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Wednesday, 11 July 2007
Looking for more opportunities to make money? Visit Online Money Portal now.
Monday, 11 June 2007
I found this site that is quite nice: Online Money Portal. I you are looking for various money making opportunities, visit this site today. It is literally crammed with a wide range of opportunities. The layout is maybe not the best, but it is easy to navigate. Some are free, while others do ask a sign-up fee (which is not a big problem since all offer a 100% money back guarantee). Visit this site today, and who knows how wealthy your future may be. Online Money Portal
Saturday, 2 June 2007
I haven't posted the last few weeks for some personal reasons. It has been a hectic period and even my Forex Trading has come to an end for this period. I closed all my open positions and stood outside the market for quite some time. How strange this was for me. Part of my existence centered around the market open and close for a few years. Suddenly I was not there when the market closed...
But at least I am back, but I still have no open positions yet. Still watching the market, trying to get a feel for the market.
I will finish my articles about creating your own mechanical system a soon as possible.
I truly hope that your Forex Trading has been very successful.
Thursday, 17 May 2007
When I just started trading the Forex Market I made the mistake of thinking that an indicator, like RSI, Stochastic or MACD, is equal to having a trading system. I poured over charts in the beginning seeing how “easy” it was to spot market turns with these indicators. Buying or selling when the indicator was at certain levels looked so easy when looking at the historical chart. Hindsight is a perfect science, and the problem is that trading is done forward and not backwards. The market can not be predicted with any degree of accuracy. There is a lot of uncertainty in trading the trading the forex market successfully.
As I stated in a previous post, you must really know yourself and how you will function under stress in terms of greed and fear (see below - 7 May 2007) to be able to master your emotions while trading. It took me quite some time just to realize that I am not very effective in controlling my own emotional experiences while trading. Your personality can be both an asset and a liability when trading the forex market. For this reason I am shying away from discretionary systems (where your discretion dictates your trading) to searching for a more mechanical method. Mechanical systems have proven to be more agreeable to my personality than discretionary methods. The system dictates when and how I will trade and it leaves my emotional experience on the sideline. But this differs from person to person.
To trade successfully you need a system that is in accord with who you are and what you wish to get out of your trading. In this respect I believe that developing a trading system needs to take some time en experimenting. In the next post I will begin to tell you how I started to create my own mechanical trading system.
Till next time – May you trade the Forex Market successfully
Tuesday, 15 May 2007
Apply "the Secret" To Forex Trading Success (Ezine Ready)
Author: Kent Douglas
The Forex market is the largest trading network in the world with $1.8 trillion dollars being exchanged every day. There are dozens of different currencies traded but the big players to focus on are all traded with the US dollar and include: EUR (Euro), GBP (British pound), JPY (Japanese yen), CHF (Swiss franc), AUD (Australian dollar), NZD (New Zealand dollar), and the CAN (Canadian dollar). Each of these currencies is exchanged with the currency of other nations at different exchange rates-which are always in a state of flux because the market trades around the clock (Sunday through Friday). The volatility and sheer size of the market means that there is ample fluctuation to produce big profits-and losses. The challenge for the investor, as always, is to predict which direction the rates of currency pairs will fluctuate.
The beginning point in any investment strategy is determining what type of analysis will be used to help guide enter and exit decisions. Investors who use fundamental analysis look at a nation's interest rates and other economic indicators when deciding to enter or exit a position. Fundamental investors tend to trade based upon news releases and economic data from the nations involved in the currency pair.
Briefly, technical analysis involves the interpretation of price performance and chart patterns-all historical data. Some technical indicators used in this type of analysis include:
Moving averages including Simple & Exponential
Lines of Support & Resistance
Technical traders do not believe that the past necessarily predicts the future-but that long and short term trends can be identified and exploited to help guide current decisions on entry and exit points on positions. Technical traders try to identify current trends in the Forex market to determine entry and exit points. If they are correct, they can ride a trend (in either direction) for a profit until an exit point is reached (when the trend is ending).
The most successful traders on the Forex tend to look for long-term trends and favor technical analysis. Fundamental traders have to enter and exit positions very quickly in order to capitalize in price fluctuations caused by news events (interest rate changes, release of economic data, etc.) and are therefore more vulnerable due to excessive trading. If there truly was "a secret" to trading success on the Forex, the top investors all tend to agree on the following:
1. Choose currency pairs involving U.S. dollar (has volume to produce the price fluctuations necessary for big profits and the liquidity to enter/exit positions at will)
2. Find currency pair through backtesting that has most profit potential (pip movement) and least volatility through use of technical analysis
3. After determining trends, set stops and exit points for both protection and maximum profitability
4. Review charts once per day (overtrading and day trading can hurt your portfolio)
5. Remain patient and exit positions once technical decision point has been reached
If there really is a secret to trading success on the Forex it has to be patience. Trading strategies are never perfect because the market will never be predictable 100% of the time. There will be times when any strategy fails and stop points are reached before profits are realized. Continuous back testing, remaining patient, and setting stops are the true secrets of Forex success.
Source: Submit Articles at ArticlesBase.com
About the Author:
Article by Kent Douglas, author of "The Simple Forex Solution: The Easiest Currency Trading System Anywhere."
Friday, 11 May 2007
Author: Sacha Tarkovsky
Trading was seen as the way for the little guy to compete with the big professional traders but guess what?
The ratio of losers remains them same as it was before the rise of online FOREX trading.
How can this be so surely they should do better? The answer is no because traders make these common errors.
1. Blinded by technology
This happens to many novice traders they see the vast amount of news and indicators at their disposal and think they have technology on their side and will win.
Most over complicate their trading and lose.
Simplicity is the key to trading and this was so before the rise of online trading and is still true today.
There is no correlation between how complicated a system is and how much money it makes.
In fact, simple systems are best as they more robust in the face of brutal market conditions.
2. Day trading and over trading
The rise of online forex trading has seen the bulk of new traders try and make money day trading.
This is a huge mistake.
Day trading doesn’t work, as the logic it’s based upon is nonsense.
Day traders have no reliable data to work with.
It's obvious that daily moves are random as daily volatility is random!
Day traders argue that trading short term is possible with online forex trading but this is not true you cant win if you cant calculate the odds.
Don’t believe me?
Ask any day trader for a real time track record of profits, they have made over the longer term and you wont get one – because it doesn’t work – PERIOD
3. Money management
The speed of the Internet in delivering information has increased volatility.
This means that traders have to be far more careful with money management than before.
Most traders in online forex trading are trying to restrict risk so much that they almost guarantee they will be stopped out and lose.
If you want to make money in forex trading your stops cannot be to tight or volatility will simply stop you out.
You need to take risks to make profits and this is as true as it’s ever been.
Placing stops close to entry may keep your losses small, but what’s the point of that if you are almost guaranteeing yourself that you will are stopped out?
To make money you need to risk it – It’s as simple as that.
The tools need to be applied correctly!
Online forex trading is seen as a way for the little man to compete on an equal footing with the big players but nothing could be further from the truth.
Online forex trading has lured many traders into a false sense of security where they think because they have all the tools they can win (but they don’t learn how to apply them)
Additionally, they think they can now catch short term moves and engage in the best way to lose money in forex – day trading.
Finally, they think they don’t need to take big risks to make big gains and end up eroding their accounts with consistent losses - all small but they add up.
Online forex trading has not seen any increase in small speculators winning and the three reasons above are the major ones why
Author: Sacha Tarkovsky
Most forex traders like to trade the majors only but in my view you can get some great opportunities in some of the minor currencies. You can diversify and get more profit opportunities
Lets look at two that can add some diversification and have some great trends you can take advantage of.
Two good currencies to trade alongside the majors are the Canadian and Australian Dollar.
While not as liquid as the majors, they offer some great trading opportunities for traders with a longer-term outlook.
Lets look at opportunities in these currencies.
We will use the free chart service futuresource.com and look at the IMM futures contract, although same logic of course applies to the cash.
The Australian Dollar
If you look at the chart you will see that this currency has been trading in a range since December.
The same system we have used to range trade the majors works here as well.
You can simply use stochastic crossovers to trade against support and resistance until a major break appears.
At present the Australian dollar looks set to test the top of the range, if it breaks through the mid point of the Bollinger band.
The Canadian Dollar
The Canada is trending down against the dollar and has had a rally - this should end shortly.
The key to look for is a cross in stochastic momentum with bearish divergence to indicate the downtrend will resume.
Like the Yen the Canada is bearish and rallies are selling opportunities.
These currencies add some diversification to any forex trading portfolio and the Canadian Dollar in particular offers a great strong trend to the downside where you can sell rallies.
Don’t fall in love with one currency simply trade the ones that have the best opportunities and risk to reward.
At the present we would in terms of trend following have the Canadian dollar with the yen as the strongest trend to trade.
In the Canadian dollar a great short opportunity is presenting itself as it corrects oversold status.
Wait for the price momentum to turn south with the stochastic showing bearish divergence and when this occurs a test of the lows should occur.
As with any currency wait for the stochastic to give you the signal - don’t anticipate wait for confirmation.
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Thursday, 10 May 2007
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The Peter Bain Video Forex Course is video course is a complete trading solution and is packed with 6 hours of live instructions on DVDs from Peter himself. In addition, there are an additional 6 hours of instruction on CDs, a 150 page “Trade Currencies the Way the Big Dogs Do” User’s Manual and 1 year access to the Forexmentor Membership website. Learn to trade the lucrative 1.5 trillion Forex Market everyday with Peter Bain's Video Forex Course. A Forex currency trader doesn’t have to worry about 7,800 stocks, or 72 commodities, and all the underlying trading rules that accompany those markets. With the Forex, a currency trader only has to think about the 4 major currency pairs – and pure technical analysis. The average daily range of 104 pips for all four pairs far surpasses that of any other stock trading market. Peter will show you the techniques and secrets used by the commercial institutions and banks.
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I have found this very interesting article about Pivot Points. They are quite useful for determining support and resistance in Forex Markets, or any other market for that matter. Enjoy.
Pivot Points in Forex: Mapping your Time Frame by: Raul Lopez
It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade.
Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.
As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from “bull” to “bear” or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible.
Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well.
In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa.
Why PP work?
They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.
Calculating pivot points
There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session).
Pivot point (PP) = (High + Low + Close) / 3
Take for instance the following EUR/USD information from the previous session:
The PP would be,
PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439
What does this number tell us?
It simply tells us that if the market is trading above 1.2439, Bulls are winning the battle pushing the prices higher. And if the market is trading below this 1.2439 the bears are winning the battle pulling prices lower. On both cases this condition is likely to sustain until the next session.
Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions is taking the open at 00:00 GMT and the close at 23:59 GMT.
Besides the calculation of the PP, there are other support and resistance levels that are calculated taking the PP as a reference.
Support 1 (S1) = (PP * 2) – H
Resistance 1 (R1) = (PP * 2) - L
Support 2 (S2) = PP – (R1 – S1)
Resistance 2 (R2) = PP + (R1 – S1)
Where, H is the High of the previous period and L is the low of the previous period
Continuing with the example above, PP = 1.2439
S1 = (1.2439 * 2) - 1.2474 = 1.2404
R1 = (1.2439 * 2) – 1.2376 = 1.2502
R2 = 1.2439 + (1.2636 – 1.2537) = 1.2537
S2 = 1.2439 – (1.2636 – 1.2537) = 1.2537
These levels are supposed to mark support and resistance levels for the current session.
On the example above, the PP was calculated using information of the previous session (previous day.) This way we could see possible intraday resistance and support levels. But it can also be calculated using the previous weekly or monthly data to determine such levels. By doing so we are able to see the sentiment over longer periods of time. Also we can see possible levels that might offer support and resistance throughout the week or month. Calculating the Pivot point in a weekly or monthly basis is mostly used by long term traders, but it can also be used by short time traders, it gives us a good idea about the longer term trend.
S1, S2, R1 AND R2...? An Objective Alternative
As already stated, the pivot point zone is a well-known technique and it works simply because many traders and investors use and trust it. But what about the other support and resistance zones (S1, S2, R1 and R2,) to forecast a support or resistance level with some mathematical formula is somehow subjective. It is hard to rely on them blindly just because the formula popped out that level. For this reason, we have created an alternative way to map our time frame, simpler but more objective and effective.
We calculate the pivot point as showed before. But our support and resistance levels are drawn in a different way. We take the previous session high and low, and draw those levels on today’s chart. The same is done with the session before the previous session. So, we will have our PP and four more important levels drawn in our chart.
LOPS1, low of the previous session.
HOPS1, high of the previous session.
LOPS2, low of the session before the previous session.
HOPS2, high of the session before the previous session.
PP, pivot point.
These levels will tell us the strength of the market at any given moment. If the market is trading above the PP, then the market is considered in a possible uptrend. If the market is trading above HOPS1 or HOPS2, then the market is in an uptrend, and we only take long positions. If the market is trading below the PP then the market is considered in a possible downtrend. If the market is trading below LOPS1 or LOPS2, then the market is in a downtrend, and we should only consider short trades.
The psychology behind this approach is simple. We know that for some reason the market stopped there from going higher/lower the previous session, or the session before that. We don’t know the reason, and we don’t need to know it. We only know the fact: the market reversed at that level. We also know that traders and investors have memories, they do remember that the price stopped there before, and the odds are that the market reverses from there again (maybe because the same reason, and maybe not) or at least find some support or resistance at these levels.
What is important about his approach is that support and resistance levels are measured objectively; they aren’t just a level derived from a mathematical formula, the price reversed there before so these levels have a higher probability of being effective.
Our mapping method works on both market conditions, when trending and on sideways conditions. In a trending market, it helps us determine the strength of the trend and trade off important levels. On sideways markets it shows us possible reversal levels.