Forex Charts the Basics You Need To Know
by monica hendrix
Here we are going to give you an introduction to the basics of forex charting and how to use them to successfully catch and hold forex trends for big profits.
Forex markets (or any financial market for that matter) move to this basic equation:
Fundamentals + Investors Perception of them = Market price
The fundamentals are the supply and demand facts and we all see them but being humans we all draw our own subjective judgements on what they mean and we are not just influenced by logic - but the emotions of greed and fear as well.
It's very difficult to trade the fundamentals, because all the facts are instantly known and discounted in the price and of course you never quite know how humans are going to view them.
A basic premise of using forex charts is to simply assume that all fundamentals are instantly discounted in the price and no study of them is needed - while this sounds essentially simple (and it is), it means a chartist is not interested in knowing them - he is only interested in price movement generated by them and investor psychology.
How and where prices move is decided not by the facts or supply and demand situation but is down to how investors as a whole see them, this then becomes the market price.
A basic foundation of forex technical analysis is that history repeats.
Why?
Because human nature is constant it will be reflected in forex charts as repetitive price patterns that can be traded for profit.
In essence forex charts allow us to study the fundamentals and investor psychology all at once - a technical analyst is not interested in how or why prices move - he just studies the charts and wants to make money when they do.
Another foundation of technical analysis is that a trend in motion is likely to persist and the aim is to lock into these trends and hold them for profit.
The fact is anyone with the right forex education can make money using forex charts but it's an art not a science and you need to learn a method based upon sound logic.
Many forex traders base their currency trading systems on trying to predict forex prices but this is wrong.
Why?
Because it's simply another word for hoping and guessing and that won't get you far in any walk of life and that includes forex trading.
Forex charting is a game of odds - not certainties and you need to keep this in mind while chart patterns do repeat they do not move to a scientific theory.
If you want to learn currency trading and be successful then charting is a quick simple and profitable method and takes very little time. You can learn it in a few weeks and you can then cover your currencies daily in around 30 minutes and that's it.
Forex charting basics are enclosed but you will now say - I like the idea how do I use them for profit? That is the subject of part 2 of this article series.
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Showing posts with label Best Forex Brokers. Show all posts
Showing posts with label Best Forex Brokers. Show all posts
Forex Charts the Basics You Need To Know
Thursday, April 9, 2009 Beginner Forex Trading, Best Forex Brokers, Best Forex System, Currency Trading Success, FOREX Charts
Advantages Of Forex Trading
Monday, March 16, 2009 Advantages, Beginner Forex Trading, Best Forex Brokers, forex trading
Advantages Of Forex Trading
by Joon Trader
Forex Trading has many advantages as compared to stock or equity trading. Due to the current uncertainty of the stock market, many stock or equity traders are now thinking to trade the Forex market. Their main question and concerned was why trade the Forex market? What are the advantages of the Forex market as compared to the stock market? In this article, I will go through some of the advantages of Forex Trading.
24 Hour Global Market - The Forex market is truly a 24 Hour Global Market opens from Monday to Friday. The Forex market starts each trading day from Sydney, Tokyo, London, and finally to New York. Regardless of whether it is in the day or night, there are always market participants actively trading the Forex market. Forex traders can respond very quickly to any currency fluctuations or breaking news immediately unlike the stock and future market. The ECN's (Electronic Communication Networks) in stock and future market are relatively new products derived as an after hours extension to the regular trading hours. Many of these ECN's have ill liquidity and there is no guarantee that a trade will be executed, or at a fair price. Usually, stock or future market traders would have to wait until the real market opens the next morning in order to execute a trade at fair value.
Liquidity - The Forex market is the largest and most liquid market in the world. According to a survey conducted by the Bank for International Settlements (BIS) in April 2007, average daily trading volume for the Forex market reached an all-time record high of US$3.2 Trillion. A 71% increase from US$1.9 Trillion that was traded in April 2004. This increase is due mainly to the participation of retail investors utilizing broker's electronic trading platform. This tremendous turnover is more than all the world's stock markets combined on any given day. With a daily trading volume larger than all stock market combined, this will ensure price stability. With such liquidity, Forex Trader can open or close a position without much difficulty and most importantly, will receive a fair market price.
Opportunity to Make Money in Both Direction - There is no such thing as "bull" or "bear" market in Forex. In Forex, it is of no concern whether the economy is booming or in a recession. For stock trading, profits are usually made when the economy is booming. But we all know that the economic cycle is cyclical - all things that go up must come down. This is not the case in Forex market. Regardless of how major economies are performing, currency exchange rates are always fluctuating, and this in turn will provide trading opportunity for traders to gain profit.
Simplicity - There are not many major currency pairs traded on the Forex market. Therefore, traders may have a better feel of price movement patterns and behavior. Where as in the stock market, there is literally thousands of stock to monitor and it is not easy to follow so many of them.
Small Trading Capital with High Profit Potential - Nowadays, the minimum amount needed to open a trading account is less than $300. Due to competition, some brokers may even accept much lesser amount. In Forex market, this small trading amount could potentially earn hundreds of dollars per week. In stock market, this may not be possible. Of course both market have potential to lose as well, but in the Forex market, traders can make good money with much lesser trading capital.
High Leverage of 100:1 - 100:1 leverage is commonly available from online Forex brokers. This is substantially exceeds the common 2:1 margin offered by equity brokers, and 15:1 in the futures market. Some brokers even offer higher leverage of 100:1. However, it is important to remember that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally great. Leverage is a double-edged sword and necessitates the use of proper money management. Without proper risk management, this high degree of leverage cans also lead to big losses as well as gains.
Demo Account - Forex Trading has a unique feature called "Demo Account" or simulate account. This "Demo Account" allows the trader to trade using real-time price on the broker's trading platform with the exact interface and function as a real account. With this simulated account, Forex trader could gain real market experience in trading without risking any capital.
With Forex Trading unique advantages, its of little wonder that more and more retail investors are participating in the Forex market utilizing broker's electronic trading platform that are widely and easily available.
by Joon Trader
Forex Trading has many advantages as compared to stock or equity trading. Due to the current uncertainty of the stock market, many stock or equity traders are now thinking to trade the Forex market. Their main question and concerned was why trade the Forex market? What are the advantages of the Forex market as compared to the stock market? In this article, I will go through some of the advantages of Forex Trading.
24 Hour Global Market - The Forex market is truly a 24 Hour Global Market opens from Monday to Friday. The Forex market starts each trading day from Sydney, Tokyo, London, and finally to New York. Regardless of whether it is in the day or night, there are always market participants actively trading the Forex market. Forex traders can respond very quickly to any currency fluctuations or breaking news immediately unlike the stock and future market. The ECN's (Electronic Communication Networks) in stock and future market are relatively new products derived as an after hours extension to the regular trading hours. Many of these ECN's have ill liquidity and there is no guarantee that a trade will be executed, or at a fair price. Usually, stock or future market traders would have to wait until the real market opens the next morning in order to execute a trade at fair value.
Liquidity - The Forex market is the largest and most liquid market in the world. According to a survey conducted by the Bank for International Settlements (BIS) in April 2007, average daily trading volume for the Forex market reached an all-time record high of US$3.2 Trillion. A 71% increase from US$1.9 Trillion that was traded in April 2004. This increase is due mainly to the participation of retail investors utilizing broker's electronic trading platform. This tremendous turnover is more than all the world's stock markets combined on any given day. With a daily trading volume larger than all stock market combined, this will ensure price stability. With such liquidity, Forex Trader can open or close a position without much difficulty and most importantly, will receive a fair market price.
Opportunity to Make Money in Both Direction - There is no such thing as "bull" or "bear" market in Forex. In Forex, it is of no concern whether the economy is booming or in a recession. For stock trading, profits are usually made when the economy is booming. But we all know that the economic cycle is cyclical - all things that go up must come down. This is not the case in Forex market. Regardless of how major economies are performing, currency exchange rates are always fluctuating, and this in turn will provide trading opportunity for traders to gain profit.
Simplicity - There are not many major currency pairs traded on the Forex market. Therefore, traders may have a better feel of price movement patterns and behavior. Where as in the stock market, there is literally thousands of stock to monitor and it is not easy to follow so many of them.
Small Trading Capital with High Profit Potential - Nowadays, the minimum amount needed to open a trading account is less than $300. Due to competition, some brokers may even accept much lesser amount. In Forex market, this small trading amount could potentially earn hundreds of dollars per week. In stock market, this may not be possible. Of course both market have potential to lose as well, but in the Forex market, traders can make good money with much lesser trading capital.
High Leverage of 100:1 - 100:1 leverage is commonly available from online Forex brokers. This is substantially exceeds the common 2:1 margin offered by equity brokers, and 15:1 in the futures market. Some brokers even offer higher leverage of 100:1. However, it is important to remember that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally great. Leverage is a double-edged sword and necessitates the use of proper money management. Without proper risk management, this high degree of leverage cans also lead to big losses as well as gains.
Demo Account - Forex Trading has a unique feature called "Demo Account" or simulate account. This "Demo Account" allows the trader to trade using real-time price on the broker's trading platform with the exact interface and function as a real account. With this simulated account, Forex trader could gain real market experience in trading without risking any capital.
With Forex Trading unique advantages, its of little wonder that more and more retail investors are participating in the Forex market utilizing broker's electronic trading platform that are widely and easily available.
Best Forex Brokers - A Perfect Way For Novice Traders to Learn
Saturday, February 28, 2009 Best Forex Brokers, Learn, Novice Traders, Perfect Way
Best Forex Brokers - A Perfect Way For Novice Traders to Learn
by kelly price
If you are looking at the best forex brokers the best way to learn is NOT a demo account. Sure a demo account shows you the mechanics of how to trade - but it doesn't give you the real feeling of dealing with money. I came across this service that solves the problem.
It's called a protected account and is designed for those traders who want to trade with a small amount and get the feel of trading. These accounts offer unlimited trading in a set period and the difference with these accounts is:
It doesn't matter if you go debit you still trade.
It is only at the end of the set period (normally a few weeks) that the profit or loss is calculated so the client gets any profits and the broker takes any losses.
This is different to a guaranteed stop - because once that's hit and your trading capital is gone, you're out - with this account and you continue trading even if you're in debit.
So for a small risk you get a real trading experience, get to do a lot of trades to test your skills and you know your risk in advance.
You know it's only at the end of the period you stop trading.
I like this idea and think it's a good one for novice's forex traders.
I see countless traders who think that because they have won with a demo account and made money with their trading signals that they will win in the real world, with money on the line.
Nothing could be further from the truth.
When money is on the line emotions kick into play and it's a whole new ballgame.
It's a bit like taking penalty kicks in your garden.
They are all completed successfully with no problem but try and do it with 100,000 people watching you and the game depends on the kick being successful and it's a different matter!
Some traders can handle the emotional side of trading and others cant - its as simple as that.
You won't know if you can Handle your emotions until you try!
These forex accounts look set to soar in popularity as they act as a bridge between a demo trading account and a full trading account and allow you to test your forex trading system in real conditions, risking real money albeit a small test amount.
It's a fact that anyone can learn to trade forex and enjoy currency trading success but it's also a fact that 95% of traders lose.
Most traders lose, not because they don't have good methods but because they cannot execute their methods with discipline, when money is on the line and this is the advantage of these accounts.
There are a whole host of inputs that make a best forex broker but this service certainly gets my vote as one of the services that can really help novice traders and you should consider them as part of your overall forex education.
by kelly price
If you are looking at the best forex brokers the best way to learn is NOT a demo account. Sure a demo account shows you the mechanics of how to trade - but it doesn't give you the real feeling of dealing with money. I came across this service that solves the problem.
It's called a protected account and is designed for those traders who want to trade with a small amount and get the feel of trading. These accounts offer unlimited trading in a set period and the difference with these accounts is:
It doesn't matter if you go debit you still trade.
It is only at the end of the set period (normally a few weeks) that the profit or loss is calculated so the client gets any profits and the broker takes any losses.
This is different to a guaranteed stop - because once that's hit and your trading capital is gone, you're out - with this account and you continue trading even if you're in debit.
So for a small risk you get a real trading experience, get to do a lot of trades to test your skills and you know your risk in advance.
You know it's only at the end of the period you stop trading.
I like this idea and think it's a good one for novice's forex traders.
I see countless traders who think that because they have won with a demo account and made money with their trading signals that they will win in the real world, with money on the line.
Nothing could be further from the truth.
When money is on the line emotions kick into play and it's a whole new ballgame.
It's a bit like taking penalty kicks in your garden.
They are all completed successfully with no problem but try and do it with 100,000 people watching you and the game depends on the kick being successful and it's a different matter!
Some traders can handle the emotional side of trading and others cant - its as simple as that.
You won't know if you can Handle your emotions until you try!
These forex accounts look set to soar in popularity as they act as a bridge between a demo trading account and a full trading account and allow you to test your forex trading system in real conditions, risking real money albeit a small test amount.
It's a fact that anyone can learn to trade forex and enjoy currency trading success but it's also a fact that 95% of traders lose.
Most traders lose, not because they don't have good methods but because they cannot execute their methods with discipline, when money is on the line and this is the advantage of these accounts.
There are a whole host of inputs that make a best forex broker but this service certainly gets my vote as one of the services that can really help novice traders and you should consider them as part of your overall forex education.
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