Forex Intraday

Open Forex Account for Better Forex Trading

2012-06-21T01:24:00.002-07:00

As beginner in Forex trading, there are a few things that you should bear in mind prior to entering this industry. You must be prepared at the earliest by gaining leverage on some beneficial tools and strategies in order to have a profitable broker. Before entering the business, an obvious fact to consider is to open forex account.

After you select a particular brokerage company that you would like to work with it is advised to open forex account. This can help you make mock or practice trades. Once you open forex account, it is also essential that you keep your demo account open as well. This helps you experiment with alternate trades which in turn assist you in developing good trading strategies as well as gaining information and facts about trading. By trying out different trading amounts and then making a comparison on their respective outcomes, you will understand if you are liberal or a traditional sort of trader.

After you do open account, you should look for information and insights on forex, the operational manner of the market, different terminologies used in trading and how to use this information to be profitable for you. These relevant facts can be easily found out online as online forex trading is the largest financial industry in the world today.

Hence, one can find various kinds of tutorials, forex demo accounts, tools etc on the internet.
Keeping a good track of other aspects such as the social, political and economical scenarios apart from you opening a account also gives you an idea about the currency rates in different countries around the world.

After you open account, you will be exposed to the nitty-gritties in forex trading which will give you a whole idea about how the forex market works. Thus, on a trial-and-error basis, you can learn how to avoid mistakes and make improvisations and quick, yet, smart decisions for your online trading business.
Forex trading can be highly profitable but it is also accompanied with risks as well as doubts. But if you open forex account, at least you know you are well prepared to face those risks and devise concrete strategies to overcome losses, if any.

Learning Forex Trading System

2009-06-17T11:43:00.000-07:00

There are a great number of people that are interested in investing in order to make a tidy profit. There are many ways to invest and many ways to make profits by investing. One method that has been gaining in popularity is that of the Forex trading system. If you are unsure of what this is, let me explain. Forex stands for foreign exchange. A Forex trading system is defined as the simultaneous exchange of one countries currency for another countries currency. If you would like more information, please let this be your guide to learning a Forex trading system.

The Forex trading system involves trading some of the world's most major currencies. These are: the dollar, yen, British pound, Swiss franc, and the Euro. The way the exchange rates of these types of currencies change is based on economic growth. An example: Sometimes the Dollar is worth more than the British pound because the United States was in a period of economic growth while Britain was on the decline. This can be because the unemployment rate was declining in the United States, while on the rise in Britain. Another example: the export rate is up in Asia so the yen is worth more than the Swiss franc where the export rate is down. Economic growth changes daily, so the value of these currencies changes daily. You need to learn to watch for these changes in order to make any money with the Forex trading system.

The Forex Trading system is much larger than that of all U.S. stock markets combined. In fact, the Forex Trading system makes about 1.9 trillion dollars each year. This is 30 times larger than the U.S. stock markets. Also, Forex trading is done throughout the entire world, so it is available 24 hours a day, unlike the U.S. stock markets.

You can learn the Forex trading system for free online at various websites. Many websites offer a free demo account and free Forex trading System training. This way you can practice everything you learn for free, without investing or losing any real money. Then when you get a feel for the Forex trading system, many websites offer a free 30 day trial or free trades to new investors. It is best to utilize some of this free training and the free demo accounts before you start investing your own money.

Now that you understand the Forex trading system a little better, you may wish to get out there and start investing. There is a lot of money to be made, or lost. Be careful and make sure you get the proper training first. With the right frame of mind, you may be able to make some healthy sums of cash through the Forex trading system!

Fibonacci Retracement

2009-06-01T08:01:00.000-07:00

For me, fibonacci is my favourite tools to use in trading. Understanding a fibonacci a will be great benefit and also give a great profit in forex trading. Look at the vidoe below and hope you will get an idea to trade using fibonacci retracement. I believe whatever forex platform you choose, it will be have a fibonacci to use in your chart.

Using Fibonacci Retracements with Support & Resistance Levels in Forex

2009-05-31T02:23:00.000-07:00

One of the capital attempt of applying abstruse assay to forex trading in a assisting address is that you appetite to see assorted confirmations for an access point afore you absolutely access the market.

If you are authoritative trading decisions based aloft arresting candlestick formations on a continued appellation chart, it would additionally be astute to analysis with a cardinal of added indicators aback you get a buy arresting in adjustment to accomplish abiding that there are no contradictions. In this commodity we are activity to focus on how Fibonacci retracement levels accompany with abutment and attrition levels, and how you can use these two altered abstruse indicators in affiliation with anniversary added in adjustment to crop authentic bazaar access signals.

Let's alpha by defining what both of these types of indicators are. Fibonacci retracements are based on the cardinal 1.618 (also alleged the Golden Ratio) that is begin in all accustomed alike systems from flowers to the animal anatomy to the banking markets. Over the years it has been accurate that aback the amount of a bill brace has a ample move and again retraces aback in the administration of the antecedent value, it is statistically added acceptable to backlash at the levels of 38.2%, 50%, and 61.8% of the aboriginal amount move.

The way that abounding traders use Fibonacci retracement levels is to actuate aback to access and aback to avenue the forex market. A Fib retracement can accord a buy arresting aback the amount hits one of the three Fib ethics and again rebounds, or it can appearance that the bazaar is 'running out of steam' and it is time to avenue aback the amount approaches one of the three Fib ethics and again falls. While Fib levels can be accomplished indicators, it is never astute to access into a barter based on these ethics alone.

Support and attrition levels are appealing abundant absolutely what they complete like: Abutment levels are the amount ethics beneath the accepted amount abstracts that the bazaar will tend to backlash off of, and attrition levels are absolutely the aforementioned except they are aloft the accepted amount data. Abutment and attrition levels can action able forex access signals aback the amount break through an accustomed level, as aback this happens the amount has a addiction to abide affective in that direction.

S&R levels and Fib retracements are both able trading accoutrement individually, but aback you amalgamate them calm the trading signals become abundant stronger and added reliable. As mentioned above, a Fib retracement can accord a able bazaar access arrangement aback the amount retraces a accustomed movement and again switches administration about one of the three capital Fib values.

As a accepted aphorism of deride aback trading the forex market, the best the time anatomy of a chart, the added reliable the trading signals that are generated. So if you happened to be attractive at a 4-hour or 8-hour blueprint and you saw a able Fib retracement signal, the way that you could affirm this arresting application abutment and attrition levels is to see whether the Fib amount is additionally a absolute S&R level.

If the amount bounces off the S&R level, this is not as able an adumbration for bazaar access as aback the amount passes through an accustomed level, because already the amount crosses an accustomed abutment or attrition akin again it has a addiction to abide affective in that direction.

Why Successful Traders Use Fibonacci Techniques

2009-02-14T01:25:00.000-08:00

Why Successful Traders Use Fibonacci Techniques.

Let’s start with looking at support and resistance. Support and resistance levels on bar charts are a major component in the study of technical analysis. Many traders use support and resistance levels to identify entry and exit points when trading markets. When determining support and resistance levels on charts, you should look at the key Fibonacci percentage "retracement" levels.

Two Fibonacci percentage retracement levels that are most important in market analysis are 38.2% and 62.8%. Most market technicians will track a "retracement" of a price uptrend from its beginning to its most recent peak. Other important retracement percentages include 75%, 50% and 33%. For example, if a price trend starts at zero, peaks at 100, and then declines to 50, it would be a 50% retracement. The same levels can be applied to a market that is in a downtrend and then experiences an upside "correction."

These numbers were derived by Leonardo Fibonacci da Pisa, a famous 13th century mathematician. Fibonacci discovered a number sequence called "the Fibonacci sequence." That sequence is as follows:
1,1,2,3,5,8,13,21,34 and so on to infinity. Adding the two previous numbers in the sequence comes up with the next number.

Importantly, after the first several numbers in the Fibonacci sequence, the ratio of any number to the next higher number is approximately .618, and the next lower number is 1.618. These two figures (.618 and 1.618) are known as the Golden Ratio or Golden Mean. Its proportions are pleasing to the human eyes and ears. It appears throughout biology, art, music and architecture.

Here are just a few examples of shapes that are based on the Golden Ratio: playing cards, sunflowers, snail shells, the galaxies of outer space, DNA molecules… Even our own body has Fibonacci numbers, (2 hands, 5 fingers each segmented into 3 parts), the size of fingers, limbs, facial features have Fibonacci relationships. William Hoffer, in the Smithsonian Magazine, wrote in 1975: "The continual occurrence of Fibonacci numbers and the Golden Spiral in nature explain precisely why the proportion of .618034 to 1 is so pleasing in art. Man can see the image of life in art that is based on the Golden Mean."

The element that is most fascinating about Fibonacci numbers and the Golden Ratio as they are applied to technical analysis of markets, is that these principles are a reflection of human nature and human behavior. Successful traders realize that trading is both art and science. The longer you are trading and the more you study the behavior of markets, the more you should realize that human behavior patterns and market price movement patterns are deeply intertwined.

Why Fibonacci Analysis Works.

Let’s look at risk and greed. Each person has his or her own tolerance for risk and level of greed. If a trade is losing value and the loss becomes unbearable, we close the trade and stop the pain. At that point we have reached our risk/pain tolerance.

The same applies to profits. In a winning trade, we eventually reach a point when we must close the trade, the profits are too great to be risked, so we lock in our profits when we reach our greed tolerance level. Our risk/greed tolerance is different from most other traders, and can also vary based on many factors.

If we take a crowd of traders, say 50,000 of them, and get an average of their risk/greed tolerance, we would arrive a defined risk/greed tolerance value for that group. We can only guess, but if we did the same for a different group of 50,000 traders we would probably arrive at a very similar average risk/greed tolerance value. Because most traders are human, we could rationally conclude that the average risk/greed tolerance level for any large group would be about the same as another group.

If we do the same for large groups of short-term traders and then large groups of long-term traders, we would have some valuable information about where these groups would translate their risk/greed tolerance into action. Knowing where the short-term and long-term traders' risk-greed tolerance coincides is very valuable. Where they coincide would be a profitable place to trade, since the market action would be more predictable.

That is exactly how successful traders apply Fibonacci ratios to trading.

The markets tell us where the groups of traders have reached their risk/greed tolerance levels - these levels are reflected in the prices of trading instruments very clearly. With that information, we can calculate the probable future action of traders. This helps determine optimum entry points and profit objectives.

Fibonacci analysis therefore is a leading indicator. Applying fibonacci analysis properly you should be able to determine probable turning points in the market before the price gets there.

Conclusion

Why does Fibonacci analysis work? Because we are human, part of nature, and because Fibonacci numbers are everywhere in nature. The more you study the behavior of markets, the more you should realize that human behavior patterns and market price movement patterns are deeply intertwined. At least as a minimum, the Study of Fibonacci techniques will help you become a much better and rounded trader.

It is easy to find Fibonacci ratios in price charts, however one warning: knowing which ones are more likely to be profitable is not as easy. Trading with only a basic understanding of Fibonacci techniques is dangerous.

Forex Trading Using Fibonacci Technique

2009-02-14T01:20:00.000-08:00

Fibonacci was the nickname of the person whose real name was Leonardo Pisano and he developed the now famous Fibonacci sequence of numbers. He was born in Pisa in the 12th century. He observed the Great Pyramid of Gizeh in Egypt and created this sequence of numbers. He was a genius mathematician who came up with this sequence.

The sequence tells you that the third number is effectively the sum of previous two numbers.

The sequence is something like this

1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and so on.

Now the real value of this sequence lies in the fact the ratio or the proportion of adjacent terms is 1.618 or the inverse is .618. This ratio is known as the golden ratio or the divine ratio. This divine ratio is really divine in terms of giving out a suitable analysis to a given issue and has been applied in many situation including stock and forex markets.

Fibonacci ratios describe the relation between trend and countertrend markets. That mans that 38%, 50 % and 62% are main numbers that form the primary pullback numbers. The way to apply them is to apply these percentages to a particular trend in each direction and then try to predict how the countertrend will act.

The hard part of the Fibonacci sequence is to check out where to trade and use the Fibonacci sequence. If you try to use this on an absolute bottom low or high you will get good results but if you apply the grids on Elliot wave start formation which is the double bottom or double top then you will be get correct results and you will begin to realize the genius of Fibonacci. A lot of expert traders use this to get a handle on the inefficiencies in the market and make profit from them.

There are softwares available in the markets which help you hone you Fibonacci trading skills. Make sure to learn all the technical stuff before you trade. Also merely learning the technical stuff will not be of help if you are trying to make money using the currency trading. You need to understand several other factors for the same like the economic indicators namely the leading and the lagging indicators.

Make the bets of this sequence to locate opportunities in the forex market and help get the best of the other traders.

Forex Trading Tips

2009-01-28T04:12:00.000-08:00

Tip 1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.

Any attempt to trade without analysis and studying the market is equal to a game. Game is fun except when you are losing real money...

Tip 2. Never invest money into a real Forex account until you practice on a Forex Demo account!

Allow at least 2 month for demo trading. Consider this: 90% of beginners fail to succeed in the real money market only because of lack of knowledge, practice and discipline. Those remaining 10% of successful traders had been sharpening and shaping their skills on demo accounts for years before entering the real market.

A good demo account to start practicing with could be, for example FXDD,FXCM,IBFX.

Tip 3. Go with the trend!
Trend is your friend. Trade with the trend to maximize your chances to succeed. Trading against the trend won't "kill" a trader, but will definitely require more attention, nerves and sharp skills to rich trading goals.

Tip 4. Always take a look at the time frame bigger than the one you've chosen to trade in.
It gives the bigger picture of market price movements and so helps to clearly define the trend. For example, when trading in 15 minute time frame, take a look at 1 hour chart; trading hourly would require obtaining a picture of daily, weekly price movements.

If a trend is hard to spot — choose a bigger time frame. Up and down market patterns are always present. Always make sure you know the dominant trend, unless you are a scalper. Scalpers have no need to spend their time studying big trends, what's happening in the market here and now (during 5-10 minute time frame) should be of only importance to a Forex scalper.

Tip 5. Never risk more than 2-3% of the total trading account.
One important difference between a successful and an unsuccessful trader is that the first is able to survive under unfavorable conditions on the market, while an unsuccessful trader will blow up his account after 5-10 unprofitable trades in the row.

Even with the same trading system 2 traders can get opposite results in the long run. The difference will be again in the money management approach. To introduce you to money management, let's get one fact: losing 50% of total account requires making 100% return from the rest of money just to restore the original balance.

Tip 6. Put emotions down. Trade calm.
Don't try to revenge after losing the trade. Don't be greedy by adding lots of positions when winning.

Overreaction blocks clear thinking and as a result will cost you money. Overtrading can shake your money management and dramatically increase trading risks.

Tip 7. Choose the time frame that is right for you.
Choosing wise means that you are comfortable and have time enough to analyze the market, place and close orders etc. Some people can't wait for hours for the price to make a move, they like action and therefore prefer smaller time frames. On the contrary, for others 10-15 minutes is a hustle to be able to make the right decision.

5 Things You Must Do If You Want To Attain Financial Freedom Through Forex Trading

2009-01-20T05:02:00.000-08:00

With the amazing growth of the forex market, you are going to see an astounding amount of traders lose all their money. Unfortunately, they haven't followed the simple steps I have laid out for you. Go through these steps and give yourself the greatest opportunity to achieve your goals.

1. Have Faith In Yourself

To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.

2. Accept Your Learning Curve

Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.

3. Decide What Type of Trader You Are

There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.

4. Get Educated

Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.

5. Continue to Get Educated

In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.

What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.

An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.

by: Eddie Yakubovich

http://www.articlecity.com/articles/education/article_585.shtml

Types of Forex Trading and Strategies

2008-12-08T09:28:00.000-08:00

by: Usha Rani

The foreign exchange market, or forex, being the largest financial market in the World has been the domain of government central banks as well as for commercial and investment banks in a scandalous manner and it exists wherever one currency is traded for another. But recently more numbers of individuals are handling the forex market as it offers trading 24-hours a day, five days a week, and the daily dollar volume of currencies traded in the currency market that exceeds $1.9 trillion daily, making it the largest liquid market in the world.

"Foreign Exchange" is the place where the money of one nation is traded with the other nation. The most popular pair of exchange in the forex market is "Euro Dollar". You can view these pairs in all forex display screens as "EUR/USD". Forex trading strategies are the key to triumphant forex trading or online currency trading. The management team of One World Capital Group bid proficiency in both Forex trading and internet technologies and proven track records that deals with large, global trading and brokerage operations as well. Forex made easy is as simple as you would want it to be.

Forex trading is different from trading in stocks entirely and it uses Forex trading strategies that will give you lot of advantages as well as help you to comprehend greater profits in the short term. There are wide ranges of forex trading strategies that are available to investors. It is one of the most useful of these forex trading strategies called as leverage. Knowledge of these Forex trading strategies can imply the difference between profits along with a loss and so it is essential that you fully grasp the strategies that are being used in Forex trading. The world of Forex trading is highly complicated and success requires education and familiarity with terms, charts, signals and indicators.

As you can be able to access it from home or office from any parts of the country, Global Forex trading is the most profitable and attractive internet income opportunity. And you do not need to do anything or there is no need of internet promotion for getting succeeded. Forex Capital Markets are nothing but foreign exchange markets where the currencies are been bought and sold continuously for profits. These capital markets of forex are present globally and their transactions are always non-stop in this forex cash market. A managed Forex account is forex made easy. Many different companies offer these accounts to their clients. The foreign exchange market is a worldwide market and as per to some estimates is almost as big as thirty times the turnover of the US Equity markets.

Trading The Trend Lines And Price Channels

2008-11-10T09:12:00.001-08:00

Article by Action Forex

Only one of two things can happen when a price approaches support or resistance: the price can break through it, or it can bounce off and reverse direction. The same is of course true for trend lines.

1. Trading on a Pullback

If a chart is trending in a clear direction, and a trend line can be drawn connecting a series of relative highs or relative lows, trading opportunities exist when the price approaches the trend line. If the price bounces off the trend line and resumes the trend in the original direction, this can be an excellent opportunity to enter the market in the direction of the dominant trend. This is often referred to as buying on a pullback in an up trend or selling into strength in a downtrend.

Buying on a bounce off such a support line can be done through a limit order just above the support.

2. Trading a Break of the Trend

The second possible trade is the break of the trend line, which can be traded just as any other broken support or resistance line. If a candle closes through a trend line to the downside, as in the example below, the proper entry point would be to sell once the price moves below the low of the breakthrough candle.

Price Channels A trending market can move between parallel support and resistance levels. A price channel between two parallel lines can often be drawn in a trending market. The key to a price channel is that the lines be parallel to each other. The value of the price channel in predicting the ongoing speed of a trend depends on the lines being parallel.

Unlike trend lines, which can be drawn on any chart with two relative lows or highs, price channels should not be forced on a chart where they are not quickly apparent. Once a trend line is established, create a duplicate parallel line on the chart. Then move it up to the relative highs above or down to the relative lows below the trend line. If two or more fit with the line, there may be a valid price channel. Otherwise, the market may simply be too volatile - even in the midst of a strong trend - to plot a channel.

In the above example the (support) trend line itself is valid, but creating a parallel line on the opposite side of the prices does not add any value to the chart and is not warranted by the data. Placing a support or resistance line where it does not belong will simply provide you with false signals to buy or sell.

How To Get Started In FOREX Trading

2008-09-22T13:09:00.000-07:00

The foreign exchange market (FOREX) offers many advantages to investors. But you need to know where to begin. This short guide will give you the FOREX basics, so you can quickly start participating in this fast growing market.

In the past, foreign exchange trading was limited to large players such as national banks and multi-national corporations. In the 1980’s the rules were changed to allow smaller investors to participate using margin accounts. Margin accounts are the reason why FOREX trading has become so popular. With a 100:1 margin account, you can control $100,000 with a $1,000 investment.

A Learning Curve

FOREX is not simple, though, so you’ll need some knowledge to make wise investment decisions. Although it is relatively easy to start trading on the FOREX, there are risks involved. Your first move as a beginner should be to find out as much as possible about the forex market before risking a dime.

Find A Forex Broker

FOREX traders usually require a broker to handle transactions. Most brokers are reputable and are associated with large financial institutions such as banks. A reputable broker will be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.

Open an Account with a forex borker

Opening a FOREX account is as simple as filling out a form and providing the necessary identification. The form includes a margin agreement which states that the broker may interfere with any trade deemed to be too risky. This is to protect the interests of the broker, since most trades are done using the broker’s money.

Once your account has been established, you can fund it and begin trading.

Many brokers offer a variety of accounts to suit the needs of individual investors. Mini accounts allow you to get involved in FOREX trading for as little as $250. Standard accounts may have a minimum deposit of $1000 to $2500, depending on the broker. The amount of leverage (how much borrowed money you can use) varies with account type. High leverage accounts give you more money to trade for a given investment.

Trades are commission-free, meaning that you can make many trades in one day without worrying about incurring high brokerage fees. Brokers make their money on the ’spread’: the difference between bid and ask prices.

Paper Trading Forex Market

Beginning traders are strongly advised get accustomed to FOREX by doing "paper trades" for a period of time. Paper trades are practice transactions that don’t involve real capital. They allow you to see how the system works while learning how to use the various software tools provided by most FOREX brokers.

Most online brokers have demo accounts that allow you to make free paper trades for up to 30 days. Every new FOREX investor should use these demo accounts at least until they are consistently showing profits.

FOREX Software

Each forex broker has its own set of software tools for making transactions, but there are a few tools that are common to all FOREX brokers. Real-time quotes, news feeds, technical analyses and charts, and profit-and-loss analyses are some of the features you can expect to see on most online brokers’ web sites.

Almost every broker operates on the Internet. To access a broker’s online services you’ll need a reasonably modern computer, a fast Internet connection, and an up-to-date operating system. Once your account is set up, you can access it from any computer just by entering your account name and password. If for some reason you are unable get to a computer, most brokers will allow you to make trades over the phone.

There are lots of ways to make money. FOREX trading is just one more potential stream of income — if you are prepared to learn and practice.

Author: fx -articles team

Forex Basic Needs To Know

2008-09-19T04:28:00.000-07:00

Forex Market Basics

The Foreign Exchange market (also referred to as the Forex, FX market, "Cash" Forex or Spot Forex market ) is the largest financial market in the world, with more than $1.5 trillion changing hands every day — 30 times larger than the combined volume of all U.S. equity markets. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

What to trade in Forex Market?

In the forex market, currency trading is always done in currency pairs, such as EUR/USD or GBP/USD. Accordingly, all trades result in the simultaneous buying of one currency and the selling of another. The base currency is the "basis" for the buy or the sell. It is useful to consider the currency pair as an instrument, which can be bought or sold.

Understanding Forex quote

Base currency : The first currency in the pair.
Counter Currency : The second currency in the pair.

Also known as the terms currency.
The US dollar is the centerpiece of the Forex market and is normally considered the ’base’ currency for quotes. This includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/CAD 1.1302 means that one U.S. dollar is equal to 1.1302 Canadian dollar.

BID and ASK Prices

When trading forex you will often see a two-sided quote, consisting of a ’bid’ and ’ask’. The ’bid’ is the price at which you can sell the base currency (at the same time buying the counter currency). The ’ask’ is the price at which you can buy the base currency (at the same time selling the counter currency).

Commission-free, but with spreads

Most broker offer commission-free Forex trading. Spread - The difference between the bid and ask price of a currency. Normally 3-5 pips on the Majors.

Rollover - What happens to my open positions at the end of the trading day?

Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies. Most brokers will automatically roll over your open positions, allowing you to hold a position for an indefinite period of time.

Leverage & Margin

Trading is one of main attractions for many traders. Leveraged trading, or trading on margin, simply means that you are not required to put up the full value of the position. Forex brokers provide more leverage than stocks or futures. In forex trading, the amount of leverage available can be up to 400 times the value of your account.

Introduction To Reversal Patterns And Continuation Patterns

2008-09-11T05:05:00.000-07:00

by: Action Forex

There are two major ways to trade the financial markets: swing trading and trend following. Swing traders use technical analysis to look for short-term price movement and capture gains in a relative short-term period. They look for the price patterns that hint for a reversal, in order that they can pick the tops and bottoms of the trend. Trend followers pay attention to the general direction of the price movement and enter trades by following the current direction. They would look for continuation patterns on the price charts to predict the future direction of the trend, or exit the trade until the reversal patterns appear.

The following articles discussed the rules for identifying reversal patterns and continuation patterns, and introduced some well-known reversal and continuation patterns. The reversal patterns include: Head and Shoulders, Double Tops and Bottoms, Triple Tops and Bottoms and Saucers. The continuation patterns include Triangles (Ascending, Descending, Symmetrical and Broadening), Flags and Pennants, Wedges and Rectangles.

The patterns exhibit the psychology and momentum of the market. No matter which type of traders you are, it is always helpful to be aware of the patterns. Using the patterns is not a stand-alone method of trading the market, in fact, it is better to be used with a mix of trend lines and technical indicators. Beginners might first find it difficult to identify the patterns; they can familiarise the patterns by looking at the historical charts and try to identify the patterns.

Rules for identifying Reversal Patterns

The following are the three basic tenets about identifying reversal patterns. While they may seem obvious and even simplistic, they are important for successfully using these patterns.

A Trend Must Exist - A trend must exist before a reversal of the trend. There can be no reversal if a trend does not exist in the first place. A reversal pattern that follows a large trend will have much more movement to retrace, and so the strength of the move after the reversal pattern will likely be stronger.

Trend Lines - The first precise signal that the trend is ending is often the failure of a trend line, that might also come along with oscillators that show overbought or oversold before a reversal pattern occurs. Note that the intraday break of the trend line is not significant until a daily candle closes through the line. The chart below shows a trend line that is broken on an intraday basis before the price recovers. The first strong signal that a reversal may be coming appears when the price closes below the green support line. The price subsequently rallies to form a double top, but it does not hold these gains.

http://www.actionforex.com/images/stories/articles/tut_patterns_2_1.gif

Time Frame - Like relative highs/lows and trend lines, reversal patterns gain greater significance if they occur over a longer time frame. A head and shoulders pattern that takes months to develop will of course signal a reversal of a much larger trend than a head and shoulders that takes place intraday.

Pivot - Support - Resistance

2008-09-06T06:10:00.000-07:00

The video show about Pivot, Support and Resistance. The 3 is important in view our forex movement daily. Watch it and try to understand to trend of daily market when open price below or above daily pivot. Thank you.

The rules is easy, buy at support and sell at resistance. Wait the moment and chance to take the profit.

Pivot Points in Forex: Mapping your Time Frame

2008-09-05T23:28:00.000-07:00

by: Raul Lopez

It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade.

Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.

As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from “bull” to “bear” or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible.

Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well.

Pivot Points

In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa.

Why PP work?

They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.

Calculating pivot points

There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session).

Pivot point (PP) = (High + Low + Close) / 3

Take for instance the following EUR/USD information from the previous session:

Open: 1.2386
High: 1.2474
Low: 1.2376
Close: 1.2458

The PP would be,
PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439

What does this number tell us?

It simply tells us that if the market is trading above 1.2439, Bulls are winning the battle pushing the prices higher. And if the market is trading below this 1.2439 the bears are winning the battle pulling prices lower. On both cases this condition is likely to sustain until the next session.

Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions is taking the open at 00:00 GMT and the close at 23:59 GMT.

Besides the calculation of the PP, there are other support and resistance levels that are calculated taking the PP as a reference.

Support 1 (S1) = (PP * 2) – H
Resistance 1 (R1) = (PP * 2) - L
Support 2 (S2) = PP – (R1 – S1)
Resistance 2 (R2) = PP + (R1 – S1)

Where, H is the High of the previous period and L is the low of the previous period

Continuing with the example above, PP = 1.2439

S1 = (1.2439 * 2) - 1.2474 = 1.2404
R1 = (1.2439 * 2) – 1.2376 = 1.2502
R2 = 1.2439 + (1.2636 – 1.2537) = 1.2537
S2 = 1.2439 – (1.2636 – 1.2537) = 1.2537

These levels are supposed to mark support and resistance levels for the current session.

On the example above, the PP was calculated using information of the previous session (previous day.) This way we could see possible intraday resistance and support levels. But it can also be calculated using the previous weekly or monthly data to determine such levels. By doing so we are able to see the sentiment over longer periods of time. Also we can see possible levels that might offer support and resistance throughout the week or month. Calculating the Pivot point in a weekly or monthly basis is mostly used by long term traders, but it can also be used by short time traders, it gives us a good idea about the longer term trend.

S1, S2, R1 AND R2...? An Objective Alternative

As already stated, the pivot point zone is a well-known technique and it works simply because many traders and investors use and trust it. But what about the other support and resistance zones (S1, S2, R1 and R2,) to forecast a support or resistance level with some mathematical formula is somehow subjective. It is hard to rely on them blindly just because the formula popped out that level. For this reason, we have created an alternative way to map our time frame, simpler but more objective and effective.

We calculate the pivot point as showed before. But our support and resistance levels are drawn in a different way. We take the previous session high and low, and draw those levels on today’s chart. The same is done with the session before the previous session. So, we will have our PP and four more important levels drawn in our chart.

LOPS1, low of the previous session.
HOPS1, high of the previous session.
LOPS2, low of the session before the previous session.
HOPS2, high of the session before the previous session.
PP, pivot point.

These levels will tell us the strength of the market at any given moment. If the market is trading above the PP, then the market is considered in a possible uptrend. If the market is trading above HOPS1 or HOPS2, then the market is in an uptrend, and we only take long positions. If the market is trading below the PP then the market is considered in a possible downtrend. If the market is trading below LOPS1 or LOPS2, then the market is in a downtrend, and we should only consider short trades.

The psychology behind this approach is simple. We know that for some reason the market stopped there from going higher/lower the previous session, or the session before that. We don’t know the reason, and we don’t need to know it. We only know the fact: the market reversed at that level. We also know that traders and investors have memories, they do remember that the price stopped there before, and the odds are that the market reverses from there again (maybe because the same reason, and maybe not) or at least find some support or resistance at these levels.

What is important about his approach is that support and resistance levels are measured objectively; they aren’t just a level derived from a mathematical formula, the price reversed there before so these levels have a higher probability of being effective.

Our mapping method works on both market conditions, when trending and on sideways conditions. In a trending market, it helps us determine the strength of the trend and trade off important levels. On sideways markets it shows us possible reversal levels.

Learn How To Read A Forex Quote

2008-09-04T19:21:00.000-07:00

by: Gregory DeVictor

Forex is an abbreviated name for "foreign exchange." The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros for Japanese Yen.

The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes often result from economic and political factors, such as the price of oil or political unrest. To better understand how the exchange rate can affect the value of your Forex investment, this article shows you how to read a Forex quote.

Forex quotes are always expressed in pairs. In the following example, your "pair" of currencies are the U.S. Dollar (USD) and the Euro (EUR). The Forex quote, USD/EUR = 265.50, means that one U.S. dollar is equal to 265.50 Euros. The currency to the left of the / (USD in this case) is referred to as base currency and its value is always 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one USD can buy 265.50 EUR, since it is the stronger of the two currencies.

Because the U.S. dollar is regarded as the central currency of the Forex market, it is always treated as the base currency in any Forex quote where it is one of the pairs. Incidentally, the U.S. Dollar is involved in nearly 90% of all Forex transactions.

In this example, your "pair" of currencies are the Japanese Yen (JPY) and the Euro (EUR). The Forex quote, JPY/EUR= 175.10, means that one Japanese Yen is equal to 175.10 Euros. The currency to the left of the / (JPY in this case) is referred to as base currency and its value is 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one JPY can buy 175.10 EUR, since it is the stronger of the two currencies.

The goal of any Forex trading system is to profit from foreign currency movements. This requires adequate training in basic Forex principles, such as performing a Technical Analysis, using Forex charts and Stop/Loss tools, and keeping up-to-date with economic and political events. In a sense, Forex training never ends.

Six Forex Trading Tips for Newbies

2008-09-04T00:45:00.000-07:00

by: Gerald Njuguna

You have decided to be a trader in the forex market, and you have no idea on how to begin. Let's first start by defining what the forex market is and what it does. The term "forex", also known as the foreign exchange is a market for the sale and purchase of all kinds of currencies. It originated in the early 1970's when floating currencies and free exchange rates were first introduced. At this time, the forex market traders were the ones who set the value of one type of currency against another. Nowadays, the market forces determine the value of a currency against another. One unique aspect of the Forex market is that very little trading qualifications are required of anyone intending to trade therein. Independence from external control ensures that only the market forces influence the currency prices. As the largest financial market, with trades reaching up to 1.5 trillion U.S. dollars, or USD, the money moves so fast, it’s impossible for a single investor to substantially affect the price of any major foreign currency. In addition, unlike any stock that is rarely traded, forex traders are able to open and close any positions within seconds, because there are always a number of willing buyers and sellers.

1. The first thing you need to do is open a forex account. You will have to fill an application form which includes a margin agreement stating if the broker will be allowed to intervene with any trade when it appears too risky. Since most trades are done using the broker's money, it is only logical that he protect his interests. However, once you have established an account, you can fund it and begin trading in the forex market.

2. Adopt a trading strategy, that has proven to be successful for you. Remember that strategies will work differently for different traders, so don't try to adopt a strategy that works well for another trader. It might backfire on you. The two available approaches are either technical analysis or fundamental analysis. A combination of the two is a more preferred choice for experienced traders.

3.Understand that prices move by trends. Forex has a popular saying, “The trend is your friend.” There are certain movements that have been studied over many years in order to identify a pattern in the trend. These trends need to be understood in order to understand a good trading strategy. For small accounts that are $25,000 and under, trading with a trend may help improving your odds when compared to bi-directional trading. Most newbie’s will look to trade in any direction, when they should be trading with a trend.

4. Ensure you know which are the top five currencies pairs in the foreign exchange. These are USD/Yen, Swiss franc/USD, Euro/Yen, Euro/USD and Pound/USD.

5. For newbies, it is advisable to maintain two accounts to ensure you learn to play the trading game. Keep one real account, one that you will actually use to trade real money; and the second account should be a demo, one that you can use to test alternative moves in the trading game. You can easily use your demo account to shadow the trades in your real account so you can widen your stops to see if you are being too conservative or not.

6. Always examine the one hour, four hour and daily charts that concern your trades. Although you can trade at 15 and 30 minute time intervals, doing so requires a handful of dexterity.

Fibonacci Retracements Pattern

2008-09-02T23:56:00.000-07:00

Stocks will often pull back or retrace a percentage of the previous move before reversing. These Fibonacci retracements often occur at three levels – 38.2%, 50%, and 61.8%. Actually, the 50% level really does not have anything to do with Fibonacci, but traders use this level because of the tendency of stocks to reverse after retracing half of the previous move. Here is an example using a graphic explaining the retracement pattern…

This picture shows a graphical representation of the reversal points for stocks in an uptrend. The pattern is reversed for stocks that are in downtrends.

After a stock makes a move to the upside (A), it can then retrace a part of that move (B), before moving on again in the desired direction (C). These retracements or pullbacks are what you as a swing trader want to watch for when initiating long or short positions.

Once the stock begins to pull back (retrace), then you can plot these retracement levels on a chart to look for signs of a reversal. You do not automatically buy the stock just because it is at a common retracement level! Wait, and look for candlestick patterns to develop at the 38.2% area. If you do not see any signs of a reversal, then it may go down to the 50% area. Look for a reversal there. You do not know if or when the stock will reverse at a Fibonacci level! You just mark these areas on a chart and wait for signal to go long or short.

Forex @ FX: Learn Finobacci Retracement & Target

2008-09-02T13:06:00.000-07:00

The video will show the rule of market movement. It will happen everyday in the forex market.

The Fibonacci retracements pattern can be useful for swing traders to identify reversals on a stock chart. On this page we will look at the Fibonacci sequence and show some examples of how you can identify this pattern.

Fibonacci numbers were developed by Leonardo Fibonacci and it is simply a series of numbers that when you add the previous numbers you come up with the next number in the sequence. Here is an example:

1, 2, 3, 5, 8, 13, 21, 34, 55

See how when you add 1 and 2 you get 3? Now add 2 and 3 and you get 5, and so on. So how does this sequence help you as a swing trader?

Well, the relationship between these numbers is what gives us the common Fibonacci retracements pattern in technical analysis.

Introduction

2008-08-27T18:39:00.002-07:00

The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets is continously growing and was last reported to be over US$ 4 trillion in April 2007 by the Bank for International Settlement