Tag Archives: forex

Market Analysis

Moving Averages In The Forex Market

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Moving averages in the Forex market is simply a way to smooth out the price action of the market. There are many different types of moving averages, and the two most common types are the exponential moving average and the simple moving average. The simple moving averages are the easiest form of moving averages, but this form is very susceptible to spikes. Exponential moving averages give more weight to recent prices and are better for showing what traders are doing now. This is considered more important by Forex traders than what was done a week ago or longer. Exponential moving averages are not as smooth as simple moving averages, and shorter period moving averages are not as smooth as longer period moving averages. Moving averages that are choppy are faster in response to price action, and this can help catch trends very early. This same quick reaction can cause spikes that will fake you out as well, so this quick reaction can be both a blessing and a curse. Moving averages that are smooth are not nearly as susceptible to spikes, but they are slower to respond to price actions. Because of the slow response, however, these moving averages can cause traders to miss out on some great trading opportunities.

The best strategy when using moving averages in the Forex market is to plot several different types of moving averages on a chart so that both the long term and short term movements can be compared. Moving average simply means to take the average currency closing price for a specific number of time periods, whether it is days, weeks, or months. Just like every other market indicator, a moving average indicator is used by Forex traders to help predict future prices and market trends. Moving average indicators operate with a lag, or delay. Because of this, only a possible forecast of future movement is predicted. Moving averages must be analysed just like every other market indicator.

Moving average indicators come in many different types. No matter which moving average indicators are used, these are just tools that are analysed by Forex market traders along with numerous other tools. Moving averages simply show the average price for a specific number of time periods, like months or days. Forex traders use moving averages to help predict market movement in the future, and thiese tools are used together with other market analysis tools by traders to predict future market movements to minimize the investment risks.

Copyright © 2007 Joel Teo. All rights reserved.

General Forex

Forex Technical Analysis – Importance Of Trend Lines And Resistance Levels In Forex Technical Analysis

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Forex Technical Analysis

Forex trend lines are important components used in chart analysis. Though the market goes in a direction which is present in zig zag lines, the placement of lower and upper portion of a zig zag allows us for plotting lines which connect the important lows also called troughs and the important highs also called peaks present in a corresponding zig zag by making use of software algorithms in a computer.

For drawing trendlines, 2 points will be necessary and 3rd will be confirmation of contact point. A trend chart must be drawn when using troughs with peaks. The trend line must be parallel and should be drawn in opposite side with trade channels. All the lines are the borders of the channel. These trendlines are very much essential for analysis of the current data of the forex market and they can provide the exact price variations which can help us to determine the right currency to invest. Forex Technical Analysis

The bottom and upper trade channel borders are called as resistance and support lines. Each of the peaks will represent the price levels that exceed the buying and selling pressure. They are also called resistance levels. The troughs represent different selling pressure levels and the buying pressure. The support levels and resistance level help in determining the correct price variation and time to sell the currencies. The consecutive resistance and support levels should exceed the other data in uptrend market. The reverse will be called as downtrend. Though smaller exceptions can be accepted, failures must be considered as the signals which warn for change in trends.

Trend significance will be varied with volume and time. The price if longer can bounce off the resistance and support levels, which is very important when the trend gets higher. The volume of forex trading is also equally significant, particularly when the resistance and support levels are critical. When level of currency bounces under certain volume, the trend significance can increase. The important of resistance and support level shall go beyond the actual functions.

If the levels get penetrated convincingly, there can be variation in opposite. A very good support level, which can be penetrated with heavy volume, shall become strong resistance level. But in other case, a very high resistance shall change into very high support once it gets penetrated. Generally the borders of trade channel which help in making decisions for saving or closing an already existing position must be based on certain rules. The first rule is that channel will be highly reliable if it exists for a longer time. When the channel is very reliable, the width will be high and steep channels will be less reliable. Support levels could be broken and are not dependent on volume level. Forex Technical Analysis

General Forex

Learn To Trade Forex – Advice From A Group Of Traders Who Made Millions

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Learn To Trade Forex

If you are looking for the best way to trade Forex, you should start by looking at the group of traders enclosed, these traders learned to trade in just two weeks and made hundreds of millions of dollars! It’s an interesting story and one which can lead you to success so let’s look at it.

If you want the best way to learn to trade Forex, ignore all the people who tell you that there is a way to beat the market, there isn’t. All the people trying to sell you Forex Robots and other get rich quick systems – should be ignored, you need to make some effort but the rewards can be staggering, as we are about to find out. The group of traders we are going to look at in this article, learned the basics and you must to but the good news is they learned to trade in two weeks and became legends; if you are thinking maybe these traders were nerds, think again.

The people who learned to trade in two weeks consisted of an actor, a security guard, a kid out of high school and a lady auditor, to name just a few. This diverse group were picked by trading legend Richard Dennis, to prove anyone could win at trading and learn quickly. He was proved right, as his group of traders made over $200 million in 4 years. They were called the “turtles” and the system they were taught is now free online and if you look at the system you will see how simple it was. The system is less effective today, as market volatility has increased ( the experiment was 25 years ago) but it still makes good profits and has all the elements a good system should: Learn To Trade Forex

It was easy to understand, was based on trading the reality of price change via breakouts, it focused on the big long term trends and had strict money management parameters.

Many of the traders in interviews stated the system was easy to understand but hard to follow with discipline. Discipline is hard for most traders, as they simply can’t take losses, so they run them and when they have profits they cut them too soon! What you need to do to win is to cut losses and run profits, the above system had far more losers than winners but made huge gains.

Discipline comes from a solid education and confidence in your systems ability to perform long term; if you have confidence and you accept and take your losses and have the courage to milk the big trends for all there worth, you can make a lot of money.

So when anyone tells you, you need to work hard or have a college education to win, don’t believe them you don’t. Many of the top traders in the world, are high school drop outs and use simple systems but they all have one thing in common which you have probably already guessed – A humble attitude, respect for the market and the discipline and courage to follow their plan.

If you have understood this article you will now know the best way to learn to trade Forex and also understand that if you adopt the right mindset it’s the key to a huge regular income. Learn To Trade Forex

General Forex

Forex Trial Account – Using a Forex Robot Demo Account

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Forex Trial Account

If you are new to Forex, you will definitely need some hands-on experience to get a feel of the market to be able to make wise investments. If you are worried that you will have to experiment with your own money to learn about the market and become a successful investor, put your mind at ease. Nowadays, there are hundreds of websites that not only give you a free demo account (with some virtual money in it) but also give you a Forex robot along with it to help you learn how to automate your investments.

How a demo account works:

Some websites give you a demo account with some amount of virtual currency of your choice in it. While you are shown live market trends, Forex charts, news and commentary, and you will be at liberty to invest as you like. If you choose to automate your investments, you will have to specify the market criteria that you think will be best for your investments, or let the Expert Advisor program decide by itself. You can then sit back and watch your virtual investment grow or shrink. This will help you learn about the different market conditions that can arise. Forex Trial Account

Choosing your Forex software:

After you’ve created your demo account, you will be given a trial period (say, 90 days) along with the trading software. The software will be a trial version, and some features will be limited. However, what it has to offer will be quite sufficient for you to learn the ropes and decided whether you like the software. It is recommended that you try out software from different companies before you make your decision. Once you have found the Forex robot that gives you the best results, you can go in for a postpaid account through which you can start trading for real. Forex Trial Account

Forex Trading Articles

Making Money Online Through Forex Trading

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Successful online forex trading requires a great level of understanding, great experience, high acumen and towering exposure. It is not a market you go over within few hours or in a day and think that you have mastered it. However, many online forex traders are failing to be on top of what is happening in the market; hence they are losing money at alarming rate. But the skilful traders are making their money because knowledge makes the difference!

As a forex trader in a Bureau d’Change before I moved into a bank, I believe I have some good level of exposure to write or talk about currency trading (forex trading). I know forex trading, experience aside, is backed by per minute information update.

How Online Forex Trading Operates:

Forex market requires that you seek new information almost always (at per minute intervals). This may mean working the telephone incessantly by calling fellow market operators for happenings in the market. In online trading, it means being on the net almost always to monitor the flagellation of currency rates which change per seconds. By so doing, you are able to prompt action to equalise or mitigate bad buy with new bids or initiate ‘sell order’ so that at the end you are able to get your brokerage (the margin known as spread or profit).

Also in online currency trading, it is not immediately you complete your ‘bid’ or ‘ask’ and ‘submit’ that your request becomes accepted. Experienced operators know this fact very well. When you fill the bid page (based on what the market prices is at that time) and click submit, a new page opens. The belief is that your request has already gone in and taken. But this is not so: there is a time lag between when you submit your bid and when your price quotes hit the trading platform. During the time intervals, currency prices have changed! Operators who have integrity to protect do explain this.

Currency Trading Attracts High Risks:

Permit me to reproduce the warning (disclaimer) published by FX Solutions (a reputable operator in online forex trading). “FX Solutions, LLC believes that customers should be aware of the risks associated with over-the-counter, spot forex. Forex trading is highly speculative in nature which can mean currency prices may become extremely volatile… Forex trading is highly leveraged, since low margin deposits normally are required, an extremely high degree of leverage is obtainable in foreign exchange trading. A relatively small market movement will have a proportionately larger impact on the funds you have deposited. You may sustain a total loss of your funds. Since the possibility of losing your entire cash balance does exist, speculation in the Forex market should only be conducted with risk capital you can afford to lose which will not dramatically impact your lifestyle. With these risk disclaimers, online forex traders are warned.”