Forex Soul

The Essence Of Forex Trading

2011-03-31T04:19:00.000-07:00

Most of the developing countries measure their economy by the GDP and an internationally accepted currency is the United States Dollar. US Dollars are not necessarily the currency of normal use in a lot of the countries. All countries of the world need oil and coal for producing energy and thus to ensure faster development. The development is achieved through industrialization, industries run primarily on electricity. The electricity is produced in power stations which use either coal or gas or petroleum for driving the turbines which produce electricity. To purchase oil from the countries that produce oil, United States Dollar is the currency used. Thus all countries of the world need to have certain reserves of foreign exchange namely US Dollars, to ensure sustenance. Thus the countries carry out its international businesses in US Dollars. Thus every export order that is completed earns revenue for the country in US Dollars. The wealth of a country is also determined by the amount of the foreign exchange reserves that it has.

The exchange rate of US Dollar is determined by the gold reserves and the forex reserves the country has. The forex trading is categorized in different levels such as inter-bank market, this includes the dealers in securities and the commercial banks. Here the trading happens with the bid and ask prices of the currencies being traded. This also determines the exchange rate of the currency against other currencies. The inter-bank Forex Trading transactions account for almost 53% of the total transactions. The next level of players are those such as Pension Funds, Mutual Funds, etc. Central Banks of the countries also get involved in the Forex Trading. They do this inorder to control the money supply into the country also thus influencing the inflation and the bank interest rates. These national central banks also use the forex money to help stabilize the internal and international markets.

Most of the foreign exchange trading is speculative in nature. The speculative nature of this trading is kindled by the hedge funds operations that various multi-national organizations undertake. There are individuals who also get involved in this trading and they are called retail brokers. The Foreign exchange was greatly affected due to the introduction in the automated dealing systems, matching systems and the Internet trading. The dealing systems were mainly based on on-line computer systems in which the banks are linked to one-to-one basis. The matching systems are based on electronic brokers. These are very fast and very reliable too.

Forex Scalping Trading With GBP/USD Currencies

2011-03-31T00:50:00.000-07:00

Known to a huge number of traders, GBP/USD is in the list of the most unstable and challenging currencies in trading Forex. It is also called cable because of how rapid its instability in trends is. That puts in plain words why it has gained so much attention from traders. However, it is a fact that it can be very profitable in just a short period. Forex Scalping Trading with the currencies GBP/USD is an impressive system to build up fast earnings in a single day particularly when the currencies gives the chance to be reached.

Inopportunely, this manner of Forex scalping trading is not suggested for beginners. As discussed above, it can be very tricky and unstable. Therefore there is a high need to know your position in and out of the spread betting platform. You also have to equally recognize your speed that when you get in and out of a certain trade. All of these will specify your proceeds. Though some experts may disagree, it is still acceptable to make use of a company focusing on spread betting that usually suggests short spread for the currencies. Surprisingly, it can even be as short as two pips but then be alert of the possibilities that these companies may swing spreads in Forex market.

A fine example of a chart set up to successfully scalp the currencies can be done in a straightforward manner. To scalp GBP/USD, set up a chart frame by means of 3 EMA's (Exponential Moving Averages). Then tint them as you desire. The first EMA would play as an add-on in the Forex Scalping Trading method. It will be present to provide the whole idea of the trading while the two other EMA'S will be working on entering and leaving trades.

As the two EMAS start moving, be very keen in observing any crossover's appearance. A crossover plainly points out that there is already an alteration in course. Once the crossover is confirmed, start finding the latest support or level that will soon break. When you find it quickly enter the trade, close the deal, and then depart from the trade. To do this, you may want to use a stop loss in a small sum like 10 pips. Find a break before a stallage, then a short exchange will pursue. Bear in mind that leaving trades with not more than 10 pips is better in contrast to a loss. Besides, you can constantly penetrate the trade again.

Do Forex Robots Work? What Robot Sellers Don't Want You To Know

2011-03-30T19:52:00.000-07:00

Introduction

Do Forex robots work? As much as robot sellers would have you believe that their latest creation is the answer to all your problems, there are very few Forex robots that work out there for sale. Sure, there are many Forex robots that work some of the time, but at the end of the day, only the best Forex trading robots will return you a consistent Forex passive income you can bank on. By the end of this article, you'll know how to find the best Forex trading robots that work.

The Dark Truth About Forex Robots

The problem with most Forex robots lies in their design. Forex robot sellers like to have you believe that the best Forex trading robots are ones that have a very high winning rate, because it's easy to design one that does. What most people don't realize is that a Forex robot can lose massive amounts of money with a 90% or even 95% win rate if the losses are big enough. That's because they tend to have small gains of 4-5 pips at a time, but when they have a losing trade, the losses can be as big as 200-300 pips! Obviously, they won't advertise the risk of huge loss in their sales message, which leads to a very rude awakening when it does happen.

How To Find The Best Forex Trading Robots

The key to winning with robots is to understand that you don't have to win every trade, or even most of your trades. In fact, the best Forex trading robots will have losses 30% or even 50% of the time! So when you're looking at the back tested results of any Forex robot, make sure that they show losses, and that their losses aren't much bigger than their gains. If you find a good candidate that you think might be the real deal, then make sure that the seller offers at least a 60 day money back guarantee for the system. Before you commit any real funds to any system, no matter how good you believe it to be, you'll want to test it to see that it really works on a demo account.

If it makes money on the demo account after a month, then chances are that you've come across one of the best Forex trading robots around. Otherwise, return it for a full refund, and continue your search. There's really no point in trading a system that you don't believe in 110%, so until you've found one of the few Forex robots that work, take your time and don't be in a hurry to put your money into any system. You can be sure that if you persevere with your searching and testing, you'll be able to identify one of the best Forex trading robots one day soon.

I've been a full time Professional Forex Systems Developer since 2007. Forex trading is my passion, which is why I really love helping anyone to overcome their challenges and become profitable in their own Forex trading. If you're just getting started in trading Forex, or if you'd like to take your trading to the next level, I'd love to help!

If you're new to Forex trading and frustrated because what you're doing right now isn't working, I can show you how you can make a Forex Passive Income in just 30 minutes! Everything you need to know is in my free report: Winning With Forex Trading Systems.

Article Source: http://EzineArticles.com/?expert=Thad_B

Forex Trendlines System

2011-03-30T15:28:00.000-07:00

When it's about trade or business, people have always come up with ways or methods to predict what would likely happen in the future or what the trend of the market they're dealing now. What would they do that, anyway? The reasons are never far away from getting profit or lots of benefits. The more they could predict the market trend, the more profit they can gain. The same thing also happens in Forex trading market. People have found methods, ways, or systems that allow them to see predict which currencies are favorite and which aren't. They could view the possibility of getting profit from the likeable ones and getting away from the ones people avoid. Another way to do so is by having Forex trendlines system.

What are Forex trendlines? Trendlines are the lines that are drawn on the price chart. They're used to connect rising points to show uptrend or to connect down points to show downtrend. In order to draw it, the points should at least consist of two price points. When it is long and there're more points to connect, it means the trend is strong enough to support the prices or to resist other prices because the market participants take interest on it. If that happens, it won't easily budge or change.

How does Forex trade make use of trendlines? People could always draw three different charts with different time. They could draw daily chart based on 1-3 years of historical data, hourly data based on 1-3 months of historical data, and a 15 minute chart based on 1-3 weeks of historical data. Based on the charts they could see how the prices move through the trendlines they've drawn on the chart. It's like having an information map in front of them. To make use of it, people usually buy on the way to the uptrend and then sell it again when it reaches the downtrend.

However, there're several things about trendlines that people should know and aware about. It's useless to always draw it every moment because it's only confusing and it won't provide any help or answer. But never draw any trendlines is also wrong because people could never know what to expect and what will happen. Sure, it has to be re-drawn but not every time the price changes. Some people would prefer to have horizontal line because they don't really like to have it. Everything is about preference and favorite method, actually.

http://forexswingprofit.com/category/trendline-analysis

Discover Secrets About How To Make Money With Forex

2011-03-30T12:01:00.000-07:00

Producing dollars with Forex is all based around buying and reselling currencies to create profit. Forex is often a good way to boost income, and all you need to obtain began is often a particular amount of money to invest to acquire the currencies and you are good to go. Forex isn't unique to any other marketplace to make dollars with Forex is still created up of the exact same principles. It can be all about the low cost buy plus the great sell. The currencies bought are performed so with the intent that they'll develop into much more valuable and o make a decent profit when sold.

There are numerous critical aspects to understanding and mastering the Forex. 1 is the fundamental understanding of the exchange rate. This is really a variable that may change and might be in some cases slightly unpredictable. Some exchange rates stay the same and do not do significantly but other people change rapidly.

The actual meaning of an exchange rate is the number comparison of 1 currencies value weighed against one more. So merely put for instance how a number of English pound sterling could be bought for 1 American dollar.

Realizing and understanding the exchange rate, how it works and how it'll effect your trading is of high importance. When you begin to collect your currencies the exchange rate reveals how pricey the currency is going to be. This will also be vital when it comes down to selling your currency the exchange rate will control just how much cash it is possible to get for it.

When you buy and sell your currency with Forex, the major objective would be to make a profit. This is all based on the base currency. The base currency is the defining aspect of regardless of whether a currency is bought or left on the shelf. This essentially means that if somebody had been to buy a pair, USD and BPS, the American dollar would be the base currency and so whilst purchasing the dollar the pound could be sold. And so the pair would only be worthwhile if the base currency was going to boost and make a bigger profit.

There are various hints, points and pieces of advice which will be applied, nevertheless you will find a few that are a lot more necessary and a necessity to all Forex participants. A really excellent tip would be to constantly work with and follow the trend, do not get carried away on what seems to be instinct or an inkling, trends tend to be right and are a reliable way of creating judgments. Do not allow emotions to control your bidding, beware of greed and excitement taking over.

In line with that, other emotions which include greed and excitement very easily distract from working sensibly and efficiently and so these two have no place in beneficial trading. Also be cautious and guard against a gambling mentality, as this sort of behavior will just cause anarchy and trouble to any traders success.

All in all currency exchange is actually a fantastic place to boost and improve income, it allows people today a bit additional financial freedom and makes space for a new kind of thought process. It'll require a clear mind and a well though out strategy, but once practiced and polished anybody might be triumphant in Forex.

Forex Trading Basics: Glossary of Common FX Trading Terms

2011-03-30T07:11:00.000-07:00

Forex: Abbreviation for Foreign Exchange (also known as FX), Forex is the buying and selling of a country's currency in order to turn a profit. By studying fluctuations in the economy, investors can predict whether a country's currency will increase or decrease, thereby allowing them to buy low and sell high. The trading occurs through the simultaneous buying of one currency and selling of another. While the New York stock exchange deals with amounts of money in the millions each day, Forex brokers trade over $4 trillion daily.

PIP: One pip is the smallest change in value that a currency pair exchange rate can make, either increasing or decreasing. It is the last decimal point in a quotation; for currency's it is equivalent to a ten thousandth (1/10,000) of a unit of that currency.

For example, if the EUR/USD is valued at 1.3114 and it is said to have raised two pips, then it will be valued at 1.3116. Although these seem like infinitesimal gains, with enough money invested and wise trades it is possible to make a substantial profit.

Limit Order: When an investor wants to control how much profit and loss he/she is willing to handle, a "limit order" is instructed to a Forex broker. This is an order with specified boundaries, telling the Forex broker at what point above market level to sell and at what point to purchase below market level.

Instead of having to constantly check the updates in the market, a limit order allows the trader to trust the Forex broker to sell the currency when it hits a particular number, assuming that it has hit its peak and will no longer continue increasing in value. Likewise, the broker is charged with purchasing a currency when it reaches a specified level below the market price, in hopes that the currency's value will turn around and increase shortly thereafter.

Stop- Loss Order: This is an order instructing a Forex broker to cut off a current trade once a specified low is hit in order to limit losses. Sometimes currencies do not perform how their investors anticipated. A stop-loss order is an attempt to dump the currency in order to prevent further losses by setting a minimum value at which the investor is no longer willing to stick with a particular transaction.

Exotic Currency: Any currency that is not heavily or popularly being traded.

Hawkish: This an adjective used to describe any Forex trading person or group that takes an aggressive stance in regards to a particular economic situation. It is most commonly used in reference to the economy or interest rates of a country.

For example, if the Bank of England suggested that they were going to increase interest rates in order to reduce high inflation, they would be considered "hawkish" in their aggressive actions.

Dovish: This adjective is used to describe a passive or non-aggressive viewpoint in response to an economic event, particularly in regards to a country's interest rates or economy.

An example would be bankers who prefer economic expansion and the creation of jobs rather than tightening interest rates, allowing the market to correct itself with little government interference.

Forex Rebellion Review - Does It Really Work?

2011-03-30T02:12:00.000-07:00

Introduction

We've all heard the typical hard luck story. The one about the poor, struggling everyman who stumbles upon a winning Forex system that makes him rich... and now he wants to share that system with you for a low, low price of $97. Sound familiar? That's the story that Forex Rebellion System creator Russ Horn tries to sell you when you visit his website. The reality is, Russ Horn is a very clever marketer, but does the Forex Rebellion System actually work? By the end of this Forex Rebellion Review, you'll know the truth.

What The Forex Rebellion System Promises

The first thing that strikes me about the Forex Rebellion System is how fast their winning rate falls as you go down the page. It starts out at 90% at the top of the page, goes to 80% somewhere down the middle, and by the time you go all the way down to the bottom, it's 55.55%. Notice that Russ Horn doesn't say very much about the actual system or promise you any results. All he does is show you what his "beta testers" earned of 36% in 5 days, 119% in 12 days and 36% in 20 days.

So what do you actually get with the Forex Rebellion System? Funny you should ask, because it took me a long time just to figure that out! Apparently, you get a Forex trading manual detailing how to trade the Forex Rebellion System, complete with indicators, chart templates and a semi-automated Metatrader 4 Expert Advisor that alerts you to trades, but doesn't actually trade for you. No mention of how or why the system actually trades at all, despite his claims of transparency and full disclosure.

Does It Actually Deliver Results?

Well, with all the smoke and mirror techniques being used on the website, I really had to get to the bottom of what the Forex Rebellion system really is all about. Considering that Clickbank has a very solid money back guarantee, I decided to buy it and try it out for myself. It turns out that the Forex Rebellion system is really just a glorified moving average crossover system, with a lot of ambiguity when it comes to choosing the timeframes and the currency pairs to trade it on. Also, there are a lot of false signals when it comes to moving average crossovers, but somehow or the other Russ Horn and his special group manage to avoid most of these trades in their testing. Even if that were possible, that means that their results cannot be replicated, and as such, you should avoid buying the Forex Rebellion System.

If you were considering buying the Forex Rebellion System, here's my advice: don't. First of all, it's a system that anyone could throw together after reading a basic trading manual, which is obviously very profitable occasionally when market conditions are favorable, but falls apart dramatically when the conditions change. Secondly, it requires you to be a very experienced trader to make it work for you, and you will have to make yourself available at all hours so as not to miss any of the rare profitable trades. All in all, it's not as turnkey and systematic as Russ Horn makes it out to be, and there systems out there that are far better and much more worth your while.

If you want to start making real money in Forex right now, then you need proven, Profitable Forex Trading Systems. Here are some of The Best Forex Trading Systems I know.

Article Source: http://EzineArticles.com/?expert=Thad_B

Easy Forex Breakout Trend Trading Simple System Review - How Does It Work?

2011-03-29T22:01:00.000-07:00

Are you wondering how the Easy Forex Breakout Trend Trading Simple System works? This is a Forex trading system is based on looking at volatility and colored indicators that are meant to make it very easy for traders to understand and follow their instructions. Even though it may look like a news trading system like what many traders are asking online, it is definitely not although it does make catching news announcements very easy.

1. How Can You Use the Easy Forex Breakout Trend Trading System to Profit From News Announcements Relevant to the Currencies Market?

This is due to the fact the indicators can work on the 1 minute and 5 minute charts that will show many profit opportunities during the most volatile time periods. I am also not required to spend many hours sitting in front of my computer screen every day now as compared to what some other Forex trading systems have taught before. Long entries are marked with a white vertical line with the exit being marked with a red dot, whereas the short trades are red vertical lines marked with blue dots as the exit point.

2. How Many Currency Pairs Can You Trade Using the Easy Forex Breakout Trend Trading Simple System?

I am required to choose either the aggressive or conservative strategies before I deciding to make use of the indicators. These 2 systems are explained clearly in detail and helps traders to choose most appropriate system for their own risk profile. It works on multiple currency pairs as the MT4 indicators can be effectively put to work on most chart patterns. It makes breakouts very easy to find on any time frame on the template provided.

3. Where Can You Watch the Demonstrations of How the Color Indicators of Easy Forex Breakout Trend Trading System Really Look Like?

Its website provides several videos that are very useful for seeing how the colored indicators in visual detail. Also, every strategy and indicator is clearly explained to me and other members via the training video tutorials that show step by step on how to execute the strategies. I can also opt for either the aggressive or conservative trading styles on different time frames.

The shorter time frames are certainly more volatile, and I tend to like to use conservative approaches when trading short time frames. This approach has boosted my profits but of course, you should choose the proper risk levels for your own risk tolerance.

Using Cross Currency Pairs in Forex Trading

2011-03-29T17:22:00.000-07:00

A question that is often asked by beginners to trading is, if we accept that the majority of forex or currency trades include the United State Dollar, why should the trader look at any currency pair that does not include the United States Dollar? The question is valid bearing in mind that over 70 % of the worlds forex trades include the United States Dollar in its currency pair.

First of all a definition. A currency pair that does not include the United States Dollar is known as a cross-currency pair or more simply a cross.

One of the biggest advantages of using cross pairs is that the trader is able to select a one where the movement is perceived to be the greatest. Let us assume that an announcement is being made which has the potential of strengthening the Japanese economy. The obvious first choice of cross would include the US Dollar. However, let us assume that at that particular time, the dollar is also perceived to be strong then this may not necessarily be a good currency pair. Having completed some research the trader realises that recent development in the Great Britain economy are showing that the Great Britain Pound is actually falling in value to other currencies. With the Yen strengthening and the Pound weakening, this may lead the trader to believe that the GBP/JPY currency may be more profitable.

Another factor which may encourage the trader to use a cross pair is the spread on a given currency. The spread is defined as the difference between the buying and selling of a currency. This is expressed as the number of pips (also known as points or ticks). On one cross the spread may be 4 pips on another 2 pips. Now for long-term trading this is less important, but for short-term trades this can make a big difference. Scalping is a trading strategy which looks for multiple short-term low value trades. If a currency pair moves 6 pips, then using the above figures, one currency will provide 2 pips profit, the other 4 pips. That is a 100% difference in profit.

When looking at which currencies therefore to "pair" with each other, the trader should look for those which have high liquidity i.e. where there is most volume and where the spread is kept as small as possible. Traditionally the currencies which have been used for cross-currency pairs also appear as major currency pairs when matched with the United States dollar. These are the British Pound, the Euro, the Japanese Yen, the Australian Dollar, the New Zealand Dollar, the Canadian dollar and the Swiss frank.

The most actively traded cross currency pairs are:
EUR/JPY Japan Euro-yenNZD/JPY Kiwi-yenGBP/JPY Sterling-yenEUR/GBP Euro-sterlingEUR/CHF Euro-SwissAUD/JPY Aussie-yen

Each individual forex trader will have their own trading style. Being able to use cross currency pairs adds an additional tool to use on the road to financial freedom,

Kaz Kowalski has been providing specialist project management support on a number of high profile projects across a variety of industries including Banking, Information Technology, Telecommunications. In his spare time he has been successful in building and running a profitable Home Forex Business which has allowed him the option of reducing the time he spends on providing consultancy services. He has also helped others acquire the basic skills need to be successful traders.

To learn more visit http://www.home-forex-business.com/

Article Source: http://EzineArticles.com/?expert=Kaz_Kowalski

Forex Trading: Economic Indicators for Euro-Zone

2011-03-29T12:42:00.000-07:00

Each country and region has its own economic indicators that allow investors in FX trading to make estimates about whether the economy is struggling or thriving in order to wisely trade for that country's currency. Presented are some of the economic indicators for the Euro-zone.

German GfK Consumer Report

This report is presented monthly, during the last week, by the GfK Group. The German GfK Report provides information about consumer spending in three major business sectors throughout Europe, Custom Research, Retail, and Technology and Media. A survey collects information from over 340,000 retail sources and the GfK Group compiles it into a report makes estimates about the current market.

The report breaks down the general growth or decline by country, shares information of particular areas that have experienced change (for example the March 2011 report states that small appliances had dynamic growth), values the worth of entire sectors of industry (such as the IT) and further breaks down what product sales are driving that industry (like personal computers for the IT sector), and compares the current consumer market with past ones to see if any historical parallels can be identified. All of these factors allow the investor to make intelligent decisions with his/her forex broker.

Euro-zone Unemployment Rate

This report is released monthly, during the first week, and provides information about the employment for two months prior. Produced by The European Commission, this report breaks down different sectors of industry and provides information on each industry, including news, publications, and upcoming events. The website provides information about new technologies and advances in practices that could affect profits, consumer attraction to a product, or other potential changes that could benefit a particular industry, thereby driving up its value. This report keeps the wise forex broker and trader alike informed about shifts in industry that could raise the value of the currency.

European Central Bank Rate Announcement and Press Conference

The monthly release by the European Central Bank (ECB) President and Vice President informs the general public whether the ECB has decided to raise, lower, or maintain current interest rates. The ECB analyzes data in order to determine areas such as market inflation, unemployment, GDP, and cost of living versus income. With this information, they decide whether or not to intervene in making changes to influence the market. They try to control decisions that would best provide for economic success and stability. Forex trading is interested in this report because the ECB does a lot of research for their announcement, so the information they have is very valuable. A report stating dramatic changes could imply significant changes in the currency's FX trade value.

German Industrial Production

The Federal Statistics Office Germany releases this monthly statement six weeks after the particular month being reported on. This information is specific to Germany, which is crucial as it is one of the world's leading markets. Included are a wide-array of articles, detailing everything from industry reports (such as air tourism numbers), statistical information (like migration background and households with a flat screen television), and economic and financial data for Germany. These tidbits can be used to predict how the Euro will shift in value.

Do Forex Robots Work? Finally, Some Real Answers!

2011-03-29T09:09:00.000-07:00

Introduction

Do Forex robots work? Well, it depends who you ask! Talk to anyone selling a Forex robot, and they'll tell you that it's the best thing since sliced bread. Ask any Forex trading coach or educator and they'll tell you that the only way to make money in Forex is by learning how to trade on your own. They're both wrong, of course, because it really depends on what your Forex trading goals are. By the end of this article, you'll know if Forex robots are right for you.

Your Forex Trading Goals

So what do you want to get out of trading Forex? Obviously, we're all in it for the money, but there are a few questions you need to ask yourself before you know if Forex robots are right for you. First of all, what's the level of income that you want to derive from your Forex trading? How much time are you willing to commit to achieving that level of income? What's the time frame that you want to achieve that income by? If you know the answers to these questions, then you'll go a long way in your Forex trading regardless of whether you use Forex robots or not.

These answers will make it obvious whether Forex robots are right for you. If you don't have a lot of time to learn how to trade Forex right now, and if you want to start making money from Forex trading straightaway, then the only way you're going to be able to do that is with Forex robots. If you want to learn how to trade on your own, and you're willing to commit the next 3-5 years of your life actively learning how to trade, day in day out, then you're better off focusing on honing your trading skills so that you can trade manually.

Are Robots Right For You?

Trading with Forex robots will take you on a very different path than if you choose to trade manually. If you decide that they are right for you, then your focus will be on identifying the best robots, and learning how to maintain your robots to ensure long term profitability. It's much less demanding and time consuming than if you choose to trade manually. So if you want to make a passive income from Forex right now, then your best bet is to trade with Forex robots.

Article Source: http://EzineArticles.com/?expert=Thad_B

Successful Forex Day Trading

2011-03-29T05:38:00.000-07:00

Forex day trading is a particular branch of trading which requires its own attention. Just as there are two main styles of forex analysis there are also two perceived main methods for forex day trading. These are typically known as 'continuation' and 'reversal'.

Anyone interested in forex day trading would be well advised to study both methods and get a good grasp of each before carrying out any kind of trading. Venturing down this road blindly or ill-informed could result in heavy losses. Once you have the knowledge, you will be able to make informed choices from which experience can be gained.

One way of acquiring such knowledge is to seek out and take up a course dealing specifically with forex day trading. There are other courses available too but if you are sure about your desire to go down this route then the more specifically biased course you can find regarding forex day trading, the better it will be for you. If you want to become an expert in that field then all your attention should be focused in that direction.

If you carry out a search online, you will find many such course providers. It might be difficult to tell which course providers are the better ones. As with everything in life, you will find some good, some better and some best. Reputable standards may also vary in extremes so carrying out a review of course providers may best the best route to go. You are sure to find a forex day trading course which is right for you.

You may find that the better course providers are reluctant to make wild claims. Common sense should tell you which claims to believe and which ones to leave well alone. No one can teach you how to make millions of dollars over night. Any such claims should be take with a pinch of salt, if not, then don't take it at all.

The real experts in forex day trading will not only be trading themselves but they can really tell the full story like it is. The aim is to always make money, but the reality is that, sometimes you will lose money too. They are the ones best placed to advice about ways of minimizing those losses.

Once you are armed with all the knowledge, information and useful tips, you will be well on your way to being able to make your own informed choices. A forex day trading course will help you make the right decisions. It is only after courses and information gathering that you are able to make a decision about which method will work best for you and your situation.

Successful forex day trading can be achieved if you are prepared to put the time, effort and energy into learning all about the market, the tools, the course providers and everything else that is there to help you along the way.
Forex day trading is a popular choice with most beginners because it may appear easier and less risky but after careful research and study you may find it to be quite the opposite.

That is why it is so important to look into everything very carefully before taking the leap.

Discover the benefits of proven and effective personal finance strategies, wealth building techniques, money saving advice and time tested personal finance tips that will help you to get more out of your hard earned dollar and live a better lifestyle.

Find the answers to financial success in today's tough economic times, discover the secrets that will help you to be a successful forex day trader and learn the tips that will show you financial benefits.

Article Source: http://EzineArticles.com/?expert=Joel_Gray

Where Is The Euro Headed - Up Or Down?

2011-03-29T01:20:00.000-07:00

If you've been following the Forex markets over the past year, then you know it's been a wild ride! With a high of 1.4282 and a low of 1.1877 over the past 12 months, it's no surprise that many people have made a lot of money, and others have lost a lot! Let's take a look at where we thinking the value of the euro is headed.

Now I must admit - the euro has surprised me many times this year. As an example, this recent surge upwards caught me a little off guard.

However, I did profit greatly from the sell-off that occurred in 2010. There so many worries about Europe and the financial mess that certain countries were in (Greece, Spain, Ireland) and the markets were bearish on Europe in general.

I remember when the euro was selling off that many people around me were scared to go short simply because they thought it had already gone down so much. They figured it couldn't go any lower!

But this was an example of one of my trading believes - it pays to follow the trend until there's a clear reason not to!

The euro just kept tanking, and everyday there were more negative news reports and numbers coming out of Europe. There just wasn't anything positive coming out and I couldn't see any reason why the world would think buying the euro was a good idea.

This recent surge in the euro (it's trading around 1.39 right now) is partially due to a US dollar selloff, and the possibility that the ECB will raise interest rates.

Many investors have been selling US dollars as they fear that what the US fed is doing in terms of monetary policy is the same as printing money, which should in turn devalue the currency.

The European Central Bank has signalled that they expect to raise interest rates very shortly. This appeals to people seeking higher yield investments, so the Euro rallies as they expect there will be more demand for euro denominated investments (and thus more demand for the currency).

Personally, I find it hard to be long euro. There are a number of countries that are in bad - no AWFUL - financial states. There is a real risk of at least one country having to "declare bankruptcy" and there really haven't been many positive financial numbers coming from Europe. The US seems to be rebounding at a better pace.

I'm going to wait until the next rate decision announcement by the ECB. I suspect they may raise rates at that time, causing another spike in the euro. At that point I will likely sell as I suspect the European zone has many challenges ahead.

Should You Become A Forex Trader?

2011-03-28T21:05:00.000-07:00

With the lack of jobs available these days and the uncertain economic situation, its no surprise that many people are looking to Forex trading as a career. The lure of working from home and making profits every day sounds great, but the reality is some what different.

Learning to trade Forex successfully is major undertaking, and it is likely to take most people several years to become consistent. But it can be done, so long as you put in a huge amount of effort and are willing to take a lot of pain along the way. There will be times when it seems impossible, but if you can overcome the doubt during the bad times and turn it in to positive thoughts and actions, you can succeed.

Before you decide if Forex trading is right for you, you need to look at your situation. First if all to be a successful trader you need money, and the more the better. There is so little chance that you can succeed with a few hundred dollars, that there is no point trying. The amount you will need depends on how good a trader you become, some people may be-able to make a 1000% in a year, therefore a few thousand may be all that is required. But for most successful traders 50-200% are the most they will make in a year.

If you have a family to support, have just lost your job, but have a couple of thousand saved there is no way you should even consider Forex trading. The stakes are too high. You should never trade with money you can't afford to lose, never!

The cash you have for trading must be disposable, so if you lose it all it wont affect your lifestyle. Its not only important that it doesn't affect lifestyle, but that it doesn't cause you to make emotional mistakes when trading. Trading with money you cannot afford to lose will make you over protective of your capital, this is called "scared money" and because you are scared to lose it, you will not be-able to accept the risks in Forex.

But if you do not have the money all is not lost, you can practice trading Forex with a demo account. These are the same as real trading accounts except that it is funded with fake money. These are available from most brokers and only take a few minutes to set up. There is no financial risk in demo trading, and you can practice until your hearts content.

But be warned, making a huge profit in a few weeks means very little. I have seen many people make 200% in a week or so and then think they are geniuses. Trading with real money is very different, you have the fear and the greed to contend with all the time. Demo trading can only take you so far.

I would recommend at least a year demo trading, before trying real money. This way you will experience nearly all market conditions, and you will have gained a great deal of knowledge about the markets.

After a year you can analyse your own situation and see if you are in the position to risk real money in the markets. But if your not than don't. You should continue with demo until you have the means to trade.

If you do decide you are in a position to take the risks involved, be prepared to lose money to start with. Nearly every new trader loses money. But its those people who break through the barriers that are put before us that ultimately succeed. If you are a quitter and don't put in the effort required there is very little chance of success.

Online Forex Trading: Know the Game and Win the Cash

2011-03-28T17:29:00.000-07:00

The economic atmosphere in the world is no longer as stable as it was before. The world financial crisis of 2009 has shifted the way people live their lives. People are trying to find ways on how to earn extra income, especially for those who lost their jobs during the economic downturn. Although online jobs are available nowadays for homemakers and jobless, however, the income it generates is not sufficient and can be considered small time. Fortunately, online Forex trading offers huge income that is sufficient to replace your previous job with the right skills and know-how.

For the people who do not know what foreign exchange is, it just simply a market where exchange of currencies take place. One good example is trading of US dollars to British Pounds. By doing this, one can do transaction in another country without the worry that his currency will not be accepted. Foreign Exchange has been around us for decades but it only limits people to go to banks and currency exchange stations to change their money. Online Forex trading changes the way people exchange their money because it is no longer a place of bar trade but also a good place to earn money.

Although online Forex trading involves risk, it is still low risk compared to other financial products such as bonds or stocks. To make sure that your money can generate income, you have to get the best Forex broker online. It is either consulting professionals or buying online software for foreign exchange to give you signals on when to buy and when to trade. Professionals are those firms that offer service for a fee to show the basics of Forex, give tips on how you will trade your money, and trade the money for you to make sure it is properly placed. Just make sure that the people you are dealing with are legit and have excellent track records in foreign exchange.

If you feel that you already know the fundamentals of trading money, it's time to choose the best Forex broker and start practicing trading. This is when you need to get an online trading platform for you to do your trading. The software is so smart that it can detect trends on which currency you will buy and when will you trade. In foreign exchange emotions get into our way making us doing bad decisions. Online programs do not have emotions to make you decide when to trade but use factual data to ensure you land in the right decision. Also, you have to make sure that the software you are buying comes to a trusted manufacturer and have earned credibility of being effective through testimonials of others who tried it.

Online Forex trading is an opportunity to earn a lot of cash in the comfort of your home which offers low risk if you have the right tool and have the best Forex broker at your side. Having this will not give you fear of losing the game and wipe out your hard earned money.

How To Read A Spot Metal Quote

2011-03-28T13:33:00.000-07:00

Spot metal quotes are represented in the markets in similar fashion to currency pairs, for instance the pairing of spot gold and the US dollar is shown in the markets as XAU/USD.

The price of spot metals are written across the globe in ounces per US dollar which means when you come across a gold quote of XAU/ 830.46 then it means the price of an ounce of gold is valued at 830.46. An increase in the market price of gold means gold has become more valuable and equivalent to higher amounts of dollars. On the other hand a decrease in gold price means that gold has lost its value and now equivalent to fewer amounts of dollars.

Similar to the currency markets, there is always a BID and ASK price for spot metals such as gold and silver. The amount of money that is generated when the metal is put up for sale is known as the BID price while the purchasing price is known as the ASK price. The ask price minus the bid price or vice versa is known as the spread and makes up for the expenses made while engaging in transactions.

Traders can only engage in the buying and selling of spot metals in lots, which represents 10 ounces for gold and 500 ounces for silver. An example of a gold quote is 900.25/75 meaning you would generate $900.25 for each ounce of your gold stock you put up for sale at that particular point in time or you have to pay $900.75 to purchase a lot of gold.

When you trade in spot metals, your profits or losses are calculated as follows:

Let's say you purchase a lot of gold at XAU/USD 900.25 and a couple of minutes later, the bid price surges to 900.95, you can just put up your stock for sale at that price. This means you will generate profits of 0.70 or 70 pips i.e. (900.95-900.25=70) for your sale. Since 1 lot represents 10 ounces, you will generate total profits of $7.00 per lot i.e. 70 pips x $0.10= $7.

On the other hand let's say the price of gold declines to 899.60, your losses will be calculated as follows:

Since you purchased 1 lot at 900.25 and sold at 899.60, there will be a loss of 65 pips per sale. 65 pips x$0.10= $6.50, meaning you will generate a loss of $6.50 per lot of gold sold.

Always keep in mind that 1 pip= $0.10

Forex Cresendo: A Review

2011-03-28T09:22:00.000-07:00

Forex Crescendo happens to be an automatic Forex trading trading program. The program is made to perform purchase and sell activities immediately once set up, entirely on it's own. Forex traders will tell you that absolutely no program or robot can do what they do, and earn cash. And honestly, the concept can seem a little preposterous. There are tons of Forex programs available right now, and they all claim that they can make money while you sleep. Forex Crescendo has several exclusive features making it distinctive from the rest of the Forex software available.

The premise of Forex Crescendo is definitely math concepts. Some other applications disregard mathematics and use trending data to determine when to purchase and sell. This really is basically wagering, they will bet that a currency that's dropping can not continue to fall beneath a particular level. Or they bet that the foreign currency cannot continue to increase in value. Neither of those are a strong foundation to buy or sell a currency, it is simply just like gambling on a losing team or in opposition to a winning team. It really doesn't make any sense. Forex Crescendo was constructed with a mathematical algorithm to make buy and sell choices. This means it analyzes statistics to determine what is going to occur later on, not what has taken place in the past. It focuses only on the GBP/USB and GBP/JPY currency sets to increase earnings. Both of these sets possess a lot of volatility, which provides a lot of chance for the Forex trading robot to discover rewarding trades making extra income.

The designer of Forex Crescendo is additionally an active trader himself. Therefore he built this automatic robot having an understanding of how investing works, and how he would need a Forex trading robot to be designed. This means Forex Crescendo is remarkably tuned and stays away from common mistakes people unfamiliar with live Forex trading do not understand. It trades heavily throughout high-volume intervals for example, and avoids slower instances when there is much less chance to buy or sell on the market. This is reflected within the overall performance of Forex Crescendo. Over seventy seven percent of the trades picked have been profitable, with very small draw down prices during closed markets.

The team powering Forex Crescendo has been extremely open about their Forex trading robot, including live updates of account amounts. They web host webinars and are truly excited to help people earn money with Forex Crescendo. Also they are proud about their own reputations as Forex investors, and wouldn't support a product or service that didn't execute extremely well. The outcomes from the live test account speak for themselves.

Results over 8 month live test period:

-Every calendar month was lucrative and there ended up being absolutely no losing weeks

-Real money gain of over $10,500 throughout the live test period

-Only a single day was a loss outside of more than 160 days of investing. And the loss was fourteen dollars

-The average monthly gain was almost seventeen percent during the trial period

Forex Crescendo is an excellent initial purchase for someone new to Forex trading. It's easy to learn, simple to setup and well-supported.

Forex Trading - The One and Only Tip That Can Make You a Winning Forex Trader

2011-03-28T06:16:00.000-07:00

Have you been dreaming about becoming rich with forex trading? Are you intimidated by the idea of doing currency trading online? Do you really think that you can make profitable trades? These are important questions that one must consider before doing forex trading.

The Reality About Forex Trading

Forex trading can be easy but it is not that easy to make money with forex. As a matter of fact, only 5% of the new traders are really able to make any money with currency trading. That means they get the money invested by 95% of the new traders. How does the money really flow from the 95% to the 5% of the traders? When the majority of the traders lose, the smart minority is able to make money. And yes, those traders do become rich overnight, while the losers go broke. If you are able to figure out the secret of successful traders, you can also be on the other side i.e. the winning side.

Successful Traders Don't Become Successful Overnight

The veteran traders put in a lot of hard work and practice to become successful. It takes years of paper trading, practice, understanding fundamental and technical analysis before they come up with "strategies" that make them successful.

The Secret of Successful Traders

The real secret of successful traders is using strategies that work for them, over and over again. The more successful strategies a trader knows, the more money they are able to make. Once they know a bunch of strategies, they continue repeating them to make money and also keep learning new ones. This is the real secret that makes a forex trader successful. They know when to make money and when not to lose money.

What You Can Learn From This Secret

If you also want to be a successful forex trader, you must know at least one winning strategy. And you must know it well. Once you know that strategy, use only that strategy repeatedly. You must wait while trading for a certain situation to come up until you can use your strategy. If it doesn't come up, don't do anything. Just keep watching the markets. That requires some self-control. Successful traders have strong control on their emotions. So once again, learn a good strategy and learn it so well that you can repeat it over and over again to win a trade.

Don't Do Forex Trading if You Can't Follow This Secret

If you have a habit of getting carried away, if you are unable to take time to learn at least one good strategy and focus only on using it, you shouldn't do forex trading. If you are trading just for fun, that's another thing. However if you really want to become successful but are not serious about it, then don't lose your money in the currency markets.

Watch the Markets Before You Start Trading

Once you have come up with a strategy, give yourself enough time to watch the markets and apply your strategy on paper before you start real trading online. Become completely comfortable with your strategy. Once you know that you can identify the situations where you can apply your strategy and are able to make money, you can then focus on learning a second strategy and follow the same process.

Although it is quite possible that one may master forex trading, it may happen that in a spur of the moment, you may forget the trading rules that you have set up for yourself and end up losing a trade. That's why currency trading is considered highly risky. On a friendly note, I don't recommend currency trading to someone who is not disciplined and dedicated enough. If your ethics don't allow you to gamble, then don't do trading either.

Tips When Looking For Good Forex Expert Advisor

2011-03-28T01:44:00.000-07:00

When the time comes for you to find a Forex expert advisor that is effective you may find this quite difficult so as a result you might decide not to trade on the Forex market before you have even begun. Okay it is going to take some time but it can prove an extremely sound investment to find an expert advisor as it isn't only your money you are investing but also your time.

So why can it prove difficult to find a good Forex expert advisor?

Answering this question isn't easy as there are numerous things that need to be taken into account when you are considering using such. If you intend to carry out reviews of different systems yourself so you can decide which one is best for you, you need to know what the differences are between them regarding the features they offer and the benefits they will provide to you.

When you are reviewing different systems then you will need to sit down and see which key features developed for these systems actually meet with your needs. Also you need to compare the results, list features as well as finding out more about trading pairs. This is the only way that you will be able to find the best Forex expert advisor for you.

When it comes to such systems these are constantly being improved and updated so it is a good idea for you to actually remain informed even when you do find a system that works for you. The most effective way of keeping abreast of what is happening in relation to such is to subscribe to one or two good newsletters that discuss all matters relating to Forex trading. Plus sign up to and read forums or blogs concerning all matters relating to trading on the Forex market. All of this information can soon help you to make a more informed decision regarding which one to use.

Finally when looking at the various Forex Expert Advisor systems available look to see what they offer in relation to Forex trading signals. A system where these are given to you can prove very helpful in the beginning when you are learning how to use the system, as they will clearly show you how the currency is trading at the time. It is best to look for systems where signals will be passed on to you as soon as a trade has been carried out by a broker reducing the risk of you losing more.

Features Of A Good Forex Trading System

2011-03-27T21:41:00.000-07:00

Forex trading systems are systems generated by experienced Forex traders which are used in making trading decisions. I must state here that any good Forex trading system be it automated or manual should have certain features which are necessary for profitable trading. The following are points to consider before buying any forex trading system:

1. It should be easy to understand and implement. Although, you may not understand the parameters it uses in generating signals, however, the system must not be complex to understand and implement.

2. It should be able to generate signals 24 hours of the day as long as the Forex market is active, except in some cases where the system has been programmed to trade at certain times of the day.

3. It must be capable of telling you at any given time whether to Buy, Sell or Stay out of the market.

4. It should be able to generate signals on any platform. However, forex systems, whether manual or automated are usually independent programs and are normally not exclusively designed for certain sites.

5. Although good Forex trading systems are not always 100% perfect every time, they should yield profitable results based on good analysis. They should be reliable enough to make money.

6. Another feature of a good Forex trading system is this: It should be able to trade profitably on any currency pair or at least on the major currency pairs.

7. The solution provided by the system must offer an integrated management system that is capable of making the best investment decisions even when the market conditions are unfavorable.

From experience, I have realized that the price of a Forex signal does not determine its efficiency. That a Forex signal is on the expensive side does not mean it is more effective or efficient than a cheaper one. Neither does a cheaper system mean that such system is effective.For this reason, you should be able know what you want from a signal generator and how its performance is like before you invest your hard earned money in it. I would strongly advice that you test all Forex system on a demo account first, and then you may decide to test it on a real account but with a very little amount of money before investing your cash on real accounts. You don't need to keep worrying about sudden market changes in the currency market. Neither do you need to be confused about which direction the market is going. You can't trade the Forex market by guessing. You need an easy to implement system which is guaranteed to make profits.

Visit http://www.bestforexwinningsystem.com for more details.

Ehis Alimian is a Forex trader with over six years experience, a prolific writer and author of articles of Forex trading tips, advice and strategies for profitable trading. Helping Forex traders both experienced and novice traders alike to be successful in forex trading. You can visit http://www.bestforexwinningsystem.com/ for more interesting topics.

Article Source: http://EzineArticles.com/?expert=Ehis_Alimian

Guidelines to Become A Successful Trader

2011-03-27T17:57:00.000-07:00

Guidelines to Become Successful Trader

The paradigm of success lies in the ability of an individual to fulfill what he has planned. Most of us believed that getting through our goals in life is enough to define that we are successful. In some instances, being successful is about coping with the whole process of achieving the best result of what we want in life. It is basically about perceiving the thing you want and putting it into practice to eventually give you contentment and satisfaction.

As such, one primary goal of the traders why they decided to join and participate in the marketplace is to become successful. Most traders (or rather all traders) want to generate cash flow from their ventures. Making money either from stocks or Forex is not that easy. Even if the trader has profound knowledge on the trading industry and training from professionals, to become successful trader is still a long way to go. Each attempt to execute a trade corresponds to the capability of the trader to win over his decisions. His patience and determination will give him the right time and accurate "feel" for the market as he watches the price action. With self-discipline, a trader can completely understand the market and eventually take control of it.

How to become a successful trader?

The fact that the market is perpetually changing, the structures need to be modified recurrently. When you learn how to develop your own trading system, you will entirely get the freedom and be able to conform to the market situations. You need to reprogram yourself, letting your subconscious mind not to limit the chances and opportunities of becoming successful in the trading industry. To become a successful trader, you may consider these easy to follow guidelines:

? Have a total accountability of your actions. No matter what the result of your action is, you need to accept it. When something goes wrong with your trade, you have to consider it as one of the lessons you need to learn. In the process, it will make you avoid the same mistake in the future.

? Find a system that best suits your needs. The first thing to do is to know your objectives so you can get the trading system that will work best for you. You need to modify your expectations and choose a reliable system amidst different trading softwares that you believe you are comfortable with.

? Prepare yourself to trade and trade what you have prepared. Stick with your plan and system by preparing all the necessities regarding your trading beforehand. You need to know the entry and exit point of performing a trade. After your "feel" to the marketplace, let the system provides you the execution of your plan.

? Learn how to master your trade. Evaluate your system and know how to improve all your trade afterwards. Don't limit yourself with the stock trading basics you have learned before you actually came out. Success is a continuous process of survival from the marketplace. Once you win, reassess yourself and keep it up.

? Believe to yourself. Always make a positive view of your decisions. Trust yourself so you could be able to make a positive system that will eventually make you successful.

? Trading is not a cash box. Your top priority is not to make money in the Forex or stock market, rather, to get self-fulfillment.

? Grow a mullet. Trade in the day and do party at night. Don't push yourself too much and find time to relax.

The paramount of becoming a successful trader will give you the dexterity to learn trading technique in the long run. It is also based on the elements of stock trading and Forex market strategies.

Tips When Looking For Forex Trading Accounts

2011-03-27T13:03:00.000-07:00

If you are an established trader then opening any kind of Forex trading accounts won't be that difficult. However if you haven't opened such an account before then it can prove a little more difficult as there are numerous to select from. It is important however that you do select an account that is right for the kind of trading that you intend to carry out. Plus it also depends on the amount of money you are willing to commit to your trading on the Forex market.

For those who haven't actually had a Forex trading account before there are numerous demo type ones that they can try out for nothing. As well as providing with a free platform on which you can practice trading on the Forex market with. These kinds of accounts also allow you to surf through various Forex databases before you start spending your own money on them. Today there are several different dummy accounts for you to select from.

But how does one select the right kind of currency trading account for them?

When it comes to choosing live Forex trading accounts you need to ensure that you select the one that has the right trading account that you want. You have a couple of options to select from. You can either go for a business account or a personal one.

It is still important however before you register for any of the accounts available that you read through the fine print carefully. As you will discover some of the Forex trading accounts are managed ones and if you check the box for such an account then a broker will make the trades on your account for you. Okay there is less risk for you as you have someone experienced carrying out the trades for you but of course any profits you make from such trades the broker will take a percentage of them.

Another thing to look at is what sort of system the Forex trading accounts have in place for providing you with Forex trading signals. What you are looking for is an account where as soon as a broker has taken a trade elsewhere that you immediately are provided with notification by email or text message of what has taken place. Then of course you can decide if you are managing the account yourself whether to invest in this particular trade or not.

The 7 Unavoidable Pillars of Selecting A Top Notch Robot for Forex Trading

2011-03-27T09:57:00.000-07:00

Forex trading robots have totally changed the way people trade the forex market for profit.

In the not too distant past, only large firms and financial dons could trade forex with any hope of making money. The advent of automated trading software, however, has simplified trading so much that absolutely anyone can "make it big" trading the forex markets:

A robot for forex trading makes it achievable for the likes of you and me to trade and generate wealth with forex.

The only issue here is that there's a bewildering choice of robots out there.

Before laying a cent down on one, there are certain things a robot for forex trading needs be capable of before it can ensure you the profits you want. It's not even worth considering if it doesn't.

Beyond all the marketing hype of scammers, here are 7 selection pillars many people are unaware of but should know before buying a forex robot.

Pillar One: Newbie Creators

Learn the past performance of the robot's creators.

So many robots supplied on-line are cloned and crippled duplicates of successful ones. You really need to know how many years of know-how in forex trading the developer and support team have.

Are they computer system programmers? Are they pro traders? The best robots should come from people with both experiences.

Pillar Two: Untested 'Bots

If it hasn't been extensively tested, go no further, run!

Ideally, you should get a robot with years of operation and plenty of satisfied owners; make sure it's been exhaustively tried with old and present-day market scenarios and that it performs excellently.

Pillar Three: Wimpy Robots

If a bot's prowess has only been tested on demo accounts, extensively or not, it's a wimp. When a robot shows a fantastic 100% score with demo accounts, it doesn't assure the high success rate you will need to turn in a healthy profit during actual trading.

Battle hardened, live trade verified robots always, ALWAYS.

Pillar Four: Lack of Support

Sometimes you need your hand held, so make sure support's offered.

A robot for forex trading should be routinely updated by the creators. This makes it wiser, keeps it efficient and allows it to adjust to up-to-date market trends.

Pillar Five: Inefficient Robots

Find out if it can safeguard your investment. Trading in big volume will not help make you rich if those trades are not optimized. Make sure the forex robot has a stop-loss feature or some other technique to limit your exposure and maximize the returns from your trade.

Pillar Six: Inflexible Robots

Don't be taken in by forex robots that are not flexible, and no, I'm not talking yoga here.

Forex trading requires constant attention. Luckily, good (NOT all) robots will take care of that for you. All you will need is a trading robot that can be hosted on a "remote server", so that your robots still run even when your PC is turned off.

Pillar Seven: Robots That Don't Make You Cold Hard Cash

Lastly, take care not to buy a forex robot that is incompatible with your platform or that is plain stressful to set up, tweak and use.

The fx market is a $3 trillion+ per day market. To be part of it, make sure to get a robot for forex trading that can assure above 70% profit and a low drawdown.

You'll be skipping all the way to the bank.

Find A Good Forex Trading Tutorial

2011-03-27T05:12:00.000-07:00

Have you seen a friend or work colleague having some success on trading on the Forex market and would now like to give it a go. However we would recommend that you shouldn't rush headlong into trading but actually undergo some training first. Therefore it is important that you find a good Forex trading tutorial to help you.

These tutorials are made up of a series of instructions provided to you by expert traders using methods and ways that have proven effective to them. In order to receive these of course you need to be willing to listen to what they have to say. If you do then you could soon become as successful as so many others have when trading on the Forex market.

Before you begin searching for the perfect trading tutorial you must make sure that you aren't going to be too busy too often. For those who are really serious about learning everything about this form of trading then they need to set time aside each day.

So what do these Forex trading tutorials do for you? They teach you the basics along with more advanced concepts so understanding currency trading becomes a great deal easier. As well as knowing what this form of trading is all about you will begin to understand the underlying mechanics of it. Plus you will soon begin to see why people have succeeded and why just so many have failed.

When looking for a good trading tutorial to do with the Forex market it should involve steps that are concrete and not just the product of someone's imagination. These steps will be ones that have been tried out and tested and will make a difference. These steps will allow you to know whether your trading on the Forex market is a success or a failure.

Look for a Forex trading tutorial that teaches you the step by step strategy and include not only the basics of currency trading, but teaches you also about Forex chart reading, technical analysis, fundamental analysis, price action, money and risk management, trading psychology, Japanese candlesticks and understanding news announcements.

Also you should be looking for a Forex trading tutorial where you learn how to read Forex trading signals correctly. So when you do receive these then of course you are ensuring that you make investments quickly and know that the ones you are making from the signals are also sound ones.

About Forex Trading

2011-03-27T00:16:00.000-07:00

People today always try to find ways to gain more profit and earn money more. The financial state and economic reason are behind all these actions because no one would be really sure of what's going to happen in the future. Since the last economic drop, people have learned to be cautious and careful. They would want to have extra saving so that they don't have to go through all those chaotic financial instability anymore. Well, one of the easiest ways to do so is by Forex trading.

Just like in other markets where people have to buy and sell and gain profit from the transaction, the same principle also applies to Forex trading. What's for traded, exactly? It's actually the international currencies. People usually need a pair of currencies where they trade one currency with other; for example, they trade American dollar with European Euro or they sell their Canadian dollar in order to buy Japanese yen. They make profit by doing the same thing traders have been doing for a long time: buy everything low and sell everything higher. They could basically do that since there's always fluctuations in the market. If they're smart and can make use of the fluctuations, they would get a lot of profit. Sure, if people are greedy, they could risk everything; including the money they've invested. That's why it's better to play it save and don't rush into things.

Some people might say that Forex trading is like gambling. Well, it's quite true and not completely. In gambling, they rely completely on their guts, while in this kind of trading, there's calculation and method to do so. For some people, who are endowed with great ability in doing trade, the combination of methods and their natural ability allow them to always gain profit and get benefit from their deals.

Some financial service agencies offer help for people (or investors) who want to start doing investment by doing Forex trading. These clients are usually given several choices. They could invest the money and let the experts to do the transaction. They could invest and participate in the trade with the help and guidance from the experts. So they're basically learning by doing, and consult everything with the consultants. Or they could do the trade by themselves while the experts are monitoring the whole deal. Of course, the last way should only be done by skilled clients.

http://forexswingprofit.com

You Don't Have to Be An Investment Genius To Make Serious Money Using Forex Robots

2011-03-26T20:31:00.000-07:00

If you go on the net searching for robots to use on an FX trading platform, you won't want for options.

The vast majority of these don't deliver the results, are poorly supported and loads are outright ripoffs. A select few - which are not known to many - however, are legacy systems, even turnkey solutions to help new comers and experts alike trade safely and profitably.

No guesses as to which ones you want to be searching for then...

By making use of robots to trade forex, you can easily build a serious fortune. Robots do 97 per cent of the decision making that goes into identifying trades, weighing odds, working out options, opening and selling positions.

They're automated and allow traders to stay in the market for as long as they choose, be in more markets and most importantly bring in more profit.

Why do I like forex robots so much? Please allow me to expand.

Once you've found a superior forex robot (more on how later) that's flexible, capable and has support provided by the creators, you've hit the jackpot. Literally.

Simplicity.

With forex robots, simplicity is the functional word. These robots come in software packages that you can download right after buying.

You click to download, click to install, you click to modify the settings to what you want them to be and that's pretty much it. Really! Naturally, you need a little prep in how forex trading works, but compared to what say a bank-employed specialist FX trader has to know, you're at play school level.

With a pairing of robots and forex, everyone can trade far better and way faster without needing to know more than the basics of forex. They tackle the routine work of actual trading.

You click to tweak the controls, changing parameters which the forex robot should conduct your trade with, and it understands which markets you are trading and which currency pairs just as well as knowing for how long, when it should buy and sell, when it should cap off and when it should pull out of transactions. From there onwards, the bot trades your forex portfolio on auto pilot.

Don't expect a huge windfall instantaneously because that hardly ever happens, but if you are patient, the rewards can be amazing. It'll take a little while to learn the software and get in rhythm with the market. But luckily the learning curve is not steep at all and it's even quicker if you really put your mind to it.

Investment professionals use custom made robots to trade forex daily. The robots they use are astonishingly close to what you can get from prestigious forex robot retailers; these robots are designed by the same math geeks and investment geniuses (genii?!) but are simpler and more adaptable.

Once you track down such a robot, you'll soon need new pants to hold your hefty wallets. That's what I call a good problem.

Forex Trading Money Management - The Best Kept Secret In Forex

2011-03-26T15:56:00.000-07:00

Introduction

With all the hype going on about automatic Forex trading systems, you'd think that they are the be all and end all of trading Forex profitably. The truth is, your long term success in trading Forex depends much more on Forex trading money management than it does on having a profitable Forex trading system. Money management in Forex is seldom talked about in professional circles though, because everyone just assumes that you know how to do it properly yourself. If you're new to trading and don't know the right way to implement money management in Forex, then this article is for you.

What Is Forex Trading Money Management

Forex trading money management is how you protect your capital so that you don't run out of bullets when you're in the trenches of the Forex markets, so to speak. The level of profits you make is directly proportional to how much capital you have at your disposal, so it makes sense for you to make keeping your capital safe a priority over making big profits. Before we get into the practice of money management in Forex, it's vital for you to understand that Forex trading money management is first and foremost an attitude. That means that when you're making decisions, you always ask yourself: is this going to protect or jeopardize my trading capital?

Maximizing Your Returns With Money Management in Forex

The attitude of protecting your capital will carry forward in your practice of Forex trading money management particularly in the size of the risk that you take with each trade. The standard rule of thumb that is often quoted in popular literature is never to risk more than 2% of your capital, but in many cases, that can be too conservative. It really depends on the risk profile of your system, which is beyond the scope of this article. In actual fact, you can go up to 3% or even 4% to really maximize your returns, and if your risk to reward ratio is 1:1 or better, then it makes sense to gear it up to that level. Any higher though, and your risk of ruin is greatly increased.

Money management in Forex is a vital part of any profitable Forex operation, because if you risk any more than 4% on any system, there's a very real risk that your account will suffer a loss that it cannot recover from. For example, if you lose 20% of your account, it will require a gain of 25% to make it back. If you lose 50% of your account, it will require a return of 100% to make it back. Clearly, the more you lose, the harder it is for you to get back to breakeven. Money management in Forex keeps your account growing at the optimal level, so that you have maximized profits with minimized risk. However, even the best money management in Forex cannot help you succeed if you don't have a profitable Forex trading system. So be sure that you have both these vital components in place if you want to make consistent profits in Forex in the long run.

Article Source: http://EzineArticles.com/?expert=Thad_B

Effective FX Strategies

2011-03-26T11:12:00.000-07:00

Searching for effective FX strategies is easier than you think. In order to do this, you must first define "work". You can save plenty of time searching for the secret of FX strategies, such as a trading system with no losing trades, by not looking at all. This is because no system exists. Remember that no one became wealthy out of Forex trading by waiting for the perfect trading system. Now that you're back in reality, let's talk about the real effective techniques.

Trend following techniques - This is one of the simplest and fastest ways to earn in Forex trading. The word "simple" is used here because the initial thing we must do, before being able to follow a trend, is to recognize the trend. Typically, currency market have three possible directions - up, down and sideways. Trend follows search to profit in either up or down currency markets only. The saying "the trend is your friend" is a popular saying for this occurrence. This is actually the standard that trend followers use.

A simple technique of trend trading is to trade by means of multiple time-frame charts. You can get your preferred indicator, like shifting average on every chart. For example, you may have shifting averages system on each of the daily, four-hour and 15-minute charts. Let's say we are trading according to the minimum time frame to go into the trade. If so, we would receive positive outcomes if the currency pair value is beyond your shifting averages on every chart mentioned. Utilizing several time frames provides traders the benefit of confirmation.

Our simple given scenario was accomplished using shifting averages. However, the several time frame trading FX strategies can be performed with or without indicators. This technique is effective when utilized with breakout systems. This also works best for going into short and long positions.

Another movement of currency pair is through sideways. This occurs when the currency pairs are in trading array. This means that the values of the pairs are moving sideways. You can make profit from this by utilizing the countertrend technique. This technique uses support and resistance in opposing direction, just like in breakout systems. In this situation, the currency pair should be sold when its value moved up to a resistance stage and purchase currency pair when the value moves down to a support level.

Traditionally, the aforementioned examples were for illustration only. These are not to be interpreted as the precise method to utilize. They are developed to provide you with a good starting point for your own testing in searching for the perfect parameters set for you.

Find Out What a Currency Trading Course Can Do For You

2011-03-26T07:22:00.000-07:00

Have you ever wondered why many people have succeeded in Forex trading, or otherwise known as currency trading? And, have you also wondered why some who tried to do it yet ended up as failures? These questions could only be answered if you look into how these people started trading, whether they underwent the right currency trading course or not.

There are people who say that currency trading is easy, and that all you need to do is to read the vast information on the topic and you could be on your way towards success. However, this is nothing but a myth. Without the proper training, you might just falter once you start trading and end up frustrated.

On the other hand, when you undergo a currency trading course, you would be equipped with all the right knowledge on Forex trading before you start with it. Remember that reading information alone could not be as good as hearing the words of an expert or have someone to ask whenever you are faced with some difficulty.

Currency trading courses would allow you to be acquainted, familiar, and eventually, master a certain trading system that will have you trading with ease and convenience. These courses are created in a certain fashion that would render it easy for you to understand what currency trading is all about. You would not feel overwhelmed with the information before you but would instead build confidence every step of the way.

The course are all geared to making you gain the proper understanding of Forex trading, and not merely to feed you with information that you would not even have an inkling on how to apply on the trading floor. By the end of the course, you will feel that you have indeed gained solid footing on Forex trading, and could very well handle it on your own.

A currency trading course is usually divided into different sessions. Each session would be focusing on several aspects of trading that you should know. Session One would always start with the most basic like selecting a platform and setting it up, reading charts and customizing them, as well as analyzing charts. Session One would also include learning trading terminologies, which is also very important in currency trading.

After the basic concepts, Session Two would often delve with the interpretation of key indicators, trading different time frames, identifying chart patterns which include candle formations and their interpretation, and also identifying trends. The latter would involve understanding trend lines and also spotting concrete trends and the changes that happen.

And lastly, a currency trading course would help you master the trading system. You will now have the ability to make profound analysis and to use multiple time frames. You will also be able to analyze indicators effectively. During the last session of the course, you shall have gained the right skill and practical knowledge on when to enter a trade, when to make an exit, and also, when you need to simply stay out of it. All these knowledge could only be yours through the right currency trading course.

High Leverage Investments - Pros and Cons of Common Margin Trading Strategies

2011-03-26T04:17:00.000-07:00

High leverage investments such as forex, futures, and options trading carry with them a considerable amount of risk. Still, many investors choose to accept the large amount of risk associated with these high leverage investments because ultimately the reward can outweigh the risks. People choose to take on the additional risks associated with leveraged trading because the payoffs can significantly alter the lifestyle of the winners - whereas normal investments offer little gain for small capital investors. Consider a brief look at some of the pros and cons of each of the most common strategies.

Leveraging Up with Forex Is a 24/5 Day per Week Job
Although it gets all the press and appears the sexiest investment vehicle going, forex trading has some great disadvantages as well. Consider that no matter how much capital you have to put in play in the market, there is always someone bigger out there and better financed. Think of currency markets as a room full of bullies and every last one of them is out to steal your lunch money. Imagine further that you each have to stay awake and alert for 24 hours a day, 5 days a week while the market is open. Eventually, one of the bullies is going to take you out - either while you sleep or by just plain muscling you out. Remember - in this arena for every dollar earned someone has to lose the same amount. Someday, you're going to lose.

Futures Trading Requires Continuous Maintenance
The futures market is less demanding than the continuously traded currencies arena yet the trades are still done on margin - meaning constant monitoring of positions is required. If the equity in the assets held dwindle below a certain level (determined by margin requirements) then your broker takes control of your account and starts selling assets to raise the equity in the account. The problem with this situation is that your broker does not particularly care how you fare in those asset sales. Your brokerage firm can sell assets from whatever suits their needs.

Options Trading Provides Boutique Style High Leverage Investments
Personally I prefer high leverage investments made with stock options. While these particular trades may not always be the most liquid, there is no margin requirement when going long normally and losses are limited to the amount of capital invested. Further, gains and leveraged positions are custom designed - each position held is unique and no bullies can push you out of the market before you are ready to sell.

Forex Trading - Gambling, Betting or Speculating?

2011-03-25T23:52:00.000-07:00

Very often when talking to people about running a forex business, I am challenged by people saying that forex trading is nothing else but gambling. There used to be a time when I would bite at the hook and launch into a defence of forex trading. Now days, experience has shown me that sometimes it was the very words that I used were being understood differently by people. Once I accepted this, it was easier to be able to define an appropriate response.

So lets look at the three words, gambling, betting and speculating.

Gambling

This single word is probably the largest cause of confusion in this debate. As an analogy, consider the word running - and let us limit this to the use of the word as a physical exercise.

The person who goes for a jog for 30 minutes in the evening after coming home from work is running. The athlete who sprints the 100m in 10 seconds is running, the person who takes runs for 5 hours to complete a marathon is running.

At its highest level gambling can be seen as the engagement of any activity which involves a risk and is associated with the prospect of potential gain. If this definition is used then yes forex trading is gambling. But then so is investing in stocks and shares, even leaving money in a bank can be seen as gambling- it rarely happens but banks do fail.

For the purposes of this article, gambling will be defined as the staking or risking of money, on the outcome of something involving random occurring events. For example, the toss of a die, the roulette wheel, the purchase of a lottery ticket. In this decision, there are no prior events that have any bearing on the outcome.

Forex trading is nothing like this.

Betting

The definition here will be to stake or risk at any event expecting an outcome where the outcome is not totally random but is influenced by other variables. The latter part of that sentence is important as it adds an additional element to the definition for gambling.

As an example, someone may decide to bet on a team winning based on the fact that two of their key players have returned from injury. Or perhaps the world number 1 in tennis is playing the world number 134.

There are a number of traders find themselves in this position. A forex trader expect currencies, for example, to become stronger based on improved economic data. A stock trader expects a stock to increase in value based on a companies performance.

I would even go so far as to say that many people who invest their money into stocks and shares, in pension funds etc are actually betting that they made the right choice. In sporting events say, the success or failure of a result is known within a few hours, when investing in stocks and shares the time line is considerably longer.

I believe that the majority of forex traders who adopt this approach can have their trading approach defined as betting.

Speculation

I would like to propose a definition that speculation is an action that involves a certain amount of risk, in order to make a financial profit, that is supported by considering a variety of factors which the trader believes support the decision taken.

In other words, when you speculate, you base your decisions on evaluating a variety of different information sources, you rely on your knowledge and analysis of past events. It is this active engagement in the decision-making process that is based on actual facts whether they be events, announcements or the technical analysis of chart patterns that defines speculation from betting or gambling.

All successful professional currency traders and those who run a home forex business trade in this manner. These skills can all be acquired and then need to be put into practise.

Kaz Kowalski has been highly successful as a project management consultant working on a number of high profile projects in blue chip companies across a variety of industries including Banking, Information Technology and Telecommunications. He has utilised his analytical ability to review and determine the profitability and effectiveness of different home business opportunities in building viable and profitable business models. As a result of his analysis, he has concluded that a Home Forex Business has significant advantages over the majority of other home business opportunities.

For more information on learning how to forex trade successfully visit http://www.home-forex-business.com/

Article Source: http://EzineArticles.com/?expert=Kaz_Kowalski

Forex Market And Its Features

2011-03-25T19:14:00.000-07:00

The foreign exchange market which is otherwise called as Forex trade or currency market is a worldwide financial market for trading currencies. It is a decentralised market that functions all around the world. Except during the weekends the trade keeps on moving with so many buyers and sellers globally. The Forex market helps in understanding about the values of each countries currency.

Purpose of Forex market:

The main important purpose of Forex market is to help during the international trade. It helps the traders to convert from one currency to another during their business. Consider an example where the dealing is between the US and British. The US people can import British goods and pay those Pounds rather than paying in dollars.

The nest reason is that it helps in supporting Speculation. The investors can borrow low yielding currency and then invest in high yielding currency through which many competitions can be reduced.

During a Forex transaction, one party purchases goods of one currency and pay them in another currency. After the discovery of Forex, then came the modern Forex during the 1970's. During this period, many countries started switching to floating exchange rates.

Uniqueness of Foreign Exchange trade:
This is mainly due to the geographical dispersion.Various factors that affect the exchange rates globally.The trading volume increases and due to this liquidity steeps high.The power it has to enhance the profit margins.It has very low margins of profit when compared to other markets in terms of fixed income.The Foreign Exchange market runs 24x7 except during the weekends.

From this uniqueness of Forex market, it has been considered as the ideal competition. As on April 2010, the average every day turnover is around $3.98 trillion. It shows a growth of approx 20% of the $3-21 trillion which is the daily turnover as on April 2007. With these improvements, some of the firms have given their average turnover as US $4 trillion.

Here is the $3098 trillion break-down:
$475 billion during the outright forwards.$1.49 trillion in the spot transactions.$43 billion during the currency swaps.$1.765 trillion during the Forex swaps.$207 billion during the marketing of other products.

Spot market:

One of the most important markets is the "Spot market". This term is given to the market as the trade is performed then and there and the market is sold on the spot. Some of the other trading markets are trading on the margin, Futures trading and the Forward outrights.

There are two main statistics of Forex trade. They are
Technical analysesFundamental analyses

How to Find the Right Forex Trading Systems and Strategies

2011-03-25T14:42:00.000-07:00

These days trading currency is big business and many people are making their living by doing it. With the current economic climate the way it is, there are more and more people turning to this to make their money now. The main question is what are the best forex trading strategies?

There are many different strategies that have been developed. Some work, some don't. Some used to work great and now no longer work as good as they used to. You can buy some strategies online that can help guide you on your way too. If you are beginner to currency trading then the best way to learn can be by buying one of the many strategy books that are available online. Just be aware that once it becomes too well known the method becomes saturated and the market adapts to it. This can often make it less profitable in the long run.

The best thing to do with any forex trading strategies is to use the available ones and adapt them slightly. So if you find one system which turns even a slight profit you could filter it slightly to make it even more profitable. This type of filter could be one of many things such as time of the day for entry, avoiding certain markets or even cutting your trade shorter. This part is completely up to you and if you want to make money in the long term you will have to work hard at it and try different combinations.

Finding a Forex System

First, you need to make sure your trading system fits your trading personality; otherwise, you will find it hard to follow. Every trader has different needs and goals. However, because, of the differences in traders there is no system that fits all of them perfectly. You need to conduct your own research on various trading styles and technical indicators, until you find a concept that perfectly works for you.

Second, incorporate price action into your system. That way you will only take long signals if the price behavior tells you the market wants to go up and short signals, if the market indicates to you that it will go down.

Third, and most important, you need to have the discipline to follow your system rigorously. Try it first on a demo account, then move on to a small account and finally, once you feel comfortable and are achieving consistent profitability, apply your system to a regular account.

Of course, creating your own Forex can be very difficult and time-consuming, not to mention the fact that it can be very risky and expensive. Therefore, you can use other systems that have been used by others and have proven useful: Elemental Trader, Rover North Forex System, Seven Summits Trader and so on.

To conclude, Forex trading systems can be extremely profitable and everyone should try a system at least once in their lives. Forex systems can be an excellent source of money for anyone. All you need to do is make sure your system fits your personality.

Forex currency trading can be difficult to get into, but with the help of foreximpact.com you can get insider tips and tricks to help you with all things related to foreign exchange. There are multiple videos and articles to get started in the exciting field of foreign exchange.

Article Source: http://EzineArticles.com/?expert=James_C._Feldon

The Strength Of Sterling And The Future of The Pound

2011-03-25T11:41:00.000-07:00

The recent drop in value of the pound against other currencies such as the US Dollar and the Euro has caused widespread concern amongst businesses and households. As well as rising costs of imported goods, the expenses involved with foreign travelling have also gone up.

Whilst importers have been worried by the decreasing value of the pound, those exporting goods have welcomed the falling exchange rates, as the exported goods are now cheaper to foreign markets, thus encouraging export trade.

The weakened pound has drawn mixed reactions from economists and businesses. Some herald the decline as a necessary means to redress import/export trade imbalances, whilst others view the developments as an ominous indication of a weakening economy.

As a free floating currency, the pound's exchange rate is determined by supply and demand. The more international demand there is for sterling currency, the stronger the exchange rate will be. The current situation of ill economic health following the credit crunch of recent times, has led to the severe weakening of the pound.

Additional factors which must be taken into account are the expected interest rates in the UK. Higher interest rates result in a better return (or yield) on bonds and other Government securities, and so attracts a greater level of overseas capital. Such a rising international demand for the pound would, as mentioned above, strengthen the value of the currency.

Relatively lower interest rates, and in particular the base rate set by the Bank of England, have resulted in a weakened pound.

Secondly, the requirement to correct a large trade deficit - i.e. a distinct imbalance between imports and exports - can also lead to a weakened exchange rate. The need to make exports cheaper and imports more expensive has been a major factor in recent pound valuations.

The current conversion rate for GBP to USD stands at 1:1.601, and from GBP to EUR stands at 1:1.15 according to currency converter xe.com.

Following 2 or 3 years of decline, the British economy has now began to recover. Following political uncertainty in 2010, Sterling then recovered some of its previous stability when the markets approved of the Government's budget deficit strategy.

It seems then that the fate of the pound and any hopes of a conversion rate optimisation is closely associated with the decision whether or not to raise the base rate from its long standing record low of 0.5%. As we have seen, higher interest rates equates to greater yields which lead to increased overseas investments, resulting in a stronger pound.

Important Factors That May Affect Your Forex Focus When Trading

2011-03-25T07:08:00.000-07:00

Companies listed on the stock market are affected by the decisions made by their board of directors, as well as their profitability and overall productivity. In much the same way, a country's currency is impacted by economic policy and the political actions of their leaders. If you want to make sure you are looking at the right indicators to make your currency trades, take a look at the following possible influencers to ensure your forex focus is on target.

Interest Rates

The relationship between interest rates and foreign exchange might not be immediately obvious. After all, on the surface forex traders make money by the movement of bid/ask and the spread in between. However, as a country's interest rates increase, more money tends to flow in because investors want to capitalize on the higher rates. This increases the demand for that currency and as basic economic theory dictates; increased demand pushes up the price of money aka the exchange rate. It follows then, that one of the key areas of forex focus should always be interest rate movements.

Political Conditions

Political change considered to be disadvantageous to the country's economy will likely reap adverse effects on the currency of the host country and its neighboring currencies. War also has a destabilizing effect and naturally too, affects perceptions about a country's currency strength in world markets.

Gross Domestic Product

The Gross Domestic Product or GDP is simply the market value of goods and services produced over one single year. A rising GDP is considered to be a strong indicator of stability in a nation's production and consumption. This can lead to increased interest rates, which come about with rising inflation. Higher interest rates attract foreign investors, improving a country's currency or exchange rate thus making room for profit in the forex market.

Inflation

Inflation is basically the rising cost of goods and services with respect to a nation's economy for a given period of time. Some inflation is expected as a result of economic growth, but high levels of inflation are considered a sign of poor money management and fiscal policy. When inflationary pressure gets to be too high, the cost of living will explode and the cost of even necessity-type goods and services become exaggerated. Thus inflation erodes the purchasing power of a currency which makes it less attractive on the forex market. Inflation is therefore yet another area to monitor to ensure your forex focus remains on target.

Employment Levels

Employment is a measure of the productivity of a nation. When employment levels are high, a great proportion of the country's population is engaged in productive activity which furthers fuel trade and investment. Forex investors realize a high employment figure reflects a stable economy and imposes some degree of peace of mind; that the wheels of commerce are turning and the currency is in good position.

Every one of these factors will contribute in some way or another to the movement of various currency pairs on the forex market.

Justin Wryke

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Disclaimer:
All articles are provided for information purposes only and are copyright of Justin Wryke. Articles can be redistributed if the resource box is left intact in its entirety. I, Justin Wryke do not accept any responsibility or liability for the use or misuse of the article content by any person or entity.

Article Source: http://EzineArticles.com/?expert=Justin_Wryke

GPS Forex Robot

2011-03-25T03:32:00.000-07:00

Is the freshly released GPS Forex Robot truly one of the top Forex trading software as exactly what its proprietors are claiming it to be? Tension are numerous automated Forex trading resources available today, you can be certain that lower than 10% of these software are able to make a consistent earnings over the long term.

One particular. How Can You Notify Whether GPS Forex Robot Works or Not?

Via my experience, the most important factor that determines the achievements any currency trading robot can be its power to perform inside a live investing market natural environment. Created by the particular professional expert trader Mark Larsen, it is the first Russian Foreign exchange software that actually works inside a live industry environment. Typically, the reside accounts decide to make $300+ per day investing some of the most fluid and erratic currency sets.

2. What Can You Expect to Obtain as a Person in GPS Forex Robot?

The customer assistance of this plan is provided by Ronald and Antony, both whom had been involved in the coding of this computer software. On top of being programmers, fortunately they are profitable Forex traders themselves, allowing them to understand customer questions quickly and provide proper advice to clients. PDF guides and video lessons provide the directions that users will need to totally install the actual robot and be up and running within 15 minutes.

Currently, this software trades the USD/CHF, EUR/USD and EUR/GBP forex pairs whatever the timeframe that you choose to use. By simply programming this particular software to imitate himself, Tag has made their robot able to calculating variables exactly the same way he would. It will take in info from the are living markets, carries out technical evaluation and then, depending on the fundamental information that has been designed in, celebrate a decision by itself about whether or not to open any trade with the discovered development.

There are so many currency trading robots today that I've ceased trying each one out. But my speculator friend which tested out there GPS Forex Robot insisted that I have to test, so I grudgingly did.

The guy powering this GPS Forex Robot is actually Mark Larsen. I know him as being a rather great forex commentator as their reviews We have followed many times before. He 's reviewed as well as tested a number of systems which is why My partner and i felt this specific GPS Forex Robot would be completely different from the rest because this guy features a reputation for you to upkeep. So I told personally that this would not be a scam and this I have verified is definitely not really.

If you glance at the site, you will notice that they have 1 year of tested live benefits based on Several accounts. They're quite amazing to me and they also say many experts have verified by their agent. There is practically 321% net profit and less that 8% drawdown.

The actual GPS Forex Robot works much like the GPS sat nav in your auto. It attempts to predict short term movement with as much detail as possible.

It's claimed in which in 98% involving cases it has been correct. Alternatives cases when it is not correct (2%), the developers possess put in an excellent reverse method inside which usually instantly unwraps a trade in the other way and covers the little loss. This can be a brilliant thought in my opinion along with a simple trick like this would likely cut the losses and thereby increase the risk for robot less hazardous, whether in back test or perhaps live exchanging.

This forex automatic trading program does not involve virtually any tricks like martingale, grid or perhaps no-stoploss trading that will prove extremely risky.

We've just started out my trading and I would have more to express after a thirty day period of screening.

GPS Forex Robot is quite a remarkable forex trading software and I think it's going to continue to be a hit next year. One and only thing is that it might be sold out shortly.

Factors Causing Growth in Foreign Exchange

2011-03-24T23:57:00.000-07:00

After the rapid increase in the growth of Foreign Exchange the currencies are easily floated from one country to another. The turnover in US in the year 1977 was $5 billion. In the year 1987, the turnover increased to $600 billion. In September 1992, the market reached to $1 trillion. The market got stabilised in the year 2000 with an average turnover of $1.5 trillion.

Currency volatility is main factor for the increase in the foreign exchange market. The one and only instruments that is profitable under conditions of low volatility are the currency options.

Interest rate volatility:

A significant impact on interest rates was created by the economic internalizations. The economic rates in one country become interrelated with another country. Thus, due to this the interest rates changed faster. The interest rates are generally changed for adjusting the growth in the economy. The interest rate differentials give an impact on the exchange rates.

Business internalizations:

The competition in the business has shown a continuous steep curve upwards. This in turn implies that market has been growing and more markets tend to provide cheap raw materials and labour. After the 1990's the growth showed a steady increase. The main reason for the pickup of the economic growth is the fall of communism in Europe and the unsteady economic financial development in South America and Southeast Asia. The changes in the economic growth have always been increasing as many layers have been added in the financial transaction.

Increase of Corporate Interest:

When a product or a service is successful then the overseas market is pulled down in the profit point of view. If you handle the Foreign exchange in the right manner, then the international performance will be enhanced. Thus, this will in turn increase the rate of return.

Improvements in Telecommunications:

The Foreign exchange was greatly affected due to the introduction in the automated dealing systems, matching systems and the Internet trading. The dealing systems were mainly based on on-line computer systems in which the banks are linked to one-to-one basis. The matching systems are based on electronic brokers. These are very fast and very reliable too. These help in allowing the traders to conduct simultaneous trades. These are very safe as you can see the deals when they are executed. Thus due to the reliability, safety and speed of the dealing systems the Forex has been expanding rapidly.

Forex Trading: Common Economic Indicators for You and Your Forex Broker, Jobless Claims, Fed Index

2011-03-24T19:47:00.000-07:00

Initial Jobless Claims

One important factor for determining currency values for Forex trading is the employment market in that country. The Initial Jobless Claims Report provides this information and is an economic indicator. This report is released by the Employment and Training Administration of the Department of Labor each Thursday, providing information from the week before ending on Saturday.

The Initial Jobless Claims Report releases data regarding how many individuals have filed for unemployment benefits each week, which can indicate the overall status of that country's economy. If the number of unemployment benefits increases, it could indicate that the economy is struggling while more people are losing their jobs and new positions are not being filled, therefore indicating that the value of the currency will decrease. Conversely, if the numbers are decreasing, it may mean that more jobs are being created and the economy is on the upswing.

Investors will typically find trends in this information, such as taking the four week average rather than a week-by-week basis. This gives a better long term market analysis, rather than the possibility of a weekly fluke. In addition, a sound piece of advice is not to overemphasize this data. Investors typically don't think that anything less than 30,000 unemployment claims could be normal fluctuations, but over that number could signify a drastic economic shift.

Anyone interested in researching this information can visit the Department of Labor's website on Thursday for the new report.

Philadelphia Fed Index

The Philadelphia Federal Index (also referred to as the Philadelphia Fed Index or the Business Outlook Survey) is a monthly report released by the Federal Reserve Bank of Philadelphia on the third week of the month and includes information about the previous month. The report deals with expansion and contraction in the manufacturing industry. A Forex broker or anyone heavily involved with Forex trading will typically access this report as an indicator.

Participating manufacturing industries from Philadelphia, New Jersey, and Delaware are administered survey questions regarding the overall changes in their business activities, the results of which are released in the Philadelphia Fed Index. Using the survey as a basis, the report generates a positive or negative number. A positive number usually indicates that the business is expanding, while a number below zero indicates contraction. The report further breaks down these numbers by comparing months and providing a six-month overview.

This report is relevant because it can reveal trends of the entire country. If one local area is doing well or poorly, it may indicate similar data from the rest of the United States. FX trading investors use the Philadelphia Fed Index to predict the state of the economy nation-wide.

Ivey Purchasing Manager's Index

Similar to the Philadelphia Fed Index, the Ivey Purchasing Manager's Index is used in Forex trading to predict the economic trends of a country in order to determine whether that country's currency will increase or decrease in value. The Ivey Purchasing Manager's Index measures the change in purchases made by corporate executives. It is intended to help executives determine economic growth. If the optimal conditions are predicted, then businesses will increase spending in order to keep up with demand for their goods. If the company is producing more goods, it is fair to say that the economy is doing well and their currency is a solid investment.

Learn Forex Trading - A Few Words On How To Start

2011-03-24T15:43:00.000-07:00

When you first learn forex trading it can be daunting. There are so many currency pairings, and trying to find a rationale for currency movements can be frustrating.

Most new traders jump into this business without considering the learning aspect at all. That's a great pity, since it's not difficult to learn the basics of forex. Successful traders are anxious to learn more all the time.

"Forex trading" is a deceptively simple term, but consider for a moment exactly what those two words mean.

"Forex" defines a whole world of currency movements, influenced by speculation, breaking economic and political news, trade figures, industrial production, crop yields, unemployment statistics, government borrowing and even geological surveys and weather reports. All the elements that go into weighing one currency against another.

"Trading" governs any market where buyers are looking out for the lowest price and sellers are holding out for the highest. It's affected by all the irrational behaviour that markets of all kinds have been subject to since they began.

Forex trading is hectic, in many ways unpredictable, and dangerous unless you know exactly what you're doing. When market data and the charts dictate that, for example, the British pound should appreciate against the US dollar, it can easily happen that the pound actually falls in value by several dozen points before recovering and advancing as predicted.

This volatility is the cause of thousands of new traders losing their capital in a very short space of time. Experienced traders, on the other hand, come to know when to enter the market and when not to enter. Yet even they often have losing trades.

But they know that it takes only one successful trade to more than make up for the losses of two or three losing trades. And they also know how to remove emotion from trading as far as possible, and come through the ups and downs of this market more often in profit than with a loss.

So let the newbies to forex fall over themselves in their haste to get rich quick, and lose their trading capital in the process. What you, as an astute trader, have to do is to practice and learn forex trading and foreign exchange futures through a demo account until you're confident enough to put your own money on the line.

Study the charts, and see if you can align them with what has been happening at the time in the various fields that I've mentioned. See how, for example, industrial production data, general or in respect of just one major industry or corporation, can affect the strength or weakness of a particular currency.

And to succeed in forex trading, you don't have to be an expert on all currencies, only on two or three that you intend to specialise in. Study past charts with one eye on what was happening that might have caused sudden movements in price. Follow your chosen forex pairings diligently, so you come to be an authority.

Putting this all together, you can learn forex trading thoroughly and give yourself the right mindset to become a successful trader within a few months.

Forex Trading: How to Know the Best Forex Automated Software in the Market

2011-03-24T11:18:00.001-07:00

What is automation software? It is software that is capable of trading by itself without human intervention. That means the software will be trading on your behalf. Automated software do all the work for you and your own is to watch the software making money for you, with automated software you can relax and make money 24/7 every single day. When you purchase this software, you need to install it and watch it transforming your live account in 40 minutes of trade.

Well, it as to do with the type of software that you use. So you need to know how to get the best automated software.

When you want to buy software in the market your conclusion should not be based on these following:

? Appealing chart: A site may display a good chart for you to see that doesn't guarantee a good software
? Testimonials: testimony is good but not all testimonies are true, so don't base your final conclusion on it.
? A good graphical site/account statement: Some developers are very good in graphic design so they use this skill to confuse you of their site. Please do not base your conclusion of buying on graphic. Some will even display account statement on their site. Claiming that the software actually made that money for them. Please do not base your final decision on that. No matter what you have heard about any fx product or how popular the product is, before buying it, there is a need for performance proof. You need to proof its performance on live trading account. How are you going to do that, very simple, you need to ask for (Investor password access to the account). The product developer should be able to provide you this, if truly his sure of his product.

Some developers have it on their site. This is what will show you how many profit and loss the software had made. Before you buy any forex robot/software, if no real-money proof is not provided and if the brokerage where the accounts are traded won't certify their transactions, the product and any other proof associated with it is useless.

You have to be careful in choosing forex software in order to make big profit from fx market and always follow all my guide line in this article and you should keep reading my articles for more knowledge on how to trade forex successfully.

New Frames from Zenni

2008-08-06T00:08:00.000-07:00

Go get the incredible stylish new frames from Zenni. Zenni Optical is the most complete prescription eyeglasses for you. Their wide selection gives you more than options to choose. Zenni Optical was on FOX news! It is shows that this company is giving you more than comprehensive selection of frames.
Get Zenni Optical $ 8 Rx Eyeglasses . In Zenni Optical, we are able to get eyeglasses from $8.00 to more than $19 with materials of metal, plastic, acetate, or others. This company has global price and have high quality and stylish eyeglasses or even full UV protection that offers you with affordable price.

Small business loans

2008-06-28T08:19:00.000-07:00

People apply for payday loans to cover their needs short term. If there is a festival or if you want to do business where you will apply for loans? Now there afsloansonline.com loans to people who want money for wedding, birthday or holiday. We just have to wait for approval. Once approved, we can spend the money as we like it. People who want to start small businesses can apply for small business loans. Here in a afsloansonline.com can apply for small business loans. Afsloansonline.com accepted application forms for only personal and business loans.

If you want to check whether you qualify or not, you can use in their system. The scrutiny will not be charged in each case. Their office was located in California, and if you have any questions, please contact live their support. The application is very short and can be filled in five minutes. We are afsloansonline.com there is a chance to approve quickly and easily. Afsloandonline.com are 1, 40,000 creditors. So, if your application is rejected in a lender then do not worry your application could get in the next lender. Afsloandonline.com are guaranteed 100% approvals. People who apply for personal loans can get money from $ 10K to $ 50K. The people who are small business loans can get money from $ 25K to $ 100K. On afsloansonline.com you can also check the status of your loan application.While applying for loans in afsloansonline.com They are not charged any fees or service charges.

Amazing Life lock promotion code

2008-05-29T08:53:00.000-07:00

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Thats right, it is rendering valuable services to the customers with all their hearts. In addition, many special discounts to attract customers. For beloved customers there are some special offers to them. This service is primarily focused on protection against theft. Generally, it provides the promotional code for safety. It also acts like a wallet code, where you can create your valuable things in him. Some of your best plans such as free lifetime membership. But, for the right offer, you should first undergo some type of offers and then you can be converted you into life long membership program.

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Auto car loans

2008-05-23T13:07:00.000-07:00

Buying car maybe easy for you. Although you don't have enough money in your bank statement, As long as they have made an offer to the dealer and they could pay in cash without having to make a loan, just simply.

For Fill an loan online that you will get many advantages that you can not get a real dealer. If you are going to get a car loan, then you should see a lot of things. The car loan that you will get should be the best. It is due to your needs.

If you don't have enough money, online service GetTheBestAutoLoan.com the online service vehicles loans could be very useful to you. If you are going to get the best rate auto loan, it will be the best place for you. GetTheBestAutoLoan.com is a online loan used to have a lower interest rate compared to most dealers. It is a website that they intend on educating consumers interested in automotive financing.

This site is known to provide the best auto car loans. There are three types of loans available on GetTheBestAutoLoan.com, they are ready for the new car, loans for used vehicles and refinancing your auto car loan. In addition, they also provide refinancing schemes, loans for new cars and old cars as well as.

Through these services, I think this will help you get a car loan that suits your income. So go ahead. These loans are very easy to implement. You can apply online for a quote on his site.

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Find Best Financial Needs

2008-05-23T12:43:00.000-07:00

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Cash advance payday loans

2008-05-23T12:16:00.000-07:00

Are You ready to know that pay-day loans are small and short-term loans that do not require any credit checks of the consumer. In the case of an emergency payment system you may need for some unexpected financial commitment as a medical emergency payment or any other easyonlinepaydayloan.com is a solution for you!

If you need some emergency cash? easy online payday loan maybe can help you for find cash to you. The only thing you have to do is just to fill in a form from your zip code, e-mails, your monthly income, pay as you like your wages and other personal information. You can save up to $ 1500 in less than an hour and without direct deposit. The lender may be required to be licensed, and registered to do business legally in your state. Remember that if you have access to this service you agree that several conditions, it is advisable to take a look at the "Terms of Service" section before your application can be process.

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Car insurance Quote

2008-05-23T12:03:00.000-07:00

Talk about number one Car Insurance don't forget this site carinsurancerates.com I like this site if we speaks about the easiest ways in which you can get Auto insurance quotes. They have given it in two sections called 10 easiest and 10 hardest cars to get insured. In the easy section aspect of the primary emphasis is on the spotless driving history and then goes on to speak about the types of cars like Oldsmobile Silhouette, etc. Likewise the hard list includes vehicles like Toyota 4runner etc. The website contains very useful information on auto insurance quote related issues by way many article presented in a simple and straightforward style. You have to see Car Insurance Guide section to believe the wealth of information that the site holds on issues like car insurance rates etc. You can get more information about car insurance quotes by clicking, and get quotes button on the top of the site. There is an extensive question and answer section where most your queries about issues relating to your auto insurance rates are bound to be answered. If you do not find the answer there you can ask them separately just providing your name and email id - free of cost. State by state car insurance guide lists out all the states in the U.S. and within each section that provides insight to the rules and procedures that you have to know before going for an auto and auto insurance in that state. I hope this site very useful.

Trade show exhibits

2008-04-18T09:20:00.000-07:00

Camelbackdisplays.com is a full service exhibit house, helps companies and organizations with their fair presentation or display. They offer virtually all types of exhibition displays from the table above trade show exhibits on the island. They come Banner stands in a wide variety to offer and also truss products for different needs as store display fixtures, displays, concerts, night clubs, lighting and much more.

They offer the largest selection of exhibition displays on the market with many custom options. Your on-line catalog consist of portable fair exhibits, graphics, banners, displays truss, directors chairs and exhibition of all types of furniture, table covers, floors and much more.

Trade show or table top displays to island exhibits, pop-ups and panel systems, hybrid systems. Their exhibition truss bridge so many custom options & Custom designs available for virtually every truss display. Weight bearing Concerts and beautiful exhibition truss truss & Shop Fittings architectural decoration, camel tour has truss that meet your requirements. They also offer fair floors, which prohibits all forms of exhibition floor you could ever use. Their banners are also all kinds of banners are today. And much more of their quality in the furniture fair, pipe and drape, stage and the stage skirting, graphic and Canopy tents, fair Lights, luminescent panels, literature / brochure holders, Hanging / overhead displays, Crowd Control, Presentation Tools and design layout.

Let's to help you achieve for your goals. GOOD LUCK

Real Estate

2008-01-22T18:48:00.000-08:00

Want to live in US ? don't have Apartment ? Search for a House or Apartment to rent in US ? hmmm... easy... San Jose real estate is my recommended for you When it comes to real estate, San Jose real estate is a competitive market. offering you the most comprehensive and current directory of San Jose real estate listings you'll find anywhere. Take and a look at the San Jose real estate information you will find here.

Or if you want to invest Los Angeles real estate is good idea for investment, strategies Location in central city.

One more ... you don’t have any cash for buy or rent a House / apartment ? but you need to have a house / Apartment ? visit Sacramento real estate. They offer help your problem if you can’t buy house by mortgage quotes so go to check their mortgage rates now. You now have your own house, moving from your rented house to your new own house it's not a big problem because they also have moving quotes. Just fill up the form that are provided for their costumer and avail a big saving in your moving.

Other Investment for Forex Player

2008-01-19T18:10:00.000-08:00

Some of you maybe already successfully trading in Forex. But how to manage your income? I suggest that you invest your money on something else than Forex like real estate and own your apartment.

There are a lot of investment destination in the world and you might confuse to choose. Well wherever you choose that's still the same. Imagine that you still able trading Forex while you are traveling in Sacramento and have your own Sacramento Real Estate. That must be more relaxing depend than stay at some hotels in there.

But other than Sacramento there are lots of investment destination that would like to compare. Like in Los Angeles on San Jose. These two area was great idea to make an investment. Compare between Sacramento Real Estate, San Jose Real Estate and Los Angeles Real Estate and start your investment today.

Managing Forex Trading Activity

2008-01-11T00:03:00.000-08:00

Maybe some of you get frustrated when see the earning of you Forex account wasn't match as your expectation. Or even maybe you still loose all the time? All the tings you should do is managed your Forex account carefully.

Forex isn't like a gamble game but Forex is an investment and for that reason you need to serious to do this investment and manage you invest as good as you can, to avoid or even raise your earning.

If you new to Forex just remember that not all people say about Forex was true. Lot of them think that Forex is a great business that can change your live in a short period of time. Forex is a lot complicated than that where you need to play carefully for the first time and maybe you will see the improvement and make you able to go the next step. Once again the most important thing is you activity as Forex managed account.

Happy trading and remember to always careful on you desision

North Finance

2008-01-04T12:19:00.000-08:00

Minimum Forex Deposit - from 100 USD
Forex Spread From 2pips
Leverage from 1:1 to 1:500
Mini and Standard Account
Swap free available upon request
Min pip value: $1.00
Funding/withdraw: TT/wire/Credit Card
Free Mobile Trading Software

I have been dealing with this broker for te past six months on demo not until last month i started trading live with them.
So my experience so far with them has been ok not until recently i came accross an official document from IFSC,Belize informing the public that the company is not registerd.
Up till now there service is ok but the issue of their registration with the regulatory body in the country is QUESTIONABLE, also their registered office address is something that worths scrutinising.
These made me to rate them 2 Stars until they clarify this issues before they entitled to full 5 Stars rating.
Also i have only wire money to them i haven;t made any withdrawal yet but they have been responding to problems very though it may sometimes late but definitely they responds to problem. I am planning to make a withdrawal by next week. i will keep you all aware of their response.

Oanda

2007-08-11T12:20:00.000-07:00

Well, it seems it has been ages since Oanda’s last platform update, but as of 18th July 2005 Oanda have a new beta version of their FXTrade platform which they originally have been using in their FXGame but have now moved it over for live account traders.

Some of these new features include:

* You can select chart views (basic or advanced). The advanced chart view allows you to see the bid/ask/average price of the currency being displayed.
* There is now a quote panel similar to that seen in FXCM
* By placing your mouse cursor over the quote list you can bring up a sell or buy order according to which side of the quote list you click on
* There’s BUY and SELL buttons in the lower left hand corner of the chart
* They’ve seem to got rid of their annoying news ticker and replaced it with a much better news platform (I isn’t real time… yet… coming soon)
* Changed the format of the user preferences section - a bit cleaner and easier to navigate now

The most exciting change is the news!! I can’t wait until it becomes real time!!

Apart from that I can’t see any other changes, if there are other great ones please post them into the comment section below.

What’s The Attraction?

What attracted me to Oanda was the ability to trade any lot amount. As most brokers only allow users to trade either the standard (100k) or mini (10k) lot size Oanda is a breath of fresh air.

One other thing that attracted me to Oanda was its own user forum and plethora of information - it sure is one content rich web site! Whatever you are looking for regarding the forex market I am sure you will be able to find at Oanda.
Live & Demo Differences

As with other platforms we found no difference between the demo and live accounts, bar the reset button for demo accounts - I wish they would implement that button in the live
accounts too!!! Another excellent feature of Oanda’s demo account is that it never expires.
What We Liked About Oanda:

The charting package that came equipped with the platform was not bad. It wasn’t the best charting package we had seen, but it altogether was not the worst either. Some time frames that we like to monitor were not available which was disappointing (time frames that are not available include: 10min, 15min, 2hr, 4hr, 8hr, 12hr, 1week, 1month).

Oanda has the capacity to have multi-denominated sub accounts other than in USD with no minimum deposit. The different currency accounts available include: AUD, EUR, JPY, GBP, CAD & CHF and allows the user to transfer between their primary account and their sub account easily with the only restriction being that you cannot externally withdraw funds from a sub account, it must all come out of the primary account.

One other little thing that might go unnoticed by others is that Oanda display the volume currently available at the current market price. It is only seen when you place an order - it can give you an idea of what size order can be taken.

The orders screen is nothing new, however, where the orders can go is unique. Oanda do not have any restrictions on how close you can place a stop or limit order to where the current market is (I have experienced placing limit orders within the spread)!

Similarly there are no real restrictions on attaching stop and limit orders bar just covering the spread and adding one pip. Orders also have a variety of expiry times allowing you to place an expiry time of 1 hour (the earliest) to 1 month (the largest) on your orders.

Added to those features we also have Oanda paying us interest by the second for currency positions that do accrue interest - obviously it works in the reverse for positions that require us to pay. AND they also pay interest on a daily basis on your account’s capital.
What We Didn’t Like About Oanda:

The highest leverage available from Oanda is set at 50:1, which you can change to 40:1, or 30:1, or 20:1, or 10:1 if desired. We would have preferred at least the standard 100:1 leverage.

It has been stated in other forums that you will encounter more slippage with Oanda, but I personally have never enountered this slippage. However, do keep in mind that Oanda clients do experience
both negative and POSITIVE slippage - it just depends on which side you sit.

The news package offered by Oanda is not the best we have seen and could be much better. I personally think that all a forex broker would need do is have streaming live news headlines on their platform - nothing fancy, but effective in providing the latest news. Oanda do have streaming news, but it’s some weird UBS feed that doesn’t display relevant economic headlines.

Oanda is also a web based platform. I personally have never liked web based platforms, I prefer to have the platform physically on my hard drive, but that’s just my view.

In summary then…
Oanda PROS:

* Charting package okay
* Platform not bad
* Can trade any sized lots (not restricted to the $100k and $10k lots imposed by other firms)
* Account can be denominated in any currency & you can have multiple sub accounts in any currency too
* Demo account that doesn’t expire
* Active user group forum
* You can place stop and limit orders right up to the current market price bar a couple of pips
* Orders can have a range of expiry times
* Tight spreads on EURUSD (~1.5 pips!)
* Interest earned on positions by the second (for currency positions that do accrue interest)
* Interest paid daily on account capital

Oanda CONS:

* 100:1 leverage NOT offered
* Interest paid on positions by the second (for currency positions that do require you to pay interest)
* News & charting package could be better
* Slippage can occur on stop and limit orders more frequently than would otherwise be exhibited at other forex brokerage firms (can be a positive if you place limit orders)

Our Oanda Rating

Oanda is another forex broker firm that is heading in the right direction. I think you will begin to see many more advancements with this firm in the future as they seem to take a lot of what their customer base recommends to heart. I personally recommend Oanda to everyone that starts out in the forex market.

As you can see from the summary above there aren’t too many major negatives that weigh Oanda down, and that is why we have given it quite a good score. If Oanda can implement a trailing stop feature, offer 100:1 leverage and can allow OCO type orders I think we would have a near 10/10 broker!

03 Agust 2007

2007-08-03T02:38:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0356. GBP USD broke 2,0330 resistance. GBP USD is in a consolidation after the last bullish movement. GBP USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility decreases. Bollinger bands are tightened. Oscillators are neutral. The price should continue to move in 2,0310 / 2,0390 range. We won't take a position.

Resistances
2,0375 - 2,0390
Supports
2,0350 - 2,0340 - 2,0310

EUR/USD - Euro Dollar
Short term (Intraday)
1,3706. EUR USD is in a range between 1,3640 and 1,3725. EUR USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Oscillators are neutral. The price should continue to move in Bollinger bands. We won't take a position.

Resistances
1,3710 - 1,3725
Supports
1,3690 - 1,3670

USD/JPY - Dollar Yen
Short term (Intraday)
119,14. USD JPY is in a range between 118,10 and 119,50. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on USD JPY. The price should find a resistance below 119,50. If the resistance is broken then the target will be 120,50 (130 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
119,30 - 119,50
Supports
119,00 - 118,90 - 118,50

30 July 2007

2007-07-30T05:50:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0218. GBP USD consolidate until the 50% retracement. GBP USD is in an downtrend directed by 1H exponential moving averages. The volatility decreases. Bollinger bands are tightened. ForexTrend 1H is in a bearish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bearish pressure on GBP USD. The downtrend should continue to gather momentum. The price should find a support above 1,0160 (60 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
2,0250 - 2,0300
Supports
2,0200 - 2,0150

EUR/USD - Euro Dollar
Short term (Intraday)
1,3637. EUR USD consolidate until the 38,20% retracement. EUR USD is in an downtrend directed by 1H exponential moving averages. EUR USD is in a consolidation after the last bearish movement. The volatility decreases. Bollinger bands are tightened. ForexTrend 1H is in a bearish configuration. 4H ForexSto (Modified Stochastic) indicate a bearish pressure on EUR USD. The price should continue to consolidate. The price should find a support above 1,3615. If the support is broken then the target will be 1,3550 (90 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,3645 - 1,3660
Supports
1,3615 - 1,3570

USD/JPY - Dollar Yen
Short term (Intraday)
118,43. USD JPY is in an downtrend directed by 1H exponential moving averages. USD JPY is in a consolidation after the last bearish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H is in a bearish configuration. The downtrend should continue on 117,50 support.
=> We could take a short position at 118,50. We will put the stop loss above 118,80 (-30 pips). The targets are 118,00 (+50 pips) 117,50 (+100 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
118,60 - 118,75
Supports
118,30 - 118,00

24 July 2007

2007-07-24T00:07:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0635. GBP USD is in an uptrend supported by 1H exponential moving averages. The volatility rises. Bollinger bands are deviated. ForexTrend 1H, 4H, daily is in a bullish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on GBP USD. The uptrend should continue to gather momentum. The target is expected at 2,0700 (65 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
2,0645 - 2,0700
Supports
2,0620 - 2,0600

EUR/USD - Euro Dollar
Short term (Intraday)
1,3819. EUR USD is in an uptrend supported by 4H exponential moving averages. EUR USD is in a range between 1,3760 and 1,3845. The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily is in a bullish configuration. The uptrend seems to be finished. The price should continue to move in 1,3760 / 1,3850 range. If the support is broken then the target will be 1,3700. We won't take a position.

Resistances
1,3830 - 1,3845
Supports
1,3815 - 1,3800

USD/JPY - Dollar Yen
Short term (Intraday)
120,49. USD JPY is in an downtrend directed by 1H exponential moving averages. The volatility rises. Bollinger bands are deviated. ForexTrend 1H, 4H is in a bearish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bearish pressure on USD JPY. The downtrend should continue to gather momentum. The target is expected at 120,00 (50 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
120,70 - 120,80 - 121,10
Supports
120,35 - 120,00

23 July 2007

2007-07-22T22:28:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0578. GBP USD is in an uptrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands are parallel and form the trend. ForexTrend 1H, 4H, daily is in a bullish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on GBP USD. The uptrend should continue to gather momentum.
=> We could take a long position at 2,0570. We will put the stop loss below 1,0540 (-100 pips). The targets are 2,0650 (+80 pips) 1,0700 (+130 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 4.

Resistances
2,0590 - 2,0600
Supports
2,0560 - 2,0540

EUR/USD - Euro Dollar
Short term (Intraday)
1,3831. EUR USD is in an uptrend supported by 1H exponential moving averages. The volatility is high. Bollinger bands are parallel and form the trend. ForexTrend 1H, 4H, daily is in a bullish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on EUR USD. The uptrend should continue to gather momentum. The target is expected at 1,3950.
=> We could take a long position at 1,3830. We will put the stop loss below 1,3800 (-30 pips). The targets are 1,3880 (+50 pips) 1,3950 (+120 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 4.

Resistances
1,3845 - 1,3855 - 1,3880
Supports
1,3830 - 1,3800

USD/JPY - Dollar Yen
Short term (Intraday)
102,97. USD JPY broke 121,65 support. USD JPY is in a consolidation after the last bearish movement. The volatility is high. Bollinger bands are parallel and form the trend. ForexTrend 1H, 4H is in a bearish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bearish pressure on USD JPY. The price should find a support above 120,80. If the support is broken then the target will be 120,00.
=> We could take a short position at 121,00. We will put the stop loss above 121,30 (-30 pips). The targets are 120,60 (+40 pips) 120,00 (+100 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 2.

Resistances
121,15 - 121,50
Supports
120,80 - 120,60

Getting Sentimental with Forex Trading

2007-07-21T04:30:00.000-07:00

Sentimental analysis is what it sounds like – gauging the market sentiment. What does that mean? Well, as traders, a part of our job is to determine if a market is bullish, bearish, overbought, oversold, and to plan a trade for those market conditions – basically putting all of the things we’ve learned up until this point all together.

So how do we do that? What tools can we use? And how do we react to certain conditions? Well, that’s what we’re going to find out today – we’re going to take a look into sentiment analysis in forex trading.

Now there are a couple of ways to gauge different market conditions. Does anyone know what those two things are? You guessed it: technical and fundamental analysis. Now, in the School of Pipsology, we’ve covered most of the commonly used technical indicators out there for forex trading, so you should be an expert at that already right?

But how about the fundamental tools? What fundamental tools are available to gauge sentiment?

Well, in stocks and options, sentiment is measured using volume data. For instance, if a declining stock suddenly reversed on high volume that means the market sentiment may have changed from bearish to bullish. Or if a stock price was rising on gradually declining volume, then that may be a sign of an overbought market.

But have you ever seen volume data on any forex charts?

Probably not.

Being that the foreign exchange does not have a centralized market, volume data cannot be accurately calculated. So, where’s a trader to go to get such valuable data? That’s where the COT report comes in.

http://babypips.com

20 July 2007

2007-07-20T01:43:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0493. GBP USD is in an uptrend supported by 1H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. The price is just above 2,0470 support. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. The uptrend should continue to gather momentum.
=> We could take a long position at 2,0490. We will put the stop loss below 2,0460 (-30 pips). The targets are 2,0550 (+60 pips) 2,0600 (+110 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 4.

Resistances
2,0500 - 2,0525 - 2,0550
Supports
2,0475 - 2,0460

EUR/USD - Euro Dollar
Short term (Intraday)
1,3800. EUR USD is in an uptrend supported by 4H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily is in a bullish configuration. The uptrend should continue to gather momentum. The price should find a resistance below 1,3830. If the resistance is broken then the target will be 1,3950.
=> We could take a long position at 1,3800. We will put the stop loss below 1,3770 (-30 pips). The targets are 1,3850 (+50 pips) 1,3900 (+100 pips) 1,3950 (+150 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
1,3810 - 1,3830
Supports
1,3790 - 1,3765

USD/JPY - Dollar Yen
Short term (Intraday)
122,22. USD JPY is in a range between 121,70 and 122,30. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Oscillators are neutral. The price should continue to move in Bollinger bands. We won't take a position.

Resistances
122,30 - 122,40
Supports
122,00 - 121,70

17 July 2007

2007-07-16T22:39:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0368. GBP USD is in an uptrend supported by 1H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. The uptrend should continue to gather momentum. The target is expected at 2,0500.
=> We could take a long position at 2,0370. We will put the stop loss below 2,0340 (-30 pips). The targets are 2,0450 (+80 pips) 2,0500 (+130 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 4.

Resistances
2,0375 - 2,0400
Supports
2,0350 - 2,0330

EUR/USD - Euro Dollar
Short term (Intraday)
1,3783. EUR USD is in an uptrend supported by 1H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The price is just bellow 1,3800 resistance. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. The price should find a resistance below 1,3800. If the resistance is broken then the target will be 1,3950.
=> We could take a long position at 1,3785. We will put the stop loss below 1,3755 (-30 pips). The targets are 1,3850 (+65 pips) 1,3950 (+165 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 4.

Resistances
1,3790 - 1,3800
Supports
1,3770 - 1,3755

USD/JPY - Dollar Yen
Short term (Intraday)
121,93. USD JPY is in a range between 121,50 and 122,60. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 4H is in a bearish configuration. The price should continue to move in Bollinger bands. If the support is broken then the target will be 121,00 (90 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
122,10 - 122,20 - 122,60
Supports
121,90 - 121,50

13 July 2007

2007-07-12T23:36:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0291. GBP USD is in an uptrend supported by 1H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. The uptrend should continue to gather momentum. The price should find a support above 2,0240.
=> We could take a long position at 2,0250. We will put the stop loss below 2,0220 (-30 pips). The targets are 2,0350 (+100 pips) 2,0400 (+150 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
2,0310 - 2,0345
Supports
2,0380 - 2,0340

EUR/USD - Euro Dollar
Short term (Intraday)
1,3781. EUR USD is in an uptrend supported by 1H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. 4H ForexSto (Modified Stochastic) indicate a bullish pressure on EUR USD. The uptrend should continue to gather momentum.
=> We could take a long position at 1,3780. We will put the stop loss below 1,3750 (-30 pips). The targets are 1,3830 (+50 pips) 1,3900 (+120 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
1,3800 - 1,3830
Supports
1,3775 - 1,3750

USD/JPY - Dollar Yen
Short term (Intraday)
122,47. USD JPY is in a range between 121,85 and 122,60. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. Oscillators are neutral. The price should continue to move in Bollinger bands. We won't take a position.

Resistances
122,60 - 123,20
Supports
122,30 - 121,85

06 July 2007

2007-07-05T22:42:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0107. GBP USD broke 2,150 support. GBP USD is in an uptrend supported by 4H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. The volatility decreases. Bollinger bands are tightened. Oscillators are neutral. The price should continue to consolidate. The price should find a support above 2,0080. We won't take a position.

Resistances
2,0130 - 2,0150
Supports
2,0100 - 2,0080

EUR/USD - Euro Dollar
Short term (Intraday)
1,3594. EUR USD is in an uptrend supported by 1H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The volatility decreases. Bollinger bands are tightened. Oscillators are neutral. The price should continue to consolidate. The price should continue to move in 1,3580 / 1,3575 range. We won't take a position.

Resistances
1,3610 - 1,3645
Supports
1,3590 - 1,3580

USD/JPY - Dollar Yen
Short term (Intraday)
123,09. USD JPY broke 122,85 resistance. The volatility rises. Bollinger bands are parallel and form the trend. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on USD JPY. The uptrend should continue to gather momentum. The price should find a resistance below 123,50 (40 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
123,20 - 123,50
Supports
122,75 - 122,50

05 July 2007

2007-07-04T23:28:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0188. GBP USD is in an uptrend supported by 1H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. GBP USD is in a range between 2,0150 and 2,0190. The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily is in a bullish configuration. The price should find a support above 2,0130. The uptrend should continue to gather momentum.
=> We could take a long position at 2,0150. We will put the stop loss below 2,0120 (-30 pips). The targets are 2,0220 (+70 pips) 2,0260 (+110 pips) 2,0300 (+150 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
2,0175 - 2,0200
Supports
2,0150 - 2,0130

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0188. GBP USD is in an uptrend supported by 1H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. GBP USD is in a range between 2,0150 and 2,0190. The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily is in a bullish configuration. The price should find a support above 2,0130. The uptrend should continue to gather momentum.
=> We could take a long position at 2,0150. We will put the stop loss below 2,0120 (-30 pips). The targets are 2,0220 (+70 pips) 2,0260 (+110 pips) 2,0300 (+150 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
2,0175 - 2,0200
Supports
2,0150 - 2,0130

USD/JPY - Dollar Yen
Short term (Intraday)
122,78. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are parallel and form the trend. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on USD JPY. The uptrend should continue to gather momentum. The price should find a resistance below 123,00. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
122,85 - 123,00
Supports
122,70 - 122,60

updated 05 july 2007 06:42 GMT

03 July 2007

2007-07-03T23:29:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
2,0176. GBP USD is in an uptrend supported by 1H exponential moving averages. GBP USD is in a consolidation after the last bullish movement. The price is just bellow 2,0190 resistance. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. 4H ForexSto (Modified Stochastic) indicate a bullish pressure on GBP USD. The uptrend should continue to gather momentum.
=> We could take a long position at 2,0170. We will put the stop loss below 2,0130 (-40 pips). The targets are 2,0220 (+50 pips) 2,0260 (+90 pips) 2,0300 (+130 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 4.

Resistances
2,0190 - 2,0220
Supports
2,0150 - 2,0120

EUR/USD - Euro Dollar
Short term (Intraday)
1,3610. EUR USD is in an uptrend supported by 1H exponential moving averages. The price is just bellow 1,3675 resistance. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily is in a bullish configuration. The uptrend should continue to gather momentum. The price should find a resistance below 1,3675/90. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,3620 - 1,3640 - 1,3675
Supports
1,3600 - 1,3585

USD/JPY - Dollar Yen
Short term (Intraday)
122,43. USD JPY is in a consolidation after the last bearish movement. USD JPY is in a range between 122,15 and 122,55. The volatility is low. Bollinger bands are flat. ForexTrend 1H is in a bearish configuration. The price should find a support above 122,15. If the support is broken then the target will be 121,00 (140 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
122,50 - 122,70
Supports
122,15 - 121,90

Aroon Oscillator

2007-06-07T15:14:00.000-07:00

Aroon Indicator and Oscillator - Developed by Tushar Chande in 1995, the Aroon is an indicator system that can be used to determine whether the trading instrument is trending or not and how strong the trend is. "Aroon" means "Dawn's Early Light" in Sanskrit and Chande choose that name for this indicator since it is designed to reveal the beginning of a new trend. The Aroon indicator consists of two lines, Aroon(up) and Aroon(down). The Aroon Oscillator is a single line that is defined as the difference between Aroon(up) and Aroon(down). All three take a single parameter which is the number of time periods to use in the calculation. Since Aroon(up) and Aroon(down) both oscillate between 0 and +100, the Aroon Oscillator ranges from -100 to +100 with zero serving as the crossover line.

Aroon(up) for a given time period is calculated by determining how much time (on a percentage basis) elapsed between the start of the time period and the point at which the highest price during that time period occurred. When the instrument is setting new highs for the time period, Aroon(up) will be 100. If the instrument has moved lower every day during the time period, Aroon(up) will be zero.

Aroon(down) is calculated in just the opposite manner, looking for new lows instead of new highs. Chande states that when Aroon(up) and Aroon(down) are moving lower in close proximity, it signals a consolidation phase is under way and no strong trend is evident. When Aroon(up) dips below 50, it indicates that the current trend has lost its upwards momentum. Similarly, when Aroon(down) dips below 50, the current downtrend has lost its momentum. Values above 70 indicate a strong trend in the same direction as the Aroon (up or down) is under way. Values below 30 indicate that a strong trend in the opposite direction is underway.

The Aroon Oscillator signals an upward trend is underway when it is above zero and a downward trend is underway when it falls below zero. The farther away the oscillator is from the zero line, the stronger the trend. The age-old problem for many trading systems is their inability to determine if a trending or trading range market is at hand. Trend-following indicators such as MACD and moving averages, tend to be whipsawed as markets enter a non-trending congestion phase. o n the other hand, overbought/oversold oscillators (which work well during trading range markets) tend to overreact to price pull-backs during trending markets?thereby closing a position prematurely. The Aroon indicator attempts to remedy this by helping you determine when trend-following or overbought/oversold indicators are likely to succeed.

Stochastic Oscillator

2007-06-07T15:02:00.000-07:00

George Lane was the originator of the stochastic indicator in the 1960’s; the indicator tracks the market momentum. Lane observed that as prices rise in an up trend, closing prices tend to be closer to the upper end of bars and in a down trend closing prices tend to be nearer the lower end of bars.
Overview

The stochastic indicator is:

* A momentum oscillator that can give a warning sign of strength or weakness in the market, often well ahead of the final turning point.
* Based on the assumption that when a stock is rising it tends to close near the high and when a stock is falling it tends to close near its lows.

The stochastic values simply represent the position of the market on a percentage basis versus its range over the previous n-period sessions. The percentage scale runs from zero to 100% The Stochastic Indicator shows where a security's price closed in relation to its price range over the specified time period.

The indicator consists of two lines:

* %K compares the latest closing price to the recent trading range.
* %D is a signal line calculated by smoothing %K.

Parameters:

Overall Period (3) - the number of periods used to determine the highest high and lowest low.

%D MA Period (14) - the number of periods used to determine the moving average for the %D value.
Calculation

The following formula is used to calculate the Stochastic Oscillator:

%K = (recent close - lowest low) / (highest_high - lowest_low)

The situation is much more complicated, really, as there are SMA of %K, SMA of this SMA and some other derivatives that people use.

SK = SMA(3) of K

SD = SMA(3) SK

You do not need to learn the full ins and outs of the stochastic parameters and its calculation.

Most advanced charting packages will do this for you.
Interpretation

The overbought warning signal is when the lines are above the 80% value, and oversold warning is when the lines are below 20%.

The signals are most reliable if you wait until the %K and %D lines turn upward below 5% before buying, and the lines turn downward above 95% before selling
Uses of a Stochastic to generate trading signals

1. Divergence between the price action and stochastic can indicate that a trend change may follow

2. When the stochastic moves from extreme levels and than moves above the 20% level, may indicate that the price is about to trend higher

3. Alert to buy is confirmed when the lines move above 50%

4. During an uptrend, once you see stochastic fall below the 80%, you may want to consider closing your long positions.

5. Once the stochastic fell below 80% and than below the 50% levels, this would offer a sell signal.

6. When the faster %K line crosses above the slower %D line and the lines are below 20, a buy signal is generated

7. When the %K lines crosses below the %D line and the lines are above 80 a sell signal is generated

As I have often said that that just relying on one indicator, as a means of generating an entry trade is very dangerous, you must look for a confluence of indicators to confirm the entry signal. There is a step-by-step guide in my ebook “The Way To Trade Forex”, on what to look for. By having these confluence will mean that the losing trades are minimised. This is the sole reason why I tend to have a high percentage of winning trades – over 70%. I am quite happy not to trade, if there is no signal.

I am looking for an ironclad trade. Often I could go few days without a trade, but that does not bother me. My golden rule is No signal – No Trade!

Just because there is a crossover of the stochastic line does not mean that you have an ironclad trade. I often find many traders use just one indicator and than lose! Than blame the Indicator and not themselves. If it were so easy than 90% of traders would not lose!

One of my favourite signals is to trade the stochastic divergence, often when I see a divergence between a price and divergence and this is followed by a crossover of lines, than often you have a winner.
Different types of divergence

1. Bearish - The price moves higher, but stochastic suggests a slowing trend. You will see higher price highs and lower stochastic highs, and is a sure sign that a price correction is not far off.

2. Bullish - The lower lows in price action show a divergence with higher stochastic lows. As stochastic shows the market becoming less oversold, the market itself fails to confirm this notion and continues on down. However, this is just indicative that price will invariably shift course and follow stochastic’s lead.

3. Bullish - In a downtrending market, changes in price establish lower price highs, all the while stochastic reflects the market becoming less oversold (higher stochastic highs), signalling a likely reversal in the works.

4. Bullish- As price achieves higher lows, stochastic reflects a last ditch effort on the part of sellers to continue the downtrend (lower stochastic lows). This exhaustion, combined with new buying pressure, as reflected in upward price direction, portends the potential reversal of the downtrend.

You can apply these observations to any timeframe. Sometimes, a particular timeframe will display one of the above characteristics more so than the others. The higher the timeframe, the better the chance for a longer-term trend reversal. It is important when looking at lesser timeframe charts to keep the big picture in mind. A divergence between price behaviour and stochastic movement on a five-minute chart may provide only a relatively short period of change in the attitude of price.
Putting it together – An Iron Clad Trade using Confluence of Indicators

I will now look at a chart, with confluence of indicators, to pull the trigger.

The stochastic indicator as a starting point.

GBP – Daily Chart – 8th July 05 to 15th Aug 05.

Looking at the above chart, you had so many confluences of indicators to go long on 26th July 2005, with the price at a bottom at 1.7360. Since than GBP has risen by nearly 900 pips.

This was a great position trade to be in. In my book “The Way To Trade Forex” I always say that you must have at least 3 reasons why you should pull the trigger. In this case we certainly had so many triggers, you just had to fill your boots! Some of the reasons were;

1. Bullish Divergence Stochastic

2. Bullish Divergence RSI

3. Bullish divergence MACD

4. Double Bottom

5. Support at a Pivot point, repeated bounce.

Good Trading

Jay Lakhani

Momentum / Lagging Indicators

2007-06-07T14:57:00.000-07:00

So how do we spot a trend? The indicators that can do so have already been identified as MACD and moving averages. These indicators will spot trends once they have been established, at the expense of delayed entry. The bright side is that there’s less chance of being wrong.

On this 1-hour chart of EUR/USD, there was a bullish crossover for MACD at 3:00 am EST on 08/03/05 and the 10 period EMA crossed over the 20 period EMA at 5:00 am. These two signals were all accurate, but if you waited for both indicators to give you a bull signal, you would have missed out on the big move. If you calculate from the start of the uptrend at 10:00 pm EST on 08/02/05 to the close of the candle at 5:00 am EST on 08/03/05, you would have watched a gain of 159 pips while sitting on the sidelines.

Let’s take a look at the same chart so you can see how these crossover signals can sometimes give false signals. We like to call them “fake-outs”. Look at how there was a bearish MACD crossover after the uptrend we just discussed.

Ten hours later, the 20 EMA crossed below the 10 EMA giving a “sell” signal. As you can see, the price didn’t drop but stayed pretty much sideways, then continued its uptrend. By the time both indicators were in agreement, you would’ve entered a short trade at the bottom and set yourself up for a loss. Bummer, dude!

Oscillators / Leading Indicators

2007-06-07T14:50:00.000-07:00

An oscillator is any object or data that moves back and forth between two points. In other words, it’s an item that is going to always fall somewhere between point A and point B. Think of when you hit the oscillating switch on your electric fan.

Think of our technical indicators as either being “on” or “off”. More specifically, an oscillator will usually signal “buy” or “sell”, with the only exception being instances when the oscillator is not clearly at either end of the buy/sell range.

Does this sound familiar? It should! Stochastics, Parabolic SAR, and the Relative Strength Index (RSI) are all oscillators. Each of these indicators is designed to signal a possible reversal, where the previous trend has run its course and the price is ready to change direction.

Let’s take a look at a few examples.

On the 1-hour chart of USD/EUR below, we have added a Parabolic SAR indicator, as well as an RSI and Stochastic oscillator. As you have already learned, when the Stochastic and RSI begin to leave their “oversold” region that is a buy signal.

Here we get buy signals between the hours 3:00 am EST and 7:00 am EST on 08/24/05. All three of these buy signals occurred within one or two hours of each other, and this would have been a good trade.

We also got a sell signal from all three indicators between the hours of 2:00 am EST and 5:00 am EST on 08/25/05. As you can see, the Stochastic indicator remained in the overbought for a pretty long time - about 20 hours. Usually when an oscillator remains in the overbought or oversold levels for a long period of time, that means there is a strong trend occurring. In this example, since Stochastic stayed overbought, you see there was a strong uptrend present.

Now let’s take a look at the same leading oscillators messing up, just so you know these signals aren’t perfect. Looking at the chart below, you can quickly see that there were a lot of false buy signals popping up. You’ll see how one indicator says to buy, while the other one is still saying sell.

Around 1 am EST on 08/16/05, both RSI and Stochastic gave buy signals, while Parabolic SAR still showed a sell signal. Yes, Parabolic SAR gave a buy signal 3 hours later at 4 am EST, but then Parabolic SAR turned into a sell signal one bar later. If you actually look at the bar with the Parabolic SAR below it, notice how it’s a strong looking red bar with very short shadows. Also, notice how the next bar closed below it. This would not have been a good long trade.

On the last two oversold (buy) signals given by Stochastic, notice how there is no indicator at all for RSI, but Parabolic SAR is giving sell signals. What’s going on here? They are each giving you different signals!

What happened to such a good set of indicators?

The answer lies in the method of calculation for each one. Stochastic is based on the high-to-low range of the time period (in this case, it’s hourly), yet doesn’t account for changes from one hour to the next. The Relative Strength Index (RSI) uses change from one closing price to the next. And Parabolic SAR has its own unique calculations that can further cause conflict.

That’s the nature of oscillators – they assume that a particular chart pattern always results in the same reversal. Of course, that’s hogwash.

While being aware of why a leading indicator may be in error, there’s no way to avoid them. If you’re getting mixed signals, you’re better off doing nothing than taking a ‘best guess’. If a chart doesn’t meet all your criteria, don’t force the trade! Move on to the next one that does meet your criteria.

Leading vs. Lagging Indicators

2007-06-07T14:40:00.000-07:00

We’ve covered a lot of tools that can help you analyze charts and identify trends. In fact, you may now have too much information to use effectively.

In this lesson, we’re going to look at streamlining your use of these chart indicators. We want you to fully understand the strengths and weaknesses of each tool, so you’ll be able to determine which ones work for you and your trading plan…and which ones don’t.
Leading versus Lagging Indicators

Let’s discuss some concepts first. There are two types of indicators: leading and lagging.

A leading indicator gives a buy signal before the new trend or reversal occurs.

A lagging indicator gives a signal after the trend has started and basically informs you “hey buddy, pay attention, the trend has started, you’re missing the boat.”

You’re probably thinking, “Ooooh, I’m going to get rich with leading indicators!” since you would be able to profit from a new trend right at the start. You’re right – you would “catch” the entire trend every single time, IF the leading indicator was correct every single time. But it’s not.

When you use leading indicators, you will experience a lot of fake-outs. Leading indicators are notorious for giving bogus signals which will “mislead” you. Get it? Leading indicators that "mislead" you? Ha-ha. Man we're so funny we even crack ourselves up.

The other option is to use lagging indicators, which aren’t as prone to bogus signals. Lagging indicators only give signals after the price change is clearly forming a trend. The downside is that you’d be a little late in entering a position. Often the biggest gains of a trend occur in the first few bars, so by using a lagging indicator you could potentially miss out on much of the profit. Which sucks.

Oscillators and Trend Following Indicators

For the purpose of this lesson, let’s broadly categorize all of our technical indicators into one of two categories:

1. Oscillators

2. Trend following or momentum indicators

Oscillators are leading indicators.

Momentum indicators are lagging indicators.

While the two can be supportive of each other, they're more likely to conflict with each other. We’re not saying that one or the other should be used exclusively, but you must understand the potential pitfalls of each.

Technical Studies: Stochastics

2007-06-06T20:27:00.000-07:00

The Stochastics indicator was introduced by George C. Lane in the late1950s. This oscillator is a momentum indicator that compares an equity’s current close to its high/low range over a set number of periods.

Stochastics is calculated according to the following formula:

Raw Stochastics = 100 * (Recent Close - Low(n)) / (High(n) - Low(n));

%K = 3-period moving average of Raw Stochastics;

%D = 3-periods moving average of %k;

n = number of periods used in the calculation.

Because it is a percentage or ratio, %K will fluctuate between 0 and 100. A 3-day simple moving average of %K is usually plotted alongside %D to act as a signal or trigger line.

Stochastics shows how far the most recent close is away from the lowest low and highest high (over the calculated period):

* A security is close to a 20-day high if its 20-day Stochastics is greater than 80%;
* A security is close to a 20-day low if its 20-day Stochastics is below 20%.

We can differentiate three types of stochastic oscillators: Fast, Slow, and Full.

%K and %D make up the Fast stochastic oscillator. The driving force behind both stochastic oscillators is %K (fast), which can be calculated with the formula provided above.

A 3-day simple moving average applied to the %K Fast Stochastics calculates the Slow Stochastics. %D (Fast) is identical to %K (Slow). An X-day simple moving average applied to the %K Fast Stochastics calculates Slow Stochastics.

Stochastics readings above 80 are typically considered to indicate an “overbought” situation whereas Stochastics readings below 20 are generally thought to indicate an “oversold” situation; however, a reading below 20 is not necessarily bullish nor is a reading above 80 automatically a bearish sign. A stock may continue to rise after its Stochastics has reached 80; conversely; it may continue to fall even after its Stochastics has reached 20. The probability of a reversal is much higher when volume surges occur close to index highs or lows (as indicated by the Stochastics).

* As a general rule, volume surges (indicated by a high PVO) that appear during an index’s advance – when combined with closes near the highs (i.e., Stochastics > 80%) – indicate potential downside reversals;
* As a general rule, volume surges (indicated by a high PVO) that appear during an index’s decline – when combined with closes near the lows (i.e., Stochastics < 20%) – indicate potential upside reversals.
* Ignore volume surges that appear when Stochastics readings exceed 20% and are below 80%. Market reactions might be short-lived under these circumstances.

Magic With Stochastics

2007-06-06T20:19:00.000-07:00

History

George Lane was the originator of the sochastics in the 1970's. Lane observed that as prices increase in an up trend, closing prices tend to be closer to the upper end of bars and in a down trend closing prices tend to be nearer the lower end of bars. Lane developed stochastics to discern the relationship between the closing price and the high and low of a bar.

Typically used to identify overbought and oversold conditions the indicator consists of two lines: % K and %D. These two lines fluctuate in a vertical range between 0 and 100. Readings above 80 are considered overbought and readings below 20 are considered oversold.

Stochastics can also be use to generate buy and sell signals. When the faster %K line crosses above the slower %D line and the lines are below 20, a buy signal is generated. When the %K lines crosses below the %D line and the lines are above 80 a sell signal is generated.

My Own use Of Stochastics

Well as usual just to be contrary to everyone I don't use the stochastics to signal overbought or oversold although I do take note of the readings.

I like to use them as possible buy and sell opportunities after defining a trend. If the trend is up as in the example below on the AUD (Australian Dollar) I like to only take buy signals regardless of the reading as long as the trend remains in place.

I ignore the sell signals. I purposefully weaken the stochastics to give me more signals and I use 8,3,3 as my settings.

This gives more signals and shows the hand of the weaker players. The same is true of selling in a down trend. I ignore the buy signals and only take the sell signals. I don't use stochastics on their own as trading method as all the settings I have tried ultimately resulted in to many wipsaws. Experiment with different settings and consider adding this indicator to your trading arsenal.

Good Trading

Understanding Stochastics

2007-06-06T20:15:00.000-07:00

The foreign exchange markets move when some force makes one currency either more or less valuable than another. The cumulative purchase and sales of a currency cause it to move up or down and to become more or less valuable in relation to other currencies. The primary factors influencing exchange rates include:

* The balance of payments
* The state of the economy
* Implications drawn from chart analysis
* Political and psychological factors
* Ebb and flow of capital between nations, known as Purchasing Power Parity (PPP) is the central factor that determines market momentum.
* A change in government or central bank policies
* Slowly shifting economic and social conditions
* Fundamental economic forces such as inflation and interest rates
* Faith in a government s ability to stand behind its currency will also impact currency prices
* Activities by professional currency managers, generally on behalf of a pool of funds, have also become a factor in moving the market.

All these things create movements in currencies that usually tend to persist once they begin. Professional currency traders usually keep their eyes out for changes in monetary policies and the forces that shape currency trends.

George Lane was the originator of the sochastics in the 1970’s. Lane observed that as prices increase in an up trend, closing prices tend to be closer to the upper end of bars and in a down trend closing prices tend to be nearer the lower end of bars. Lane developed stochastics to discern the relationship between the closing price and the high and low of a bar.

Typically used to identify overbought and oversold conditions the indicator consists of two lines: % K and %D. These two lines fluctuate in a vertical range between 0 and 100. Readings above 80 are considered overbought and readings below 20 are considered oversold.

Stochastics can also be use to generate buy and sell signals. When the faster %K line crosses above the slower %D line and the lines are below 20, a buy signal is generated. When the %K lines crosses below the %D line and the lines are above 80 a sell signal is generated.

Well as usual just to be contrary to everyone I don’t use the stochastics to signal overbought or oversold although I do take note of the readings. I like to use them as possible buy and sell opportunities after defining a trend. If the trend is up as in the example below on the AUD (Australian Dollar) I like to only take buy signals regardless of the reading as long as the trend remains in place. I ignore the sell signals. I purposefully weaken the stochastics to give me more signals and I use 8,3,3 as my settings.

This gives more signals and shows the hand of the weaker players. The same is true of selling in a down trend. I ignore the buy signals and only take the sell signals. I don’t use stochastics on their own as trading method as all the settings I have tried ultimately resulted in to many wipsaws. Experiment with different settings and consider adding this indicator to your trading arsenal.

Stochastics Tutorial

2007-06-06T19:52:00.000-07:00

by : Joseph Skibinski

George Lane found another way to track market momentum by following the relationship between a market's closing price and the extremes of its recent range. A bull market should consistently see closes near the high it's recent range. A bear market should see closes near the range's lows. A market's momentum wanes as the day's closing prices move towards the midpoint of its recent range. As such, traders assume that the stage is being set for a reversal as a market's momentum begins to wane. Stochastics provide us with a way to both quantify and chart these statistics.

As you can tell by the equation below, Stochastics describe the relationship between a market's recent extremes and its relative daily close as a percentage value. Mr. Lane labels his descriptive values as a %K and %D. The %K value is described as follows:

%K = 100 [(C – L14) / (H14 – L14)]

Thus, we calculate what percentage of the recent range the close for the day falls within. The result here is an extremely volatile value. Hence, it is termed a "Fast Stochastic". To generate a trade signal, traders plot a smoothing 3 period moving average of this %K value and trade it as one may trade a moving average crossover system. This smoothed value is called a %D. A more reliable trading methodology would be to further reduce this volatility by taking another 3 period moving average of %D. This calculation yields a "Slow Stochastic". You can see this detailed in the example chart below as the values displayed are (14(3), 3). Thus, we have the original 14 period calculation smoothed by 3 period moving average and then by an additional 3 period moving average. The resulting values can be graphed against daily prices. Also, as with most other technical studies, Stochastics exhibit self-similar characteristics across a wide range of time frames. Thus, they may be applied to monthly, weekly, daily, intraday and even tick charts.

A chart of Stochastic values reveals a considerable amount of information about a market when compared with overall price action. The end of a prolonged rally may be foretold as a Stochastic value fails to follow the price action to new highs, much like a bearish divergence with an RSI indicator. Look for the faster %K to cross over the slower %D as the indicator tops out and crosses below the overbought 80 level. A 20 level is considered to be oversold. This compares to the 70 and 30 levels used with an RSI indicator.

You have undoubtedly noticed the similarity of techniques used in trading both Stochastics and the RSI. This allows you to easily use them as a means of confirmation for each other. Just be sure to use the same analysis periods. I will explore this concept further in the chart below.

Difference between EMA and SMA

2007-06-02T22:49:00.000-07:00

The only difference between these two types of moving average is the sensitivity each one shows to changes in the data used in its calculation.

More specifically, the exponential moving average (EMA) gives a higher weighting to recent prices than the simple moving average (SMA) does, while the SMA assigns equal weighting to all values. The two averages are similar because they are interpreted in the same manner and are both commonly used by technical traders to smooth out price fluctuations.

The SMA is the most common type of average used by technical analysts and it is calculated by dividing the sum of a set of prices by the total number of prices found in the series. For example, a seven-period moving average can be calculated by adding the following seven prices together and then dividing the result by seven (the result is also known as an arithmetic mean average).

Example
Given the following series of prices:
$10, $11, $12, $16, $17, $19, $20

The SMA calculation would look like this:
$10+$11+$12+$16+$17+$19+$20 = $105
7-period SMA = $105/7 = 15

Since EMAs place a higher weighting on recent data than on older data, they are more reactive to the latest price changes than SMAs are, which makes the results from EMAs more timely and explains why the EMA is the preferred average among many traders. As you can see from the chart below, traders with a short-term perspective may not care about which average is used, since the difference between the two averages is usually a matter of mere cents. On the other hand, traders with a longer-term perspective should give more consideration to the average they use because the values can vary by a few dollars, which is enough of a price difference to ultimately prove influential on realized returns - especially when you are trading a large quantity of stock.

As with all technical indicators, there is no one type of average that a trader can use to guarantee success, but by using trial and error you can undoubtedly improve your comfort level with all types of indicators and, as a result, increase your odds of making wise trading decisions.

Exploring The Exponentially Weighted Moving Average

2007-06-02T22:26:00.000-07:00

Volatility is the most common measure of risk, but it comes in several flavors. In a previous article, we showed how to calculate simple historical volatility. (To read this article, see Using Volatility To Gauge Future Risk.) We used Google's actual stock price data in order to compute daily volatility based on 30 days of stock data. In this article, we will improve on simple volatility and discuss the exponentially weighted moving average (EWMA).

Historical Vs. Implied Volatility
First, let's put this metric into a bit of perspective. There are two broad approaches: historical and implied (or implicit) volatility. The historical approach assumes that past is prologue; we measure history in the hope that it is predictive. Implied volatility, on the other hand, ignores history; it solves for the volatility implied by market prices. It hopes that the market knows best and that the market price contains, even if implicitly, a consensus estimate of volatility. (For related reading, see The Uses And Limits Of Volatility.)

If we focus on just the three historical approaches (on the left above), they have two steps in common:

1. Calculate the series of periodic returns
2. Apply a weighting scheme

First, we calculate the periodic return. That's typically a series of daily returns where each return is expressed in continually compounded terms. For each day, we take the natural log of the ratio of stock prices (i.e., price today divided by price yesterday, and so on).

This produces a series of daily returns, from ui to ui-m, depending on how many days (m = days) we are measuring.

That gets us to the second step: This is where the three approaches differ. In the previous article (Using Volatility To Gauge Future Risk), we showed that under a couple of acceptable simplifications, the simple variance is the average of the squared returns:

Notice that this sums each of the periodic returns, then divides that total by the number of days or observations (m). So, it's really just an average of the squared periodic returns. Put another way, each squared return is given an equal weight. So if alpha (a) is a weighting factor (specifically, a = 1/m), then a simple variance looks something like this:

The EWMA Improves on Simple Variance
The weakness of this approach is that all returns earn the same weight. Yesterday's (very recent) return has no more influence on the variance than last month's return. This problem is fixed by using the exponentially weighted moving average (EWMA), in which more recent returns have greater weight on the variance.

The exponentially weighted moving average (EWMA) introduces lambda, which is called the smoothing parameter. Lambda must be less than one. Under that condition, instead of equal weights, each squared return is weighted by a multiplier as follows:

For example, RiskMetricsTM, a financial risk management company, tends to use a lambda of 0.94, or 94%. In this case, the first (most recent) squared periodic return is weighted by (1-0.94)(.94)0 = 6%. The next squared return is simply a lambda-multiple of the prior weight; in this case 6% multiplied by 94% = 5.64%. And the third prior day's weight equals (1-0.94)(0.94)2 = 5.30%.

That's the meaning of "exponential" in EWMA: each weight is a constant multiplier (i.e. lambda, which must be less than one) of the prior day's weight. This ensures a variance that is weighted or biased toward more recent data. (To learn more, check out the Excel Worksheet for Google's Volatility.) The difference between simply volatility and EWMA for Google is shown below.

Simple volatility effectively weighs each and every periodic return by 0.196% as shown in Column O (we had two years of daily stock price data. That is 509 daily returns and 1/509 = 0.196%). But notice that Column P assigns a weight of 6%, then 5.64%, then 5.3% and so on. That's the only difference between simple variance and EWMA.

Remember: After we sum the entire series (in Column Q) we have the variance, which is the square of the standard deviation. If we want volatility, we need to remember to take the square root of that variance.

What's the difference in daily volatility between the variance and EWMA in Google's case? It's significant: The simple variance gave us a daily volatility of 2.4% but the EWMA gave a daily volatility of only 1.4% (see the spreadsheet for details). Apparently, Google's volatility settled down more recently; therefore, a simple variance might be artificially high.

Today's Variance Is a Function of Pior Day's Variance
You'll notice we needed to compute a long series of exponentially declining weights. We won't do the math here, but one of the best features of the EWMA is that the entire series conveniently reduces to a recursive formula:

Recursive means that today's variance references (i.e. is a function of the prior day's variance). You can find this formula in the spreadsheet also, and it produces the exact same result as the longhand calculation! It says: Today's variance (under EWMA) equals yesterday's variance (weighted by lambda) plus yesterday's squared return (weighed by one minus lambda). Notice how we are just adding two terms together: yesterday's weighted variance and yesterdays' weighted, squared return.

Even so, lambda is our smoothing parameter. A higher lambda (e.g., like RiskMetric's 94%) indicates slower decay in the series - in relative terms, we are going to have more data points in the series and they are going to "fall off" more slowly. On the other hand, if we reduce the lambda, we indicate higher decay: the weights fall off more quickly and, as a direct result of the rapid decay, fewer data points are used. (In the spreadsheet, lambda is an input, so you can experiment with its sensitivity).

Summary
Volatility is the instantaneous standard deviation of a stock and the most common risk metric. It is also the square root of variance. We can measure variance historically or implicitly (implied volatility). When measuring historically, the easiest method is simple variance. But the weakness with simple variance is all returns get the same weight. So we face a classic trade-off: we always want more data but the more data we have the more our calculation is diluted by distant (less relevant) data. The exponentially weighted moving average (EWMA) improves on simple variance by assigning weights to the periodic returns. By doing this, we can both use a large sample size but also give greater weight to more recent returns.

MACD

2007-06-02T15:44:00.000-07:00

MACD (Moving Average Convergence Divergence) was developed by Gerald Appel at 1981, and from this day it became one of the most used technical analysis indicators in the financial world.

The MACD based on the moving average which is a lagging indicator (walking behind the price) but the MACD is more sensitive for the price movements.

Note: there are three types of indicators, lagging…

The MACD indicator consists of two lines; the first line in the traditional MACD is the MACD line, and it uses the 12 period exponential moving average of the price (fast EMA) minus 26 period exponential moving average of the price (slow EMA).

MACD = EMA [12] of price – EMA [26] of price

The produced line oscillates around a zero line (Center Line) without upper and lower limits.

Note: You can apply the 12 EMA and 26 EMA to the close price, open price, high price, low price, median price ((high + low) /2), typical price ((high + low + close)/3) and weighted close price ((high + low + close + close)/4). The recommended and widely used price type is the close price.

The second line called the Signal line and it uses 9 period simple moving average of the previous line (MACD line).

Signal = MACD – SMA [9] of MACD

Figure 1 – Shows the MACD line (The red histogram) oscillates around zero centered line. And the Signal line (yellow line).

MACD settings:

The author of the MACD indicator recommends the default settings; 26 EMA for the slow moving average, 12 EMA for the fast moving average and 9 SMA for the signal line.

But you can choose the settings that fit your trade style, bear in your mind that shorter moving averages will produce quicker indicator that is more sensitive to the price movements while the slower moving averages will produce slower indicator that is less zigzagged (Figure 2 and 3).

How to use the MACD indicator for trading?

The MACD indicator is Bullish and Bearish signals generator that used to forecast the market movement.
It can be used in different ways, the most used methods of MACD trading are:

1- Moving average crossing

2- Centerline crossing.

3- Divergence.

Moving average crossing:

When the MACD crosses over upward (down to up) the 9 period simple moving average a Bullish signal occurs.
Conversely, when the MACD crosses over upward (down to up) the 9 period simple moving average a Bearish signal occurs (Figure 4).

Note: These signals usually false signal and must be confirmed with other indicators signals.

Centerline crossing:

When the MACD crosses over upward (down to up) the zero line (Centerline) a Bullish signal occurs.
Conversely, when the MACD crosses over upward (down to up) the zero line a Bearish signal occurs (Figure 5) .
Like the Moving average crossing signals these signals must be confirmed by other MACD signals (Divergence for example) or indicators signals.

Divergence:

When the MACD divergence from the market trend, it divergence from the trend when the MACD makes a new high while the trend failed to reach this high in the case it’s a Bullish signal.
Conversely, the Bearish signal occurs when the MACD makes a new low while the trend failed to reach this low.

Note: The MACD indicator can be used too as overbought/oversold indicator when the 12 period moving average (fast EMA) had been crossed the 26 period moving average (slow EMA) and pulls away for far distance and a long period, that’s usually a sign of overbought/oversold signal and the market near to reverse its direction.

Moving Average Convergence/Divergence (MACD)

2007-06-02T15:24:00.000-07:00

Developed by Gerald Appel, Moving Average Convergence Divergence (MACD) is one of the simplest and most reliable indicators available. The Moving Average Convergence/Divergence (MACD) indicator is calculated by subtracting the 12-period exponential moving average of a given currency or commodity from its 26-period exponential moving average. A 9-period exponential moving average of the MACD itself is usually plotted over this line as a signal or trigger line. By using moving averages, MACD has trend following characteristics. In addition, by plotting the difference of the moving averages as an oscillator, MACD also has momentum characteristics.

There are three techniques commonly used to interpret the MACD:

Divergence: When MACD moves counter to the direction of the currency itself, it is a warning that the currency's trend may change.

Centerline Crossover: Some analysts choose to buy or sell when the MACD goes above or below zero (the centerline).

Trigger line: When the MACD crosses above the slower trigger line, this is a bullish signal. When the MACD goes below the trigger line, it's a bearish signal.

Tales From The Trenches: A Simple Bollinger Band Strategy

2007-06-02T07:49:00.000-07:00

Bollinger bands were created by John Bollinger in the '80s, and they have quickly become one of the most commonly used tools in technical analysis. Bollinger bands consist of three bands - an upper, middle and lower band - that are used to spotlight extreme short-term prices in a security. The upper band represents overbought territory, while the lower band can show you when a security is oversold. Most technicians will use Bollinger bands in conjunction with other analysis tools to get a better picture of the current state of a market or security. (To learn more about how Bollinger bands are constructed see, The Basics of Bollinger Bands.)

The Strategy
Most technicians will use Bollinger bands in conjunction with other indicators, but we wanted to take a look at a simple strategy that uses only the bands to make trading decisions. It has been found that buying the breaks of the lower Bollinger band is a way to take advantage of oversold conditions. Usually, once a lower band has been broken due to heavy selling, the price of the stock will revert back above the lower band and head toward the middle band. This is the exact scenario this strategy attempts to profit from. The strategy calls for a close below the lower band, which is then used as an immediate signal to buy the stock the next day.

Example 1: Intel Corp. (INTC)
Below is an example of how this strategy works under ideal conditions.

Figure 1 Chart by StockCharts.com

Figure 1 shows that Intel breaks the lower Bollinger band and closes below it on December 22. This presented a clear signal that the stock was in oversold territory.

Our simple Bollinger band strategy calls for a close below the lower band followed by an immediate buy the next day. The next trading day was not until December 26, which is the time when traders would enter their positions. This turned out to be an excellent trade. December 26 marked the last time Intel would trade below the lower band. From that day forward, Intel soared all the way past the upper Bollinger band. This is a textbook example of what the strategy is looking for.

While the price move was not major, this example serves to highlight the conditions that the strategy is looking to profit from. (For related reading, see Profiting From The Squeeze.)

Example 2: New York Stock Exchange (NYX)
Another example of a successful attempt using this strategy is found on the chart of the New York Stock Exchange when it broke the lower Bollinger band on June 12, 2006.

Figure 2 Chart by StockCharts.com

NYX was clearly in oversold territory. Following the strategy, technical traders would enter their buy orders for NYX on June 13. NYX closed below the lower Bollinger band for the second day, which may have caused some concern among market participants, but this would be the last time it closed below the lower band for the remainder of the month.

This is the ideal scenario that the strategy is looking to capture. In Figure 2, the selling pressure was extreme and while the Bollinger bands adjust for this, June 12 marked the heaviest selling. Opening a position on June 13 allowed traders to enter right before the turnaround.

Example 3: Yahoo Inc. (YHOO)
In a different example, Yahoo broke the lower band on December 20, 2006. The strategy called for an immediate buy of the stock the next trading day.

Figure 3 Chart by StockCharts.com

Just like in the previous example, there was still selling pressure on the stock. While everyone else was selling, the strategy calls for a buy. The break of the lower Bollinger band signaled an oversold condition. That proved correct, as Yahoo soon turned around. On December 26, Yahoo again tested the lower band, but did not close below it. This would be the last time that Yahoo tested the lower band as it marched upward toward the upper band.

Riding the Band Downward
As we all know, every strategy has its drawbacks and this one is definitely no exception. In the following examples, we'll demonstrate the limitations of this strategy and what can happen when things do not work out as planned.

When the strategy is incorrect, the bands are still broken and you'll find that the price continues its decline as it rides the band downward. Unfortunately, the price does not rebound as quickly, which can result in significant losses. In the long run, the strategy is often correct, but most traders will not be able to withstand the declines that can occur before the correction.

Example 4: International Business Machines (IBM)
For example, IBM closed below the lower Bollinger band on February 26, 2007. The selling pressure was clearly in oversold territory. The strategy called for a buy on the stock the next trading day. Like the previous examples, the next trading day was a down day; this one was a bit unusual in that the selling pressure caused the stock to go down heavily. The selling continued well past the day the stock was purchased and the stock continued to close below the lower band for the next four trading days. Finally, on March 5, the selling pressure was over and the stock turned around and headed back toward the middle band. Unfortunately, by this time the damage was done.

Figure 4
Chart by StockCharts.com

The strategy calls for buying Apple shares on December 22. The next day, the stock made a move to the downside. The selling pressure continued to take the stock down where it hit an intraday low of $76.77 (more than 6% below the entry) after only two days from when the position was entered. Finally, the oversold condition was corrected on December 27, but for most traders who were unable to withstand a short-term drawdown of 6% in two days, this correction was of little comfort. This is case where the selling continued in the face of clear oversold territory. During the selloff there was no way to know when it would end.

What We Learned
The strategy was correct in using the lower Bollinger band to highlight oversold market conditions. These conditions were quickly corrected as the stocks headed back toward the middle Bollinger band.

There are times, however, when the strategy is correct, but the selling pressure continues. During these conditions, there is no way of knowing when the selling pressure will end. Therefore, a protection needs to be in place once the decision to buy has been made. In the NYX example, the stock climbed undaunted after it closed below the lower Bollinger band a second time. The strategy correctly got us into that trade.

Both Apple and IBM were different because they did not break the lower band and rebound. Instead, they succumbed to further selling pressure and rode the lower band down. This can often be very costly. In the end, both Apple and IBM did turn around and this proved that the strategy is correct. The best strategy to protect us from a trade that will continue to ride the band lower is to use stop-loss orders. In researching these trades, it has become clear that a five-point stop would have gotten you out of the bad trades but would have still not gotten you out of the ones that worked. (To learn more, see The Stop-Loss Order - Make Sure You Use It.)

Summary
Buying on the break of the lower Bollinger band is a simple strategy that often works. In every scenario, the break of the lower band was in oversold territory. The timing of the trades seems to be the biggest issue. Stocks that break the lower Bollinger band and enter oversold territory face heavy selling pressure. This selling pressure is usually corrected quickly. When this pressure is not corrected, the stocks continued to make new lows and continue into oversold territory. To effectively use this strategy, a good exit strategy is in order. Stop-loss orders are the best way to protect you from a stock that will continue to ride the lower band down and make new lows.

By John Devcic,
Access Investopedia's Forex Advisor FREE Report - The 5 Things That Move The Currency Market

The Basics Of Bollinger Bands

2007-06-02T07:33:00.000-07:00

John Bollinger, a long-time technician of the markets developed the technique of using moving averages with two trading bands, not unlike using envelopes on either side of a moving average. Unlike using a percentage calculation from a normal moving average, Bollinger Bands simply add and subtract a standard deviation calculation.

What does all this mean? Well, let's start with standard deviation. Standard deviation is a mathematical formula that measures volatility, showing how the stock price can be spread around it's "true value". The technician can be relatively certain that almost all of the price data needed will be found between the two bands.

Bollinger Bands consist of a centerline and two price channels, one above the centerline and one below. The centerline is an exponential moving average, and the price channels are standard deviations of the stock the chartist is studying. The bands will expand and contract as the price action of an issue becomes volatile (expansion) or becomes bound into a tight trading pattern (contraction).

A stock may trade for long periods of time in a trend, albeit from time to time with some volatility. To better see the trend, traders use moving averages to filter the price action. This way, traders can gather important information regarding how the market is trading. For example, after a sharp rise or fall in the trend, the market may consolidate, trading in a narrow fashion and criss-crossing above and below the moving average. To better monitor this behavior, traders use price channels, which are designed to encompass the trading activity around the trend.

We know that markets trade erratically on a daily basis even though they are still trading in an uptrend or downtrend. We also know that technicians use moving averages with support and resistance lines to anticipate the price action of a stock. Upper resistance and lower support lines are first drawn and then extrapolated to form channels within which the trader expects prices to be contained. Some traders draw straight lines connecting either tops or bottoms of prices to identify the upper or lower price extremes, respectively, and then add parallel lines to define the channel within which the prices should move. As long as prices do not move out of this channel, the trader can be reasonably confident that prices are moving as expected.

Traders know that when the stock price continually touches the upper Bollinger Band, the price is thought to be overbought and conversely, when they continually touch the lower band, the prices are thought to be oversold, and a buy signal would thus kick in.

When using Bollinger Bands, designate the upper and lower bands as price targets. If the price deflects off the lower band and crosses above the 20-day average (which is the middle line), the upper band comes to represent the upper price target. In a strong uptrend, prices usually fluctuate between the upper band and the 20-day moving average. When that happens, a crossing below the 20-day moving average warns of a trend reversal to the downside.

You can see in this chart of Nortel Networks from the start of 2001 that for the most part the price action was touching the lower band and the stock price fell from the $40 level in the dead of winter to its October position of $5.69. There were a couple of instances that saw the price action cut through the centerline (mid- January and early April), but for many traders, this was certainly not a buy signal as the trend had not been broken.

In the 2001 chart of Microsoft Corporation, you can see the trend reversed to an uptrend in the early part of January, but look how slow it was in showing the trend change. Before the price action crossed over the centerline, the stock price had moved from $40 to $47 and then on to between $48 and $49 before some traders would have confirmation of this trend reversal.

Now, this is not to say that Bollinger Bands aren't a well regarded indicator of overbought or oversold issues, but it is charts like the Microsoft layout that may remind us of what Ralph Acampora said once in an interview on CNBC: "Start each day remembering the basics of technical analysis. Start with recognizing trends and then simple moving averages, and leave the more 'exotic indicators' to last."

Simple Moving Average

2007-05-26T15:49:00.000-07:00

A simple moving average is the simplest type of moving average (DUH!). Basically, a simple moving average is calculated by adding up the last “X” period’s closing prices and then dividing that number by X. Confused??? Allow me to clarify.

If you plotted a 5 period simple moving average on a 1 hour chart, you would add up the closing prices for the last 5 hours, and then divide that number by 5. Voila! You have your simple moving average.

If you were to plot a 5 period simple moving average on a 10 minute chart, you would add up the closing prices of the last 50 minutes and then divide that number by 5.

If you were to plot a 5 period simple moving average on a 30 minute chart, you would add up the closing prices of the last 150 minutes and then divide that number by 5.

If you were to plot the 5 period simple moving average on the a 4 hr. chart………………..OK OK, I think you get the picture! Let’s move on.

Most charting packages will do all the calculations for you. The reason we just bored you (yawn!) with how to calculate a simple moving average is because it is important that you understand how the moving averages are calculated. If you understand how each moving average is calculated, you can make your own decision as to which type is better for you.

Just like any indicator out there, moving averages operate with a delay. Because you are taking the averages of the price, you are really only seeing a “forecast” of the future price and not a concrete view of the future. Disclaimer: Moving averages will not turn you into Ms. Cleo the psychic!

Here is an example of how moving averages smooth out the price action.

On the previous chart, you can see 3 different SMAs. As you can see, the longer the SMA period is, the more it lags behind the price. Notice how the 62 SMA is farther away from the current price than the 30 and 5 SMA. This is because with the 62 SMA, you are adding up the closing prices of the last 62 periods and dividing it by 62. The higher the number period you use, the slower it is to react to the price movement.

The SMA’s in this chart show you the overall sentiment of the market at this point in time. Instead of just looking at the current price of the market, the moving averages give us a broader view, and we can now make a general prediction of its future price.

Price Smoothies

2007-05-26T15:45:00.000-07:00

A moving average is simply a way to smooth out price action over time. By “moving average”, we mean that you are taking the average closing price of a currency for the last ‘X’ number of periods.

Like every indicator, a moving average indicator is used to help us forecast future prices. By looking at the slope of the moving average, you can make general predictions as to where the price will go.

As we said, moving averages smooth out price action. There are different types of moving averages, and each of them has their own level of “smoothness”. Generally, the smoother the moving average, the slower it is to react to the price movement. The choppier the moving average, the quicker it is to react to the price movement.

Fibonacci Who?

2007-04-20T07:22:00.000-07:00

We will be using Fibonacci ratios a lot in our trading so you better learn it and love it like your mother. Fibonacci is a huge subject and there are many different studies of Fibonacci with weird names but we’re going to stick to two: retracement and extension.

Let me first start by introducing you to the Fib man himself…Leonard Fibonacci.

Leonard Fibonacci was a famous Italian mathematician, also called a super duper uber geek, who had an “aha!” moment and discovered a simple series of numbers that created ratios describing the natural proportions of things in the universe

The ratios arise from the following number series: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 ……

This series of numbers is derived by starting with 1 followed by 2 and then adding 1 + 2 to get 3, the third number. Then, adding 2 + 3 to get 5, the fourth number, and so on.

After the first few numbers in the sequence, if you measure the ratio of any number to that of the next higher number you get .618. For example, 34 divided by 55 equals 0.618.

If you measure the ratio between alternate numbers you get .382. For example, 34 divided by 89 = 0.382 and that’s as far as into the explanation as we’ll go.

These ratios are called the “golden mean.” Okay that’s enough mumbo jumbo. Even I’m about to fall asleep with all these numbers. I'll just cut to the chase; these are the ratios you have to know:

Fibonacci Retracement Levels
0.236, 0.382, 0.500, 0.618, 0.764

Fibonacci Extension Levels
0, 0.382, 0.618, 1.000, 1.382, 1.618

You won’t really need to know how to calculate all of this. Your charting software will do all the work for you. But it’s always good to be familiar with the basic theory behind the indicator so you’ll have knowledge to impress your date.

Traders use the Fibonacci retracement levels as support and resistance levels. Since so many traders watch these same levels and place buy and sell orders on them to enter trades or place stops, the support and resistance levels become a self-fulfilling expectation.

Traders use the Fibonacci extension levels as profit taking levels. Again, since so many traders are watching these levels and placing buy and sell orders to take profits, this tool usually works due self-fulfilling expectations.

Most charting software includes both Fibonacci retracement levels and extension level tools. In order to apply Fibonacci levels to your charts, you’ll need to identify Swing High and Swing Low points.

A Swing High is a candlestick with at least two lower highs on both the left and right of itself.

A Swing Low is a candlestick with at least two higher lows on both the left and right of itself.

Let's take a closer look at Fibonacci retracement levels...

Candlestick

2007-04-20T04:19:00.000-07:00

While we briefly covered candlestick charts in the previous lesson, we’ll now dig in a little and discuss them more in detail. First let’s do a quick review.

What is a Candlestick?

Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. A westerner by the name of Steve Nison “discovered” this secret technique on how to read charts from a fellow Japanese broker and Japanese candlesticks lived happily ever after. Steve researched, studied, lived, breathed, ate candlesticks, began writing about it and slowly grew in popularity in 90s. To make a long story short, without Steve Nison, candle charts might have remained a buried secret. Steve Nison is Mr. Candlestick.

Candlesticks are formed using the open, high, low and close.

If the close is above the open, then a hollow candlestick (usually displayed as white) is drawn.
If the close is below the open, then a filled candlestick (usually displayed as black) is drawn.
The hollow or filled section of the candlestick is called the “real body” or body.
The thin lines poking above and below the body display the high/low range and are called shadows.
The top of the upper shadow is the “high”.
The bottom of the lower shadow is the “low”.

Would You Like Fries with Your Pips?

2007-01-22T12:15:00.000-08:00

The term "order" refers to how you will enter or exit a trade. Here we discuss the different types of orders that can be placed into the foreign exchange market. Be sure that you know which types of orders your broker accepts. Different brokers accept different types of orders.
Order Types

Basic Order Types
There are some basic order types that all brokers provide and some others that sound weird. The basic ones are:

* Market order
A market order is an order to buy or sell at the current market price. For example, EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon.com, it's (kinda) like using their 1-Click ordering. You like the current price, you click once and it's yours! The only difference is you are buying or selling one currency against another currency instead of buying Britney Spears CDs.
* Limit order
A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070. You can either sit in front of your monitor and wait it for it to hit 1.2070 where you would then click a buy market order. Or you can set a buy limit order at 1.2070, then walk away from your computer and attend your ballroom dancing class. If the price goes up to 1.2070, your trading platform will automatically execute a buy order at that exact price. You specify the price at which you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active (GTC or GFD).
* Stop-loss order
A stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order. For example, you went long (buy) EUR/USD at 1.2230. To limit your maximum loss, you set a stop-loss order at 1.2200. This means if you were dead wrong and EUR/USD drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position for a 30 pip loss (eww!). Stop-losses are extremely useful if you don't want to sit in front of your monitor all day worried that you will lose all your money. You can simply set a stop-loss order on any open positions so you won't miss your basket weaving class.

Weird Sounding Order Types
* GTC (Good ‘til canceled)
A GTC order remains active in the market until you decide to cancel it. Your broker will not cancel the order at any time, therefore it's your responsibility to remember that you have the order scheduled.
* GFD (Good for the day)
A GFD order remains active in the market until the end of the trading day. Because foreign exchange is a 24-hour market, this usually means 5pm EST since that that's U.S. markets close, but I’d recommend you double check with your broker.
* OCO (Order cancels other)
An OCO order is a mixture of two limit and/or stop-loss orders. Two orders with price and duration variables are placed above and below the current price. When one of the orders are executed the other order is canceled. Example: The price of EUR/USD is 1.2040. You want to either buy 10,000 at 1.2095 over the resistance level in anticipation of a breakout or initiate a selling position if the price falls below 1.1985. The understanding is that if 1.2095 is reached, you will buy 10,000 and the 1.1985 order will be automatically canceled.
Always check with your broker for specific order information and to see if any rollover fees will be applied if a position is held longer than one day. Keeping your ordering rules simple is the best strategy.

Summary

The basic order types (market, stop loss, and limit) are usually all that most traders ever need. Unless you are a veteran trader (yeah right), don’t get fancy and design a system of trading requiring a large number of orders sandwiched in the market at all times – stick with the basic stuff first.
Make sure you fully understand and are comfortable with your broker’s order entry system before executing a trade.

DO NOT make a trade with real money until you have an extremely high comfort level with the trading platform and order entry system.

babypips.com

Would You Like Fries with Your Pips?

2007-01-22T12:04:00.000-08:00

Summary

Know Your P's and P's

2007-01-22T11:35:00.000-08:00

Know Your P’s and L’s
Here is where we’re going to do a little math. You've probably heard of the terms "pips" and "lots" thrown around, and here we're going to explain what they are and show you how they are calculated.
Take your time with this information, as it is required knowledge for all Forex traders. Don’t even think about trading until you are comfortable with pip values and calculating profit and loss.

What the heck is a Pip?
The most common increment of currencies is the Pip. If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.
As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the US Dollar is quoted first, the calculation would be as follows.
Let’s take USD/JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)

In the case of USD/JPY, 1 pip would be .01
Therefore,
USD/JPY:
119.80
.01 divided by exchange rate = pip value
.01 / 119.80 = 0.0000834

This looks like a very long number but later we will discuss lot size.
USD/CHF:
1.5250
.0001 divided by exchange rate = pip value
.0001 / 1.5250 = 0.0000655

USD/CAD:
1.4890
.0001 divided by exchange rate = pip value
.0001 / 1.4890 = 0.00006715

In the case where the US Dollar is not quoted first and we want to get the US Dollar value, we have to add one more step.

EUR/USD:
1.2200
.0001 divided by exchange rate = pip value
so
.0001 / 1.2200 = EUR 0.00008196

but we need to get back to US dollars so we add another calculation which is

EUR x Exchange rate

So
0.00008196 x 1.2200 = 0.00009999

When rounded up it would be 0.0001

GBP/USD:
1.7975
.0001 divided by exchange rate = pip value
So
.0001 / 1.7975 = GBP 0.0000556

But we need to get back to US dollars so we add another calculation which is

GBP x Exchange rate

So
0.0000556 x 1.7975 = 0.0000998

When rounded up it would be 0.0001

You’re probably rolling your eyes back and thinking do I really need to work all this out and the answer is no. Nearly all forex brokers will work all this out for you automatically. It’s always good for you to know how they work it out.

babypips.com

The Skinny on Forex Trading

2006-09-17T08:19:00.000-07:00

What is FOREX?

The Foreign Exchange, also referred to as the "FOREX" or "Forex" or “FX” or "Spot FX" market is the largest financial market in the world, with a volume over $1.95 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you see how giant the Foreign Exchange really is. It's actually more than three times the total amount of the stocks and futures markets combined!

What is traded on the Foreign Exchange? The answer is money. Forex trading is the simultaneous buying of one currency and selling of another. Currencies are traded through a broker or dealer and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

This kind of trading is often very confusing to people because they are not buying anything physical. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the country's economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy compared to the other countries' economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

Until the late 1990’s, only the “big guys” could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start. Forex was originally intended to be used by bankers and large institutions and not by us “little guys”. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.

All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site. BabyPips.com was created to introduce beginning traders to all the essential aspects of foreign exchange in a fun and easy-to-understand manner.

1. What is a Spot Market?
A spot market is any market that deals in the current price of a financial instrument.

2. Which Currencies Are Traded?

Any currency backed by an existing nation can be traded at the larger brokers. The most popular currencies along with their symbols are show below:

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.
When Can Currencies Be Traded?

The spot FX market is unique to any other market in the world. It’s like a Super Wal-Mart where the market is open 24-hours a day. Somewhere around the world, a financial center is open for business, and banks and other institutions exchange currencies, every hour of the day and night with generally only minor gaps on the weekend.

The foreign exchange markets follows the sun around the world, so you can trade late at night if you’re a vampire or in the morning if you’re an early bird. Keep in the mind though, the early bird doesn’t necessarily get the worm in this market. You might get the worm but a bigger nastier falcon can sneak up and eat you too.

School of Pipsology Curriculum

2006-09-15T16:51:00.000-07:00

Pre-school Technical versus Fundamental Analysis

ELEMENTARY SCHOOL
1. Kindergarten Types of charts
2. 1st Grade Japanese Candesticks
3. 2nd Grade Support and Resistance, Trend Lines, and Channels
4. 3rd Grade Fibonacci
5. 4th Grade Moving Averages
6. 5th Grade Common Chart Indicators
7. Bollinger Bands, MACD, Stochastics, RSI, and Parabolic SAR

MIDDLE SCHOOL
8. 6th Grade Oscillators and Momentum Indicators
9. 7th Grade Important Chart Patterns
10. 8th Grade Pivot Points

HIGH SCHOOL
11. 9th Grade Multiple Timeframes
12. 10th Grade Elliott Wave Theory
13. 11th Grade Create Your Own Trading System
14. 12th Grade Market Hours - Know When to Trade
15. 13th Grade Money Management
16. 14th Grade Plan Your Trade and Trade Your Plan

babypips.com

School of Pipsology

2006-09-04T13:59:00.000-07:00

Forex education is crucial for beginners.

BabyPips.com’s School of Pipsology provides free forex education that is designed to help you acquire the skills, knowledge, and abilities to become a successful trader in the foreign exchange market. Our definition of a successful trader is having the ability to do three things:
1. Make pips
2. Keep pips
3. Repeat

If you can repeatedly do these three things, then you're on your way!

Remember when you attended grade school? No? Well, this is how it worked.

In the United States, you start schooling at the age of five and enter Kindergarten. The next year you enter 1st Grade. If you pass, the next year you enter 2nd Grade, and so on, all the way up to the 12th Grade. Depending on what grade you were in, you would attend one of three schools:
1. Elementary school (Kindergarten - 5th grade)
2. Middle school (6th grade - 8th grade)
3. High school (9th grade - 12th grade)*

This is how our lessons are broken apart so you can relive the past and also be able to learn and study forex trading techniques at your own pace.

You will learn how to identify trading opportunities, how to time the market, and when to take profits or close a trade. But that's not all folks. You will also learn the art of risk management: how to maximize your profits and keep your losses to a minimum. Our forex education curriculum here at the School of Pipsology will make a bold attempt to cover all aspects of forex trading.

Quickstart Guide to Forex

2006-09-01T07:05:00.000-07:00

Are you a forex newbie? Well here is where you begin your illustrious forex trading career.
Our Quickstart guide is a series of Forex lessons created to quickly familiarize the clueless forex newbie or kinda-clueless forex newbie.
Every industry has its own collection of jargon, and Forex is no exception. You have to grasp Forex gobbledygook before you can start trading. The lessons are designed to help you gain a better understanding of what the Forex market actually is, who participates in this foxy market, and how you can make money trading Forex.
By the time you finish reading this guide, the slang of currency trading will have become second nature to you.
You'll probably be all fired up and hyped about forex trading and be tempted to open a real account and start trading your rent money. Don’t do it! You might disagree, but you're still a forex newbie! This guide was made to make sure you're properly equipped with the right knowledge before moving forward to our School Pipsology.