Month: July 2011

By Taro Hideyoshi

In earlier articles, I have introduced you to basic reversal patterns; double top & double bottom, head-and-shoulder & reverse head-and-shoulder. Besides the reversal patterns, the price patterns falls into another category, the continuation patterns.

While the reversal patterns usually forecast an upcoming trend reversal, the continuation patterns, in the other hand, indicate an interlude in a trend where the stock rests during its uptrend or downtrend. In other words, the stocks pullback or consolidate before breaking out resuming their prior trend.

Generally, the continuation patterns has a distinct difference with a reversal patterns in that the continuation patterns are often very short in the time that they take to setup, or more simply, its duration.
The most common continuation patterns that are well-known among traders are flags, pennants and triangles.

First, let checks out the continuation pattern known as “flag“. The flag is a tight consolidation pattern defined as a parallelogram that lines up with the current trend. In almost all cases, flags show up in a very short period in the trading. Traditionally, it lasts three days to three weeks. When it completes its action, the price resumes its previous trend.

The second pattern is the pennant. As the flag’s colleague, the pennant resembles the flag, except that it moves horizontally in the shape of small, symmetrical triangle. In the other words, the pennant is often more symmetrical in design and somewhat horizontal in shape. The pennant, too, lasts for very short period in trading. In fact it often represents as few as seven to ten trading days.

Both flags and pennants are preceded by a flagpole, one day of dramatic trading with heavy volume. They last a period of one to three weeks in time and the prevailing trend then continues. Because the setup time is so short, you will only be able to witness flags and pennants in daily chart.

The last continuation patterns discussed in this article is the triangles. Triangles appear in the following forms: ascending, descending and symmetrical.

The ascending triangle consolidates sideways between converging trend lines, with the upper line staying relatively horizontal while the lower line rising.

The descending triangle forms the same way as the ascending triangle, only upside down.

The symmetrical triangle formed as a consolidation pattern begins with a wide price range that gets squished from the bottom and the top into a tighter and tighter range. Although it is a continuation pattern, when the price can break out either way of the pattern.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management.Please go to MetaStock Trading System.

You would also find the recommended investing and trading books at The Investing Books.

By Forex Mansion

One of the most exceptional ways to trade on the Forex market is with the use of Bollinger Bands. These bands indicate volatility based on the standard deviation and are set in relation to the moving average. To learn about the history of Bollinger bands, have a look at the original Bollinger site. Essentially, as the volatility increased or decreases, the bands reflect off of the moving average and expand or shrink to indicate the directional movement of volatility. The bands are calculated as follows:

• Lower Band: The 20-day Simple Moving Average less two times the 20-day standard deviation of the price.
• Middle Band: Only the 20-day Simple Moving Average
• Upper Band: The 20-day Simple Moving Average plus two times the 20-day standard deviation of the price.

On a chart, the three lines described above will explain the variation in price and allow for an educated trend outlook to be made. The amazing thing about the Bollinger Bands is that they can be adjusted according to the specific trading style or currency. This means that if there is a currency that is subject to an extremely high rate of inflation, that it can be adjusted to understand the movements and deviations accurately.

For longer periods of time, the Simple Moving Average is recommended by Bollinger to be adjusted as follows:

• 10-day period SMA: The standard deviation should be adjusted by increasing the multiplier to 1.9 fro 2.
• 50-day period SMA: The standard deviation should be adjusted by increasing the multiplier to 2.1 from 2.

There two major signals that should be recognized when using Bollinger Bands, which will allow for a good analysis of information and assessment of patterns: M-Tops and W-Bottoms. Before trying to identify the M-tops, the price must be in an uptrend or else the formula will not show itself on the graph.

• M-Tops. The stipulations for M-Top formations are as follows:
o The first close must be outside the upper band
o The price should then correct and close below the Middle band
o The price should have an increase in volume but not enough to close above the Upper band.
o To use the stop loss function properly using this information, it must be kept at the high. Feel free to increase the stop loss as necessary when the risk and reward seem off-balance.

• W-Bottoms. The stipulations for W-Bottom formations are as follows:
o The price must begin in a downward trend for the W-Bottom to work
o The first close must be below the lower band
o The price should then increase and close above the Middle band
o The price should then drop again but not below the lower band. Finally, it must close above the Middle band on the increase trajectory.
o For activating a stop loss, it must be kept at the low of the W-Bottom.

Using these tools allows one to improve his style through better technical analysis of trends and even find a way to incorporate robots or automated investment tools into his system.

About the Author

For more stocks day trading and EUR USD Analysis, please visit http://www.forexmansion.com.

By Harjeet

The Indian economy has been on a continuous growth curve. This is providing the non-resident Indians (NRIs) to explore multiple options to invest their funds in their home country. The returns from India are considerably higher than those from the US or European countries.

Some of the investment options available to NRIs in India are:

* Investment in the Indian equities markets, including IPOs
* Investment in mutual funds
* Company fixed deposits and non-convertible debentures of companies
* Real estate investments
* Government securities
* National Savings Certificates issued by post offices in India
* Deposits in Indian banks

Both NRIs and PIOs are offered several facilities by the Government of India. NRIs are Indian citizen who resides outside India, while PIO (Person of Indian Origin) refers to an individual who at any time held an Indian passport, or any of whose parents or grandparents was a citizen of India. While NRIs are allowed to invest in all sectors when Indian citizens are allowed, PIOs are allowed to invest only in non-agricultural sectors. A ‘24% Scheme’ allows Indian companies, except those engaged in agricultural activities, to issue up to 24% of their shares and debentures to NRIs with repatriation benefits.

The following is the list of foreign Investments which can give good returns and provide protection against inflation:

Mutual funds
Mutual funds have in its fold a number of innovative products nowadays, opening up innumerable choices for investors. The investor now has the option to choose a mutual fund that meets his risk acceptance and his risk capacity levels.

Direct Equity
As in other parts of the world, in India too stocks have outperformed every other asset class in a longer run.

Company Shares/Debentures
Direct investment can be made by NRIs in proprietary/partnership concerns in India as also in shares/debentures of Indian companies. Portfolio investments i.e. purchase of shares/debentures of Indian companies through stock exchange/s in India are also permitted. These facilities are granted both on repatriation and non-repatriation basis.

Government Securities/Mutual Funds/ National Savings Certificates in India
NRIs are permitted to invest their funds in Government securities, Indian mutual funds and certain other investments such as the National Savings Certificate (NSC). Investments in NSC can be made by NRIs subject to certain terms and conditions. However, NRIs are not permitted to invest in bearer securities like Kisan Vikas Patra, Public Provident Fund (PPF) etc.

The maturity proceeds of such investments can be repatriated if they are purchased out of funds remitted from abroad or out of NRE/FCNR accounts. However, the maturity proceeds of investments purchased out of funds in NRO accounts can only be credited to NRO accounts and cannot be repatriated abroad.

Immovable Property
Reserve Bank of India has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain any prior permission of Reserve Bank. Further, the Reserve Bank has granted general permission for sale of such property without its permission.

About the Author

Harjeet is an Indian – born mass-market novelist, who covers the world internet related topics . He writes columns and articles for various websites and internet journals in the domain of Investment options and Investment opportunities.

By Dezan Shira

As it stands, China an advantage over India in six key areas: scale, integration of value chain, research and development capability, productivity, ease of conducting business, and infrastructure.

In terms of scale, China has maintained and will likely continue to hold onto its significant lead. As of 2009, China exported roughly US$1.4 trillion dollars worth of goods, compared to India’s US$200 billion, which means China is in the lead by a multiple of 7. China’s exports have been growing at a faster rate too–21 percent versus India’s 18 percent.

China’s value chain is also very tightly integrated geographically, which limits transaction costs and the time from production to the market, especially in the Yangtze River and Pearl River Delta areas. Moreover, China’s exports are more complex, farther up the value chain, and in higher volume.

And labor productivity in China, although it should be measured against labor cost growth, is steadily increasing (though, India’s productivity is also increasing, albeit at a slower rate).

The World Bank’s doing business index also ranks India more than 50 spots behind China, at 134 versus China’s 79.

And it is no secret that China’s power generation, connectivity, internet penetration are all significantly better and more consistently provided than India’s.

And yet, one must consider that India’s economy is only one-third the size of China’s. India may remind you of China 30 years ago because it is China 30 years ago, and has all of the untapped opportunities to go with it. India will continue its unimpeded rise over the course of this century much as how China has over the past one.

In China, costs are rising on three fronts. The RMB is appreciating against other currencies quickly, which limits China’s position as a low-cost country from which to source. Since 2005, the RMB has appreciated roughly 26 percent against the dollar. Rising labor costs have sent the average cost of a unit of labor up 15 percent per year. Moreover, industries involved in the extraction of commodities or the creation of chemicals–ones that China’s government considers “low value-add”–are on the receiving end of a tightening of tax policy. The government is also pushing firms to restructure their presence from a representative office to a wholly foreign-owned enterprise or other such structures that increase a firm’s tax liability in China.

About the Author

You can read the rest of this article by Teja Yenamandra comparing business in China and India at the China business news site, China-Briefing.com.

You can also learn more in Asia Briefings China business guide.

By Cedric Welsch

There are many variations on the basic Forex strategies that people use when trying to maximize profit potential in a foreign exchange trading account. Of course, the purpose of setting up and trading with a Forex account is to increase the value of the account. While some people may jump from one system to another, never giving one the chance to work before trying a second or third method of currency trading, this practice is unlikely to give you long term capital growth. The following tips are based on sound principles to improve your Forex results.

With any market transaction, one of the most basic strategies is to buy low and sell high. This seems self explanatory, but many novice traders wait to jump into a trade when it has reached the peak or the low point of a cycle, thinking that there is always going to be room for profit in the trade. While this is true, you need to track and understand the cyclical nature of the price movements, in order to time your entry and exit points.

You can follow the trend, or you can trade as a contra-trend guru. Either way will work for you during most times in the market. If you have the capital to wait for the price line to turn, you can eventually exit the trade with at least a break-even record. Unfortunately, many beginning traders may not realize that a small profit, repeated many times happens more commonly than one giant price move.

Use the trend to your advantage. For many years in many markets, a saying that is popular reads “The trend is your friend”. Whether you trade with or against the trend, you can use it to set limits on losses and on profit points.

Use the indicators that are available. Most Forex platforms have various indications built in. You may be able to find moving averages, volume and volatility indicators, just to name a few. Even the simplest of these indicators can be utilized in building a strategy that works for your trading style.

Slippage can affect your strategy and your profits. Slippage is the term applied when the time between when you submit the order and when it is filled is long enough that your profits are reduced. Find a broker who is willing to talk about slippage before choosing a website.

Regardless of your specific Forex strategies, you should always minimize risk. A good rule of thumb is to only trade with five percent of your available capital. If you follow this rule, you are unlikely to lose more than you can afford.

About the Author

The uprising of forex techniques will always make things a little extra competitive to all.
Whereas, you as a wise trader, must always look at the fundamental fx trading strategies.

By Forex Mansion

The optimum trading experience begins with a volatile market. Not enough volatility creates a situation that makes it harder to have large enough positive days to offset the negative days. On the same level too much volatility creates an environment in which it is extremely difficult to hold positions for big gains. Picture a heart monitor. If the heart is beating to slow the patient will not have enough blood flow or energy or stock movement or currency movement to get a jump on its competition. If the heart is beating too fast that is extremely dangerous for the patient as too much volatility decreases the chance of being able to follow a stock or currency on it’s true path for an extended period of time.

The quote about the trend being your friend is not something to be taken lightly. It is however something that must be truly understood to succeed in trading in any type of situation. Let’s say for example that “ABC” stock or commodity or currency opens up 50 cents and closes up 25 cents. If you are lying on the beach and at the end of the trading day you hear that your long term investments rose 25 cents for the day you would be very happy. If, however as a day trader you bought into that position when it was positive 45 cents and sold it when it was positive 28 cents you would not be a very happy camper. This is where a great indicator known as ‘net since the open’ comes into play. When I look at a quote of a position or potential position I look to see the current price and what the position is up or down for the day.

However, more importantly I look to see how much the position is up or down since after the opening bell. This helps me to determine the relative strength or weakness of a position based on what it has done for me lately and not what it has done overnight to trigger an up or down open. This allows us to view the most up to the second strengths or weakness’s. As a day trader you need to be correct for the first couple of minutes that you are in your position. Once you are in the plus column then you can determine how much of the profits you are willing to risk to enable yourself the chance for a big gain while protecting a percentage of the already established profit margin.

Once you have established the current direction of the market which is simply done by quickly looking at the current direction and momentum you take all the positions on your screen and evaluate them. Are a majority of them net positive and trading up since after the market has opened? Are they net positive yet trading lower since the open? Are they net negative and trading even lower since after the open? Or are they net negative yet trading higher since the open. The easiest scenario is to have an up market with a lot of upwards momentum and you are long positions that are net positive on the day and trading higher since the open. Or to be short a down market that is continuing downwards with positions that are net negative and continuing to trade lower since the open. Remember the trend is your friend. However; it is not always so simple.
Positions, and markets reverse trends quickly. They can turn a negative bounce into a monster up day or conversely they can turn a positive day pullback into a spiraling move to the downside. This is where the next set of position indicators become very useful. They are called ‘net from high’ and ‘net from the low’. A weak position should not all of a sudden be 30% off the low of the day as conversely a very strong position to the upside should not retrace 30% on its own. These indicators will help give you the jump (and a lot of fun) on a market or position reversal and give you the chance to reverse course.

About the Author

For more information check out http://www.winningedgesystem.net/

EURUSD continued its upward move from 1.4102 and the rise extended to as high as 1.4577. Support is at 1.4435, as long as this level holds, uptrend could be expected to continue, and next target would be at 1.4600-1.4650 area. On the downside, a breakdown below 1.4435 will indicate that the uptrend from 1.4102 is complete, then the following downward movement could bring price back to 1.4200 zone.

Daily Forex Forecast

By Cedric Welsch

Most people who are involved in FOREX already know that the right currency trading system is what makes the difference between success and failure. This is the reason most people spend a lot of money and time searching for the perfect trading robot. Some other people also expend a lot of energy searching for currency news. Others are bent on buying the best software in the market. The fact is that there is no full-proof method for the smart trader.

Like every other business, this form of trading works on the simple principle of demand and supply. It is also affected by market forces and other factors which we all see in forex news regularly. For this reason, people involved in this lucrative but volatile business need to understand how the business works. They also need to understand clearly that there is no single way of making money in this business. In fact, experience has shown that the best way to succeed in this market is to use the methods that help people succeed in any other market for that matter.

The first step is to carry out dummy trading for a number of months. Three months is the minimum period but six months is preferred. During this time, the would-be FOREX trader learns a lot of things about how the market works. More to the point, the person in question is not using real money to trade so there is simply no risk of loss.

After the months of dummy trading, the real business of currency trading begins in earnest. At this time, the trader has got some knowledge and can afford to risk his or her money. It has to be pointed out that the safe thing to do at this point will be to invest little amounts of capital first. The principle of starting small but thinking big is also applicable to the FOREX market. By starting small, the trader can minimize losses when they occur. By thinking big, the trader can increase investment in the business when it is time to do so.

Another great way to make the most of the currency business is to invest by using economic indicators and market trends. Nobody in his or her right mind will invest and just go to sleep. Prudent investors keep an eye on their investments and ensure things are going the right way. In this context, the point is that the trader needs to use information and political developments to make deductions on what may happen in the currency market.

All told, currency trading is a volatile form of business. The risk of loss is always there. By taking the right steps, it is possible to minimize risk and get the most out of the FOREX market. This is what a perfect currency trading system is all about.

About the Author

It can be inconsiderably confusing at times listening to various currency news trading all at once. There can be a huge magnitude of forex broker review sources you can read, but pick the reputable one.

By Cedric Welsch

Forex stands for the foreign exchange market. There are many different places that one can go to help them learn forex. The internet has a wealth of information regarding this type of trading. There are also a countless number of books available on the subject. It is recommended that one learns enough until they are absolutely comfortable investing their money. It is also recommended that the market is paper traded for a while in order to test out different strategies. This market works kind of like the stock market and currencies are kind of evaluated in the same way as stocks are. Many people in this market are very short term.

One of the upsides to this market is the fact that it can be traded for very long amounts of time during the day where as the stock market has a limited amount of trading time. The primary purpose of the market is to assist businesses dealing with foreign markets to convert their money more easily. The market trades for twenty four hours a day with the exception of the weekends.

One of the things that people like about this kind of trading is it is a very large market. It has a lot of liquidity. A small investor does not have to worry about moving the market due to large trading volumes. It also has a daily turnover rate in the trillions.

The forex marketplace has become very easy to trade over the internet. Many different brokers have become available and most of them are able to offer up to date software in order to track the market. There are also programs available that can assist one in when to buy or sell in the market. Many of these programs turn out not to work very well so it is highly recommended that a lot of research is done before going with an automated system.

There is a numerous amount of literature on the subject. If one is looking to invest it is recommended that they buy a book that teaches the basics on every aspect of the market. Only until one has read and comprehended how the market functions they should not invest. It is also important to be comfortable with reading the charts online. It is important that you understand how a currency is moving.

World affairs also tend to have a very big impact on currency trading. They seem to impact the market much more than that of the stock market. Political relations can have a large impact on this type of market.

Before any money is invested it is crucial that one learn forex. It can be a very lucrative way to make money but the fact of the matter is that most people do not. It is important that one is comfortable with the trades they are making before they make them.

About the Author

The arrival of different forex trading schemes makes the business very complicated today.
That is why you should be able to develop a currency trading technique that is simply effective.

By Forex Mansion

Trading on the Forex begins with a solid understanding of the market movements, but can only continue with a solid broker. Of the many brokers available, eToro has one of the most advanced platforms, reliable customer service and collects and harvests valuable information that would otherwise need to be culled from many sites. The user-friendly interface makes it easy for beginners to hone their skills in trading foreign currencies while providing detailed accounts of up-to-date market analysis and research for advanced traders alike. Not only can the platform be downloaded, but it is also accessible as a web page to facilitate trading for a dynamic user base.

• Practice Accounts with Virtual Money. Starting to use eToro is simple, not only providing a free practice account to allow users to acclimate to the trading platform before using real money, but also having a mere $50 minimum requirement to start trading when users do feel ready to trade.

• Low Spreads. eToro’s low trading costs are on par with most other trading platforms with a spread of as low as 2 pips on the major EUR/USD pair.

• Competitive Leverage. The leverage benefits of eToro are solid when comparing to competitor platforms, allowing for trading with currencies aside from the US Dollar as well as providing impressive 400:1 maximum leverage support. This platform makes funding your account simple through wire-transfer, Paypal, credit card, Western Unions, Webmoney, MoneyGram and Netteller.

• Instant Order Execution. Considering the speed at which the markets move, a crucial feature of eToro is the instant execution of all orders. This outstanding feature guarantees that users can make trades at the price listed at the time of trade rather than when the trade is finalized.

• Social Networking. As a huge draw for any trader who realizes the importance of sharing information, eToro has a social forum that is second to none. Included in this social forum are chat discussions to share strategy and information, a frequently updated blog, top traders insight and trading contests in which all users can participate.

• Commitment to Continuing Trader Education. This might be overwhelming for beginners, which is why eToro has invested in developing an education program that teaches users about the fundamentals of foreign exchange trading and methods for developing personal strategies. Once traders have a solid understanding of the markets, they will be pleased to see the incredible amount of information available to them in real-time graphs and charts. Furthermore, the financial news that is collected for users leaves little to be desired when compared to other sites.

eToro allows users to become serious about stock day trading and reading currency trading charts in a fun way by using a writing style that speaks to the average person and does not feel sterile as many financial sites tend to be. As such, it is no surprise that they won the World Finance Award for the “Most Innovative Trading Platform 2010.” This is a platform that caters to the needs of expert traders while understanding the need to communicate to beginners in such a way that they can feel comfortable in becoming part of the world of Forex Trading.

About the Author

This article at http://www.etororeview.net reviews the broker eToro, and gives a well-rounded picture of the broker and what its platform offers.