Tailoring Your Technical Approach to Currency "Personalities"

Every currency pair has qualities unique to it.
Find out what those qualities are.

Much has been written about the suitability of technical analysis for trading in the currency markets. While this is undoubtedly true, it can leave traders, particularly those new to the currency markets, with the impression that all technical tools are equally applicable to all major currency pairs. Perhaps most dangerous from the standpoint of profitability, it can also seduce traders into searching for the proverbial silver bullet: that magic technical tool or study that works for all currency pairs, all the time. However, anyone who has traded forex for any length of time will recognize that, for example, dollar/Yen (USD/JPY) and dollar/Swiss (USD/CHF) trade in distinctly different fashions.

Why, then, should a one-size-fits-all technical approach be expected to produce steady trading results? Instead, traders are more likely to experience improved results if they recognize the differences between the major currency pairs and employ different technical strategies to them. This article will explore some of the differences between the major currency pairs and suggest technical approaches that are best suited to each pair's behavioral tendencies.

The Biggie
By far the most actively traded currency pair is euro/dollar (EUR/USD), accounting for 28 percent of daily global volume in the most recent Bank for International Settlements (BIS) survey of currency market activity. EUR/USD receives further interest from volume generated by the Euro-crosses (e.g. euro/British pound (EUR/GBP), EUR/CHF and EUR/JPY, and this interest tends to be contrary to the underlying U.S. dollar direction. For example, in a U.S. dollar-negative environment, the Euro will have an underlying bid stemming from overall U.S. dollar selling. However, less liquid dollar pairs (e.g. USD/CHF) will be sold through the more liquid Euro crosses, in this case resulting in EUR/CHF selling, which introduces a Euro offer into the EUR/USD market.

This two-way interest tends to slow Euro movements relative to other major dollar pairs and makes it an ideal market for short-term traders, who can exploit "backing and filling." On the other hand, this depth of liquidity also means EUR/USD tends to experience prolonged, seemingly inconclusive tests of technical levels, whether generated by trendline analysis or Fibonacci/Elliott wave calculations. This suggests breakout traders need to allow for a greater margin of error: 20-30 pips. (A pip is the smallest increment in which a foreign currency can trade with respect to identifying breaks of technical levels.) Another way to gauge whether EUR/USD is breaking out is to look to the less liquid USD/CHF and GBP/USD. If these pairs have broken equivalent technical levels, for example recent daily highs, then EUR/USD is likely to do the same after a lag. If "Swissy" and "Cable" (popular name for British pound) are stalling at those levels, then EUR/USD will likely fail as well.

Customize Your Settings

In terms of technical studies, the overwhelming depth of EUR/USD suggests that momentum oscillators are well-suited to trading the euro, but traders should consider adjusting the studies' parameters (increase time periods) to account for the relatively plodding, back-and-fill movements of EUR/USD. See Figure 1. In this sense, reliance on very short-term indicators (less than 30 minutes) exposes traders to an increased likelihood of "whipsaw" movements. Moving average convergence divergence (MACD) as a momentum study is well-suited to EUR/USD, particularly because it utilizes exponential moving averages (greater weight to more recent prices, less to old prices) in conjunction with a third moving average, resulting in fewer false crossovers. Short-term (hourly) momentum divergences routinely occur in EUR/USD, but they need to be confirmed by breaks of price levels identified though trendline analysis to suggest an actionable trade. When larger moves are underway, traders are also likely to find the directional movement indicator (DMI) system useful for confirming whether a trend is in place, in which case momentum readings should be discounted, and might choose to rely on DI+/DI- crossovers for additional trade entry signals.


















Second Place

The next most actively traded currency pair is USD/JPY, which accounted for 17 percent of daily global volume in the 2004 BIS survey of currency market turnover. USD/JPY has traditionally been the most politically sensitive currency pair, with successive U.S.Japan. While China has recently replaced Japan as the Asian market evoking U.S. trade tensions, USD/JPY still acts as a regional currency proxy for China

For day-to-day trading, however, the most significant feature of USD/JPY is the heavy influence exerted by Japanese institutional investors and asset managers. Due to a culture of intra-Japanese collegiality, including extensive position and strategy information-sharing, Japanese asset managers frequently act in the same direction on the yen in the currency market. In concrete terms, this frequently manifests itself in clusters of orders at similar price or technical levels, which then reinforce those levels as points of support or resistance. Once these levels are breached, similar clusters of stop loss orders are frequently just behind, which in turn fuel the breakout. Also, as the Japanese investment community moves en masse into a particular trade, they tend to drive the market away from themselves for periods of time, all the while adjusting their orders to the new price levels, for instance raising limit buy orders as the price rises.

An alternate tactic frequently employed by Japanese asset managers is to stagger orders to take advantage of any short-term reversals in the direction of the larger trend. For example, if USD/JPY is at 115.00 and trending higher, USD/JPY buying orders would be placed at arbitrary price points, such as 114.75, 114.50, 114.25 and 114.00, to take advantage of any pullback in the broader trend. This also helps explain why USD/JPY frequently encounters support or resistance at numerically round levels, even though there may be no other corresponding technical significance.

governments using the exchange rate as a lever in trade negotiations with and other less-liquid, highly regulated Asian currencies. In this sense, USD/JPY is frequently prone to extended trending periods as trade or regional political themes (e.g. yuan revaluation) play out.

















For day-to-day trading, however, the most significant feature of USD/JPY is the heavy influence exerted by Japanese institutional investors and asset managers. Due to a culture of intra-Japanese collegiality, including extensive position and strategy information-sharing, Japanese asset managers frequently act in the same direction on the yen in the currency market. In concrete terms, this frequently manifests itself in clusters of orders at similar price or technical levels, which then reinforce those levels as points of support or resistance. Once these levels are breached, similar clusters of stop loss orders are frequently just behind, which in turn fuel the breakout. Also, as the Japanese investment community moves en masse into a particular trade, they tend to drive the market away from themselves for periods of time, all the while adjusting their orders to the new price levels, for instance raising limit buy orders as the price rises.

An alternate tactic frequently employed by Japanese asset managers is to stagger orders to take advantage of any short-term reversals in the direction of the larger trend. For example, if USD/JPY is at 115.00 and trending higher, USD/JPY buying orders would be placed at arbitrary price points, such as 114.75, 114.50, 114.25 and 114.00, to take advantage of any pullback in the broader trend. This also helps explain why USD/JPY frequently encounters support or resistance at numerically round levels, even though there may be no other corresponding technical significance.

Take A Look at Trendlines
Turning to the technical side of USD/JPY, the foregoing discussion suggests trendline analysis as perhaps the most significant technical tool for trading USD/JPY. Because of the clustering of Japanese institutional orders around technical or price levels, USD/JPY tends to experience fewer false breaks of trendlines. For example, large-scale selling interest at technical resistance will need to be absorbed if the technical level is to be broken. This is likely to happen only if a larger market move is unfolding, and this suggests any break will be sustained. This makes USD/JPY ideal for breakout traders who employ stop-loss entry orders on breaks of trendline support or resistance. Short-term trendlines, such as hourly or 15 minutes, can be used effectively, but traders need to operate on a similarly short-term basis; daily closing levels hold the most meaning in USD/JPY. In terms of chart analysis, Japanese institutional asset managers rely heavily on candlestick charts (which depend heavily on daily close levels) and traders would be well-advised to learn to recognize major candlestick patterns, such as doji, hanging man, tweezer tops/bottoms and the like. See Figure 2. When it comes to significant trend reversals or pauses, daily close (5 p.m. EST), candlesticks are highly reliable leading indicators.

The yen discussion above also highlighted the factors behind the propensity of USD/JPY to trend over the medium-term (multiweek). This facet suggests traders should look to trend following tools such as moving averages (21- and 55-day perio ds are heavily used), DMI, and Parabolic SAR. (This refers to J. Welles Wilder Jr.'s Parabolic System. SAR stands for stop and reverse.) Momentum oscillators such as the relative strength index (RSI), MACD or stochastics should generally be avoided, especially intraday, due to the trending and institutional nature driving USD/JPY. While a momentum indicator may reverse course, typically suggesting a potential trade, price action often fails to reverse enough to make the trade worthwhile due to underlying institutional interest. Instead of reversing along with momentum, USD/JPY price action will frequently settle into a sideways range, allowing momentum studies to continue to unwind, until the underlying trend resumes. Finally, Ichimoku analysis (roughly translated as one-glance cloud chart) is another largely Japanese-specific trend identification system that highlights trends and major reversals.

A Look At Some Illiquid Currencies
Having looked at the two most heavily traded currency pairs, let's now examine two of the least liquid major currency pairs, USD/CHF and GBP/USD, which pose special challenges to technically oriented traders. The so-called Swissy holds a place among the major currency pairs due to Switzerland's unique status as a global investment haven; estimates are that nearly one-third of the world's private assets are held in Switzerland. The Swiss franc has also acted historically as a so-called "safe-haven" currency alternative to the U.S. dollar in times of geo-political uncertainty, but this dimension has largely faded since the end of the Cold War. Today, USD/CHF trades mostly based on overall U.S. dollar sentiment, as opposed to Swiss-based economic fundamentals. The Swiss National Bank (SNB) is primarily concerned with the franc's value relative to the euro, since the vast majority of Swiss trade is with the European Union, and Swiss fundamental developments are primarily reflected in the EUR/CHF cross rate.

Liquidity in USD/CHF is never very good, and this makes it a favorite "whipping horse" for hedge funds and other speculative interests looking to maximize the bang for their buck. The lower liquidity and higher volatility of Swissy also makes it a significant leading indicator for major U.S. dollar movements. Figure 3 illustrates an example of a recent break of major daily trendline support in USD/CHF that took place a full day before EUR/USD and USD/JPY broke equivalent levels. Swissy will also lead the way in shorter-term movements, but the overall volatility and general jitteriness of USD/CHF price action makes false breaks of technical levels common. These false breaks are frequently stop-loss driven and it is not unusual for prices to trade 15-25 points through a support/resistance level before reversing after the stop losses have been triggered. In strong directional moves, USD/CHF price action tends toward extreme one-way traffic, with minimal backing and filling in comparison to EUR/USD.

Cable (GBP/USD), or sterling, also suffers from relatively poor liquidity and this is in part due to its higher pip value (U.S. dollars) and the relatively Euro-centric basis of U.K. trade. Sterling shares many of the same trading characteristics of Swissy outlined just above, but Cable will also react sharply to U.K. fundamental data as well as to U.S. news. Sterling's price action will also display extreme one-way tendencies during larger moves, as traders caught on the wrong side chase the illiquid market to the extremes.

Focus On Risk Management

The volatility and illiquidity of Swissy and sterling suggests traders need to use a more proactive overall approach to trading these pairs, particularly concerning risk management (i.e. position size in relation to stop levels). With regard to technical tools, the tendency for both pairs to make short-term false breaks of chart levels suggests breakout traders need to be particularly disciplined concerning stop entry levels and should consider a greater margin of error on the order of 30-35 points. In this sense, trendline analysis of periods less than an hour tends to generate more noise than tradable break points, so a focus on longer time periods (four hours-daily) is likely to be more successful in identifying meaningful breaks. By the same token, once a breakout occurs, surpassing the margin of error, the ensuing one-way price action favors traders who are quick on the trigger, and this suggests employing resting stop-loss entry orders to reduce slippage. For those positioned with a move, trailing stops with an acceleration factor, such as parabolic SAR, are well suited to riding out directional volatility until a price reversal signals an exit.

The volatility inherent in Cable and Swissy makes the use of short-term (hourly and shorter) momentum oscillators problematic, due to both false crossovers and divergences between price/momentum that frequently occur in these time frames. Longer-period oscillators (four hours and more) are best used to highlight potential reversals or divergent price action, but volatility discourages initiating trades based on these alone. Instead, momentum signals need to be confirmed by other indicators, such as breaks of trendlines, Fibonacci retracements or parabolic levels, before a trade is initiated.

Try A Larger Retracement

With regard to Fibonacci retracement levels, the greater volatility of Cable and Swissy frequently sees them exceed 61.8-percent retracements, only to stall later at the 76.4-percent level, by which time most short-term Elliott wave followers have been stopped out. Short-term spike reversals of greater than 30 points also serve as a reliable way to identify when a directional surge, especially intraday, is completed, and these can be used as both profit taking and counter-trend trading signals. For counter-trend, corrective trades based on spike reversals, stops should be placed slightly beyond the extreme of the spike low/high. A final technical study that is well suited to the explosiveness of Swissy and sterling is the Williams %R, an overbought/oversold momentum indicator, which frequently acts as a leading indicator of price reversals. The overbought/oversold bands should be adjusted to -10/-90 to fit the higher volatility of Cable and Swissy. As with all overbought/oversold studies, however, price action needs to reverse course first before trades are initiated.

It's Not One Size Fits All
Traders who seek to apply technical trading approaches to the currency market should be aware of the differences in the trading characteristics of the major currency pairs. Just because the euro and the pound are both traded against the dollar does not mean they will trade identically to each other. A more thorough understanding of the various market traits of currencies suggests that certain technical tools are better suited to some currency pairs than others. A currency-specific approach to applying technical analysis is more likely to produce successful results than a one-size-fits-all application across all currency pairs.

What is a pip?

In the Forex market, prices are quoted in PIPS. Pip stands for "percentage in point" and is the fourth decimal point, which is 1/100th of 1%.

In EUR/USD, a 3 pip spread is quoted as 1.2500/1.2503

Among the major currencies, the only exception to that rule is the Japanese yen. In USD/JPY, the quotation is only taken out to two decimal points (i.e. to 1/100 th of yen, as opposed to 1/1000th with other major currencies).

In USD/JPY, a 3 pip spread is quoted as 114.05/114.08

What Is Forex?

forex is the only market in the world which is being deliberated on the clock. 24 consecutive hours. The speed in completing transactions, the cost is very low, high liquidity. All these factors make the foreign exchange market (or the foreign exchange market), more markets for its clients. The market for the circulation of currency that can only be likened markets trading in the shares of form, as there is no exchange here - known traditional sense of the word. It is composed of a global network linking tremendous simply enormous number of currency traders worldwide. Here are circulation among hundreds of banks over the phone or via the Internet.

The major currencies are sold are : the American dollar, euro, pound sterling, Japanese yen, Swiss franc, in addition to all the currencies of the world. The five largest centers where circulation among banks which represent two-thirds of the volume of global exchanges : London, New York, Zurich, Frankfurt and Tokyo. Who are the players on this scene? 1 global banks. It is no secret to anyone that banks are the largest and most important players in the arena of global trade currencies. They are conducting thousands of transactions daily around the clock, which they exchange among themselves, or with ordinary Albrooker Awalmstthmarin through their Permanent Representatives in this area. It is no secret that the greatest influence in moving the market and identify and exclusively in the hands of his senior international banks, as the daily transactions amounting to billions of dollars.

2 central banks. Central banks are deals in this market commissioned by the government, a move often to influence the course of the direction taken by the Special currencies, as interest that are consistent with their financial, and therefore protect its economic interests.

3 investment funds. It was due mostly to investment, or retirement funds, or insurance companies, intervene in the market as dictated by their own interests. Months these funds remember "Quantum", which is owned by the Fund renowned investor George Soros, who wrote a history in this area and still is the largest investors unable to influence the course of directing the market.

4 clients trade currencies. These are the important link between the buyers and sellers. Other words are moving one hand as intermediaries between the various banks, on the other hand between the banks and private investors. In return for this work are they reckoned commission or the so-called Brockerg.

5 independent persons. These are ordinary people who make a daily turnover of massive currency to finance their trips planned, or to secure access to their salaries, or at retirement, etc.. Today, after the revolution, which introduced the Internet operations of global communications, and after successive collapses in the stock markets, and under the influence of the foggy atmosphere witnessed by the global markets, treasury bonds, slowly growing role of independent dealers who have modest amounts of money in selling and buying the daily fast, "Dai Trader ". Growing influence and grow in the foreign exchange market, so that many of them are engaged in this work, and spend their days in front of computers sell and buy each according to his vision of the course of events today. Exchanges around the clock. As mentioned above, the work currency markets over the past 24 hours. In calendar today and most obviously, start first in the Far East, in New Zealand, then moved to the role of Sydney, Australia, then to Tokyo, and on to Honkkong, Vsinghafooreh, then Moscow, Frankfurt, London and,

finally, New York, MONEY Angeles. Work begins foreign exchange dealer in Western Europe, for example, in the seventh 7.30am. In the eighth work in the draw. It is necessary to devote the first half-hour each day to analyze market conditions, and study the developments of the day both the substantive fundamental, and technical art, after which access to the new daily newspapers, or the exchange of information and leaks into the market, which will influence the course of the markets. Thus, a clear idea, a program today which must be applied is that the amendment called for the need to be working daylight.

Who Is Currency Trader?

Above all let us know dealer currencies journeyman, "Dai Auto." Bom interested? What are the temptations that pulls individuals to the profession. Profession? Yes profession like other professions, and perhaps the most exciting ever, and most cause for commitment, credibility and courage and steadiness. In March this trade without making it a profession, it is converted into runs a game Roulet, which relies on luck, first and foremost, if it affects more than disappointed. Journeyman trade in currencies is one Brooker company, or bank, or any other financial institution, operating in the stock market and looking after their interests.

But we can add to this definition, another definition provides another category of traders these self-employed personal and risked their own money in order to obtain certain profits from their business. These are the category that matters in our conversation, what really pushes them to practice this profession? Alterayder is the master himself : live anywhere, work anywhere, without the worries of superior and subordinate. Besides, and this is perhaps the most important factor, this work provides those skilled possibility of providing huge profit in one day is not provided by any other action. The requirement to be available in the course of each working conditions that lead to this success. Otherwise, the bitter taste of failure, God saved us from it. Perhaps what distinguishes currency markets trade on other markets.

Is it provides the possibility for the dealer to achieve a profit in the market as the slope in the market high. In contrast to the stock markets, where only the high-profit market, and control the loss Palmtahaml low in the market. But, on the other hand dealer must abide by this market without having to race to be a weapon of defense and attack; He must have known, and taken into account the possibility that the very high here that the market takes it all they have become subdued him not around him no strength. While it appears that the opportunity for each dealer with experience that he can gain 500 or 1000 dollars in one day, and capital does not exceed the $ 1000 only. Yes, this is true. Two types of traders : There are two types of traders : technical trader and merchant statute. Take both methods oriented to the particular trade decisions. The basic analysis focuses on the inner causes of price change (economic data and results, market news and political news), but the technical analysis examines price change itself (analysis graph, and other indicators ..) -

A technical analysis : The technical analysis focused on the price change. The history of currencies used to anticipate the future trend of prices. A method of studying the movement of the currency is only needed by the merchant trade for a decision. The primary tools of technical analysis are graphs. Using charts to determine a tendency to look for opportunities to profit. The main point in technical analysis is that the market has viability Inclination (increase or decrease). Key technical analysis is the ability to identify trend forecast.

B - basic analysis : The analyst or trader statute focuses on the strong economic, social and political vision that is leading the movement of supply and demand. Analyst statute to consider data such as rates of economic growth, interest, inflation, unemployment and other ... Expected results on the movement of currency. Technical analysis or statute? ! ? Most traders make their decisions was the technical analysis because it is not needed for hours studying. Technical analyst that could be followed by several currencies at the same time. But on a currency analyst basic certain data for several influential single currency. For once technical proficiency how can the merchant to control the market and the types of currencies traded. We all we want true champion like you, but what do you think the youth

The Difference Between Forex & Shares

advantage and favorable currency dealings first, is the continuation of dealing 24 hours a day. This leaves room for each dealer to devote part of his time, as circumstances allow for that. While some believe to do the job, while others see career professionally proficient in additional income lactation. They can spend a few hours in the afternoon or evening, regardless of the country or region where they live. The shares Treating the doomed Greenwich country belonging to him. In America, for example believe that the deal begins at 9:30 am and ends at 4:00 pm New York time.

2-in the currency market available at every moment trading conditions, regardless of the state of the economy generally. This situation imposes on the stock market retreat has long-lasting impossible to work. In currencies, a dealer can sell in the market and buy passiveness in the market is high. This provides the possibility of a profit in the case.

3-easily traded currencies due to the small number, Valeraesseh of not more than six pairs, and this offers the possibility of focus and analysis. It also raises the incidence in defining the goal and reduce the error rate, while the shares that are dealing with more than hundreds of thousands, confounding dealer sometimes opted to different ways unsafe side to identify and hand work.

4-in the currency market, you can obtain the free illusory deal, which trained on the progress of work, while not in the stock market. You can also obtain market news periodically and continuous, and the graph too. 5-in the currency market, you can start with the "Arab Online Brokers" deal in a mini-account gives you the danger of trains because Khsartk limited to one point in this account equal to the loss in the extreme case one dollar. This is impossible in other markets.

Forex Brokers- What You Get for Your money

by Wade Robins

The majority of the Forex brokers do not charge commissions. They are remunerated by revenues from their activities as currency dealers, including earnings from buying, selling, interest on deposited funds, converting and holding currencies, and rollover fees.If you think that, because Forex brokers do not charge commissions, they are working for free, you need to go back to Forex school. Forex brokers make their money from you, by selling you currency at one price and buying it back from you at a lower one. The difference in the prices is known as the "spread" and it can mount in a hurry. How can you determine a "spread?"Understanding

The Spread

You may have thought a "pip" meant is a fruit seed, and you would have been right. But in the 21st century, the "pip" is far more widely known as the smallest monetary increment, usually one one-hundredth of a percent. On the Forex market, currencies are priced to the fourth decimal place, and that fourth decimal pace is the"pip." It's also known as a "basis point."
Forex brokers make their livings in pips. The number of pips they charge per trade is known as their spread. Some Forex brokers charge the same spread no matter what the trade, and other Forex brokers charge a variable spread. While a variable spread can look enticingly small in a slow market, it will not be available when the Forex trading begins to fluctuate, because the

Forex broker will raise his spread.

You can hook up with Forex brokers through major banks or investment firms. They are regulated by the Commodity Futures Trading Commission and they are registered with the Futures Commission Merchant. But the Internet has caused a proliferation on online Forex brokers, who will provide traders the technology necessary to trade. They have opened the Forex market to million of small investors who may lack the capital and understanding to have any chance of succeeding.

What To Expect From Your Forex Brokers

If you're working with Forex brokers, and you should be, your have the right to expect their offices to be available around the clock. The Forex market never sleeps, and even if you are placing a trade in the middle of the day, it might be the middle of the in the hemisphere where your Forex broker's office is located.
If you need to get out of your trade in a hurry, you should be able to depend on someone being at the other end of the phone. And by the way, always make certain with your Forex brokers that you can close a position over the phone. If not, a power outage hitting your PC, or a failed Internet connection can spell disaster.

Before you sign on with any firm of Forex brokers, take the time to do some background checking. Not all Forex brokers have the financial underpinnings to hold money in reserve if their trades go wrong and their customers want to cleanout their trading accounts. Your Forex broker should be open about his company's financial condition and history, and be able to provide documentation of his claims. If he can't or won't, take your business elsewhere.And before you commit any money to any Forex brokers, use their online sample trading features to decide which programs are best suited to your trading style. It costs nothing, and will give you confidence that in the fast moving world of Forex trading you'll be able to keep up.

About the Author

You can also find more info on Gft Forex and Global Forex Trading. e-forextradingsystem.com is a comprehensive resource to know about e-Forex Trading System.

Using Stock Trading Signals To Your Advantage

by Adam Heist

Signals are the indications of market conditions. These are extremely beneficial for an investor who wishes to remain in the market with an investment for only a short period of time. Obviously the market would fluctuate with each passing day. Sometimes the market would be favorable, while other times it would not be. Hence signals are required which would enable the investor to act upon them, as per certain conditions of the market.

For long term investors the signals may not be very important, since all changes that take place in the market are remedied in the long run. But these signals could spell life and death for investors who treat investing as a fulltime job. They mostly use the signals that are provided online, or are assimilated into software. Knowing these signals, the investor is in a position to pass some order.

Therefore it is necessary to work on the principle of averages. A wise investor would not rely on a signal that judges with one factor, but that one which uses at least three different market indicators for its verification. Such signals would cover more aspects of the market and hence could be thought to be more accurate. It is also advisable to consider signals applicable in different timeframes. This would help to understand variations in the market better.There are different ways in which signals can be delivered over to the investor. Daily emails are the most popularly used, or they could also be displayed on the broker's website. If so, they could be integrated into the trading software, so that the investor would get pop-up alerts from time to time.The fees to be paid for getting a signal facility are generally on a monthly basis. These could be very expensive - something like several hundreds of dollars per month - but then they are designed for the hardcore investor who looks upon investment as a business.The investor must make research on the competition in the market. Signals could save the investor's time, but they could compound the carelessness of the investor about the market. The signal should be used as a tool only, and the calculations should be personally done in order to achieve the maximum benefits on the investment.

About the AuthorAdam Heist is a freelance writer with many years of experience writing articles on Bad CreditSecured Loan related subjects. Take a few moments now to visit our site and see what we have in store for you.
Software signals are provided by most reputed brokers in the investment market. One would have to subscribe to avail of its benefits, and the subscription fee would run up to hundreds of dollars. However the choice that these programs offer is commendable. The investor him/herself can choose which signal to act upon, and which signal to block.Signals are also helpful for those who cannot remain on their computers for a long period of time. These signals could be customized to be received on a daily or hourly basis. All signals are fully automated, so the transmission is fast and accurate. But different agencies could charges differently for the same kind of job. Hence it is in your best interests to shop around before shelling out for the signal service

When a third party is involved in providing the signals, then it is important to know what the criteria for producing the signals are. Sometimes, the signals could become confusing as different kinds of market data could clash with each other. This would send out even wrong and unwise signals to the investor.

How accurate the signals are would depend on the prevalent market conditions of that time. If the market is favorable, then the trend signal would be to buy. However, the long-term oscillator indicators would caution that the market could become overbought and hence send out a sell signal. Now both of these things would be wise to do; trends could be more justifiable during short-term fad conditions and oscillator signals are best when the market is undergoing a state of transition. Both signals would often have conflict each other.

Basics Of The Foreign Exchange ( Forex Markets)

by Paul Bryan

Foreign exchange market operates by trading one type of currency against another. Unlike other financial markets, the market has no physical location and no central exchange. It operates through a global network of banks, financial institutions, and individuals. The forex market is emerging as the world's largest financial market, operating round the clock with enormous amounts of money traded on a daily basisAnother major difference between forex market and other financial market is that in forex, investors can respond to currency fluctuations caused by economic, political and social events immediately, without waiting for the exchanges to open.

Modern news services, smart online charting services, electronic forex trading platforms, signal services exploded the forex market and opened it for even small and medium traders and investors. In the foreign exchange market 6 major currency pairs are traded the most, which accounts for almost 90% of the daily trading activity.

They include:1. EUR/USD = Euro versus U.S. Dollar 2. JPY/USD = Japanese Yen versus U.S. Dollar 3. USD/CHF = U.S. Dollar versus Swiss Franc 4. AUD/USD = Australian Dollar versus U.S. Dollar 5. GBP/USD = British Pound versus U.S. Dollar 6. USD/CAD = U.S. Dollar versus Canadian DollarWhen reading these forex quotes we have to look at the bid price which is the highest price for buying versus the ask price which is the lowest price to sell. The first currency of the pair (EUR/USD) is known as the base currency and has the value of 1. If the bid of the Euro versus U.S. Dollar is 1.2811, it means that for buying one Euro we have to pay $1.2811.When the bid and ask prices moves in an uptrend, it suggests that the secondary currency is getting weaker and the base currency in turn is getting stronger. They go up or down by units known as pips or price interest point which is almost identical to a tick in a stock price. It is the smallest increment and a move from $1.2811 to $1.2821 is a 10 pip move upwards.When trading the pairs, we should think in terms of the base currency for buying and selling. If we were to buy (long) the EUR/USD, it means that we bought (long) the euro, hoping it to go up, and selling (short) the dollar, hoping it will fall.

If we were to sell (short) the EUR/USD, it means that we sold (short) the euro, hoping it to fall and in turn buying (long) the dollar hoping it to rise. There are different types of transactions in the forex market. They are Spot transactions, Forward transaction, Futures, Options, and Swap.In the Foreign Exchange markets we trade in lots, which are in increments of 10,000s:
1 lot=10,000 units 2 lot=20,000 units 3 lot=30,000 unitsThe minimum one can purchase is 10,000 units of a certain currency pair. For example, if we were to buy 3 lots of the EUR/USD with the bid price at 1.2811, we would spend $38,433 (30,000 ´ 1.2811= 25,622). With buying 3 lots this means for every pip that it goes up you make $3. So with movements of some of these pairs, it's possible to generate considerable profits.It is important to remember that high risks accompany any investment like forex market has the potential for great returns. Proper knowledge, studied information and risk management measures can help the investors gain profit without the fear of losing in their trade.

About the Author
To learn more about trading Forex please visit Basics of the Foreign Exchange Market

Forex Charts - Why Trying To Predict Forex Trading Will See You Lose

One of the biggest mistakes any trader can make is to try and predict currency prices it has never and will never work. If you try and predict you will lose and lose quickly, however if you want to win you can but you must:Treat forex trading as an odds game.First let s look at why predicting is doomed to failureIt s obvious that if you could predict prices in advance there would be no market, as we would all know the price in advance!Everyone would make money and that is not the case in any free market.Let s look at some dumb predictive theories.Let s start with the king of them all - Elliot wave.Elliot said he has an objective scientific theory and then tells people to make subjective judgements Well that s not an objective theory as an objective theory would tell you EXACTLY what to do.Another great one is the Fibonacci number sequence.All those levels that magically are supposed to hold and they do sometimes, but more often than not they don t.

There are many more including the numerous e-books and currency trading systems that are sold by vendors promising you the secrets of forex success for a few hundred dollars.
Think about it:
If their currency trading systems were any good, they would not be selling the system, they would be to busy making money to bother you for a few dollars.
Many forex traders don t use the above theories, but they still love to predict.If prices dip to support and you think the level is going to hold, don t buy and hope, get confirmation and trade with the odds - this means looking at price momentum.Price momentum MUST support your view before you enter and execute your trading signals. What you need to look for if buying into support is, for price momentum first to turn up then enter your trade this way you have the odds in your favour.

You re not predicting and hoping, you are trading on confirmation of price. So forget predicting and hoping, trade on confirmation of price momentum and get the odds in your favour.Two great momentum indicators to look at are: The Relative strength Index (RSI) and the stochastic if you don t know what they are and how to use them, check our other articles.DON T PREDICT AND HOPE TRADE THE ODDS!

If you want to win, you need to trade with price momentum and get the odds in your favour.If you want to predict and hope then get ready to lose - its as simple as that.
By: Monica Hendrix

Article Directory:www.articledashboard.comGRAB 3 X FREE TRADER & FREE TRADER PROFITS NEWSLETTER On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at www.net-planet.org/index.html

Forex Trading Strategy - 6 Simple Steps To Success

by Sacha Tarkovsky

If you want to win at forex trading you need a forex trading strategy that can help you enter the elite 5% that make money and avoid joining the vast majority of losers. This article is all about devising a forex trading strategy for success in 5 simple steps.

1. Accept Responsibility The first point to keep in mind is that you are responsible for your own success - if you think you can buy success from a vendor for a few hundred dollars - you are going to lose. Only you can make yourself successful and this means you have to develop your forex strategy on your own. The good news is, everything about forex trading can be specifically learned and is free on the net.

2. Learn the RIGHT knowledge Forex trading is all about learning the right knowledge - This is an important point, many traders simply think the more the better in terms of knowledge, but this is simply NOT true. You get rewarded for results in currency trading and the accuracy of your trading signals, not the effort you make. Your forex trading system that you use in your trading strategy should be kept simple and easy to understand. This way, ensures it will be robust in the face of ever changing market conditions. Simple systems work far better than complicated ones and have the added benefit of being easy to understand by you - This means that you will have the confidence to follow it with discipline.

3. Deciding Your Methodology You will need to decide if you want to a technical or fundamental trader. By far the easiest is to be a technical one and use forex charts to spot trading opportunities. You need to get the odds on your side and this means NO forex day trading! It doesn't work, as all short term volatility is random. Instead, base your forex trading strategy on swing trading, or long term trend following. Both these methods will work and the one you choose is personal preference. You then need to have a clear understanding of support and resistance and some momentum indicators to help you get into trades ( this is covered in our other articles )essentially you need to confirm price momentum is on your side when you trade.
Finally, learn the concept of "breakouts" it's a timeless very profitable methodology.

4. RISK and Money Management If you don't like risk don't trade forex markets. Most traders don't understand risk and are so frightened of it, they end up being to cautious and lose. If you want to make money you need to take calculated risks, at the right time. You need to have the courage of your conviction. If you come into forex trading thinking you can risk 2% of your equity and make money do something else, as you will lose.

5. Trading is in the head Most traders fail because they cannot obtain mental discipline, to follow their forex trading system through bad periods i.e. they lack discipline due to lack of confidence. If you develop your forex trading strategy yourself, you will understand exactly how and why your system works - this will instil confidence and from confidence flows discipline. Keep in mind if you don't have discipline to follow your system you have no system!

6. Realism Sure people get rich quickly but that's the norm for most currency traders. You need to have a realistic forex trading strategy and that means aiming for 50 - 100% per annum. If you can achieve this you will be up there with the best and this will compound to a lot of money over time. REMEMBER! You don't need to buy any material to construct your forex trading strategy, its all free online. You just need to research it and avoid people telling you that you can buy success from them, for a few hundred dollars - you cant, there are no shortcuts The good news is, everything about forex trading can be specifically learned and you can do it all on your own, if you are prepared to put in a little time and effort.About the Author

GRAB 3 X FREE TRADER & FREE TRADER PROFITS NEWSLETTER More on becoming a profitable trader some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html