.

Advantages of Forex

2009-02-25T03:24:00.000-08:00

A Global 24-Hour Market

The forex market is unique in that traders can access a 24-hour market very conveniently, without having to wait for the markets to open. At any time, there is always a major financial center open where banks, hedge funds, corporations, and individual speculators are trading currencies. Traders can trade during anytime of the day or night, and do not have to wait for any markets to be opened before placing their trades. This is particularly beneficial to people who hold nine-to-five jobs since they can trade it without any problems in the evening or night. The market runs 24 hours for 5.5 days a week because markets around the world open and close at different times. In stock or futures markets, you can only actively trade for less than 7 hours a day.

FX market	GMT
Tokyo Open	23:00
Tokyo Close	08:00
London Open	07:00
London Close	16:00
New York Open	12:00
New York Close	21:00

With the stock and futures markets, one would need to have access to electronic communication networks (ECN) for pre-market trading, or would have to wait till the markets open. The chances of the prices gapping up or down against you are high, especially if there have been news while the markets are closed.

World’s Most Liquid Market

According to the Central Bank Survey of the forex market conducted by the Bank for International Settlements, as at 2004, daily trading volume reached an all-time record high of $1.9 trillion, up 58% from 2001. Do you know that this humongous daily trading volume is about 20 times that of the New York Stock Exchange and the Nasdaq combined?
With about 80 percent of foreign exchange transactions having a dollar leg, you don’t have to worry about liquidity issues when trading any of the these big-economy currencies, which are namely, USD, GBP, EUR, CHF, JPY, CAD, AUD and NZD. However with stocks, futures, options or commodities, you tend to be restricted by their illiquidity especially during after-hours.

Limited Slippage

Most brokers guarantee fills on stop-loss and limit orders on up to a certain number of standard lots, and provide instantaneous trade executions from real-time quotes which are displayed on the screen. There is usually no discrepancy between the displayed price and the execution price during normal market conditions. However, you may be subjected to slippage when you trade during news or during periods of high volatility. In the futures and stock markets, execution price can be vague because all orders must be done through the exchange, and slippage and partial fills are common especially in the futures market due to the chaotic open-outcry system.

Buy Or Short-Sell Anytime

When trading stocks, short-selling is only allowed with an uptick, so it can be very frustrating for traders to wait and see their stocks trend downward, while waiting for an uptick. In the futures market, there is a limit down/limit up rule which kicks in when the contract value declines or increases by more than a certain percentage from the previous day’s close. However, in the forex market, you can short a currency pair anytime without having to wait for any upticks, and this translates to a more efficient and instant order execution.

Profit In All Market Conditions - bull, bear or sideways

With forex, you can have the freedom to long or short currency pairs whenever the opportunity comes, since there are no exchange-enforced restrictions on daily activities, like for stocks or futures.

Flexible Leverage

The forex market offers the highest leverage available for any market. Leveraged trading allows forex traders to execute trades up to $500,000 with an initial margin of only $5000. That means you get as high as 100-to-1 leverage or more, offered by most online forex firms on standard-sized accounts. However, it is important to note that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally large. The good thing is, it is up to you to select the amount of leverage that you are most comfortable with.

Differences between Forex and Stocks

Forex	Stocks
Largest and most liquid market in the world	Liquidity dependent on stock’s daily volume
24-hour trading action for 5.5 days a week	Less than 7 hours of trading time per day
Can profit in both bull and bear markets	Most people buy stocks instead of short-sell
Can short-sell anytime	Need to obey uptick rule in order to short-sell
Minimum slippage and order errors	More room for slippage and error
100:1 leverage on standard-sized accounts	2:1 leverage to the average stock investor

Differences between Forex and Futures

Forex	Futures
Largest and most liquid market in the world	Liquidity dependent on month of traded contract
24-hour trading action for 5.5 days a week	Varying trading hours based on the markets
Can profit in both bull and bear markets	Tend to have extended bearish periods
Can short-sell anytime	Trading restricted by limit up/down rule
Minimum slippage and order errors	More room for slippage and error
100:1 leverage on standard-sized accounts	Smaller leverage

Differences between Forex and Options

Forex	Options
Largest and most liquid market in the world	Liquidity depends on underlying asset & expiry date
24-hour trading action for 5.5 days a week	Not 24-hour. Varying trading hours based on the exchanges
Easier to calculate stop beforehand	Difficult and unreliable to place stops on underlying asset
Minimum slippage and order errors	More room for slippage due to lack of liquidity
100:1 leverage on standard-sized accounts	Leverage depends on the type of option transaction you want to engage in. Selling Naked Calls or Puts generally requires a huge amount of margin

Tactical Trading

2009-02-25T03:21:00.000-08:00

Tactical Trading

Tactical Trading is a combination of a trading chatroom, a member training website, online trading training
sessions, and trading seminars. The Tactical Trading chat room combines text, voice, and 'real time' application
sharing where I can show my trading charts that are being traded and discussed. I also highly recommend that other
traders, especially those who are paper trading, also post their own trades in order that I can try to provide
additional feedback and help with learning the trading method, and making the transition to real money trading.

If you would like to become part of the Tactical Trading Group, click Join Tactical Trading for registration, or
for a 3 day chatroom trial. If you have any questions or want more information, or even want to talk on the phone
- you can let me know this on the form.

Tactical Trading Objectives

I approach emini and futures day trading from the realization that the vast majority of 'traders' are going to
lose, and if you are going to ever become profitable, you will have to 'act' differently from that group. From
my experiences in emini and futures day trading, and working with other day traders, the primary differences are
going to largely be related to the approach taken to learning to trade, along with reasonable expectations
regarding the amount of work and time that is going to be necessary. Although this isn't the kind of thing that
most people want to hear, that learning to emini and futures day trade takes time and hard work AND even with
this, there are no guarantees of success - I will not give you 'hype' and 'promises', and 'to be' assurances that
if you join the group you will be profitable in a couple of months - it's just not going to happen.

My objectives for Tactical Trading are to teach a price continuation-momentum expansion based day trading method;
this is in contrast to a method that attempts to buy-sell market extremes and/or price momentum divergences.
As this is a day trading method, trading is done not as a 'fixed system', but through the development of '
base method' trading setups, which are traded in the context of market conditions and key price specifics,
what I refer to as trading from the left side to the right side using repeatable trading discretion and setup
combinations.

Emini Day Trading - Day Trade Setup Combinations

The emini day trading method has two basic ways to view an emini day trading setup: (1) right side only -

referred to as right side base or minimum base (2) left-right - referred to as selective base, the right
side base setup has become more selective from adding additional setup components that can be seen from left
side price action-price failure.

There are a set of trading indicators that are used as part of the day trade setup combinations BUT I am not
an indicator trader - the indicators are used for chart reading and the information that they provide-especially
with regards to the flow of momentum on a retrace; the indicators are not used as trading signals.

Join Tactical Trading Tactical Trader - Day Trading Journal

The Tactical Trader Day Trading Journal was developed to be a daily teaching lesson where I can discuss some
charts-trades from the day, in order to point out various trading setups and/or trading issues-problems that
I am aware. I also like to use this to specifically answer questions that someone may ask, where it is more
effective to try to answer with a chart-discussion, than it would be to try to answer by text only.

To make this most effective, it is recommended that the charts-questions first be read-answered AND then go
to the discussion page to study what has been written, along with comparing this to your own answers - don’t
simply go to the discussion page and read what has been written.

Day Trading Journal Objectives

Understanding the day trading method, and especially how the trading method setups are related to the strengths
and weaknesses of the base method.

Understanding that discretion is inherent in a trading method BUT that this discretion can be repeatable -vs-
non-random discretion coming from things like market bias or market opinion OR trying to indicator trade as a
trading system.

Understanding how to use indicator information as part of the trading setup -vs- being an indicator only trader.

Understand mixed method [the trading method which will be entering at the same approximated time BUT in the
opposite direction] AND the implications of these 'other' methods on our trading.

Discussion of trading charts-setups, explaining why a setup is method base and comparing to similar setups that
'shouldn't' be traded - setups that could be regard as trading setup misreads.

Discussion of opening emini russell trades and trading setup scenarios using previous price action prices.

Discussion of trading setups related to method strengths and weaknesses AND in relation to market conditions
such as directional-counter or continuation-congestion.

Discussion of directional strength and maximizing the profits of these trading swings with addon trading.

The Psychology Of Trading

2009-02-25T02:59:00.000-08:00

Psychological Aspect

The psychological aspect of trading is usually underestimated by those new to trading. The psychological problem for most traders is the fear of losing - ironically it is this fear that causes most traders to lose money in the long run. The fear of losing can manifest itself in a number of ways:

Unable to pull the trigger and enter a trade.

A trader can start to lose faith in a system that has produced a number of consecutive losing trades and might start to look for further confirmation before taking the next trade. Inevitably the trade that is not taken will be the winner. The point of a mechanical trading system is that it forces the trader to take the trades that they wouldn't normally take just by looking at a chart.

Unwilling to accept a losing trade and cut a losing position short. Losing trades are an inevitable part of trading, many successful systems will produce more than 50% losing trades. The key is to never marry a position - if it hits your stop loss then exit it. Preserve your capital for the next trade.

Taking a profit too early to prevent a winning position become a losing one.

There are a number of ways to counteract the fear of losing:

Have a plan. Never enter a trade on a hunch, tip or gut feeling. Always know your exit before you enter a trade.

Discipline. Developing your own trading plan that you believe in will make it much easier to follow than trying to trade someone else's.

Money Management. If a position is too large for your account size then you are more likely to hang on to the losers or cut the winners short. Each trade is merely one step along a very long journey. Strict money management rules should ensure that you never stake more than you are comfortable with.

Ignore the money. Don't view your trading account as money, view it as points. The better your trading plan and your execution the more points you will accumulate as a reward. It is difficult to trade objectively if all you can think of is that your last losing trade could have paid for a two week holiday or bought you the latest camcorder!

Tim Wreford runs Online Futures Trading, a website that provides information and resources for traders. Tim also provides a free day trading system, the results of which are updated daily on the site.

rading psychology has become so widely discussed and promoted through books and consultants that it has become a very convenient rationalization and excuse for losing. Why take the responsibility for a lack of work ethic and trading without any concept of plan, an honest assessment which would be a ‘hit’ on the trader’s self-esteem – when you can just blame it on trading psychology instead?

Trading psychology is ‘something’ that a trader creates from existing personality traits that are not initially related to trading, but surface from trading without method understanding. The outcome of course is fear, but wouldn’t this be the case when doing anything that was perceived as ‘dangerous’, and which was being done without the necessary understanding and skills? Trading, with its inherent characteristic of accepting financial risk while participating in unknown outcomes, is certainly ‘dangerous’, and thus the more preparation and understanding that is needed.

Trading Scenario

Consider the a trading plan which has the following three setup types: (1) initial which is your intended trade entry (2) first continuation which is used to enter a trade in case you have either missed your initial entry, or you decided that you wanted more confirmation because it was a counter direction trade (3) second continuation which is intended as a trade addon setup, but is also one ‘last’ chance to enter a trade.

You get an initial sell setup that triggers, but you do not take the trade = trade1. The trade breaks cleanly and goes to what would have resulted in a partial profit, and then before price goes down further, it retraces back to the area where the sell was done. This price holds so the swing remains short, and from this hold of what is now resistance, you get the trigger of your first continuation setup BUT you don’t take this trade either = trade2. Why wasn’t the trade taken? You decide that after missing the initial entry that you have missed the trade; your emotions and biases tell you that the ‘move’ has gone too far. Again, this trade breaks cleanly, not only adding to the gains of trade1, but also giving a partial profit on trade2.

Price now consolidates between the lows and the price resistance that you would typically be using to stay short if you had taken either the initial trade, or the first continuation trade. Instead of the swing reversing after consolidating, it continues down again, and with this continuation your second continuation setup triggers = trade3. AND AGAIN - you don’t take the trade. After all, if you didn’t take either of the first two trades, how can you possibly take this trade; maybe you were wrong when you thought that the move had gone too far to take trade2, but certainly that’s the case for trader3.

Like trade1 and trade2, trade3 is a profitable trade. This swing has really turned into a great directional move, with each break holding on weak retests – a textbook example of the strengths of your trading method, but YOU have never entered a trade. You are going nuts! You are getting into this damn swing - you just can't take it any more. Another retrace holds as a lower high. You don’t have an entry setup, but that doesn’t matter, the other three trades were profitable after a lower high. Isn’t it interesting, the same emotions which wouldn’t let you enter your plan trades, are now ‘forcing’ you to take a non-plan trade.

Instead of YOUR trade going to a lower low and to a profit, it instead goes to a higher low and then reverses into an initial buy. Bad just got worse, you also don’t exit when the swing goes into buy. After what you went through to finally get into the trade, you have to try and make it work, and after all the trend is down – right? TraderA uses this initial buy to exit their profitable sell and sell addon; they decide that they want more confirmation of swing reverse before trading the counter direction. A first continuation setup triggers and they go long, the swing has reversed, and this trade reaches its first profit target.

TraderB finally ‘gives up’ and exits THEIR short, although with a two point loss instead of the intended one point, and without any consideration of taking their next plan trade, the first continuation buy. This trader is done for the day, but at least they were ‘right’ all along; the swing had gone too far to enter, and their fears had been warranted – this was a losing trade that they should not enter.

Is this a trading method or trading psychology issue? What ‘message’ is TraderB going to take from what has just happened. Will they take the attitude that they should not be blamed, they just can’t trade because of trading psychology? Or, will they acknowledge that the method did win, that the resulting loss was not a method trade, and even if it was, the loss would have been offset by the prior winners. Will they acknowledge that THEY made their worst fears come true and not only turned this into a losing trade, they also increased he size of that loss, and then avoiding another method winning trade.

Granted, psychology was involved with what has happened in the described trading scenario, but that is a function of the individual’s ‘core’ personality, and would most probably be an issue regardless of what was being done; if there is ‘risk’ involved, there will be an ‘emotional’ response. Thus, it is first necessary to separate personal psychology from trading psychology, and the use of this concept as an excuse for trading actions. Then, if trading psychology is going to be controlled, this will be done through the development and implementation of a tested plan that the trader is willing to follow. Do not trade with ‘built-in’ excuses for failing, you will have lost before you begin, and will continue to do so with a continued ‘snowballing’ of emotion to the extent where trading will no longer be possible.

Effective Forex Trading

2009-02-25T02:51:00.000-08:00

Forex Trading Tips

Are you one of those who have heard about Forex trading but not sure what it really is? Or you would like to find forex trading tips on how it works and if you can make money out of it, but not sure whom to ask? Well, I can tell you are not alone in this situation. Many people think that they are familiar with Forex trading, but in reality, most of them think that forex trading has something to do with stocks or bonds.

Forex trading is different from stocks or bonds. It is a type of trading that involves trading of currency pairs. The currencies that are usually chosen for trading are considered above the rest because they are stable and have a greater value than other foreign currencies.

For all the newcomers to the forex market, the first piece of tips is to protect themselves from frauds. If you're new in forex trading, it doesn't hurt to take some advice from the ones who are already engaged in forex trading. In fact, you can make use of their tips for your own good, and even to your advantage.

People across the globe participate in forex trading and that's why it is not surprising to see the kind of frauds that are able to infiltrate the financial market. To shield the legitimate traders from these frauds, they must be made aware of these growing facts, so that they can take suitable actions to protect their trading career.

The opportunities that forex trading provides for different individuals, firms, and organizations is growing rapidly every year. And accompanying this growth is the widespread growth of different scams related with forex trading. But you should not worry because there are a lot of legitimate companies or firms that can help you in forex trading.

The best thing to do is to find these legitimate companies to stay away from fraudulent ones. However, most new traders fall prey to these scammers because of their savory offers.

Don't get fooled by the companies that advertise high profits for minimal risks. The fact is that, if you want to earn high profits, then you are likely subjected to high risks as well. Higher rate of profit means higher risk.

So, always stay on the safer side. If you're looking for a forex trading broker, and since each broker is part of a certain company, make sure that you select a government registered company. In signing any contract with them, double check if they are registered or certified brokers. This is one basic precaution that will prevent any misfortune that you might encounter in the future.

The job of reducing the risk is entirely yours, not that of the broker; so if the company offers or promises little risks, guaranteed profits, and the like, that is a sure sign that they are there to make a fool out of you.

Even if you are not a professional trader, a little use of the common sense can help in long run.

Before actually participating in any forex trade, make sure you have done your homework. Do the research and jot down all the necessary details about the trading transaction that you wish to perform. Ever heard of inter-bank market? Stay away from companies which lure you into trading in the inter-bank market because the currency transactions are negotiated in a wobbly network of large companies and financial institutions.

Also, make sure to check the background or history of the trading company. If a certain company does not disclose information about their background, that should serve as a red flag. It means that you should continue doing transactions with them. Nor is it advisable to transfer/send cash through the mail or the internet. Practice caution in everything you do, and you'll be more than sure that you are always safe.

Fraudulent companies often solicit services and advertise soaring pressure tactics to attract you in participating or joining their services. An offshore company which guarantees no risk and return of profit is a big NO. Always be skeptical and don’t give in to any instant offer that comes your way.

Forex Trading Tips, Training and Analysis

2009-02-25T02:42:00.000-08:00

You can do it too! You can use the Internet to start forex trading and build a new source of income for yourself. I have created this website/weblog to help you to achieve that.

I have been working as an internet marketer for so many years. There are different kinds of home businesses that I can recommend but because of so many scam programs and the raising competition, I prefer to recommend you to learn and work on forex or online foreign currency exchange or currency trading.

There are two good reasons for that: 1- You will not be scammed and 2- Competition will have no effect in this business. In fact, foreign currency exchange is the only business that becomes more profitable for everybody if more people work on it. It is amazing, isn't it?

There are a lot of similarities between currency trading and stock trading but currency trading is easier to learn and work.

There is a risk in this business like others but if you learn it properly, you will be profitable. It is like driving. You will hurt yourself and others if you start driving before you learn it properly. And you will enjoy driving if you do it after passing the training stages and enough practice and experience.

Today we are able to sit at our personal computers and trade so many different currencies in the forex market through the internet and without having to go to any bank or money exchange agency or making even a small phone call. Everything can be done through the internet and from home.

Why Is Forex Trading a Suitable Business?

It is easy to learn: There are a lot of good home businesses but they can be hard for most people. For example, blogging is a good home business but it is impossible for 99% of people because they are not writers and they can not write. You can learn forex trading easily. You just need to be serious and organized.
It is a different home business: In other online home jobs, you have to make websites, advertise, sell, refer, recruit, support and ... but in this business you don't have to do any of these things.
It makes a considerable decent income for you: You can make thousands of dollars through forex trading if you learn it properly. Once you learn it, making money will be as easy as 1, 2, 3. Of course let me tell you again that there is a risk. Those who start currency trading without having enough knowledge and experience will lose and give up. It is like any other business. You have to learn it first.
It is safe: Yes, it is safe because you will not be scammed. Once you learn it and choose a well-known and reliable broker company (you need to join a brokerage company to become able to trade currencies), you will have nothing to be worried about.
It is stable: Forex is an international business not just a business opportunity created by a small local company. So it is a stable business. It is not like other businesses that make money for a limited time only and then become slowed down, bankrupt or closed. Currency market is always ready for the traders to trade and make money.

I publish two different kinds of articles on this weblog: 1- Technical analysis training and 2- Daily Analysis and Signals.

If you are a beginner, you can use the training articles and learn how to trade and make money. If you are already a forex trader, you can take the advantage of my daily reports to trade.

Subscribe for my RSS feed or enter your email address here below and receive my articles and daily analysis reports in your inbox automatically. You will not receive any spam email and your email will not be sold or given to any third party. You can unsubscribe at any time:

Forex Trading

2009-02-25T02:27:00.000-08:00

Forex

The forex (Foreign Exchange) is the currency market. Forex trading is currency trading. You trade currencies by pair : EUR/USD (euro/us dollar), USD/GBP (US dollar, Great Britain Pound), etc. Forex trading is hard to understand if you don't know anything about trading. You can find a lot of Forex informations online, just check some of these pages we selected for you.

The Internet made it possible for invidual to trade currencies from home. The Forex market is the biggest financial market, bigger than the stock market and a lot of people now are trading forex online and are making money. But that's not easy !

Even if online Forex trading is a great opportunity to make huge money online, this is not a game. Yes you may make $1,000 in 5 minutes, but you can also lose these $1,000. Actually if you plan to become a forex trader from home, you better do your homework first. You will need to develop the forex trader skills and one essential is risk management.

Forex trading also has its own vocabulary. You will have to learn what are forex signals and what are the forex charts indicators that will help you.

Here is an online Forex tutorial from FXCM. You can also download it as a .PDF (requires Adobe Reader) or .Doc document. All the basics are explained. I strongly recommend you read it, maybe more than once. It's free, so you have no excuse.

Forex Demo

My second recommendation is to practice a lot. Your forex broker will let you open a free demo forex account and you will trade the real time forex market. Of course this is not real money. I suggest you practice for 3-6 monthes before starting trading forex with your own money in a live account.

You need to know that forex brokers requires a minimal investment to open a forex live account. Marketiva, will let you open a free $10,000 practice account and gives you $5 to trade live.

If you really want to become a forex trader and from your home, you must be patient. Learn to manage risk and practice currency trading a lot with a demo account.

Here is a list of the Forex brokers we recommend.

Forex Signals

When you start forex trading, you don't know when you have to place a trade, when you have to exit it. You can sign up for forex signals subscription. It will cost you some hundreds dollars a year, from $500 to 700. Or you can also subscribe for one month or one week of forex signals. You may think this is high priced but this is also high value.

Signals tell you (by mail or sms) what pair to trade, when exactly to start and stop a trade. You just have to login to your account and enter the data provided. Forex signals are often accurate and an increase of funds averaging 60% to 80% yearly is generally noted.

Here is a list of Forex signals providers.

Managed Forex Accounts

If you have enough money, you can sign up for a managed forex account. These accounts generally require at least $10,000, sometimes more, to be opened. Here you ask your Forex broker to manage the funds for you. The forex broker will ask his forex traders to do the work. So your funds are in the hands of professionnal traders. Risks are really lowered and you don't need to stay at your computer to fight with forex charts. Of course the forex broker will take a percentage (about 20%) of the net profit made.

This is a high percentage, but a little example : you invested $10,000 and the forex trader who manages your money makes 10% ($1,000) profit a month. He takes 20% ($200) of the profit. You still earned $800.

Here is a list of managed forex accounts providers.

Automated Forex Trading
Some forex brokers offer forex autotrading services. You fund your account and choose the pair you want to trade. Then their software receive signals and trade automatically. If your forex broker doesn't offer this option, you can find a software and setup it to autotrade

You will have to add files to called "expert advisors". Nothing difficult, once your trading software is installed, just copy the expert advisor file in the indicated folder. You then can activate the expert advisor and let the trading automated.

Money Management

2009-02-24T20:26:00.000-08:00

Introduction

Money management is the process of knowing where you are spending your money today, and having a well thought-out plan in place for where you want it to go in the future. This program will cover the core concepts of money management, and will teach you how to:

Set Goals
Get Organized
Cut Spending Waste
Build a Budget
Save Money

Setting financial goals is exciting – it is your opportunity to decide what you truly want to do with your money, and to achieve those goals without having to borrow for them.

Set specific goals
Financial goals are specific rather than vague. Before you start to save, determine exactly what you want, when you want it, and how much it will cost.

There are three basic goal types: short-term (achievable in under a year), mid-term (achievable in two to five years), and long-term (achievable in five-plus years). If you have multiple goals, you may choose to work toward them all at once, or concentrate on one and then move to the next. Calculate the amount you need to save:

For short and mid-term goals, the calculation for how much you need to set aside each month is simple: the cost divided by the number of months you have to save.

Example: The laptop computer you want is $800, and you would like it in six months. To reach that goal, you will need to set aside $133 per month ($800/6 = $133).

Long-term goals are a little more complicated because of something positive: you can deposit your savings into an investment vehicle and earn interest, which will help you achieve your final savings goal. Use a financial calculator and plug in the numbers:

Example: Your goal is to save $10,000 in ten years for your child’s higher education. If your annual rate of return (interest) averages eight percent, you will need to set aside just $55 each month.

Note: The interest you can earn depends on the investment product you choose. The higher the reward, though, the greater the risk. Never enter into any investment arrangement before researching and understanding it completely.

Be flexible
When saving for goals, be flexible. If you simply can't manage to put away the amount you thought you could, don’t give up. Consider extending the goal achievement date, reducing the goal amount, or increasing your income so you can save more.

Technical Analysis

2009-02-24T19:57:00.000-08:00

echnical analysis is a security analysis technique that claims the ability to forecast the future direction of prices through the study of past market data, primarily price and volume.^[1] In its purest form, technical analysis considers only the actual price and volume behavior of the market or instrument. Technical analysts, sometimes called "chartists", may employ models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, cycles or, classically, through recognition of chart patterns.

Technical analysis stands in distinction to fundamental analysis. Technical analysis "ignores" the actual nature of the company, market, currency or commodity and is based solely on "the charts," that is to say price and volume information, whereas fundamental analysis does look at the actual facts of the company, market, currency or commodity. For example, any large brokerage, trading group, or financial institution will typically have both a technical analysis and fundamental analysis team.

Technical analysis is widely used among traders and financial professionals, and is very often used by active day traders, market makers, and pit traders. In the 1960s and 1970s it was widely discredited by academic mathematics. In a recent review, Irwin and Park^[2] reported that 56 of 95 modern studies found it produces positive results, but noted that many of the positive results were rendered dubious by issues such as data snooping so that the evidence in support of technical analysis was inconclusive; it is still considered by many academics to be pseudoscience.^[3] Academics such as Eugene Fama say the evidence for technical analysis is sparse and is inconsistent with the weak form of the efficient market hypothesis.^[4]^[5] Users hold that even if technical analysis cannot predict the future, it helps to identify trading opportunities.^[6]

In the foreign exchange markets, its use may be more widespread than fundamental analysis.^[7]^[8] While some isolated studies have indicated that technical trading rules might lead to consistent returns in the period prior to 1987,^[9]^[10]^[11]^[12] most academic work has focused on the nature of the anomalous position of the foreign exchange market.^[13] It is speculated that this anomaly is due to central bank intervention.

General description

Technical analysts (or technicians) seek to identify price patterns and trends in financial markets and attempt to exploit those patterns.^[15] While technicians use various methods and tools, the study of price charts is primary.

Technicians especially search for archetypal patterns, such as the well-known head and shoulders or double top reversal patterns, study indicators such as moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants or balance days.

Critics argue that these 'patterns' are simply random effects on which humans impose causation. Critics state that humans see patterns that aren't there and then ascribe value to them.

Technical analysts also extensively use indicators, which are typically mathematical transformations of price or volume. These indicators are used to help determine whether an asset is trending, and if it is, its price direction. Technicians also look for relationships between price, volume and, in the case of futures, open interest. Examples include the relative strength index, and MACD. Other avenues of study include correlations between changes in options (implied volatility) and put/call ratios with price. Other technicians include sentiment indicators, such as Put/Call ratios and Implied Volatility in their analysis.

Technicians seek to forecast price movements such that large gains from successful trades exceed more numerous but smaller losing trades, producing positive returns in the long run through proper risk control and money management.

There are several schools of technical analysis. Adherents of different schools (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one school. Technical analysts use judgment gained from experience to decide which pattern a particular instrument reflects at a given time, and what the interpretation of that pattern should be.

Technical analysis is frequently contrasted with fundamental analysis, the study of economic factors that influence prices in financial markets. Technical analysis holds that prices already reflect all such influences before investors are aware of them, hence the study of price action alone. Some traders use technical or fundamental analysis exclusively, while others use both types to make trading decisions.

How to Calculate Profit or Loss

2009-02-24T19:50:00.000-08:00

How to Calculate a Profit or Loss

When calculating profit or loss, consider the spread, as well as the interest differential. For easy calculation, use the following tools:

The following examples illustrate how to calculate profit or loss when you close particular trades. (Interest differentials are not considered.)

Example 1:

You see that the rate for EUR/USD is 0.9517/22 and decide to sell 10,000 EUR. Your trade is executed at 0.9517.

10,000 EUR * 0.9517= 9,517.00 USD

You sold 10,000 EUR and bought 9,517.00 USD.

After you trade, the market rate of EUR/USD decreases to EUR/USD=0.9500/05. You then buy back 10,000 EUR at 0.9505.

10,000 EUR *0.9505= 9,505.00 USD

You sold 10,000 EUR for 9,517 USD and bought 10,000 back for 9,505. The difference is your profit:

9,517.00-9,505.00= $12.00 USD

Example 2:

You see that the rate for USD/JPY is 115.00/05 and decide to buy 10,000 USD. Your trade is executed at 115.05.

10,000 USD*115.05= 1,150,500 JPY

You bought 10,000 USD and sold 1,150,500 JPY.

The market rate of USD/JPY falls to 114.45/50. You decide to sell back 10,000 USD at 114.45.

10,000 USD*114.45=1,144,500 JPY

You bought 10,000 USD for 1,150,500 JPY and sold 10,000 USD back for 1,144,500 JPY. The difference is your loss and is calculated as follows: 1,150,500-1,144,500= 6,000 JPY. Note that your loss is in JPY and must be converted back to dollars.

To calculate this amount in USD:

6,000 JPY/ 114.45 = $52.42 USD or
6,000 *1/114.45=$52.42

Trading Platforms

2009-02-24T19:37:00.000-08:00

FOREX Trader is our most robust, feature rich platform.
This Windows-based application offers a highly intuitive
user interface, advanced customization features and a full
suite of professional trading tools.

Advanced charting functionality allows you to spot trends in

the market. Flip between multiple charts and trade setups,

layer on technical studies, even visually track and manage

your open orders and positions directly on the charts.

Customize your trading layouts to suit your style. Try our

pre-set layouts or create and save your own. Tear-off windows

ensure that you're never far from your next trade, even when

working in other programs.

Forex vs. Stocks

2009-02-24T19:25:00.000-08:00

Forex versus Stocks

Forex versus Stocks Advantages
Advantage	Forex	Stocks
24-hour Trading	YES	NO
Commission Free Trading	YES	NO
Instant Execution of Market Orders	YES	NO
Short-Selling without an Uptick	YES	NO

24-Hour Market

The Forex market is a seamless 24-hour market. Most brokers are open from Sunday at 2PM EST until Friday at 4 PM EST with customer service available 24/7. With the ability to trade during the U.S., Asian, and European market hours, you can customize your own trading schedule.

Commission Free Trading

Most Forex brokers charge no commission or additional transactions fees to trade currencies online or over the phone. Combined with the tight, consistent, and fully transparent spread, Forex trading costs are lower than those of any other

market. The brokers are compensated for theirs services through the bid/ask prices.

Instantaneous Execution of Market Orders

Your trades are instantly executed under normal market conditions. You also have price certainty on every market order under normal market conditions. What you click is the price you get. You’re able to execute directly off real-time streaming prices (Yeeeaah!). There's no discrepancy between the displayed price shown on the platform and the execution price to enter your trade. Keep in mind that most brokers only guarantee stop, limit, and entry orders are only guaranteed under normal market conditions. Fills are instantaneous most of the time, but under extraordinarily volatile market conditions order execution may experience delays.

Short-Selling without an Uptick

Unlike the equity market, there is no restriction on short selling in the currency market. Trading opportunities exist in the currency market regardless of whether a trader is long or short, or which way the market is moving. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. So you always have equal access to trade in a rising or falling market.

More Reasons to Like Forex

No Middlemen

Centralized exchanges provide many advantages to the trader. However, one of the problems with any centralized exchange is the involvement of middlemen. Any party located in between the trader and the buyer or seller of the security or instrument traded will cost them money. The cost can be either in time or in fees. Spot currency trading does away with the middlemen and allows clients to interact directly with the market-maker responsible for the pricing on a particular currency pair. Forex traders get quicker access and cheaper costs.

Buy/Sell programs do not control the market

How many times have you heard that "fund A" was selling "X" or buying "Z"? Rumor had it that the funds were taking profits because of the end of the financial year or because today is "triple witching day", all as an explanation of why this stock is up or the market in general is down or positive on the session. The stock market is very susceptible to large fund buying and selling.

In spot trading, the liquidity of the Forex market makes the likelihood of any one fund or bank to control a particular currency very slim. Banks, hedge funds, governments, retail currency conversion houses and large net-worth individuals are just some of the participants in the spot currency markets where the liquidity is unprecedented.

Analysts and brokerage firms are less likely to influence the market

Have you watched TV lately? Heard about a certain Internet stock and an analyst of a prestigious brokerage firm accused of keeping its recommendations, such as "buy" when the stock was rapidly declining? It is the nature of these relationships. No matter what the government does to step in and discourage this type of activity, we have not heard the last of it.

IPO's are big business for both the companies going public and the brokerage houses. Relationships are mutually beneficial and analysts work for the brokerage houses that need the companies as clients. That catch-22 will never disappear.

Foreign exchange, as the prime market, generates billions in revenue for the world's banks and is a necessity of the global markets. Analysts in foreign exchange don't drive the deal flow, they just analyze the forex market.

8,000 stocks versus 4 major currency pairs

There are approximately 4,500 stocks listed on the New York Stock exchange. Another 3,500 are listed on the NASDAQ. Which one will you trade? Got the time to stay on top of so many companies? In spot currency trading, there are dozens of currencies traded, but the majority of the market trades the 4 major pairs. Aren’t four pairs much easier to keep an eye on than thousands of stocks? I’d say so.

Forex History

2009-02-24T19:15:00.000-08:00

n 1967, a Chicago bank refused a college professor by the name of Milton Friedman a loan in pound sterling because he had intended to use the funds to short the British currency. Friedman, ho had perceived sterling to be priced too high against the dollar, wanted to sell the currency, then later buy it back to repay the bank after the currency declined, thus pocketing a quick profit. The bank's refusal to grant the loan was due to the Bretton Woods Agreement, established twenty years earlier, which fixed national currencies against the dollar, and set the dollar at a rate of $35 per ounce of gold.

M. Friedman

The Bretton Woods Agreement, set up in 1944, aimed at installing international monetary stability by preventing money from fleeing across nations, and restricting speculation in the world currencies Prior to the Agreement, the gold exchange standard--prevailing between 1876 and World War I--dominated the international economic system. Under the gold. exchange, currencies gained a new phase of stability as they were backed by the price of gold. It abolished the age-old practice used by kings and rulers of arbitrarily debasing money and triggering inflation.

The Bretton Woods Agreement

But the gold exchange standard didn't lack faults. As an economy strengthened, it would import heavily from abroad until it ran down its gold reserves required to back its money. As a result, money supply would shrink, interest rates rose and economic activity slowed to the extent of recession. Ultimately, prices of goods had hit bottom, appearing attractive to other nations, which would rush into buying sprees that injected the economy with gold until it increased its money supply, and drive down interest rates and recreate wealth into the economy. Such boom-bust patterns prevailed throughout the gold standard until the outbreak of World War I interrupted trade flows and the free movement of gold.

After the Wars, the Bretton Woods Agreement was founded, where participating countries agreed to try and maintain the value of their currency with a narrow margin against the dollar and a corresponding rate of gold as needed. Countries were prohibited from devaluing their currencies to their trade advantage and were only allowed to do so for devaluations of less than 10%. Into the 1950s, the ever-expanding volume of international trade led to massive movements of capital generated by post-war construction. That destabilized foreign exchange rates as set up in Bretton Woods.

The Agreement was finally abandoned in 1971, and the US dollar would no longer be convertible into gold. By 1973, currencies of major industrialized nations became more freely floating, controlled mainly by the forces of supply and demand which acted in the foreign exchange market. Prices were floated daily, with volumes, speed and price volatility all increasing throughout the 1970s, giving rise to new financial instruments, market deregulation and trade liberalization.

In the 1980s, cross-border capital movements accelerated with the advent of computers and technology, extending market continuum through Asian, European and American time zones. Transactions in foreign exchange rocketed from about $70 billion a day in the 1980s, to more than $1.5 trillion a day two decades later.

Introduction to Forex

2009-02-24T18:57:00.000-08:00

Forex (FOReign EXchange market) is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating ones. This is a set of transactions among forex market agents involving exchange of specified sums of money in a currency unit of any given nation for currency of another nation at an agreed rate as of any specified date. During exchange, the exchange rate of one currency to another currency is determined simply: by supply and demand – exchange to which both parties agree.

The scope of transactions in the global currency market is constantly growing, which is due to development of international trade and abolition of currency restrictions in many nations. Global daily conversion transactions came to $1,982 billion in mid-1998 (the London market accounted for some 32% of daily turnover; the New York market exchanged approx. 18%, and the German market, 10%). Not only the scope of transactions but also the rates that mark the market development are impressive: in 1977, the daily turnover stood at five billion U.S. dollars; it grew to 600 billion U.S. dollars over ten years – to one trillion in 1992. Speculative transactions intended to derive profit from jobbing on the exchange rate differences make up nearly 80% of total transactions. Jobbing attracts numerous participants – both financial institutions and individual investors.

With the highest rates of information technology development in the last two decades, the market itself changed beyond recognition. Once surrounded with a halo of caste mystique, the foreign exchange dealer’s profession became almost grasroots. Forex transactions that used to be the privilege of the biggest monopolist banks not so long ago are now publicly accessible thanks to e-commerce systems. And the foremost banks themselves also often prefer trade in electronic systems over individual bilateral transactions. E-brokers now account for 11% of the forex market turnover. The daily scope of transactions of the biggest banks (Deutsche Bank, Barclays Bank, Union Bank of Switzerland, Citibank, Chase Manhattan Bank, Standard Chartered Bank) reaches billions of dollars.

The FOREX market as a place where to apply one’s personal financial, intellectual and psychic power is not designed for attempts at catching a bluebird there. Sometimes someone manages to do so but for a short time only. The key advantage of a forex market is that one can succeed there just by the strength of one’s intelligence.

Another essential feature of the FOREX market, no matter how strange it might seem, is its stability. Everybody knows that sudden falls are very typical of the financial market. However, unlike the stock market, the FOREX market never falls. If shares devalue it means a collapse. But if the dollar slumps, that only means that another currency gets stronger. For instance, the yen strengthened by a quarter against the dollar late in 1998. On some days dollar fell by dozens percentage points. However, the market did not collapse anywhere; trading continued in the usual manner. It is here that the market and the related business stability lie - currency is an absolutely liquid commodity and will be always traded in.

The FOREX market is a 24-hour market that does not depend on certain business hours of foreign exchanges; trade takes place among banks located in different corners of the globe. Exchange rates àre so flexible that significant changes happen quite frequently, which enables to make several transactions every day. If we have an elaborate and reliable trade technology we can make a business, which no other business can match by efficiency. It is not without reason that the pivotal banks buy expensive electronic equipment and maintain the staffs of hundreds of traders operating in different sectors of the FOREX market.

The starting costs of joining this business are very low now. Actually, it costs several thousands of dollars to take a course of initial training, to buy a computer, to purchase an information service and to create a deposit; no real business can be established with this money. With excessive offers of services, finding a reliable broker is also quite a real thing. The rest depends on the trader himself or herself. Everything depends on you personally, as in no other area of business now.
The main thing the market will require for successful operations is not the quantity of money you will enter it with – the main thing is the ability to constantly focus on studying the market, understanding its mechanisms and participants’ interests; this is constant improvement of one’s trade approaches and their disciplined implementation. Nobody has achieved success in that market by forcing one’s way with one’s capital atilt. The market is stronger than anything else; it is even stronger than central banks with their huge foreign exchange reserves. George Soros, a national hero of the FOREX market, did not win the Bank of England at all, as many of us believe – he made the right guess that, with existing contradictions inherent in the European financial system, there were plenty of problems and interests that would not allow to hold the pound. That’s exactly what happened. The Bank of England, having spent nearly $20 billion to maintain the pound rate, jacked it up, by giving it in to the market. The market settled this problem, and Soros got his billion.
The global monetary system has gone a long way during thousands of years of the human history, but it is surely experiencing the most exciting and earlier unthinkable changes. The two main changes determine a new image of the global monetary system:

the money is fully separated from any tangible media;
powerful information and telecommunications technologies made it possible to consolidate monetary systems of different nations into the single global financial system that has no boundaries.

Trade The Currency Market

2009-02-13T00:04:00.000-08:00

I am so tired of people whining and crying about there jobs, the economy or the fact they don't have any money. Well, then if you have any guts, a small amount of intelligence and the will to succeed you will never have to worry about any of that above again. I am going to you how to trade the currency markets and make a killing, even if you don't know a single thing about Forex. It is that easy, I have taught my ten year kid how to trade and he already has his college fund paid for. The little brat is now asking me if he can buy a Porsche when he turns sixteen.

Look, this is so simple anybody can do it. First, lets examine the odds of selecting a currency to purchase you hope will go up in value so that you make money. A currency can only do one of two things, it can increase in value or it can decrease in value. That is it, they can't do anything else. In other words, if you flip a coin when attempting to decide which currency to buy you would be correct fifty percent of the time.

If you almost breaking even when you're flipping a coin to pick a currency, how much better do you think you would do if you just a little about the markets. A lot better is the answer. And if you do a lot better than fifty percent selecting a profitable currency you know what that means? Your worries are over and you can buy anything you want and go anywhere you desire. Life is so tough, when you don't know what you're doing, but when you have a clue it is a breeze.

That was how I started trading the Forex markets and became a professional currency trader, when I finally figured out the odds are all in your favor. Now that I have explained to you how easy it is to make a killing you are going to need to learn how to do it. I have a ton of sophisticated trading and investing techniques I use to make a fortune. But, those aren't for you now, what you need is something that is easy to learn, simple to trade with and is a guaranteed money maker.

I got really lucky when I first started because one of the first currency courses I bought to teach myself the markets was the best one I ever purchased and I have bought at least fifty others since then. I want you to get Forex Trading Made E Z; it is a really inexpensive Forex course and a big time winner when it comes to racking up the profits. It is based on a Forex strategy called "Forex Scalping." Which means you get in and out of the market very quickly and hopefully hit some big numbers. If only takes a few minutes to check out its web site and if you get it, trust me you worries are over if you follow every thing he tells you to do. You can't lose, it is that fool proof.

Forex Trading Fast Money

2009-02-06T01:54:00.001-08:00

If you are searching for some advice on how to make fast money in forex trading, here's something you might want to dig in.
What you need to make money fast at forex is to have a specific method that you can use in your trade. One example is the turtles experiment, conducted by Richard Dennis who strongly believed that forex trading can be learned. As a trader, you need to have the proper knowledge for you to win at forex trading.
To do this, you can do some research from the Internet and other books that can help educate yourself about the basic things that ought to learn in forex trading. Learning does not end in reading, you need to practice it for you to get used to the environment in the forex market and for you to come up with strategies that will help you earn money quickly. You can begin by learning about the technical analysis system that is widely used in forex trading. Learn about the ways on how to trade your odds in the market.
Consider the things that matters most in forex trading such as taking note of the convergence of time and price and when is the perfect time to trade. You need to know how to analyze the movement of the trend. This will help you a lot in your forex trading business.
Forex trading is not easy, but with the properly knowledge and the right method, you will definitely be earning money in no time.

Forex Trading Fast Money

2009-02-06T01:54:00.000-08:00

Forex Trend System

2009-02-06T01:20:00.000-08:00

For what ever reason there are certain Forex trading systems that take off like gang busters and there sales zoom through the roof. I am going to tell you about a product today that is one of, in not the most under appreciated, under utilized currency trading system that producing astounding results that rival or beat any of the more known or popular products.
How do I know this, simple, I use it every day and take wades of cash it makes me right to the bank. The fact of the matter is, that if you concentrate on one of the most popular pairs of currency exchanged on a daily basis, the GBP/USD and you are not using Forex Trend System then you are simply costing yourself a ton of money.
Any person with even the smallest knowledge at all, knows exactly what has been happening to these two currencies over the past few months. I am very happy to say that Forex Trend Systems has now bought me a new mansion on Miami Beach and my own private island off the coast of Thailand due to its extraordinary performance with these two currencies. Don't believe me check out what the have been doing for yourself then.
I don't write about this product much on its own, But if you research my past articles you will find that in almost every article I mention Forex trading systems this item is mentioned. I thought a few of you would get the hint by now. But I guess not. To bad for you, but not to bad for me.
Let me put this as clearly as I can put it. Forex Trend Systems ranks right up there with the best of the best. If you consider yourself a serious player or desire to be a serious player this product needs to be on your computer running constantly.

Forex Brokers

2009-02-06T01:16:00.000-08:00

The decision of which brokerage firm is best for you is as important in the Forex market as it is in the Stock Market. The way of evaluating the various firms differs slightly between the two markets, however. Forex trades do not involve commissions, but they do have what are known as spreads, which is the difference between the price a currency can be purchased and the price for which it can be sold at a given point in time. This spread (which is expressed in "pips") is how the brokerage makes its money, so it serves the same purpose for them as a commission. You can be pretty certain that the spreads vary between brokerage firms just as widely as commissions do in the Stock Market, so investigate this carefully before making your selection. Most brokerages dealing with the Forex market are involved with large financial institutions where the funds are available to provide sufficient leverage for their clients. It is still important to make sure your firm is reliable. They should be registered as a FCM (Futures Commission Merchant), and regulated by the CFTC (Commodity Futures Trading Commission). Most firms offer widely varied packages of tools that assist you in making trading decisions and understanding the market better. They provide information and research that is available to you in many different formats. It is wise to take a little time to study these tools, and to find the ones that are most helpful to you. They are going to end up being very important and you need to be comfortable with them. Look for a firm with a wide variety of account and leverage options. The ability to use the Forex market's advantages in leverage is one of the things that makes it the most attractive to you as an investor, and you want to have the maximum flexibility here. Although there are a few unethical firms operating, a few references and inquires should be able to identify them. This selection process is worth a little effort and an investment of time. It is an investment that is going to the most likely to pay off.

Forex Market Analysis

2009-02-06T01:09:00.000-08:00

Technical analysis is considered to be the opposite of fundamental analysis. Technical analysis looks at the past performance and history of an investment. It relies on data showing this history and current trends and patterns to make predictions of future market activity. It ignores the intrinsic value of the investment in favor of its statistical abstract. The Forex market lends itself to technical analysis rather well. The history of the value of currency pairs is a matter of statistical record and can be easily accessed. Its supporters claim it is the only sure way of understanding the market and predicting its future. This is especially true in the Forex market. Fans of technical analysis say that the economies of modern nations are so very complex that they can not be accurately predicated. It is only in the study of the past history of the currency and the trends that are revealed that a possible glimpse of the future be found. To better understand the difference between fundamental analysis and technical analysis consider this example. If you were interested in determining what flavor of ice cream was the best to buy, the fundamental analyzer would go into the ice cream store and try several different types. He seeks its intrinsic value. The technical analysis man would sit outside the store and take notes on the flavors others are buying to decide which was the most popular and therefore most likely the best. He does not look at the intrinsic value, but relies on the data he gathers from others to make his decision. Of course, in the end, it is going to be his own preference that settles the question, and this is true of the market. Both fundamental analysis and technical analysis are mere tools that help you make the decisions that in the end only you can make.

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Advantages of Forex

Tactical Trading

The Psychology Of Trading

Effective Forex Trading

Forex Trading Tips, Training and Analysis

Why Is Forex Trading a Suitable Business?

Forex Trading

Forex

Forex Demo

Money Management

Technical Analysis

General description

How to Calculate Profit or Loss

How to Calculate a Profit or Loss

Example 1:

Example 2:

Trading Platforms

Forex vs. Stocks

Forex versus Stocks

Buy a copy of School of Pipsology for $49 in PDF format

24-Hour Market

Commission Free Trading

Instantaneous Execution of Market Orders

Short-Selling without an Uptick

More Reasons to Like Forex

No Middlemen

Buy/Sell programs do not control the market

Analysts and brokerage firms are less likely to influence the market

8,000 stocks versus 4 major currency pairs

Forex History

Introduction to Forex

Trade The Currency Market

Forex Trading Fast Money

Forex Trading Fast Money

Forex Trend System

Forex Brokers

Forex Market Analysis