Forex Highlights

A Range Trading Strategy That Makes Breakout Part Of It

September 2nd, 2010 by admin in Forex Strategy with 0 Comments

Sometimes, the market gets locked in a large trading range extending from 150 to 300 pips. These large trading ranges get formed when central banks try to intervene in the foreign exchange market in order to stabilize their currencies within a certain range. This is done to boost exports or discourage imports.

First, you need to identify a trading range using an ADX (Average Directional Index). If the reading on the ADX chart is below 20, it means that the market is consolidating. You can further confirm it with the DMI (Directional Movement Index). After confirming that the market is in a consolidating phase and trading between a range of something like 150 to 300 pips, you are ready for applying this trading strategy. When the market rallies towards the resistance level, big players like the large banks and financial institutions enter the market and start selling aggressively creating more sellers than buyers. Consequently prices fall.

Now get ready for selling near the resistance level as the market nears that level. Switch to a smaller timeframe like the 30 minutes or 60 minutes chart and look for the bearish candlestick pattern like the Hanging Man to appear. Appearance of the Hanging Man is a signal that the uptrend is about to end and the prices are about to start falling or the market is about to take U turn. Go short once you get that signal.

After doing that switch to the daily chart larger timeframe. Now wait for the price action to reach near the support. When the price action nears support, big players once again enter the market. This time they are bullish and think that the currency pair is underpriced. So they start buying the currency pair. This heavy buying makes the bulls prevail in the market and price action starts to move up again. The market is about to take a U turn.

Again switch to a smaller timeframe like the 30 minutes or 60 minutes chart and wait for a bullish candlestick pattern like the Hammer to appear. Appearance of a Hammer signals that the market is about to take a U turn again. Once you spot the bullish candlestick pattern like the Hammer, go long.

This simple range trading strategy has the beauty that in case if the bulls don’t overcome the bears at the support, there is going to be no candlestick pattern to tell you that the price is going to reverse itself. So you don’t have to fear when this happens and a breakout takes place. Breakout trading is highly profitable. Similarly if the bears don’t overcome the bulls at the resistance, a breakout is going to take place and no candlestick pattern is going to appear telling you about the reversal in price action.

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Do you need a currency trading platform?

August 31st, 2010 by admin in Currency Trading with 0 Comments

Are you interested in finding more about this Forex business? Do you want to find a professional and trustworthy currency trading platform? If your answer to either of these two questions is yes, then you should definitely keep on reading. You will be informed about Forex, finding a trading platform and how can you earn money by making reference to the resource you are currently using. It all sounds pretty interesting, doesn’t it?

Before anything else, we should talk a little bit about the Foreign Exchange Market or Forex as we all know it. If you have experience in the field of currency trading, then you’ve surely used a currency trading platform at least once or twice. Forex is all about trading foreign currencies and these transactions manage to attract people from all over the world. We are talking about more than a simple Forex business. This worldwide phenomenon has been brought into the attention of the general public through the Internet, with an increased number of people entering the cyberspace in search of trading opportunities. They started looking at a currency trading platform and enjoyed the numerous benefits the FX market has brought right in front of their eyes.

In order to perform trades and engage in various investments on the FX market, one needs what is known as a currency trading platform. Searching the Internet for such specialized software will only take a couple of minutes but you have to be certain that you have chosen a reliable source. Forex is all about continuous trading, liquidity (you can modify the state of your trades at any given hour in the day) and leverage usage. If you want to win money by trading on the FX market, then you most definitely need a professional currency trading platform. This is serious Forex business and as important profits can be made, it is highly important that you understand everything there is to know.

To summarize, a currency trading platform represents the connection between you and Forex. It can be accessed through the Internet browser and it often requires a fast connection. The platform that guaranteed high-speed trading is used by millions of people every day, all being enticed by the attractive opportunities offered. You can be certain that you will be pleased with the features offered with your account, benefiting from 24/7 support and low spreads. The list of benefits continues with the opportunity to print reports of your activities, instant trading and a wide range of tools put to your disposal. Can you still say now to online trading after reading all that?

When you say Forex business, you can also think about the many benefits involved. We are talking about the incentives you will get for recommending the currency trading platform to your friends and other acquaintances. They sign up for some online trading, you get a piece of the Forex business pie. The bonuses are quite appealing and there are many benefits promised for you as an agent. Are you ready to discover them?

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How Automated Forex Robots Work to Make You Reliable Profits in the Forex Market

August 31st, 2010 by admin in Forex Tips with 0 Comments

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Automated forex robots handle every aspect of forex trading on your behalf and streamline the entire process so that you can sit back and see some reliable profits trickle in while you live your life without the time or knowledge required in this market. This is exactly how automated forex robots work to bring in reliable and consistent automated profits in the foreign exchange market for you.

Automated forex robots are essentially programs which automatically trade to respond to changes in the forex market. They constantly analyze real time market data around the clock and both trade offensively and defensively for you.

So they both scour the market looking for profitable trading opportunities and automatically enact them when they have found what they deem as being a high probability trade opportunity, but they also follow that trade and any existing trades of yours along and make sure that you’re always making money from them. When the time comes that the market fluctuates out of your favor, they trade away the now bad investment or investments to ensure that you stay on the winning sides of your trades as often as possible.

You can think of automated forex robots as like employing someone to watch over your forex investments and effectively trade for you a full 24 hours a day. It’s both a safety net but also a capable offensive trading machine. In fact with 30% of all traders currently using this technology, many traders are beginning to replace their full service broker with one of these programs. This is primarily because a full service broker charges regular fees and even typically takes out commissions on top of that, whereas you can employ automated forex robots for a one time cost of typically only around $100.

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Fundamental Analysis should not be Forgotten in Forex

August 31st, 2010 by admin in Forex Analysis with 0 Comments

Before starting on the foreign exchange market, we must understand some basic precepts of forex. Among the concepts essential to know, next to the carry trade or the technical analysis is the fundamental analysis.

Again, it should be noted that fundamental analysis is inseparable from the technical analysis, and vice versa, because they allow when combined to make investment choices, if not wiser, at least more thoughtful . Fundamental analysis is based on the evaluation of an economic indicator. These include employment figures or the publication of the index of activity in Chicago.

The main economic indicators

Of all the economic indicators, some have a bigger impact on other currencies. Thus, the index of activity in Chicago, when published, had less influence on the exchange rate of the dollar as the publication of unemployment figures. In fact, to know what the economic indicators are the most important, you only need a little experience. However, beginners in the foreign exchange market can go, at least, the principle that there are four economic indicators do not miss when it appears on the economic calendar this week. It is the interest rate, the unemployment rate, the rate of inflation and the consumer confidence index. These four economic indicators generally affect investment decisions of many traders.

The importance of the irrational

However, we must always keep in mind that financial markets are, by nature, thank you for the irrational behavior. Thus, even if the decision of a central bank to lower its rates or not, for example, often plays on the currency rates, one should keep in mind that nothing is gained. We must take account of market expectations, which can be met or satisfied, and the aversion to risk may go completely unnoticed to the publication of economic indicators.

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