A new marketing course to hit the internet by Nick Marks that advertises earnings of $1000 a day and $30,000 a month respectively. This turnkey system generating multiple streams of income is relatively new and so it is my pleasure to review it for you.
After purchasing you are given a login page where you are introduced to the system which is in website format. Everything is easy to access and well organized.
After Nick gives you a little pep talk about positive thinking and goal setting, you will be introduced to his first recommendation: join Coastal Vacations. While not a part of his main Forex system this is a recommendation I could've done without.
In the pay per click section you are given a large list of keywords that Nick found convert really well with his system. Some of the keywords in the list have bid prices already attached to them so you can get front page exposure.
The course also has $50 in free adwords credit that unfortunately only works with new accounts so I was out of luck. If you don't already have an account this is worth the price of the course alone.
The forex course shows you some inexpensive traffic methods and provides links to these sources. He also covers stuff like pop-over ads, e-mail lists and autoresponders. Not bad information by any means, and is an alternative to pay per click advertising if you have a smaller budget.
He has an ebook package that seemed like it was going to be really cool as there were dozens of bonus ebooks and software programs covering everything from creating ebooks and website templates, to getting top positions in the major search engines.
As I took a closer look at this package I realized there were some bargain bin informational products included. However, there were also alot of goodies in there as well that I found rather useful. You get so many ebooks and software in here that it really is worth far more than the price of the course.
There is a section on becoming an Ebay power seller in 90 days that goes into a fair amount of detail and wasn't bad. However, Ebay isn't something I have ever been particularly interested in doing. There is also a section on baccarat strategies that I had no interest in.
One of the last sections of his course introduces you to e-currency exchanging using the DXINONE system. It is a great way to acquaint yourself with this increasingly popular opportunity without having to buy standalone e-currency courses which can cost a couple hundred dollars.
The author has combined several effective ways to earn money online and rolled them all into one course. While I didn't jump up and down about all of his strategies, the free ebooks, software, and adwords credit make Forex Enterprise worth the money.
by Joey Merrick
source: http://www.earnforex.com/articles/forex_enterprise_a_full_review.php
Saturday, August 22, 2009
Forex Trading
So what is is Forex trading you may ask? Forex is the exchange you can buy and sell currencies. For example, you might buy British pounds (by exchanging them to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and buy dollars again. At the end of this operation you are going to have more dollars, then you had at the beginning.
The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.
Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.
The name convention. In Forex, the name of a "symbol" is composed of two parts — one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).
As with stocks, you can apply tools of the technical analysis to Forex charts. Trader's indexes can be optimized for Forex "symbols", allowing you to find winning strategy.
Example Forex transaction
Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.
The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).
As you expected, the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.
by Richard Goldie
source: http://www.earnforex.com/articles/forex_trading.php
The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.
Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.
The name convention. In Forex, the name of a "symbol" is composed of two parts — one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).
As with stocks, you can apply tools of the technical analysis to Forex charts. Trader's indexes can be optimized for Forex "symbols", allowing you to find winning strategy.
Example Forex transaction
Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.
The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).
As you expected, the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.
by Richard Goldie
source: http://www.earnforex.com/articles/forex_trading.php
Forex Avenue: The Road to Riches
In my continuing quest to provide visitors of my site with a large amount of options to chose from when considering working from home I have done some research on Forex trading. I first learned of Forex trading while pursuing my MBA program. For those of you who have never heard of this, Forex trading is the exchange of foreign currency.
I know I would have never even know this was an option for making money had I not found out in class. Most of the really big corporations have departments of people that do this for a living because it can be very lucrative if done correctly. The best news I have learned about this process of exchanging currencies is that many of the websites that you can sign up with to do this offer free trial accounts to help you learn before you invest your money into trying it. You won't make any money in the trial accounts if you do well, it is just pretend money essentially but with the real market conditions. If you do well in the trial account you will know if this is something you want to try on your own.
Benefits to Forex trading are that is can be done 24/7 whereas the stock market is a business hours only exchange. It is 24/7 because it is done with countries around the world so clearly there are countries that are awake and working while we sleep. Another benefit is you are in control of the trading on your account. You do not need to hire a licensed broker to make your trades and charge you fees. Along those same lines, anyone who does any investing most likely knows that some funds require you to own then for a certain period of time or pay early withdrawal fees. You do not need to concern yourself with this either. One last benefit that I would like to point out is the fact that Forex is not really subject to the same kinds of swings in the market that stocks are subject to. Of course if you always buy and sell the same currencies then there will be market swings. But, because there are hundreds of currencies out there, there is always going to be something for you to make money on because while one currency is up in value another one is down and vice versa.
There are many resources available to someone interested in becoming involved in this type of training. The Federal Reserve Bank's website is just one example of the information available — http://www.ny.frb.org/markets/foreignex.html. Here is another article that you will find helpful in starting out in this field. http://www.forex.com/pdf/pro2.pdf . I have also included one of the sites that does offer a free lesson.
While there are many benefits to this type of training, as I mentioned above, there are certainly risks involved as well. There are risks with exchange rates, central banks in foreign countries, and risks involving interest rates and credit. Forex is quickly becoming a popular way to help diversify your investment portfolio. If you are good with understanding investing concepts and enjoy doing it this may be the home business opportunity for you. Just do your research and try to find one of the sites offering the free trial account to practice with and you are well on your way down the Road to Riches.
by Scott Bianchi
source: http://www.earnforex.com/articles/forex_avenue_the_road_to_riches.php
I know I would have never even know this was an option for making money had I not found out in class. Most of the really big corporations have departments of people that do this for a living because it can be very lucrative if done correctly. The best news I have learned about this process of exchanging currencies is that many of the websites that you can sign up with to do this offer free trial accounts to help you learn before you invest your money into trying it. You won't make any money in the trial accounts if you do well, it is just pretend money essentially but with the real market conditions. If you do well in the trial account you will know if this is something you want to try on your own.
Benefits to Forex trading are that is can be done 24/7 whereas the stock market is a business hours only exchange. It is 24/7 because it is done with countries around the world so clearly there are countries that are awake and working while we sleep. Another benefit is you are in control of the trading on your account. You do not need to hire a licensed broker to make your trades and charge you fees. Along those same lines, anyone who does any investing most likely knows that some funds require you to own then for a certain period of time or pay early withdrawal fees. You do not need to concern yourself with this either. One last benefit that I would like to point out is the fact that Forex is not really subject to the same kinds of swings in the market that stocks are subject to. Of course if you always buy and sell the same currencies then there will be market swings. But, because there are hundreds of currencies out there, there is always going to be something for you to make money on because while one currency is up in value another one is down and vice versa.
There are many resources available to someone interested in becoming involved in this type of training. The Federal Reserve Bank's website is just one example of the information available — http://www.ny.frb.org/markets/foreignex.html. Here is another article that you will find helpful in starting out in this field. http://www.forex.com/pdf/pro2.pdf . I have also included one of the sites that does offer a free lesson.
While there are many benefits to this type of training, as I mentioned above, there are certainly risks involved as well. There are risks with exchange rates, central banks in foreign countries, and risks involving interest rates and credit. Forex is quickly becoming a popular way to help diversify your investment portfolio. If you are good with understanding investing concepts and enjoy doing it this may be the home business opportunity for you. Just do your research and try to find one of the sites offering the free trial account to practice with and you are well on your way down the Road to Riches.
by Scott Bianchi
source: http://www.earnforex.com/articles/forex_avenue_the_road_to_riches.php
Why Trade the FOREX?
My purpose for writing this article is to demonstrate to you the advantages of trading on the Forex market. However, there is one myth that I want to dispel before I go further. The myth is that there is a difference between trading and investing. To dispel that myth I quote from Al Thomas, President of Williamsburg Investment Company, who wrote "If It Doesn't Go Up, Don't Buy It". He said "Everyone who invests is a trader, only the time period is different." It is a lesson that I took seriously after taking a beating in the stock market in 2000.
So now, let's compare features of currency trading to those of stock and commodity trading.
Liquidity — The Forex market is the most liquid financial market in the world around 1.9 trillion dollars traded everyday. The commodities market trades around 440 billion dollars a day, and the US stock market trades around 200 billion dollars a day. This ensures better trade execution and prevents market manipulation. It also ensures easily executable trading.
Trading Times — The Forex market is open 24 hours a day (except weekends) which means that in the US it opens at 3:00 pm Sunday (EST) and closes Friday at 5:00 (EST), allowing active traders to choose the times they want to trade. Commodities trading hours are all over the board depending on which commodity you are trading. Including extended trading times US stocks can be traded from 8:30 am to 6:30 pm (ET) on weekdays.
Leverage — Depending on your Forex account size, your leverage may be 100:1, although there are Forex brokers that offer leverage of up to 400:1 (not that I would ever recommend that kind of leverage). Leverage in the stock market can be as high as 4:1, and in the commodities market, leverage varies with the commodity traded but it can be quite high. Because the commodity markets are not as liquid as the Forex market, its leverage is inherently riskier. Although I was never shut out of a commodity trade by the day limit, the fear was always in the back of my mind.
Trading costs — Transaction costs in the Forex market is the difference between the buy and sell price of each currency pair. There are no brokerage fees. For both the stock and the commodity markets, there are transaction costs and brokerage fees. Even when you use discount brokers, those fees add up.
Minimum investment — You can open a Forex trading account for as little as $300.00. It took $5,000 for me to open my futures trading account.
Focus — 85% of all trading transactions are made on 7 major currencies. In the US stock market alone there are 40,000 stocks. There are just over 200 commodity markets, although quite a few are so illiquid that they are not traded except by hedgers. As you can see, the fewer number of instruments allows us to study each one more closely.
Trade execution — In the Forex market, trade execution is almost instantaneous. In both the equity and commodity markets, you count on a broker to execute your trades and their results are sometimes inconsistent.
While all of these features make trading the Forex market very attractive, it still requires a lot of education, discipline, commitment and patience. All trading can be risky.
by Susan Walker
sourcea: http://www.earnforex.com/articles/why_trade_the_forex.php
So now, let's compare features of currency trading to those of stock and commodity trading.
Liquidity — The Forex market is the most liquid financial market in the world around 1.9 trillion dollars traded everyday. The commodities market trades around 440 billion dollars a day, and the US stock market trades around 200 billion dollars a day. This ensures better trade execution and prevents market manipulation. It also ensures easily executable trading.
Trading Times — The Forex market is open 24 hours a day (except weekends) which means that in the US it opens at 3:00 pm Sunday (EST) and closes Friday at 5:00 (EST), allowing active traders to choose the times they want to trade. Commodities trading hours are all over the board depending on which commodity you are trading. Including extended trading times US stocks can be traded from 8:30 am to 6:30 pm (ET) on weekdays.
Leverage — Depending on your Forex account size, your leverage may be 100:1, although there are Forex brokers that offer leverage of up to 400:1 (not that I would ever recommend that kind of leverage). Leverage in the stock market can be as high as 4:1, and in the commodities market, leverage varies with the commodity traded but it can be quite high. Because the commodity markets are not as liquid as the Forex market, its leverage is inherently riskier. Although I was never shut out of a commodity trade by the day limit, the fear was always in the back of my mind.
Trading costs — Transaction costs in the Forex market is the difference between the buy and sell price of each currency pair. There are no brokerage fees. For both the stock and the commodity markets, there are transaction costs and brokerage fees. Even when you use discount brokers, those fees add up.
Minimum investment — You can open a Forex trading account for as little as $300.00. It took $5,000 for me to open my futures trading account.
Focus — 85% of all trading transactions are made on 7 major currencies. In the US stock market alone there are 40,000 stocks. There are just over 200 commodity markets, although quite a few are so illiquid that they are not traded except by hedgers. As you can see, the fewer number of instruments allows us to study each one more closely.
Trade execution — In the Forex market, trade execution is almost instantaneous. In both the equity and commodity markets, you count on a broker to execute your trades and their results are sometimes inconsistent.
While all of these features make trading the Forex market very attractive, it still requires a lot of education, discipline, commitment and patience. All trading can be risky.
by Susan Walker
sourcea: http://www.earnforex.com/articles/why_trade_the_forex.php
Explosive Profits: 7 Reasons to Trade Forex
There are many money-making opportunities out there and we've been involved with quite a few, namely property marketing, web development, residential construction security, multi-level marketing businesses etc.
We've come to a few conclusions with the help of some well-known properity coaches.
Often people with the income they desire don't have the time to enjoy it. Those that have time don't often have money. You don't have to sacrifice your life-style to earn an above-average income. If you focus on the for a few months you can make that dream a reality and create time and money to do what you REALLY want.
To earn a living money is given in exchange for a product or service rendered. It needs to be sold continuously otherwise your income stops abruptly unless it's a repeat type of product or service.
Money is a medium of exchange. There's no magical formula to possess it, you need to exchange something of value for it.
What if, you could have access to thousands of customers who are ready, willing and able to buy from you whenever you wanted? Wouldn't it be great to avoid any hassles like money collection problems (just had a delayed payment from my web business), keeping difficult customers happy (we all know what that's like), competition stealing your business without providing the same value etc.
All that is possible with . You can also trade from anywhere. Take your laptop with you, find an internet connection and away you go.
Another advantage is that you don't need experience to get started. Get a traditionally job involves accumulating specialized experience, having a well-polished resume and having the right contacts. With the right training course, you can get started straight away.
Here's 7 more reasons to trade :
1. It never closes. It's open around the clock, worldwide. Trading positions open at Monday 7am, New Zealand time and close 5pm New York time on Friday. During this time, you can enter or exit the market whenever you like. It's a continuous electronic currency exchange. This is great because you can trade whenever you have spare time.
2. Leverage. Standard $100 000 currency lots can be traded with as little as $1000. This is mainly because of the ease with which you can buy and sell, some brokers will leverage up to 200 times, so with $100 you can control a 200 000 unit currency position. It's the best use of trading capital around, even banks lending on property investments don't come close.
3. Accurately predict the outcomes. Currency prices generally repeat themselves in predictable cycles so you can see what the trends are. 'Technical Analysis' helps to see these trends and profit from them.
4. Low Transaction Cost. In other words, you mistakes won't cost you a fortune. Good brokers won' charge commissions to trade or maintain an account even if you have a mini account and trade small volumes.
5. Unlimited Earning Potential. has a daily trading volume of over 1.5 trillion, the largest financial market in the world. It dwarfs the equities market (50 billion daily) and the futures market (30 billion).
6. You can make money in any market conditions. Each market is one currency against another, so when you buy in one, you're selling in another so there's no biase towards either currency moving up or down. This means it's up to you to choose which currency to buy or sell with. Yu can make money going up or down.
7. Market transparency. This is an advantage in any business or trading environment. It means you can manage risk and execute orders within seconds. It's highly efficient and allows you to avoid unexpected 'surprises'.
I hope you're now convinced that is the best investment and income opportunity around.
by Sorna Devadas
dropv2003@yahoo.co.uk
source: http://www.earnforex.com/articles/explosive_profits_7_reasons_to_trade_forex.php
We've come to a few conclusions with the help of some well-known properity coaches.
Often people with the income they desire don't have the time to enjoy it. Those that have time don't often have money. You don't have to sacrifice your life-style to earn an above-average income. If you focus on the for a few months you can make that dream a reality and create time and money to do what you REALLY want.
To earn a living money is given in exchange for a product or service rendered. It needs to be sold continuously otherwise your income stops abruptly unless it's a repeat type of product or service.
Money is a medium of exchange. There's no magical formula to possess it, you need to exchange something of value for it.
What if, you could have access to thousands of customers who are ready, willing and able to buy from you whenever you wanted? Wouldn't it be great to avoid any hassles like money collection problems (just had a delayed payment from my web business), keeping difficult customers happy (we all know what that's like), competition stealing your business without providing the same value etc.
All that is possible with . You can also trade from anywhere. Take your laptop with you, find an internet connection and away you go.
Another advantage is that you don't need experience to get started. Get a traditionally job involves accumulating specialized experience, having a well-polished resume and having the right contacts. With the right training course, you can get started straight away.
Here's 7 more reasons to trade :
1. It never closes. It's open around the clock, worldwide. Trading positions open at Monday 7am, New Zealand time and close 5pm New York time on Friday. During this time, you can enter or exit the market whenever you like. It's a continuous electronic currency exchange. This is great because you can trade whenever you have spare time.
2. Leverage. Standard $100 000 currency lots can be traded with as little as $1000. This is mainly because of the ease with which you can buy and sell, some brokers will leverage up to 200 times, so with $100 you can control a 200 000 unit currency position. It's the best use of trading capital around, even banks lending on property investments don't come close.
3. Accurately predict the outcomes. Currency prices generally repeat themselves in predictable cycles so you can see what the trends are. 'Technical Analysis' helps to see these trends and profit from them.
4. Low Transaction Cost. In other words, you mistakes won't cost you a fortune. Good brokers won' charge commissions to trade or maintain an account even if you have a mini account and trade small volumes.
5. Unlimited Earning Potential. has a daily trading volume of over 1.5 trillion, the largest financial market in the world. It dwarfs the equities market (50 billion daily) and the futures market (30 billion).
6. You can make money in any market conditions. Each market is one currency against another, so when you buy in one, you're selling in another so there's no biase towards either currency moving up or down. This means it's up to you to choose which currency to buy or sell with. Yu can make money going up or down.
7. Market transparency. This is an advantage in any business or trading environment. It means you can manage risk and execute orders within seconds. It's highly efficient and allows you to avoid unexpected 'surprises'.
I hope you're now convinced that is the best investment and income opportunity around.
by Sorna Devadas
dropv2003@yahoo.co.uk
source: http://www.earnforex.com/articles/explosive_profits_7_reasons_to_trade_forex.php
Forex The Future Investment
There are many many advantages over the various other ways of investing. First of all it is a 24 hr market, except for weekends of course. You have the US market then the european and then the Asian. One of the great times to trade is during the over lapping periods. The USA and european overlap between 5am & 9am eastern and the Euro & Asian between 11pm & 1am eastern. Usually the busiest time and best to trade.
The is also the risk factor for the accounts. With futures and options you can get margin calls that can wipe you out. If you get caught in a bad trade not only do you lose the money in the account but you may have to come up with alot more from your pocket. It can be very risking. But not in Forex. Worst case senerio you could lose whats in you account. But you would have to do something really stupid. Like making a big trade on a Fundamental day and leave it alone. If market takes a bad move and you weren't there. OOOPS. But That wouldn't happen with a smarth trader.
Then there are the demo accounts which is an account where you can trade using all the right things, platform,charts,and information. But you are using play money, or what we call paper trading too.
Plus with Forex you have a mini account. Instead of needing thousands of dollars to get into it. You can open an account with as little as $300.00. Now of course you will be trading at 1 tenth of a trade. IN other words you controling 10,000 instead of 100,000.00 These are call lots. Which also means you will only risk 1 tenth too!
So if you would love to learn to do investing and not have near the risk you really need to take a closer look at Forex trading.
by Mike Pachuta
mpachuta@yahoo.com
source: http://www.earnforex.com/articles/forex_the_future_investment.php
The is also the risk factor for the accounts. With futures and options you can get margin calls that can wipe you out. If you get caught in a bad trade not only do you lose the money in the account but you may have to come up with alot more from your pocket. It can be very risking. But not in Forex. Worst case senerio you could lose whats in you account. But you would have to do something really stupid. Like making a big trade on a Fundamental day and leave it alone. If market takes a bad move and you weren't there. OOOPS. But That wouldn't happen with a smarth trader.
Then there are the demo accounts which is an account where you can trade using all the right things, platform,charts,and information. But you are using play money, or what we call paper trading too.
Plus with Forex you have a mini account. Instead of needing thousands of dollars to get into it. You can open an account with as little as $300.00. Now of course you will be trading at 1 tenth of a trade. IN other words you controling 10,000 instead of 100,000.00 These are call lots. Which also means you will only risk 1 tenth too!
So if you would love to learn to do investing and not have near the risk you really need to take a closer look at Forex trading.
by Mike Pachuta
mpachuta@yahoo.com
source: http://www.earnforex.com/articles/forex_the_future_investment.php
Investing in Forex
Investing in foreign currencies is a relatively new avenue of investing. There are considerably fewer people are aware of this market than there are people aware of several other avenues of investing. Trading foreign currency, also known as forex, is the most lucrative investment market that exists. There are several factors that make this true among which, successful forex traders earn realistic profits of one hundred plus percent each month. Compared to some of the better known investment markets such as corporate stocks, this is an unheard of return on investment. It's very necessary to mention here that a person who invests in forex must, without exception, make it a point to learn the detailed, but simple strategies and information surrounding the market. This very fact is what makes the difference between successful forex traders and other traders.
A few additional points, which create such powerful leverage for investors within the forex market are: The amount of capital required to begin investing in the market is only three hundred dollars. For the most part, any other investment market is going to demand thousands of dollars of the investor in the beginning. Also, the market offers opportunities to profit regardless what the direction of the market may be; In most commonly known markets investors sit and wait for the market to begin an up trend before entering a trade. Even then, investors, as a rule must sit and wait some more to be able to exit the trade with a nice profit. Given that the forex market produces several up, down, and sideways trends in a single day, it can easily be seen that forex stands head and shoulders above other markets. Additionally there are trading strategies, which are taught that provide for compounded profits; these are profits on top of profits. In addition, free demo accounts are available within the industry of forex trading, which facilitate the sharpening of skills without the risk losing any capital. And the advantage regarding the time factor in trading foreign currency is a very attractive point for any investor. Compared to one of the most sought after avenues of investing, which often requires forty or more hours each week, namely in the real-estate market, the forex market requires a much smaller demand on the investor's time. Forex trading requires approximately ten to fifteen hours each week to earn a full time income. It's easy to see that the advantages and great leverage that exist in the forex market, make it among the most lucrative, time liberating, and easy to enter by far.
I hope this information gives you a clear understanding of how you can turn your investing into a true method of making your money work harder for you.
by Joe Clinton
source: http://www.earnforex.com/articles/investing_in_forex.php
A few additional points, which create such powerful leverage for investors within the forex market are: The amount of capital required to begin investing in the market is only three hundred dollars. For the most part, any other investment market is going to demand thousands of dollars of the investor in the beginning. Also, the market offers opportunities to profit regardless what the direction of the market may be; In most commonly known markets investors sit and wait for the market to begin an up trend before entering a trade. Even then, investors, as a rule must sit and wait some more to be able to exit the trade with a nice profit. Given that the forex market produces several up, down, and sideways trends in a single day, it can easily be seen that forex stands head and shoulders above other markets. Additionally there are trading strategies, which are taught that provide for compounded profits; these are profits on top of profits. In addition, free demo accounts are available within the industry of forex trading, which facilitate the sharpening of skills without the risk losing any capital. And the advantage regarding the time factor in trading foreign currency is a very attractive point for any investor. Compared to one of the most sought after avenues of investing, which often requires forty or more hours each week, namely in the real-estate market, the forex market requires a much smaller demand on the investor's time. Forex trading requires approximately ten to fifteen hours each week to earn a full time income. It's easy to see that the advantages and great leverage that exist in the forex market, make it among the most lucrative, time liberating, and easy to enter by far.
I hope this information gives you a clear understanding of how you can turn your investing into a true method of making your money work harder for you.
by Joe Clinton
source: http://www.earnforex.com/articles/investing_in_forex.php
Advantages of the Forex Market
What are the advantages of the Forex Market over other types of investments?
When thinking about various investments, there is one investment vehicle that comes to mind. The Forex or Foreign Currency Market has many advantages over other types of investments. The Forex market is open 24 hrs a day, unlike the regular stock markets. Most investments require a substantial amount of capital before you can take advantage of an investment opportunity. To trade Forex, you only need a small amount of capital. Anyone can enter the market with as little as $300 USD to trade a "mini account", which allows you to trade lots of 10,000 units. One lot of 10,000 units of currency is equal to 1 contract. Each "pip" or move up or down in the currency pair is worth a $1 gain or loss, depending on which side of the market you are on. A standard account gives you control over 100,000 units of currency and a pip is worth $10.
The Forex market is also very liquid. When trading Forex you have full control of your capital.
Many other types of investments require holding your money up for long periods of time. This is a disadvantage because if you need to use the capital it can be difficult to access to it without taking a huge loss. Also, with a small amount of money, you can control
Forex traders can be profitable in bullish or bearish market conditions. Stock market traders need stock prices to rise in order to take a profit. Forex traders can make a profit during up trends and downtrends. Forex Trading can be risky, but with having the ability to have a good system to follow, good money management skills, and possessing self discipline, Forex trading can be a relatively low risk investment.
The Forex market can be traded anytime, anywhere. As long as you have access to a computer, you have the ability to trade the Forex market. An important thing to remember is before jumping into trading currencies, is it wise to practice with "paper money", or "fake money." Most brokers have demo accounts where you can download their trading station and practice real time with fake money. While this is no guarantee of your performance with real money, practicing can give you a huge advantage to become better prepared when you trade with your real, hard earned money. There are also many Forex courses on the internet, just be careful when choosing which ones to purchase.
by Heather Redmond
source: http://www.earnforex.com/articles/advantages_of_the_forex_market.php
When thinking about various investments, there is one investment vehicle that comes to mind. The Forex or Foreign Currency Market has many advantages over other types of investments. The Forex market is open 24 hrs a day, unlike the regular stock markets. Most investments require a substantial amount of capital before you can take advantage of an investment opportunity. To trade Forex, you only need a small amount of capital. Anyone can enter the market with as little as $300 USD to trade a "mini account", which allows you to trade lots of 10,000 units. One lot of 10,000 units of currency is equal to 1 contract. Each "pip" or move up or down in the currency pair is worth a $1 gain or loss, depending on which side of the market you are on. A standard account gives you control over 100,000 units of currency and a pip is worth $10.
The Forex market is also very liquid. When trading Forex you have full control of your capital.
Many other types of investments require holding your money up for long periods of time. This is a disadvantage because if you need to use the capital it can be difficult to access to it without taking a huge loss. Also, with a small amount of money, you can control
Forex traders can be profitable in bullish or bearish market conditions. Stock market traders need stock prices to rise in order to take a profit. Forex traders can make a profit during up trends and downtrends. Forex Trading can be risky, but with having the ability to have a good system to follow, good money management skills, and possessing self discipline, Forex trading can be a relatively low risk investment.
The Forex market can be traded anytime, anywhere. As long as you have access to a computer, you have the ability to trade the Forex market. An important thing to remember is before jumping into trading currencies, is it wise to practice with "paper money", or "fake money." Most brokers have demo accounts where you can download their trading station and practice real time with fake money. While this is no guarantee of your performance with real money, practicing can give you a huge advantage to become better prepared when you trade with your real, hard earned money. There are also many Forex courses on the internet, just be careful when choosing which ones to purchase.
by Heather Redmond
source: http://www.earnforex.com/articles/advantages_of_the_forex_market.php
Forex Glossary
Ask (Offer) — price of the offer, the price you buy for.
Aussie — a Forex slang name for the Australian dollar.
Bank Rate — the percentage rate at which central bank of a country lends money to the country's commercial banks.
Bid — price of the demand, the price you sell for.
Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.
Cable — a Forex traders slang word GBP/USD currency pair.
Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
CFD — a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
Commission — broker commissions for operation handling.
CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.
ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
ECB (European Central Bank) — the main regulatory body of the European Union financial system.
Fed (Federal Reserve) — the main regulatory body of the United States of America financial system, which division — FOMC (Federal Open Market Committee) — regulates, among other things, federal interest rates.
Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
Flat (Square) — neutral state when all your positions are closed.
Fundamental Analysis — the analysis based only on news, economic indicators and global events.
GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.
GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
Hedging — maintaining a market position which secures the existing open positions in the opposite direction.
Jobber — a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight.
Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.
Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
Liquidity — the measure of markets which describes relationship between the trading volume and the price change.
Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.
Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.
Margin Account — account which is used to hold investor's deposited money for FOREX trading.
Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.
Market Order — order to buy or sell a lot for a current market price.
Market Price — the current price for which the currency is traded for on the market.
Momentum — the measure of the currency's ability to move in the given direction.
Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Offer (Ask) — price of the offer, the price you buy for.
Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.
Order — order for a broker to buy or sell the currency with a certain rate.
Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).
Profit (Gain) — positive amount of money gained for closing the position.
Principal Value — the initial amount of money of the invested.
Realized Profit/Loss — gain/loss for already closed positions.
Resistance — price level for which the intensive selling can lead to price increasing (up-trend).
Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
Settled (Closed) Position — closed positions for which all needed transactions has been made.
Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
Spread — difference between ask and bid prices for a currency pair.
Standard Lot — 100,000 units of the base currency of the currency pair, which you are buying or selling.
Stop-Limit Order — order to sell or buy a lot for a certain price or worse.
Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.
Support — price level for which intensive buying can lead to the price decreasing (down-trend).
Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.
Trend — direction of market which has been established with influence of different factors.
Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
Useable Margin — amount of money in the account that can be used for trading.
Used Margin — amount of money in the account already used to hold open positions open.
Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.
VPS (Virtual Private Server) — virtual environment hosted on the dedicated server, which can be used to run the programs independent on the user's PC. Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions.
source: http://www.earnforex.com/forex_glossary.php
Aussie — a Forex slang name for the Australian dollar.
Bank Rate — the percentage rate at which central bank of a country lends money to the country's commercial banks.
Bid — price of the demand, the price you sell for.
Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.
Cable — a Forex traders slang word GBP/USD currency pair.
Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
CFD — a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
Commission — broker commissions for operation handling.
CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.
ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
ECB (European Central Bank) — the main regulatory body of the European Union financial system.
Fed (Federal Reserve) — the main regulatory body of the United States of America financial system, which division — FOMC (Federal Open Market Committee) — regulates, among other things, federal interest rates.
Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
Flat (Square) — neutral state when all your positions are closed.
Fundamental Analysis — the analysis based only on news, economic indicators and global events.
GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.
GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
Hedging — maintaining a market position which secures the existing open positions in the opposite direction.
Jobber — a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight.
Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.
Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
Liquidity — the measure of markets which describes relationship between the trading volume and the price change.
Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.
Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.
Margin Account — account which is used to hold investor's deposited money for FOREX trading.
Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.
Market Order — order to buy or sell a lot for a current market price.
Market Price — the current price for which the currency is traded for on the market.
Momentum — the measure of the currency's ability to move in the given direction.
Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Offer (Ask) — price of the offer, the price you buy for.
Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.
Order — order for a broker to buy or sell the currency with a certain rate.
Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).
Profit (Gain) — positive amount of money gained for closing the position.
Principal Value — the initial amount of money of the invested.
Realized Profit/Loss — gain/loss for already closed positions.
Resistance — price level for which the intensive selling can lead to price increasing (up-trend).
Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
Settled (Closed) Position — closed positions for which all needed transactions has been made.
Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
Spread — difference between ask and bid prices for a currency pair.
Standard Lot — 100,000 units of the base currency of the currency pair, which you are buying or selling.
Stop-Limit Order — order to sell or buy a lot for a certain price or worse.
Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.
Support — price level for which intensive buying can lead to the price decreasing (down-trend).
Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.
Trend — direction of market which has been established with influence of different factors.
Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
Useable Margin — amount of money in the account that can be used for trading.
Used Margin — amount of money in the account already used to hold open positions open.
Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.
VPS (Virtual Private Server) — virtual environment hosted on the dedicated server, which can be used to run the programs independent on the user's PC. Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions.
source: http://www.earnforex.com/forex_glossary.php
Forex FAQ
What is FOREX?
You can read the detailed answer in the separate section of the site — "What is Forex?".
How can I start trading Forex?
You'll need to register a trading account with a Forex broker, such as Marketiva. Then you can begin using their Forex client program to buy and sell currencies. This will take less than 5 minutes of your time!
Who owns Forex and where is it located?
It's not owned by anyone in particular. Forex is an Interbank market, meaning that it's transactions are conducted only between two participants - seller and the buyer. So as long as existing banking system will exist, Forex will be here. It's not connected to any specific country or government organization.
What the working hours of Forex market?
Forex market is open from 22:00 GMT Sunday (opening of Australia trading session) till 22:00 GMT Friday (closing of USA trading session).
What is margin?
Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open.
What are the "long" and "short" positions?
Long position is a "buy" position, meaning that this position will be in profit if price goes up.
Short position is a "sell" position, meaning that this position will be in profit if price goes down.
What is the best Forex trading strategy?
There is none. You should constantly develop your own strategies for every possible market situation, if you want to be in profit. Specific strategies can only be good for a certain period of time and for certain currency pairs.
How much money I need to start trading Forex?
With Marketiva you can start trading Forex with as little as $1. Usually, the minimum amount varies from $100 to $10,000 ($100,000 and more for Interbank trading).
I can't (or don't want to) install any Forex trading software on my computer. Can I still trade Forex?
If you don't want (or it is not possible) to install new software to start trading Forex then a good option for you would be using web based trading platform. You can browse our Forex brokers list to find those which support such platform. Here are those brokers which have web based trading options: Easy Forex, ForexYard, Oanda, Saxo Bank, ACM, Interactive Brokers.
I've downloaded the expert advisor for MetaTrader platform but I don't know how to install it. What should I do?
You can read the MetaTrader Expert Advisors User's Tutorial to find out how to intstall those expert advisors.
I've downloaded a custom indicator for MetaTrader platform but I don't know how to install it. What should I do?
You can read the MetaTrader Indicators User's Tutorial to find out how to intstall those indicators.
source: http://www.earnforex.com/forex_faq.php
You can read the detailed answer in the separate section of the site — "What is Forex?".
How can I start trading Forex?
You'll need to register a trading account with a Forex broker, such as Marketiva. Then you can begin using their Forex client program to buy and sell currencies. This will take less than 5 minutes of your time!
Who owns Forex and where is it located?
It's not owned by anyone in particular. Forex is an Interbank market, meaning that it's transactions are conducted only between two participants - seller and the buyer. So as long as existing banking system will exist, Forex will be here. It's not connected to any specific country or government organization.
What the working hours of Forex market?
Forex market is open from 22:00 GMT Sunday (opening of Australia trading session) till 22:00 GMT Friday (closing of USA trading session).
What is margin?
Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open.
What are the "long" and "short" positions?
Long position is a "buy" position, meaning that this position will be in profit if price goes up.
Short position is a "sell" position, meaning that this position will be in profit if price goes down.
What is the best Forex trading strategy?
There is none. You should constantly develop your own strategies for every possible market situation, if you want to be in profit. Specific strategies can only be good for a certain period of time and for certain currency pairs.
How much money I need to start trading Forex?
With Marketiva you can start trading Forex with as little as $1. Usually, the minimum amount varies from $100 to $10,000 ($100,000 and more for Interbank trading).
I can't (or don't want to) install any Forex trading software on my computer. Can I still trade Forex?
If you don't want (or it is not possible) to install new software to start trading Forex then a good option for you would be using web based trading platform. You can browse our Forex brokers list to find those which support such platform. Here are those brokers which have web based trading options: Easy Forex, ForexYard, Oanda, Saxo Bank, ACM, Interactive Brokers.
I've downloaded the expert advisor for MetaTrader platform but I don't know how to install it. What should I do?
You can read the MetaTrader Expert Advisors User's Tutorial to find out how to intstall those expert advisors.
I've downloaded a custom indicator for MetaTrader platform but I don't know how to install it. What should I do?
You can read the MetaTrader Indicators User's Tutorial to find out how to intstall those indicators.
source: http://www.earnforex.com/forex_faq.php
Forex for Dummies
Forex Basics
If you've already read the "What is Forex?" section then you should know what Forex market is and what it is all about. If not, please, do it. There are five essential aspects of foreign currency market a beginner trader (and an old one as well) should be aware of:
* Forex Fundamental Analysis
* Forex Technical Analysis
* Money Management
* Forex Trading Psychology
* Forex Brokerage
Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.
Forex Fundamental Analysis
Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:
* Reminiscences of a Stock Operator
* What Moves the Currency Market?
Forex Technical Analysis
Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:
* The Law Of Charts
* Candlesticks For Support And Resistance
* Trend Determination
Money Management in Forex
Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:
* Risk Control and Money Management
* Money Management (A chapter from The Mathematics of Gambling)
Forex Trading Psychology
While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:
* Your greed
* Overtrading
* Lack of discipline
* Lack of confidence
* Blind following others' forecasts
These are very professional books on psychology written specially for financial traders:
* Calming The Mind So That Body Can Perform
* The Miracle of Discipline
Forex Brokerage
Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:
* Being a professional company you can trust
* Provide you with real-time quotes
* Execute your orders fast and accurately
* Don't take a lot of commissions
* Support the withdraw/deposit methods that you can use
For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:
* FXOpen — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind of traders.
* InstaForex — a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.
* FXcast — good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including WebMoney, e-Bullion and wire transfer.
* LiteForex — broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start with.
source: http://www.earnforex.com/forex_for_dummies.php
If you've already read the "What is Forex?" section then you should know what Forex market is and what it is all about. If not, please, do it. There are five essential aspects of foreign currency market a beginner trader (and an old one as well) should be aware of:
* Forex Fundamental Analysis
* Forex Technical Analysis
* Money Management
* Forex Trading Psychology
* Forex Brokerage
Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.
Forex Fundamental Analysis
Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:
* Reminiscences of a Stock Operator
* What Moves the Currency Market?
Forex Technical Analysis
Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:
* The Law Of Charts
* Candlesticks For Support And Resistance
* Trend Determination
Money Management in Forex
Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:
* Risk Control and Money Management
* Money Management (A chapter from The Mathematics of Gambling)
Forex Trading Psychology
While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:
* Your greed
* Overtrading
* Lack of discipline
* Lack of confidence
* Blind following others' forecasts
These are very professional books on psychology written specially for financial traders:
* Calming The Mind So That Body Can Perform
* The Miracle of Discipline
Forex Brokerage
Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:
* Being a professional company you can trust
* Provide you with real-time quotes
* Execute your orders fast and accurately
* Don't take a lot of commissions
* Support the withdraw/deposit methods that you can use
For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:
* FXOpen — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind of traders.
* InstaForex — a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.
* FXcast — good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including WebMoney, e-Bullion and wire transfer.
* LiteForex — broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start with.
source: http://www.earnforex.com/forex_for_dummies.php
What is Forex?
FOREX - the foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world.
Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.
In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.
Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.
Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.
Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.
This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).
Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.
Compiled using Wikipedia materials.
source: http://www.earnforex.com/what_is_forex.php
Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.
In the foreign exchange market there is little or no 'inside information'. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.
Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.
Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study.
Like any market there is a bid/offer spread (difference between buying price and selling price). On major currency crosses, the difference between the price at which a market maker will sell ("ask", or "offer") to a wholesale customer and the price at which the same market-maker will buy ("bid") from the same wholesale customer is minimal, usually only 1 or 2 pips. In the EUR/USD price of 1.4238 a pip would be the '8' at the end. So the bid/ask quote of EUR/USD might be 1.4238/1.4239.
This, of course, does not apply to retail customers. Most individual currency speculators will trade using a broker which will typically have a spread marked up to say 3-20 pips (so in our example 1.4237/1.4239 or 1.423/1.425). The broker will give their clients often huge amounts of margin, thereby facilitating clients spending more money on the bid/ask spread. The brokers are not regulated by the U.S. Securities and Exchange Commission (since they do not sell securities), so they are not bound by the same margin limits as stock brokerages. They do not typically charge margin interest, however since currency trades must be settled in 2 days, they will "resettle" open positions (again collecting the bid/ask spread).
Individual currency speculators can work during the day and trade in the evenings, taking advantage of the market's 24 hours long trading day.
Compiled using Wikipedia materials.
source: http://www.earnforex.com/what_is_forex.php
Thursday, August 13, 2009
MoneyForex Trading Technology & Technical Approach
MoneyForex is a trading technology for Forex retail market for traders and financial institutions. The platform is designed to be fast, effortless, reliable, and efficient. This means sub-second flash fills, real-time account balances and sophisticated charting to name a few. We offer a very powerful, efficient, easy-to-use, and cutting-edge FX trading system designed to take introducing brokers to the next level, giving them the scalability and speed needed to expand the forex retail trading business.
Standard And Open Architecture
Built on top of industry standard J2EE application servers, MoneyForex Trader trading platform leverage ongoing advances in the technology industry and provide a standard architecture for future development. In addition, the open nature of its architecture ensures a highly flexible design, and allows for the easy and rapid integration of additional third-party tools and services.
Customization For Introducing Broker
The flexibility provided by the platform allows objects, services and presentation components to be quickly tailored to company needs, including adjusting and adapting business processes and systems for customized transaction flow and information transparency throughout the full lifecycle of each and every trade.
Scalability
MoneyForex technology uses the latest fault tolerance and load balancing technologies to assure high levels of service and availability and satisfies the reliability requirements of mission-critical applications. The design of MoneyForex trading system supports multiple application servers, offering horizontal scalability and supporting large numbers of users with true non-stop resilience.
Reliable connectivity:
Instant notification of connection failure, secure, works with firewalls and proxy servers, works with unreliable or poor connections.
Client API/SDK:
End user application works over client API (Java), what allows trader to use third party tools like MetaStock, Omega TradeStation, eSignal, or custom build tools (e.g. trading robots).
source: http://www.moneyforex.com/forex-trading-technology.php
Standard And Open Architecture
Built on top of industry standard J2EE application servers, MoneyForex Trader trading platform leverage ongoing advances in the technology industry and provide a standard architecture for future development. In addition, the open nature of its architecture ensures a highly flexible design, and allows for the easy and rapid integration of additional third-party tools and services.
Customization For Introducing Broker
The flexibility provided by the platform allows objects, services and presentation components to be quickly tailored to company needs, including adjusting and adapting business processes and systems for customized transaction flow and information transparency throughout the full lifecycle of each and every trade.
Scalability
MoneyForex technology uses the latest fault tolerance and load balancing technologies to assure high levels of service and availability and satisfies the reliability requirements of mission-critical applications. The design of MoneyForex trading system supports multiple application servers, offering horizontal scalability and supporting large numbers of users with true non-stop resilience.
Reliable connectivity:
Instant notification of connection failure, secure, works with firewalls and proxy servers, works with unreliable or poor connections.
Client API/SDK:
End user application works over client API (Java), what allows trader to use third party tools like MetaStock, Omega TradeStation, eSignal, or custom build tools (e.g. trading robots).
source: http://www.moneyforex.com/forex-trading-technology.php
Mini Forex Trading
The MONEYFOREX Mini account was designed for those who are new to the forex market. The Mini forex account trades in smaller contract sizes of 10,000 units, which is 1/10th the size of the standard account. The smaller trade size gives traders the opportunity to trade live with less overall risk or exposure to the market. In addition, the Mini account allows traders to become familiar with MONEYFOREX, more specifically the quality and reliability of MONEYFOREX dealing practices and the stability of the MoneyForex Trader Trading Platform.
Important of Trading Strategy
Many traders will hold on to losses hoping it will reverse eventually, only to see the loss get progressively larger. The trading decisions are based on emotional reactions to fluctuating profits and losses, a common pitfall for new traders.
Because the pip value on the Mini Account is just $1 per pip, traders can focus on developing a disciplined trading strategy, basing decisions on pip movement and market conditions NOT P/L.
For Example: When trading a MONEYFOREX Mini account, a 50-pip floating loss is approximately $50. That same 50-pip move against you on the Standard Account now becomes a $500 floating loss. By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Generating larger losses on the Standard Account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss.
Start Small with 10,000 units.
There is NO MAXIMUM trade volume on the MONEYFOREX Mini forex account. The standard default trade size in the platform is 100,000 units which equivalent to one standard lot. Therefore, for mini lot you need to adjust it to 0.1 lot in order to place 10,000 units. For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more experienced and build up confidence you can slowly increase the size of your positions to maximize profits. In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade enables better risk and account management. To place trade for mini lot, please change the lot amount setting to 0.1.The current default setting is 1 standard lot. The default setting located in the Total Account(s) Equity Window under "DA".
Ideal for Beginners
MONEYFOREX recommends that all traders with account balances less than $10,000 trade a Mini account. This gives you more staying power in the market, and the ability to take advantage of multiple opportunities without over-leveraging your account. Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.
source: http://www.moneyforex.com/mini-forex-trading-account.php
Important of Trading Strategy
Many traders will hold on to losses hoping it will reverse eventually, only to see the loss get progressively larger. The trading decisions are based on emotional reactions to fluctuating profits and losses, a common pitfall for new traders.
Because the pip value on the Mini Account is just $1 per pip, traders can focus on developing a disciplined trading strategy, basing decisions on pip movement and market conditions NOT P/L.
For Example: When trading a MONEYFOREX Mini account, a 50-pip floating loss is approximately $50. That same 50-pip move against you on the Standard Account now becomes a $500 floating loss. By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy. Generating larger losses on the Standard Account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss.
Start Small with 10,000 units.
There is NO MAXIMUM trade volume on the MONEYFOREX Mini forex account. The standard default trade size in the platform is 100,000 units which equivalent to one standard lot. Therefore, for mini lot you need to adjust it to 0.1 lot in order to place 10,000 units. For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more experienced and build up confidence you can slowly increase the size of your positions to maximize profits. In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade enables better risk and account management. To place trade for mini lot, please change the lot amount setting to 0.1.The current default setting is 1 standard lot. The default setting located in the Total Account(s) Equity Window under "DA".
Ideal for Beginners
MONEYFOREX recommends that all traders with account balances less than $10,000 trade a Mini account. This gives you more staying power in the market, and the ability to take advantage of multiple opportunities without over-leveraging your account. Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.
source: http://www.moneyforex.com/mini-forex-trading-account.php
Corporate News
MoneyForex Financial Ltd. is one of the world leading online forex currency and CFDs trading broker offering low pips and commission-free online forex trading. MoneyForex has been known as one of the reputable offshore forex broker that provides top level services to high privillege investors around the world. Our company has been a regular contributors of forex news and signals to many forex resources such as the following:
* FxStreet.com
* Bloomberg News
* Reuters
* ForexYellowPages.com
* FXNews.co.uk
* Search-Forex.com
* Every-Forex.com
* BrokersMatrix.com
* Earn up to a $1000 bonus for existing and new clients!
* MoneyForex.com offers online streaming forex news
* Announcing MoneyForex Trader, the best online forex trading platform in the industry
* MoneyForex Trader comes with charting and news
In The Press
* PR News - MoneyForex launched new trading instruments; CFDs, Commodities Futures Contract and Indices.
* BrokersMatrix.com - Profiling of MoneyFOREX.com as recommended Forex Broker; Commodities Futures and CFDs trading Brokers.
* PRWeb News - MoneyForex FInancial Ltd. Announces New Forex Trading Platform
* FXStreet.com - MoneyForex's Profile
source: http://www.moneyforex.com/forex-corporate-news.php
* FxStreet.com
* Bloomberg News
* Reuters
* ForexYellowPages.com
* FXNews.co.uk
* Search-Forex.com
* Every-Forex.com
* BrokersMatrix.com
* Earn up to a $1000 bonus for existing and new clients!
* MoneyForex.com offers online streaming forex news
* Announcing MoneyForex Trader, the best online forex trading platform in the industry
* MoneyForex Trader comes with charting and news
In The Press
* PR News - MoneyForex launched new trading instruments; CFDs, Commodities Futures Contract and Indices.
* BrokersMatrix.com - Profiling of MoneyFOREX.com as recommended Forex Broker; Commodities Futures and CFDs trading Brokers.
* PRWeb News - MoneyForex FInancial Ltd. Announces New Forex Trading Platform
* FXStreet.com - MoneyForex's Profile
source: http://www.moneyforex.com/forex-corporate-news.php
Why MoneyForex?
Forex Trading with MoneyForex Financial Ltd. can offer benefits to traders and investors around the world.
One of the main benefits of an offshore forex trading account is that there is none capital gain tax incurred from forex trading activities. Either you made $1000 or even $1 million, MoneyForex has no obligation to report the capital gain to any tax authority.
For any resident around the world, this will offers considerable cash flow benefits especially for the larger account holders, money managers, and financial institutions as one can plan the payment of tax more efficiently. However, one still have a duty to declare taxation to the appropriate tax authority.
Commission-Free
No commission on either entering or exit the market.
User Friendly Trading Platform
Rated the most user friendly trading platform by professional traders. Features What You Click Is What You Get (WYCIWYG).Unlike many other forex platform, we do not re-quote the price. For comparison Chart of MoneyForex Trader with MetaTrader and other platforms, please click here.
Accessibility
Accessible to most information needed from checking account balance, floating positions to printing account balance all through the platform.
Light Speed Execution
When comes to forex trading, speed is one of the most important criteria. Try out our lightning speed execution with our trading platform.
High Leverage
Free margin on hedge or lock position (which many trading platforms do not allow).
Low Spread
Spread on major currency pairs are between 3-5 pips which is the lowest in the industry.
Safety of Fund
Investor funds are held separately with company operating capital in reputable banks.
State of The Art Dealing Facilities
Other than the advance dealing platform, we are backed by 24-hours live dealing via telephone.
Professional Dealers
All our dealers are former dealers of major banks and at least 5 years of experience dealing in forex.
Managed Account
Our manage accounts are manage by Wall Street professional money manager with more than 10 years of experience trading in forex. Please contact us for more information.
Introducing Broker Program (IB)
We have the best IB program in the industry. For more information, please contact us.
Offshore Money Haven
Your investment will be parked in major offshore Bank and rest assures it will be treated in confidentiality manner. It helps to keep your private and business affairs away from public eyes in an offshore jurisdiction. Invest in offshore will secure your assets against possible future claim.
Asset Protection
Invest in offshore will secure your assets against possible future claim.
source: http://www.moneyforex.com/why-money-forex.php
One of the main benefits of an offshore forex trading account is that there is none capital gain tax incurred from forex trading activities. Either you made $1000 or even $1 million, MoneyForex has no obligation to report the capital gain to any tax authority.
For any resident around the world, this will offers considerable cash flow benefits especially for the larger account holders, money managers, and financial institutions as one can plan the payment of tax more efficiently. However, one still have a duty to declare taxation to the appropriate tax authority.
Commission-Free
No commission on either entering or exit the market.
User Friendly Trading Platform
Rated the most user friendly trading platform by professional traders. Features What You Click Is What You Get (WYCIWYG).Unlike many other forex platform, we do not re-quote the price. For comparison Chart of MoneyForex Trader with MetaTrader and other platforms, please click here.
Accessibility
Accessible to most information needed from checking account balance, floating positions to printing account balance all through the platform.
Light Speed Execution
When comes to forex trading, speed is one of the most important criteria. Try out our lightning speed execution with our trading platform.
High Leverage
Free margin on hedge or lock position (which many trading platforms do not allow).
Low Spread
Spread on major currency pairs are between 3-5 pips which is the lowest in the industry.
Safety of Fund
Investor funds are held separately with company operating capital in reputable banks.
State of The Art Dealing Facilities
Other than the advance dealing platform, we are backed by 24-hours live dealing via telephone.
Professional Dealers
All our dealers are former dealers of major banks and at least 5 years of experience dealing in forex.
Managed Account
Our manage accounts are manage by Wall Street professional money manager with more than 10 years of experience trading in forex. Please contact us for more information.
Introducing Broker Program (IB)
We have the best IB program in the industry. For more information, please contact us.
Offshore Money Haven
Your investment will be parked in major offshore Bank and rest assures it will be treated in confidentiality manner. It helps to keep your private and business affairs away from public eyes in an offshore jurisdiction. Invest in offshore will secure your assets against possible future claim.
Asset Protection
Invest in offshore will secure your assets against possible future claim.
source: http://www.moneyforex.com/why-money-forex.php
Online Forex Broker Profile
MoneyForex Financial Ltd. is one of the world leading online currency trading broker offering low pips and commission-free online forex trading. Founded by Wall Street veterans, MoneyForex's vision is to service individual and corporate investors such as money managers, banks, and financial institutions in easing the complexity in dealing with forex trading. Our dealing software which specialized in forex dealing is rated second to none for it user friendly environment. Lightning speed and efficient execution is one of its many benefits.
MoneyForex Financial Ltd. is incorporated in British Virgin Island (Registration Number 629302) under the provisions of the International Business Companies Act, 1984. MoneyForex is authorized to offer futures, securities, and foreign exchange as a forex broker and primary market maker.
MoneyForex is founded by a group of Wall Street Veterans who has more than 30 years experience in the financial market. Other than the financial industry, the group operates various businesses including real estate development, media communication, advertising, internet technology and software application and development.
In this complex forex market, a user friendly platform is a must in order to make fast and efficient trading decision and execution. Our trading platform is rated the most user friendly by professional traders. MoneyForex's clients consist of financial institutions, money managers as well as individual investors.
We take pride in our professional staff that is thoroughly trained to look after the best interests of our clients. Our professional staff is available twenty-four hours a day (Monday to Friday) to answer your inquiry. Try out our service by open a free demo forex account.
source: http://www.moneyforex.com/profile.php
MoneyForex Financial Ltd. is incorporated in British Virgin Island (Registration Number 629302) under the provisions of the International Business Companies Act, 1984. MoneyForex is authorized to offer futures, securities, and foreign exchange as a forex broker and primary market maker.
MoneyForex is founded by a group of Wall Street Veterans who has more than 30 years experience in the financial market. Other than the financial industry, the group operates various businesses including real estate development, media communication, advertising, internet technology and software application and development.
In this complex forex market, a user friendly platform is a must in order to make fast and efficient trading decision and execution. Our trading platform is rated the most user friendly by professional traders. MoneyForex's clients consist of financial institutions, money managers as well as individual investors.
We take pride in our professional staff that is thoroughly trained to look after the best interests of our clients. Our professional staff is available twenty-four hours a day (Monday to Friday) to answer your inquiry. Try out our service by open a free demo forex account.
source: http://www.moneyforex.com/profile.php
Saturday, August 8, 2009
Forex Trading: The Perfect Forex Trading System
Trading the Forex market has become very popular in the last few years. But how difficult is it to achieve success in the Forex trading arena? Or let me rephrase this question, how many traders achieve consistent profitable results trading the Forex market? Unfortunately very few, only about 5% of traders achieve this goal. One of the main reasons of this is because Forex traders focus in the wrong information to make their trading decisions and totally forget about the most important factor: Price behavior.
Most Forex trading systems are made off technical indicators. But what are technical indicators? They are just a series of data points plotted in a chart; these points are derived from a mathematical formula applied to the price of any given currency pair. In other words, it is a chart of price plotted in a different way that helps us see other aspects of price.
There is an important implication on this definition of technical indicators. The fact that the readings obtained from them are based on price action. Take for instance a long MA crossover signal, the price has gone up enough to make the short period MA crossover the long period MA generating a long signal. Most traders see it as "the MA crossover made the price go up," but it happened the other way around, the MA crossover signal occurred because the price went up. Where I’m trying to get here is that at the end, price behavior dictates how an indicator will act, and this should be taken into consideration on any trading decision made.
Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. For example, again a long signal generated by a MA crossover as the market approaches an important resistance level. If the price suddenly starts to bounce back off that important level there is no point on taking this signal, price action is telling us the market doesn’t want to go up. Most of the time, under this circumstances, the market will continue to fall down, disregarding the MA crossover.
Don’t get me wrong here, technical indicators are a very important aspect of trading. They help us see certain conditions that are otherwise difficult to see by watching pure price action. But when it comes to pull the trigger, price action incorporation into our Forex trading system will definitely put the odds in our favor, it will generate higher probability trades.
So, how to create a perfect Forex trading system?
1. First of all, you need to make sure your trading system fits your trading personality; otherwise you will find it hard to follow it. Every trader has different needs and goals, thus there is no system that perfectly fits all traders. You need to make your own research on various trading styles and technical indicators until you find a concept that perfectly works for you. Make sure you know the nature of whatever technical indicator used.
2. Secondly, incorporate price action into your system. So you only take long signals if the price behavior tells you the market wants to go up, and short signals if the market gives you indication that it will go down.
3. Third, and most importantly, you need to have the discipline to follow your Forex trading system rigorously. Try it first on a demo account, then move on to a small account and finally when feeling comfortably and being consistent profitable apply your system in a regular account.
source: http://www.forex-articles.net/article-9.html
Most Forex trading systems are made off technical indicators. But what are technical indicators? They are just a series of data points plotted in a chart; these points are derived from a mathematical formula applied to the price of any given currency pair. In other words, it is a chart of price plotted in a different way that helps us see other aspects of price.
There is an important implication on this definition of technical indicators. The fact that the readings obtained from them are based on price action. Take for instance a long MA crossover signal, the price has gone up enough to make the short period MA crossover the long period MA generating a long signal. Most traders see it as "the MA crossover made the price go up," but it happened the other way around, the MA crossover signal occurred because the price went up. Where I’m trying to get here is that at the end, price behavior dictates how an indicator will act, and this should be taken into consideration on any trading decision made.
Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. For example, again a long signal generated by a MA crossover as the market approaches an important resistance level. If the price suddenly starts to bounce back off that important level there is no point on taking this signal, price action is telling us the market doesn’t want to go up. Most of the time, under this circumstances, the market will continue to fall down, disregarding the MA crossover.
Don’t get me wrong here, technical indicators are a very important aspect of trading. They help us see certain conditions that are otherwise difficult to see by watching pure price action. But when it comes to pull the trigger, price action incorporation into our Forex trading system will definitely put the odds in our favor, it will generate higher probability trades.
So, how to create a perfect Forex trading system?
1. First of all, you need to make sure your trading system fits your trading personality; otherwise you will find it hard to follow it. Every trader has different needs and goals, thus there is no system that perfectly fits all traders. You need to make your own research on various trading styles and technical indicators until you find a concept that perfectly works for you. Make sure you know the nature of whatever technical indicator used.
2. Secondly, incorporate price action into your system. So you only take long signals if the price behavior tells you the market wants to go up, and short signals if the market gives you indication that it will go down.
3. Third, and most importantly, you need to have the discipline to follow your Forex trading system rigorously. Try it first on a demo account, then move on to a small account and finally when feeling comfortably and being consistent profitable apply your system in a regular account.
source: http://www.forex-articles.net/article-9.html
Earnings Growth and Stock’s Performance
Why Earnings Growth is Important to a Stock’s Performance
If you go back through the history of the stock market there is a recurring theme among those stocks which have had some of the strongest price appreciation and it’s related to their Earnings Growth. If you plot a chart of Earnings Growth versus a companies Stock Price there is a usually a strong relationship between the two.
Here are a few examples over the past few years. First lets look at ELNT and its associated table of Earnings Growth and Stock Price over the past two years.
Meanwhile if we take the table above and make a graphical plot of ELNT’s Earnings Growth versus its Stock Price show a very strong relationship. Notice how ELNT’s stock price (blue line) began to rise significantly as its Earnings Growth (red line) started to accelerate beginning in December of 1999 (point A) and continued through September of 2000 (point B). From September of 1999 until September of 2000 ELNT saw its stock price rise from $9 to over $90 a share for a return of nearly 900%.
Next look what happened as ELNT’s Earnings Growth peaked in September of 2000 and began to decelerate over the next several months. As you can see ELNT’s stock price dropped in unison with its Earnings Growth (points B to C) and eventually gave back much of its gains that had occurred in 2000.
Now lets look at another example which proves that even in a Bear Market stocks can do well if they have strong Earnings Growth. BEL was a company that had major problems with its Earnings Growth in 2000 as shown by the table below. BEL didn’t start to see any positive Earnings Growth until 2001 but when it did finally occur BEL’s Earnings Growth accelerated strongly in the latter half of 2001 into early 2002.
As shown by the graphical chart of the table above BEL’s stock price went nowhere in 2000 (points D to E) as their Earnings Growth remained negative. However as BEL’s Earnings Growth accelerated in 2001 into early 2002 investors took notice as BEL’s stock price exploded in early 2002 (point F to G). Since the Fall of 2001 BEL’s stock price has risen from around $4 to over $20 a share for a return of 375% even in a negative market environment.
As these examples show regardless of market conditions companies which have strong accelerating Earnings Growth have the potential to perform very well until their Earnings Growth begins to decelerate. If you don’t believe this go back and research some of the best performing stocks of all time and a majority of them will exhibit similar characteristics.
The key is to recognize those companies which are starting to establish a trend of accelerating Earnings Growth before everyone else does which takes a lot of time and research. This is what I do every week as I spend over 20 hours a week looking for companies that are starting to show signs of accelerating Earnings Growth. This is how I found BEL and ELNT well before their stock prices took off.
Regards,
Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-75.html
If you go back through the history of the stock market there is a recurring theme among those stocks which have had some of the strongest price appreciation and it’s related to their Earnings Growth. If you plot a chart of Earnings Growth versus a companies Stock Price there is a usually a strong relationship between the two.
Here are a few examples over the past few years. First lets look at ELNT and its associated table of Earnings Growth and Stock Price over the past two years.
Meanwhile if we take the table above and make a graphical plot of ELNT’s Earnings Growth versus its Stock Price show a very strong relationship. Notice how ELNT’s stock price (blue line) began to rise significantly as its Earnings Growth (red line) started to accelerate beginning in December of 1999 (point A) and continued through September of 2000 (point B). From September of 1999 until September of 2000 ELNT saw its stock price rise from $9 to over $90 a share for a return of nearly 900%.
Next look what happened as ELNT’s Earnings Growth peaked in September of 2000 and began to decelerate over the next several months. As you can see ELNT’s stock price dropped in unison with its Earnings Growth (points B to C) and eventually gave back much of its gains that had occurred in 2000.
Now lets look at another example which proves that even in a Bear Market stocks can do well if they have strong Earnings Growth. BEL was a company that had major problems with its Earnings Growth in 2000 as shown by the table below. BEL didn’t start to see any positive Earnings Growth until 2001 but when it did finally occur BEL’s Earnings Growth accelerated strongly in the latter half of 2001 into early 2002.
As shown by the graphical chart of the table above BEL’s stock price went nowhere in 2000 (points D to E) as their Earnings Growth remained negative. However as BEL’s Earnings Growth accelerated in 2001 into early 2002 investors took notice as BEL’s stock price exploded in early 2002 (point F to G). Since the Fall of 2001 BEL’s stock price has risen from around $4 to over $20 a share for a return of 375% even in a negative market environment.
As these examples show regardless of market conditions companies which have strong accelerating Earnings Growth have the potential to perform very well until their Earnings Growth begins to decelerate. If you don’t believe this go back and research some of the best performing stocks of all time and a majority of them will exhibit similar characteristics.
The key is to recognize those companies which are starting to establish a trend of accelerating Earnings Growth before everyone else does which takes a lot of time and research. This is what I do every week as I spend over 20 hours a week looking for companies that are starting to show signs of accelerating Earnings Growth. This is how I found BEL and ELNT well before their stock prices took off.
Regards,
Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-75.html
Pivot Points
Those of you who have been trading for a while will be familiar with Pivot Points. During this lesson I want to go over how to find a Pivot Point and also a slightly different method of using them. First let’s look at how you calculate a Pivot Point.
Using a bar chart you will observe that each bar has an Open, High, Low and Close. This information represents all price activity during that particular period.
In the case of the following example, we shall use a daily bar. To calculate the pivot point all you need to do is add the High, Low and Close. Once this has been done you next divide the total by three, e.g. the cash FTSE on the 2nd May 02 had a High of 5192.70, a low of 5125.50, and a close of 5174.10. If you add the three together, you get 15492.3. You then divide that total by three to get a Pivot Point of 5164.10.
OK, so far so good, but what do you do with this information? Well, one technique I like to use intra day is to use the pivot point as a trend indicator. We already know that the Pivot Point for the 2nd May was 5164.10 and we will use this the next day as an intra day trend indicator.
If the price is above 5164.10, then I would only be long and if it were below 5164.10, I would only be short.
As price can fluctuate around any given point I also add a further proviso. If I have support close to 5164.10, I will first wait for the price to pass through 5164.10 and support before entering short. If I have resistance close to 5164.10, I will first wait for the price to move through the Pivot Point and resistance before entering long.
This method becomes even more powerful when the Pivot Point is close to the opening price. If, for example, the opening price is 5174.10, the Pivot Point is 5164.10, and I eventually go short at 5155, I can stay short the whole day as long as it does not go above the Pivot Point.
Once in a position I normally have a very tight stop to begin with and then will follow the market with a trailing stop to lock in profits.
Another way I like to add Pivot Points to my analysis is for more long-term projections. I will use the Pivot Point of a Yearly, Monthly and Weekly chart. In this case it would be the High, Low and Close of the previous Year, Month and Week.
I like to think of the weekly Pivot Point as the short-term trend, the monthly as the medium term trend and the Yearly as the long-term trend. I find this particularly useful in Spot Forex. If I am below the yearly, monthly and weekly Pivot Point, I know I am in a strong down trend and I can scale into multiple positions over time. The same holds true for long positions.
The point is there are many ways to determine trend. You can also use Pivot Point to find potential Support and Resistance, which we will cover in later lessons.
Experiment with Pivot Points and see if it suits your trading style. At the very least it is always handy to know where they are and it may help you decide which side of the market you should be trading from.
Good Trading
April 2004
by Mark Mc Rae
http://www.surefire-trading.com/
source: http://www.forex-articles.net/article-36.html
Using a bar chart you will observe that each bar has an Open, High, Low and Close. This information represents all price activity during that particular period.
In the case of the following example, we shall use a daily bar. To calculate the pivot point all you need to do is add the High, Low and Close. Once this has been done you next divide the total by three, e.g. the cash FTSE on the 2nd May 02 had a High of 5192.70, a low of 5125.50, and a close of 5174.10. If you add the three together, you get 15492.3. You then divide that total by three to get a Pivot Point of 5164.10.
OK, so far so good, but what do you do with this information? Well, one technique I like to use intra day is to use the pivot point as a trend indicator. We already know that the Pivot Point for the 2nd May was 5164.10 and we will use this the next day as an intra day trend indicator.
If the price is above 5164.10, then I would only be long and if it were below 5164.10, I would only be short.
As price can fluctuate around any given point I also add a further proviso. If I have support close to 5164.10, I will first wait for the price to pass through 5164.10 and support before entering short. If I have resistance close to 5164.10, I will first wait for the price to move through the Pivot Point and resistance before entering long.
This method becomes even more powerful when the Pivot Point is close to the opening price. If, for example, the opening price is 5174.10, the Pivot Point is 5164.10, and I eventually go short at 5155, I can stay short the whole day as long as it does not go above the Pivot Point.
Once in a position I normally have a very tight stop to begin with and then will follow the market with a trailing stop to lock in profits.
Another way I like to add Pivot Points to my analysis is for more long-term projections. I will use the Pivot Point of a Yearly, Monthly and Weekly chart. In this case it would be the High, Low and Close of the previous Year, Month and Week.
I like to think of the weekly Pivot Point as the short-term trend, the monthly as the medium term trend and the Yearly as the long-term trend. I find this particularly useful in Spot Forex. If I am below the yearly, monthly and weekly Pivot Point, I know I am in a strong down trend and I can scale into multiple positions over time. The same holds true for long positions.
The point is there are many ways to determine trend. You can also use Pivot Point to find potential Support and Resistance, which we will cover in later lessons.
Experiment with Pivot Points and see if it suits your trading style. At the very least it is always handy to know where they are and it may help you decide which side of the market you should be trading from.
Good Trading
April 2004
by Mark Mc Rae
http://www.surefire-trading.com/
source: http://www.forex-articles.net/article-36.html
Tuesday, August 4, 2009
Achieving Trading Perfection
Achieving Trading Perfection - Trade quality, not quantity. Take the best of the best. Get the big picture. If you haven’t previously come across such advice, or if you have and are not following it, it is time that you take these words to heart. But how?
Trade selection and adequate planning go hand in hand. This is where most would-be professional traders miss the boat.
Much more money is made as a result of proper planning than from sitting and trading everything that comes along or "looks" good.
It’s difficult to fully understand why people think they have to trade so much. It’s difficult to truly grasp why people think that they have to take as many trades as they do.
Just the opposite is true. There is a correct approach to each and every trade. That is what achieving perfection is all about.
It all starts with proper management: planning, organizing, delegating, directing, and controlling.
These facets of management must be woven together into your trading; they do overlap.
Although planning is the major management function involved in achieving perfection, you can’t possibly plan well unless you are organized to do so.
You must have your tools at hand: your trading software, your data, the proper equipment. All of the rudiments for planning must be in place, which in itself is a part of organizing.
You must be physically fit when you plan: well nourished, properly exercised, well rested and mentally alert - all part of having your life organized, all part of achieving perfection as a trader.
To be a winning trader, you have to be among the best. There can be no middle ground. There are only winners and losers, and to be a winner you have to be a champion. And, just like any champion, you must have discipline, self-control, and a willingness to train, train, train.
There are no runners-up in trading, you either get the gold or you give the gold. Often, while others are busy going to parties or watching sports events, you are busy poring over charts, studying, thinking, planning. When others are listening to music or watching TV, you are busy practicing your trading, practicing trade selection, working hard to become a more astute trader.
Part of achieving perfection involves the diligent study of charts. The data, as presented on your screen and preserved as charts, are, for the most part, all you have for making trading decisions. They are a picture, a visualization of what is taking place in the reality of the market. Your job in achieving perfection and becoming an adequate trader is to picture and imagine in your mind what makes prices move and form the way they do. Ask yourself, "How does what I see in front of me relate to the supply and demand for the underlying?" Ask yourself, "Is what I am seeing on the chart even related to supply and demand, or is what I am seeing related to an engineered move by some insider or market mover?"
Supply and demand are not what makes prices move or fail to move most of the time. The sooner you realize that fact, the better off you will be. Markets are engineered, manipulated ¾ you need to know that.
But there’s more to a chart than merely price patterns. Reflected in the chart are the emotional reactions of human beings. Reactions to rumors and news; to national and world events; to government reports - these, too, are on the charts.
You might say that price movement, or the lack thereof, is the net effect of all the perceptions of all the traders who are participating in the market for a particular futures.
There is something else on the charts, something that too few take into account. That something is the manipulations from and by the insiders, the market movers, and by commercials holding large inventories of the underlying you are attempting to trade.
In achieving perfection as a trader, you must train yourself to look for evidence of any and all of these things as you study your charts. It is the cumulative action of all perceptions which causes patterns to form on a price chart.
You must learn to look for the truths in the markets. There are certain truths which are self-evident; they are always true. For instance, take the phenomenon of a breakout. When prices break out, no one can change the fact that they did break out. It is a fact and it is true. The breakout may turn out to be a "false" breakout, but nevertheless it is a breakout. As part of achieving perfection in your trade selection skills, you have to learn to tell which breakouts are most likely true breakouts, and which ones are most likely false. How can you know? By the price patterns on the chart.
And what about trend? Your job in achieving perfection as a trader is to master how to trade a trend. A trend is a trend, is a trend. It is a trend until the end, and part of your job is to know when a market is not trending.
The trend is the trend while it lasts. While a market is trending it is telling the truth. The trend can change, but the truth is the truth. If prices are rising, the trend is up. If prices are falling, the trend is down. The truth can be found in the trend. It is an immutable fact. You are to learn to make my money by trading with the trend. You are to learn what constitutes a trend. You have to learn to spot trends early so that you can make the most out of the market while it is trending. Your job in achieving perfection as a trader is to learn to recognize when a trend will most likely begin, and just as important, to learn to be even more adept at deciphering when a trend is ending.
In achieving perfection, you must learn to recognize "your" trade(s), and to take only "your" trades. Trade the formations and patterns that you can easily recognize and identify.
You must learn to trade using tips and tricks that you are shown and to accumulate and keep a collection of techniques that result in the selection of high probability trades.
How are you to do all this? Practice, practice, PRACTICE. Practice recognition of congestion areas. Practice recognition of high probability breakouts. Practice trend recognition. Practice and more practice. Just like anyone who wants to achieve perfection at anything, there must be total dedication, study, practice and more practice. You are to become a trading virtuoso. You are to practice, yet always realizing that you will never attain true perfection, that there is always room for improvement. There is usually a way to refine: ways that you can do things better, more efficiently, and with greater speed and finesse.
by Joe Ross
http://www.tradingeducators.com/
source: http://www.forex-articles.net/article-60.html
Trade selection and adequate planning go hand in hand. This is where most would-be professional traders miss the boat.
Much more money is made as a result of proper planning than from sitting and trading everything that comes along or "looks" good.
It’s difficult to fully understand why people think they have to trade so much. It’s difficult to truly grasp why people think that they have to take as many trades as they do.
Just the opposite is true. There is a correct approach to each and every trade. That is what achieving perfection is all about.
It all starts with proper management: planning, organizing, delegating, directing, and controlling.
These facets of management must be woven together into your trading; they do overlap.
Although planning is the major management function involved in achieving perfection, you can’t possibly plan well unless you are organized to do so.
You must have your tools at hand: your trading software, your data, the proper equipment. All of the rudiments for planning must be in place, which in itself is a part of organizing.
You must be physically fit when you plan: well nourished, properly exercised, well rested and mentally alert - all part of having your life organized, all part of achieving perfection as a trader.
To be a winning trader, you have to be among the best. There can be no middle ground. There are only winners and losers, and to be a winner you have to be a champion. And, just like any champion, you must have discipline, self-control, and a willingness to train, train, train.
There are no runners-up in trading, you either get the gold or you give the gold. Often, while others are busy going to parties or watching sports events, you are busy poring over charts, studying, thinking, planning. When others are listening to music or watching TV, you are busy practicing your trading, practicing trade selection, working hard to become a more astute trader.
Part of achieving perfection involves the diligent study of charts. The data, as presented on your screen and preserved as charts, are, for the most part, all you have for making trading decisions. They are a picture, a visualization of what is taking place in the reality of the market. Your job in achieving perfection and becoming an adequate trader is to picture and imagine in your mind what makes prices move and form the way they do. Ask yourself, "How does what I see in front of me relate to the supply and demand for the underlying?" Ask yourself, "Is what I am seeing on the chart even related to supply and demand, or is what I am seeing related to an engineered move by some insider or market mover?"
Supply and demand are not what makes prices move or fail to move most of the time. The sooner you realize that fact, the better off you will be. Markets are engineered, manipulated ¾ you need to know that.
But there’s more to a chart than merely price patterns. Reflected in the chart are the emotional reactions of human beings. Reactions to rumors and news; to national and world events; to government reports - these, too, are on the charts.
You might say that price movement, or the lack thereof, is the net effect of all the perceptions of all the traders who are participating in the market for a particular futures.
There is something else on the charts, something that too few take into account. That something is the manipulations from and by the insiders, the market movers, and by commercials holding large inventories of the underlying you are attempting to trade.
In achieving perfection as a trader, you must train yourself to look for evidence of any and all of these things as you study your charts. It is the cumulative action of all perceptions which causes patterns to form on a price chart.
You must learn to look for the truths in the markets. There are certain truths which are self-evident; they are always true. For instance, take the phenomenon of a breakout. When prices break out, no one can change the fact that they did break out. It is a fact and it is true. The breakout may turn out to be a "false" breakout, but nevertheless it is a breakout. As part of achieving perfection in your trade selection skills, you have to learn to tell which breakouts are most likely true breakouts, and which ones are most likely false. How can you know? By the price patterns on the chart.
And what about trend? Your job in achieving perfection as a trader is to master how to trade a trend. A trend is a trend, is a trend. It is a trend until the end, and part of your job is to know when a market is not trending.
The trend is the trend while it lasts. While a market is trending it is telling the truth. The trend can change, but the truth is the truth. If prices are rising, the trend is up. If prices are falling, the trend is down. The truth can be found in the trend. It is an immutable fact. You are to learn to make my money by trading with the trend. You are to learn what constitutes a trend. You have to learn to spot trends early so that you can make the most out of the market while it is trending. Your job in achieving perfection as a trader is to learn to recognize when a trend will most likely begin, and just as important, to learn to be even more adept at deciphering when a trend is ending.
In achieving perfection, you must learn to recognize "your" trade(s), and to take only "your" trades. Trade the formations and patterns that you can easily recognize and identify.
You must learn to trade using tips and tricks that you are shown and to accumulate and keep a collection of techniques that result in the selection of high probability trades.
How are you to do all this? Practice, practice, PRACTICE. Practice recognition of congestion areas. Practice recognition of high probability breakouts. Practice trend recognition. Practice and more practice. Just like anyone who wants to achieve perfection at anything, there must be total dedication, study, practice and more practice. You are to become a trading virtuoso. You are to practice, yet always realizing that you will never attain true perfection, that there is always room for improvement. There is usually a way to refine: ways that you can do things better, more efficiently, and with greater speed and finesse.
by Joe Ross
http://www.tradingeducators.com/
source: http://www.forex-articles.net/article-60.html
The truth about Buy and sell signals
Hey Joe!
If I get all my buy and sell signals to work properly, I should come out a winner, right?
Wrong! The perennial questions are, "Should I buy? Should I sell?" All too many traders focus their efforts on identifying buy and sell signals. In fact, that’s what most trading books consist of-some way to find buy and sell signals. Trading systems are usually all about "where to get in."
The research and analysis traders do is geared towards reaching the goal of getting that magic "base line" directive to guide their actions. How ignorant can you be?
Any successful, experienced trader will tell you that although properly identifying buy/sell signals is important, it’s not the key to being successful. Instead, the way you manage each trade is what will determine your success.
Traders who take the baseline approach tend to believe that the success of their trading activity is dependent on following the right buy/sell signals at the right time. Clearly, it’s important that a trader be able to understand the process of generating signals and to use the methods involved. Realistically though, almost any trader can find a way to generate signals (whether using technical methods already out there, coming up with their own system, or using their platform’s automated signal generation tools).
Any successful, experienced trader will tell you that your trade doesn’t begin and end with a buy or sell. There’s a trade management process involved. For each trade you make, you’re making a group of decisions. The way you manage and time those decisions is what will determine the success of your trade.
Let’ say two traders get the same signal at the same time and act on it. One’s trade may result in profits while the other’s results in losses. How is this possible? It can occur because each trader made a different combination of decisions throughout the course of the trade. The decisions might include scaling in and/or out of the trade, using or not using trailing stop losses, setting or not setting profit objectives prior to entry, patience or lack thereof, etc. The trader who made the most effective overall combination of decisions will have the better trade results in the end. Of course, there are times when pure chance, gives the better result to the worst trader.
It’s very important to regard trading as a process, and to understand that as a trader your efforts need to be focused on the activity of trading itself, as opposed to getting a quick base line answer. Because there are many things to take into consideration in making your trades successful, it’s essential that you educate and train yourself in all the different areas. Learn how to develop better trading plans and analysis methods, and then learn how to apply what you’ve developed to the process of a making a trade-from the original impulse to enter or stay out of a trade to the control of your thought processes and emotions in managing that trade.
June 2004
by Joe Ross
http://www.tradingeducators.com/
source: http://www.forex-articles.net/article-38.html
If I get all my buy and sell signals to work properly, I should come out a winner, right?
Wrong! The perennial questions are, "Should I buy? Should I sell?" All too many traders focus their efforts on identifying buy and sell signals. In fact, that’s what most trading books consist of-some way to find buy and sell signals. Trading systems are usually all about "where to get in."
The research and analysis traders do is geared towards reaching the goal of getting that magic "base line" directive to guide their actions. How ignorant can you be?
Any successful, experienced trader will tell you that although properly identifying buy/sell signals is important, it’s not the key to being successful. Instead, the way you manage each trade is what will determine your success.
Traders who take the baseline approach tend to believe that the success of their trading activity is dependent on following the right buy/sell signals at the right time. Clearly, it’s important that a trader be able to understand the process of generating signals and to use the methods involved. Realistically though, almost any trader can find a way to generate signals (whether using technical methods already out there, coming up with their own system, or using their platform’s automated signal generation tools).
Any successful, experienced trader will tell you that your trade doesn’t begin and end with a buy or sell. There’s a trade management process involved. For each trade you make, you’re making a group of decisions. The way you manage and time those decisions is what will determine the success of your trade.
Let’ say two traders get the same signal at the same time and act on it. One’s trade may result in profits while the other’s results in losses. How is this possible? It can occur because each trader made a different combination of decisions throughout the course of the trade. The decisions might include scaling in and/or out of the trade, using or not using trailing stop losses, setting or not setting profit objectives prior to entry, patience or lack thereof, etc. The trader who made the most effective overall combination of decisions will have the better trade results in the end. Of course, there are times when pure chance, gives the better result to the worst trader.
It’s very important to regard trading as a process, and to understand that as a trader your efforts need to be focused on the activity of trading itself, as opposed to getting a quick base line answer. Because there are many things to take into consideration in making your trades successful, it’s essential that you educate and train yourself in all the different areas. Learn how to develop better trading plans and analysis methods, and then learn how to apply what you’ve developed to the process of a making a trade-from the original impulse to enter or stay out of a trade to the control of your thought processes and emotions in managing that trade.
June 2004
by Joe Ross
http://www.tradingeducators.com/
source: http://www.forex-articles.net/article-38.html
An Analysis of Secular Bear Markets and Secular Bull Markets since 1900
From a historical perspective since 1900 there have been 3 Secular Bull Markets and 3 Secular Bear Markets as shown by the tables below of the Dow and S&P 500. As you can see during a Secular Bull Market the Average Annual Return (highlighted in red) is considerably higher than during a Secular Bear Market (highlighted in blue). Thus the long term Buy and Hold strategy that worked well in the 1980’s and 1990’s for investors may have not worked very well during the Secular Bear Markets of 1906-1921, 1929-1949 and 1966-1982.
Secular Bear Markets vs Secular Bull Markets and Dow Performance
The big question is now are we in the beginning stages of a 4th Secular Bear Mark
et which started in 2000. The average length of the previous 3 Secular Bear Markets was 18 years with a minimum of 16 years and a maximum of 21 years. Thus if you add 18 years to the year 2000 and take + or - 3 years on either side then the next Secular Bull Market may not begin until sometime in the 2015 to 2021 time period if we are now entering a 4th Secular Bear Market. However I would like to point out that even in a Secular Bear Market there can still be Bull Markets lasting a year or two as the longer term charts of the Dow show below.
Notice after the Secular Bull Market of 1922-1928 which was followed by a Secular Bear Market from 1929-1949 that the Dow still had impressive gains during the early to mid 1930s (points A to B) before going through another Bear Cycle prior too and during World War II (points B to C). This was then followed by another Bull Cycle from 1943-1946 (points C to D). However from the early part of 1937 (point B) until the end of 1949 (point E) the Dow virtually had a net gain of 0% as its basic overall pattern was a series of up and down movements which pretty much cancelled each other out.
Meanwhile after the Secular Bull Market from 1950-1965 the Dow once again went through another Secular Bear Market from 1966-1982. Notice after the Dow peaked in early 1966 (point F) that it had a lot of upward and downward movements from 1966 through 1982 but it basically went nowhere and actually was lower at the end of 1982 (point G) versus its peak in early 1966 (point F).
Looking at the current chart of the Dow shows that it has been exhibiting a choppy pattern similar to previous Secular Bear Market environments after experiencing a Secular Bull Market from 1983-1999. One has to wonder during the next 10 years or so whether the Dow will continue to exhibit a similar pattern that occurred from the mid 1960’s through the 1970’s in which it had a lot of downward and upward moves but the overall net gain was negligible.
Even if we go through another Secular Bear Market over the next several years there will still be plenty of smaller Bull Markets and if taken advantage of properly will still lead to some excellent investment opportunities in the future.
Regards,
Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-66.html
Secular Bear Markets vs Secular Bull Markets and Dow Performance
The big question is now are we in the beginning stages of a 4th Secular Bear Mark
et which started in 2000. The average length of the previous 3 Secular Bear Markets was 18 years with a minimum of 16 years and a maximum of 21 years. Thus if you add 18 years to the year 2000 and take + or - 3 years on either side then the next Secular Bull Market may not begin until sometime in the 2015 to 2021 time period if we are now entering a 4th Secular Bear Market. However I would like to point out that even in a Secular Bear Market there can still be Bull Markets lasting a year or two as the longer term charts of the Dow show below.
Notice after the Secular Bull Market of 1922-1928 which was followed by a Secular Bear Market from 1929-1949 that the Dow still had impressive gains during the early to mid 1930s (points A to B) before going through another Bear Cycle prior too and during World War II (points B to C). This was then followed by another Bull Cycle from 1943-1946 (points C to D). However from the early part of 1937 (point B) until the end of 1949 (point E) the Dow virtually had a net gain of 0% as its basic overall pattern was a series of up and down movements which pretty much cancelled each other out.
Meanwhile after the Secular Bull Market from 1950-1965 the Dow once again went through another Secular Bear Market from 1966-1982. Notice after the Dow peaked in early 1966 (point F) that it had a lot of upward and downward movements from 1966 through 1982 but it basically went nowhere and actually was lower at the end of 1982 (point G) versus its peak in early 1966 (point F).
Looking at the current chart of the Dow shows that it has been exhibiting a choppy pattern similar to previous Secular Bear Market environments after experiencing a Secular Bull Market from 1983-1999. One has to wonder during the next 10 years or so whether the Dow will continue to exhibit a similar pattern that occurred from the mid 1960’s through the 1970’s in which it had a lot of downward and upward moves but the overall net gain was negligible.
Even if we go through another Secular Bear Market over the next several years there will still be plenty of smaller Bull Markets and if taken advantage of properly will still lead to some excellent investment opportunities in the future.
Regards,
Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-66.html
Chart Topping Patterns to Avoid: Climax Top Off a Parabolic Move
This pattern occurs when a stock rises very quickly out of a base and gets overextended. Stocks in a Parabolic Move can double or triple in value in a very short period of time (usually less than two weeks). As an investor you certainly don’t want to be one of the last passengers on the train and get quickly thrown off. Some examples of this pattern are shown below.
Avoid Parabolic Move
Notice the quick move upward in MCOM back in July. In 5 trading days it went from $20 to $57 for a gain of 185%. Also notice that on the biggest volume day (point A) that it gapped up strongly to $53 and then closed poorly around $41. This was the Climax Top Off the Parabolic Move. As an investor you should have sold this day if you had bought the stock in the $20’s. Meanwhile you certainly should have not bought this stock this day. Notice how the stock eventually pulled all the way back to $20 by early August (point B).
Climax Top Off a Parabolic Move
Another example of a Climax Top Off a Parabolic Move is demonstrated by LWIN. This stock skyrocketed from $30 to $95 in 10 trading days for a whopping gain of 217%. The Climax Top occurred on the 10th and 11th days of trading as the volume peaked (point A). The stock then sold off and retreated back quickly to around $42 by late November.
As you can see stocks that go up very quickly, in a Parabolic Move, can also come down just as fast. My advice is if you buy a stock and it doubles or triples in value in a very short period of time (1 to 2 weeks) take your profits and congratulate yourself for a job well done. If you become greedy then you could lose most of your gains as the above examples indicate. Furthermore if your buying a stock in this type of move be very careful and watch out for the Climax Top if the stock is trading on its biggest volume day.
Regards,
May 2004
by Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-24.html
Avoid Parabolic Move
Notice the quick move upward in MCOM back in July. In 5 trading days it went from $20 to $57 for a gain of 185%. Also notice that on the biggest volume day (point A) that it gapped up strongly to $53 and then closed poorly around $41. This was the Climax Top Off the Parabolic Move. As an investor you should have sold this day if you had bought the stock in the $20’s. Meanwhile you certainly should have not bought this stock this day. Notice how the stock eventually pulled all the way back to $20 by early August (point B).
Climax Top Off a Parabolic Move
Another example of a Climax Top Off a Parabolic Move is demonstrated by LWIN. This stock skyrocketed from $30 to $95 in 10 trading days for a whopping gain of 217%. The Climax Top occurred on the 10th and 11th days of trading as the volume peaked (point A). The stock then sold off and retreated back quickly to around $42 by late November.
As you can see stocks that go up very quickly, in a Parabolic Move, can also come down just as fast. My advice is if you buy a stock and it doubles or triples in value in a very short period of time (1 to 2 weeks) take your profits and congratulate yourself for a job well done. If you become greedy then you could lose most of your gains as the above examples indicate. Furthermore if your buying a stock in this type of move be very careful and watch out for the Climax Top if the stock is trading on its biggest volume day.
Regards,
May 2004
by Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-24.html
How to Make Consistent Profits Trading Futures Part I
One of the mistakes I consistently made in my early years as a trader was to try to make too much money in relation to my trading capital. To make £1000 a day while Futures Trading with £10,000 is absurdly ambitious; of course I have done it many times, as would anyone with this intention, but I have also gone bust on more than one occasion. To have the aspiration of taking £1000 out of the market each day, when trading with £10,000 or under is, I think, a quick route to the poor house.
So what is a reasonable objective for a day / futures trader?
A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.
One of the reasons he has chosen to work with young futures traders is that he wants people who have minimal financial commitments. He knows it will take a while for them to start earning an income from the business. So his belief is that if his traders can regularly take small amounts of money out of the market, their knowledge, skills and confidence will grow and in time they will become bigger traders. What is critical about this approach is that his traders do not grow in size until they have achieved consistent, regular success on a small scale; and we are talking small, I mean £25 or £50 in a day.
What can we learn from this low risk approach? Well first let me ask you: what is more important, to make money today, or to become a consistently profitable trader? Because if we want to become consistently successful traders we need to take a different tack than if we are just out to make as much money as we can today.
So back to the question, what is a reasonable objective for a day trader? Well let’s look at bringing our daily target right down to £100, with £10,000 of trading capital, i.e. 1%. Now £100 a day, trading a market like the FTSE seems an achievable target to me. That is a net profit of 10 FTSE points a day. Can you come up with a system that trades 5 times a day and has an average net profit of 2 points? Or a system that trades 10 times a day with an average net profit of 1 point?
Is that a yes I hear? Because if you can make an average of £100 a day you will double your money in 100 trading days i.e. 20 weeks or about 5 months. If you double you position size every time you double your money, your account will grow to £1,000,000 in 140 weeks, which is less than 3 years! Of course this does not take into account the impact of tax; but my point is that by taking a low risk, conservative approach to trading objectives, we give ourselves the chance to grow and develop into traders, while also availing ourselves of the possibility of a deceptively good return.
If at this point you are tearing your hair out and screaming at the screen that I am a fool for suggesting that you can trade a strategy that averages a few points a trade, I assume that you are not familiar with the benefits of direct access trading. Direct access trading effectively gives everyone and their uncle the same low costs, immediate trade execution and access as was exclusively enjoyed by the floor traders before the advent of the electronic market place. To learn about the advantages of direct access trading...
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-53.html
So what is a reasonable objective for a day / futures trader?
A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.
One of the reasons he has chosen to work with young futures traders is that he wants people who have minimal financial commitments. He knows it will take a while for them to start earning an income from the business. So his belief is that if his traders can regularly take small amounts of money out of the market, their knowledge, skills and confidence will grow and in time they will become bigger traders. What is critical about this approach is that his traders do not grow in size until they have achieved consistent, regular success on a small scale; and we are talking small, I mean £25 or £50 in a day.
What can we learn from this low risk approach? Well first let me ask you: what is more important, to make money today, or to become a consistently profitable trader? Because if we want to become consistently successful traders we need to take a different tack than if we are just out to make as much money as we can today.
So back to the question, what is a reasonable objective for a day trader? Well let’s look at bringing our daily target right down to £100, with £10,000 of trading capital, i.e. 1%. Now £100 a day, trading a market like the FTSE seems an achievable target to me. That is a net profit of 10 FTSE points a day. Can you come up with a system that trades 5 times a day and has an average net profit of 2 points? Or a system that trades 10 times a day with an average net profit of 1 point?
Is that a yes I hear? Because if you can make an average of £100 a day you will double your money in 100 trading days i.e. 20 weeks or about 5 months. If you double you position size every time you double your money, your account will grow to £1,000,000 in 140 weeks, which is less than 3 years! Of course this does not take into account the impact of tax; but my point is that by taking a low risk, conservative approach to trading objectives, we give ourselves the chance to grow and develop into traders, while also availing ourselves of the possibility of a deceptively good return.
If at this point you are tearing your hair out and screaming at the screen that I am a fool for suggesting that you can trade a strategy that averages a few points a trade, I assume that you are not familiar with the benefits of direct access trading. Direct access trading effectively gives everyone and their uncle the same low costs, immediate trade execution and access as was exclusively enjoyed by the floor traders before the advent of the electronic market place. To learn about the advantages of direct access trading...
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-53.html
Day Trading Indicators and Indicator Trading
Did You Begin Day Trading As An Indicator Only Trader?
Did you start day trading after buying a book on technical analysis, and getting a charting program - probably a free one that you found online - in order to save money? While reading your book you learned about trading indicators which could ’predict’ price movement, and what do you know, the ’best’ indicators were actually included in your free charting program - let the games begin.
Now that you have all the day trading tools that are necessary, the book for education AND the free charting program with those ’best’ day trading indicators, you now need a day trading plan so you can decide which ones of those ’magic’ day trading indicators you are supposed to use. This really is a great book, besides telling you how to day trade using indicators to ’predict’ price - it also said that you need a trading plan to day trade.
So what should this plan be? The book told you about trend following using an indicator called macd, and it also told you how it was possible to pick the top or bottoms using an indicator called stochastic; my guess is that you picked the stochastic indicator to start your day trading - this must be the ’best of the best’ since this indicator was going to ensure you of entering your trades with the ’best’ price. Amazing, simply amazing how easy this day trading stuff really is. In fact, why even bother taking the trades, each time your indicators give a signal - just call up your broker and tell him to stick $100 in your account.
My book was Technical Analysis of the Futures Markets. My charting program was TradeStation with an eSignal fm receiver; that was the one that if you hung the antennae wires just right, and you put enough foil on the tips, you might even get quotes. I had sold a business before I started trading so I did have some capital - isn’t that how everyone gets into trading, you either sell a business or you lose your job? My indicator was the macd as I had decided that I was going to be a ’trend follower’ instead of a ’top-bottom picker’. I also decided that I was going to be ’extra’ clever, if one indicator was good than two indicators must be better, so I added a 20 period moving average. My first trade was a winner, then after many months of extensive therapy, I was finally able to forget the next twelve months - ahhh the memories ƒ؛
Learning To Day Trading - The Learning Progression
Beginning to day trade, or learning to day trade, as an indicator trader is very typical. This is also logical when you consider - HOW are you supposed to initially learn how to trade? Trading indicators are available to anyone who has a charting program, and simply using line crosses, or histogram color changes, provide ’easy’ signals to understand. If you will also take the time to learn the arithmetic behind your indicators, as well as learning what each indicator is specifically intended to do, not only is this a logical way to begin, it is also a good ’step’ in your learning progression - understanding the WHAT you are doing, instead of attempting to create ’canned’ indicator only trading systems, without any regard as to WHY you are trading this way.
This does become one of the ’sticking’ points in your learning progression, as you come to find out that you are unable to profitably trade indicators as signals only - now what? Now what - you ’can’t’ develop your own indicators, so you start doing google searches for day trading indicators and start buying your ’collection’ - they don’t ’work’ either. Now what - you buy a mechanical trading system - what does hypothetical results may not be indicative of real trading or future results mean? Now what - you start subscribing to signal services OR you start joining the ’latest and greatest’ chat room - am I really the only person using the signals who isn’t profitable?
Now what - you never learn how to trade.
I began trading as an indicator trader, and I did try to learn everything that I could about the various indicators, as well as trying to combine indicators that were consistent with how I wanted to trade - I just could never develop a mechanical day trading system from what was available to me. I read a couple more books that didn’t really help me, so I then started looking for someone who could teach me. From what I now know about gurus -vs- teachers, I am very lucky that I got involved with a money manager-trader who taught me a tremendous amount, but I still couldn’t get profitable, in part because there was also ’pressure’ to learn how to trade using real money. As well, any discussions or thoughts about trading psychology and the issues involved, especially to beginning traders, was non-existent.
Now what - learning but losing - I stopped trading. Learning to trading using real money, and ’scoffing’ at trading psychology as simply individual weakness, really was something that I now regard as misinformation. I always mention this as I now feel that this cost me as much as a year of time, and was very close to costing me my trading future, as stopped trading was VERY close to quitting trading. How can’t trading psychology be real to a beginner, when you consider that you are risking losing money at a very fast pace as a day trader, and when you further consider that you are also doing this when you really don’t know what you are doing - this is NOT by definition being weak. And if trading psychology is real, how are you going to learn to make ’good’ trading habits with real money while you are fighting the implications?
Now what - not trading and not ready [quite] to quit - still studying and searching.
Probably the single most important ’thing’ that got me to a next step in learning how to trade, was the concept of a trading setup, and that a setup and a signal were not the same. This was extremely meaningful to me, as it also led to an understanding of how to better use trading indicators for the information that they can provide, but not to use them as trading signals - in essence I began learning about trading method where discretion could be consistently applied -vs- trading system that was mechanical and arithmetic rules.
Traders who are indicator only traders, are also what I refer to right side only traders, that is they are always looking at the right side of their charts for an indicator signal. BUT what about the left side of the chart, what about price and patterns, what about market conditions - WHAT about the relevant ’things’ that are ’moving’ price, instead of indicators only as an arithmetic derivative of price, and thus, one that is dependant on the time frame that you have chosen to trade from? These ’thoughts’, along with the concept of trade setup, became instrumental in the development of a trading method, and how I came to turning my trading around.
When I think about the steps in my learning progression - I would list them as follows:
2/95 - 6/96 indicators only teaching service that included signals learning to trading with real money and trading psychology issues stop trading
6/96 - 3/97 understanding of trading psychology issues learning about trading setups concept trading method -vs- trading system trade setup - trade trigger are not the same method development understand the importance of the left side of the chart and what is happening ’across’ the chart related trading setups and how/when they triggered indicators + pattern indicators + pattern + price indicators + pattern + price + market conditions
3/97 - 11/97 able to paper trade profitably able to real money trade profitably able to trade for a living
Indicator Only Day Trader - Setup Including Indicators Method Day Trader
I have attempted to discuss the way I started day trading, and the way I think many-most traders typically begin. Along with this, I have pointed various issues and problems that I had - those regarding how to learn to trade, and then progressing into a profitable trader. My experiences have been both personal, as well as those of many traders that I have worked with over the last 8-9 years through Tactical Trading - that a very large number of these problems are due to day trading only with indicators, the specific indicators used, along with trying to turn these indicators into a mechanical trading system. This is not to say that this can’t be done - I simply couldn’t do it. However, I would strongly suggest that anyone who is in the early stages of day trading, or struggling with their day trading, consider these things that have been discussed.
Copyright © 2006 Tactical Trading, LLC. All rights reserved. Reproduction in whole or in part without permission is prohibited.
source: http://www.forex-articles.net/article-83.html
Did you start day trading after buying a book on technical analysis, and getting a charting program - probably a free one that you found online - in order to save money? While reading your book you learned about trading indicators which could ’predict’ price movement, and what do you know, the ’best’ indicators were actually included in your free charting program - let the games begin.
Now that you have all the day trading tools that are necessary, the book for education AND the free charting program with those ’best’ day trading indicators, you now need a day trading plan so you can decide which ones of those ’magic’ day trading indicators you are supposed to use. This really is a great book, besides telling you how to day trade using indicators to ’predict’ price - it also said that you need a trading plan to day trade.
So what should this plan be? The book told you about trend following using an indicator called macd, and it also told you how it was possible to pick the top or bottoms using an indicator called stochastic; my guess is that you picked the stochastic indicator to start your day trading - this must be the ’best of the best’ since this indicator was going to ensure you of entering your trades with the ’best’ price. Amazing, simply amazing how easy this day trading stuff really is. In fact, why even bother taking the trades, each time your indicators give a signal - just call up your broker and tell him to stick $100 in your account.
My book was Technical Analysis of the Futures Markets. My charting program was TradeStation with an eSignal fm receiver; that was the one that if you hung the antennae wires just right, and you put enough foil on the tips, you might even get quotes. I had sold a business before I started trading so I did have some capital - isn’t that how everyone gets into trading, you either sell a business or you lose your job? My indicator was the macd as I had decided that I was going to be a ’trend follower’ instead of a ’top-bottom picker’. I also decided that I was going to be ’extra’ clever, if one indicator was good than two indicators must be better, so I added a 20 period moving average. My first trade was a winner, then after many months of extensive therapy, I was finally able to forget the next twelve months - ahhh the memories ƒ؛
Learning To Day Trading - The Learning Progression
Beginning to day trade, or learning to day trade, as an indicator trader is very typical. This is also logical when you consider - HOW are you supposed to initially learn how to trade? Trading indicators are available to anyone who has a charting program, and simply using line crosses, or histogram color changes, provide ’easy’ signals to understand. If you will also take the time to learn the arithmetic behind your indicators, as well as learning what each indicator is specifically intended to do, not only is this a logical way to begin, it is also a good ’step’ in your learning progression - understanding the WHAT you are doing, instead of attempting to create ’canned’ indicator only trading systems, without any regard as to WHY you are trading this way.
This does become one of the ’sticking’ points in your learning progression, as you come to find out that you are unable to profitably trade indicators as signals only - now what? Now what - you ’can’t’ develop your own indicators, so you start doing google searches for day trading indicators and start buying your ’collection’ - they don’t ’work’ either. Now what - you buy a mechanical trading system - what does hypothetical results may not be indicative of real trading or future results mean? Now what - you start subscribing to signal services OR you start joining the ’latest and greatest’ chat room - am I really the only person using the signals who isn’t profitable?
Now what - you never learn how to trade.
I began trading as an indicator trader, and I did try to learn everything that I could about the various indicators, as well as trying to combine indicators that were consistent with how I wanted to trade - I just could never develop a mechanical day trading system from what was available to me. I read a couple more books that didn’t really help me, so I then started looking for someone who could teach me. From what I now know about gurus -vs- teachers, I am very lucky that I got involved with a money manager-trader who taught me a tremendous amount, but I still couldn’t get profitable, in part because there was also ’pressure’ to learn how to trade using real money. As well, any discussions or thoughts about trading psychology and the issues involved, especially to beginning traders, was non-existent.
Now what - learning but losing - I stopped trading. Learning to trading using real money, and ’scoffing’ at trading psychology as simply individual weakness, really was something that I now regard as misinformation. I always mention this as I now feel that this cost me as much as a year of time, and was very close to costing me my trading future, as stopped trading was VERY close to quitting trading. How can’t trading psychology be real to a beginner, when you consider that you are risking losing money at a very fast pace as a day trader, and when you further consider that you are also doing this when you really don’t know what you are doing - this is NOT by definition being weak. And if trading psychology is real, how are you going to learn to make ’good’ trading habits with real money while you are fighting the implications?
Now what - not trading and not ready [quite] to quit - still studying and searching.
Probably the single most important ’thing’ that got me to a next step in learning how to trade, was the concept of a trading setup, and that a setup and a signal were not the same. This was extremely meaningful to me, as it also led to an understanding of how to better use trading indicators for the information that they can provide, but not to use them as trading signals - in essence I began learning about trading method where discretion could be consistently applied -vs- trading system that was mechanical and arithmetic rules.
Traders who are indicator only traders, are also what I refer to right side only traders, that is they are always looking at the right side of their charts for an indicator signal. BUT what about the left side of the chart, what about price and patterns, what about market conditions - WHAT about the relevant ’things’ that are ’moving’ price, instead of indicators only as an arithmetic derivative of price, and thus, one that is dependant on the time frame that you have chosen to trade from? These ’thoughts’, along with the concept of trade setup, became instrumental in the development of a trading method, and how I came to turning my trading around.
When I think about the steps in my learning progression - I would list them as follows:
2/95 - 6/96 indicators only teaching service that included signals learning to trading with real money and trading psychology issues stop trading
6/96 - 3/97 understanding of trading psychology issues learning about trading setups concept trading method -vs- trading system trade setup - trade trigger are not the same method development understand the importance of the left side of the chart and what is happening ’across’ the chart related trading setups and how/when they triggered indicators + pattern indicators + pattern + price indicators + pattern + price + market conditions
3/97 - 11/97 able to paper trade profitably able to real money trade profitably able to trade for a living
Indicator Only Day Trader - Setup Including Indicators Method Day Trader
I have attempted to discuss the way I started day trading, and the way I think many-most traders typically begin. Along with this, I have pointed various issues and problems that I had - those regarding how to learn to trade, and then progressing into a profitable trader. My experiences have been both personal, as well as those of many traders that I have worked with over the last 8-9 years through Tactical Trading - that a very large number of these problems are due to day trading only with indicators, the specific indicators used, along with trying to turn these indicators into a mechanical trading system. This is not to say that this can’t be done - I simply couldn’t do it. However, I would strongly suggest that anyone who is in the early stages of day trading, or struggling with their day trading, consider these things that have been discussed.
Copyright © 2006 Tactical Trading, LLC. All rights reserved. Reproduction in whole or in part without permission is prohibited.
source: http://www.forex-articles.net/article-83.html
Forex Trading Systems
You should build your own trading system
A trading system on the Forex market is a type of strategy that allows traders to trade with a set of rules. There are many free trading systems and strategies printed in trading articles, journals, books and on trading-related websites. I would have to say that if you are not inclined to learn how to develop your own trading methodology, then perhaps you should consider giving your money for someone else to invest. Give it to someone who is trading a system that he developed and tested himself because he is more likely to have the confidence and courage to follow his own trading system.
Why you need a forex trading system?
1. It’s easy to trade with a system.
2. A good system provides consistent result.
What makes a good trading system?
* It’s simple. Forget complicated systems with lots of rules - it’s a proven fact that simple systems work better - and are less likely to fail, in the brutal world of trading.
* A trading system with profitable expectation.
* It provides good ratio of reward/risk.
* A system of comprehensive risk management including market exposure weightings, stop-loss provisions and capital commitment guidelines that preserve capital during trend-less or volatile periods.
Once you learn how to develop trading systems and strategies, you can then be better equipped to test them as well. By this point you might even find that the system created by yourself is the best one for you, because it becomes the system more suited to your profit objectives while operating within your risk tolerance levels. It is likely that once you develops this level of competence, you will simply acquire other trading systems only to dissect them, grab the parts you likes and add them to your own system. To me, the irony is that for a trader to know which system to purchase, you must first learn how to create a system. And after knowing how to create a system, he will no longer have the need to buy one.
source: http://www.forex-articles.net/article-3.html
A trading system on the Forex market is a type of strategy that allows traders to trade with a set of rules. There are many free trading systems and strategies printed in trading articles, journals, books and on trading-related websites. I would have to say that if you are not inclined to learn how to develop your own trading methodology, then perhaps you should consider giving your money for someone else to invest. Give it to someone who is trading a system that he developed and tested himself because he is more likely to have the confidence and courage to follow his own trading system.
Why you need a forex trading system?
1. It’s easy to trade with a system.
2. A good system provides consistent result.
What makes a good trading system?
* It’s simple. Forget complicated systems with lots of rules - it’s a proven fact that simple systems work better - and are less likely to fail, in the brutal world of trading.
* A trading system with profitable expectation.
* It provides good ratio of reward/risk.
* A system of comprehensive risk management including market exposure weightings, stop-loss provisions and capital commitment guidelines that preserve capital during trend-less or volatile periods.
Once you learn how to develop trading systems and strategies, you can then be better equipped to test them as well. By this point you might even find that the system created by yourself is the best one for you, because it becomes the system more suited to your profit objectives while operating within your risk tolerance levels. It is likely that once you develops this level of competence, you will simply acquire other trading systems only to dissect them, grab the parts you likes and add them to your own system. To me, the irony is that for a trader to know which system to purchase, you must first learn how to create a system. And after knowing how to create a system, he will no longer have the need to buy one.
source: http://www.forex-articles.net/article-3.html
Looking for Cup and Handle Chart Patterns before Buying a Stock
Cup and Handle
Favorable Chart Patterns to Look for before Buying a Stock
One of the biggest factors an investor should consider before buying a stock is what type of chart pattern the stock is forming. A company may have great fundamentals but if it has an unfavorable chart pattern then it may not be a good company to invest in. One of the basic chart patterns to look for before investing in a stock is called a "Cup and Handle" pattern. Typically a "Cup and Handle" looks similar to a coffee cup if you were holding the cup in your right hand.
Generally I look for stocks that take 3 Months or more to form a Cup and then develop a Handle for at least 2 Weeks. Some examples are shown below.
AMHC formed a Cup for 14 Months and then developed a Handle for 8 Weeks (point A). AMHC broke out of the Handle in December of 2001 and then preceded to rise from $8 to $37 a share over the next 12 months for a gain of over 400%.
cup and handle
EASI developed a 2 year Cup and then formed a 10 week Handle (point B) before breaking out in August of 2000. EASI then preceded to rise from $12 to $38 a share over the next 12 months for a gain of over 200%.
chart patterns
FRNT developed a 12 Month Cup and then formed an 8 Week Handle (point C) before breaking out in November of 2000. FRNT then preceded to rise from $12 to $26 a share for a gain of over 100% over the next 5 Months.
stocks
Finally TARO developed a Cup for 10 Months and then formed a 6 Week Handle (point D) before breaking out in October of 2001. TARO then rose from $17 to $50 a share for a gain of 190% over the next 6 Months.
stock chart
By focusing on companies with good fundamentals that are breaking out of a favorable chart pattern such as a "Cup and Handle" will allow you to find winning stocks even in a Bear Market environment. The purpose of our site is to help focus investors on those stocks that have good fundamentals which are forming favorable chart patterns such as the "Cup and Handle".
Regards,
May 2004
by Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-31.html
Favorable Chart Patterns to Look for before Buying a Stock
One of the biggest factors an investor should consider before buying a stock is what type of chart pattern the stock is forming. A company may have great fundamentals but if it has an unfavorable chart pattern then it may not be a good company to invest in. One of the basic chart patterns to look for before investing in a stock is called a "Cup and Handle" pattern. Typically a "Cup and Handle" looks similar to a coffee cup if you were holding the cup in your right hand.
Generally I look for stocks that take 3 Months or more to form a Cup and then develop a Handle for at least 2 Weeks. Some examples are shown below.
AMHC formed a Cup for 14 Months and then developed a Handle for 8 Weeks (point A). AMHC broke out of the Handle in December of 2001 and then preceded to rise from $8 to $37 a share over the next 12 months for a gain of over 400%.
cup and handle
EASI developed a 2 year Cup and then formed a 10 week Handle (point B) before breaking out in August of 2000. EASI then preceded to rise from $12 to $38 a share over the next 12 months for a gain of over 200%.
chart patterns
FRNT developed a 12 Month Cup and then formed an 8 Week Handle (point C) before breaking out in November of 2000. FRNT then preceded to rise from $12 to $26 a share for a gain of over 100% over the next 5 Months.
stocks
Finally TARO developed a Cup for 10 Months and then formed a 6 Week Handle (point D) before breaking out in October of 2001. TARO then rose from $17 to $50 a share for a gain of 190% over the next 6 Months.
stock chart
By focusing on companies with good fundamentals that are breaking out of a favorable chart pattern such as a "Cup and Handle" will allow you to find winning stocks even in a Bear Market environment. The purpose of our site is to help focus investors on those stocks that have good fundamentals which are forming favorable chart patterns such as the "Cup and Handle".
Regards,
May 2004
by Bob Kleyla
http://www.amateur-investor.net/
source: http://www.forex-articles.net/article-31.html
Fibonacci Trading Techniques
Introduction to Fibonacci trading techniques.
First, a few words about Fibonacci himself…
Leonardo Pisano (nickname Fibonacci) was a mathematician, born in 1170, in Pisa (now Italy). His father was Guilielmo, of the Bonacci family. His father was a diplomat, as a result Fibonacci was educated in North Africa, where he learned "accounting" and "mathematics".
Fibonacci also contributed to the science of numbers, and introduced the "Fibonacci sequence"
The Fibonacci sequence is the sequence 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, introduced in his work "Liber abaci" in a problem involving the growth of a population of rabbits.
Aside from this sequence of number where every next number is the sum of the proceeding two, 0, 1 (0+1), 2 (1+1), 3 (2+1), 5 (3+2), 8 (5+3), 13 (8+5), etc.
There are the "Fibonacci ratios".. By comparing the relationship between each number, and each alternate number, and even each number to the one four places to the right, we arrive at some fairly consistent ratios.. The important ones are .236, 50, .382, .618, .764, 1.382, 1.618, 2.618, 4.236, and for good measure we include 1.00 ..
It turns out that the ratios are mathematical principles prevalent in nature around us, and is also in man-made objects. There are many interesting, entertaining, and poetic observations about Fibonacci numbers and ratios in the universe (see the reference section below). Fibonacci numbers appear in ancient buildings, in plants, planets, molecules, the dimensions of human bodies, and of course snails… But of what use is all that to the lowly trader?
What really interests you, the application of Fibonacci techniques in the trading environment..
Traders usually study charts! Fibonacci ratios may be applied to the Price scale, and also to the time scale of charts. I study the price scale. My focus here will be on the price scale for now, perhaps in the future I’ll add some time-scale studies.
Prices never move in a straight line. Look at any chart, you will see many wiggles, as price advances and retraces.. Stocks, Futures, Forex, all instruments which are liquid, will often retrace in Fibonacci proportions, and advance in Fibonacci proportions. Not always, and not precisely to the penny. But very often, and reasonably close! This happens often enough that profitable trades can result. I will show you some examples below.
I used Fibonacci ratios with a few simple indicators to help determine probable price turning points, optimum entry, exit and stop-loss levels. My complete techniques are available in on-line video seminars, in-person seminars, and via my real-time on-line chat facility. For more details, see the this web page
The application of Fibonacci to trading can be very complex, and take much time and experience to perfect. Many traders enjoy making the process as difficult and as complex as they can tolerate.. I do the opposite, I try to simplify, try to bring clarity.
Fibonacci example - Microsoft Weekly chart.
This lesson demonstrates a very basic way to use Fibonacci levels. You just read about Fibonacci ratios. We will use just one of those ratios for now, the .382 Fibonacci ratio. In this chart MSFT made a high of (approximately) $59.97 in December of 1999. After that, it moved down to make a low of $30.19 in May of 2000.
The down move was $29.78 (59.97-30.19), quite a substantial amount.
Projecting from that low in May, and using a Fibonacci ratio, we can calculate 29.78*.382=$11.37 . So 38.2% of 29.78 is 11.37 . If MSFT were to rally 38.2% of the down-move it would reach $41.57 (11.37+30.20). I’m using rounded numbers in my calculations, the chart above calculates it to be $41.564, we don’t need that degree of accuracy!
Several weeks later, MSFT rallied and resisted right near that .382 Fibonacci level !!
So we were able to predict a future probable turning point (after the low of May 2000), using the Fibonacci ratio of .382!! If only it were always so easy.
The steps involved are:
1. Calculate the total value of a significant price-move (high to low, or vice-versa).
2. Calculate a Fibonacci retracement (in this case .382) of the prior move.
3. Look for price to confirm, by resisting (or support in an up-move) near that predicted retracement area.
Fibonacci example - Microsoft Daily chart.
This chart shows how a different Fibonacci level (61.8%) predicted resistance and a market turn.
Notice how the market behaved at the .382 level (30.80 area). Initially the market spiked through, then fell back to that level (late October). We cannot expect a chart to retrace at every Fib level. We can expect some support/resistance as buyers/sellers enter the market at these levels, but we can’t always predict whether the market will actually turn at any particular level. Fibonacci techniques are used to alert you to a possible trade, if that price level does cause support or resistance. These techniques are not used as a trigger for entry. Other indicators are used in conjunction with Fibonacci studies to provide higher-probability entries..
As mentioned before, there are several Fib levels, .236, 50, .382, .618, .764, 1.382, 1.618, 2.618, 4.236, and 1.00 .. So there are several places to look for a market turn. They can be calculated in advance, but trading blindly at a fib level can be dangerous, because you never know for certain (in advance) whether the market will turn at any particular Fib level. I use other indicators to help overcome that problem, click here to learn how to determine which Fib ratio is likely to be strong enough to turn the market.
Important notes from this lesson:
1. There are several Fib levels.
2. It takes some skill to determine which Fib level is likely to cause the market to turn.
3. There are some techniques to help you determine where a market is more likely to turn.
4. Do not blindly anticipate a market turn at a Fib level.
More Fibonacci examples.
QQQ Weekly chart with a deep retracement to .618 and a weak attempt to rally after that. However, consider the daily chart and intraday traders. they would have enjoyed the rally from $75 to $100, after going long from a support level that could have been predicted in March!
QQQ daily chart. Multiple Fib levels timing the market perfectly in 3 consecutive waves up!
Intraday chart, QQQ 30-minute. Notice the two market Fib retracements (there are others in this chart too).. The rally from 29.26 stopped at 31.10, then it supported **twice** at 30.39, for two good scalps. The next highlighted Fib support is at a retracement of .618 from the move up 30.47 to 32.49 .. Both of these support levels were predictable before the market supported there.. Hint:--- See how the rally continued after the shallow retracement to 30.39 ... See how the rally after the deeper retracement to .618 near 31.25 was a weaker rally.. This is common, a deeper retracement often foretells a weaker rally... See the next lesson in the table of contents for more on these advanced Fibonacci trading principles.
Another intraday chart, S&P 5-minute.. The first Fib retracement is on a bearish move, an opportunity to short. The second is bullish, with a long entry near 999.25 .. Note that popular charting software will calculate Fibonacci to rediculous precision, we don’t need anything closer than one tick! Actually, you should allow some room don’t expect precision every time. Allow the trade some room to develop, or you will be stopped out too often.
More Advanced - Microsoft Daily chart.
By now you’re probably quite interested, perhaps applying all those Fibonacci ratios to many charts.. You should experiment with your own charts. As long as the instrument traded has a lot of liquidity (not a penny stock for example), you should start to see Fib support and resistance at work. You will start to notice that Fibonacci levels "work" sometimes and not others. Sometimes the trades are not profitable, or are less profitable than others. You need to develop the skills required to select better trades.
In this mini-lesson I want to show you how to evaluate price action based on which Fib levels it responds to, and how the market behaves immediately preceding the Fib support/resistance.
The chart below actually has many Fibonacci levels "performing well", providing support or resistance to the market. I want you to focus on the two that I have identified, for the purposes of this lesson.
The first up-move that I have identified topped out at $26.90, and then retraced 61.8% before supporting at that Fib level. There was a pause at the .382 level, but it was not sufficient to hold the market. Now look at the rally from the support level near .618, it rallied but did not exceed the prior high of 26.90 … As a general rule, a retracement to .618 or below indicates that the preceding up-move is losing steam. A shallow retracement which supports at .382 is more likely to rally beyond the prior high than one which has a deep retracement beyond .50 all the way to .618 ..
The impressive thrust from 22.55 up to 26.90 was negated by a quick move back to .618 at about 24.20, so a trader should not be too optimistic about a continuation of the initial up-thrust.
Similarly, the move up in June, from 23.50 to almost 26.50 would also not inspire much optimism for a huge rally above the high of 26.50 … In general a shallow support at .382 would indicate a probable rally beyond the prior high. However, if the up-move preceding the retracement was sluggish rather than thrusting, you also should temper your enthusiasm.
If the second rally which only retraced to .382 had the thrust of the first rally, it would be a more attractive trade!
These are not firm rules, instead they are used as a guide, to help you filter for better trades. Every Fib level is not equal, some are more attractive than others.
Important notes from this lesson:
1. Not all Fib levels are alike.
2. No technical study is perfect, you must develop the skills to filter out bad trades, and improve the odds of finding better trades.
3. Price action just before a Fib retracement can tell you something about the future.
4. Which Fib level causes the end of a retracement also can give a hint to future price action.
5. No technical study is perfect, you must develop the skills to filter out bad trades, and improve the odds of finding better trades.
Good Trading
Best Regards
Neal Hughes
http://www.fibmarkets.com/
source: http://www.forex-articles.net/article-42.html
First, a few words about Fibonacci himself…
Leonardo Pisano (nickname Fibonacci) was a mathematician, born in 1170, in Pisa (now Italy). His father was Guilielmo, of the Bonacci family. His father was a diplomat, as a result Fibonacci was educated in North Africa, where he learned "accounting" and "mathematics".
Fibonacci also contributed to the science of numbers, and introduced the "Fibonacci sequence"
The Fibonacci sequence is the sequence 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, introduced in his work "Liber abaci" in a problem involving the growth of a population of rabbits.
Aside from this sequence of number where every next number is the sum of the proceeding two, 0, 1 (0+1), 2 (1+1), 3 (2+1), 5 (3+2), 8 (5+3), 13 (8+5), etc.
There are the "Fibonacci ratios".. By comparing the relationship between each number, and each alternate number, and even each number to the one four places to the right, we arrive at some fairly consistent ratios.. The important ones are .236, 50, .382, .618, .764, 1.382, 1.618, 2.618, 4.236, and for good measure we include 1.00 ..
It turns out that the ratios are mathematical principles prevalent in nature around us, and is also in man-made objects. There are many interesting, entertaining, and poetic observations about Fibonacci numbers and ratios in the universe (see the reference section below). Fibonacci numbers appear in ancient buildings, in plants, planets, molecules, the dimensions of human bodies, and of course snails… But of what use is all that to the lowly trader?
What really interests you, the application of Fibonacci techniques in the trading environment..
Traders usually study charts! Fibonacci ratios may be applied to the Price scale, and also to the time scale of charts. I study the price scale. My focus here will be on the price scale for now, perhaps in the future I’ll add some time-scale studies.
Prices never move in a straight line. Look at any chart, you will see many wiggles, as price advances and retraces.. Stocks, Futures, Forex, all instruments which are liquid, will often retrace in Fibonacci proportions, and advance in Fibonacci proportions. Not always, and not precisely to the penny. But very often, and reasonably close! This happens often enough that profitable trades can result. I will show you some examples below.
I used Fibonacci ratios with a few simple indicators to help determine probable price turning points, optimum entry, exit and stop-loss levels. My complete techniques are available in on-line video seminars, in-person seminars, and via my real-time on-line chat facility. For more details, see the this web page
The application of Fibonacci to trading can be very complex, and take much time and experience to perfect. Many traders enjoy making the process as difficult and as complex as they can tolerate.. I do the opposite, I try to simplify, try to bring clarity.
Fibonacci example - Microsoft Weekly chart.
This lesson demonstrates a very basic way to use Fibonacci levels. You just read about Fibonacci ratios. We will use just one of those ratios for now, the .382 Fibonacci ratio. In this chart MSFT made a high of (approximately) $59.97 in December of 1999. After that, it moved down to make a low of $30.19 in May of 2000.
The down move was $29.78 (59.97-30.19), quite a substantial amount.
Projecting from that low in May, and using a Fibonacci ratio, we can calculate 29.78*.382=$11.37 . So 38.2% of 29.78 is 11.37 . If MSFT were to rally 38.2% of the down-move it would reach $41.57 (11.37+30.20). I’m using rounded numbers in my calculations, the chart above calculates it to be $41.564, we don’t need that degree of accuracy!
Several weeks later, MSFT rallied and resisted right near that .382 Fibonacci level !!
So we were able to predict a future probable turning point (after the low of May 2000), using the Fibonacci ratio of .382!! If only it were always so easy.
The steps involved are:
1. Calculate the total value of a significant price-move (high to low, or vice-versa).
2. Calculate a Fibonacci retracement (in this case .382) of the prior move.
3. Look for price to confirm, by resisting (or support in an up-move) near that predicted retracement area.
Fibonacci example - Microsoft Daily chart.
This chart shows how a different Fibonacci level (61.8%) predicted resistance and a market turn.
Notice how the market behaved at the .382 level (30.80 area). Initially the market spiked through, then fell back to that level (late October). We cannot expect a chart to retrace at every Fib level. We can expect some support/resistance as buyers/sellers enter the market at these levels, but we can’t always predict whether the market will actually turn at any particular level. Fibonacci techniques are used to alert you to a possible trade, if that price level does cause support or resistance. These techniques are not used as a trigger for entry. Other indicators are used in conjunction with Fibonacci studies to provide higher-probability entries..
As mentioned before, there are several Fib levels, .236, 50, .382, .618, .764, 1.382, 1.618, 2.618, 4.236, and 1.00 .. So there are several places to look for a market turn. They can be calculated in advance, but trading blindly at a fib level can be dangerous, because you never know for certain (in advance) whether the market will turn at any particular Fib level. I use other indicators to help overcome that problem, click here to learn how to determine which Fib ratio is likely to be strong enough to turn the market.
Important notes from this lesson:
1. There are several Fib levels.
2. It takes some skill to determine which Fib level is likely to cause the market to turn.
3. There are some techniques to help you determine where a market is more likely to turn.
4. Do not blindly anticipate a market turn at a Fib level.
More Fibonacci examples.
QQQ Weekly chart with a deep retracement to .618 and a weak attempt to rally after that. However, consider the daily chart and intraday traders. they would have enjoyed the rally from $75 to $100, after going long from a support level that could have been predicted in March!
QQQ daily chart. Multiple Fib levels timing the market perfectly in 3 consecutive waves up!
Intraday chart, QQQ 30-minute. Notice the two market Fib retracements (there are others in this chart too).. The rally from 29.26 stopped at 31.10, then it supported **twice** at 30.39, for two good scalps. The next highlighted Fib support is at a retracement of .618 from the move up 30.47 to 32.49 .. Both of these support levels were predictable before the market supported there.. Hint:--- See how the rally continued after the shallow retracement to 30.39 ... See how the rally after the deeper retracement to .618 near 31.25 was a weaker rally.. This is common, a deeper retracement often foretells a weaker rally... See the next lesson in the table of contents for more on these advanced Fibonacci trading principles.
Another intraday chart, S&P 5-minute.. The first Fib retracement is on a bearish move, an opportunity to short. The second is bullish, with a long entry near 999.25 .. Note that popular charting software will calculate Fibonacci to rediculous precision, we don’t need anything closer than one tick! Actually, you should allow some room don’t expect precision every time. Allow the trade some room to develop, or you will be stopped out too often.
More Advanced - Microsoft Daily chart.
By now you’re probably quite interested, perhaps applying all those Fibonacci ratios to many charts.. You should experiment with your own charts. As long as the instrument traded has a lot of liquidity (not a penny stock for example), you should start to see Fib support and resistance at work. You will start to notice that Fibonacci levels "work" sometimes and not others. Sometimes the trades are not profitable, or are less profitable than others. You need to develop the skills required to select better trades.
In this mini-lesson I want to show you how to evaluate price action based on which Fib levels it responds to, and how the market behaves immediately preceding the Fib support/resistance.
The chart below actually has many Fibonacci levels "performing well", providing support or resistance to the market. I want you to focus on the two that I have identified, for the purposes of this lesson.
The first up-move that I have identified topped out at $26.90, and then retraced 61.8% before supporting at that Fib level. There was a pause at the .382 level, but it was not sufficient to hold the market. Now look at the rally from the support level near .618, it rallied but did not exceed the prior high of 26.90 … As a general rule, a retracement to .618 or below indicates that the preceding up-move is losing steam. A shallow retracement which supports at .382 is more likely to rally beyond the prior high than one which has a deep retracement beyond .50 all the way to .618 ..
The impressive thrust from 22.55 up to 26.90 was negated by a quick move back to .618 at about 24.20, so a trader should not be too optimistic about a continuation of the initial up-thrust.
Similarly, the move up in June, from 23.50 to almost 26.50 would also not inspire much optimism for a huge rally above the high of 26.50 … In general a shallow support at .382 would indicate a probable rally beyond the prior high. However, if the up-move preceding the retracement was sluggish rather than thrusting, you also should temper your enthusiasm.
If the second rally which only retraced to .382 had the thrust of the first rally, it would be a more attractive trade!
These are not firm rules, instead they are used as a guide, to help you filter for better trades. Every Fib level is not equal, some are more attractive than others.
Important notes from this lesson:
1. Not all Fib levels are alike.
2. No technical study is perfect, you must develop the skills to filter out bad trades, and improve the odds of finding better trades.
3. Price action just before a Fib retracement can tell you something about the future.
4. Which Fib level causes the end of a retracement also can give a hint to future price action.
5. No technical study is perfect, you must develop the skills to filter out bad trades, and improve the odds of finding better trades.
Good Trading
Best Regards
Neal Hughes
http://www.fibmarkets.com/
source: http://www.forex-articles.net/article-42.html
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