by Monica Hendrix
If you want catch the big profits then you need to follow the big trends and this means following the trends that last for weeks or months. These are the trends that reflect the underlying health of the currencies economy. Want to catch them? Read on.
If you want to catch the big trends you need to do the following
Establish the Main Trend
You don't do this from the daily chart you do it from the weekly chart - this will help you separate the wood from the trees and see the big picture. The its onto the daily chart to look for entry points.
Support and resistance
Simple trend lines that can help you establish trend lines are all you need to look for entry points for your forex trading signal. Look for areas which have been tested several times and are considered valid by the market i.e if they give way a new trend is likely to develop.
Buy New Highs Sell New Lows
If you want to make money at forex trend following then you need to do this.
Most new trends develop from market highs and lows - so if you were thinking buy low and selling high was the way to make money, think again.
You need - to buy high and sell higher.
Confirm Confirm Confirm
You are not going to just buy a break you will use momentum oscillators to time your entry - if you don't know what they are then you need to make them an essential part of your forex education.
We don't have time to discuss them in detail here simply check our other articles but two good ones to start with are the stochastic and the RSI. These are simple visual indicators that will tell you if price momentum supports the move or not.
By using momentum oscillators, you are effectively getting the odds in your favour that the break is more likely to be valid and continue.
Place Your Stop and Hold it
Placing stops with breakouts is easy behind the breakout point - you then need to be patient and hold it here.
Run the profit
Many traders never catch big long term trends because they try so hard to avoid risk that they actually create it. If you move your stop to quickly normal reactions in the trend will simply stop you out. Volatility moves prices takes your stop out and then the trend continues piling up huge profits and your not in!
If you believe the break is valid then hold your stop back and trail it very slowly.
When the trend changes you will miss a good chunk of the move but consider the fact that if you only got 50 - 60% of the major trends you would be very rich and you can see how this strategy will pay off.
So there you have it a simple way to trend follow in forex.
In essence its very simple will take you less than 30 minutes a day and can learned in about a week. All you need to do is use support and resistance and few confirming indicators and your all set.
It takes discipline and patience to follow long term trends but it can be very financially rewarding. Try it and you will soon be enjoying currency trading success
About the Author
NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF's
For free trading guides and an exclusive Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com/index.html
Tuesday, December 4, 2007
Saturday, December 1, 2007
Forex Trading - A Simple Method To Target 100% Gains
by kelly Price
Here we will look at a simple method anyone can understand and use and a potential opportunity shaping up right now that could yield big gains with low risk for any forex trader. Let's discuss this forex trading method and give you an example, shaping up right now.
The method is really common sense and easy to understand and is based on this equation.
Fundamentals + Investor Perception = Price.
It's a fact that currency markets move in line with the fundamentals but it's not as simple as just looking at the news - in fact if you try and do this you will lose.
The reason for this is the markets are a discounting mechanism.
News is discounted in a split second in today's world of instant communications furthermore; humans have to decide what the facts mean and their not logical or sensible!
They are influenced by greed and fear and a host of other inputs.
Prices Have Gone to Far a Turn Coming
The fact is throughout history humans spike prices away from fair value when greed and fear take hold and then prices return back to fair value.
If you look at news and its influence on price and then use forex charts to spot prices being pushed to far from fair value, you can get some great contrary trades - now let's look at a specific example.
If you have read my previous articles you will have seen how bullish I have been of the commodity currencies and with the Aussie and Canadian dollar making new multi decade highs we have cleared 1,000 pips - that's right, a 1,000 so, not a minor profit! You can see the reasons we used in our other articles.
The above was not doing anything complicated just following the long term trend but now if you look at the news - the bullish news has pushed prices too far - here's why.
Yesterday we had FOMC and they cut rates by 0.25% - this was expected and discounted but there was some bullish news the market ignored.
First, the Fed tempered the view that they would cut rates further but the most interesting bit of news was.. The economy expanded by 3.9%, versus calls for 3.0% GDP growth and up slightly from the previous quarter at 3.8%. This is the strongest growth since Q1 2006.
The short Term Bearish Scenario Is Peaking.
Of course, this doesn't mean that the dollar is "out of the woods" long term - but short term the market bearish news has peaked. Many investors were looking at 3.0% in terms of GDP and 0.5% in rates so we could see a turn.
Non farm payroll on Friday could be it at expected levels or better and the dollar could rally.
The market has pushed to far from fair value and the fundamentals and a short covering rally could be on the cards. There are a huge number of speculators long, making money and the market will flush them - it's just a question of when.
Watch The Following:
Let's take the Canadian dollar as an example.
Were long but we can see the warning signs that it could turn and there is also another factor with this currency - Crude oil.
Crude has made a huge rise and many are talking of $100 a barrel maybe we will get one but only as a spike. Fact is there is no shortage of oil, this spike is pure emotional trading and a retreat to the $80.00 level could come any day and longer term $60 - 70, looks fair value.
With the Canadian dollar were looking closely at oil for a top which should add weight to the fall as Canada is a major exporter.
What are the charts saying?
Pull up a daily chart of the Canadian Dollar and you see new highs and no warning signs of a top - but pull up a monthly or weekly chart and you will see the "wood from the trees", a spike that needs to correct.
When will it come? No one knows but the odds are the daily chart will show signs in the next few days on the Canada and a low risk high reward correction will occur.
There' an old saying...
"If you can hold your head when others are losing theirs you probably haven't hear the news"
In this instance it is simply you have heard the news - but you are stepping back from the majority view, getting your forex charts out and seeing the reality - a profit opportunity.
Watch action after non farm payroll and see what happens - don't jump to soon, prices will tell you what to do.
Good luck and good trading!
About the Author
NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF's
For free trading guides and an exclusive Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com/index.html
Here we will look at a simple method anyone can understand and use and a potential opportunity shaping up right now that could yield big gains with low risk for any forex trader. Let's discuss this forex trading method and give you an example, shaping up right now.
The method is really common sense and easy to understand and is based on this equation.
Fundamentals + Investor Perception = Price.
It's a fact that currency markets move in line with the fundamentals but it's not as simple as just looking at the news - in fact if you try and do this you will lose.
The reason for this is the markets are a discounting mechanism.
News is discounted in a split second in today's world of instant communications furthermore; humans have to decide what the facts mean and their not logical or sensible!
They are influenced by greed and fear and a host of other inputs.
Prices Have Gone to Far a Turn Coming
The fact is throughout history humans spike prices away from fair value when greed and fear take hold and then prices return back to fair value.
If you look at news and its influence on price and then use forex charts to spot prices being pushed to far from fair value, you can get some great contrary trades - now let's look at a specific example.
If you have read my previous articles you will have seen how bullish I have been of the commodity currencies and with the Aussie and Canadian dollar making new multi decade highs we have cleared 1,000 pips - that's right, a 1,000 so, not a minor profit! You can see the reasons we used in our other articles.
The above was not doing anything complicated just following the long term trend but now if you look at the news - the bullish news has pushed prices too far - here's why.
Yesterday we had FOMC and they cut rates by 0.25% - this was expected and discounted but there was some bullish news the market ignored.
First, the Fed tempered the view that they would cut rates further but the most interesting bit of news was.. The economy expanded by 3.9%, versus calls for 3.0% GDP growth and up slightly from the previous quarter at 3.8%. This is the strongest growth since Q1 2006.
The short Term Bearish Scenario Is Peaking.
Of course, this doesn't mean that the dollar is "out of the woods" long term - but short term the market bearish news has peaked. Many investors were looking at 3.0% in terms of GDP and 0.5% in rates so we could see a turn.
Non farm payroll on Friday could be it at expected levels or better and the dollar could rally.
The market has pushed to far from fair value and the fundamentals and a short covering rally could be on the cards. There are a huge number of speculators long, making money and the market will flush them - it's just a question of when.
Watch The Following:
Let's take the Canadian dollar as an example.
Were long but we can see the warning signs that it could turn and there is also another factor with this currency - Crude oil.
Crude has made a huge rise and many are talking of $100 a barrel maybe we will get one but only as a spike. Fact is there is no shortage of oil, this spike is pure emotional trading and a retreat to the $80.00 level could come any day and longer term $60 - 70, looks fair value.
With the Canadian dollar were looking closely at oil for a top which should add weight to the fall as Canada is a major exporter.
What are the charts saying?
Pull up a daily chart of the Canadian Dollar and you see new highs and no warning signs of a top - but pull up a monthly or weekly chart and you will see the "wood from the trees", a spike that needs to correct.
When will it come? No one knows but the odds are the daily chart will show signs in the next few days on the Canada and a low risk high reward correction will occur.
There' an old saying...
"If you can hold your head when others are losing theirs you probably haven't hear the news"
In this instance it is simply you have heard the news - but you are stepping back from the majority view, getting your forex charts out and seeing the reality - a profit opportunity.
Watch action after non farm payroll and see what happens - don't jump to soon, prices will tell you what to do.
Good luck and good trading!
About the Author
NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF's
For free trading guides and an exclusive Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com/index.html
How Physics Can Make You A Lot Of Money In Forex Trading
by Olumuyiwa Ojo
Physics. That haunt of the nerd and the may be occasional weirdo? Well, have I got news for you! If you are a trader, physics could make you a lot of money and you do not have to study black holes and string theory to reach your goal.
Just think Time and Gravity. Let these be your friend. Study these two and you are home free. What does time and gravity have to do with trading you say? Have you ever heard of "the trend is your friend until it ends"? To use physics, you have to then apply one of Newton's Law of Motion - the one that says, an object remains in motion until it is stopped by a greater opposing force.
Then if the trend is up, you have to keep buying until you can no longer buy. And if the trend is down, you have to keep on selling until you can no longer sell. To be successful at trading forex, you have to then know the trend and trade accordingly. When you trade with the trend, Time then becomes your ally. You can enter at a crappy price and time will probably bail you out and make you profitable if you understood how it works.
First of all, many traders jump in the market regardless of the conditions. They enter a dead market with no volatility and enter a volatile market against the trend; big mistake!
A bigger mistake is that they often set tight stops that are sure to be taken out!
This is the lesson to take out of this article. Be slow to take profits when you trade with the trend and be fast to take profits when you trade against the trend.
The reason? Time.
The passage of time is favorable to the trend trader and a killer to the counter-trend trader. Take the following steps: 1. Plot a Simple Moving average 49 on your chart 2. When price crosses it to the upside, trend is up and to the downside, down 3. Buy when the trend is up. No sells 4. Sell when the trend is down. No buys 5. Attempt counter-trend trades only after price has made a considerable run away from the 49 MA. In the GBP/USD I wait for about 100-120 pips before attempting a counter-trend trade.
The 49 MA is a special MA with a peculiar behavior that you can learn to exploit. To learn more about my techniques, please visit http://learnforexoption.com/
About the Author
Olumuyiwa is a full-time trader. He researches and trades the spot forex and forex options markets to gain trading advantage for himself and other traders. He coaches and shares his experience with both new and experienced traders
Physics. That haunt of the nerd and the may be occasional weirdo? Well, have I got news for you! If you are a trader, physics could make you a lot of money and you do not have to study black holes and string theory to reach your goal.
Just think Time and Gravity. Let these be your friend. Study these two and you are home free. What does time and gravity have to do with trading you say? Have you ever heard of "the trend is your friend until it ends"? To use physics, you have to then apply one of Newton's Law of Motion - the one that says, an object remains in motion until it is stopped by a greater opposing force.
Then if the trend is up, you have to keep buying until you can no longer buy. And if the trend is down, you have to keep on selling until you can no longer sell. To be successful at trading forex, you have to then know the trend and trade accordingly. When you trade with the trend, Time then becomes your ally. You can enter at a crappy price and time will probably bail you out and make you profitable if you understood how it works.
First of all, many traders jump in the market regardless of the conditions. They enter a dead market with no volatility and enter a volatile market against the trend; big mistake!
A bigger mistake is that they often set tight stops that are sure to be taken out!
This is the lesson to take out of this article. Be slow to take profits when you trade with the trend and be fast to take profits when you trade against the trend.
The reason? Time.
The passage of time is favorable to the trend trader and a killer to the counter-trend trader. Take the following steps: 1. Plot a Simple Moving average 49 on your chart 2. When price crosses it to the upside, trend is up and to the downside, down 3. Buy when the trend is up. No sells 4. Sell when the trend is down. No buys 5. Attempt counter-trend trades only after price has made a considerable run away from the 49 MA. In the GBP/USD I wait for about 100-120 pips before attempting a counter-trend trade.
The 49 MA is a special MA with a peculiar behavior that you can learn to exploit. To learn more about my techniques, please visit http://learnforexoption.com/
About the Author
Olumuyiwa is a full-time trader. He researches and trades the spot forex and forex options markets to gain trading advantage for himself and other traders. He coaches and shares his experience with both new and experienced traders
Forex scalping Success - 5 Key Facts You Need to Know
by kelly price
Forex scalping and day trading is more popular than ever and is the choice of most new forex traders but is it the right one and how do you enjoy forex scalping success - lets find out.
1. Short Term Volatility is Random
Millions of forex traders trade trillions of dollars in currency each day and to say that you can measure what this diverse number of traders will do in a few hours, or a day is laughable you cant.
2. Support and Resistance Levels are Meaningless
To trade any market you need to have valid levels of support or resistance to key off however with all volatility being random in short term trading, prices can and do go anywhere and support and resistance cannot be used - as the data simply isn't valid.
3. No Trading system Will Work
It doesn't matter how good or well thought out the trading system is - if volatility is random and support and resistance not valid it wont work!
In any financial market to win you need to trade the odds and if you cant, you are going to lose longer term. It's a bit like being in a casino - if you can count the cards in a game such as blackjack you win but in a game of pure chance like roulette, play long enough with the odds against you and your going to lose and it's the same in forex scalping.
You cant get the odds on your side and you cant win - PERIOD
4. Forex Scalping Systems Don't have Track Records
Yes they do many traders will say - I have seen them. Sure they have and written all over the track record will be "hypothetical" or "simulated" This means it wasn't traded in the market but done on paper knowing the closing prices!
How hard is that?
You could do it and so can I and even my 10 year old daughter could - but the markets don't work backwards its harder - You have to trade going forwards!
5. Why is it So Popular?
Because it makes a good story and vendors know this.
Most of them have never traded in their lives - but the story of small regular profits and low risk is an easy one to sell, to naive or greedy investors who are looking for an easy way to get rich in forex.
Of course there is no easy way to get rich in forex and you wouldn't expect there to be, with the rewards on offer.
THE GOOD NEWS!
The good news is you can make money in forex trading if you avoid forex scalping and concentrate on trading the odds. This means valid data where you can get the odds in your favour with your forex trading system and trade them for profit.
You can swing trade, looking for trends of a few days to a few weeks, or trend follow looking for trends that last weeks, months or even years. In both forex methods you can trade the odds - the key to a successful forex trading strategy.
Forex scalping is not the only myth in currency trading - but it's a popular one and you need to ignore it and concentrate on getting the right forex education to win.
So leave forex scalping and day trading to the dreamers and greedy traders, who think forex trading is simply a walk in the park and concentrate on building your own forex trading strategy based around trading the odds.
Learn the odds, learn how to trade them and there is nothing to stop you enjoying currency trading success.
About the Author
NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF's
For free trading guides and an exclusive Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com/index.html
Forex scalping and day trading is more popular than ever and is the choice of most new forex traders but is it the right one and how do you enjoy forex scalping success - lets find out.
1. Short Term Volatility is Random
Millions of forex traders trade trillions of dollars in currency each day and to say that you can measure what this diverse number of traders will do in a few hours, or a day is laughable you cant.
2. Support and Resistance Levels are Meaningless
To trade any market you need to have valid levels of support or resistance to key off however with all volatility being random in short term trading, prices can and do go anywhere and support and resistance cannot be used - as the data simply isn't valid.
3. No Trading system Will Work
It doesn't matter how good or well thought out the trading system is - if volatility is random and support and resistance not valid it wont work!
In any financial market to win you need to trade the odds and if you cant, you are going to lose longer term. It's a bit like being in a casino - if you can count the cards in a game such as blackjack you win but in a game of pure chance like roulette, play long enough with the odds against you and your going to lose and it's the same in forex scalping.
You cant get the odds on your side and you cant win - PERIOD
4. Forex Scalping Systems Don't have Track Records
Yes they do many traders will say - I have seen them. Sure they have and written all over the track record will be "hypothetical" or "simulated" This means it wasn't traded in the market but done on paper knowing the closing prices!
How hard is that?
You could do it and so can I and even my 10 year old daughter could - but the markets don't work backwards its harder - You have to trade going forwards!
5. Why is it So Popular?
Because it makes a good story and vendors know this.
Most of them have never traded in their lives - but the story of small regular profits and low risk is an easy one to sell, to naive or greedy investors who are looking for an easy way to get rich in forex.
Of course there is no easy way to get rich in forex and you wouldn't expect there to be, with the rewards on offer.
THE GOOD NEWS!
The good news is you can make money in forex trading if you avoid forex scalping and concentrate on trading the odds. This means valid data where you can get the odds in your favour with your forex trading system and trade them for profit.
You can swing trade, looking for trends of a few days to a few weeks, or trend follow looking for trends that last weeks, months or even years. In both forex methods you can trade the odds - the key to a successful forex trading strategy.
Forex scalping is not the only myth in currency trading - but it's a popular one and you need to ignore it and concentrate on getting the right forex education to win.
So leave forex scalping and day trading to the dreamers and greedy traders, who think forex trading is simply a walk in the park and concentrate on building your own forex trading strategy based around trading the odds.
Learn the odds, learn how to trade them and there is nothing to stop you enjoying currency trading success.
About the Author
NEW! PROFESSIONAL FOREX COURSE AND FREE TRADING PDF's
For free trading guides and an exclusive Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com/index.html
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