Forex Articles

A.C.T.I.O.N. Plan Overview

2012-02-11T01:39:00.000-08:00

ACCEPT… all possible losses before the battle begins

CENTER … yourself in Mind, Body & Spirit

TRUST … your System and Warrior-Skills

IMAGINE … winning EVERY trade in Mind’s-Eye

ONLY… exist in the PRESENT to control FEAR

NEVER … second-guess yourself after the battle

ACCEPT

all possible losses BEFORE entering the battle!!

This is the Warrior’s GREATEST secret of Personal Empowerment And YOUR’S too

CENTER

Yourself In Mind, Body & Spirit!!

This is accomplished

by “Way” of regular Meditation

to condition your responses!

TRUST

Your Warrior Skills and your SYSTEM!!

It is instinctive to

THINK FEARFULLY…

imagine the result you WANT,

EVERY time you trade!!

IMAGINE

Winning EVERY trade in your Mind’s-Eye!!

99% of All fear is either

Anticipatory or Reflective…

So stay in control by staying in the

NOW, by breathe focus!!

ONLY

Exist in the PRESENT moment to control FEAR!!

Looking back is only good for

COURSE-CORRECTION ONLY!

Just trust YOURSELF & your SYSTEM

and do your BEST!!

NEVER

Second-Guess yourself After battle is over!!

Looking back is only good for

COURSE-CORRECTION ONLY!

Just trust YOURSELF & your SYSTEM

and do your BEST!!

How can I trade foreign currency exchange rates?

2012-02-06T04:36:00.000-08:00

As you can see from the London vacation example,currency exchange rates fluctuate. As the value of one currency rises or falls relative to another, traders decide to buy or sell currencies to make profits. Retail customers also participate in the Forex market, generally as speculators who are hoping to profit from changes in currency rates.

Foreign currency exchange rates may be traded in one of three ways:

On an exchange that is regulated by the Commodity Futures Trading Commission (CFTC). For example, the Chicago Mercantile Exchange offers currency futures and options on futures products. Exchange-traded currency futures and options provide their users with a liquid, secondary market for contracts with a set unit size, a fixed expiration date and centralized clearing.

[1] On an exchange that is regulated by the Securities and Exchange Commission (SEC).

For example, the Philadelphia Stock Exchange offers options on currencies (i.e., the right but not the obligation to buy or sell a currency at a specific rate within a specified time).

Exchange-traded options on currencies have characteristics similar to exchange traded futures and options (e.g.,a liquid, secondary market with a set size, a fixed expiration date and centralized clearing).

In the off-exchange, also called the over-the-counter (OTC) market.

A retail customer trades directly with counterpart and there is no exchange or central clearinghouse to support the transaction. This brochure focuses on the off-exchange foreign currency market.

Momo Trade Failure

2011-12-15T04:52:00.000-08:00

As you can see, the Five Minute Momo Trade is an extremely powerful strategy to capture momentum-based reversal moves. However, it does not always work and it is important to explore an example of where it fails and to understand why this happens.

Figure 5: Five-Minute Momo Trade, EUR/CHF Source: FXtrek Intellichart

The final example of the Five Minute Momo Trade is EUR/CHF on March 21, 2006. In Figure 5, the price crosses below the 20-period EMA and we wait for 20 minutes for the MACD histogram to move into negative territory, putting our entry order at 1.5711. We place our stop at the 20-EMA plus 20 pips or 1.5721 + 20 = 1.5741. Our first target is the entry price minus the amount risked or 1.5711 - (1.5741-1.5711) = 1.5681. The price trades down to a low of 1.5696, which is not low enough to reach our trigger. It

then proceeds to reverse course, eventually hitting our stop, causing a total trade loss of 30 pips.

When trading the Five Minute Momo strategy the most important thing to be wary of is trading ranges that are too tight or too wide. In quiet trading hours where the price simply fluctuates around the 20-EMA, the MACD histogram may flip back and forth causing many false signals. Alternatively, if this strategy is implemented in a currency paid with a trading range that is too wide, the stop might be hit before the target is

triggered.

Conclusion

The Five-Minute Momo Trade allows traders to profit on short bursts of momentum, while also providing the solid exit rules required to protect profits.

Short Trades

2011-12-15T04:26:00.000-08:00

On the short side, our first example is the NZD/USD on March 20, 2006 (Figure 3).

We see the price cross below the 20-period EMA, but the MACD histogram is still positive, so we wait for it to cross below the zero line 25 minutes later. Our trade is then triggered at 0.6294. Like the earlier USD/JPY example, the math is a bit messy on this one because the cross of the moving average did not occur at the same time as when MACD moved below the zero line like it did in our first EUR/USD example. As a

esult, we enter at 0.6294. Our stop is the 20-EMA plus 20 pips. At the time, the 20-EMA was at 0.6301, so that puts our entry at 0.6291 and our stop at 0.6301 + 20pips = 0.6321. Our first target is the entry price minus the amount risked or 0.6291 - (0.6321-0.6291) = 0.6261. The target is hit two hours later and the stop on the second half is moved to breakeven. We then proceed to trail the second half of the position by the 20-period EMA plus 15 pips. The second half is then closed at 0.6262 at 7:10 EST for a total profit on the trade of 29.5pips.

Source: FXtrek Intellichart The example in Figure 4 is based on an opportunity that developed on March 10, 2006, in the GBP/USD. In the chart below, the price crosses below the 20-period EMA and we wait for 10 minutes for the MACD histogram to move into negative territory, thereby triggering our entry order at 1.7375. Based on the rules above, as soon as the trade is triggered, we put our stop at the 20-EMA plus 20 pips or 1.7385 + 20 = 1.7405. Our first target is the entry price minus the amount risked, or 1.7375 - (1.7405 - 1.7375) = 1.7345. It gets triggered shortly thereafter. We then proceed to trail the second half of the position by the 20-period EMA plus 15 pips. The second half of the position is eventually closed at 1.7268 at 14:35 EST for a total profit on the trade of 68.5 pips.

Coincidently enough, the trade was also closed at the exact moment when the MACD histogram flipped into positive territory.

Figure 4: Five-Minute Momo Trade, GBP/USD

Source: FXtrek Intellichart

Long Trades

2011-12-15T03:54:00.000-08:00

Figure 1: Five-Minute Momo Trade, EUR/USD Source: FXtrek Intellichart

Our first example in Figure 1 is the EUR/USD on March 16, 2006, when we see the price move above the 20-period EMA as the MACD histogram crosses above the zero line. Although there were a few instances of the price attempting to move above the 20- period EMA between 1:30 and 2:00 EST, a trade was not triggered at that time because the MACD histogram was below the zero line.

We waited for the MACD histogram to cross the zero line and when it did, the trade was triggered at 1.2044. We enter at 1.2046 + 10 pips = 1.2056 with a stop at 1.2046 -20 pips = 1.2026. Our first target was 1.2056 + 30 pips = 1.2084. It was triggered approximately two and a half hours later. We exit half of the position and trail the remaining half by the 20-period EMA minus 15 pips. The second half is eventually closed at 1.2157 at 21:35 EST for a total profit on the trade of 65.5 pips.

Figure 2: Five-Minute Momo Trade, USD/JPY Source: FXtrek Intellichart

The next example, shown in Figure 2, is USD/JPY on March 21, 2006, when we see the price move above the 20-period EMA. Like in the previous EUR/USD example, there were also a few instances in which the price crossed above the 20-period EMA right before our entry point, but we did not take the trade because the MACD histogram was below the zero line.

The MACD turned first, so we waited for the price to cross the EMA by 10 pips and when it did, we entered the trade at 116.67 (EMA was at 116.57). The math is a bit more complicated on this one. The stop is at the 20-EMA minus 20 pips or 116.57 - 20 pips = 116.37. The first target is entry plus the amount risked, or 116.67 + (116.67-116.37) = 116.97. It gets triggered five minutes later. We exit half of the position and trail the remaining half by the 20-period EMA minus 15 pips. The second half is eventually closed at 117.07 at 18:00 EST for a total average profit on the trade of 35 pips. Although the profit was not as attractive as the first trade, the chart shows a clean and smooth move that indicates that price action conformed well to our rules.

Rules for a Short Trade

2011-12-15T03:46:00.000-08:00

1. Look for the currency pair to be trading above the 20-period EMA and MACD to be positive.

2. Wait for the price to cross below the 20-period EMA; make sure that MACD is either in the process of crossing from positive to negative or crossed into negative territory no longer than five bars ago.

3. Go short 10 pips below the 20-period EMA.

4. For an aggressive trade, place stop at the swing high on a five-minute chart. For a conservative trade, place the stop 20 pips above 20-period EMA

5. Buy back half of the position at entry minus the amount risked and move the stop on the second half to break even.

6. Trail stop by lower of breakeven or 20-period EMA plus 15 pips

Rules for a Long Trade

2011-12-15T03:44:00.000-08:00

1. Look for currency pair trading below the 20-period EMA and MACD to be negative.

2. Wait for price to cross above the 20-period EMA, then make sure that MACD is either in the process of crossing from negative to positive or has crossed into positive territory no longer than five bars ago.

3. Go long 10 pips above the 20-period EMA.

4. For an aggressive trade, place a stop at the swing low on the five-minute chart. For a conservative trade, place a stop 20 pips below the 20-period EMA.

5. Sell half of the position at entry plus the amount risked; move the stop on the second half to breakeven.

6. Trail the stop by breakeven or the 20-period EMA minus 15 pips, whichever is higher.

What's a Momo ?

2011-12-15T03:41:00.000-08:00

The Five Minute Momo Trade looks for a momentum or "momo" burst on very shortterm (five-minute) charts. First, traders lay on two indicators, the first of which is the 20-period exponential moving average (EMA). The EMA is chosen over the simple moving average because it places higher weight on recent movements, which is needed for fast momentum trades. The moving average is used to help determine the trend. The second indicator to use is the moving average convergence divergence (MACD) histogram, which helps us gauge momentum. The settings for the MACD histogram is the default, which is first EMA = 12, second EMA = 26, signal EMA = 9, all using the close price.

This strategy waits for a reversal trade but only takes advantage of it when momentum supports the reversal move enough to create a larger extension burst. The position is exited in two separate segments; the first half helps us lock in gains and ensures that we never turn a winner into a loser. The second half lets us attempt to catch what could become a very large move with no risk because the stop has already been moved to breakeven.

The 5-Minute Forex "Momo" Trade

2011-12-15T03:38:00.000-08:00

Some traders are extremely patient and love to wait for the perfect setup while others are extremely impatient and need to see a move happen quickly or they'll abandon their positions. These impatient traders make perfect momentum traders because they wait for the market to have enough strength to push a currency in the desired direction and piggyback on the momentum in the hope of an extension move. However, once the move shows signs of losing strength, an impatient momentum trader will also be the first to jump ship. Therefore, a true momentum strategy needs to have solid exit rules to protect profits while still being able to ride as much of the extension move as possible.

In this article, we'll take a look at strategy that does just that: the Five-Minute Momo Trade.

Level structures and Candlestick Structures

2011-12-15T01:15:00.000-08:00

Each blue line represents the week estimated high and each read line represents each week estimated Low.

Of course, each set of lines has 5 candlesticks inside, the 5 days of the week.

Every time you draw the High and Low lines for the coming week, you are drawing what I call a “Level Structures”, and there are different structures according to where are the High/Low levels from the past week

I have identified 8 different “Level Structures” and organized them under 2 categories:

1) Regular Level Structures

• Rising Levels

• Falling Levels

• Continued Rising Levels

• Continued Falling Levels

2) Irregular Level Structures

• Middle Channel

• Lower Channel

• Upper Channel

• Wide Channel

On the next 2 pages I describe each structure’s details:

(note: when looking at the graphics on the following two pages, Resistance=High and Support=Low)

According to what structure level we are in, there is a differenet action to take if price hits our High or Low and candlestick patterns are very important here. I have identified and organized the different candlestick patterns that you can find on the 8 structure levels and have named them as A,B,C,D,E,F,G,H,I and Reaching

Structures. Anyway, you should get some reading about candlestick patterns, The Steve Nisson’s book “Japanese Candlestick charting techniques” is the most recommendable one but it is not absolutely necessary,

you can find plenty of information about candlestick patterns on the web for free.

Take a look at the following table:

If you look at the table above, you’ll see that the first two or three candles(days) of the week are the ones that

form the different “candlestick structures”, therefore most of the signals will come up during Wednesdays of

Thursdays except for the reaching structure because this last one can happen on any day of the week.

The “Reaching structure” occurs when price touches our High or Low level but we can’t make it fit into any of

the other 9 structures.

Here is an example of the H structure:

This candlestick pattern (I’m talking about the 2 candles of the now present week) corresponds to the

candlestick structure H, whichs says that when the second bar hits the High we have to go short on the next

day.

Onother example, this one for the A structure:

The A candlestick structure, two small bodie rising candles. We have to go long on the next day of the week.

There’s one thing very important that you should keep in mind. These candlestick patterns I describe

here are not perfect, what I mean is that if you bring up a chart and start to draw the Level Structures

you’ll find that the candlestick patterns wont be perfectly identificable, they wont look just exactly like

the ones I have drawn on the “Candlestick structures ” table above but with time you’ll be able to

identified the different patterns even when they are not perfectly represented on the chart.

The section that starts on the following page of this document will help you to identifiy all the different Level

and Candlestick structures.

Starting Up a trade

2011-12-15T00:50:00.000-08:00

chart from http://www.netdania.com/

Monday 00:00:00 GMT, our trading week has just started. The day opens at 1.2127. Remember our estimated

High/low for the week is 1.2319/1.2014.

At this point when the week just starts, it’s really hard and risky to take any decisions about what is the

direction the quotes will take, our open of 1.2127 is far from both High and Low estimated levels, so what is my call on this situation?

Monday 00:00:00 GMT

no signals for today.

Tuesday 00:00:00 GMT, The second day of our trading week begins. The situation now is a little better

because Monday has finished and now we have at least one finished bar/candlestick on our chart with the

estimated High/Low for the week. Monday has closed at 1.2052 and during the day it has reached a minimum of 1.2040. Again, our estimated High/Low levels are 1.2319/1.2014.

Monday has been very close to reach our Low level. What is my call on this situation?

Tuesday 00:00:00 GMT

no signals for today.

It seems like price is about to reach the Low level, lets wait one more day to see what happens…

Wednesday 00:00:00 GMT, The third day of our trading week begins. Now that Tuesday has finished, lets see what happened. Price went down the whole day, reaching a minimum of 1.1964 and closing at 1.1967.

Our Low level of 1.2014 has been reached and crossed. What is my call on this situation?

Wednesday 00:00:00 GMT

EUR/USD will rise today.

Entry 1.1967

Tp 100 pips

Sl 80 pips Here is the original signal posted at the group’s message board:

The result? EUR/USD went up reaching a maximum of 1.2057 and closing at 1.2021, a + 54 pips gain.

Now, it doesn’t end here. This first concept of “buy when price hits the Low and Sell when price this the High” is a little more complex.

If you Take a daily chart and you start to calculate DeMark’s pivot points for every week, the chart will look like this: Next Articles

Thomas DeMark’s Pivot Points

2011-12-15T00:08:00.000-08:00

As you can imagine, we are going to use Thomas DeMark’s pivot points formula, which is very different from

the traditional one. DeMark’s formula gives you only two levels, High and Low. You wont have the pivot point

and 2 support/resistance levels for the next session, you will only have the High and Low for the next session.

From now on, when I talk about Pivot points I will be referring to DeMark’s pivot points.

At first, you will find DeMark’s pivot points a little harder to calculate because the formula you have to use

depends on the price action of the previous session. Suppose it’s Sunday and we want to calculate the pivot

points for the next week, just like with the traditional formula we have to look at the chart from the previous

session. On this case, if we want to calculate the pivot points for this coming week first we need to look at the

chart from the past week and take note of the High, Low, Open and Close.

chart from http://www.netdania.com/

DeMark’s formula works this way:

You look at the previous week data, High, Low, Open and Close.

Scenario 1

If Close is LOWER than Open (close<open) you have to make this calculations:

High + Low + Close + Low = X

Projections for the coming week are:

HIGH for the coming week = X/2 – Low

LOW for the coming week= X/2 – High

Scenario 2

If Close is HIGHER than Open (close>open) you have to make this calculations:

- 7 -

High + Low + Close + High = X

Projections for the coming week are:

HIGH for the coming week = X/2 – Low

LOW for the coming week= X/2 – High

Scenario 3

If Close is EQUAL to Open (close=open) you have to make this calculations:

High + Low + Close + Close = X

Projections for the coming week are:

HIGH for the coming week = X/2 – Low

LOW for the coming week= X/2 – High

Here’s an example using the same last chart. As you can see it’s a daily chart for EUR/USD and we want to

calculate DeMark’s pivot points for next week, so lets take a look at the past week Open, High, Low and Close:

chart from http://www.netdania.com/

OK, we have the following data from the past week:

High= 1.2204

Low= 1.1899

Open= 1.2024

Close= 1.2128

Now it’s time to calculate DeMark’s pivot points. What do we do first?, we find out what’s the scenario:

Scenario 1 says “If Close is LOWER than Open…”

- 8 -

Lets see, we have Close 1.2128 and Open 1.2024. Is our Close LOWER than our Open? The answer is NO,

so we are not going to use the formula from scenario 1.

Scenario 2 says “If Close is HIGHER than Open…”

Lets see, we have Close 1.2128 and Open 1.2024. Is our Close HIGHER than our Open? The answer is YES,

so we are going to use the formula from scenario 2.

The formula from scenario 2 goes like this:

If Close is HIGHER than Open (close>open) you have to make this calculations:

High + Low + Close + High = X

Projections for the coming week are:

HIGH for the coming week = X/2 – Low

LOW for the coming week= X/2 – High

Now lets replace some words by numbers:

1.2204 + 1.1899 + 1.2128 + 1.2204 = 4.8435

HIGH for the coming week = 4.8435 / 2 – 1.1899 = 1.2319

LOW for the coming week= 4.8435 / 2 – 1.2204 = 1.2014

On our chart, it would look like this:

chart from http://www.netdania.com/

Now we have the estimated High for the coming week (1.2319) and the estimated Low (1.2014).

The first basic rule is: Buy when price hits the Low, and Sell when price hits the High.

Easy, eh?...

Below we have again our chart with the estimated high/low 1.2319/1.2014

The process of analyzing the market and deciding which direction is price going to take today is something like this : Next Article

Pivot Points Basics

2011-12-15T00:00:00.000-08:00

This strategy is almost entirely based on Pivot Points, but not the traditional ones. The most common formula for calculating pivot points is this:

R2 = P + (H - L) = P + (R1 - S1)

R1 = (P x 2) - L

P = (H + L + C) / 3

S1 = (P x 2) - H

S2 = P - (H - L) = P - (R1 - S1)

As you can see, this formula gives you back 5 different levels:

Resistance 2 (R2)

Resistance 1 (R1)

The Pivot (P)

Support 1 (S1)

Support 2 (S2)

chart from http://www.netdania.com/

What you do is take the “High”, “Low” and “close” prices from the previous session and what you get is a

series of 5 different levels that will give you some idea about what will be the range where price is going to

move during the coming session. The “session” can be 1 day, 1 week, 1 month, 4 hours, 8 hours….whatever

you want it to be. So lets say we are day traders and we want to know what are the pivot points for today, what we have to do is to look at the chart from Yesterday and see what was the High, Low and Close and then calculate the pivots using the simple formula explained below. Here’s an example looking at the chart above.

We take a chart from the past session, we want to know the pivot points for this coming day (the coming 24

hours), so what we have to do first is to look at the chart from the past 24 hours. Above, we have a 30 minutes chart for EUR/USD. I have already marked the High(1.1996), Low(1.1839) and Close(1.1871).

We are going to take this data and calculate the pivot points for the next session. First, we calculate the Pivot:

P= (H+L+C)/3 P= (1.1996+1.1839+1.1871)/3 P= 1.1902

It’s very simple math, now that we have the pivot point value we can calculate the support and resistance levels:

R2=1.2059

R1=1.1965

P= 1.1902

S1=1.1808

S2=1.1745

chart from http://www.netdania.com/

Now, above we have the chart for the session we calculated the pivot points for. As you can see, on this

particular case price only touched two levels, the pivot and support 1. I am not going to get into the whole

explanation about how price acts on the different support and resistance levels, first because it would take too

long and second because it’s not necessary. This is just an introduction to pivot points for those who have no

idea of what they are.

So, you take the previous session data, you make a few numbers and you got the 5 levels pivot points for the

next session. Now, this is not the only formula for calculating pivot points and it is not the formula we are going to use (even we are not going to use the formula I’ve been explaining during these 2 pages, I thought it was important for you to know it).

Gaps

2011-12-14T02:31:00.000-08:00

Exhaustion Gaps Exhaustion gaps may occur at the top or bottom of a formation when trends change direction in an atypically quick manner. Gaps of that kind indicate on the direction of next movement of the market and reflect a sudden change in the demand-supply ratio. By a relatively slow reversal of the market you may wait on two exhaustion gaps to left and to right from a consolidation figure when so called exhaustion island is being formed. Real examples of an Exhaustion Gap and Exhaustion Island are shown on Figures 4.51.

Mathematical tools for the technical analysis

2011-12-14T02:00:00.000-08:00

(Technical indicators) | part 1

The quantitative or mathematical tools for the technical analysis called the technical indicators are being obtained as a result of the mathematical processing of prices averaged in time as well as other characteristics of market movements. They are applied to get signals for an additional evaluation of trade channels and patterns analysis by means of the indicators charts. The main groups of technical indicators are moving averages and oscillators.

Moving Averages. A moving average is an average price of a certain currency over a certain time interval (in days, hours, minutes etc) during an observation period divided by these time intervals.

This averaged price is being determined for each regular interval beginning from the first. A moving average has a smoother line than the underlying currency because statistical ‘noises’ are excluded to provide more convenient visualization of the currency activity. A moving average may be used as a special indicator or to create an oscillator. The moving average may be based on the midrange level or on a daily average of the high, low, and closing prices. The charts of moving averages are being plotted within same coordinates with an underlying price chart (See Figures 4.53 – 4.56). Technical analysis uses the next three types of moving averages:

1. The simple moving average or arithmetic mean (SMA).

2. The linearly weighted moving average (LMA). This type of average assigns more weight to the more recent closings. This is achieved by multiplying the last day's price by one, and each closer day by an increasing consecutive number. In our previous example, the fourth day's price is multiplied by 1, the third by 2, the second by 3, and the last one by 4; then the fourth day's price is deducted. The new sum is divided by 9, which is the sum of its multipliers.

3. The exponentially smoothed moving average (EMA) which provides the best smoothing of data averaged taking into account the previous price information of the underlying currency.

In Figure 4.53 is shown the difference in reading of different types of moving averages

Elliott wave theory

2011-12-14T01:53:00.000-08:00

he Elliott Waves Principle is a system of empirically derived rules about the amount of ascending and descending waves during the history of a market movement. This theory postulates that all the market movement consists of cycles containing 8 waves each including five waves in the direction of the trend at one larger scale and three waves against that trend. In a rising market, this five wave/three-wave pattern forms one complete bull market/bear market cycle of eight waves. The five-wave upward movement as a whole is referred to as an impulse wave with sub waves labeled with figures while the three-wave counter trend movement is described as a corrective wave with sub waves labeled with letters (See Figure 5.1). Amplitudes of the correction waves subordinate certain rules: a second wave may never retrace more than 100 percent of a first wave (for example, in a bull market, the low of the second wave may not go below the beginning of the first wave); the third wave is never the shortest wave in an impulse sequence, often, it is the longest; a fourth wave can never enter the price range of a first wave (see Figure 5.2) As the illustration shows, waves of any degree in any series can be subdivided and resubdivided into waves of smaller degree or expanded into waves of larger degree. Furthermore, smaller-scale movements link up to create larger-scale movements possessing the same basic form. Conversely, large-scale movements consist of smaller-scale subdivisions with which they share a geometric similarity. Because these movements link up in increments of five waves and three waves, they generate sequences of numbers that the analyst can use (along with the rules of wave formation) to help identify the current state of pattern development, as shown in Figure 5.3.

Extentions In any given five-wave sequence, a tendency exists for one of the three impulse sub waves (i.e., wave 1, wave 3, or wave 5) to be an extension—an elongated movement, usually with internal subdivisions. At times, these subdivisions are of nearly the same amplitude and duration as the larger degree waves of the main impulse sequence, giving a total count of nine waves of similar size rather than the normal count of five for the main sequence (See Figure 5.4).

Extensions can provide a useful guide to the lengths of future waves. Most impulse sequences contain extensions in only one of their three impulsive sub waves. Thus, if the first and third waves are of about the same magnitude, the fifth wave probably will be extended, especially if volume during the fifth wave is greater than during the third.

Diagonal Triangles There are certain patterns resembling known from the technical analysis theory including two types of triangles, which are to be considered from the Elliott Wave theory position. The diagonal triangle type 1 occurs only in fifth waves and in С waves, and it signals that the preceding move has "gone too far, too fast," as Elliott put it. Essentially a rising wedge formation defined by two converging trend lines, type 1 diagonal triangles indicates exhaustion of the larger movement. Unlike other impulse waves, all of the patterns' sub-waves, including waves 1, 3, and 5, consist of three wave movements, and their fourth waves often enter the price range of their first waves, as shown in Figures 5.5 and 5.6. A rising diagonal triangle type 1 is bearish, because it is usually followed by a sharp decline, at least to the level where the formation began.

In contrast, a falling diagonal type 1 is bullish, because an upward thrust usually follows. The diagonal triangle type 2 occurs even more rarely than type 1. This pattern, found in first wave or A-wave positions in very rare cases, resembles a diagonal type 1 in that it is defined by converging trend lines and its first wave and fourth wave overlap, as shown in Figure 5.7.

However, it differs significantly from type 1 in that its impulsive sub waves (waves 1, 3, and 5) are normal, five-wave impulse waves, in contrast to the three-wave sub waves of type 1. This is consistent with the message of the type 2 diagonal triangle, which signals continuation of the underlying trend, in contrast to the type 1’s message of termination of the larger trend.

Failures (Truncated Fifths) Elliott used the word failure to describe an impulse pattern in which the extreme of the fifth wave fails to exceed the extreme of the third wave. Figures 5.8 and 5.9 show examples of failures in bull and bear markets. As the illustrations show, the truncated fifth wave contains the necessary impulsive (i.e., five-wave) substructure to complete the larger movement. However, its failure to surpass the previous impulse wave's extreme signals weakness in the underlying trend, and a sharp reversal usually follows.

Technische Analyse | Teil 1

2011-12-14T01:46:00.000-08:00

Das Ziel und Grundlagen der technischen Analyse Technische Analyse ist für die Vorhersage von Marktbewegungen verwendet (dh Veränderungen in Währungen Preise, Mengen und offenen Interessen) ausgehende aus den Informationen über die Vergangenheit erhalten. Die wichtigsten Instrumente der technischen Analyse sind verschiedene Arten von Diagrammen, welche Währungen Preisänderung stellen während einer bestimmten Zeit vor Austausch-Angebote, sowie technische Indikatoren. Letztere sind als Ergebnis der mathematischen Verarbeitung der Mittelung und andere Merkmale der Preisbewegungen erhalten. Die Instrumente der technischen Analyse sind universell und gelten für alle Forex-Sektor, jede Währung und jede Zeitspanne.

Technische Analyse ist leicht zu berechnen, was wichtig ist, während die technischen Dienstleistungen zu werden immer ausgefeilter und preiswert. Sie sind für alle Forex Teilnehmer unabhängig von ihrer Handel Pläne, Strategien anzuwenden und den Zeitpunkt der Stellung Fortsetzung.

Dow Theory

Die grundlegenden Prinzipien der technischen Analyse sind auf der Dow-Theorie mit den folgenden Hauptthese zugrunde:

1. Der Preis ist eine umfassende Reflexion der alle Kräfte des Marktes. Zu jedem gegebenen Zeitpunkt werden alle Marktinformationen und Kräfte in der Währung Preise ("Der Markt weiß alles") nieder.

2. Preisbewegungen sind Trendfolger ("Trend is your friend"); Trends sind als up-Trends (bullish), Abwärtstrends (bearish) und flach (seitwärts) klassifiziert. 4,3 - Beispiele erwähnt Trends basieren auf Fakten 4.1.

3. Preisbewegungen sind historisch wiederholende ("Die Geschichte wiederholt sich"), die in den gleichen Mustern in regelmäßigen Abständen neu aufkommende die Charts Ergebnisse.

4. Der Markt hat drei Trends: die längste (ca. 1 Jahr) major, oder primäre, weniger dauerhaft (1 Monat und mehr) Zwischen-oder Sekundär-, und eher kurz (einige Tage oder Wochen) gering. Der primäre Trend hat drei Phasen: Akkumulation, run-up/run-down und Vertrieb. Auf diese Weise, in der Ansparphase einer Hausse der klügsten Händler geben neue Positionen. In der run-up/run-down Phase, die Mehrheit des Marktes schließlich "sieht" Bewegung und springt auf den Zug. Schließlich, in der Vertriebsphase, nehmen Sie die schärfsten Händler ihre Gewinne und schließen ihre Positionen, während die Allgemeinen Geschäftsbedingungen Interesse verlangsamt in einer Überschreitung Markt. Der sekundäre Trend ist eine Korrektur an den primären Trend und kann nachvollziehen zu einem Drittel, der Hälfte oder zwei Drittel aus dem primären Trend.

In Rahmen einer großen Trend kann eine beliebige Anzahl von sekundären oder nur geringfügige Trends sein. Der Aufbau eines Aufwärtstrend ist in Abbildung 4.5 dargestellt.

5. Trends bestehen, bis sie gebrochen werden (siehe Abbildungen 4.2, 4.3) und deren Umkehrungen sind bestätigt. Abbildung 4.4 zeigt Beispiele für Umkehrungen in ein rückläufiges Devisenmarkt. Die Kaufsignale entstehen an den Punkten A und В, wenn die Währung der vorherigen Hochs übertrifft.

6. Volume muss bestätigen den Trend. Volume besteht aus dem Gesamtbetrag der Währung innerhalb eines Zeitraums, in der Regel 1 Tag gehandelt. Große Handelsvolumen darauf hin, dass es Interesse und Liquidität in einem bestimmten Markt und geringem Volumen, warnt der Händler auf Positionen zu schließen. Das Open Interest ist die gesamte Exposition oder herausragende Stellung, in ein bestimmtes Instrument. Volumen und Open Interest Figuren sind aus verschiedenen Quellen zur Verfügung, obwohl einen Tag zu spät, wie die Nachrichtenagenturen (Bridge Information Systems, Reuters,

Bloomberg), Zeitungen (Wall Street Journal, dem Journal of Commerce), wöchentlich gedruckten Karten (Commodity Perspective, Commodity Trend Service).

Prozentuale Maßnahmen der Preis Umkehrungen. Der Preis für eine ausländische Währung auch auf die stärksten Trends ist nicht ständig in Bewegung nach oben oder unten. Traders Uhr möglich Auflösungen (eine Änderung der Bewegungsrichtung) an bestimmten Punkten der Charts. Es gibt drei folgenden typischen Punkte einer möglichen Umkehr, die auf ein Diagramm in Prozent gegenüber dem vorangegangen Bewegungen (prozentuale Kürzungen) markiert werden können:

1. Neben Charles Dow eine Umkehr bis traditionell, die nach dem Preis nach unten 3.1 (33%), ½ (50%) oder 3.2 (66%) der neuesten aufstehen bestanden hat. Die Umkehr nach 66% ist als Trend-Korrektur berücksichtigt.

2. Mit Fibonacci-Konstanten kann man für eine Umkehr zu warten bis der Abwärtstrend zeigt auf 0,382 (38%), 0,5 (50%) und 0.618 (62%) der neuesten aufstehen.

3. Neben Gann muss man für eine Umkehr zu warten bis nach jeder 1 / 8 der jüngste Anstieg bis auf dem Weg nach unten

La dépendance sur le Forex facteurs financiers et sociopolitiques

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Les facteurs financiers sont essentiels à l'analyse fondamentale. Les changements dans les politiques monétaires ou budgétaires d'un gouvernement sont tenus de produire des changements dans l'économie, et elles seront reflétées dans les taux de change. Les facteurs financiers devrait être déclenché que par des facteurs économiques. Lorsque les gouvernements se concentrent sur différents aspects de l'économie ou ont d'autres responsabilités internationales, les facteurs financiers peuvent avoir la priorité sur les facteurs économiques. Cela a été douloureusement vrai dans le cas du Système monétaire européen (SME) dans le début des années 1990. Les réalités du marché a révélé l'artificialité sous-jacente de cette approche.

Le rôle des taux d'intérêt. Utiliser le taux d'intérêt indépendamment de l'environnement économique réelle s'est traduite par une stratégie très coûteuse.Parce change, par définition, se compose de transactions simultanées dans deux monnaies, il s'ensuit que le marché doit se concentrer

sur les deux taux d'intérêt respectifs ainsi. C'est le différentiel de taux d'intérêt, un facteur de base dans les marchés. Traders réagir lorsque les changements de taux d'intérêt différentiel, pas simplement lorsque les taux d'intérêt se changer. Par exemple, si tous les pays du G-5 a décidé de simultanément réduire leurs taux d'intérêt de 0,5 pour cent, le mouvement serait neutre pour les devises étrangères, car les différentiels de taux d'intérêt serait également neutre. Bien sûr, la plupart du temps les taux d'actualisation sont coupés de façon unilatérale, un geste qui génère des changements tant dans le différentiel d'intérêt et le taux de change. Traders l'approche du taux d'intérêt, comme tout autre facteur, la négociation sur les attentes et les faits.

Par exemple, si la rumeur dit que le taux d'actualisation sera coupé, la monnaie respectifs seront vendus avant le fait. Une fois la coupe se produit, il est fort possible que la monnaie va être racheté, ou l'inverse. Un changement inattendu des taux d'intérêt est susceptible de déclencher un mouvement de devises nettes.

Autres facteurs affectant la décision de transaction sont les délais entre la rumeur et la réalité, les raisons derrière le changement de taux d'intérêt et l'importance perçue du changement. Le marché général des prix dans un changement de taux d'actualisation qui a été retardé. Comme il est un fait accompli, il est neutre au marché. Si le taux d'escompte a été changé pour des raisons politiques plutôt qu'économiques, une pratique courante dans le Système monétaire européen, les marchés sont susceptibles d'aller à l'encontre des banques centrales, coller aux fondamentaux réels plutôt que les politiques. Ce qui s'est passé dans les deux Septembre 1992 et l'été 1993, quand les banques centrales européennes ont perdu des sommes sans précédent essayant de soutenir leurs monnaies, malgré des taux d'intérêt élevés. Le marché perçu ces taux d'intérêt artificiellement élevés et, par conséquent, agressivement vendu les monnaies respectives. Enfin, les commerçants face à l'importance perçue d'un changement dans le différentiel de taux d'intérêt.

Les crises politiques influence. Une crise politique est communément dangereux pour le Forex, car elle peut déclencher une forte diminution des volumes d'échanges. Les prix dans des conditions critiques sécher rapidement, et parfois les écarts entre l'offre et à sauter de 5 pips à 100 pips. Contrairement prévisibles événements politiques (élections du parlement, etc interétatiques conclusion d'accords), qui ont généralement lieu dans un moment précis et de donner au marché la possibilité d'adopter, les crises politiques et venir frapper soudainement.Les cambistes ont un talent pour répondre aux crises. Les commerçants doivent réagir aussi vite que possible pour éviter de grosses pertes. Ils peuvent ne pas avoir beaucoup de temps pour prendre des décisions, souvent, ils ont seulement quelques secondes. Retour sur le marché après une crise est souvent problématique.

Frühindikatoren

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• Die Frühindikatoren aus den folgenden wirtschaftlichen Indikatoren:

• Durchschnittliche Wochenarbeitszeit von Produktionsarbeiter in der Industrie

• Durchschnittliche Wochenarbeitszeit Ansprüche auf staatliche Arbeitslosenversicherung

• Neue Aufträge für Konsumgüter und Materialien (inflationsbereinigt)

• Hersteller Leistung (Unternehmen erhalten langsamere Lieferungen von Lieferanten)

• Verträge und Aufträge für Maschinen und Anlagen (inflationsbereinigt)

• Neue Baugenehmigungen

• Ändern Sie in der offenen Bestellungen der Hersteller, langlebige Güter

• Ändern Sie in empfindlichen Materialien Preise

Persönliches Einkommen ist das Einkommen von Einzelpersonen, gemeinnützigeInstitutionen und private Vertrauen erhalten Fonds. Komponenten dieses Indikators werden Löhne und Gehälter, Mieteinnahmen, Dividenden, Zinsen Ertrags-, und Transferzahlungen (Social Security, staatlichen Arbeitslosenversicherung und Veteranen Leistungen). Die Löhne und Gehälter spiegeln die wirtschaftlichen Rahmenbedingungen. Dieser Indikator wird entscheidend für die Sales-Bereich. Ohne eine ausreichende persönliche Einkommen und eine Neigung zu erwerben, Verbraucher Käufe von langlebigen und Verbrauchsgüter sind begrenzt. Für FXHändler, persönlichen Einkommen ist nicht signifikant.

Les dépenses de consommation des indicateurs

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Indice du coût de l'emploi (ECI) des mesures salaires et l'inflation et fournit une analyse complète de la rémunération des travailleurs, y compris les traitements, salaires et avantages sociaux. Indicateurs des dépenses de consommation fondées sur des données en raison du volume vente au détail est important pour le Forex, car il montre le niveau de demande des consommateurs et de leurs sentiments, ce qui est des données initiales pour le calcul des autres indicateurs tels que national brut et le produit intérieur brut.

Généralement, le chiffre de l'emploi le plus couramment utilisé n'est pas le taux de chômage mensuel, qui est libérée sous forme de pourcentage, mais le taux de salariés non agricoles. Le chiffre taux est calculé comme le rapport de la différence entre la population active totale et la population active occupée, divisée par la population active totale. Les données sont plus complexes, cependant, et elle génère plus d'informations. Dans le Forex, les indicateurs standards suivis par les commerçants sont le taux de chômage, la rémunération de fabrication, emplois non agricoles, le revenu moyen, et semaine de travail moyenne. Généralement, les données sur l'emploi les plus significatives sont la masse salariale de fabrication et non agricoles, suivie par le taux de chômage.Les ventes au détail sont un important consommateur de dépenses indicateur de cambistes, car il montre la force de la demande des consommateurs ainsi que la confiance des consommateurs. En tant qu'indicateur économique, les ventes de détail sont particulièrement importants dans les Etats-Unis. Contrairement à d'autres pays comme le Japon, l'accent de l'économie américaine est le consommateur. Si le consommateur a suffisamment de revenus discrétionnaires, ou assez de crédit pour cette matière, de la marchandise alors plus seront produites ou importées. Détail des chiffres de ventes de créer un processus économique de «ruissellement up" pour le secteur manufacturier. L'aspect saisonnier est important pour cet indicateur économique. Le mois de vente au détail qui sont les plus regardées par les commerçants de change sont Décembre, en raison de la saison des vacances, et Septembre, le mois de retour à l'école. De plus en plus, Novembre est devenu un mois important, en raison de l'évolution dans l'ex soldes d'après Noël pour pré-Décembre jours de vente. Un autre phénomène intéressant s'est produit aux États-Unis, malgré la récession économique dans le début des années 1990. Le volume des ventes au détail a été exceptionnellement élevée tandis que la marge bénéficiaire a été beaucoup plus minces. La raison en était déplacement du consommateur vers les magasins discount. Traders regarder les ventes au détail près pour évaluer la solidité globale de l'économie et, par conséquent, la force de la monnaie. Cet indicateur est publié sur une base mensuelle.La confiance des consommateurs est une enquête auprès des ménages qui est conçu pour évaluer la propension directement individuel pour dépenser de l'argent pour augmenter ou de maintenir au même niveau de leurs dépenses liées à la satisfaction des besoins domestiques courants et, par implication, - la situation sur le marché du travail du marché.Malgré l'importance de l'industrie automobile en termes de production et les ventes, le niveau des ventes d'automobiles ne sont pas un indicateur économique largement suivie par les commerçants étrangers exchangen. Les constructeurs américains ont connu une longue, une perte constante de parts de marché, seulement pour commencer à rebondir dans le début des années 1990. Mais l'automobile est devenue de plus en plus internationalisé, avec des voitures américaines étant assemblé en dehors des Etats-Unis et du Japon et des voitures allemandes assemblés aux États-Unis. En raison de leur nature confuse, les ventes de voitures chiffres ne peuvent pas facilement être utilisées dans l'analyse de change.

Indikatoren für die Beschäftigung

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Die Erwerbsquote ist ein wirtschaftlicher Indikator mit Bedeutung in mehrere Bereiche. Die Beschäftigungsquote, natürlich, Maßnahmen der Solidität einer Volkswirtschaft (siehe Abbildung 3.1). Die Arbeitslosenquote ist ein RückstandKonjunkturindikator. Es ist ein wichtiges Merkmal zu erinnern, vor allem in Zeiten wirtschaftlicher Rezession. Während die Menschen auf die Gesundheit und Erholung der Job-Sektor zu konzentrieren, ist die Beschäftigung die letzte Konjunkturindikatorzum Rebound. Wenn die wirtschaftliche Kontraktion abzubauenden Stellenverursacht, dauert es länger, psychologische Vertrauen in die wirtschaftliche Erholung auf der Führungsebene zu erzeugen, bevor neue Positionen hinzugefügt werden. Auf individueller Ebene kann die Verbesserung der Arbeit Aussichtengetrübt, wenn neue Stellen in kleinen Unternehmen aufgenommen werden und somitnicht vollständig in den Daten wider. Die Beschäftigung Berichte sind sie wesentlich für den Finanzmärkten im Allgemeinen und Devisen im Besonderen. In Devisen,werden die Daten wirklich affektiven in Zeiten des wirtschaftlichen Übergangs-Recovery und Kontraktion. Der Grund für die Indikatoren "Bedeutung inextremen wirtschaftlichen Situationen liegt in der Bild, das sie der Gesundheit der Wirtschaft malen und in den Reifegrad eines Konjunkturzyklus. Eine abnehmendeZahl der Arbeitslosen Signale einer reifenden Zyklus, während das Gegenteil für einesteigende Arbeitslosigkeit Indikator wahr.

Merchandise trade balance

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It’s one of the most important economic indicators. Its value may trigger long-lasting changes in monetary and foreign policies. The trade balance consists of the net difference between the exports and imports of a certain economy. The data includes six categories:

1. food,

2. raw materials and industrial supplies,

3. consumer goods,

4. autos,

5. Capital goods,

6. Other merchandise.

A separate indicator that belongs to that group is the “US – Japan Merchandise Trade Balance”.

Inflation indicators

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Traders watch the development of inflation closely, because the method of choice for fighting inflation is raising the interest rates, and higher interest rates tend to support the local currency.

To measure inflation traders use economic tools considered below.

Producer price index (PPI) is compiled from most sectors of the economy, such as manufacturing, mining, and agriculture. The sample used to calculate the index contains about 3400 commodities. The weights used for the calculation of the index for some of the most important groups are: food—24 percent; fuel—7 percent; autos—7 percent; and clothing—6 percent. Unlike the CPI, the PPI does not include imported goods, services, or taxes.

Consumer price index (CPI) reflects the average change in retail prices for a fixed market basket of goods and services. The CPI data is compiled from a sample of prices for food, shelter, clothing, fuel, transportation, and medical services that people purchase on a daily basis. The weights attached for the calculation of the index to the most important groups are: housing—38 percent; food—19 percent; fuel—8 percent; and autos—7 percent. The two indexes, PPI and CPI, are instrumental in helping traders measure inflationary activity, although the Federal Reserve takes the position that the indexes overstate the strength of inflation.

Gross national product implicit deflator is calculated by dividing the current dollar GNP figure by the constant dollar GNP figure.

Gross domestic product implicit deflator is calculated by dividing the current dollar GDP figure by the constant dollar GDP figure. Both the GNP and GDP implicit deflators are released quarterly, along with the respective GNP and GDP figures. The implicit deflators are generally regarded as the most significant measure of inflation.

Commodity Research Bureau's (CRB) Futures Index makes watching for inflationary trends

easier. The CRB Index consists of the equally weighted futures prices of 21 commodities. The components of the CRB Index are:

• Precious metals: gold, silver and platinum

• Industrials: crude oil, heating oil, unleaded gas, lumber, copper, and cotton

• Grains: corn, wheat, soybeans, soy meal, soy oil

• Livestock and meat: cattle, hogs, and pork bellies

• Imports: coffee, cocoa, sugar

• Miscellaneous: orange juice

The preponderance of food commodities makes the CRB Index less reliable in terms of general inflation. Nevertheless, the index is a popular tool that has proved quite reliable since the late 1980s.

The “Journal of Commerce” industrial price index (JoC) consists of the prices of 18 industrial

materials and supplies processed in the initial stages of manufacturing, building, and energy production. It is more sensitive than other indexes, as it was designed to signal changes in inflation prior to the other price indexes.

Construction Data

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Construction indicators constitute a significant group that is included in the calculation of the GDP of the

United States

. Moreover, housing has traditionally been the engine that pulled the

U.S.

economy out of recessions as it did after World War II. These indicators are classified into three major categories:

1. housing starts and permits

2. new and existing one-family home sales; and

3. construction spending.

Construction indicators are cyclical and very sensitive to the level of interest rates (and consequently mortgage rates) and the level of disposable income. Low interest rates alone may not be able to generate a high demand for housing, though. As the situation in the early 1990s demonstrated, despite historically low mortgage rates in the

United States

, housing increased only marginally, as a result of the lack of job security in a weak economy. For example, in spite of the 2000 – 2001 recession, the cost of houses in California hardly decreased. Housing starts between one and a half and two million units reflect a strong economy, whereas a figure of approximately one million units suggests that the economy is in recession.

Industrial sector indicators

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Industrial Production indicator consists of the total output of a nation's plants, utilities, and mines. From a fundamental point of view, it is an important economic indicator that reflects the strength of the economy, and by extrapolation, the strength of a specific currency. Therefore, foreign exchange traders use this economic indicator as a potential trading signal.

Capacity utilization indicator consists of total industrial output divided by total production capability. The term refers to the maximum level of output a plant can generate under normal business conditions. In general, capacity utilization is not a major economic indicator for the foreign exchange market. However, there are instances when its economic implications are useful for fundamental analysis. A "normal" figure for a steady economy is 81.5 percent. If the figure reads 85 percent or more, the data suggests that the industrial production is overheating, that the economy is close to full capacity. High capacity utilization rates precede inflation, and expectation in the foreign exchange market is that the central bank will raise interest rates in order to avoid or fight inflation.

Factory orders refer to the total of durable and nondurable goods orders. Nondurable goods consist of food, clothing, light industrial products, and products designed for the maintenance of durable goods. Durable goods orders are discussed separately. The factory orders indicator has limited significance for foreign exchange traders.

Durable goods orders consist of products with a life span of more than three years. Examples of durable goods are autos, appliances, furniture, jewelry, and toys. They are divided into four major categories: primary metals, machinery, electrical machinery, and transportation. In order to eliminate the volatility pertinent to large military orders, the indicator includes a breakdown of the orders between defense and non-defense. This data is fairly important to foreign exchange markets because it gives a good indication of consumer confidence. Because durable goods cost more than non durable, a high number in this indicator shows consumers' propensity to spend. Therefore, a good figure is generally bullish for the domestic currency.

Business inventories consist of items produced and held for future sale. The compilation of this information is facile and holds little surprise for the market. Moreover, financial management and computerization help control business inventories in unprecedented ways. Therefore, the importance of this indicator for foreign exchange traders is limited.