Month: January 2011

By Cedric Welsch

Are you one of the many traders around today who have yet to see some really significant amount of profit as a result of their investments? Well, you could be lacking on some good knowledge in terms of really well and effective strategies to implement. Techniques and strategies can be acquired by simply observing professional traders and even brokers when they perform trading transactions.

The entire forex market consists of a huge network of traders, brokers, and several other professionals involved in the trading transactions. The forex trading industry is a worldwide based business operation of buying and selling currencies owned by different countries. Although forex trading is a globally operated kind of business, anyone can easily get access to the forex market online and trade currencies themselves at their convenience from any part of the world. This is all made possible because of the internet technology.

If a trader choose to buy the currency of a particular country, and that country’s economic standing improves later on, then that will mean to be a handsome profit for the trader already. The buying and selling part of the transaction is really simple, but the decision making part is what maybe hard to do right. You as the trader must know very well which currency is best to buy now, and you should also know when would be the best time to sell it.

One very bad misconception about forex trading is that it is somehow associated to luck. On the contrary, foreign exchange trading has absolutely nothing to do with the concept of being lucky or anything like that. It is purely a business that is based on facts, statistics, and prudent decision making. As a trader, if you have no solid collection of factual data that a currency will perform well, then it is a bad thing to think that it might indeed rise later on based on pure gut-feel. This kind of thinking is what makes a lot of traders lose large amounts of investments, simply because they choose to act based on feelings and emotions rather than through some careful study and analysis.

A good strategy that is implemented by a lot of professional traders is the strategy of buying a certain currency during its lowest possible value and then waiting patiently for its value to rise before selling it. This strategy obviously involves patience and the proper timing to act on things. Without these two very important and much needed trading qualities, it will be very difficult for a trader to make profits.

About the Author

The feeding of trade forex news is so crucial to many investors. And so are forex trading review write-ups very crucial in avoiding scams.

The Euro put in an impressive week versus both the dollar and the Swiss franc with both pairs approaching short term targets.

The EUR/USD has made a close above 1.3500 and now may target the 61.8% Fibonacci retracement level from the November to January move. This level coincides with the resistance level from October at 1.3740.

The EUR/CHF completed a bottom head and shoulders reversal pattern and has reached its estimated target at 1.3030, which coincides with the 50% retracement from the mid-November to January move. The 100-day moving average now comes into play which is currently close to the falling trend line off of the November highs at 1.3140.

Today’s Market Events:

EUR – German Flash Manufacturing PMI – 08:30 GMT
Expectations: 61.1. Previous: 60.7

EUR – Industrial New Orders – 10:30 GMT
Expectations: 2.3%. Previous: 1.4%.

Germany, the engine of EU growth, appears be to coming out of the recession with the Bundesbank increasing its economic forecast, raising 2011 expectations to 2.3% from 1.8%. Euro strength will likely be seen if these two industrial reports come in above market expectations.

By James Woolley

When you’re first starting out it can be fairly difficult to decide which currencies are the best ones to trade. Do you watch all of them or only concentrate on one or two?

Well in truth there’s no right and wrong answer. If you have a rigid trading system which produces consistent profits whatever the currency pair, then you may want to open a window for each pair, ideally on a multiple monitor set-up, so you can watch for your entry criteria to be met for any of these pairs.

So for example, let’s say your trading criteria is a MACD crossover, a Supertrend change of colour, and RSI in overbought/oversold territory.

In this instance, you would simply create graphs containing this data for every major currency pair, and wait for a suitable entry for any of them.

That’s one approach. Another approach, and one favoured by myself, is to only concentrate on the major pairs. This is because they are the most traded, and therefore charting patterns and technical indicators are generally more reliable and tradeable.

Another reason why I take this approach is because these pairs have the tightest spreads. This is extremely important because you really don’t want to be trading pairs that have wide spreads simply because it limits your profits more and puts added pressure on you to make correct calls.

Over time these wider spreads can really eat into your profits, so I generally stick to three of the four major currency pairs – GBP/USD, EUR/USD and USD/JPY (USD/CHF is the other but that has a spread of 4 points with the broker I use).

I can easily watch these three pairs at once and watch for any entry points, but if you’re just starting out, another approach could be to just concentrate on one pair. You will find that although most pairs follow technical indicators very well, each pair has it’s own personality and so by concentrating on just one pair, and learning how it behaves, you may find this is the most profitable approach to take.

Another factor is your location and the time at which you are available to trade. For example, the GBP/USD is most active between around 8.00 GMT and 20.00 GMT, so if you’re based in Australia, for example, you would miss most of the action if you wanted to trade in the daytime where you are.

So to conclude, there aren’t really any best currencies to trade, each pair is potentially very profitable. However, the major pairs generally have the tightest spreads and are the most actively traded, and generally conform very well to technical analysis, so these are the currencies I would recommend trading.

About the Author

James Woolley has been trading currencies for around five years. He also runs a blog where he reveals all his best forex tips and strategies

By James Woolley

If you have any experience in using any kind of charting packages to assist you with your forex trading, you will know that there are endless different technical indicators you can use. In this article I’m going to be asking what are all these indicators and which ones do you really need?

As you can guess from the title of this article, there are essentially four different types of technical indicator and they are as follows:

1.Trend indicators.

MACD, Parabolic SAR and the various moving averages are a few examples of trend indicators and they can all be used to identify a trend. It’s widely argued that you should only trade with the trend so all of these indicators will help you to take the decision out of your hands, and therefore dictate which way you should be trading. Your only decision now is at what level to enter the trade.

2.Momentum indicators.

These types of indicators are essentially oscillating indicators and are most useful for determining overbought and oversold positions and can be very useful in signalling the start of a new trend. Examples include RSI, Stochastics and CCI.

3.Volume indicators.

As the name suggests, these types of indicators show the volume of trades behind a particualr price movement which can be extremely beneficial because a price movement backed up by high volume is a much stronger signal than a price movement based on low volume. Examples here include Chaikin Money Flow, Force Index, Money Flow Index and Ease Of Movement.

4.Volatility indicators.

Volatility indicators generally use ranges to show the behaviour of the price and the volume behind any movements. This is useful because any dramatic change in behaviour can provide a good entry signal. Common examples include Bollinger Bands, Average True Range and Envelopes.

So there you have the four different types of technical indicators available to you. Which ones you use is entirely up to you, but it’s generally advised that you have at least one type of each in order to provide additional confirmation for entering a trade.

Trading forex using technical analysis is all about probabilities in that when you enter a long position, for example, you want all of your chosen signals to be signalling an upwards movement, therefore indicating a high probability of an upwards movement taking place.

If you use a strict stop loss policy and use these different types of indicators to confirm positions, then over time this high probability trading method should provide you with more winners than losers in the long run.

About the Author

James Woolley has been trading currencies for around five years and also runs a forex trading blog dedicated to offering free forex tips and strategies.

Being supported by 0.9803, AUDUSD rebounded from 0.9832, however, another fall to re-test 0.9803 support is still possible later today, a breakdown below this level could trigger deeper decline to 0.9600 area. Resistance is at 0.9920, above this level will suggest that a cycle bottom has been formed at 0.9832 level on 4-hour chart, then further rise towards 1.0076 could be seen.

Daily Forex Analysis

By Cedric Welsch

If you have been hearing about the forex trading business for quite some time now and you find yourself starting to develop that deep sense of interest for it, then consider this as a brief introduction to it.

The forex market is that kind of place where people perform their trading transactions. In the forex trading world, people trade currencies. Buyers are those in the buying end of the transaction, while sellers are in the selling end of the transaction. Both buyers and sellers are busy all throughout the trading hours doing business transactions, all for one single purpose in mind – and that is to make a good profit out of their investment.

Each single day, trading transactions in the forex market can reach by the trillion in dollars. This is how huge the forex trading industry is around the world. No wonder why too many people are attracted to this wealth making opportunity that much. There are individuals who make millions of dollars in profits out of buying and selling currencies in the forex market. The principle really of the trading process is rather simple and easy to understand. When you decide to buy a currency, you must base such decision in the hope that the value of that currency will be higher by the time you sell it. Through this simple principle in mind, you are bound to make profits.

In order to become really successful at trading currencies, you should not only be very familiar with the buying and selling part of the entire trading transaction, you should also become very knowledgeable with the whole forex market and its trending behavior. Familiarize yourself with all sorts of technical jargon within the entire industry. Learn what causes the ups and downs of the market and which causes certain currency rate values to decline. If you do a thorough research online, you will find several good sources of information that will help you understand every bit of detail you need to learn about forex trading.

Once you are well equipped with the right knowledge, what you will need to have as well is an ample experience on trading. You can either start off with a practice account or you can gain your experience through actual and real live trading transactions. Only, you should be prepared at losing some of your investments in the start. If you hit the lucky break early on in your trading game, then good for you. But don’t depend too much on luck as this is a very rare thing to happen in the forex trading business.

After you have all the much needed knowledge and experience, you are now ready to go full blast on your quest to a real forex trading success.

About the Author

Want to get more out of trading? Go read forex news updates. Who says you can’t find reputable brokers? Find out who they are here: forex reviews

By Ben McArthur

New traders come into the Forex market every day. Many have never traded in any type market before. Experienced traders know that to succeed in Forex trading you must have the knowledge and mindset to trade without emotional attachment and with the proper discipline.

You must have a detailed trading plan in place before entering any trade. Don’t abandon your plan because the market did not react the way you anticipated. The market is always right.

To be a successful Forex trader you must at all times adhere to your trading plan and be disciplined in every trade you make.
Undisciplined traders don’t have long careers as traders.

Always trade with stops in place. Never adjust them to stay in a losing trade. Only adjust stops to protect profits already made.

You must learn that you, and every other trader, will have losses. It is inevitable. You are no different than other traders.
There is no perfect trading system or perfect trader.

Both bulls and bears make money. Don’t be afraid to short a market if your trading system or indicators are pointing to a market about to go in decline.

Refine your trading system as you gain more experience. No system is perfect and your system should be tailored to your particular trading style.

Don’t be afraid to stand aside from time to time. New trading situations come along every day. Wait until you feel that the odds are more in your favor before placing an order.

Trading is not gambling. It is a business. Always treat is as one.

Patience is a virtue. Most of the big moves take time to develop. Wait for the market to tip it’s hand before jumping in too soon.

Greed is a surefire way to blow out your account. Trying to squeeze extra profits out of a trade can backfire if the market suddenly changes direction.

Don’t overtrade. Overextending your account will lead to a short career as a trader. Too much leverage on any trade has been the downfall of many traders.

Control your emotions. Emotionally attaching yourself to a trade can affect your judgement.

Study your trading system and be familiar with the indicators, chart patterns, or price movements that signal a trade. Wait for your trading methodology to give a trading signal before entering the market.

The trend is your frend. Sometimes a short term trade against a trend can be profitable, but be extra cautious if making a short term trade against a strong trend. Temporary reversals of a major trend are traders taking profits and the trend will usually resume in full force.

Forex trading involves skills beyond having a well designed trading system. Learning to control emotions and becoming well versed in the other attributes needed are what sets the best traders apart from the rest.

Learn more forex trading secrets at the author’s website.

About the Author

Want to learn more about Forex trading? Visit the author’s website for more Forex trading tips and learn some little known forex trading secrets

The Euro traded on much stronger sentiments in the last week and almost touched it’s highest in the last two months versus the US dollar. The increase in Germany’s business sentiment boosted the investor’s confidence over the single currency.

The pair EUR/USD reported the increase of 1.73 percent in the last week to 1.3243 on Friday. The pair is expected to find support at 1.3448 and likely to find resistance at 1.3786 which also happens to be its highest since November 22nd, 2010.

The list of events that could influence the trading of the pair EUR/USD for the week Jan 24th, 2011 to January 28th, 2011 are as follows:-

On Monday January 24th, 2011 report on activity in manufacturing and services sectors will be released by Germany and France and a comprehensive report will be also published for euro zone covering industrial new orders.

Data on German consumer climate by Gfk Research will be published in Germany while France will also report its official consumer spending data on January 25th, 2011.

United States will also report their official data on consumer confidence and industry data on house price on January 25th.

On Wednesday January 26th, 2011 the US Federal Reserve will report its Federal Funds Rate which will give a future outlook for interest rates in United States. Moreover US will also release the data on new home sales on Wednesday.

Preliminary report on consumer price inflation will be published by Germany on Thursday January 27th, 2011. Whereas key data on weekly jobless claims, durable goods orders, natural gas stockpiles and pending home sales will be published in United States.

On Friday January 28th, 2011 European Central Bank will report its data on private borrowing and M3 money supply while United States will publish the fourth quarter’s GDP. Moreover revised data on consumer sentiment & inflation expectations will be reported by University of Michigan.

About the Author

Daily forex trading news written by Rehan from DailyForexTrade.com

By Cedric Welsch

In any kind or form of business that exists, the ultimate key to become successful at it is always knowledge. Any other requirement in putting up or running a business becomes irrelevant, if the important factor of having good knowledge towards that business is not present. With the right knowledge on hand, you can plan, make decisions, and implement actions that will contribute to the success of the business. But with little knowledge, every other move or action you take will also be limited. The same is exactly true when you get involved in the business of trading currencies.

Unlike in the early years of its introduction, forex trading has grown to be extremely popular nowadays. With the help of the web technology, more and more people are plunging their way into this very powerful medium of building investment profits. Because of the internet, anyone can easily go online and then trade currencies within the forex market at will.

However, although the forex market can easily be accessed by virtually any person with a computer and an internet connection, the process of trading is not that simple. The process of buying and selling currencies needs to be performed by someone who has the right and proper knowledge about forex trading, otherwise the loss of funds can be pretty imminent.

There are various ways in which any individual can easily learn the process of trading currencies. One of the simplest methods is by way of visiting foreign exchange related sites. There are some forex sites that offer free trading courses. You may take advantage of their offer by simply becoming a member of their site. Some sites will offer an instant e-book tutorial that you can download upon successful sign-up with them, while others do it in a form of newsletter series. Either way, both free tutorial resources will be very helpful for your learning.

Another very good option to learn forex trading is by way of joining certain online communities of foreign exchange traders. There are places online that are exclusively considered to be a community of pure forex traders. Once you become a member of such trading community, you will get to enjoy some privileges that are given to all members of that community. One of which is the open access to all available tools and materials offered in that community. And the most important benefit of joining such community is the privilege to be able to communicate and learn from real professional currency traders. Become actively involved in discussions and ask questions to them. By doing so, you will learn strategies and techniques directly from professional traders themselves.

About the Author

Let the forex trading news be your partner in investing. Now make sure you avoid scams through the forex scam review corner.

By James Woolley

Economic data releases occur almost every day and can have a dramatic effect on the forex markets, and indeed all major markets. They can cause wild swings and increased volatility which is great for traders, but can you successfully profit from them as a forex trader?

Before I address that question, let me start off by talking about data releases in more detail. As a trader the first thing you should do every day is consult an economic calendar to see what releases are scheduled for the forthcoming day. This will allow you to determine when you should be out of a trade if you don’t want to trade through them, or when to turn your computer on and be ready to trade if you do wish to trade them.

The best economic calendar in my opinion is at Forex Factory as this tells you not only what releases are scheduled for the day, but also the predicted and actual figures for each release, plus the importance of each one and the effect that they may have on specific currency pairs.

Different data releases affect currencies in different ways. For example, interest rate decisions and non-farm payrolls have a major impact on dollar currencies whereas other less significant data releases will hardly have an effect at all and will remain little changed.

So it’s best to arm yourself with all this information and be fully prepared for any scheduled releases, but can you profit from them?

Well in my opinion I don’t think you can consistently make profits trading the news as soon as it’s released simply because it’s extremely difficult to predict how the market will react to any given news.

For example, sometimes you will get seemingly bullish figures and expect the currency to go up, but it will do the complete opposite. Other times it will go up initially and then reverse as analysts and traders digest the news.

It really is an extremely difficult way to trade the markets, particularly for the individual trader working alone. Trying to second guess the market is a very dangerous game.

In my opinion there are far easier ways to trade the forex markets using solid technical analysis methods. You don’t need to trade during those times when market-moving figures are announced because all they will do is distort any technical analysis and make it very difficult to enter a trade with confidence.

Furthermore I always believe it’s best to exit trades in advance of economic data releases simply because prices can move very fast and your stop losses may not get filled at the price you requested.

I’m sure there are people who can make profits from news releases, but in my experience it’s extremely difficult and akin to gambling in some instances.

About the Author

James Woolley has been trading currencies for around five years and also runs a forex trading blog dedicated to offering free forex tips and strategies.