Posts Tagged ‘trading’

Forex Trends In Opposition To Trading Currency Headlines

Thursday, August 26th, 2010

There is no easy money in the forex markets, yet new traders still flood the markets with trades everyday that are based solely on tips and innuendo in an effort to retrieve profits. Other traders will explore the tools used to determine the gravity of a forex trend. The debate remains, which one of these trading types is more realistic?

Making money with forex trading is will not always be difficult for the individual trader involved. On the other hand, it isn’t always as straightforward as many people assume. Anyone who attempts to second guess the market or take the approach of treating a trade like a gamblers bet, thinking that chance will be on their side, is probably going to invariably lose that trade. In a similar way, there’s no system that will guarantee earning money all of the time. It is necessary to find some sort of a system that can work for you a majority of the time.

If your serious about your success in the forex markets, you owe it to yourself to learn forex utilizing whatever resources are available. We’re not talking about simply learning your way around your broker’s trading platform. One of the key concerns of any trader is risk management and how you manage your funds within your account. With education, comes the ability to identify a quality forex trading method that will prove to be profitable during your trading career. It will not serve you well to lose time shifting from one system to another wasting both time and money. Don’t move to another system bases solely on the fact that it may be the next best thing. Likely, once researched, it is not. If a system is working for you and generating profit, then its a forex system worth keeping around. This is especially true with a system that is based upon forex market trends.

Forex trends and forex predictions do not share the same meaning. A system that relies on trends involves taking a look at charts to see what the price movement has been over the past few periods, or even a comparatively similar period a couple years ago. With this method, it has been possible to identify a long term trend of upward or downward movement in the price of a forex currency pair. We can achieve an advantage from that by supporting the trend in one of our own trades and watching our profits rise, provided that we heed any warnings and get out before the a reversal takes shape. It is always crucial to remember that any give trend will eventually stop, or worse, back-shift and reverse on us if we wait too long.

While you may find that making a guess about the forex market is easier than the hard work involved in the discovery of a trend, it definitely involves substantial risk. Reliance on graphs, charts and key analysis of historical price movements may not be up your alley, but fundamental analysis also requires a steady following of current events like rate changes, housing starts, and other economic factors that drive markets around the world.

It takes significant knowledge of the forex markets to be able to conjure up a prediction in price movement that is going to have any chance of being remotely accurate. While relying on your gut feeling for making financial decisions about your home or family may be working for you, their sure to get you in hot water in the forex market. Financial sites, blogs, or even the large financial news sites are good sources for information. The problem is that the information was never meant to follow literally. Don’t put your hard earned money where these new outlets tell you, otherwise you might as well just rely on Vegas odds. News travels quickly in the digital age, and before you make a trade in the forex market, the news you were depending on could have already moved the market one direction or the other.

Without further a due, I will repeat what the market has been telling you all along. The Trend is your friend. Distancing yourself from trading the news and interest rates will further insulate you from risky practices. Tracing a forex trend, researching its origin and historical price moves, and making a decision on how to act on a similar trend today gives traders better opportunities in the market than simple predictive practices.

You realize the advantages of forex trading, and you are excited to start trading today. Now you need to learn what this market is all about. Take time to read this important report from Thomas Chan before trading online.

Increasing Wisdom With Forex Currency Trading Online Books

Saturday, August 21st, 2010

You may have experienced some difficult finding quality forex trading information that you can use in your own market trading. Of course we’re assuming your already trading in the currency markets. If so, then you likely have a few hard back books on the subject on standby nearby. It’s also likely those books are starting to collect dust with the release forex ebooks in recent years, something the internet and technology have brought us. The ebook is an excellent training tool and highly convenient. It can be edited easily, and many of them are free to the masses.

The last thing you want to fall prey to is being buried from cover to cover with forex trading information when searching through a book written for the currency trading industry. This is likely to happen if you get bogged down in terms, principles and fundamental analysis. Forex books are often written with a singular trading method in mind, which has a tendency to steer you toward system that may no be well suited for your style of trading. This would detrimental to your pocketbook and could hinder your progression and training into more advanced learning of the forex markets. Its a good idea to stick with the system you currently already have in place and concentrate solely on moving through different levels of training so you can elevate your capacity to earn a profit in the currency markets.

Determining exactly what books will provide you a good FX education and then later help you to become profitable is certainly the goal you should have in mind when researching new trading books. You won’t want to pass up reviewing the basics for forex trading if your new to the currency markets and not familiar with basic terms like FX or pips. Knowing something about how to place a stop loss is something every forex trader should learn before risking their own funds. Its easy enough to learn the terminology from the many resources available such as blogs, financial forums and places where trading tutorials exist. Ebooks are very inept in delivering the basics that every forex trader should know as well as many advanced topics for the more seasoned trading professional.

Its always advised to keep your current trading system from start to finish to give yourself time to learn everything about it. If you move away from it too early, you may have missed the opportunity to be profitable with such a system. You’ll find forex books concentrate on either a single system that works for the author, or several systems he may have tried that offered some success. Don’t let your curiosity get the best of you in this case. You don’t want to find yourself switching currency trading systems just because they might sound interesting or worthwhile in the words of the author. If you don’t have a system in place, then utilizing the author’s system may actually benefit your trading. Working with a single system during your forex training is going to be the best possible way to maximize your returns and prevent forex losses.

The majority of traders have declared their favorite to be the ebook over a standard book you find in stores. Your ebooks these days are more concise, shorter in length, and can provide you more information per page. They tend to be written by true forex traders who are interested in writing about their knowledge, using their skills and providing a quality ebook that thousands will come across and read. The ebook is usually tied to a website that can offer both support and additional forex knowledge and insight.

With a website and ebook, you may even find other multimedia such as podcasts, audio transcripts and full length forex trading videos. It is much more effective to see a trader actually show you how he trading, the tools, platforms and anything else involved in real-time full motion video. Let’s face it, currency trading can deliver very dry material, so the more action and cinematography surrounding it the better. You’ll appreciate the fact that staying awake is far easier using the ebook and material from a website vs. a currency trading book from the bookstore.

With any experience in forex trading you have done in the past, you realize that it brings with it a certain amount of stress and frustration. Your ability to handle those emotions, even work them to your advantage, is what makes up the psychology behind currency trading. If your not able to find an ebook or video that covers this topic, then keep looking. Don’t overlook the importance of a traders mindset, and how he handles the everyday anxiety the financial markets bring to your life. For proper training, whether it be an ebook or the book on your shelf, developing your skill-set and your mindset at the same time will keep you trading profitably for years to come.

Forex Indicators There are other countries whose currencies are pegged to the dollar to give them some economic stability. Traders with many years of experience can often recognize patterns without even knowing that they are doing it. It is worth beginning to develop that experience before you leap in with real money.

Retirees And Online Stock Trading

Wednesday, April 7th, 2010

Retirement brings the retiree more time and usually, less income. However, the discovery of the Internet has brought about many changes in the way that people lead their lives, hobbies and business. You can pay your bills online, do your shopping online, do your banking online, and even date online!

You can also participate in online stock investing, which I think, could fit in nicely. Online stock investors love having the ability to look at their investment accounts whenever they want to, and online stock brokers like having the ability to take orders over the Internet, as opposed to using the telephone.

All it takes really is reading the newspapers and watching the news. Well, that is the start of it. Any ideas that spring to mind can be followed up by greater research into the company concerned. The majority of stock brokers and brokerage houses now offer online stock research to their customers as well as online stock investing. Another great thing about online stock trading is that fees and commissions are often lower. While online stock trading is great, there are also some drawbacks.

If you are brand new to trading, having the ability to actually speak with a stock broker can be quite beneficial. If you aren’t experienced in the stock market, online stock trading may be a rather dangerous thing for you to do. If this is the case, make sure that you learn as much as you can about trading stocks before you start ‘live’online stock trading.

You could control a dummy portfolio. For instance, most online stock brokers offer the facility to run a ‘watch list’ or dummy portfolio, where you can ‘buy and sell’ without risking your pension!

You should also remember that not everyone has a computer with Internet access with them, although many mobile phones can get online. So you might not always have the ability to get online to make a trade when you want to. You will need to be sure that you can speak with your broker if you use an online stock broker. This is true whether you are an advanced stock market investor or a beginner.

It is also a good idea for the retiree to go with an online stock broker that has been in business for quite a while. You won’t find one that has been in business online for fifty years of course, but you will be able to find a company that has been in business that long and that now offers online stock trading.

To be sure, online stock trading is a fantastic opportunity for retirees - but it is not for everyone, the impetuous can lose money quickly. Think carefully before you decide to opt for online stock trading, and make sure that you really know what you are doing!

And so, in summary, pensioners can use their extra free time to explore the stock market for nothing by finding leads in newspapers, magazines and news items. These leads can then be followed up by doing online research with the help of a free online stock investing account.

These hunches can then be tracked using a dummy or trial portfolio. When you have gained sufficient experience, you can go ‘live’ by opening an active online stock investing account.

If you are interested in online stock investing, please go along to our web-based resource Online Stock Investing for Retirees for further information. Grab a totally unique version of this article from the Uber Article Directory

Moving Average Crossover Secrets That You Need To Know

Wednesday, March 24th, 2010

As a trader, you need to master the two technical indicators that are very simple to use but most effective. These are the trendlines and the moving averages. These two technical indicators can be used with a naked eye by just eyeballing the chart. They work for all markets. While calculating the moving averages, the time period used to calculate the average is very important. The shorter the time period, more fluctuations and whipsaw. What this means is the chances of getting wrong trading signals increase with shorted time periods.

There are three types of moving averages. Simple averages are calculated by dividing all the prices with the number of time periods used to calculate the average. In case of weighted and exponential moving averages, more weight is given to the recent prices as compared to the old ones making them more responsive to recent price action as compared to the simple moving averages.

On the other hand, longer time period averages move slowly with a smoother curve that can be slow in giving trading signals for entering into a long or short position. Now many traders use a combination of slow and fast moving averages in generating trading signals.

Most traders use the combination of three averages. Futures traders use the combination like 4,9 and 18 period averages. Stock traders use longer periods like the 40 day, 100 day and 200 day to generate trading signals. When the short period average crosses the medium one, this gives a trading signal but this need to be confirmed. Confirmation is obtained when the short and the medium move above the longer period average.

When using moving average crossovers as a technical indicator, when it is below, you should be short. And you should be long when the short average is above the longer period average.

The crossovers of these short and longer averages provide the trading signal to act as they indicate that the momentum is shifting from one direction to another. Moving average crossovers are an important tool in the arsenal of any trader. Moving Average Convergence Divergence (MACD) one of the most popular indicator depends on them.

These averages work very well in a trending market but do not work well in non trending or choppy markets. However, when trading with these crossovers, you should know this that these averages are lagging indicators. What this means is that they are giving a signal about the past price action something that has already taken place.

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5 Pro Trading Secrets

Wednesday, March 24th, 2010

Technical analysis is based purely on the price action. It does not take into account the fundamentals behind the price action. It only follows the swings on the charts. Many traders use technical analysis in making their trading decisions. There is no doubt that technical analysis is a powerful tool but ignoring the fundamentals altogether is not a good thing. As a good trader, you should always keep an eye on the changing fundamentals in the market.

For example, heating oil demand tends to rise in the fall and winter. Now a novice trader will think that it is a good strategy to go long on heating oil futures December contract without thinking that professional traders are already aware of this seasonality in the heating oil futures and factored this fact into the December contract prices.

Always keep yourself informed of the economic report release calendar. These reports can sometimes have significant impact on the markets. Try to learn about the reports that can have a significant impact on the market you plan to trade. For example, as a currency trader, you should always know that NFP Report release can move the market at the time of its release significantly. If you are trading T-Bonds, don’t enter into a position before the release of the US Employment Report.

There are some markets like the agricultural commodities and others that might not get extensive coverage. In that case, you need to subscribe to a specific newsletter that you think is good and can keep you informed about what is happening in these markets. As a trader, you need to keep yourself abreast of the developments in the world that are going to have an effect on the market that you trade. Read the Wall Street Journal, The Financial Times or the Bloomberg regularly. This way, you know what fundamentals are driving the market that you trade.

Now, no market functions in isolation. All market in the present time have become highly interconnected and interlinked. You need to understand the interrelationship between the futures markets and the stock market. What are the double and triple witching dates and how they might affect your trading or for that matter your investments. What starts in one market may soon spread to the other markets. The stock market crash of 1987 had started in the futures market. Similarly the recent stock market crash has its origins in the subprime mortgage market.

Now markets like crude oil, gold and US Dollar can significantly impact other markets. So never limit you scope to one market only. Always use intermarket analysis to figure out what is happening to the other market and how it can spread to the market you trade.

You should make a checklist to help you execute a trade. A trend may appear different on different timeframes. Always check that your daily charts are in agreement with the long term trends. Use multiple timeframes to figure out the primary trend in the market.

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Major Futures Trading Exchanges

Tuesday, March 23rd, 2010

Most of the people who invest in stocks, only know about the New York Stock Exchange (NYSE) or the NASDAQ over the counter market. Futures trading is one of the ways to grow your wealth. There are many dozens of futures contracts that you can trade ranging from crude oil, gold, ethanol, heating, gasoline, silver, copper, wheat, corn, coffee, soybeans, pork bellies, cattle, interest rates, currencies and others.

If you want to profit from commodities than futures trading is the best and direct method of getting access to the commodity market. There are several active futures trading exchanges in the US. Three of the world’s largest futures exchanges are located in Chicago.

The number one is the CME ( Chicago Mercantile Exchange). The futures contracts that get traded on CME include among others stock index futures, foreign currencies, interest rates, commodities, environmental futures and others. Futures trading is no doubt risky but if you learn it, it can be highly profitable. As said before, Ricard Dennis and his turtles used to trade the most liquid contracts in the market.

The commodities futures that get traded on CME include live cattle, milk, lean hogs, feeder cattle, butter, limber, pork bellies, Goldman Sachs Commodities Index and fertilizer.

CME provides you with the opportunity to trade futures contracts on these stock indexes as well as their mini versions the E-Minis. Now, one of the ways to trade stock market is to trade stock indexes like the various S&P 500 like the S&P 500 Midcap, Small Cap as well as the Russell 2000 and the NASDAQ 100.

You can easily trade almost all these contracts from the comfort of your home electronically using your computer.GLOBEX is the Electronic Trading Platform owned by the CME Group that allows the electronic trading of these contracts almost 24 hours a day.

The second most important futures exchange is the CBOT ( Chicago Board of Trade).The futures contracts that are available on CBOT include agricultural futures like the soybeans, ethanol, rice, corn, wheat and others. Mini contracts on corn, soybeans and wheat are also available for trading on CBOT.

CBOT gives you the opportunity to trade one of the most popular stock indexex the DJIA Dow Jones Industrial Average)in the form of Dow Futures. A mini version of Dow Futures called the E-Mini Dow is also available. You can also trade mini versions of gold and silver futures contract on CBOT.

Now the best place to trade crude oil, natural gas, gasoline as as well as a host of other energy futures in the NYMEX (New York Mercantile Exchange).This is infact the global hub for energy trading and offers futures contracts on unleaded gasoline, heating oil, electricity, light sweet crude, natural gas, propane and coal.

NYMEX also provides you with the opportunity to trade precious metals like the gold, silver, platinum as well as palladium. You can also trade metals like copper and aluminum on NYMEX. Futures trading is something that is not difficult to do once you get the hang of it. In the beginning, you should just paper trade these contracts for a few months!

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A Highly Reliable Chart Pattern-M Tops And W Bottoms

Monday, March 22nd, 2010

How do you know this is the market top or the market bottom when you look at the chart? The most reliable chart patterns that tell about a market top and the market bottom is the M and W patterns. Sometimes these look like the Double Top or the Double Bottom or what many chartists call the Head and Shoulder Pattern.

Now, first we need to understand how these patterns are formed. Markets tend to move all the time. When a trend starts, market advances tend to get carried away as traders and investors scramble to get onboard the new trend. Buying frenzy starts. Everyone wants to buy.

This first peak in the price action forms the first leg of the M in the chart pattern! But this upward push ultimately at some point loses its momentum. When it does, buying stops and selling starts. This is the top of the market or the peak in the price action.

When selling starts, price action begins to fall. Selling is now driving the price action down. Those traders who had long positions, now want to take profit and exit. This selling continues until a point is reached where buyers again jump into action driving the prices up again. This results in the formation of a second peak in the pattern that might be close to the first peak or lower than it. If the second peak is higher than the first, the chart pattern formed is the Head and Shoulder Pattern.

When the second peak is reached, the buying stops and selling starts, this forms the second leg of the M pattern. However, in almost majority of the cases, the second peak is lower than the first. The second buying rally has a peak that is lower than the first.

The W in the pattern is formed in almost in the similar fashion but in this case there is a downtrend. The first part of W is formed when the first bottom is reached. This is sort of a support where buyers jump in. Falling price action reaches it bottom, climbs again and then falls again forming the W Chart Pattern.

When buyers start buying, price action begins to rise again till it reaches its high and then falls again. Whatever, these Double Top and Double Bottom Patterns or what you call the M and W Chart Patterns are highly reliable indicators of price reversal. However, you need to confirm them with volume before you trade on these patterns.

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Silver Investing Vs Gold Investing-How Silver Might Exceed $400/oz

Saturday, March 20th, 2010

Silver and gold have always been used as medium of exchange since the dawn of civilization. Over the centuriers gold and silver coins were used as a sort of international currency. In the last century, gold and silver has been used to back the paper currency. Even today in times of financial distress, gold and silver are considered to be safe havens. Gold is more popular among the investors but to tell you the truth, silver can be a ten times a far better investment as compared to gold. It is being predicted by the pundits that silver prices can go over $400 per ounce in the next few months. So if you have been thinking of investing in gold, think about investing in silver too!

Now, in the decade between 1970 and 1980, gold and silver both had seen an unprecedented bull market. Many investors who had invested in gold in those days, still remember those days with nostalgia. Gold prices rose from $35 per ounce to $850 per ounce during that period of ten years. This was an increase of 2,329%. Not bad huh!

During the same decade between 1970 and 1980, silver prices rose from $1.5 per ounce to almost $50 per ounce. This was an increase of 3,233%.Right now, silver prices are hovering in the range of $17 per ounce. Just imagine, silver prices skyrocketing to around $400 per ounce in the next few months. This will be an unprecedented gain of over 2,000%. So don’t miss this chance of investing in silver right now!

Now, let me explain why this unprecedented rise in silver prices might happen. You see as compared to gold, silver has far more industrial applications. As the global economy starts to expand again in this year, the demand for many industrial products will grow. Silver like gold is available only in limited quantity. So you can well imagine what happens when the demand rises but supply does not! As the global economy starts to expand again in this year, the demand for many industrial products will grow.

The most important application of silver is as an electricity conductor. Silver wires are used as high tension cables. You will be surprised to know that silver is also used in a number of household appliances like refrigerators, washing machines, wall switches, fuses and so on.

Silver is used extensively in photography. This use might decrease as digital photography replaces traditional photography. But this will be replaced by new uses of silver in other industries.

Your computer monitor uses silver. Your cell phone uses silver. Satellites, High Tech Robots, Lasers and other high tech gadgets use silver.

A new double layer of silver on glass is sweeping the window market, as it reflects away almost 95% of the hot rays of the sun. A new electronic application for “smart tags” that are replacing bar codes could use significant quantities of silver.

Silver is heavily used in chemical industry. Silver is a great reflector and as said before is used widely in mirrors and glass coatings.

So, you can well imagine as the global economy starts to expand again and the demand for these products and services increase, you will see a skyrocketing of silver prices.

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Profitable Candlestick Trend Confirming Patterns-Separating Lines And Bullish Thrusting Lines

Saturday, March 20th, 2010

You are trading stocks. You have bought low when the uptrend started. You won’t to get out now before the trend reversal happens. But you are not sure. You don’t won’t to leave profits on the table by getting out early. So how to know that the trend is still in place and you can continue riding the trend for more profit. Candlestick charting and candlestick patterns can help you know whether the trend is about to continue to reverse itself. There are a number of trend confirmation patterns that you can use. Thrusting Lines Candlestick Pattern is on such pattern.

There are as usual two types of thrusting lines candlestick patterns-bullish as well as bearish. Bullish thrusting lines candlestick pattern is a long bullish candle on the first day. The second day or what you call the signal day, it is a bearish candle with a gap opening with price higher than the high of the setup day. However, the close of the signal day should be above the midpoint of the setup day.

On the signal day, the bulls push the price to a gap opening. When this happens, the bears try to comeback with the sellers trying to do the selling but are unable to push the price down below the middle of the first day. When a bullish long candle is formed, it means that the bulls have been in control of the market. So bulls are still in control and are again ready to take control of the market.

You can safely keep on riding the trend when you find this pattern. When a Thrusting Line Candlestick Pattern is formed, it means that the trend is going to continue in the future.

Now, Bullish Separating Lines is another important trend confirmation candlestick pattern that you should master. On the first day or what you call the setup day or what you call the first day, you will find a long bearish candle. This long bearish candle means that the bears have been in total control of the market for the day.

However, on the signal day or the second day, you will find a bullish candle. This bullish candle has got an open that is equal to almost equal to the open of the first day or the setup day. This is the feature that is used to identify the Separating Lines Pattern.

Now, the bulls are in total control of the market meaning that the uptrend will continue. On the second day, bulls start massive buying making the opening price equal to the opening price on the first day.

When these candlestick patterns appear on the chart, it means that the trend is going to continue. However, these patterns do not appear frequently and are somewhat rare. But whenever, they do make an appearance, they can be highly profitable if spotted correctly.

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Know What Is Trading Volume And Open Interest

Tuesday, March 16th, 2010

Trading volume of a security is a direct real time market sentiment indicator. A high trading volume is an indication that the current trend is likely to continue. Now, good volume analysis needs to be combined with other technical indicators in order to make a trading decision.

Now, volume figures are not available to currency traders in view of the over the counter unregulated nature of the currency market. However, volume figures are available to stocks and futures traders. The release of the volume figure in the futures market is delayed by one trading day.

Higher trading volume steadily moves towards the closest month to delivery in the futures market. Delivery month in the futures market is the month when the contract is settled and the physical delivery of the asset takes place. Higher trading volume is good for traders as it can mean a better price.

A Limit Up Day is a sign of strength however, a limit down day is usually followed by trading collars. You should know the Limit Days in futures market. Limit days are those days when a futures contract makes a big move in a very short period of time with heavy volume.

Open interest is the number of open contracts of a security in the market during a given trading period. Open interest is particularly an important tool for futures traders. Volume data alone can be confusing. So as a trader, you need to use volume data in conjunction with technical indicators. This way, you can understand the signficance of trading volume change and the trend change. You should also understand how volume data is reported in the stock and the futures market.

Open interest only applies to futures and options contracts and not to stocks. Open interest is the number of contracts entered into during a specific period of time but have not been liquidated or settled.

Open interest gives you information about the total number of short and long contracts. Open interest varies with the number of traders entering and leaving the market. It rises by one when a new buyer and a new seller enter the market. Similarly falls by one when a buyer and a seller leave the market. Charting open interest on a daily basis in conjunction with the price charts helps you keep track of the trend in the futures market and can be a very useful tool.

Mr. Ahmad Hassam has done Masters from Harvard University. Know this shocking Dow Futures secret that can make you rich. Download this very simple 1 Minute Forex Trading System FREE that makes money instantly anytime.


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