By Krisman Situmorang
Amazing Forex Strategy is one of the most important tools for all traders but most of the writers or traders said that only few traders can make money from trading. Is that true? How can you lose money while there are so many tools which can help you beat the trading!.
If you are still new to the trading there is still chance for you to make a lot of money after reading this article. I’ll try to explain here the strategy you as long as you follow the rule. I will explain How to win Forex Without Technical Indicators.
Technical Analysis is the biggest aspect that influences the trader’s mind and decision when start trading. Thousands of indicators even strategies and tricks can be easily found in many forex forums but only few make money? Right. Why do you fail using technical indicators? The answer is because technical indicators can not beat NEWS or Fundamental Analysis.
Fundamental news may cause all your technical indicators or strategy not work, this is what so many traders forget when begin trading. They use technical indicators by not considering fundamental analysis.
Herewith we will try to take a look at fundamental / news affects to your trading. So if you feel that you always lose your money, try just to follow this simple method Every week there are some NEWS that will affect the price that you must know. They are:
1. NON FARM PAYROLL
2. TRADE BALANCE
3. INTEREST RATE STATEMENTS
4. DURABLE GOOD
5. PRODUCER PRICE INDEX
6. PPI excl. FOOD AND ENERGY
7. CONSUMER PRICE INDEX
8. CPI excl. FOOD AND ENERGY
9. TRICHET, BERNANKE, & FUKUI SPEAKS
10. UNEMPLOYMENT RATE
1.NON FARM PAYROLL Remarks : # Pip : 100 – 200 pips # Country : USA # Currencies : all USD pair
2. TRADE BALANCE Remarks : # Pip : 70 – 120 pips # Country : USA # Currencies : all USD pair
3. INTEREST RATE STATEMENTS Remarks : # Pip : >100 pips# Country : ALL # Currencies : all pair
4. DURABLE GOOD Remarks : # Pip : 50 - 100 pips # Country : ALL # Currencies : all pair
5. PRODUCER PRICE INDEX Remarks : # Pip : 50 - 60 pips # Country : ALL # Currencies : all pair
6.PPI excl. FOOD AND ENERGY Remarks : # Pip : 50 - 100 pips # Country : ALL # Currencies : all pair
7.CONSUMER PRICE INDEX Remarks : # Pip : 50 - 100 pips # Country : ALL # Currencies : all pair
8.CPI excl. FOOD AND ENERGY Remarks # Pip : 50 - 100 pips # Country : ALL # Currencies : all pair
9.TRICHET, BERNANKE, & FUKUI SPEAKS Remarks # Pip : 30 - 100 pips # Country : E-12, USA, & JPN # Currencies : EURO, USD, & JPY
10.UNEMPLOYMENT RATE Remarks # Pip : 30 - 50 pips # Country : ALL # Currencies : all pair
All the above news can be seen in this following site, It is clearly explained what news to be released in the week and we have to bookmark this page to make us easier to look at the News everyday. There are many sites now providing traders with News that we have to bookmark.
How can we start trading the news?
TIPS 1 : NON FARM PAYROLL (NFP) The Great in Forex Trading
Check your calendar news this month, you don’t have to take care of what news to be released. Just remember that Every Friday of each month the above news will be released at 12.30 GMT.
The effect of this news is really big (100 -200 pis) only in a few minutes. So lets try to put the TRAP against the price direction.
Strategy
- Before the news released, do not trade, but just be prepared to trade on Brit / USD.
- 30 minutes before the news, open your - Metatrader (Your chart station) with 30 minutes chart. - Look at current price. - BUY STOP at 20 pips above current price, (example current price is 1.9050, so you put BUY STOP at 1.9070)
- At the same time SELL STOP at 20 pips below current price, (example current price is 1.9050, so you put SELL STOP at 1.9030)
- Cancel one of them it the price starts touching the charts.
- Set Take profit 100 pips - Set trailing stop 15.
Trading on this news once a month will make you profit at least 100 pips without technical analysis. What you want to see is the schedule for that news on every month of the first Friday.
For the other news you can do the same thing, and I am sure that every week you will make good profit without technical analysis that usually make traders confused and finally loose the trade.
Happy trading.
Krisman Situmoranghttp://forex-winning.blogspot.com
Article Source: http://EzineArticles.com/?expert=Krisman_Situmorang
Friday, April 25, 2008
Trading Gaps in the Forex: Not Trendy, But Very Profitable!
Author: Jason Fielder
Common sense isn't common, more young kids know who's on the "Surreal Life" than know where Mexico is located, and if it's not new, it's not "trendy" or "hip." While this general foolishness seems to have nothing to do with Forex trading, why is it that long effective trading strategies are ignored because they're "simple" or "old?"
Why spend hours a day on an advanced, new fangled, supposedly cutting edge (read: complicated and confusing) trading system when the old "boring" version is profitable? Isn't profit the point? Isn't it better to be old, boring, and profitable than new, flashy, and questionable? Isn't profit the bottom line here?
Gap trading is nothing new. It's been used in the stock market and in commodities trading for decades, and takes advantage of the difference, or "gap" between the closing price of the day before with the opening price of the next day, but this strategy is ignored in the Forex. Why is that? Well, gaps rely on a market close, and when the Forex market never closes, it's really hard to get a gap or take advantage of it.
In fact, during an entire trading week, there is only one time when using gap trading strategies in the Forex market is even possible! Sunday night at the open is the only time that gap trading Forex is possible. Boring?
For most of us, yeah. Pointless? Oh heck no. While different trading systems are looking for that .5% or that 1% above the 50% mark, some signs and indicators suggest that the Forex gap method is correct over 85% of the time. No, that's not a typo, and that's not hype. Once a week may be boring, but those numbers make it worth the wait and should have you drooling at the possibilities.
So how do you trade the gaps on the Forex market? First, understand that there are 3, and ONLY 3, things that the price can do between Friday's close and Sunday's open. They can:
1. Open above Friday's close, which is called "gapping up"
2. Open below Friday's close, which is called "gapping down"
3. Open at the exact same price, meaning there was no gap
There can be large gaps, often referred to as "full gaps" in price, or small gaps, known as "partial gaps." As far as strategy, there's no difference between the two. Good gap trading strategy works for all types of gaps. The one thing to watch out for is gap size.
I don't recommend trading a gap unless there is a 15 pip difference, and this strategy is best used with the major currency pairs. Knowing this, the rule to trading gaps may seem the opposite of what you would expect, but if you want to be right 85% of the time, here's the rule you want to follow:
Whatever direction the gap is going, you want to trade the opposite direction. So if a pair gaps up, sell short, if it gaps down, buy more. This strategy works a stunning amount of the time, and can be the edge in the Forex market that you've been looking for.
Article Source: http://www.articlesbase.com/currency-trading-articles/trading-gaps-in-the-forex-not-trendy-but-very-profitable-369881.html
About the Author:
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/ From Jason Fielder: Founder, ForexImpact.com
Common sense isn't common, more young kids know who's on the "Surreal Life" than know where Mexico is located, and if it's not new, it's not "trendy" or "hip." While this general foolishness seems to have nothing to do with Forex trading, why is it that long effective trading strategies are ignored because they're "simple" or "old?"
Why spend hours a day on an advanced, new fangled, supposedly cutting edge (read: complicated and confusing) trading system when the old "boring" version is profitable? Isn't profit the point? Isn't it better to be old, boring, and profitable than new, flashy, and questionable? Isn't profit the bottom line here?
Gap trading is nothing new. It's been used in the stock market and in commodities trading for decades, and takes advantage of the difference, or "gap" between the closing price of the day before with the opening price of the next day, but this strategy is ignored in the Forex. Why is that? Well, gaps rely on a market close, and when the Forex market never closes, it's really hard to get a gap or take advantage of it.
In fact, during an entire trading week, there is only one time when using gap trading strategies in the Forex market is even possible! Sunday night at the open is the only time that gap trading Forex is possible. Boring?
For most of us, yeah. Pointless? Oh heck no. While different trading systems are looking for that .5% or that 1% above the 50% mark, some signs and indicators suggest that the Forex gap method is correct over 85% of the time. No, that's not a typo, and that's not hype. Once a week may be boring, but those numbers make it worth the wait and should have you drooling at the possibilities.
So how do you trade the gaps on the Forex market? First, understand that there are 3, and ONLY 3, things that the price can do between Friday's close and Sunday's open. They can:
1. Open above Friday's close, which is called "gapping up"
2. Open below Friday's close, which is called "gapping down"
3. Open at the exact same price, meaning there was no gap
There can be large gaps, often referred to as "full gaps" in price, or small gaps, known as "partial gaps." As far as strategy, there's no difference between the two. Good gap trading strategy works for all types of gaps. The one thing to watch out for is gap size.
I don't recommend trading a gap unless there is a 15 pip difference, and this strategy is best used with the major currency pairs. Knowing this, the rule to trading gaps may seem the opposite of what you would expect, but if you want to be right 85% of the time, here's the rule you want to follow:
Whatever direction the gap is going, you want to trade the opposite direction. So if a pair gaps up, sell short, if it gaps down, buy more. This strategy works a stunning amount of the time, and can be the edge in the Forex market that you've been looking for.
Article Source: http://www.articlesbase.com/currency-trading-articles/trading-gaps-in-the-forex-not-trendy-but-very-profitable-369881.html
About the Author:
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/ From Jason Fielder: Founder, ForexImpact.com
Thursday, April 24, 2008
Non-Farm Payroll Reports as a Major Forex Indicator
Author: Jason Fielder
The Unemployment Report, also referred to as the Non-Farm Payroll (NFP) Reports, is a major indicator of a country's economic health, and one of the most anticipated economic reports for investors in all markets, including the Forex.
The Unemployment Report may be released at different times for different countries, so make sure to know when this information comes out for whatever nations your currency pair is from. In the United States the Non-Farm Payroll Report is released on the first Friday of every month by the U.S Bureau of Labor Statistics, and often times will affect at least the short term action in the Forex market in regards to the U.S. Dollar.
This report, in the United States, includes roughly 80% of the paid workers in the country and excludes government, farm, and non-profit employees. This report is used as one of the biggest measuring sticks for a country's overall economic health, which logically will affect its currency strength and thus affect the Forex market.
That part is true of any country's non-farm payroll report, is that it is one of the biggest indicators of a nation's overall economic health and will almost always have an impact on investment and trading markets.The Unemployment/Non-Farm Payroll Report is one of the major five economic reports for each country that traders jump on, the other four being interest rates, consumer price index, trade balance, and retail sales.
Even among all these, the unemployment report often gets the strongest attention, and is considered one of the most accurate economic indicators of a country's overall economic health, which makes sense. The more people who are working, the more currency you have being made and spent in a nation's economy.
You'll want to know when the reports are released. For example, if you are trading the US Dollar and Euro, then you'll need to know that the United States and European Union release different economic indicators on different days, meaning the unemployment report for the United States may come on a different day than the reports from the European Union.
If you want to get the maximum information for this currency pair, then you'll want to know the information for both.The same idea applies to the Japanese Yen, or any currency you're trading. You want to know when all the reports become available so you can stay on top of the current financial news and end up a Forex winner!
Article Source: http://www.articlesbase.com/currency-trading-articles/nonfarm-payroll-reports-as-a-major-forex-indicator-371647.html
About the Author:
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/ From Jason Fielder: Founder, ForexImpact.com
The Unemployment Report, also referred to as the Non-Farm Payroll (NFP) Reports, is a major indicator of a country's economic health, and one of the most anticipated economic reports for investors in all markets, including the Forex.
The Unemployment Report may be released at different times for different countries, so make sure to know when this information comes out for whatever nations your currency pair is from. In the United States the Non-Farm Payroll Report is released on the first Friday of every month by the U.S Bureau of Labor Statistics, and often times will affect at least the short term action in the Forex market in regards to the U.S. Dollar.
This report, in the United States, includes roughly 80% of the paid workers in the country and excludes government, farm, and non-profit employees. This report is used as one of the biggest measuring sticks for a country's overall economic health, which logically will affect its currency strength and thus affect the Forex market.
That part is true of any country's non-farm payroll report, is that it is one of the biggest indicators of a nation's overall economic health and will almost always have an impact on investment and trading markets.The Unemployment/Non-Farm Payroll Report is one of the major five economic reports for each country that traders jump on, the other four being interest rates, consumer price index, trade balance, and retail sales.
Even among all these, the unemployment report often gets the strongest attention, and is considered one of the most accurate economic indicators of a country's overall economic health, which makes sense. The more people who are working, the more currency you have being made and spent in a nation's economy.
You'll want to know when the reports are released. For example, if you are trading the US Dollar and Euro, then you'll need to know that the United States and European Union release different economic indicators on different days, meaning the unemployment report for the United States may come on a different day than the reports from the European Union.
If you want to get the maximum information for this currency pair, then you'll want to know the information for both.The same idea applies to the Japanese Yen, or any currency you're trading. You want to know when all the reports become available so you can stay on top of the current financial news and end up a Forex winner!
Article Source: http://www.articlesbase.com/currency-trading-articles/nonfarm-payroll-reports-as-a-major-forex-indicator-371647.html
About the Author:
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/ From Jason Fielder: Founder, ForexImpact.com
Wednesday, April 23, 2008
Trading Forex With Pivot Points
By: E.J Sieberhagen
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days move and trades are entered when the market hits a support or resistance line of the pivot point providing your OB/OS indicator is in agreement. All the support and resist lines are put in place 1st thing in the morning. then you wait for the market to hit those entry Points.
Contrary to what some might believe, trading Forex with Pivot Points are probably the most popular method used in trading the financial markets today. Long before the invention of computers this was the method used by the traders in the pits to determine hidden support and resistance levels.
The Pivot Point is still used by experienced floor traders and technical analysts alike. The major advantage now is that we now have computers and can calculate our points well in advance. Many charting packages can calculate them for you automatically, thus enhancing the use of Pivot Points.
Whilst there is a lot more to Pivot Point Trading in Forex Trading than we will be mentioned in this article, the purpose of this exercise is to introduce you to the concept of trading Forex with Pivot Points.
Remember the market can only go up, down, or sideways. It is like an elastic band that has been stretched, sooner or later it will rebound to an equilibrium point where the market is in balance, and then stretch the opposite way only to rebound and reach another balance point. Then some fundamental announcement or happening will drive the market in a new direction and so on day after day. Pivot Points can aid us in determining how far that elastic can stretch before it rebounds.
Whilst there are many time frames that can be used for calculating Pivots, for the purpose of this exercise lets concentrate on the daily time frame (i.e.: 24hr) Pivot Points are calculated using the previous days, Open, High, Low, and Close figures. There are many Pivot Point calculators available on the web so you don’t have to waste your time doing the calculations manually. Also bear in mind the longer the time frame you are using the longer you must be prepared to stay in the market or wait for the next entry point.
Pivot points unlike many other indicators are an objective tool. Because they are mathematically calculated, there can only be one answer for a specific time period.
Many subjective indicators like Fibonacci retracements, (and I am a great fib fan) Elliot waves etc. can have different people trading in different directions at the same time due to individual interpretation..
The PP’s can help you to predict the next day’s highs and lows in advance. PP’s can give you anything from 4 to 8 support and resistance levels. However you still have to be able to identify the trend to be a successful PP trader. Pivot Points also work best in a trending market.
Entry and exit points
Pivot Points can give you exact entry and exit points, rather than enter markets that are in the middle of a run, or about to turn the other way. Here is where we use other indicators to assist on the entry or exit. If the market stalls at a Pivot Point level, and you have an overbought or oversold indicator that will be a good time to get in or out. Or if a Fibonacci level coincides with a Pivot Point level it can make a strong case to enter or exit a trade. If the market is bullish and your favourite indicator is not near overbought, when it hits the first resistance level then you probably have a good case to stay in the market and make your profit target the next Pivot Point resistance line. The breakout above the 1st resistance level can then become your new stop or stop reverse.
Obviously the reverse is true of the support level as well. By combining the Pivot Points with your favourite indicator you can develop your own trading system that no one else uses.
Trading for the day will probably remain between the 1st support (S1) and resistance (R1) levels as the floor traders make their markets. Once one of these levels is penetrated other traders will be attracted to the market, and should the second level be breached, the longer term traders are attracted to the market.
Knowledge of where the floor traders are expecting support or resistance can be a distinct advantage especially when there is no outside influence in the market. Provided no significant market news has occurred between yesterdays close and today’s opening, the local floor traders and market makers tend to move the market between the Pivot Point (P) and the first support line (S1) and resistance (R1) If one of these levels is breached then expect the market to test the next levels (S2) and ( S3) or (R2) and (R3)
Whilst there are many other aspects to Pivot Point trading why not try this simple method first and see if you can develop your own strategy by using your existing trading technique’s in conjunction with the Pivot Points.
About the Author
For more online Forex trading information please visit Free Forex Trading Information Online - a popular online Forex trading website that provides trading advice and information to beginner traders. Visit our Forex Trading Beginnner for the latest Forex news.
Permanent Link: http://www.isnare.com/?aid=46861&ca=Finances
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days move and trades are entered when the market hits a support or resistance line of the pivot point providing your OB/OS indicator is in agreement. All the support and resist lines are put in place 1st thing in the morning. then you wait for the market to hit those entry Points.
Contrary to what some might believe, trading Forex with Pivot Points are probably the most popular method used in trading the financial markets today. Long before the invention of computers this was the method used by the traders in the pits to determine hidden support and resistance levels.
The Pivot Point is still used by experienced floor traders and technical analysts alike. The major advantage now is that we now have computers and can calculate our points well in advance. Many charting packages can calculate them for you automatically, thus enhancing the use of Pivot Points.
Whilst there is a lot more to Pivot Point Trading in Forex Trading than we will be mentioned in this article, the purpose of this exercise is to introduce you to the concept of trading Forex with Pivot Points.
Remember the market can only go up, down, or sideways. It is like an elastic band that has been stretched, sooner or later it will rebound to an equilibrium point where the market is in balance, and then stretch the opposite way only to rebound and reach another balance point. Then some fundamental announcement or happening will drive the market in a new direction and so on day after day. Pivot Points can aid us in determining how far that elastic can stretch before it rebounds.
Whilst there are many time frames that can be used for calculating Pivots, for the purpose of this exercise lets concentrate on the daily time frame (i.e.: 24hr) Pivot Points are calculated using the previous days, Open, High, Low, and Close figures. There are many Pivot Point calculators available on the web so you don’t have to waste your time doing the calculations manually. Also bear in mind the longer the time frame you are using the longer you must be prepared to stay in the market or wait for the next entry point.
Pivot points unlike many other indicators are an objective tool. Because they are mathematically calculated, there can only be one answer for a specific time period.
Many subjective indicators like Fibonacci retracements, (and I am a great fib fan) Elliot waves etc. can have different people trading in different directions at the same time due to individual interpretation..
The PP’s can help you to predict the next day’s highs and lows in advance. PP’s can give you anything from 4 to 8 support and resistance levels. However you still have to be able to identify the trend to be a successful PP trader. Pivot Points also work best in a trending market.
Entry and exit points
Pivot Points can give you exact entry and exit points, rather than enter markets that are in the middle of a run, or about to turn the other way. Here is where we use other indicators to assist on the entry or exit. If the market stalls at a Pivot Point level, and you have an overbought or oversold indicator that will be a good time to get in or out. Or if a Fibonacci level coincides with a Pivot Point level it can make a strong case to enter or exit a trade. If the market is bullish and your favourite indicator is not near overbought, when it hits the first resistance level then you probably have a good case to stay in the market and make your profit target the next Pivot Point resistance line. The breakout above the 1st resistance level can then become your new stop or stop reverse.
Obviously the reverse is true of the support level as well. By combining the Pivot Points with your favourite indicator you can develop your own trading system that no one else uses.
Trading for the day will probably remain between the 1st support (S1) and resistance (R1) levels as the floor traders make their markets. Once one of these levels is penetrated other traders will be attracted to the market, and should the second level be breached, the longer term traders are attracted to the market.
Knowledge of where the floor traders are expecting support or resistance can be a distinct advantage especially when there is no outside influence in the market. Provided no significant market news has occurred between yesterdays close and today’s opening, the local floor traders and market makers tend to move the market between the Pivot Point (P) and the first support line (S1) and resistance (R1) If one of these levels is breached then expect the market to test the next levels (S2) and ( S3) or (R2) and (R3)
Whilst there are many other aspects to Pivot Point trading why not try this simple method first and see if you can develop your own strategy by using your existing trading technique’s in conjunction with the Pivot Points.
About the Author
For more online Forex trading information please visit Free Forex Trading Information Online - a popular online Forex trading website that provides trading advice and information to beginner traders. Visit our Forex Trading Beginnner for the latest Forex news.
Permanent Link: http://www.isnare.com/?aid=46861&ca=Finances
Forex Trading Tip - Learn 80 - 20 Rule and Instantly Enhance Your Profit Potential
by kelly Price
The 80 / 20 rule will help you make money in forex trading and if you are new to forex trading or trading already and not making enough money this forex trading tip is for you...
The 80 / 20 rule is simple.
It simply states that:
80% of your success comes from 20% of your efforts.
Let's take a simple example of a sales organization.
It's well known that 80% of the income normally comes from 20% of the clients.
In trading terms therefore: 80% of your profits come from 20% of your trades and the rest (80%) give you just 20% of your profits.
If you think about the 80 / 20 rule, you can apply it to many areas of life and try applying it to your forex trading and you will see it makes sense.
So what should you do?
Cut your trading frequency!
It's a well known fact that most forex traders try to hard, they think they need to trade a lot or always be in the market to win.
What happens?
They take low odds trades and lose. Keep these two points in mind:
- Unlike most activities you don't get paid for effort in forex trading you get paid for being right with your trading signal and that's it.
- The amount of trades is NOT In any way related to your profit potential.
To give you an example - I know traders who trade less than once a month yet make 100% + annualized gains!
The fact is most short term volatility in forex trading is random. This means you can't get the odds on your side and you won't win. Ever wonder why you never see a winning day trader or forex scalper?
Well, the reason is they trade to much and trade low odds or trades and this means an erosion and eventual wipeout of equity.
If you trade longer term, your chances of success with your forex trading system will be more because you are focusing on high odds trades.
If you really want to win, use the 80 / 20 rule and get the odds in your favor.
Try trading long term high odds trades and trade valid breakouts to new highs and lows (most major moves start from them), be selective and follow the market action and lock into these big breaks and follow the big trends that develop.
The 80 / 20 rule is logical in life and in the forex market and if you understand it, you can make big gains.
Many people like trading frequently - but their just playing a game and not interested in making money, it's a thrill seeking exercise - personally I would rather go Scuba Diving!
If you believe forex trading is all about making money and NOTHING else, then you will see how you can use the 80 / 20 rule to your advantage.
Think about the above and using it in your forex trading strategy and you maybe glad you did!
About the Author
NEW! 2 X ESSSENTIAL FOREX PDFS PDF
For free 2 x trading Pdf's, with 50 of essential info and anexclusive Currency Trading Course visit our website at: http://www.learncurrencytradingonline.com
The 80 / 20 rule will help you make money in forex trading and if you are new to forex trading or trading already and not making enough money this forex trading tip is for you...
The 80 / 20 rule is simple.
It simply states that:
80% of your success comes from 20% of your efforts.
Let's take a simple example of a sales organization.
It's well known that 80% of the income normally comes from 20% of the clients.
In trading terms therefore: 80% of your profits come from 20% of your trades and the rest (80%) give you just 20% of your profits.
If you think about the 80 / 20 rule, you can apply it to many areas of life and try applying it to your forex trading and you will see it makes sense.
So what should you do?
Cut your trading frequency!
It's a well known fact that most forex traders try to hard, they think they need to trade a lot or always be in the market to win.
What happens?
They take low odds trades and lose. Keep these two points in mind:
- Unlike most activities you don't get paid for effort in forex trading you get paid for being right with your trading signal and that's it.
- The amount of trades is NOT In any way related to your profit potential.
To give you an example - I know traders who trade less than once a month yet make 100% + annualized gains!
The fact is most short term volatility in forex trading is random. This means you can't get the odds on your side and you won't win. Ever wonder why you never see a winning day trader or forex scalper?
Well, the reason is they trade to much and trade low odds or trades and this means an erosion and eventual wipeout of equity.
If you trade longer term, your chances of success with your forex trading system will be more because you are focusing on high odds trades.
If you really want to win, use the 80 / 20 rule and get the odds in your favor.
Try trading long term high odds trades and trade valid breakouts to new highs and lows (most major moves start from them), be selective and follow the market action and lock into these big breaks and follow the big trends that develop.
The 80 / 20 rule is logical in life and in the forex market and if you understand it, you can make big gains.
Many people like trading frequently - but their just playing a game and not interested in making money, it's a thrill seeking exercise - personally I would rather go Scuba Diving!
If you believe forex trading is all about making money and NOTHING else, then you will see how you can use the 80 / 20 rule to your advantage.
Think about the above and using it in your forex trading strategy and you maybe glad you did!
About the Author
NEW! 2 X ESSSENTIAL FOREX PDFS PDF
For free 2 x trading Pdf's, with 50 of essential info and anexclusive Currency Trading Course visit our website at: http://www.learncurrencytradingonline.com
Tuesday, April 22, 2008
Forex Trends - How to Follow Them for Bigger Profits
Author: Monica Hendrix
When you look back at a forex chart forex trends that last for weeks or months are easy to see but there much harder to hold in real time trading.
There are huge profits to be made if you can milk the longer term trends but you must be aware of two main problems you will encounter.
Volatility within the Main Trend When your are forex trend following you get constant pullbacks in price and you have to decide whether they are a trend change or a pullback and this is not so easy when money is on the line. The dilemma you face is: Where should you put your stop so that you can stay with the trend but get at least a good chunk of profit should the trend turn. For this you should have an understanding of standard deviation of price - if you don't know what it is - make it an essential part of your forex education.
Our view is to use trend line support and moving averages pullbacks to the 18 - 25 day moving average are normal and pullbacks to the 40 day moving average indicate a trend that might turn. Once the trend is in motion, use the 40 day and trend line support as your stop. Of course when the trend turns you give back a bit of profit but that's ok - if you caught 50% of every major trend, you would be very rich.
Don't ever try and predict when a trend might end or impose your view on the market let the market action tell you when you are wrong. You Have to Accept Short Term Dips to Make Long Term Gains!Many traders get excited when they get a profit and the bigger it becomes, the more excited they get - Every dip in open equity causes them emotional turmoil and they simply want to get the profit in the bank, before it gets away.
They end up snatching their profit and banking a marginal one - what happens next? The trend continues and makes $5 10 or 15,000 and their not in yet, that's where they thought the price was going anyway!They just didn't have the discipline to stay with them. The fact is you must be disciplined and be prepared to take open equity dips - sometimes of thousands at a time, once a big trend is in motion.
This requires confidence and discipline in your forex trading strategy, an understanding of volatility and a mindset to put up with it, to seek a longer term gain. Take a look at a forex charts and you won't just see trends at present that yield a few hundred pips in motion, you will see ones that could give you thousands or tens of thousands and you can get these trends with the right attitude.
If you have the discipline and the mindset to succeed you can make a lot of money from long term trends - you don't have to be perfect and you and you don't have to be clever, just have the patience to stay with the trend, until the chart tells you that your wrong.
Article Source: http://www.articlesbase.com/currency-trading-articles/forex-trends-how-to-follow-them-for-bigger-profits-392718.html
About the Author:
NEW! 2 X FREE ESSENTIAL TRADER PDFS & MUCH MORE!For free 2 x trading Pdf's with 90 of pages of essential info on Forex Trend Following Systems visit our website at: http://www.learncurrencytradingonline.com
When you look back at a forex chart forex trends that last for weeks or months are easy to see but there much harder to hold in real time trading.
There are huge profits to be made if you can milk the longer term trends but you must be aware of two main problems you will encounter.
Volatility within the Main Trend When your are forex trend following you get constant pullbacks in price and you have to decide whether they are a trend change or a pullback and this is not so easy when money is on the line. The dilemma you face is: Where should you put your stop so that you can stay with the trend but get at least a good chunk of profit should the trend turn. For this you should have an understanding of standard deviation of price - if you don't know what it is - make it an essential part of your forex education.
Our view is to use trend line support and moving averages pullbacks to the 18 - 25 day moving average are normal and pullbacks to the 40 day moving average indicate a trend that might turn. Once the trend is in motion, use the 40 day and trend line support as your stop. Of course when the trend turns you give back a bit of profit but that's ok - if you caught 50% of every major trend, you would be very rich.
Don't ever try and predict when a trend might end or impose your view on the market let the market action tell you when you are wrong. You Have to Accept Short Term Dips to Make Long Term Gains!Many traders get excited when they get a profit and the bigger it becomes, the more excited they get - Every dip in open equity causes them emotional turmoil and they simply want to get the profit in the bank, before it gets away.
They end up snatching their profit and banking a marginal one - what happens next? The trend continues and makes $5 10 or 15,000 and their not in yet, that's where they thought the price was going anyway!They just didn't have the discipline to stay with them. The fact is you must be disciplined and be prepared to take open equity dips - sometimes of thousands at a time, once a big trend is in motion.
This requires confidence and discipline in your forex trading strategy, an understanding of volatility and a mindset to put up with it, to seek a longer term gain. Take a look at a forex charts and you won't just see trends at present that yield a few hundred pips in motion, you will see ones that could give you thousands or tens of thousands and you can get these trends with the right attitude.
If you have the discipline and the mindset to succeed you can make a lot of money from long term trends - you don't have to be perfect and you and you don't have to be clever, just have the patience to stay with the trend, until the chart tells you that your wrong.
Article Source: http://www.articlesbase.com/currency-trading-articles/forex-trends-how-to-follow-them-for-bigger-profits-392718.html
About the Author:
NEW! 2 X FREE ESSENTIAL TRADER PDFS & MUCH MORE!For free 2 x trading Pdf's with 90 of pages of essential info on Forex Trend Following Systems visit our website at: http://www.learncurrencytradingonline.com
FOREX: Exiting positions at a right time
Author: Andrey Moraru
The presented article covers one of the most important (in author's opinion) aspects of trading in general and FOREX trading in particular ? managing of orders and positions. This includes choosing entry points, making decisions about exit points, stop-loss and take-profit of the trader. I hope this article will help new traders, who just began to work with FOREX, and also to experienced traders who trade regularly and regularly make or loose their money to the market.
When I started to trade FOREX and made my first big losses and profits I began to notice when very important thing about the whole trading process. While the right time to enter a position was rarely a problem for myself (nearly 80% of all my open positions had gone into the "green" profit zone), the problem was hidden in the determining the right exit point for that position.
Not only was it important to cut my risk on the potential losses with stop-loss orders, but to limit my greediness and take profit when I can take it and make it as high as I can. There are many known guidelines and ways to enter a right position at a right time ? like major economic news releases, global world events, technical indicators combinations, etc. But while the entering into a position is optional and trade can decide to miss as many good/bad entry point moments as they wish, this is untrue if we talk about exiting a position.
Margin trading makes it impossible to wait too long with an open position. More than that, every open position in a certain way limits trader's ability to trade.Choosing the good exit points for positions could be an easy task if only the FOREX market wasn't so chaotic and volatile. In my opinion (backed by my trading experience) exit orders for every position should be toggled constantly with time and as the new market data (technical and fundamental) appear.
Let's say, you took a short position on EUR/USD at 1.2563, at the time you are taking this position the support/resistance level is 1.2500/1.2620. You set your stop-loss order to 1.2625 and your take-profit order to 1.2505. So now, this position can be considered as an intraday or 2-3 days term position. This means that you must close it before it's "term" is over, or it will become a very unpredictable position (because market will differ greatly from what it was at the time you have entered this position).
After the position is taken and initial exit orders are set, you need to follow the market events and technical indicators to adjust your exit orders. The most important rule is to tighten the loss/profit limit as time goes by. Usually if I take a middle term position (2-4 days) I try to lower the stop and target order by 10-25 pips every day. I also monitor global events, trying to lower my stop-losses when very important news can hurt my position.
If the profit is already quite high, I try to move my stop-loss the entry point, making a sure-win position. The main idea here is to find an equilibrium point between greed and caution. But as your position gets older the profit should be more limited and losses cut. Also, trader should always remember that if the market began to act unexpectedly, they need to be even more cautious with exit order, even if the position is still showing profits.
Every trader has their own trading strategy and habits. I hope this article will make its readers think about such an important aspect of trading as the exit orders and this will only improve their trading results.
To learn more about FOREX market visit my website - http://www.earnforex.com and my blog - http://earnforex.blogspot.com
This article is free for republishingSource: http://www.a1articles.com/article_78217_19.html
The presented article covers one of the most important (in author's opinion) aspects of trading in general and FOREX trading in particular ? managing of orders and positions. This includes choosing entry points, making decisions about exit points, stop-loss and take-profit of the trader. I hope this article will help new traders, who just began to work with FOREX, and also to experienced traders who trade regularly and regularly make or loose their money to the market.
When I started to trade FOREX and made my first big losses and profits I began to notice when very important thing about the whole trading process. While the right time to enter a position was rarely a problem for myself (nearly 80% of all my open positions had gone into the "green" profit zone), the problem was hidden in the determining the right exit point for that position.
Not only was it important to cut my risk on the potential losses with stop-loss orders, but to limit my greediness and take profit when I can take it and make it as high as I can. There are many known guidelines and ways to enter a right position at a right time ? like major economic news releases, global world events, technical indicators combinations, etc. But while the entering into a position is optional and trade can decide to miss as many good/bad entry point moments as they wish, this is untrue if we talk about exiting a position.
Margin trading makes it impossible to wait too long with an open position. More than that, every open position in a certain way limits trader's ability to trade.Choosing the good exit points for positions could be an easy task if only the FOREX market wasn't so chaotic and volatile. In my opinion (backed by my trading experience) exit orders for every position should be toggled constantly with time and as the new market data (technical and fundamental) appear.
Let's say, you took a short position on EUR/USD at 1.2563, at the time you are taking this position the support/resistance level is 1.2500/1.2620. You set your stop-loss order to 1.2625 and your take-profit order to 1.2505. So now, this position can be considered as an intraday or 2-3 days term position. This means that you must close it before it's "term" is over, or it will become a very unpredictable position (because market will differ greatly from what it was at the time you have entered this position).
After the position is taken and initial exit orders are set, you need to follow the market events and technical indicators to adjust your exit orders. The most important rule is to tighten the loss/profit limit as time goes by. Usually if I take a middle term position (2-4 days) I try to lower the stop and target order by 10-25 pips every day. I also monitor global events, trying to lower my stop-losses when very important news can hurt my position.
If the profit is already quite high, I try to move my stop-loss the entry point, making a sure-win position. The main idea here is to find an equilibrium point between greed and caution. But as your position gets older the profit should be more limited and losses cut. Also, trader should always remember that if the market began to act unexpectedly, they need to be even more cautious with exit order, even if the position is still showing profits.
Every trader has their own trading strategy and habits. I hope this article will make its readers think about such an important aspect of trading as the exit orders and this will only improve their trading results.
To learn more about FOREX market visit my website - http://www.earnforex.com and my blog - http://earnforex.blogspot.com
This article is free for republishingSource: http://www.a1articles.com/article_78217_19.html
Monday, April 21, 2008
Forex Trading - It is Possible to Make Money With Only 50% Wins
Author: Craig Torey
To be realistic, most people will have a win loss ratio no better than 50%. The reason so many people lose money in Forex trading is that with a 50% win rate, they lose much more money than when they win. It is possible to make money in Forex trading by picking winning trades with no better statistical advantage than flipping a coin.
How can someone make money when you only get half the trades right? That means 5 out of every 10 trades are losers. Well, if your money management is set up with the right profit loss ratio, it is possible. Let's use 30 pips as a profit target on every trade and 20 pips as a stop loss on every trade. We will use 10 trades to make it easier using percentages. Winning 5 trades at 30 pips per trade, nets 150 pips profit.
Losing 5 trades at 20 pips per trade is 100 pips loss. The net profit for ten trades is 50 pips gain. With one contract, this is $500.00 or one mini-contract, this is $50.00 per ten trades. Let's say you get better at your trading and win 60% trades. Winning 6 trades at 30 pips per trade, nets 180 pips profit. Losing 4 trades at 20 pips per trade is 80 pips loss. The net profit for ten trades is 100 pips.
With one contract, this is $1,000.00 or one mini-contract, this is $100.00 profit per ten trades. A more rare win percentage is 70%. But working out the math, 7 winning trades at 30 pips, nets 210 pips profit. Losing 3 trades at 20 pips per trade is 60 pips loss. The net profit for ten trades is 150 pips. With one contract, this is $1,500.00 or one mini-contract, this is $150.00 profit per ten trades.
This shows that even with only 50 % wins, money can be made. Using a 3:2 profit loss ratio is profitable for making money in Forex trading. This could mean using a 60 point target with a 40 point stop loss as well.
Using a smaller ratio like a 30 point target and 30 point stop loss, a 1:1 ratio will only give a profit with a win rate greater than 50%. You may find that your trading strategy can only get a 20 point target so you may need to do the 1:1 ratio.
Using the 3:2 ratio, with a 20 point target, you will have less than 20 as a stop loss and this is too small of a stop loss for Forex trading. There are so many market forces that can swing more than 20 pips and hit your stop loss.
Practically speaking, you need to work with the currency pairs with the smallest spreads when using a 20 point stop. Now, knowing the right target loss ratio, the right trading strategy needs to be incorporated to make this work. Finding the right strategy is vital to this ratio.
Article Source: http://www.articlesbase.com/currency-trading-articles/forex-trading-it-is-possible-to-make-money-with-only-50-wins-369607.html
About the Author:
For information on Stock Trading Strategies we reviewed, visit our website at OpinionandReview.com
To be realistic, most people will have a win loss ratio no better than 50%. The reason so many people lose money in Forex trading is that with a 50% win rate, they lose much more money than when they win. It is possible to make money in Forex trading by picking winning trades with no better statistical advantage than flipping a coin.
How can someone make money when you only get half the trades right? That means 5 out of every 10 trades are losers. Well, if your money management is set up with the right profit loss ratio, it is possible. Let's use 30 pips as a profit target on every trade and 20 pips as a stop loss on every trade. We will use 10 trades to make it easier using percentages. Winning 5 trades at 30 pips per trade, nets 150 pips profit.
Losing 5 trades at 20 pips per trade is 100 pips loss. The net profit for ten trades is 50 pips gain. With one contract, this is $500.00 or one mini-contract, this is $50.00 per ten trades. Let's say you get better at your trading and win 60% trades. Winning 6 trades at 30 pips per trade, nets 180 pips profit. Losing 4 trades at 20 pips per trade is 80 pips loss. The net profit for ten trades is 100 pips.
With one contract, this is $1,000.00 or one mini-contract, this is $100.00 profit per ten trades. A more rare win percentage is 70%. But working out the math, 7 winning trades at 30 pips, nets 210 pips profit. Losing 3 trades at 20 pips per trade is 60 pips loss. The net profit for ten trades is 150 pips. With one contract, this is $1,500.00 or one mini-contract, this is $150.00 profit per ten trades.
This shows that even with only 50 % wins, money can be made. Using a 3:2 profit loss ratio is profitable for making money in Forex trading. This could mean using a 60 point target with a 40 point stop loss as well.
Using a smaller ratio like a 30 point target and 30 point stop loss, a 1:1 ratio will only give a profit with a win rate greater than 50%. You may find that your trading strategy can only get a 20 point target so you may need to do the 1:1 ratio.
Using the 3:2 ratio, with a 20 point target, you will have less than 20 as a stop loss and this is too small of a stop loss for Forex trading. There are so many market forces that can swing more than 20 pips and hit your stop loss.
Practically speaking, you need to work with the currency pairs with the smallest spreads when using a 20 point stop. Now, knowing the right target loss ratio, the right trading strategy needs to be incorporated to make this work. Finding the right strategy is vital to this ratio.
Article Source: http://www.articlesbase.com/currency-trading-articles/forex-trading-it-is-possible-to-make-money-with-only-50-wins-369607.html
About the Author:
For information on Stock Trading Strategies we reviewed, visit our website at OpinionandReview.com
Forex Trading Strategies and Forex Market Volatility
Part of developing a profitable Forex trading strategy involves being able to determine market volatility. The Forex market is open 24 hours per day and you will find it impossible to keep track of all market activities, all the time. You will need to understand the timing of various markets, particularly those in which you are trading and those that influence your trades, so that you are in a position to make the best possible decisions during your trading hours.
Different markets are affected by differing market conditions. All currency pairs are subject to market volatility, but most currencies tend to become more or less volatile during certain times of the day. As a trader, you will need to have some knowledge of the currency trading system, currency pairings in different times zones and the conditions that affect their volatility.
The London market is the largest and most volatile Forex market in the world since some of the largest dealing desks of large banks are located there and transactions that take place usually involve large sums of money. The London market share is about 30% of all markets. The market hours are from 2 am to 12 pm EST, which is also the time for which most transactions are completed.
The benchmark established for volatility is 80 pips and more than half of the London market currency pairings are likely to reach in excess of 80 pips. It would not be uncommon for the daily range of GBP/CHF and GBP/JPY currency pairs to average more than 140 pips.
The ability of these currency pairs to generate huge profits in a short amount of time appeals to traders willing to take risks in the currency trading system.Since most large market participants complete their circle of currency conversions during the London market hours, daily trade activities peak during this time, causing high volatility. Near the end of the London trading session most large investors will convert their European assets to US dollar assets in anticipation of the opening of the US market.
This conversion is responsible for the increased volatility in GBP/CHF and GBP/JPY currency pairs. The New York trading session is the benchmark for US trading and it represents the second largest FOREX market. Trading hours are from 8 am and 5 pm EST. The majority of transactions occur in the US market from 8 am to noon EST.
During this timeframe, the European market is still in session, which creates a market of high liquidity. Trading during this period of overlap accounts for about 70% of the currency pair trading in the European session and about 80% of currency pair trading in the US session.Other currency pairs that appeal to high-risk traders during the London market hours include the USD/CHF, GBP/USD, USD/CAD and EUR/USD currency pairs.
It is not uncommon for these pairs to reach a daily range of about 100 pips. This level of volatility creates opportunities for entry into the market. In contrast, is not uncommon for the AUD/JPY, EUR/CHF, AUD/USD and NZD/USD currency pairs to reach a daily range of about 50 pips. This level of volatility is more appealing to traders who attempt to avoid risks. The level of volatility indicates that these pairs may be less likely to create a loss.
The London market also overlaps with the Asian market. The Tokyo trading session is the benchmark for the Asian market. Trading hours are from 7 pm and 4 am EST. Large investors take positions in the Tokyo market in anticipation of the opening of the London session. The GBP/CHF and GBP/JPY currency pairs are also highly volatile during this timeframe of overlap.
Trading during the period of overlap, which is between 2 am and 4 am, is the lowest of any trading session. Traders use these slow trading hours to position themselves for the opening of the European or US market.
Andrew Daigle is the owner and author of many successful websites including ForexBoost, a free Forex educational site to learn Forex trading strategies and a Free Forex Training blog for keeping online Forex trading records.
Different markets are affected by differing market conditions. All currency pairs are subject to market volatility, but most currencies tend to become more or less volatile during certain times of the day. As a trader, you will need to have some knowledge of the currency trading system, currency pairings in different times zones and the conditions that affect their volatility.
The London market is the largest and most volatile Forex market in the world since some of the largest dealing desks of large banks are located there and transactions that take place usually involve large sums of money. The London market share is about 30% of all markets. The market hours are from 2 am to 12 pm EST, which is also the time for which most transactions are completed.
The benchmark established for volatility is 80 pips and more than half of the London market currency pairings are likely to reach in excess of 80 pips. It would not be uncommon for the daily range of GBP/CHF and GBP/JPY currency pairs to average more than 140 pips.
The ability of these currency pairs to generate huge profits in a short amount of time appeals to traders willing to take risks in the currency trading system.Since most large market participants complete their circle of currency conversions during the London market hours, daily trade activities peak during this time, causing high volatility. Near the end of the London trading session most large investors will convert their European assets to US dollar assets in anticipation of the opening of the US market.
This conversion is responsible for the increased volatility in GBP/CHF and GBP/JPY currency pairs. The New York trading session is the benchmark for US trading and it represents the second largest FOREX market. Trading hours are from 8 am and 5 pm EST. The majority of transactions occur in the US market from 8 am to noon EST.
During this timeframe, the European market is still in session, which creates a market of high liquidity. Trading during this period of overlap accounts for about 70% of the currency pair trading in the European session and about 80% of currency pair trading in the US session.Other currency pairs that appeal to high-risk traders during the London market hours include the USD/CHF, GBP/USD, USD/CAD and EUR/USD currency pairs.
It is not uncommon for these pairs to reach a daily range of about 100 pips. This level of volatility creates opportunities for entry into the market. In contrast, is not uncommon for the AUD/JPY, EUR/CHF, AUD/USD and NZD/USD currency pairs to reach a daily range of about 50 pips. This level of volatility is more appealing to traders who attempt to avoid risks. The level of volatility indicates that these pairs may be less likely to create a loss.
The London market also overlaps with the Asian market. The Tokyo trading session is the benchmark for the Asian market. Trading hours are from 7 pm and 4 am EST. Large investors take positions in the Tokyo market in anticipation of the opening of the London session. The GBP/CHF and GBP/JPY currency pairs are also highly volatile during this timeframe of overlap.
Trading during the period of overlap, which is between 2 am and 4 am, is the lowest of any trading session. Traders use these slow trading hours to position themselves for the opening of the European or US market.
Andrew Daigle is the owner and author of many successful websites including ForexBoost, a free Forex educational site to learn Forex trading strategies and a Free Forex Training blog for keeping online Forex trading records.
Forex Trading-How To Make 10 Pips A Day
By Nathan Pennington
Ten pips per day, if I could only do 10 pips each day... I'd be a millionaire in 18 months!
Have you ever run calculations like that? I know I have. That's the allure of just 10 pips a day. It's just 10, right? I mean, how hard could that be? Really hard.
First the bad news, if you try to just make 10 pips in a day, you will fail. You can't be that consistent in trading over any significant space of time.
Now the good news, you can make an average of 10 pips a day. Notice however, that I said average 10 pips per day.
Let's back up a bit. 10 pips per day become 50 pips in a week. 50 pips in a week become 200 pips in a month. Now that's something you can work with.
Focus on 200 pips per month. Take fewer trades. Trade off of the daily charts. Use much larger profit targets and stop losses. Trade less lots. It will still equal the same outcome as the unreal expectations above, but this time you're actually setting yourself up for success.
Doing all this still won't guarantee that you'll be able to hit the target. You'll probably still have a losing month here and there. That happens. The thing is you'll be able to survive it.
In the 10 pips a day mindset, you're trading with very high leverage. One or two errors and you could be wiped out. In fact that is what happens almost every time.
Give yourself a change. After all, really making money is more fun.
Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".
Download it free here: Forex Trading
Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide
Article Source: http://EzineArticles.com/?expert=Nathan_Pennington
Ten pips per day, if I could only do 10 pips each day... I'd be a millionaire in 18 months!
Have you ever run calculations like that? I know I have. That's the allure of just 10 pips a day. It's just 10, right? I mean, how hard could that be? Really hard.
First the bad news, if you try to just make 10 pips in a day, you will fail. You can't be that consistent in trading over any significant space of time.
Now the good news, you can make an average of 10 pips a day. Notice however, that I said average 10 pips per day.
Let's back up a bit. 10 pips per day become 50 pips in a week. 50 pips in a week become 200 pips in a month. Now that's something you can work with.
Focus on 200 pips per month. Take fewer trades. Trade off of the daily charts. Use much larger profit targets and stop losses. Trade less lots. It will still equal the same outcome as the unreal expectations above, but this time you're actually setting yourself up for success.
Doing all this still won't guarantee that you'll be able to hit the target. You'll probably still have a losing month here and there. That happens. The thing is you'll be able to survive it.
In the 10 pips a day mindset, you're trading with very high leverage. One or two errors and you could be wiped out. In fact that is what happens almost every time.
Give yourself a change. After all, really making money is more fun.
Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".
Download it free here: Forex Trading
Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide
Article Source: http://EzineArticles.com/?expert=Nathan_Pennington
Forex Day Trading Versus Position Trading - The Pros and Cons
Trading can be fun and exciting when you daytrade and very boring when you position trade.
Our motto: get in, get out and go play!WHY We Want To Day Trade Versus Position Trade
1) We want to spend only a few short hours each day trading, sometimes just a few minutes!
2) We don't want to hold any overnight positions!
3) We don't want to hedge!
4) We want the fun of the quicker action and quicker profits!
5) We want more profits with less risk!
So keep these goals in mind as you learn our trading techniques!Be patient in your learning process and keep in your awareness that if you learn this trading system successfully, you will have a cash cow system FOR LIFE that is safe, independent, portable and highly profitable. It will give you the freedom to quit your J.O.B. (Just Over Broke) and travel the world and earn a great living, with just a portable laptop and your debit card!The currency pairs are made to swing, so trade with ease and without fear.
Quickly close out a losing position...don't dream/hope that it will turn back into profit! It often doesn't!Don't be radically bullish or bearish, swing trade within the trading range of the day, go with the short term trend.If you can develop the mental and emotional disciplines to trade according to these guidelines, you'll do very well and become very successful!I
deas About Trading in the Different Time FramesEach person needs to experiment with the different time frames and moving averages to find out what he/she is most suited for, time-wise and personality-wise. This takes time and lots of practice and patience in your demo account.If you have a J.O.B., then what we teach is perfect for you if you can trade during the busiest hours, between 3 am to 11 am EST.
Even 1 hour of trading in the 1-5-10 or 15 minute chart will make you enough money for the day. You can do multiple scalping trades in the 1 and 5 minute chart, or one trade in the 10 or 15 minute chart, and then go to work. If you get lucky and hit a breakout or breakdown, no matter what time frame you are in, you can make as much as 30 -100 pips in a few minutes!
YOU ONLY NEED 20 PIPS A DAY TO BE RICH!Some people love scalp trading, which are quick trades in the 1 and 5 minute charts for small but quick profits; and some love day trading, mostly done in the 10 and 15 and 30 minute charts, which simply means you close out all positions before the end of the trading day.If you do one or more trades in one day that rides the price up and down and you close each position out, that is called day trade swing trading. And some prefer swing trading over the course of several days or weeks, which I call position trading, mostly done in the 1 or 2 or 4 hour charts.
We personally scalp and short term day trade, which is really just one-day swing trading. If you use a 1 or 5 minute chart with a 20 pip initial stop loss with a 10-15 pip trailing stop after breakeven, and/or a 10-50 pip limit, you will do very well without big risk or staring at your computer screen until you fall asleep or go blind! Our motto: get in, get out and go play!The beauty of this method is that you don't have to have your PC on all the time or be glued to it or worry about overnight positions.
The trade-off is that the longer plays make more money, although, they do carry more inherent risk. So again, staying with your trade in the beginning until you've moved your stop to a breakeven, is your first goal, and this is true for every time frame you decide to trade in.Keep a trading journalFinally, it is a good practice to keep a simple trading journal. This way you can keep track of your trades and progress and be able to analyze, improve and hone your trading skills.
Simply include the time you entered and exited the trade, the currency pair, the chart time frame (this is important), and the strategy (breakout, trend or top or bottom). Also include write down what happened and what you could have done differently for future reference.Not every trade can be a winner but in order for you to be a consistent winner, you need to do two things: keep your losses small and manage your margin conservatively.We recommend that you trade no more than 5-10% of your account size in each trade. 5% is safer. It's easier to make up the losses, when they happen, and they will happen!!!
And ALWAYS use stops! Learn to manage your money wisely...invest small amounts each time and keep your losses small and when you're in profit, let your profits run with a trailing stop.What "Rich Dad, Poor Dad" says about trading:"It's not gambling if you know what you're doing. It is gambling if you're just throwing money into a trade and praying. The idea in trading is to use your technical knowledge, wisdom and love of the game to cut the odds down, to lower the risk.
Of course there is always risk. It is financial intelligence that improves the odds."Robert T. Kiyosaki"Knowing how to take a loss for the trader is as significant for him or her as learning to overcome the fear of death was for the samurai warrior."Robert KoppelWhat's the best way to stay positive no matter what? Celebrate your losses! Get up and dance, do a little jig, blow a horn, yell yippie, another loss!
Remember, you love the game and winning and losing are both part of the game!
Article Source: http://www.dk-article.com Web Directory: http://www.dk-seek.com
Erol Bortucene and Cynthia Macy are co-authors of The Day Trade Forex System: The Ultimate Step-By-Step Guide To Online Currency Trading: The Day Trade Forex Trading Systems
Our motto: get in, get out and go play!WHY We Want To Day Trade Versus Position Trade
1) We want to spend only a few short hours each day trading, sometimes just a few minutes!
2) We don't want to hold any overnight positions!
3) We don't want to hedge!
4) We want the fun of the quicker action and quicker profits!
5) We want more profits with less risk!
So keep these goals in mind as you learn our trading techniques!Be patient in your learning process and keep in your awareness that if you learn this trading system successfully, you will have a cash cow system FOR LIFE that is safe, independent, portable and highly profitable. It will give you the freedom to quit your J.O.B. (Just Over Broke) and travel the world and earn a great living, with just a portable laptop and your debit card!The currency pairs are made to swing, so trade with ease and without fear.
Quickly close out a losing position...don't dream/hope that it will turn back into profit! It often doesn't!Don't be radically bullish or bearish, swing trade within the trading range of the day, go with the short term trend.If you can develop the mental and emotional disciplines to trade according to these guidelines, you'll do very well and become very successful!I
deas About Trading in the Different Time FramesEach person needs to experiment with the different time frames and moving averages to find out what he/she is most suited for, time-wise and personality-wise. This takes time and lots of practice and patience in your demo account.If you have a J.O.B., then what we teach is perfect for you if you can trade during the busiest hours, between 3 am to 11 am EST.
Even 1 hour of trading in the 1-5-10 or 15 minute chart will make you enough money for the day. You can do multiple scalping trades in the 1 and 5 minute chart, or one trade in the 10 or 15 minute chart, and then go to work. If you get lucky and hit a breakout or breakdown, no matter what time frame you are in, you can make as much as 30 -100 pips in a few minutes!
YOU ONLY NEED 20 PIPS A DAY TO BE RICH!Some people love scalp trading, which are quick trades in the 1 and 5 minute charts for small but quick profits; and some love day trading, mostly done in the 10 and 15 and 30 minute charts, which simply means you close out all positions before the end of the trading day.If you do one or more trades in one day that rides the price up and down and you close each position out, that is called day trade swing trading. And some prefer swing trading over the course of several days or weeks, which I call position trading, mostly done in the 1 or 2 or 4 hour charts.
We personally scalp and short term day trade, which is really just one-day swing trading. If you use a 1 or 5 minute chart with a 20 pip initial stop loss with a 10-15 pip trailing stop after breakeven, and/or a 10-50 pip limit, you will do very well without big risk or staring at your computer screen until you fall asleep or go blind! Our motto: get in, get out and go play!The beauty of this method is that you don't have to have your PC on all the time or be glued to it or worry about overnight positions.
The trade-off is that the longer plays make more money, although, they do carry more inherent risk. So again, staying with your trade in the beginning until you've moved your stop to a breakeven, is your first goal, and this is true for every time frame you decide to trade in.Keep a trading journalFinally, it is a good practice to keep a simple trading journal. This way you can keep track of your trades and progress and be able to analyze, improve and hone your trading skills.
Simply include the time you entered and exited the trade, the currency pair, the chart time frame (this is important), and the strategy (breakout, trend or top or bottom). Also include write down what happened and what you could have done differently for future reference.Not every trade can be a winner but in order for you to be a consistent winner, you need to do two things: keep your losses small and manage your margin conservatively.We recommend that you trade no more than 5-10% of your account size in each trade. 5% is safer. It's easier to make up the losses, when they happen, and they will happen!!!
And ALWAYS use stops! Learn to manage your money wisely...invest small amounts each time and keep your losses small and when you're in profit, let your profits run with a trailing stop.What "Rich Dad, Poor Dad" says about trading:"It's not gambling if you know what you're doing. It is gambling if you're just throwing money into a trade and praying. The idea in trading is to use your technical knowledge, wisdom and love of the game to cut the odds down, to lower the risk.
Of course there is always risk. It is financial intelligence that improves the odds."Robert T. Kiyosaki"Knowing how to take a loss for the trader is as significant for him or her as learning to overcome the fear of death was for the samurai warrior."Robert KoppelWhat's the best way to stay positive no matter what? Celebrate your losses! Get up and dance, do a little jig, blow a horn, yell yippie, another loss!
Remember, you love the game and winning and losing are both part of the game!
Article Source: http://www.dk-article.com Web Directory: http://www.dk-seek.com
Erol Bortucene and Cynthia Macy are co-authors of The Day Trade Forex System: The Ultimate Step-By-Step Guide To Online Currency Trading: The Day Trade Forex Trading Systems
Saturday, April 19, 2008
How Many Kinds Of Main Strategies Are There In Forex Trading?
By Victor Mars and Oaco M
There may be dozens of strategies in Forex trading. Let's just talk about the roots.
Nature Of Market:
Every thing in the universe has its NATURE. So is Forex market. So is every currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and dance at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.
Once we find this kind of "Nature of Market", we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.
Fundamental Trading:
In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called "Fundamental Analysis". Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.
If you like to try Fundamental Trading, you need learn and understand a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA's GDP or employment report is strong, you begin to get a fairly clear picture: the general health of America's economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading may not answer this question very accurately. You may need to come up with other precise tools as to how best to translate this information into entry and exit points for a particular trading strategy.
Hedge:
In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.
In FOREX, there are two kinds of similar "hedging" strategies:
1, Buy and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can wait for the loser turning around. In a yo-yo market, this method works well.
For example, buy 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the buy order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let's wait for the rate falling down, it will fall down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don't forget the 50 pips we have taken at the buy order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let's say down to 2.0027, we can take 50-30=20 pips, etc.
Some people would doubt it... doesn't this "strategy" sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders say that this method helps them screening false signals out.
This kind of "Yo-Yo Hedge" can work at any currencies pair.
2, Buy (or sell) unequal lots of special currencies pairs and buy unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a "Semi-Hedge" trading strategy. It is created based on "Correlation" between some particular currencies pairs. So it is not suitable for every currencies pair.
Actually, this kind of hedge has another feature: earning SWAP! You earn interest daily on the held position which can yield up to 50% per year of your full account balance.
There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.
Let's take the EUR/USD and the CHF/USD pairs.
These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage account (as high as 400:1 or 500:1), you could earn 50% SWAP interest in a year. How? Let's say you have $5,000 in your account and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.
And, this return does not include the buy low/sell high profits.
But, if the base of this kind of hedge collapses, it means the "Correlation" does not exist any more, for example the "Correlation" drops under 50% or lower, there will be a disaster.
Arbitrage:
Some people call "Arbitrage" as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:
1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.
In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.
More pairs:
AUD/CAD CAD/JPY AUD/JPY AUD/CAD GBP/CAD GBP/AUD AUD/CAD USD/CAD AUD/USD AUD/CHF CHF/JPY AUD/JPY AUD/CHF GBP/CHF GBP/AUD AUD/CHF USD/CHF AUD/USD AUD/JPY EUR/JPY EUR/AUD AUD/JPY GBP/JPY GBP/AUD AUD/JPY USD/JPY AUD/USD AUD/USD GBP/USD GBP/AUD AUD/USD USD/CAD AUD/CAD AUD/USD USD/CHF AUD/CHF AUD/USD USD/JPY AUD/JPY CAD/JPY EUR/JPY EUR/CAD CAD/JPY GBP/JPY GBP/CAD CAD/JPY USD/JPY USD/CAD CHF/JPY EUR/JPY EUR/CHF CHF/JPY GBP/JPY GBP/CHF EUR/AUD AUD/CHF EUR/CHF EUR/AUD AUD/JPY EUR/JPY EUR/AUD AUD/USD EUR/USD EUR/AUD GBP/AUD EUR/GBP EUR/CAD AUD/CAD EUR/AUD EUR/CAD GBP/CAD EUR/CAD EUR/CAD USD/CAD EUR/USD EUR/CHF AUD/CHF EUR/AUD EUR/CHF GBP/CHF EUR/GBP EUR/CHF USD/CHF EUR/USD EUR/GBP GBP/AUD EUR/AUD EUR/GBP GBP/CAD EUR/CAD EUR/GBP GBP/CHF EUR/CHF EUR/GBP GBP/JPY EUR/JPY EUR/GBP GBP/USD EUR/USD EUR/JPY GBP/JPY EUR/GBP EUR/JPY USD/JPY EUR/USD EUR/USD GBP/USD EUR/GBP EUR/USD USD/JPY EUR/JPY GBP/JPY USD/JPY GBP/USD
2, Hedging Arbitrage:
This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.
One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main idea about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will gain the interest or SWAP that is credited to your account, risk-free.
3, Netting Arbitrage:
The main idea behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.
For example, suppose you had opened the following positions:buy 1 lot EUR/USD at 1.4867;sell 1 lot EUR/GBP at 0.7600;and sell 0.76 lot GBP/USD at 1.9586.
The netting/clearing gives the following results:Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.Short position from the first pair ($148,670.00) in USD and long position from the third pair ($195,860.00*0.76) in USD gives you $183.60 profit without open positions and exposures. Simple? Not really for small traders, may be for those "big brothers" only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.
Carry Trading:
Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.
JPY is currently considered to be the most popular currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world almost at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.
When we buy these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF; Or sell: EUR/AUD, EUR/GBP, AUD/NZD; Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.
The big risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.
Martingale:
Originally, martingale referred to a class of betting strategies popular in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after every loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you bought 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, "double down", buy two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you may lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.
EUR/USD Lots Average or Breakeven Price 1.4650 1 1.4650 1.4630 2 1.4640 1.4610 4 1.4625 1.4590 8 1.4605 1.4570 16 1.4588 1.4550 32 1.4569
The Martingale strategy needs a very strict money management and you must understand that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you may not hang on to the end to see the turn-around.
Anti-Martingale:
The anti-martingale strategy is the opposite of the better known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.
Grid:
Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, ...) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then every 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of "grid". It is simple and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts say we do not need stop loss, but will you take the chance to hold your all positions till "Margin Call?"
Day trading:
This refers to the practice of buying and selling currencies pairs such that all positions will usually be closed within the same Forex the trading day. The day trading idea comes from stock market. Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts.
But in Forex market, every one can be a day trader to do day trading. Actually, more than day trading, they can do "scalping".
Scalping:
Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market every time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is closed and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is ideal for Forex scalping. Every time you enter the market, wait 10 or 20 minutes, once you have several pips gain then cash it and go.
Scalping has some features:
1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.
2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.
3, Large volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade large in order to add up the profits. Scalping is not suitable for small-capital traders.
But be careful, not every broker welcomes this kind of scalping strategy. If you scalp it too quick and thin, let's say you just hit 1 pip every 2 or 3 minutes then run, and repeat it again and again within a day, every day, you must feel high, eh? But the broker may be not happy and bans you. You will be kicked out because of your successful scalping!
Break-Out:
Using the Bollinger Bands indicator on a chart, we will find every Forex currencies pair is waving in a "band", or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will buy this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.
Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The idea of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. So buy it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.
Pivot:
Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to analyze and predict currency pairs' price changes, it is so-called: the Pivot Point. To calculate and analyze pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to buy or sell.
Classical Pivot Point, Support and Resistance Formulas are as follows:
Look at any one chart, the pivot is an average of the previous bar's high, low, and closing prices. In the following formula, "H" represents the previous bar's high, "L" represents the previous bar's low, and "C" represents the previous bar's closing price.
Current Bar's Pivot Point (P)=Previous Bar's (H+L+C)/3 First level of support and resistance can be calculated as follows: First Resistance Level (R1)=(2*P)-L First Support Level (S1)=(2*P)-H Likewise, the second level of support and resistance: Second Resistance Level (R2)=P+(R1-S1) Second Support Level (S2)=P-(R1-S1)
Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to qualify as a breakout.
News Trading:
The system is developed based on economic news events from around the world. Nearly half of those announcements have moved the market significantly. Before a big news is coming, we can buy and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the big one, both sides of buy order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner's gain minus the loser's loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report - The NFP is the most influential news release of every month. It's announced on the first Friday of the month at 8:30am EST for the prior month. We can put a buy order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don't forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a big one! Then the sell order jumps over 100 pips, and the buy order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your gain could be 100-30=70 pips. Quick and easy, cool enough?
Trend Following:
It is so simple, just follow the trend. Buy it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.
The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or "waves," that recur in market price data.
Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the "market time factor", which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with $300 and one with $150. It turned out to be wildly successful: Gann was able to make $25,000 profit with his $300 account in only three months; meanwhile, he made $12,000 profit with his $150 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.
Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?
If you would like to find out more about Forex trading, come and visit us at http://www.vdux.com
If you want to download our Raingull Automated Trading Software EA, please come to http://www.raingull.com
Article Source: http://EzineArticles.com/?expert=Victor_Mars
There may be dozens of strategies in Forex trading. Let's just talk about the roots.
Nature Of Market:
Every thing in the universe has its NATURE. So is Forex market. So is every currencies pair in this market. For example, GBP/JPY always moves faster, and its wave range is longer than other pairs, such as a hundred pips during a day or even a hour. EUR/GBP generally waves narrowly several pips only within a day. For American, EUR/USD and GBP/USD like to sleep in day and dance at night. AUD/USD and NZD/USD look like twin, they commonly act in the same style, if one of they goes north, another one does not like to go south. But EUR/USD and USD/CHF are doomed to be enemy, while one of them flies up like a hydrogen balloon, the counterpart mostly will drop like a lead ball. And so on, so on.
Once we find this kind of "Nature of Market", we can develop and figure out some strategies for particular currencies pairs, just follow their nature, predict their moving direction and range. Then we will get our own trading strategy and system.
Fundamental Trading:
In Forex market, many professional analysts like to use a kind of method to predict the future. It is so-called "Fundamental Analysis". Based on this method, they develop many kinds of strategies to trade Forex. These are strategies of forecasting the future price movements of currencies based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the foreign currencies.
If you like to try Fundamental Trading, you need learn and understand a lot of finance knowledge. Actually, not only finance knowledge, you need to be interested at many things of this world, including politics, economy, geography, culture, diplomacy, even military affairs. And you need to study the core underlying elements that influence the economy of a particular entity. For example, when the USA's GDP or employment report is strong, you begin to get a fairly clear picture: the general health of America's economy is good. So the US dollar should be stronger than other currencies. But how far can the US dollar go? Fundamental Trading may not answer this question very accurately. You may need to come up with other precise tools as to how best to translate this information into entry and exit points for a particular trading strategy.
Hedge:
In finance, a hedge is an investment that is taken out specifically to reduce the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.
In FOREX, there are two kinds of similar "hedging" strategies:
1, Buy and Sell the same currencies pair, same lots, same timing. Then let it go. While one of those orders goes north, the counterpart will go south. After the winner takes profit, we can wait for the loser turning around. In a yo-yo market, this method works well.
For example, buy 2 lots GBP/USD at 2.0003, at the same time sell 2 lots GBP/USD at 1.9997. While the rate rises up to 2.0053, we close the buy order and take profit 50 pips. Now, the sell order will draw down around 50 pips. Let's wait for the rate falling down, it will fall down usually, especially in yo-yo market environment. If the rate drops down to 2.0037, close the sell order, the sell order will lose 40 pips. Does it hurt? No. Don't forget the 50 pips we have taken at the buy order. Totally, we can get 50-40=10 pips. Furthermore, if the rate keeps falling, let's say down to 2.0027, we can take 50-30=20 pips, etc.
Some people would doubt it... doesn't this "strategy" sound like hedging flat for nothing, just paying double spread? Why bother? Well, they are right, because we forgot mentioning the key point: timing of closing orders. When to close the winning order to set a foundation and when to close the losing order to lock the profit, there are some tricks inside. Experienced traders use technical analysis skills to decide this vital timing. Believe it or not, those experienced traders say that this method helps them screening false signals out.
This kind of "Yo-Yo Hedge" can work at any currencies pair.
2, Buy (or sell) unequal lots of special currencies pairs and buy unequal quantities of another kinds of currencies pairs which usually move in the opposite direction. This seems a "Semi-Hedge" trading strategy. It is created based on "Correlation" between some particular currencies pairs. So it is not suitable for every currencies pair.
Actually, this kind of hedge has another feature: earning SWAP! You earn interest daily on the held position which can yield up to 50% per year of your full account balance.
There are several pairs can do it. Such as EUR/USD Vs. USD /CHF, GBP/USD Vs. USD/CHF, AUD/USD Vs. NZD/USD, EUR/JPY Vs. CHF/JPY, GBP/JPY Vs. CHF/JPY.
Let's take the EUR/USD and the CHF/USD pairs.
These pairs are historically negatively correlative 93-98% of the time. That is when one pair goes up the other goes down, and vice versa, up to 98% of the time. In a high leverage account (as high as 400:1 or 500:1), you could earn 50% SWAP interest in a year. How? Let's say you have $5,000 in your account and a 10% risk margin set. If the net interest we receive is 1.25% annually, this 1.25% interest will be enlarged to 50% per annum, by the 400:1 leverage.
And, this return does not include the buy low/sell high profits.
But, if the base of this kind of hedge collapses, it means the "Correlation" does not exist any more, for example the "Correlation" drops under 50% or lower, there will be a disaster.
Arbitrage:
Some people call "Arbitrage" as a risk free strategy. But other people call it as a trick which looks like the cat pawing chestnuts from a fire. But in theory, its risk is minimum in deed. We introduce three types of arbitrage strategies here:
1, Triangle Arbitrage: Searching for two highly fast-moving pairs (like EUR/USD and USD/JPY), the price of a not-so-fast moving pair like EURJPY should always be derived by multiplying (or dividing, etc) the fast-moving pairs. So for example, if EUR/USD is 1.4871 and USD/JPY is 108.24, the logical price of EUR/JPY should be 1.2 x 120 = 160.96. But at the same time, the real EUR/JPY rate is 160.90. The slower moving pair lags behind the logical price, then profit opportunity comes.
In practice currencies are quoted with a bid ask spread, so a trader should be careful that he is actually buying at the quoted ask price, and selling at the quoted bid price. Other transaction costs, such as commissions, might also invalidate the apparent free lunch.
More pairs:
AUD/CAD CAD/JPY AUD/JPY AUD/CAD GBP/CAD GBP/AUD AUD/CAD USD/CAD AUD/USD AUD/CHF CHF/JPY AUD/JPY AUD/CHF GBP/CHF GBP/AUD AUD/CHF USD/CHF AUD/USD AUD/JPY EUR/JPY EUR/AUD AUD/JPY GBP/JPY GBP/AUD AUD/JPY USD/JPY AUD/USD AUD/USD GBP/USD GBP/AUD AUD/USD USD/CAD AUD/CAD AUD/USD USD/CHF AUD/CHF AUD/USD USD/JPY AUD/JPY CAD/JPY EUR/JPY EUR/CAD CAD/JPY GBP/JPY GBP/CAD CAD/JPY USD/JPY USD/CAD CHF/JPY EUR/JPY EUR/CHF CHF/JPY GBP/JPY GBP/CHF EUR/AUD AUD/CHF EUR/CHF EUR/AUD AUD/JPY EUR/JPY EUR/AUD AUD/USD EUR/USD EUR/AUD GBP/AUD EUR/GBP EUR/CAD AUD/CAD EUR/AUD EUR/CAD GBP/CAD EUR/CAD EUR/CAD USD/CAD EUR/USD EUR/CHF AUD/CHF EUR/AUD EUR/CHF GBP/CHF EUR/GBP EUR/CHF USD/CHF EUR/USD EUR/GBP GBP/AUD EUR/AUD EUR/GBP GBP/CAD EUR/CAD EUR/GBP GBP/CHF EUR/CHF EUR/GBP GBP/JPY EUR/JPY EUR/GBP GBP/USD EUR/USD EUR/JPY GBP/JPY EUR/GBP EUR/JPY USD/JPY EUR/USD EUR/USD GBP/USD EUR/GBP EUR/USD USD/JPY EUR/JPY GBP/JPY USD/JPY GBP/USD
2, Hedging Arbitrage:
This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of roll over interest rates (SWAP) between two brokers.
One broker which pays or charges roll over interest at end of day, and the other should not charge or pay this kind of roll over SWAP interest. The main idea about this type of Hedge Arbitrage is to open a position of currency (Fore example, the highest SWAP GBP/JPY) at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency with the broker that does not charge interest for carrying the trade. This way you will gain the interest or SWAP that is credited to your account, risk-free.
3, Netting Arbitrage:
The main idea behind the strategy is, using differences between cross rates (such as EUR/USD, GBP/USD, and EUR/GBP) at different markets.
For example, suppose you had opened the following positions:buy 1 lot EUR/USD at 1.4867;sell 1 lot EUR/GBP at 0.7600;and sell 0.76 lot GBP/USD at 1.9586.
The netting/clearing gives the following results:Long EUR from the first pair and short EUR from the second pair gives zero exposure in EUR.Long position in GBP from the second pair and short position from the third pair gives zero exposure in GBP.Short position from the first pair ($148,670.00) in USD and long position from the third pair ($195,860.00*0.76) in USD gives you $183.60 profit without open positions and exposures. Simple? Not really for small traders, may be for those "big brothers" only. Because it is really hard to play spread, slippage, stop loss hunting or so on games against brokers.
Carry Trading:
Carry trading is a well known trading strategy which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. Then this investor can make profit from the difference of these two interest rates.
JPY is currently considered to be the most popular currency to use as the low interest yielding currency in the carry trade, because its interest rate is the lowest of the world almost at 0. And GBP is currently considered to be the high yielding currency. So are NZD and AUD.
When we buy these currencies pairs: GBP/JPY, AUD/JPY, GBP/CHF, USD/JPY, or EUR/CHF; Or sell: EUR/AUD, EUR/GBP, AUD/NZD; Both actions can yield positive SWAP roll over interest. If combining with some kinds of hedge trading, we can make as high as 100% profit annually and keep the risk low.
The big risk in a carry trading is the uncertainty of exchange rates. Also, these transactions are generally done with a high leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.
Martingale:
Originally, martingale referred to a class of betting strategies popular in 18th century France. In Forex trading, the strategy let the trader double his/her order lots after every loss, so that the first win would recover all previous losses plus win a profit equal to the original investment. In the example below, you bought 1 lot EUR/USD at 1.4650. Unfortunately, the rate drops. You play it in martingale way, "double down", buy two lots, you need the EUR/USD to rally from 1.4630 to 1.4640 to break even. As the price moves lower and you add four lots, you only need it to rally to 1.4625 instead of 1.4640 to break even. The more lots you add, the lower your average entry price. Even though you may lose 100 pips on the first lot of the EUR/USD if the price hits 1.4550, you only need the currencies pair to rally to 1.4569 to break even on your entire holdings. Once the rate goes up one more pip, you will win a lot.
EUR/USD Lots Average or Breakeven Price 1.4650 1 1.4650 1.4630 2 1.4640 1.4610 4 1.4625 1.4590 8 1.4605 1.4570 16 1.4588 1.4550 32 1.4569
The Martingale strategy needs a very strict money management and you must understand that in the beginning money will be coming slowly, but if you lose the patience and raise risk level up to much, you may not hang on to the end to see the turn-around.
Anti-Martingale:
The anti-martingale strategy is the opposite of the better known martingale approach. This approach instead increases order lots after wins, while reducing them after a loss. Using an anti-martingale risk management scheme will increase profits during time periods when a trading approach is working well, while automatically decreasing exposure during portions of the cycle where trading is unprofitable. This is believed to decrease the risk of ruin for trading.
Grid:
Basically the trader sets a series of entry limit orders X pips from the current price, for example 15 pips. Some experienced traders like to use the Fibonacci Series Numbers (0, 1, 1, 2, 3, 5, 8, 13, ...) or Golden Section Numbers to make this grid. Once price hits the level the limit order is executed. Then every 15 pips there is another order at limit price executed. And so on. In a yo-yo market, while the price moves up or down, there always be some limit orders executed. Once the order is taken profit, and the price moves to its original level again, a new limit order shall be executed again, then repeat the same process. Just open orders and take profits in a set of "grid". It is simple and easy, but hard to deal with when and how to close all orders, especially the Stop Loss. Some experts say we do not need stop loss, but will you take the chance to hold your all positions till "Margin Call?"
Day trading:
This refers to the practice of buying and selling currencies pairs such that all positions will usually be closed within the same Forex the trading day. The day trading idea comes from stock market. Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts.
But in Forex market, every one can be a day trader to do day trading. Actually, more than day trading, they can do "scalping".
Scalping:
Scalping is a trading style where small price gaps created by the bid-ask spreads are exploited. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. It means trying to get a few points (1~3 pips only, no greed, no long term) off the market every time. This strategy is based on a fact: approximately 70 to 80% of the time, the market is in a consolidation pattern. What this means is that for the majority of time the market is not making significant moves. For example, after the USA market is closed and before the Europe market is open, the Forex market tends to range in a consolidation channel for hours at a time before making another significant move in one direction. This kind of market behavior pattern is ideal for Forex scalping. Every time you enter the market, wait 10 or 20 minutes, once you have several pips gain then cash it and go.
Scalping has some features:
1, Lower exposure, lower risks. Scalpers are only exposed in a relatively short period.
2, Smaller moves, easier to obtain. The normal wave of the market will give you several pips easily.
3, Large volume, adding profits up. Since the profit obtained per share or contract is very small due to its target of spread, they need to trade large in order to add up the profits. Scalping is not suitable for small-capital traders.
But be careful, not every broker welcomes this kind of scalping strategy. If you scalp it too quick and thin, let's say you just hit 1 pip every 2 or 3 minutes then run, and repeat it again and again within a day, every day, you must feel high, eh? But the broker may be not happy and bans you. You will be kicked out because of your successful scalping!
Break-Out:
Using the Bollinger Bands indicator on a chart, we will find every Forex currencies pair is waving in a "band", or a channel. By finding major support and resistance levels with technical analysis, a Break-Out strategy trader will buy this pair at the lower level of support (bottom of the band/channel) and sell them near resistance (top of the band/channel). Till now there is not a Break-Out yet.
Once the price breaks the upper range line with larger-than-average volume, or the opposite: the price breaks the lower range line with larger-than-average volume, the chance is coming. The idea of this strategy is that when a currencies pair breaks out of the channel, it usually experiences a large price movement in the direction of the breakout. So buy it at the price breaks the upper range line and continue to hold it until the rate has risen a distance comparable to the height of the range. If it goes down instead, stop losses as it penetrates the upper range line. Or, sell it at the price breaks the lower range line, and continue to hold it until the rate has fallen a distance comparable to the height of the range. If it goes up instead, stop losses as it penetrates the lower range line.
Pivot:
Besides Support and Resistance levels, many foreign exchange traders like to use another indicator to analyze and predict currency pairs' price changes, it is so-called: the Pivot Point. To calculate and analyze pivot is a subset of technical analysis, with this bench mark, traders can locate the rotation point of the trend, and this is very helpful for deciding when and where to buy or sell.
Classical Pivot Point, Support and Resistance Formulas are as follows:
Look at any one chart, the pivot is an average of the previous bar's high, low, and closing prices. In the following formula, "H" represents the previous bar's high, "L" represents the previous bar's low, and "C" represents the previous bar's closing price.
Current Bar's Pivot Point (P)=Previous Bar's (H+L+C)/3 First level of support and resistance can be calculated as follows: First Resistance Level (R1)=(2*P)-L First Support Level (S1)=(2*P)-H Likewise, the second level of support and resistance: Second Resistance Level (R2)=P+(R1-S1) Second Support Level (S2)=P-(R1-S1)
Since many currency pairs tend to fluctuate between Support and Resistance levels, and these levels are calculated based on Pivot points, so when a trend or breakout trader knows where the pivot point is, it will enable him/her to find out key levels that need to be broken for a move to qualify as a breakout.
News Trading:
The system is developed based on economic news events from around the world. Nearly half of those announcements have moved the market significantly. Before a big news is coming, we can buy and sell some currencies pairs at the same time, same lots, set stop loss prices for them. After the news is released, especially for the big one, both sides of buy order and sell order will jump significantly. No matter which order is a winner, just let it go. And the loser will hit the Stop Loss, just let it be. The winner's gain minus the loser's loss, it is your news trading profit. For example, Non-Farm Payrolls/Employment Report - The NFP is the most influential news release of every month. It's announced on the first Friday of the month at 8:30am EST for the prior month. We can put a buy order and a sell order at market prices for GBP/USD, at 8:29 am EST. Don't forget, set 30 pips Stop Loss level for them. Wait 2 minutes only, the news is announced, it is a big one! Then the sell order jumps over 100 pips, and the buy order drops like a brick. The brick hits the Stop Loss and the pain is over. Totally, your gain could be 100-30=70 pips. Quick and easy, cool enough?
Trend Following:
It is so simple, just follow the trend. Buy it is the most difficult strategy because no one can tell you 100% for sure what is the right TREND. Go to look at a weekly chat of USD/CAD, if you had shorted this pair in September 2001 and held it till September 2007, you know what the trend means.
The most famous trend analysis tool seems the Wave Principle. In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. Elliott isolated five such patterns, or "waves," that recur in market price data.
Another trend analysis guru should be W. D. Gann. In 1908, Gann discovered what he called the "market time factor", which made him one of the pioneers of technical analysis. To test his new strategy, he opened one account with $300 and one with $150. It turned out to be wildly successful: Gann was able to make $25,000 profit with his $300 account in only three months; meanwhile, he made $12,000 profit with his $150 account in only 30 days! After his results were verified, he became famous on Wall Street as one of the best forecasters of all time.
Back to the chat of USD/CAD, now, please tell me, how to follow the trend? Will USD/CAD continue the trend which is going south further to 0.6000, or, another trend going north reversely back to 1.6000?
If you would like to find out more about Forex trading, come and visit us at http://www.vdux.com
If you want to download our Raingull Automated Trading Software EA, please come to http://www.raingull.com
Article Source: http://EzineArticles.com/?expert=Victor_Mars
Make money with MetaTrader 4
Jeffrey Royer
Information platform MetaTrader 4 was developed for organization of broking on Forex, CFD and Futures markets. This is a full-service complex. It means that you don’t need to organize additional software for organizing of broking if you use MetaTrader 4.
MetaTrader 4 includes:- MetaTrader 4 ServerServer is a system nucleus as it gets all the users’ requests. As a matter of fact, the server elaborates all the traders’ requests about getting quotations and news, fulfilling trading transaction, setting and executing of orders.
MetaTrader 4 Server is developed as service of Microsoft Windows NT/2000/XP/2003 operation system. MetaTrader 4 Administrator was developed for administration of all the service settings and MetaTrader 4 Manager elaborates all the traders’ requests. - MetaTrader 4 Data CenterData Center is a proxy-server and works as link between system server and client terminals. It was developed as Microsoft Windows NT/2000/XP/2003 operation system service and can elaborate requests of client terminals without real server. So use of Data Centers allows to exclude direct connection between system server and client terminal. - MetaTrader 4 Mobile TerminalsMobile trading (m-trading) is administration of trading account via mobile devices like cell phone or Personal Digital Assistant.
System requirements: PDA Pocket PC, Windows Pocket PC 2002 (at least).The main advantage of MetaTrader 4 Mobile Terminals use is that you can obtain access to markets from everywhere just in a few seconds with full guarantee of operation security.- MetaTrader 4 AdministratorMetaTrader 4 Administrator is a part of MetaTrader 4 information trading platform and was developed for server remote administrating.Data exchange between MetaTrader 4 Server and Administrator is encrypted with 128-bit keys.
So data operations are secure and safe. - MetaTrader 4 ManagerMetaTrader 4 Manager is a part of MetaTrader 4 information trading platform and was developed for trading transactions and traders’ accounts administrating.This program is multiuse working place. Administrating managers’ accounts’ rights with MetaTrader 4 Manager you can get terminals of different user options.
It may be terminal of dealer, risk-manager, account-manager and many other variants. - MetaTrader 4 Client TerminalMetaTrader 4 Client Terminal was developed for fulfilling of trading transactions and technical analysis in a real time mode while operating on Forex, CFD or Futures markets. Several types of integrated orders provide possibility of flexible trading activity administrating. The terminal has large number of technical MetaTrader 4 indicators and its own trading strategies programming language MetaQuotes Language 4 which is integrated.
Using this language you can create mechanical trading systems like MetaTrader 4 Expert Advisor which may analyze market situation, make decisions and so on.MetaTrader 4 is the best solution for broker companies, banks, financial companies and dealing centers. The main advantages of the system are as follows: - Serviced markets The platform was developed for providing service on Forex, Futures and CFD markets.- The complex is multicurrencyThe system is multicurrency. It means that any currency unit may become a base currency used for work of the whole complex so it may be used in any country with any currency. - High cost efficiency and productivityProtocols of data transmission and computing are highly cost efficient.
So you can support up to several thousand traders on one server with configuration Pentium 4 2 GHz, 512 DDR RAM, 80 GB HDD. New protocols also have moderate requirements that reduce the cost of their use. - The complex is reliableIf the platform data are damaged a backup system can restore database. Besides, synchronization helps to restore the whole damaged database by another MetaTrader 4 server. - SafetyFor reasons of safety all the information components of the complex exchange is encrypted with 128-bit keys.
Devices of additional user identity verification on the basis of RSA algorithm are also implemented. Such a solution warrants information security. Third party persons will not be able to use it. An integrated anti-DoS attack system improves stability of server operation and stability of the whole system functioning in general. A conceptually new system arrangement was developed for the protection against DDoS attacks. Now it is possible to hide real IP-adress of system with help of numerous Data Centers.
They are provided with integrated system of protection against DDoS attacks so they can detect and block those attacks. If a DDoS attack occurs it affects only Data Centers meanwhile MetaTrader 4 Server goes on working in normal operation mode. In this way Data Centers improve system DDoS attack stability. - Multilanguage supportMetaTrader 4 has a Multilanguage support imbedded. As for distributives they include MultiLanguage Pack which makes possible fast and correct translation of interfaces into any language. It enables any language integration into system.
This feature makes possible MetaTrader 4 usage by consumers of any country all over the world. - Open interfacesOpen interfaces of the server MetaTrader 4 Server API help you set the platform according to your wishes.
API enables you to solve a wide range of problems, for example it allows:
* To create your own analyzers for detecting of trends in traders monthly markup;
* To develop integration applications to other systems;
* To enhance server functionality;
* To embed your own mechanisms of system work control;
* Carrying out many other useful operations.- Integration with web-servicesTo provide better services for traders option of integration with web-services (www, wap) was embedded in the complex.
That allows to publish quotations, diagrams, dynamic tables with reports about situation on the market on your site in real time mode. - System flexibilityThe platform has a wide range of configurable functions. You may set all the parameters – time of trade session, detailed characteristics of financial tools of concrete groups of clients. - SubadministrationMechanisms of subadministration make possible conducting many Introducing Brokers on one server so you need only one server for your IB clients’ accounts and orders supervision. As for additional advantages, I may admit that purchasing this system with integrated software you may save money as development of analogue program product costs much more.
Besides, system introduction into service requires only one day so you can save your time.You may improve the system efficiency buying and installing metatrader expert advisor programming which was developed exclusively for this platform and has Mql4 programming language integrated. This Forex mechanical trading system usage will evidently make your business much more prosperous so do not hesitate to purchase it. Interesting? I guess so. And if you want to buy this mt4 expert it will be rather useful to make acquaintance with Metatrader 4 delivery terms.
Standard delivery terms include:* Program complex MetaTrader 4 (MetaTrader Server, MetaTrader Administrator, MetaTrader Manager, MetaTrader Data Center, MetaTrader Client Terminal, Mobile Terminals). One license allows you to install three copies of the server: the first one is for real accounts, the second one is for demonstrational accounts and the third server is a reserve one. MetaTrader Data Center, Administrator and Manager may be installed with no limitations. Client terminals (MetaTrader, MetaTrader CE and MetaTrader for Palm) may be provided with your company’s name and logo image. But be aware of the fact that traders may use MetaTrader 4 terminals of other companies while working you’re your service;* Free maintenance support during six months. Besides, planned renovations of versions of each program of the complex are provided. All the errors in the software will be swiftly fixed. Maintenance support also includes addition of new functions and the complex functions enhancement on your request. Maintenance support becomes payable in six months;* Pay instalments (up to six months).
And now let’s talk about one more feature which is called White Label. This is an additional arrangement which allows you to have the second set of client terminals developed exclusively for your Introducing Broker (IB). White Label terminals are absolutely identic to the terminals of standard delivery. The only difference is that they are provided with your IB’s attributes not with logo image of your company. Have any questions? Contact us and our managers will answer them and give you useful advice how to make your business more successful.And to sum it all up I must tell you that success is not difficult thing with MetaTrader 4.
Source: Articles Universe: http://articlesuniverse.com
Information platform MetaTrader 4 was developed for organization of broking on Forex, CFD and Futures markets. This is a full-service complex. It means that you don’t need to organize additional software for organizing of broking if you use MetaTrader 4.
MetaTrader 4 includes:- MetaTrader 4 ServerServer is a system nucleus as it gets all the users’ requests. As a matter of fact, the server elaborates all the traders’ requests about getting quotations and news, fulfilling trading transaction, setting and executing of orders.
MetaTrader 4 Server is developed as service of Microsoft Windows NT/2000/XP/2003 operation system. MetaTrader 4 Administrator was developed for administration of all the service settings and MetaTrader 4 Manager elaborates all the traders’ requests. - MetaTrader 4 Data CenterData Center is a proxy-server and works as link between system server and client terminals. It was developed as Microsoft Windows NT/2000/XP/2003 operation system service and can elaborate requests of client terminals without real server. So use of Data Centers allows to exclude direct connection between system server and client terminal. - MetaTrader 4 Mobile TerminalsMobile trading (m-trading) is administration of trading account via mobile devices like cell phone or Personal Digital Assistant.
System requirements: PDA Pocket PC, Windows Pocket PC 2002 (at least).The main advantage of MetaTrader 4 Mobile Terminals use is that you can obtain access to markets from everywhere just in a few seconds with full guarantee of operation security.- MetaTrader 4 AdministratorMetaTrader 4 Administrator is a part of MetaTrader 4 information trading platform and was developed for server remote administrating.Data exchange between MetaTrader 4 Server and Administrator is encrypted with 128-bit keys.
So data operations are secure and safe. - MetaTrader 4 ManagerMetaTrader 4 Manager is a part of MetaTrader 4 information trading platform and was developed for trading transactions and traders’ accounts administrating.This program is multiuse working place. Administrating managers’ accounts’ rights with MetaTrader 4 Manager you can get terminals of different user options.
It may be terminal of dealer, risk-manager, account-manager and many other variants. - MetaTrader 4 Client TerminalMetaTrader 4 Client Terminal was developed for fulfilling of trading transactions and technical analysis in a real time mode while operating on Forex, CFD or Futures markets. Several types of integrated orders provide possibility of flexible trading activity administrating. The terminal has large number of technical MetaTrader 4 indicators and its own trading strategies programming language MetaQuotes Language 4 which is integrated.
Using this language you can create mechanical trading systems like MetaTrader 4 Expert Advisor which may analyze market situation, make decisions and so on.MetaTrader 4 is the best solution for broker companies, banks, financial companies and dealing centers. The main advantages of the system are as follows: - Serviced markets The platform was developed for providing service on Forex, Futures and CFD markets.- The complex is multicurrencyThe system is multicurrency. It means that any currency unit may become a base currency used for work of the whole complex so it may be used in any country with any currency. - High cost efficiency and productivityProtocols of data transmission and computing are highly cost efficient.
So you can support up to several thousand traders on one server with configuration Pentium 4 2 GHz, 512 DDR RAM, 80 GB HDD. New protocols also have moderate requirements that reduce the cost of their use. - The complex is reliableIf the platform data are damaged a backup system can restore database. Besides, synchronization helps to restore the whole damaged database by another MetaTrader 4 server. - SafetyFor reasons of safety all the information components of the complex exchange is encrypted with 128-bit keys.
Devices of additional user identity verification on the basis of RSA algorithm are also implemented. Such a solution warrants information security. Third party persons will not be able to use it. An integrated anti-DoS attack system improves stability of server operation and stability of the whole system functioning in general. A conceptually new system arrangement was developed for the protection against DDoS attacks. Now it is possible to hide real IP-adress of system with help of numerous Data Centers.
They are provided with integrated system of protection against DDoS attacks so they can detect and block those attacks. If a DDoS attack occurs it affects only Data Centers meanwhile MetaTrader 4 Server goes on working in normal operation mode. In this way Data Centers improve system DDoS attack stability. - Multilanguage supportMetaTrader 4 has a Multilanguage support imbedded. As for distributives they include MultiLanguage Pack which makes possible fast and correct translation of interfaces into any language. It enables any language integration into system.
This feature makes possible MetaTrader 4 usage by consumers of any country all over the world. - Open interfacesOpen interfaces of the server MetaTrader 4 Server API help you set the platform according to your wishes.
API enables you to solve a wide range of problems, for example it allows:
* To create your own analyzers for detecting of trends in traders monthly markup;
* To develop integration applications to other systems;
* To enhance server functionality;
* To embed your own mechanisms of system work control;
* Carrying out many other useful operations.- Integration with web-servicesTo provide better services for traders option of integration with web-services (www, wap) was embedded in the complex.
That allows to publish quotations, diagrams, dynamic tables with reports about situation on the market on your site in real time mode. - System flexibilityThe platform has a wide range of configurable functions. You may set all the parameters – time of trade session, detailed characteristics of financial tools of concrete groups of clients. - SubadministrationMechanisms of subadministration make possible conducting many Introducing Brokers on one server so you need only one server for your IB clients’ accounts and orders supervision. As for additional advantages, I may admit that purchasing this system with integrated software you may save money as development of analogue program product costs much more.
Besides, system introduction into service requires only one day so you can save your time.You may improve the system efficiency buying and installing metatrader expert advisor programming which was developed exclusively for this platform and has Mql4 programming language integrated. This Forex mechanical trading system usage will evidently make your business much more prosperous so do not hesitate to purchase it. Interesting? I guess so. And if you want to buy this mt4 expert it will be rather useful to make acquaintance with Metatrader 4 delivery terms.
Standard delivery terms include:* Program complex MetaTrader 4 (MetaTrader Server, MetaTrader Administrator, MetaTrader Manager, MetaTrader Data Center, MetaTrader Client Terminal, Mobile Terminals). One license allows you to install three copies of the server: the first one is for real accounts, the second one is for demonstrational accounts and the third server is a reserve one. MetaTrader Data Center, Administrator and Manager may be installed with no limitations. Client terminals (MetaTrader, MetaTrader CE and MetaTrader for Palm) may be provided with your company’s name and logo image. But be aware of the fact that traders may use MetaTrader 4 terminals of other companies while working you’re your service;* Free maintenance support during six months. Besides, planned renovations of versions of each program of the complex are provided. All the errors in the software will be swiftly fixed. Maintenance support also includes addition of new functions and the complex functions enhancement on your request. Maintenance support becomes payable in six months;* Pay instalments (up to six months).
And now let’s talk about one more feature which is called White Label. This is an additional arrangement which allows you to have the second set of client terminals developed exclusively for your Introducing Broker (IB). White Label terminals are absolutely identic to the terminals of standard delivery. The only difference is that they are provided with your IB’s attributes not with logo image of your company. Have any questions? Contact us and our managers will answer them and give you useful advice how to make your business more successful.And to sum it all up I must tell you that success is not difficult thing with MetaTrader 4.
Source: Articles Universe: http://articlesuniverse.com
Friday, April 18, 2008
MACD Divergence Forex Signal - How Reliable?
By Michael A. Jones
Some traders regard MACD divergence as a Forex signal to enter a high probability trade. They almost suggest you get straight in to a trade as soon as you see MACD divergence.
Is this Forex signal that reliable? To be fair, it certainly has a place in a successful trader's kit of strategies, but as with any Forex signal, there are certain precautions that have to be observed to make any trade high probability.
At this time there doesn't appear to be any Forex signal that offers anywhere near a 100% success rate.
So if you are tempted to trade on the basis of MACD divergence, what other factors should you keep in mind?
MACD Divergence Defined
First let's just spell out exactly what is meant by MACD divergence.
MACD (Moving Average Convergence Divergence) comes as a standard Forex signal on all the main charting packages. Some show MACD by itself with two lines, one a combination of a 12 and 26 Exponential Moving Average, and the other line based on a 9 Exponential Moving Average.
Some charting packages also include what is called a Histogram in the same charting area as MACD. The histogram merely represents in a different way what is happening between the two MACD lines as to market momentum. The wider the gap between the MACD lines, the higher or lower the height of the histogram bars.
To identify MACD divergence, simply draw a line across the highs if MACD is above the zero line, or draw a line across the lows if MACD is below the zero line.
Now go to the price action section of the chart, the candlesticks, and draw a line across the highs directly above where the line is drawn on the MACD highs, or draw a line across price lows directly above where the line is drawn on MACD lows.
If they are going in opposite directions you have MACD divergence. In other words, when MACD is making lower highs and lower lows but price is making higher highs and higher lows, this negative MACD divergence forms a Forex signal indicating price could well start to drop.
If MACD is making higher highs and higher lows but price is making lower highs and lower lows, this positive MACD divergence forms a Forex signal indicating price could well start to rise.
MACD Divergence Precautions
Be aware that MACD divergence on a smaller time frame is not so significant. When it is seen on a 15 minute chart it may or may not be very important.
If seen on a 60 minute, 4 hour, or daily chart, start doing more analysis.
If you see MACD divergence on two or more of the higher time frames, then definitely sit up and take notice and start looking for other factors to indicate when price may react to the divergence.
This brings us to a key point when trading MACD divergence as a Forex signal to enter a trade. On a higher time frame, MACD divergence can be a fairly reliable indicator of a change in price direction. However, the big question is: WHEN?
Many traders get caught out by entering a trade too soon when they see MACD divergence. In many cases, price has still got some muscle to continue in the current direction. The trader who has jumped in too soon can only stare at the screen in dismay as price shoots through his stop taking him out.
How Can This Scenario Be Avoided
Before pulling the trigger when you see MACD divergence on the higher time frames, be sure to look for other key Forex signals to confirm that the divergence has really kicked in.
For example, if you see a distinctive candle pattern such as a tweezer top or a hanging man on the higher time frame it may appear price has topped out and is now ready to move in the other direction.
If at the same time the distinctive candle pattern is at a key level of previous support or resistance, or at a pivot level, or a Fibonacci retracement or extension level, you have added reason to believe this could well be a turning point and put an entry order in at this level to get taken in.
At the same time, you will want to consult your trading calendar to make sure you are not entering a trade near a significant Fundamental Announcement. Even though the MACD divergence may kick in soon, the Fundamental Announcement could cause a major spike in price and take out your stop.
So in summary, is MACD divergence a high probability Forex signal?
Answer: By itself NO!
How can MACD divergence be used safely?
Answer: Check to see if MACD divergence is seen on one or more higher time frame charts such as the 60 minute, 4 hour, or daily.
Then look for other Forex signals such as candle patterns, support or resistance levels, or Fibonacci retracement extension levels.
In other words, use MACD divergence as a confirmation Forex signal that you are going in the right direction rather than a stand-alone Forex signal.
Get a useful free tip on how to use the MACD indicator for safe trading here:
http://www.vitalstop.com/Forex/Advisor/forex-strategy-MACD-save-anxiety.htm
To learn how to preserve your mental and emotional resources in addition to your account equity click here:
http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm
For the best free economic calendars plus a free pivot point calculator and Fibonacci calculator click here:
http://www.vitalstop.com/Forex/tools.html
Article Source: http://EzineArticles.com/?expert=Michael_A._Jones
Some traders regard MACD divergence as a Forex signal to enter a high probability trade. They almost suggest you get straight in to a trade as soon as you see MACD divergence.
Is this Forex signal that reliable? To be fair, it certainly has a place in a successful trader's kit of strategies, but as with any Forex signal, there are certain precautions that have to be observed to make any trade high probability.
At this time there doesn't appear to be any Forex signal that offers anywhere near a 100% success rate.
So if you are tempted to trade on the basis of MACD divergence, what other factors should you keep in mind?
MACD Divergence Defined
First let's just spell out exactly what is meant by MACD divergence.
MACD (Moving Average Convergence Divergence) comes as a standard Forex signal on all the main charting packages. Some show MACD by itself with two lines, one a combination of a 12 and 26 Exponential Moving Average, and the other line based on a 9 Exponential Moving Average.
Some charting packages also include what is called a Histogram in the same charting area as MACD. The histogram merely represents in a different way what is happening between the two MACD lines as to market momentum. The wider the gap between the MACD lines, the higher or lower the height of the histogram bars.
To identify MACD divergence, simply draw a line across the highs if MACD is above the zero line, or draw a line across the lows if MACD is below the zero line.
Now go to the price action section of the chart, the candlesticks, and draw a line across the highs directly above where the line is drawn on the MACD highs, or draw a line across price lows directly above where the line is drawn on MACD lows.
If they are going in opposite directions you have MACD divergence. In other words, when MACD is making lower highs and lower lows but price is making higher highs and higher lows, this negative MACD divergence forms a Forex signal indicating price could well start to drop.
If MACD is making higher highs and higher lows but price is making lower highs and lower lows, this positive MACD divergence forms a Forex signal indicating price could well start to rise.
MACD Divergence Precautions
Be aware that MACD divergence on a smaller time frame is not so significant. When it is seen on a 15 minute chart it may or may not be very important.
If seen on a 60 minute, 4 hour, or daily chart, start doing more analysis.
If you see MACD divergence on two or more of the higher time frames, then definitely sit up and take notice and start looking for other factors to indicate when price may react to the divergence.
This brings us to a key point when trading MACD divergence as a Forex signal to enter a trade. On a higher time frame, MACD divergence can be a fairly reliable indicator of a change in price direction. However, the big question is: WHEN?
Many traders get caught out by entering a trade too soon when they see MACD divergence. In many cases, price has still got some muscle to continue in the current direction. The trader who has jumped in too soon can only stare at the screen in dismay as price shoots through his stop taking him out.
How Can This Scenario Be Avoided
Before pulling the trigger when you see MACD divergence on the higher time frames, be sure to look for other key Forex signals to confirm that the divergence has really kicked in.
For example, if you see a distinctive candle pattern such as a tweezer top or a hanging man on the higher time frame it may appear price has topped out and is now ready to move in the other direction.
If at the same time the distinctive candle pattern is at a key level of previous support or resistance, or at a pivot level, or a Fibonacci retracement or extension level, you have added reason to believe this could well be a turning point and put an entry order in at this level to get taken in.
At the same time, you will want to consult your trading calendar to make sure you are not entering a trade near a significant Fundamental Announcement. Even though the MACD divergence may kick in soon, the Fundamental Announcement could cause a major spike in price and take out your stop.
So in summary, is MACD divergence a high probability Forex signal?
Answer: By itself NO!
How can MACD divergence be used safely?
Answer: Check to see if MACD divergence is seen on one or more higher time frame charts such as the 60 minute, 4 hour, or daily.
Then look for other Forex signals such as candle patterns, support or resistance levels, or Fibonacci retracement extension levels.
In other words, use MACD divergence as a confirmation Forex signal that you are going in the right direction rather than a stand-alone Forex signal.
Get a useful free tip on how to use the MACD indicator for safe trading here:
http://www.vitalstop.com/Forex/Advisor/forex-strategy-MACD-save-anxiety.htm
To learn how to preserve your mental and emotional resources in addition to your account equity click here:
http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm
For the best free economic calendars plus a free pivot point calculator and Fibonacci calculator click here:
http://www.vitalstop.com/Forex/tools.html
Article Source: http://EzineArticles.com/?expert=Michael_A._Jones
Forex Profits - Want Them? Use This Free Automatic Trading System!
Author: Kelly Price
I have been a trader for over 25 years and for most of this period I have used the free automatic trading software system I will describe here, as part of my forex trading strategy and it's been highly profitable. Here I will share it with you. The system was originally thought up by trading legend Richard Donchian and many great traders have used it and held it in high regard.
While it is simple (one rule) its extremely powerful. You don't need a computer to use it you can work it out on paper! You can also customize it to fit your risk reward parameters. By the end of this article you will know the rule it is based on and can test it and you will know exactly why it does work and will continue to work, so here is the rule of the system, called Richard Donchian's 4 week rule: When the price is at its highest in a four week period, buy long and cover short positions if the price falls below the lows of a four week period, sell short and liquidate long positions. That's it! - Very simple but that makes it extremely robust and a great trend following system.
Don't think because its simple it doesn't work - it does but it does of course suffer drawdown when the markets are not trending so, you need to have an adequate spread of contracts to trade it or adjust the exit rule. As a trend following system its not meant to catch tops or bottoms and is not to fussy about market timing - but it does work long term. So how do you cope with drawdown when markets are not trending? You can try shortening the time period to a more sensitive 1 or 2 weeks for liquidation purposes and then re-enter on the 4 week rule. You can of course exit on a lagging moving average and you can back test any between 20 and 10days.
Many traders I know like to use RSI, ADX and other filters, the choice is yours. The basics of the system are obvious and it's really the exit levels that need some work if you don't want large drawdowns. Consider this fact: Currency markets tend to trend well longer term and this system will always keep you in the strong trends - its objective to, so you don't need to make subjective judgments and will take you around 15 - 30 minutes a day to trade and that's it.
Of course this system doesn't trade a lot and requires a lot of discipline to follow but it works. Today this system with one rule and its brutally objective approach, won't appeal to most traders - they want to apply science and love systems that have the chaos theory or artificial intelligence in them but this system will beat most of these trendy hands down because it's so robust.
Complicated strategies don't work as they have too many elements to break. Donchian left a great system that anyone can understand, use and make money with. Before you think about buying a system, try this one and add your own money management if you wish and you will see it's a great tool for forex profits.
I have been a trader for over 25 years and for most of this period I have used the free automatic trading software system I will describe here, as part of my forex trading strategy and it's been highly profitable. Here I will share it with you. The system was originally thought up by trading legend Richard Donchian and many great traders have used it and held it in high regard.
While it is simple (one rule) its extremely powerful. You don't need a computer to use it you can work it out on paper! You can also customize it to fit your risk reward parameters. By the end of this article you will know the rule it is based on and can test it and you will know exactly why it does work and will continue to work, so here is the rule of the system, called Richard Donchian's 4 week rule: When the price is at its highest in a four week period, buy long and cover short positions if the price falls below the lows of a four week period, sell short and liquidate long positions. That's it! - Very simple but that makes it extremely robust and a great trend following system.
Don't think because its simple it doesn't work - it does but it does of course suffer drawdown when the markets are not trending so, you need to have an adequate spread of contracts to trade it or adjust the exit rule. As a trend following system its not meant to catch tops or bottoms and is not to fussy about market timing - but it does work long term. So how do you cope with drawdown when markets are not trending? You can try shortening the time period to a more sensitive 1 or 2 weeks for liquidation purposes and then re-enter on the 4 week rule. You can of course exit on a lagging moving average and you can back test any between 20 and 10days.
Many traders I know like to use RSI, ADX and other filters, the choice is yours. The basics of the system are obvious and it's really the exit levels that need some work if you don't want large drawdowns. Consider this fact: Currency markets tend to trend well longer term and this system will always keep you in the strong trends - its objective to, so you don't need to make subjective judgments and will take you around 15 - 30 minutes a day to trade and that's it.
Of course this system doesn't trade a lot and requires a lot of discipline to follow but it works. Today this system with one rule and its brutally objective approach, won't appeal to most traders - they want to apply science and love systems that have the chaos theory or artificial intelligence in them but this system will beat most of these trendy hands down because it's so robust.
Complicated strategies don't work as they have too many elements to break. Donchian left a great system that anyone can understand, use and make money with. Before you think about buying a system, try this one and add your own money management if you wish and you will see it's a great tool for forex profits.
Wednesday, April 16, 2008
Saturday, April 12, 2008
Correlation In Forex Trading and Profiting
by Iwan Whiteley
Looking on the internet at comments about forex trading, one wonders how people expect to make money without having a basic grasp of the principles involved in trading. People tend to rush in, with promises of easy money, but they then discover that it is a lot harder than it looks. This article seeks to identify a fundamental principle that leads to creating a successful trading model, it is founded on the idea of correlation.
Correlation exists where there is a mutual relationship of interdependence between two entities. Why is it that people feel so sure that they can earn money in forex? Surely the reason is that they immediately see that there are patterns, that is, correlation in the graph that can be exploited to make money. For example, consider AUDUSD (15 mins, 19th March) in the graph below:
We can see that there is correlation between the graph and the yellow line and is is tempting to think that, as a consequence this can be easily traded. The problem is that there are too many unknowns. How could anyone foresee that the price would bounce off of this line? How can we know how high the price will bounce off the line? How can we tell when the price will stop bouncing?
I would suggest that the reason that the majority lose money in currency trading is that although there is correlation in the graphs, yet people fail to realize that the nature of the correlation is very complicated. There is not only a relationship of interdependence between the price and the line on the graph above. Below is the graph with the inclusion of the stochastic (5, 3, 3) oscillator:
We can see that there is correlation between these two graphs. Although the price doesn't move directly proportional to the stochastic graph, yet the former generally turns at similar times to the latter. The result is that we have another tool to contribute to our understanding of how the price moves.
I would suggest that this is the nature of currency trading; it involves the accumulation of indicators that correlate with the price and as a consequence contribute to creating a successful trading method.
About the Author
For more practical tips on Forex Profiting visit ForexProfitingTips.net and learn how to create a Forex Trading Strategy using the fibonacci sequence.
Looking on the internet at comments about forex trading, one wonders how people expect to make money without having a basic grasp of the principles involved in trading. People tend to rush in, with promises of easy money, but they then discover that it is a lot harder than it looks. This article seeks to identify a fundamental principle that leads to creating a successful trading model, it is founded on the idea of correlation.
Correlation exists where there is a mutual relationship of interdependence between two entities. Why is it that people feel so sure that they can earn money in forex? Surely the reason is that they immediately see that there are patterns, that is, correlation in the graph that can be exploited to make money. For example, consider AUDUSD (15 mins, 19th March) in the graph below:
We can see that there is correlation between the graph and the yellow line and is is tempting to think that, as a consequence this can be easily traded. The problem is that there are too many unknowns. How could anyone foresee that the price would bounce off of this line? How can we know how high the price will bounce off the line? How can we tell when the price will stop bouncing?
I would suggest that the reason that the majority lose money in currency trading is that although there is correlation in the graphs, yet people fail to realize that the nature of the correlation is very complicated. There is not only a relationship of interdependence between the price and the line on the graph above. Below is the graph with the inclusion of the stochastic (5, 3, 3) oscillator:
We can see that there is correlation between these two graphs. Although the price doesn't move directly proportional to the stochastic graph, yet the former generally turns at similar times to the latter. The result is that we have another tool to contribute to our understanding of how the price moves.
I would suggest that this is the nature of currency trading; it involves the accumulation of indicators that correlate with the price and as a consequence contribute to creating a successful trading method.
About the Author
For more practical tips on Forex Profiting visit ForexProfitingTips.net and learn how to create a Forex Trading Strategy using the fibonacci sequence.
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