An essential element of your forex trading education is using valid support and resistance to time your trading signal. Here we are going to walk you through a live example of how to use it properly.
The currency we are going to look at on our forex charts is the Japanese yen.
If you look at the yen daily chart, you will see a very valid resistance level at the 108.00 level and since March of this year there have been numerous tests of it, over 20 and yet the dollar has failed to close above it supported by momentum.
This resistance is very valid because there have been so many tests. Resistance or support gain validity
- the more times they are tested and hold
- The more different time frames and the wider apart they are
- The traders who trade the market and the news sees the level as significant
Watch the level then confirm the Trade
The way to trade it is to wait for the rise but DON'T sell until you see momentum turn down and two great indicators for timing your trade are the stochastic and the Relative Strength Index. Simply wait for the level to be tested and wait for them to turn down.
Never just assume a level will hold, wait for confirmation via momentum indicators
Once this occurs you can be short and you know when you're wrong - if prices close above resistance.
This simple method of trading into valid resistance or support works and providing you time your entry correctly with momentum indicators, it can make a lot of money.
We have used this simple strategy to clear thousands of pips profits, this year and we have kept it simple, nothing complicated about it but it doesn't mean it simple strategies can't make money they can.
While resistance holds you keep doing it sell into the level and take profits when the dollar becomes oversold, then wait for the next test.
Follow Reality of Price Change
If the price breaks up and closes strongly above resistance, the odds will favour further strength in the dollar.
Simple and Effective
Sure it's simple but it can be very profitable and the above is a good example of a low risk, high reward way of trading into valid resistance.
You don't need to do anything else, than trade the reality of price change on the charts and if you do and you confirm your moves this simple forex trading strategy can make a lot of money.
This article was written on the 2nd Of August, good luck and good trading.
About the Author
NEW! 2 X FREE ESSENTIAL TRADER PDFS + Professional Forex Course
For free 2 x trading Pdf's, with 90 of essential info and more on Forex Trading Education visit our website at: http://www.learncurrencytradingonline.com
Monday, August 4, 2008
Saturday, June 14, 2008
Market analysis from independent forex research organizations and banks: A useful tool for traders by Agwu Chukwuemeka O.
Understanding and applying the prevailing market analysis will greatly assist you pick out the major trades daily. Forex trading requires some level of sophistication and access to vital market information. Banks and major trading organizations publishes research papers, commentary and market outlook daily to guide traders. Studying this information carefully before trading will help you prepare for the major market move and trend for the day. Also, reading independent forex research documents daily over several years will mould you into a well informed and better professional in the market. This could arise because of the fact that some events are reoccurring which could simply translate that you should do what you have been doing initially during such event occurrence.
Websites are tools through which forex oriented organizations and banks publish information and commentary that could guide you on trading forex daily. Though the data published may be boring and uninteresting at the initial time, but after several weeks of constantly forcing and tuning your mind to study them, you will start understanding how important these researches are.
There is no major move in the market that was not mentioned by a forex research organization before it happened. Depending on too many websites that publish forex information can make the whole process tiresome and very slow.
I advice you use website www.actionforex.com for all your forex research updates and events. It is the best website for fast updated forex research information. Although. I also use www.dailyfx.com to check on the day’s major market news as theirs is more straightforward.
For more information on forex trading visit http://www.forexonlineinseconds.blogspot.com
Websites are tools through which forex oriented organizations and banks publish information and commentary that could guide you on trading forex daily. Though the data published may be boring and uninteresting at the initial time, but after several weeks of constantly forcing and tuning your mind to study them, you will start understanding how important these researches are.
There is no major move in the market that was not mentioned by a forex research organization before it happened. Depending on too many websites that publish forex information can make the whole process tiresome and very slow.
I advice you use website www.actionforex.com for all your forex research updates and events. It is the best website for fast updated forex research information. Although. I also use www.dailyfx.com to check on the day’s major market news as theirs is more straightforward.
For more information on forex trading visit http://www.forexonlineinseconds.blogspot.com
Sunday, June 1, 2008
Coping with forex trading risk by Agwu Chukwuemeka O.
The forex trading with $1.3 trillion market is larger than every other market combined. Forex trading is available to everybody to trade with the same risk and reward. Movement of market in forex can be quickly or sharp in negative or positive direction. You can manage your risk by understanding how this unique market works and what drives it up and down. It will interest you to know that forex market carries higher risk than any other market.
The market movement can fluctuate for reasons out of our control and unforeseeable including changes in political and economic policies. These unpredictable situations are what drives the value of the currencies up and down, thereby changing their values in respect to other currencies. It is this very volatility that attracts investors. It is necessary that you understand all your buying and selling options so that you appropriately react to these currency fluctuations immediately.
Be determined to manage trades without emotion as it can help you manage your risk. Map out the percentage you are willing to risk on each trade and stick with it. When you have multiple trade open, it’s important to stay on top of the percentage that you have at risk because multiple losses can be devastating and one big loss can wipe out all your other profits.
If your trading platform provides the ability to set stop losses, you should determine your stop loss at the time you enter a trade and set it. When your stop loss is reached, your trade will automatically be closed limiting your potential loss.
It is important to take the volatility of the market into account when determining your stop loss amount. If you set it too large, you could lose a significant amount of money before the stop loss is triggered. If you set it too small, the random ups and downs in the market will mean that your position is being closed early incurring additional transaction costs.
Avoid currencies that are closely related. It is a smart risk management strategy to avoid trading two currencies that tend to move together like the British pound and the Euro. These currencies are correlated. The most common pairing is the US dollar and the Euro.
You should avoid taking a long and short position in currencies which generally move in opposite directions. You are taking more risk than you need to do.
Finally, don’t gamble. If you’ve lost money on your previous few trades, don’t double-up your next trade in order to recoup your previous losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
The market movement can fluctuate for reasons out of our control and unforeseeable including changes in political and economic policies. These unpredictable situations are what drives the value of the currencies up and down, thereby changing their values in respect to other currencies. It is this very volatility that attracts investors. It is necessary that you understand all your buying and selling options so that you appropriately react to these currency fluctuations immediately.
Be determined to manage trades without emotion as it can help you manage your risk. Map out the percentage you are willing to risk on each trade and stick with it. When you have multiple trade open, it’s important to stay on top of the percentage that you have at risk because multiple losses can be devastating and one big loss can wipe out all your other profits.
If your trading platform provides the ability to set stop losses, you should determine your stop loss at the time you enter a trade and set it. When your stop loss is reached, your trade will automatically be closed limiting your potential loss.
It is important to take the volatility of the market into account when determining your stop loss amount. If you set it too large, you could lose a significant amount of money before the stop loss is triggered. If you set it too small, the random ups and downs in the market will mean that your position is being closed early incurring additional transaction costs.
Avoid currencies that are closely related. It is a smart risk management strategy to avoid trading two currencies that tend to move together like the British pound and the Euro. These currencies are correlated. The most common pairing is the US dollar and the Euro.
You should avoid taking a long and short position in currencies which generally move in opposite directions. You are taking more risk than you need to do.
Finally, don’t gamble. If you’ve lost money on your previous few trades, don’t double-up your next trade in order to recoup your previous losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
Forex fundamental information release and currencies to be focused by Agwu Chukwuemeka O.
In forex trading, economic date tends to be one of the most important catalyst for short term movements in any market, this is particularly true because it responds not only to US economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to decide the positions the take. Generally, no less than seven piece of data are released daily from the eight major currencies or countries that are most closely followed. So far those who choose to trade news, there are plenty of opportunities. We can check which economic news releases is released when, which is the most relevant to forex traders and how traders can act on this market-moving data. The following are the major eight currencies that should be our focus:-
US dollars (USD)
British Pounds (GBP)
Euro (EUR)
Japanese Yan (JPY)
Swiss Fran (CHF)
Canadian dollar (CAD)
Australian dollar (AUD)
New Zealand dollar (NRD)
We can deduct from the list, that the currencies that we can easily trade span the entire globe. This means that you can handpick the currencies and economic releases to which you pay particular attention. But, as a general rule, since US dollar is on the “other side” of 90% of all currency trades, US economic releases tend to have the most pronounced impart on the market.
Trading news is harder that it may sound, but some releases are more important than the others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data being released at the same time.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
US dollars (USD)
British Pounds (GBP)
Euro (EUR)
Japanese Yan (JPY)
Swiss Fran (CHF)
Canadian dollar (CAD)
Australian dollar (AUD)
New Zealand dollar (NRD)
We can deduct from the list, that the currencies that we can easily trade span the entire globe. This means that you can handpick the currencies and economic releases to which you pay particular attention. But, as a general rule, since US dollar is on the “other side” of 90% of all currency trades, US economic releases tend to have the most pronounced impart on the market.
Trading news is harder that it may sound, but some releases are more important than the others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data being released at the same time.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
Forex Leverage: A double – edged sword by Agwu Chukwuemeka O.
Forex leverage could be described as the needed amount of money given to you by your trading platform or broker to enable you participate in forex trading with little commission. This money is given to you to boost the amount of money you trade with in the market These leverages is what makes most traders attracted to trading forex.
But forex leverage is a double edged sword because in as much as it can help you make more profit, it can also cause huge losses. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up and control a huge amount of money. To get the value of margin based leverage, divide the total transaction value by the amount of margin you are required to put up.
Margin-based leverage = (Total value of transaction)/(Margin required)
It is also advisable to use 1:100 leverage in forex trading to avoid higher risk. If you are required to deposit 1% of the total transaction value as margin and you intend one mini lot of USD/CHF which is equivalent to US$10,000 the margin required would be US$100. Thus, your margin-based leverage will be 100:1 (10,000:100).
Margin-based leverage in ratio Meaning
1:400 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 400 lot
1:200 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 200 lot
1:100 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 100 lot
You can make decent profits and losses during trading when you monitor currency movements in pips which is magnified through the use of leverage. When you trade with a big amount by using higher leverage, a small in the price of currency can result in significant profits or losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
But forex leverage is a double edged sword because in as much as it can help you make more profit, it can also cause huge losses. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up and control a huge amount of money. To get the value of margin based leverage, divide the total transaction value by the amount of margin you are required to put up.
Margin-based leverage = (Total value of transaction)/(Margin required)
It is also advisable to use 1:100 leverage in forex trading to avoid higher risk. If you are required to deposit 1% of the total transaction value as margin and you intend one mini lot of USD/CHF which is equivalent to US$10,000 the margin required would be US$100. Thus, your margin-based leverage will be 100:1 (10,000:100).
Margin-based leverage in ratio Meaning
1:400 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 400 lot
1:200 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 200 lot
1:100 That means for every 1 lot/dollar you want to trade
with, your broker will give you additional 100 lot
You can make decent profits and losses during trading when you monitor currency movements in pips which is magnified through the use of leverage. When you trade with a big amount by using higher leverage, a small in the price of currency can result in significant profits or losses.
Agwu Chukwuemeka Odi is an expert in the field of forex trading. Visit http://forexonlineinseconds.blogspot.com for more information on forex trading.
Tuesday, May 27, 2008
Forex Trading For Beginners
The Foreign Exchange is proving to be an exciting area of investment for the individual investor. As opposed to the earlier scenarios involving secretive hedge funds and the fact that Forex was meant only for large financial institutions, multinational companies, or banks, today virtually anyone can add online Forex trading to their portfolios. The convenience of online trading and attractive liquidity of this largest financial market in the world makes it an interesting choice for first time investors.
If you are planning to invest in Forex, it is vitally important that you are aware of the basics of the currency trading, and know how different the Forex markets are from stock markets, futures and other investment options. There is no governing body that controls and monitors Forex trading, and there is no guarantee that you will be paid your profits; investors trade with each other on a credit agreement system. The Forex market is one of the most volatile markets, always in a state of flux, which can be a good thing if you trade at the most opportune moments. In general, all online currency trading is done via Forex brokers, who employ trading tools, analytic modes, and real time data to facilitate currency trading for you. Choosing a good Forex broker is definitely an important parameter that you will have to consider before you jump on to the Forex bandwagon.
When it comes to currency trading, all Forex transactions are done in terms of currency pairs. Currency pairs, like USD/JPY, EUR/USD, etc, are indicative of the two currencies of US dollar and the Japanese Yen, and the Euro and the US dollar respectively. Essentially, you can either buy or sell one currency in terms of the other. The Exchange Rate is the ratio of one currency in the terms of another. This expresses the value of one currency against the value of the other. The first currency in this ratio is the base currency, and the second called the quote currency or the counter currency. So in a pair of USD/JPY the US Dollar is the base currency, while the JPY is the quote currency.
Spot Forex is traded as one currency, in relation to a second currency. If a trader thinks the dollar will rise in relation to the Euro, s/he would sell the EUR/USD, which means s/he would sell the Euros in units of the US Dollars. The currency pairs are given a trade name, for example the EUR/USD is called a 'Euro', and the GBP/USD is called the 'Cable'. Investors should look at the possible rise of one currency's value against the other, so as to sell off the base currency.
To read more how to make money on autopilot, click here: Forex Autopilot Review. John Drummond works from home. He writes often on business, trading, and finances. There is more than one forex trading software. To read John Drummond's review of the 2 best ones, click here: Automatic Forex Trading Software.
Article Source: http://EzineArticles.com/?expert=John_J._Drummond
If you are planning to invest in Forex, it is vitally important that you are aware of the basics of the currency trading, and know how different the Forex markets are from stock markets, futures and other investment options. There is no governing body that controls and monitors Forex trading, and there is no guarantee that you will be paid your profits; investors trade with each other on a credit agreement system. The Forex market is one of the most volatile markets, always in a state of flux, which can be a good thing if you trade at the most opportune moments. In general, all online currency trading is done via Forex brokers, who employ trading tools, analytic modes, and real time data to facilitate currency trading for you. Choosing a good Forex broker is definitely an important parameter that you will have to consider before you jump on to the Forex bandwagon.
When it comes to currency trading, all Forex transactions are done in terms of currency pairs. Currency pairs, like USD/JPY, EUR/USD, etc, are indicative of the two currencies of US dollar and the Japanese Yen, and the Euro and the US dollar respectively. Essentially, you can either buy or sell one currency in terms of the other. The Exchange Rate is the ratio of one currency in the terms of another. This expresses the value of one currency against the value of the other. The first currency in this ratio is the base currency, and the second called the quote currency or the counter currency. So in a pair of USD/JPY the US Dollar is the base currency, while the JPY is the quote currency.
Spot Forex is traded as one currency, in relation to a second currency. If a trader thinks the dollar will rise in relation to the Euro, s/he would sell the EUR/USD, which means s/he would sell the Euros in units of the US Dollars. The currency pairs are given a trade name, for example the EUR/USD is called a 'Euro', and the GBP/USD is called the 'Cable'. Investors should look at the possible rise of one currency's value against the other, so as to sell off the base currency.
To read more how to make money on autopilot, click here: Forex Autopilot Review. John Drummond works from home. He writes often on business, trading, and finances. There is more than one forex trading software. To read John Drummond's review of the 2 best ones, click here: Automatic Forex Trading Software.
Article Source: http://EzineArticles.com/?expert=John_J._Drummond
Saturday, May 10, 2008
Work from Home Trading Forex by Karen Fairham
Ways of making money on the internet are abundant today and everyone is competing for that great product to market. Making money from home ranges from paid surveys to affiliate marketing and many more, but all these require a great deal of marketing on your part.
Forex Trading is a great way to work from home because you do not require having your own product, building a website or buying a domain name. one way of trading forex without so much stress is through the use of autopilot system which trades your account for you.
Trading forex simply means buying and selling currency pairs simultaneously, meaning that you buy one and sell the other at the same time. By using an autopilot system what you are doing is simply handing over control to mathematically designed complex algorithms which will analyze the market data and enter trades on your behalf. Most of the systems live up to their name by not requiring any sort of attention from you, although you must set them up properly the first time.
Trading forex using the autopilot system might require that you download a piece of software that runs on various famous trading platforms. Some of them also allow you to start trading with capital as little as $100 and in some cases even less than that. Because the forex market is open 24 hours majority of the forex autopilot system can run on your computer for 24 hours non stop but it might require that you keep your system on.
Deciding to start forex trading as a work at home opportunity using forex autopilot system, you must ensure that you set up the system properly from the start. Most of the programs take about 15-20 minutes to set up and once it is set up you are ready to start trading. Using a forex autopilot in most cases might require for you to either use the default trade settings or to select your trade setting. If you are knowledgeable in forex trading then it will be wise to select a setting that will suit your trading account, but if you do not have any previous trading knowledge you might be better off using the default setting with the recommended account value.
About the Author
For more information on how you can work at home trading forex using forex autopilot system visit: http://www.forexxautopilot.info
Forex Trading is a great way to work from home because you do not require having your own product, building a website or buying a domain name. one way of trading forex without so much stress is through the use of autopilot system which trades your account for you.
Trading forex simply means buying and selling currency pairs simultaneously, meaning that you buy one and sell the other at the same time. By using an autopilot system what you are doing is simply handing over control to mathematically designed complex algorithms which will analyze the market data and enter trades on your behalf. Most of the systems live up to their name by not requiring any sort of attention from you, although you must set them up properly the first time.
Trading forex using the autopilot system might require that you download a piece of software that runs on various famous trading platforms. Some of them also allow you to start trading with capital as little as $100 and in some cases even less than that. Because the forex market is open 24 hours majority of the forex autopilot system can run on your computer for 24 hours non stop but it might require that you keep your system on.
Deciding to start forex trading as a work at home opportunity using forex autopilot system, you must ensure that you set up the system properly from the start. Most of the programs take about 15-20 minutes to set up and once it is set up you are ready to start trading. Using a forex autopilot in most cases might require for you to either use the default trade settings or to select your trade setting. If you are knowledgeable in forex trading then it will be wise to select a setting that will suit your trading account, but if you do not have any previous trading knowledge you might be better off using the default setting with the recommended account value.
About the Author
For more information on how you can work at home trading forex using forex autopilot system visit: http://www.forexxautopilot.info
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