Swiss Franc, it is CHF.

XXX/YYY is the general format by which currency pairs are denoted, where XXX and YYY both refer to the ISO 4217 international three-letter code of international currencies. Currencies are always traded in pairs, and here are a few examples of currency pairs:

For Euro-Dollar pair, it would be EUR/USD
For Pound Sterling-Dollar pair, it would be GBP/USD
For US Dollar-Canadian Dollar, it would be USD/CAD
For Australian dollar-US dollar, it would be AUD/USD

For Dollar-Swiss Franc pair it would be USD/CHF and so on for other currency pairs according to their three-letter currency codes. 80% of all trades in the Forex market originate from these currency pairs.

Consider this example of a currency pair GBP/USD. In this example of a currency pair, the currency on the left (GBP in this case) is called the base currency. The currency on the right (USD in this case) is called the quote currency (also called counter currency).The base currency (in this case GBP) always has a value of 1 in exchange rate.

In the currency pair GBP/USD, GBP is being bought, and the value of the currency on the right (USD in this case) represents how much of the base currency it is worth.

Consider another example of a currency pair EUR/USD 1.2436. This simply means 1 Euro is equal to 1.2436 US Dollars. Or it means that 1.2436 US dollars are needed to get one EUR. If you want to buy 100 Euros how much would you need in USD? You need precisely 124.36 US Dollars to buy 100 Euros.

Generally you will see the USD quoted first in most currency pairs the exceptions being Pounds Sterling, Euro- Dollar, Australian Dollar and New Zealand Dollar. The predominance of the US Dollar and the fact that it figures in a majority of forex transactions is perhaps a legacy of the Bretton Woods Agreement (1944), which pegged all currencies to the U.S. dollar.

“Bid” and “Ask” prices

All currency pair quotes have a bid and ask price. For example the currency quote for EUR/USD would appear as EUR/USD 1.4888/1.4890. The figure on the left, i.e. the number 1.4888 is called the “bid” price. This means you can sell 1 Euro for $1.4888

The number on the right of the currency quote EUR/USD 1.4888/1.4890, i.e. 1.4890 is called the “ask” price. This means you can buy 1 Euro for $1.4890. It is important to remember that the “bid” price is always lower than the “ask” price.

Spread

As we have seen from example cited above, every currency pair has a "bid" and "ask" price, and further the “bid” price is always lower than the “ask” price. The difference between the “bid” and “ask” price is called the “spread”.

In the currency example EURUSD 1.4888/1.4890 you will notice that there is a difference between the “bid” and the “ask” price. This difference is called as the spread. In other words, the “spread” is the difference between the highest price the buyer is willing to buy the currency and the lowest price the seller is willing to set it. For instance if you assume the “bid” price is $1 and the “ask” price is $1.3 then the spread would be $0.3.

In the example of currency quote EUR/USD 1.4888/1.4890 we discussed earlier, you will notice that the spread is 2 pips being the difference between the ask price and the bid price (1.4890 minus 1.4888). “Spreads” are usually on the lower side in forex markets on account of high liquidity

What is a pip?

Pip, is an acronym for Price Interest Point, and represents the smallest digit in the price of a currency. Pip is also the method by which profit is calculated in a currency deal, and its value depends on the base currency of the pair. Consider this example. A move in the EUR/USD from 1.4877 to 1.4897 equals 20 pips. And a move in the USD/JPY from 89.70 to 89.90 equals 20 pips.

When your trading account is in US Dollars and the U.S. dollar is the base currency, then one pip equals one dollar in a mini account or ten dollars in a standard account. So if you place a trade with one of these currencies and earn 20 pips it would translate to a profit of $20 in a mini account or $200 in a standard one.

If the base currency is not the U.S. dollar, then the value of one pip is equal to one unit of the base currency. For example in the GBP/USD, the pound sterling is the base currency, so one pip is equal to one pound; So if you make 20 pip profits in GBP/USD it would mean a profit of 20 pounds Sterling in a mini account. When you make profits in these currencies, you’re making them in the base currency, which then may be exchanged into the U.S. dollar at the current exchange rate, since your trading account may not be denominated in the base currency.

Summing up, in this ar

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A Quick Forex Guide for Traders

Real Source: http://www.straightforex.com/quick.html

In this Forex guide we will review some steps you need to take care before you venture into your trading journey. Most traders venture into the Forex market with little or no experience in the Forex market. This results in painful experiences like loosing most of the risk capital, frustration because it seemed so easy to make money, etc.

The first thing you need to realize is that, it is not easy to make money. As every other endeavor in life, where important rewards are to come after mastering it, you need to work hard. You need to get very well educated and experienced before having the possibility to receive important rewards on it. The key on mastering the Forex market relies on commitment, patience and discipline.

Ok, you have decided you are going to trade the Forex market, you have seen several advertisings featuring how easy is to make money in the Forex market. You might think this is your opportunity to reach your financial freedom, right away, time is money, why waiting any longer if you have the opportunity to make money now. I know, I’ve been there, but you have a chance now, I didn’t, no body told me what I am going to tell you.

We, Forex traders, make transactions based on a set of rules. These sets of rules are what we call a Trading System. Our systems tell us the exact time where we need to get in the market and out the market in order to make a profit (i.e. buy low sell high.)

Creating a system is the first big step you need to take care first. Why is this so important? Because you need to build a system that suits your personality, otherwise you are going to find hard to follow it, thus hard to profit from. A system can be based on technical indicators or what we called a mechanical system or based on experience and intuition or what we call discretionary systems. I highly recommend using and trying first a mechanical system, because discretionary systems are dangerous during the early stages of a Forex trader (can lead to indiscipline.) With experience, on later stages, you will find out which signals work better and which ones to avoid.

The next step in this Forex guide is to try your system on a demo account. Most Forex brokers offer a demo account, an account with virtual money. This is an excellent choice to test your trading system as there is no money at risk. In this step you will figure out if the strategy works for you. If you feel comfortable trading it, then it is most likely to produce good results. How much time should you stay in this step? It varies, but you shouldn’t go one step further until your system gets consistent profitable results over a period of time. It can take many months, but remember, you need to be patient.

You must be honest to yourself; you need to take every single signal generated by your system, not only the signals you thought were going to work, otherwise, you are going to have problems in the next two steps.

Ok, by know you had consistent profitable results on your demo account. You might think its time to go full. Nope, nope, nope. There is a big difference between trading a demo and a real account. The most important difference lies on emotions (fear, greed, anger, etc.) These are psychological barriers that affect every single decision made by traders regardless of what he/she is trading (stocks, bonds, Forex, futures, grains, etc.) These emotional factors, in my opinion, are the most determinant factor that separates profitable traders from the others.

The next step in this Forex guide is specially designed to deal with emotions and to confirm the results obtained in the prior step (consistent results in a demo account.) At this step you need to trade in a real account with limited funds. Some brokers offer fractional lot trading. Meaning you are able to trade any desired amount (even cents.) The important thing here is that these emotions we’ve been talking about are present only when there is real money at risk. At this stage, you are going to see if you are really comfortable trading your system and if you are able to trade with such system, remember different systems produce different emotions. If you are able to produce similar results than those obtained in a demo account, then ready for the next step. If you didn’t, then you might need to create another system, there is chance your system never fit you. If you created consistent profitable results on this stage, you have a chance to produce similar results in the next one, on the other hand, if you didn’t produce good results in this stage, you will not be able to make on the next stage. Remember, you need to do things right, and be honest to yourself.

The last stage is trading in a real account with sufficient funds. If you are at this stage, and have passed successfully every prior stage, then you have a chance to make it, go ahead and try it, you need to be confident in yourself and in your system, your strategy have already produced consistent profitable results, there are reasons to believe you are going to make it. Very few traders fail at this stage (if passed successfully prior stages.)

Trading successfully is no easy task, it requires a lot of work, patience, discipline, and education. By completing the steps outlined in this Forex course, you have a chance to produce profitable results. I repeat it again, you need to be honest to yourself about the results obtained in every stage. Some times you might need expert guidance regarding your system development strategies.

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Forex Price Dynamics

Real Source: http://www.forextradingzone.org/articles-Forex_Price_Dynamics

In order to gain an understanding of what actually moves the prices, or exchange rates in the interbank market, we must first understand that for any transaction to take place, there must be a buyer and there must be a seller – there must be a counter party for every trade. Open interest in the forex can be loosely defined as the combination of all resting (limit) orders. Many market participants set such orders either above (sell limit) or below the current price (buy limit). These orders are to be filled only when price reaches the set level. For example, say we are trading EUR/USD and the current bid price is at 1.2500. We set a sell limit order at 1.2501. When will our order get triggered? Once all the sell orders at 1.2500 have found buyers, the bid price will move up to the next available level, which is 1.2501. Once buyers enter the market at that price (they would actually be paying the ask price, and the broker would collect the difference), they become the counter party to our trade and our order is filled. One way to look at it is that there are essentially 2 types of orders: limit orders and market orders. There are other types, but they can always be classified as sub-types of these two. Limit orders are set to execute if and only if a set price level is reached, while market orders are set to execute at the current market price. Alternately, limit orders can be described as providing open interest, while market orders can be described as consuming open interest. This is a very important distinction because it is the backbone of price dynamics.

It should be noted that the only relationship between bid and ask prices is that the ask price, by its definition, should never be lower than the bid price. In every other aspect, the two are unrelated, so the spread between the two varies according to where the open interest lies. During times of low liquidity there may be no one interested in buying above 1.2450 and no one interested in selling below 1.2550, making the spread 100+ pips. This is not necessarily the product of shady dealer practices (though at the retail level it may be), but is more likely caused my normal market mechanics – all open interest was either consumed by market orders, or withdrawn (limit orders can be cancelled before they are executed). This type of situation normally happens when important, unexpected information enters the market, such as an NFP reading that is way off the mark. In that case, open interest in one direction will be consumed by a barrage of market orders, and open interest in the other direction will be withdrawn by market participants cancelling their orders. This is equivalent to saying that liquidity is “drying up”, and that the bid price will gap down until it finds a buy limit order, and likewise, the ask price will jump up until it reaches a sell limit order. Note that no one has come in and “set” the spread. The spread is not a parameter that can be set, but is rather the result of market mechanics at their most basic level. It also should not be a surprise that, although today’s technology is lightning fast, there are delays between market order entry and execution, during which time the open interest at the desired level can be consumed, particularly in fast moving markets. In such circumstances, there is no longer a counterparty to take the market order at the desired level, and it can either be filled at a worse price (slippage), or it can be re-quoted. Again, this is not necessarily indicative of any malpractice by your broker, but is more often than not a natural result of market mechanics and the delays inherent in communication media. It should be noted however, that once prices have moved through several tiers and they reach the retail level, they may or may not have been “massaged” by someone along the way (a practice known as price shading). This is the reason many quote for their preference in trading through an ECN rather than a traditional retail broker. In reality, there are advantages and disadvantages to both. You can explore exactly how and why this is true in our follow-up article How Forex Brokers Work.

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Hours with a pair of EUR / USD.

Real Source: http://euronis-free.com/Articles10.html

In this article I want to share their thoughts on the currency market Forex with a pair of euro / dollar. This is one of the most beloved and frequently traded currency pairs on the exchange, and I think you will be very interesting to learn some of the features of trade with it.

So, let's begin. Intensive movement in a pair euro / dollar, as a rule, begins from 9.00 am Moscow time. At night, the Americans and Europeans are asleep and the fluctuation is very minimal, Asian forex traders are working with other currencies such as Yen, the Yuan, the Australian dollar, etc. At 9 o'clock in Moscow emerging basic movement in a given currency pair. The main trend is given by Europeans in Berlin, Frankfurt and Paris. British come to trade a little bit later, around 11-12 hours. At 12.30 - 13.00 face important macroeconomic news in Europe, and they can seriously break the movement that emerged in the morning.

The main drivers of growth or decline serve data on unemployment in the EU, the level of industrial production, etc. At 15.30 on Thursday, a monthly published decision of the European Central Bank's interest rate. This, in my opinion, the central event of the European scale, which significantly affects the dynamics of the pair eur / usd.

From 16.00 on the currency market forex come the Americans, and trade activity increases significantly. This is a time when all the professional traders must monitor the auction in front of their monitors.

16.30 central time on Forex for a couple of euro / dollar, the U.S. published the important macroeconomic indicators. This currency pair can for five minutes, ten "striding" hundred or two hundred points up or down, especially this can be observed at the output of these pay rolls.

Also of note for a time 18.00, as well as major events occur in the forex in the United States. Apart stands the time of 22.15, when it becomes known to the decision of the Fed (U.S. central bank) about the changes in the discount rate. If you are a professional speculator - this is your finest hour for a good profit. Do not miss this event.

After 23.00 trade activity comes to naught. Fix profit, closed unprofitable positions.

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Using Pivot Points for Reversal Entries

Real Source: http://2ndskiesforex.com/articles/using-pivot-points-for-reversal-entries/

One of the most challenging aspects for traders is finding and entry point into the market, particularly when looking for reversals or rejections. However this is not as complicated as it seems for there is a tool which is exceptional at helping traders find intraday entries for reversals – Pivot Points.

What are Pivot Points?
Originally created by floor traders, Pivot Points were simply used to mark key support and resistance levels based upon the previous High, Low and Close for the last day of price action. These three metrics were combined, then divided by 3 and this formed the Daily Pivot. The DP (daily pivot) was used to determine if the overall pressure for the day would likely be more down or up. If price opened above the DP, buying was generally preferred and vice versa if it opened below.

From the DP several other pivots were formed which were Resistance or R pivots and Support or S pivots. Finally, after becoming so popular they created Mid-Pivots which were simply the halfway point between any two pivots. Below are the calculations for pivots which we use:

DP = (H + L + C) /3

s1 = DP – (H – DP);//S1
s2 = DP – (H – L); //S2
s3 = L – (H – L); //S3

r1 = DP + (DP – L); //R1
r2 = DP + (H – L); //R2
r3 = H + (H – L); //R3

S1 = Support 1 pivot
S2 = Support 2
S3 = Support 3
R1 = Resistance 1 pivot
R2 = Resistance 2
R3 = Resistance 3

The blue colored lines are the support pivots and the red colored ones are resistance pivots while the yellow are the mid-pivots. As the name suggests, support pivots are the intraday support levels for that day while the resistance pivots offer key resistance price levels to watch for that day. We set our pivots to the London open since the London traders are basing their charts off their open and with the majority of traders coming out of London, we feel these will be the most effective and consistently watched by the institutional market.

The Statistics
The bottom line is price action has a greater chance to respond to a pivot level for that day than any other indicator out there. Our quantitative research done over the last 10 years suggests every 1hr candle from the London open to NY close has a 70+% chance of touching a pivot. Meaning, if you are going to be in a trade for more than 1hr, chances are the price will touch, react or respond to a pivot.

Since the institutional traders move the market, they are likely placing orders here on an intraday basis more than anything else.

How to use them for Reversals and Rejections?
To use them for a rejection/reversal play, the first thing we need to do is find an existing trend or momentum play. If you read our article on Impulsive vs. Corrective moves in reading price action, you will be able to easily spot these.

EURCAD
We will start with the EURCAD which on the daily chart below we can see is clearly in a downtrend.

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Dollar-Cost Averaging

Real Source: http://2ndskiesforex.com/articles/dollar-cost-averaging/

I was recently reading some article on some very popular finance site whereby the person was talking about the stock market and today’s 376pt crash. They were saying how its not good for buy-and-hold investors, it is good if you are dollar-cost-averaging.

The funny thing about this is this term is totally misunderstood in context, history and is really used by rookies. You will never see a hedge-fund manager using this term, nor some ultra-high level investor. When have you ever heard Warren Buffet, George Soros, Mark Faber or any other high roller using this term? Never.

You know why? Cause its a joke.

The term was originally used in Chinese chop shops whereby they tried to goat people on to trading more when the prices were falling heavily. They would use the term ‘dollar-cost average’ trying to get you to buy again even though the price got hammered. Why would they do that? Because chop shops like theirs got paid in two ways;

1) by customers trading

2) by taking the other side of the trade

When the market crashes like they did today, people are totally afraid to buy and rightfully so. However, to keep the market busy, supported artificially with the dumb money, make more money off of trading, people use the term ‘dollar-cost-average’ like its some brilliant investment idea. Sure, there are some mathematics about it, but anyone can make those mathematics seem brilliant. Think of how well dollar-cost-averaging worked on Bear Stearns, Lehman Bros. or a host of other companies that failed in 2008 or the dot.com bust.

Its the most rookie, insane and ridiculous idea that after something fell huge, we should buy it again. Why? Because its cheaper? After a huge day of selling, unless its sitting at some major support, who will want to buy it?

Yeah, dollar-cost-averaging worked for Bank of America (BAC) when it dropped from the mid $40’s to about $4. Oh yeah, it worked again with Citigroup (C) which fell from the mid $20’s to about $3.

Bottom line is whenever you hear the term used by anyone, you know immediately they are just using what some guy before them has told them to say without any real understanding of the word, its history or significance. You know immediately they are a rookie and really do not have any clue as to whats going on in the market.

I know this has little use for Forex traders, but you likely are going to run into this word or some investment ‘professional’ who uses this so understanding what it really means and where it comes from will help you in the future steer clear of that person.

In fact, any student of price action witnessing a market where people are saying, ‘dollar-cost-averaging’ would be selling the market and making money why others are buying it and getting killed the next day.

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Forex Ichimoku Report July 28th

Real Source: http://2ndskiesforex.com/research/forex-ichimoku-report-july-28th/

EURUSD – Looking Like it Wants to
Since breaking the daily kumo for the first time in the last 8 mos and the entire year of 2010, the EURUSD has performed notably consistent with a kumo break play as it has pulled back to the flat top and since bounced from there.

It has however stalled around the 1.3000 barrier and after two major rejections off there with one of them sending the pair back to the flat top, the pair has been attacking it for a few days now without any major dips. In essence, its behaving like a pair that wants to break 1.3000 and has yet to show any signs of it not having the gusto to do so. Now would not be the time to add longs so you can either wait till a mild pullback to the kumo flat top or a weekly close above 1.3050.

USDJPY – Rejected Again
After making its most legitimate attack on the 20ema, the USDJPY has been rejected off the daily 20ema for a 6th time now. The pair has sold off but albeit mildly and considering how the price action looks to form a base around 86 yen, look for the pair to produce a higher low and strike back at the 20ema. A close above it will likely gun for the falling Kijun trend line but if that should be broken, then it seems like an attack on the kumo might be inline before the bulls mettle will be really challenged.

GBPUSD – Outperforming
Going further than most expectations off the 1.4300 lows, the pair has cruised at a saunterly pace past 1.5350 and 1.5500 which were major fib / resistance levels. The pair is eating its way past 1.5600 but has yet to have an aggressive attack on the upside suggesting liquidity is low at the moment.

With that being said, a dip back to the 20ema would be a solid play for another long as the tenkan’s momentum is strong and the kijuns path is climbing suggesting this pair will continue to walk up the slope for more ground. A little caution is noted though since the pair has climbed for 4 straight days and looks set for a 5th so perhaps waiting for a pullback day (albeit a mild one) would be more prudent.

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How I became a successful part time forex trader

Real Source: http://www.aboutcurrency.com/articles/fxknowledge/how_i_became_a_successful_part_time_forex_trader.shtml

Introduction

I am Joe Chalhoub, a computer engineer, Forex trader and strategy builder. I began trading currencies 3 years ago. The first 3 months trading were complete failure, I remember I lost all my money and I was about to quit, but I couldn’t, I felt if I quit now maybe I am missing the chance of having my own business. So I stopped trading and began observing, studying, analyzing and practicing.

Observing: I began observing the market, what causes movement, reaction, ranging and trading.

Analyzing: I began working with technical and fundamental analysis; how each analysis can predict and redirect the market and how I can use them both for my own benefit. I will talk about these analyses in the following paragraph.

Reading: I bought Forex Trading Books and read them, books explaining different strategies and tactics used by experienced traders.

Practicing: I created free accounts and began trading virtually and each technique I invent I tried it and monitored its performance and validity.

After one year of studies, analysis and practicing trading techniques and after many failure and frustration I reached my own strategy and it is working very well and each month my profit is positive.

Implementation

I reached my targets and I built a successful strategy, but that’s not enough; to make profit I must not miss any opportunity and forex market is full of opportunities because it is the most active market in the world, for that reason I must sit all time and watch and detect opportunities all day long from Monday to Friday.

How to resolve this problem, I can’t sit and observe the market hours and hours, I have my career and my family, so I thought I must program my strategy, let the Information Technology do the hard work for me, and nobody is discipline as a software, so I created an artificial intelligent software which collects data from the market and implement my strategy on this data and detect opportunities 24/24.

This program analyses fundamental and technical data and generates forex signals which are forwarded automatically to my broker platform where the signals are executed automatically and forwarded also to my website members. All this is done without my interfering, I just run the program, it analyses and makes its decisions (Buying, Selling or stay aside).

How to succeed in Forex Trading

Five over hundred traders succeed in this business, what differentiate those five successful from the 95 others is one thing, it is the HARD WORK. Forex trading is not an easy business, and who tells you that he can make you rich in one night is one of those 95. Only one thing can make you a successful trader, HARD WORK, and nothing else. Don’t rely on other traders or advisors to help you, rely and have confidence on yourself.

Don’t begin trading quickly, the forex market will not go anywhere, it will stay forever, give yourself 6 to 12 months of studies, analysis, readings, practice and build your own strategy before begin real trading, it will take a lot of time and dedication but at the end you will reach your target.

Strategy

I will not reveal my full strategy but I will reveal some techniques I use which help traders in their trades.

My strategy follows the following tips and techniques:

1 – Discipline: Put criteria for your trades, watch the market and only trade when criteria are met, if they are not met do not trade. My program is the most disciplined trader, it takes care of all of this, it monitors the market and only trade if only criteria are met, and the second advantage of this is the elimination of the fear factor, it enters a trade when it sees it is good to enter and fear nothing.

2 – Money management: It’s the main key for good trading, I exit all trades and stop trading for a specific day if I lost -60 pips, in the other hand I put stop loss for my trades if I reached +25 pips profit, in that case profit will not get under +25 pips and it has open target, and all I have to do is go out and have fun.

3 – No trades for now: The most important thing in trading is sometime not to trade, I take this decision after looking to my charts and see that there is not enough volatility or there is no enough reports will be released for today and it is better to wait until market is more volatile. I advise traders not to trade during the first days of the month, personally I begin trading at the first Friday of the month when the “NonFarm payroll” report will be released.

4 – Analysis: I use fundamental and technical analysis while trading. Fundamental defines the trend of the market and the technical analysis is used after the definition of the trend. I trade the news by analyzing programmatically the released data for a specific report and generate signals which are executed immediately on the trading platform and forwarded simultaneously to my members.

Fundamental and technical analysis must be used together, if one is used without the other this will lead to failure.

5 – Technical indicators: In the forex market there is a lot of indicators which are used by many traders. I use ADX, Bollinger Bands to identify trends and volatility; RSI to identify an over bought or sold and Moving Average to identify a signal. And the most important technique is FIBONACCI, I advise traders to implement this technique and use it to confirm trades.

Finally, I must say that Forex is not easy, and many times we feel that someone is doing a conspiracy on us to take our money, but the truth is nothing is impossible, and others successful traders are not more intelligent than us and they are not genius from other planet, the fact is the more you work the more you become closer to become good trader. Do not quit quickly because this business deserves hard work and dedication.

Joe Chalhoub

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What is Slippage in Forex?

Real Source: http://www.aboutcurrency.com/articles/fxknowledge/what_is_slippage_in_forex_trading.shtml

You bought the EUR/USD at 1.4000 and the market is now trading at 1.4025.

Since there is an economic release due out in 15 minutes, you move your protective stop up to 1.4000 to protect your winning trade from turning into a losing trade. The number is released and the market trades down through your stop level to as low as 1.3975 in a matter of seconds. But instead of getting filled at your price of 1.4000, you are filled at 1.3990 and now have a losing trade on your hands.

Why? The answer is that there was nobody willing to take the other side of the trade at your price. A trade is when two people agree on price but disagree on value. One thinks the value is too high and the market should move down while the other thinks the value is too low and the market should move up.

When a major economic number is released, the volume dries up as most big traders stand aside. They will not trade if they cannot identify their risk. So there is not as much volume as you would see in a normal market environment. However, there are still plenty of traders trying to take advantage of the volatility. They will all want to trade in the direction the market should take based on the number released.

So if everybody thinks that the market is going down, all these traders try to sell at the same time. The problem is that there are not many traders looking to buy if the market is falling quickly. So the market continues to fall until the buyers step in and start taking the other side of the trades. But they are buying at their price, not yours. In the example above, a sell stop order becomes a market order once the price designated is printed. So when the market traded down to your stop level of 1.4000, your order then became a market order.

When you are selling at the market you are matched up with somebody is buying. If they are only buying below your sell stop price, you will be filled at that level. This is called slippage and it is present in every market in the world. This brings us back to why many big traders do not trade in this environment. So if you are trading in a volatile market environment, you have to be prepared for slippage. It is the nature of the game.

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Brokers monitoring your pattern of trade

Real source: http://www.aboutcurrency.com/articles/fxknowledge/brokers_monitoring_your_patterns_of_trade.shtml
Do you have any idea as to how much your Broker knows about you and your trading habits? Your Broker will know a lot more about you and your trading habits than you may realize, especially if they run their own Dealing Desk rather than routing your order straight through to the Inter-bank. A Dealing Desk will be looking to match your Order with another client that is trading the same Pair, but in the opposite direction. That way the trade stays in-house, no Inter-bank commission is paid and your Order never leaves the Broker's door.

At a base level your Broker will not be reviewing each and every trade that comes through the door, but they will be monitoring their internal order flows to ensure that they are in-line with both the Interbank prices, and the next tier down, at the EBS (or Level II). The decision to route Orders to the market, or not, is Automated and mainly dependent on volume levels, but your pattern of trade will also add to that decision as your account balance grows.

There is nothing untoward about this business model, it is nothing new, after all it is what Dealing Desks are there for; they are replicating the Interbank and Level II for their internal uses, and by collating this kind of data are able to generate internal liquidity. So long as your fills are reliable it makes no difference where the Order goes, but knowing what is happening at the Broker's Desk may also help in understanding what actually happens on the occasions when your Order does not get filled.

Pattern of Trade. You create a pattern of trade each day that is easy to follow, and with the help of technology is something that is simple to track and report. If for example you regularly trade the same currency, you use the same Lot size, and you tend to hold the trades for set periods of time, your new Order can be reliably swapped with another that is going the opposite way. Once you have an account balance at a set level, and a set pattern of trade that can be followed, your Orders will not often leave your Broker's doors if they have an active Desk. Your trading footprint can be easily followed and monitored, and there are positives in what your Broker can do with data for you as well in providing liquidity.

Trading Bio. A trading Bio of your habits, your Trends, your Stop areas, your Take Profits, and even the length of time that you are in a trade is a great tool for a Broker to leverage in being able to set the criteria in deciding whether Orders go to the Market or not. If a Broker needs liquidity in a certain Pair, that may tip their hand in that decision as well. Technology and Automation are revealing more about each trader than most would realize, as the Broker works to get you filled at the prices that you see.

Slippage and Spikes. There is nothing underhand with a 'Broker Big Brother' (BBB), and nothing to worry about so long as your Broker does not have 'unusual' looking price spikes, holds off order fills , or creates slippage on a regular basis. Spikes, slippage and failed Orders are a reflection of one thing in general; the fact that there are no Interbank Orders on both sides of the quoted prices, there is no conspiracy in the Interbank to manipulate prices, it is just a time and a price point that for whatever reason does not contain Orders. Spikes will occur until a price point is reached that houses Orders, it is the natural flow of the Market.

If your Broker runs a Dealing Desk they will replicate the Interbank, and your trading habits will then form your Broker's Level II, or EBS, data. So as your account balance grows it may be something to be aware of when placing your trades; maybe by splitting your main account into a number of smaller accounts, and if you do not pay a commission per trade maybe look to split one big Order up into a series of smaller Tickets. That way a lack of liquidity will not impact your Order as much.

Big Brother? No doubt about that all. A Problem? Not really, not as long as we understand the natural flow of the Markets, but it is something that we need to be aware of, especially when placing larger trades.

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Is Finanzas Forex a Reputable Investment Firm?

Real Source: http://www.forexfraud.com/forex-articles/finazas-forex.html

Is Finanzas Forex a Reputable Investment Firm?

Many people these days seem to be wondering if Finanzas Forex is a reputable investment firm. Unfortunately for those who invested money in the firm, the answer appears to be a resounding “no” and the company demonstrates all of the classic hallmarks of a failed High Yield Investment Plan or HYIP Ponzi scheme.

Additional details about this potential forex scam appear in the following sections.

What is Finanzas Forex?

According to information contained on FAQ web page for Finanzas Forex, Finanzas Forex is the commercial name of Evolution Market Group Inc. which claims to be headquartered in Panama. Apparently, the firm was registered as an anonymous corporation with a Panama Registration number of 558703. This is one warning signal about the company since Panama does not regulate corporate activities like the United States does.

The FAQ goes on to say that Finanzas Forex is an online private investment firm specializing in the forex market. It also claims to facilitate people of limited resources to obtain access to investing in the forex market without a large investment and without any knowledge of financial markets.

Finanzas Forex Organizational Structure

Furthermore, although the Finanzas Forex FAQ page describes the organization of the company as being headed by a president, no name is given for that individual. Neither are names provided for the heads of the other departments listed on the website which includes the firm’s information, administration, marketing, legal, finance and account management sections.

Without publishing any names, the site nevertheless assures the visitor that the head of each department is a real professional in their respective areas. This makes it rather difficult to check up on the biographies and possible criminal records of any individuals involved.

The page goes on to explain that the company is not a bank or stock brokerage, but that their investments are outside of the stock market and that they invest solely in the Forex market – an unregulated market.

Minimum Deposit and Duration of Deposits

According to the FAQ, the minimum deposit for investors in Finanzas Forex is $100 USD, which is typically not credited to your account for two weeks or 10 business days after the initial deposit is made. After depositing the money, which can only be done through a bank transfer, the funds must be left in the account for a minimum of six months.

Commissions are charged by the bank depending on where the funds originated. Finanzas Forex assures potential customers that these fees can usually be recovered in the first month’s profits. The funds are then made available for a customer to invest in any one of a number of different investment options.

Nevertheless, when trying to find out what the investment options are that customers can choose from, the web page with the investment plans was blank. The page did say that the company was not accepting investments from the European Union, or from any country, depending on which language you read the website it.

Furthermore, the firm’s website also advised that those wishing to invest should do so through companies regulated by competent organizations. Perhaps this implies that they are not such an organization?

More Discrepancies

When pulling up the pages in English, the site specifies it does not “admit any investor from any world’s country” citing the Evolution Market Group Inc. was waiting for:

“The resolution that the USA authorities will release in order to return to its investors the deposited funds.”

In addition, the site reminds investors that Finanzas Forex:

“Has followed and continues to follow an anti-money laundering strict policy, for which it was implanted a compliance system.”

While the exact meaning is unclear due to the notably poor English, it might be trying to say that the company has a compliance system to avoid having people use it to launder money.

Conclusion – Very probably not.

Basically, the Finanzas Forex website is sorely lacking in any valid information about the people operating the company, its investment plans or whether they are willing to return funds to their original investors. This means that Finanzas Forex is highly unlikely to be a reputable investment firm.

Furthermore, many people on online forex discussion forums claim to have not had their funds returned and to have not received any word from the company for some time. Since Finanzas Forex does not seem to have addressed its investors since August of 2009, most people who trusted the company are now losing hope of recovering their investments. Apparently, several international lawsuits against the company are also pending.

Basically, the Finanzas Forex HYIP scheme seems to have gone the way of the dinosaur — extinct.

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Forex Robots

Real Source: http://www.forexfraud.com/forex-articles/forex-robots-trade-signal-software.html

What is a forex robot? This is a kind of program developed by some high-school educated individual, which purports to be able to eliminate the human factor from trading entirely. Since programs, API’s, do not respond emotionally to market developments, we’re told that they possess a clear advantage over the human trader who is constrained by his natural disposition to shout, weep, laugh at sharp turns in the market. In this era of automation, the proponents of automated trading propose that we are fools to draw charts manually and to analyze every twist and turn of the market with eyes glued to the screen, especially when the computer can be programmed to do all these in our place and to do so with an efficiency that is impossible to match for a human being. Since everyone emphasizes the importance of discipline during trading decisions, of the crucial role of solid rules which are followed with punctuality and consistency, the creators of these programs submit that there is no better choice than leaving all the practical aspects of this task to an automated program.

In order to establish the validity of their claims and to demonstrate the purported prowess of the robot, the sellers of these curiosities will couple their sales letters with a large record of back testing data that shows the irrefutable power of automated trading – in hindsight. Very large profits with little drawdown, consistent gains over many trades all convince inexperienced traders that the Holy Grail is within reach finally. If only it were possible that Percival and Lady Guinevere were here, how merry everyone would be! But we will have to contend ourselves with the tremendous profits we’ll make while utilizing our new robot, which we bought for about $500.

But will we really make those great profits or are we just helping to fill the stomach of the bard for the entertainment value? What does a forex robot or an automated trading program really do? It must first establish some rules for the trade which will be in the form of some technical indicators or price patterns as evaluated by the computer. Then it must apply these rules for profiting from market events, as signals are generated throughout the trading day, and into the future. What does the back testing prove? If the rules were applied in the past, the program would have registered profits. What must the program do? It must make profits for us in the future because historical profits may make us smile, but they will not add a penny in our pockets – unless we’re selling a forex robot.

Now, if the program established potential success in the past, why can’t we expect the same results to be repeated in the future? Since the charts look very similar on the whole, why can’t we expect those back testing results to be transformed to future profits? There’s this little disclaimer at the bottom of every legitimate forex broker’s webpage, which states that past performance does not guarantee future results. What does that mean? It means that financial markets are chaotic processes in which the prevailing rules change all the time according to dynamics which are not well understood as yet. In other words, the technical rules that are valid today will not be valid tomorrow. The technical methods that generate profits today will not do so in the future, because the mathematical processes that define the price action change all the time. Most definitely, there’s no single mathematical process or formula that can be applied to generate consistent profits in the market. All that the back testing results prove is that at some point in the past, there were technical methods the use of which could be profitable for the trader. But we want to know what the successful technical method will be tomorrow, not two days ago, as we don’t own a time machine that will deliver us back in time to trade the markets with the hindsight we possess.

And if you have any difficulty in accepting the above statement, consider your own experiences in the forex market: How many times have you seen that a technical indicator, a trading strategy, a combination of technical tools that worked five minutes ago, is unsuccessful just a short while later? Now wouldn’t you laugh at yourself if you had taken the combination that had worked five minutes ago and declared it to be a universally valid tool for all time? We know for sure that regardless of how successful our technical configuration was five minutes ago, it will fail regularly in the future because of the random nature of price movements.

But some will contradict us and say:

“The back testing results are used to choose the trading systems that were consistently successful over a much longer time than five minutes. You’re simplifying the methods and tools of the creators of these systems grossly, and putting yourself in a ridiculous situation by the simplicity of your argument.”

To that we will respond by reminding the traders of the fractal nature of the price graphics. In other words, the price action has a strange tendency to repeat itself with very subtle changes over a long period of time. The patterns observed in a five-minute chart can still be identified in a five-year chart. The randomness, unpredictability of the price formations are no different on five-year long charts than they are on five minute charts and the length of the back testing period is of very little consequence as a result. If a trading robot can be shown to trade successfully on five minute charts only on a consistent basis, that would be a powerful hint of its eventual applicability to many more time frames too. There has never been such a forex robot and if there will be one in the future, it will definitely use very different methods for trading the markets.

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Forex Robots and Trading Signal Software: Who has the Holy Grail?

Real Source: http://www.forexfraud.com/forex-articles/forex-robots-trade-signal-software.html

We do not know what use was made of the Holy Grail, if it had ever existed. Nowadays, perhaps some forex robots and trading signal software hold the key! However, if the Knights of the Round Table derived any advantage from any association with that legendary item, history doesn’t provide a lot of details on the nature of the benefits. It seems the bards and the poets of the Medieval era were the greatest beneficiaries of the Grail legend, selling their tales at the courts and ensuring a full stomach in the process, if not more. The tradition is alive even today, with “Holy Blood, Holy Grail”, the “Da Vinci Code” all reaping their share of the profits from the propagation of this ancient, dubious, yet highly entertaining legend.

The currency trading field has its own share of these bards and poets, each telling the same story from a different angle, embellishing it with new and exciting details on the unimaginable benefits, the unparalleled gains that one can achieve once he is in possession of the Holy Grail, the Forex Code, the Universal Secret of Trading, the Best Automated System in History. Times change however, and the blood of Christ no longer has the same powerful impact on the minds of believers as it had in the past. Nowadays, the scientifically minded, but gullible individual will seek the Holy Grail in some kind of mathematical formula, a numerical trick, some technical tool that will reveal the secrets of profitable trading to the entire universe.

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Effective Date of Amendments to Forex Requirements

Real Source: http://www.forexfraud.com/forex-articles/new-cftc-and-nfa-rules-and-regulations.html

NFA has received notice that the Commodity Futures Trading Commission has approved changes to NFA Bylaws 306 and 1507; Compliance Rules 1-1, 2-36, and 2-39; Code of Arbitration Section 1; Financial Requirements Sections 1, 11, and 12; and the Interpretive Notice Regarding Forex Transactions. Most of these changes ensure that NFA has jurisdiction over leveraged off-exchange foreign currency contracts when NFA Members act as counterparty to, solicit or introduce, or manage accounts on behalf of retail customers. The remaining changes are technical amendments that clarify the existing forex requirements. All of these amendments became effective on February 13, 2007.

The amendments adopt a new section (b) to Bylaw 1507 to define "forex" as any leveraged off-exchange foreign currency transaction offered to customers who are not eligible contract participants. The definition does, however, contain a limited exclusion for transactions that either 1) result in actual delivery within two days or 2) create an enforceable obligation to deliver between a buyer and seller who have the ability to fulfill that obligation in connection with their line of business (e.g., bona fide hedging activities). The amendments also incorporate this definition into NFA's other forex requirements by reference, eliminate language made superfluous by the new definition, and revise the introductory language to the Interpretive Notice to make it consistent with this definition.

Finally, the Board adopted several technical changes to the existing forex requirements. Those changes:

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Who we trade with?

Real Source: http://www.forex-directory.org/forexarticles/forexparticipants.php

Each person who is exchanging money in whatever purpose contribute to forex volume. You can say that all people are forex participants in some way because they are using money. We'll focus on trading participants who are using forex market in order to realize profits.

First group would be individual traders. They are people like you or me who invest their own money using some brokerage as a middleman. This group is biggest if you look at number of people who are making this group as you can find literally millions of independent traders out there. Although independent traders are largest group main liquidity is provided by commercial, investment and central banks. Banks are moving huge contracts everyday between themselves making most of daily volume on forex market. Biggest and most active banks on forex are as follows: Bank of America, First Boston, Morgan Stanley, Goldman Sachs, HSBC, J.P. Morgan, Credit Suisse, UBS Warburg and Dean Whiter. Other forex participants are numerous corporations, hedge funds, financial institutions and import/export companies. All together participating daily in foreign exchange market, its members are building up enormous volume creating most liquid market on earth.

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Forex Strategy: Trading with Stochastics

Real Source: http://www.straightforex.com/forexstrategy.html

Stochastics are amongst the most popular technical indicators when it comes to Forex Trading. Unfortunately most traders use them incorrectly. In this article we will review the correct way to use this popular technical indicator.

George Lane developed this indicator in the late 1950s. Stochastics measure the current close relative to the range (high/low) over a set of periods.

Stochastics consist of two lines:

%K - Is the main line and is usually displayed as a solid line
%D - Is simply a moving average of the %K and is usually displayed as a dotted line

There are three types of Stochastics: Full, fast and slow stochastics. Slow stochastics are simply a smother version of the fast stochastics, and full stochastics are even a smother version of the slow stochastics.

Interpretation:

Buy when %K falls below the oversold level (below 20) and rises back above the same level.

Sell when %K rises above de overbought level (above 80) and falls back below the same level.

The interpretation above is how most traders and investors use them; however, it only works when the market is trendless or ranging. When the market is trending, a reading above the overbought territory isn't necessary a bearish signal, while a reading below de oversold territory isn't necessary bullish signal.

Trending market

When the market is trending is necessary to adapt the oscillator to the same conditions: When the market is trending up, then the signals with the higher probability of success are those in direction of the trend "Buy signals", on the other hand when the market is trending down, selling signals offer the lowest risk opportunities.

Thus when the market is trending up, we will only look for oversold conditions (when the stochastics fall below the oversold level [below 20] and rises back above the same level) to get ready to trade, and in the same way, when the market is trending down we will only look for overbought conditions (when the stochastics rise above de overbought level [above 80] and falls back below the same level.

Taking all overbought/oversold signals during a trending market will lead us to many whipsaws. If you are not comfortable with the number of signals given, try expanding your trading to other currency pairs.

Trend-less market

During a ranging market we could use the interpretation explained above to trade off stochastics.

Divergence

Divergence trades are amongst the most reliable trading signals in the Forex market. A divergence occurs either when the indicator reaches new highs/lows and the market fails to do it or the market reaches new highs/lows and the indicator fails to do it. Both conditions mean that the market isn't as strong as it used to be giving us opportunities to profit from the market.

Stochastics can also be used to trade off divergences.

Price behavior

A price behavior can be incorporated into any kind of system or Forex strategy. When using divergences or overbought/oversold condition with a price behavior approach, the probability of success of our signals increases enormously. Why? Because price dictates at the end, how all indicators will behave, it also gives us a lot of information about the probable direction it will take in the future.

I hope this article helps you become a better trader.

Don't forget to read our risk disclaimer.

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Currency Trading For Dummies

Real Source: http://theforexarticles.com/2010/09/22/currency-trading-for-dummies/

Currency Trading For Dummies is a very popular forex trading book written by Mark Galant and Brian Dolan. It is targeted mainly towards those people that are new to forex trading, and covers every single aspect of currency trading in some detail.

The Currency Trading For Dummies book, which has been the top-selling forex trading book on Amazon for some time now, is 360 pages long and is divided into 5 parts. There are 20 chapters in total and they cover a wide range of different subjects, as you can see from the list of contents below:

Introduction

Part 1 - Trading The World's Largest Financial Market

Chapter 1 - Currency Trading 101
Chapter 2 - What Is The Forex Market?
Chapter 3 - Who Trades Currencies? Meet The Players
Chapter 4 - The Mechanics Of Currency Trading

Part 2 - Moving Currencies: Driving Forces Behind Forex Rates

Chapter 5 - Getting To Know The Major Currency Pairs
Chapter 6 - Minor Currency Pairs And Cross-Currency Trading
Chapter 7 - Looking At The Big Picture
Chapter 8 - Understand And Applying Market News, Data And Information
Chapter 9 - Getting Down And Dirty With Fundamental Data
Chapter 10 - Cutting The Fog With Technical Analysis

Part 3 - Developing A Trading Plan

Chapter 11 - Training And Preparing For Battle
Chapter 12 - Identifying Trade Opportunities
Chapter 13 - Risk Management Considerations

Part 4 - Executing A Plan

Chapter 14 - Pulling The Trigger
Chapter 15 - Managing The Trade
Chapter 16 - Closing Your Position And Evaluating Your Trading Results

Part 5 - The Part Of Tens

Chapter 17 - Ten Habits Of Successful Currency Traders
Chapter 18 - Ten Beginner Trading Mistakes
Chapter 19 - Ten Rules Of Risk Management
Chapter 20 - Ten Great Resources

Index

The Currency Trading For Dummies book is not that useful for experienced traders like myself, but I think it's ideal for anyone who wants to learn the basics of forex currency trading. If you want to buy this book, or simply want to read some reviews from people who have purchased the book, you can do so by clicking on the following link:

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Better Understand Technical Analysis and Some Indicators

Real Source: http://www.earnforex.com/articles/better-understand-technical-analysis-and-some-indicators

We're focusing on technical analysis in this article with a description of some of the important indicators.

We could say, all wealthy traders use technical analysis but not all technical analysis traders are wealthy although T.A. is the most precise way of trading the Forex market. It's also useful note that fundamentals play their part in indicating whether a price will move up or down. It gives you the edge over other traders.

Technical Analysis is so powerful because of a few reasons

1) it represents numbers. All information and its impact on the market and traders is represented in a currency's price. 2) It helps to predict trends and the foreign exchange market is very 'trendy'. 3) Certain chart patterns are consistent, reliable and repeat themselves. T.A. helps us to see them.

Here's one way of putting technical analsysis into perspective (wish I had a dollar each time I said 'technical analysis'). We all know that prices move in trends. Research has shown that those that trade 'with the trend' greatly improve their chances of making a profitable trade.

Trends help you become aware of the overall market direction and often rescue us from less then profitable entry points. I attended a 2 day course costing me over $2500 AUD and the biggest thing I learned from it was the need for discipline and emotional control. The content was so basic that within the next 3 or 4 articles, I would have covered all of it. So learning the 'tools of the trade' the technical indicators and their applications will help you to diagnose what the market is doing but even then you need to expect ups and down and trade with emotional control.

Stay with the trend, follow the price.

Find the price of the currency pair. If EUR/USD is 1.4224 and moves to 1.4180 then 1.4090 then the market is in a down trend. Concern yourself only with what the market IS doing not what it might do. Listen to the markets and the indicators will backup what they are telling you.

Moving Averages. Tell you the price at a given point of time over a defined period of intervals. They are called moving because they give you the latest price while calculating the average based on the selected time measure.

They lag the market so to give you an indication of a change in trend, use a shorter average such as a 5 or 10 day moving average. By combining a shorter term and longer term M.A. you can detect a buy signal when the shorter term crosses the longer term moving average in the upward direction. Or a sell signal if it crosses in a downward direction. For example, you could use a 5 day versus a 20 day moving average or a 40 day versus a 200 day moving average. There are simple moving averages, linearly weighted which gives more importance to the recent prices or exponentially weighted. The latter is a favourite because it considers all prices in a time period but emphasizes the importance of the most recent price changes.

MACD Based on moving averages, a MACD plots the difference between a 26 exponential moving average and a 12 day exponential moving average, with a 9 day used as a trigger line. If a MACD turns positive when the market is still plummeting it could be a strong buy signal. The converse also works.

Bollinger Bands (sounds like an elastic band) Prices tend to stay between the upper and lower bands. They widen and become more narrow depending on the volatility of the market at the time. A sell signal would be when the moving average is above the Bollinger bands and vice versa for a buy signal. Some traders use it in conjunction with RSI, MACD, CCI and Rate of Change.

Fibonacci Retracement Describe cycles found throughout nature and when applied to technical analysis can find shifts in the market trends. After a climb prices often retrace a large portion sometimes all of the original move. Support and resitance levels often occur near the Fibonacci retracement levels.

RSI Relative Strength Index measures the market activity to see whether it's overbought or oversold. This is a leading indicator so helps to indicate what the market is going to do (awesome!). Ahigher RSI number indicates overbought (so expect a bearish shift) and a lower number indicates oversold.

Successful traders will generally use 3 or 4 signals to provide a more conculsive signal before entering a trade.

Always remember, "If in doubt, stay out!" . Technical analysis doesn't factor in political news, a country's economic profile or fundamental supply and demand.

Technical Analysis helps us figure out how much money to risk on a trade. How and when to enter the market and how to exit the trade for profit or to minimize loss.

I sincerely hope you find this article useful.

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Trading Wisdom and Quotes

Real Source: http://www.forextradingzone.org/trading

While retail forex trading is a relatively new phenomenon, on the institutional level it has been around for many years. Furthermore, there are similarities between all financial markets, so those that have been traders for a long time have developed their own wisdom. Much of this wisdom is contained in some inspiring quotes. Some of this advice may seem like common sense, but letting it really sink in can offer newer traders a moment of truth that can bring about a profound improvement in the way they view the market, and as a result, in the way they trade.

"The trend is your friend" - perhaps the best known trading adage of all time, it is meant to remind traders to always identify the prevailing trend, and never to trade against it, but rather wait for retracements and then enter trades in the direction of the trend.

"The market can stay irrational longer than you can stay solvent" - The way the market reacts to certain news or events may not seem rational at times, but there is no sense in trying to fight the market - it moves where it moves and does not care one bit about your opinion.

"A fool and his money are soon parted" - If you are not smart about where you put your money, you will most likely lose it.

"The trading rules I live by are: (a) Cut losses, (b) Ride Winners, (c) Keep bets small, (d) Follow the rules without question, and (e) Know when to break the rules." - Rules are important, but following them blindly does not necessarily lead to success. Know which conditions produced those rules in the first place, so that when the conditions change, the rules can too.

"Amateurs Focus On Rewards. Professionals Focus on Risk." - Experienced traders think first about how much they can lose on a trade, base their calculations on that, and then see if they are happy with the potential reward the trade offers. Novices usually do the opposite, blinded by the allure of quick riches.

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Forecasting Forex Trading

Real Source: http://www.earnforex.com/articles/forecasting-forex-trading

What is Forex or Foreign Exchange: It is the largest financial market in the world, with a volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.

What about Forecasting: Predicting current and future market trends using existing data and facts. Analysts rely on technical and fundamental statistics to predict the directions of the economy, stock market and individual securities.

For those who trade using the Forex, or foreign currency exchange, knowing how to forecast the Forex can make the difference between trading successfully and losing money. When you begin learning about Forex trading, it is vital that you understand how to forecast the Forex trading market.

There are a few methods that are used when forecasting the Forex. Each system is used to understand how the Forex works and how the fluctuations in the market can affect traders and currency rates. The two methods that are most often used are called technical analysis and fundamental analysis. Both methods differ in their own ways, but each one can help the Forex trader understand how the rates are affecting the currency trade. Most of the time, experienced traders and brokers know each method and use a mixture of the two to trade on the Forex.

One method used in forecasting foreign currency exchange is called technical analysis. This method uses predictions by looking at trends in charts and graphs from past Forex market happenings. This system is based on solid events that have actually taken place in the Forex in the past. Many experience Forex traders and brokers rely on this system because it follows actual trends and can be quite reliable.

When looking at the technical analysis in the Forex, there are three basic principles that are used to make projections. These principles are based on the market action in relation to current events, trends in price movements and past Forex history. When the market action is looked at, everything from supply and demand, current politics and the current state of the market are taken into consideration. It is usually agreed that the actual price of the Forex is a direct reflection of current events.

The trends in price movement are another factor when using technical analysis. This means that there are patterns in the market behavior that have been known to be a contributing factor in the Forex. These patterns are usually repeating over time and can often be a consistent factor when forecasting the Forex market. Another factor that is taken into consideration when forecasting the Forex is history. There are definite patterns in the market and these are usually reliable factors. There are several charts that are taken into consideration when forecasting the Forex market using technical analysis. The five categories that are look at include indicators, number theory, waves, gaps and trends.

Most of these can be quite complicated for those who are inexperienced using the Forex. Most professional Forex brokers understand these charts and have the ability to offer their clients well-informed advice about Forex trading.

Another way that experienced brokers and traders in the Forex use to forecast the trends is called fundamental analysis. This method is used to forecast the future of price movements based on events that have not taken place yet. This can range from political changes, environmental factors and even natural disasters. Important factors and statistics are used to predict how it will affect supply and demand and the rates of the Forex. Most of the time, this method is not a reliable factor on its own, but is used in conjunction with technical analysis to form opinion about the changes in the Forex market.

For those interesting in being involved with Forex trading, a basic understanding of how the system works is essential. Understanding both forecasting systems and how they can predict the market trends will help Forex traders be successful with their trading. Most experienced traders and brokers involved with the Forex use a system of both technical and fundamental information when making decisions about the Forex market. When used together, they can provide the trader with invaluable information about where the currency trends are headed.

Always leave the forecasting to the pros unless you are playing the Forex as a hobby and don't have a lot of money invested...Or like most people you will learn the hard way.

by David Mclauchlan

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Bollinger Bands

Real Source: http://www.earnforex.com/articles/bollinger-bands

Contracting bands warn that the market is about to trend: the bands first converge into a narrow neck, followed by a sharp price movement. The first breakout is often a false move, preceding a strong trend in the opposite direction.

A move that starts at one band normally carries through to the other, in a ranging market.

A move outside the band indicates that the trend is strong and likely to continue — unless price quickly reverses.

A trend that hugs one band signals that the trend is strong and likely to continue. Wait for divergence (when the price is flat or rising or falling, but the MACD is going in the opposite direction...the price will break out in the direction of the MACD) or a Momentum Indicator to signal the end of a trend.

I use the BB's for indication of when a breakout or breakdown is imminent. When the outside bands get very narrow, it means the price is consolidating and is getting ready for a breakout, either up or down.

At this point, it's dangerous to have a position because you don't know if it's going to break up or down. When the bands get very narrow, it's almost better to close out your old positions, even at a loss, until you see a clear direction. If you don't want to close out an old position at a loss, at least hedge it. See more about hedging later in the Advanced Day Trade Forex course.

The BB's can't tell you which direction the breakout will be, the Chaos Oscillator (MACD) and Momentum will do that, and I always trade in the direction the Momentum and Chaos (MACD) are going.

Sometimes when using the slower timeframes, I use the outer BB's as targets for my limit sell price. If the bands are really wide after a big move, I use the middle band as my limit target price.

Bollinger Bands are designed to capture the majority of price movement. When prices move beyond the upper or lower band, they are considered high (overbought) or low (oversold) on a relative basis.

More On Using Bollinger Bands:

First, the BB's can be used as I mentioned before, as price targets. If the bands are narrow, the price will be jumping up & down within the two outer bands. As mentioned before, this is not the best time to be putting on a trade, as the trading range is too narrow, unless you can make a decent quick profit in a 1 or 5 minute chart.

If the range isn't too narrow, you can ride it up and down and book pips. I only attempt this in a 1 or 5 minute timeframe using the 5/9/18/50 EMA's. Don't do it if you can't make at least 5-10 pips up and down. The danger is in whipsaws.

Most of the time, unless the bands are too narrow, you can make trades by literally bouncing off the outer bands.

This is called "The Bollinger Bounce".

When placing a trade, just set your stop at the outer BB and your price target limit sell order where the other outer band is.

If your trade rapidly approaches the limit price and all your indicators say that the price movement is just getting started & not likely to quickly reverse on you, then you should first either remove your limit price & let the price run, or, raise your limit price another 5-10 pips. Then raise your stop to either your entry point or past it, to lock in either breakeven or some profit in case the price suddenly reverses on you.

This is definitely what you should do in a price breakout. If the price keeps going up in an extended breakout, you just keep adjusting your stop upwards to lock in more profit (this is called a trailing stop, more later on this subject) and keep raising your limit also.

A Super Advanced method of using BB's is to use two sets of BB's, both with the middle band set at 18. Set one BB to a standard deviation of 3 and leave the other standard deviation at 1. This gives you 6 short term support/resistance lines to work with. Your initial stop and target are the outer bands, and your inner bands are used for your trailing stop and short term resistance and support. You can also trade off the two inner bands.

This method is very similar to using Fibonacci OR Average True Range (ATR), but is much easier to use and understand.

by Cynthia Macy

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