General Forex

Automated Forex Technical Analysis Trading Software on Mt4

There’s a numerous choices of technical analysis trading software, however don’t assume that every software provides traders with effective and trust-able trading features and options. Among several trading platforms, one shines out the most: MetaTrader 4.

Forex Technical Analysis Trading Software

Metatrader 4 offers you strategy testers, expert advisors, together with indicators, which allow fx traders to conduct evaluation tests on their personal trading systems with past historical market info. Advanced traders who know programming will find themselves able to write their trading system into a program and run their system on the past data to see how well their trading system performed in the past by just a press of the button.

To make things far more convenient, the open sourced software metatrader 4 have a lot of developers creating apps for the application. Introducing a type of software range we find it extremely useful are tools which allow the trader to draw lines on the chart and to instruct the lines to perform trade entry and exit executions automatically when price touches or breaks through them. This software is commonly mentioned in the community called trendline EA or trendline break EA. The drawing of line is all that is required for the trader to automate his trading work.

Explaining in more detail, you draw lines in the chart manually by hand, and when price breaks across or touches the line, will instruct the technical analysis trading software to make trade entries or exits. This will effectively frees up the forex traders’ time to look at the computer screen while waiting for the signal.

The drawing of lines now serves two functions, to perform technical analysis and also to execute trade entries and exits from there. Lines on the Mt4 charts are not just a visual marking tool but also the traders’ automated technical analysis trading software. In other words, they made most of manual forex trading systems to perform automated.

Look at the possibilities of how one can trade forex market in spite of having a day job. Trading this classical chart patterns in the past requires constant monitoring of the market, but now trading these technical chart patterns on automation are made possible.

Time-tested and commonly mentioned in most of technical analysis trading reports.

1) Breakouts

2) Support Levels And Resistance Levels,

3) Envelope Patterns Or Channels Trading

4) Triangles Chart Patterns- symmetrical triangle, ascending or descending triangles

5) Trading based on 2 stochastic lines and other oscillators (as a trade filter, entries or exit)

6) Fibonacci levels – application of these indicators enable forex traders to make a profitable entry into the market.

Technical Analysis Trading Software Offers Trade Versatility

There are many more indicators for forex traders to incorporate into their manual fx systems and made automated. Whether you want them to work as a trading filter, entry signal line or exit signal lines, it is now possible with the many automated technical analysis trading software on metatrader 4 or Mt4.

Most importantly, automated technical analysis trading software must be able to consider the unique experiences and personality of the trader putting on the trade position- the ‘edge’ that enables the trader to combine objective chart information with his own understanding and experience so that these crucial information will be passed onto and used by the software to perform key trading processes like trade signal recognition, trade entry and exit and trade management.

This technical analysis trading software will make forex trading in mt4 works in a similar fashion just like an actual manual trader trading the markets (and if not even better).

General Forex

Pre- Requisites To Support Resistance Trading

Support Resistance Trading is most often used by traders. As traders will plot charts with trendlines and key horizontal levels to mark the support and resistance levels, this will only constitute half of the battle to more profits; the other half requires the trader to be able to trade these levels.

Every Trader Has His Own Support Resistance Trading System

Somehow, each trader has his own way of identifying key support and resistance levels and there are some who do not even know how to plot. The next few points will highlight what are support and resistance levels so that a trader is able to plot and use them effectively without compromising the quality of his trading performance for his support resistance trading strategy. Therefore it serves as a foundation to support resistance trading.

Key Foundations To A Good Support Resistance Trading System

Using Trend Lines

Trend lines in support resistance trading are used to depict the direction of price on a chart. These trend lines are often used to enter trades whenever the market touches or breaks through them. As trend lines drawn are subjective in nature, there is a possibility that the price can choose not to respect the support or resistance line a trader has plotted.

It should only be used as a guide to determine a trader’s trade intention of a buy, sell or stand aside base on the trend.

Generally accepted practice to draw a trend line in support resistance trading is by connecting three or more consecutive lows increasing in price for up-trend or consecutive highs decreasing in price for down-trend.

Drawing Support

Support line is drawn across consecutive candle lows which indicate an area where buyers and sellers are balanced, therefore price unable to go lower. This level serves as a spring-board to push price higher, suitable for buy entry.

Drawing Resistance

Resistance line is drawn across consecutive candle highs which indicate an area where sellers and buyers are balanced, therefore price unable to go higher. This level serves as a spring-board to push price lower, suitable for sell entry.

Note that support and resistance levels can often swap roles whenever price breaks through them. This is when price breaks through a support; it will serve as a resistance level as the market will want to test this level before proceeding to fall further. The same also goes for resistance level becoming a support level.

Use Round Numbers

Round numbers are excellent to be used as potential support and resistance levels as it represents the psychological factor in supply and demand. Traders are humans with tendencies to prefer round numbers for entry or exits as it is easy to remember and calculate profits.

Using Daily Ranges

Daily high and low of every trading day represents key support and resistance levels for support resistance trading. Often, the market will want to test these levels. The validity of these daily levels can only be taken for the last two to three days as support and resistance levels.

Use Long Term Support And Resistance For Support Resistance Trading

Look out for resistance and support levels from longer timeframes as the validity of price respecting these values are often strong. Moving to shorter timeframes, the validity will decrease but these are the levels where a trader can hunt for bargains and make their move.

Support Resistance Trading Conclusion

The above six point gives an idea to the trader on how to start plotting key support and resistance levels as a foundation to trade analysis and trade entries for support resistance trading. This will eventually boost a trader’s confidence and trading performance.

General Business

Forex: What Desire For Risk

The single most significant issue for us to understand once first starting to trade is risk management. Of course we all need to trade to aquire money. So the main thing we need to understand is not to lose it. Of course you will experience losing trades, we all do, it is part of trading, it is inevitable. But learn to survive those losses and subsequently endeavour to minimise and keep on minimising them.

With this in mind I confess to being intrigued by the wildly distinctive approaches proposed by various people. Some will tell you to swing trade so that you can capture whichever significant swings that occur throughout the day. Their argument is that by doing this they will not lose out on any major movements that take place. They benefit from sizeable stop losses to allow the trade a chance to breathe, as they say. This way they can permit the trade run and run for a decent long while and gather in a nice high profit. They do not need to stay chained to a laptop all day long and are comfortable in the knowledge that a large stop loss allows them to trade in this way. And various traders do precisely this.

Let us consider the amount they are risking. Suppose for example the pound is falling against the euro and the chart shows the price bouncing down and up against say the 40 daily moving average. Let us imagine that our stop loss is trailing slightly above the 40dma.There might well be a difference between the price and the stop loss of say 2-400 pips. That is one heck of a lot of risk! You need very deep pockets for this method.

Another method that the risk adverse beginner might want to consider is somewhat different. Imagine the chart described above instead of being a daily chart is a 10-minute chart although we will presume its outline is much the same. Because the price variations are smaller the risk is much smaller. Being a smaller time frame it will need closer monitoring than a swing trade but this is a balance that needs to be struck.

It often amazes me that certain traders will let a trade rise to its summit and subsequently let it retrace in the hope that it will take off again to a higher peak. This it might or might not achieve. When a price reaches its high point it is surely wise to exit the trade at the earliest obvious sign of a reversal and to re-enter later on. By following such an approach the stop loss, instead of being placed on a moving average can be placed at say the low of the preceding bar. As a consequence the risk is reduced to a very low level and fulfils one of the criteria outlined at the start of this article. In order to continue to reduce the risk element you might find you can reduce the stop loss to a portion of the proceeding bar so instead of having a 200 pip stop loss you can perhaps get away with say 20. Now that is low risk.

General Investing

Gold Investments

European Central Banks renew sales pact and Boost Gold

Europe agreed to renew their pact to cap sales of gold for another five years causing gold prices to boost.

This reaffirmed gold’s status as a key reserve asset. Also, the new Central Bank Gold Agreement reduced the maximum amount of gold that can be sold by the signatories.

Under a new deal to replace the current five-year pact, the limit for sales has gone down to 2,000 tons from 2,500 tons. Annual sales are now capped at 400 tons, down 25% from 500 tons – a quota that was not reached in recent years.

Gold sales were first capped by European in 1999 in an attempt to reduce market volatility. Their agreement to prevent markets being flooded with the gold has been an important factor in its rally over recent years.

Because of the recent economic plummet, gold’s status as a safe-haven asset has also helped boost the price of gold.

The new deal and its tighter sales quotas help cement a view that the days are over of central banks’ anti-gold stance and the kind of big sales announcements – notably by the Bank of England at the end of the 1990s – that led to wild swings in prices.

The World Gold Council welcomed the new deal. “The announcement is a clear endorsement of gold’s role in today’s global economic and financial architecture and a reflection of the success of the previous Central Bank Gold Agreements,” said chief executive, Aram Shishmanian.

“The agreement to limit the sale of gold over the five-year period to 2,000 tons demonstrates that, at a time of continued market volatility and inflationary fears, gold’s unique investment qualities provide the necessary hedge and protection that central banks are seeking.

“The reduction in the annual ceiling on sales … reflects an acknowledgment of the fact that the central banks’ appetite for sales is diminishing.”

Investing in the US

In the worst financial crisis since the great depression, the U.S. government has responded with $13.5 trillion in pledged or potential outlays. Meanwhile, rising unemployment and slumping corporate profits are crimping the U. S. Treasury’s tax revenue.

Because the credit worthiness of the U. S. government is raising concern, it’s no surprise that the eagerness of foreign governments and investors for dollar-denominated investments has diminished.

The dollar’s standing as the world’s de facto reserve currency is impaired. Nations are looking to diversify their foreign exchange reserves away from the dollar and showing a liking for gold. The combination of liquidity circulating through the U. S. economy and a tanking dollar stokes inflation. Gold is being sought out as a safe-haven by investors who sense the threat of inflation.

Gold Price Outlook

Gold is once again approaching the psychologically important $1,000 per ounce mark. Rallies in the price of gold have peaked in the $900-1,000 per ounce range three times since the start of 2008. I believe gold will crack the four-figure mark in 2009 and move on to exceed its 2008 highs. Given the state of the U. S. economy and the monumental challenges ahead, the $1,000 per ounce figure can well become a support or floor for a long time to come.

General Business

Trading Commodity Futures Via The Internet

Before online commodities and future trading became the high-rolling, high-stake investment ground that it is today, its early proprietors were farmers of the 1800’s.

These farmers would grow their crops and bring these to the market come harvest time in the hope of selling them. But the main concern then was that without an indicator, they could not efficiently gauge how much of their goods are needed therefore resulting either to shortages or excesses, both causing losses for the farmer.

With shortages causing loss of the opportunity to earn more and excesses causing meats and crops to rot and dairy products to spoil. Also, when a certain produce is out of season any product made from them would be priced so high due to its scarcity.

A central marketplace was subsequently created for farmers to take their harvests and sell them either for immediate or forward delivery. Immediate delivery is what is known now as the spot or cash market and forward delivery is now called futures market.

This concept helped stabilize prices for commodities that were out of season as well as served as an effective indicator of supply and demand therefore saving farmers thousands of dollars that would otherwise go to spoilage.

From forward contracts evolved commodities and futures contracts. Forward contracts are effectively agreements to buy now for payment and delivery at a specified date in the future, which is usually three months from the date of the contract.

These were originally only for food and agricultural products but now they have expanded to include financial instruments. Forward contracts have evolved and have been standardized into what we know today as futures contracts.

Basically, when dealing in online commodities or futures trading, a contract must have a seller (the producer) and a buyer (the consumer). If you purchase a futures contract, you are agreeing to buy a commodity that is not there yet for a specific price.

Although most futures contracts are based on an actual commodity, some futures contracts also are sold based on its future value based on stock market indices.

Unless you are a businessman who is into the trade of the actual commodity you purchased, you won’t actually use the goods (if you’re the buyer) or actually provide the commodity (if you’re the seller) for which you’re trading a futures contract.

Remember, buyers and sellers in the futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods.

On the other hand, online commodities differ from futures trading in that commodities trading may involve the physical delivery of the goods. In which case a receipt is issued in the favor of the buyer. This receipt enables the buyer to take the commodity from the warehouse.

Traders in online commodities and futures market can use different strategies to take advantage of rising and declining prices. The most common are known as going long, going short and spreads.

When an investor enters a contract by agreeing to buy and receive delivery of the commodity at a set price – it means that he or she is trying to earn from an anticipated future price increase, he or she is going long.

When he or she is looking to make a profit from declining price levels, this is going short. The speculator sells high now so he or she can repurchase the contract in the future at a lower price.

When one makes a spread, however, he or she is trying to benefit from the price difference between two separate contracts of the same commodity.

As an online commodities or futures trader, therefore, you should be armed with a firm grasp of how the market and contracts function.