Chart Trend Patterns

Chitika   Maret 18, 2018

Chart Trend Patterns

Chart Patterns? It's Easy If You Do It Smart

Chart Patterns Your Way To Success

The discussion is how to recognize forex chart trend patterns and chart patterns your way to success and trade reversals. In this forex blog from forex friend loan, Chart trend patterns can be very helpful when trading forex trader in the forex market. They can help you get into forex near the bottom or the top.

Chart patterns are one of the most effective trading tools for a forex trader. They are pure price-action and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.

Why Forex Chart Patterns?

Chart patterns are naturally occurring patterns in the forex market that can indicate a big move either to the upside or the downside. They can be a good indicator for short-term movements.

So why are they so important? Why can they give you a great way to trade the forex market?

1. They offer you a target

Chart patterns normally have a target that you can shoot for. This means that when you enter the trade you know what you are planning to happen.

It can be hard to determine how much profit is enough. Where you are just being greedy, and where you still need to hang onto the trade.  Well, chart patterns have targets so you know exactly when to take your profits and when to run.

2. They Let You Cut Your Losses

In addition to letting you know exactly where you should be aiming for they also allow you to know when the trade is just not working out and it is better if you just cut your losses short.

If a pattern breaks out but fails to move higher and in fact, the price of the currency pairs goes back into the pattern it broke out of, that is a good sign that the pattern has failed and it is likely to start turning against you. So if it was me I would want to exit for a small loss before it became a big loss.

3. Lets you trade all Time Periods

If you want to be a day trader chart patterns can help you, if you want to hold your forex pairs for several days chart patterns can help and if you want to hold your forex pairs for many months chart patterns can help you.

The same principals apply so you only need to readjust your chart in order for you to trade your desired time frame.

LEARN TO TRADE BASICS FIRST BEFORE TRADE

Chart patterns are specific price formations on a chart that predict future price movements. As the technical analysis is based on the assumption that history repeats itself, popular chart patterns have shown that a specific price movement is following a particular formation of price (chart pattern) with high probability. Therefore, chart patterns are grouped into (1) Continuation Patterns – that signal a continuation of the underlying trend, and (2) Reversal Patterns – that signal reversal of the underlying trend.

So, what is a trend reversal pattern? They are simply patterns that are seen time and time again at the end of a trend. There are a number of different ones, Double Top/Bottom, Head and Shoulders, Rounding Top, Triple Top, Triple Bottom, Rounding Bottom and Cup & Handle, etc. But they tell you the same thing.

Part 1 Reversal Patterns

Double Top and Double Bottom
Double Top and Double Bottom are another reversal pattern, occurring during up- and downtrend, respectively. A double top, as the name suggests, has two swing highs at about the same, or slightly different price. It shows that buyers didn’t manage to push the price higher, and a trend reversal might be ahead. The trigger signal for opening a sell position is the break of the support line, with target price being the distance between the top and the support line of the formation. A double bottom pattern is the opposite, with two swing lows. Sellers didn’t have the power to move the price more downward. The trigger signal is the break of the resistance line, with the target price being the distance between the bottom and the resistance line.

Head and Shoulders
Head and Shoulders is a reversal chart pattern, that indicates the underlying trend is about to change. It consists of three swing highs, with the middle swing high being the highest (red lines on the chart). After the middle swing high, a lower high occurs which signals that buyers didn’t have enough strength to pull the price higher. The pattern looks like a head with a left and right shoulder (the three swing highs), and that’s how it got its name. The neckline is connecting the two shoulders, and a break-out below the neckline is considered a selling signal, with a price target being the distance from the top of the head to the neckline (green arrows). If the Head and Shoulders pattern occurs during a downtrend, the same inverse pattern (with three swing lows) is called an Inverse Head and Shoulders pattern.

Triple Top and Triple Bottom
Triple Top and Tripple Bottom formations are basically the same as Double Top and Double Bottom formations. Both are reversal patterns, with the difference that Triple Tops and Bottoms have three swing highs and swing lows, respectively. Trigger signals are again the break of support and resistance lines, with target prices being the distance between the top and support line (for Triple Tops), and bottom and resistance line (for Triple Bottoms).

Rounding Top
A Rounding Top pattern takes a little longer to form then the other mentioned chart patterns. It shows a gradual change of the sentiment from bullish to bearish. The price forms gradually a „rounded top“, as can be seen on the chart. The trigger for entering a short position is the break of the support line, with the price target equal the distance from the top to the support line.

Rounding Bottom
A Rounding Bottom is a Rounding Top flipped vertically. The price made a gradual change from the previous downtrend, indicated by a „rounded bottom“. The trigger signals are the same as by the Rounding Top, i.e. the break of the resistance line. Price target is the distance between the bottom and the resistance line.

Part 2 Continuation Chart Patterns
In this part, I will reveal the most popular continuation chart patterns. Continuation patterns are as important as reversal patterns. They are more suitable for a different style of trading- trend following. While reversal patterns are good for contrarian traders and swing traders, continuation patterns are considered to be great for finding a good entry point to follow the trend. The next few patterns will reveal a new angle to trading to you. I will start with the first one, which is the rectangle:

Rectangles
A rectangle is a continuation pattern, which means it confirms that the underlying trend should continue. It is divided into bullish and bearish rectangles, depending on the underlying trend. A bullish rectangle appears during an uptrend, when the price enters a congestion phase, during a sideways trading. The price will likely break out in the direction of the preceding trend. The trigger signal is the break of the upper line of the rectangle, with the price target being the height of the rectangle. For the bearish rectangle, the opposite rules apply. It forms during a prevailing downtrend when the price enters a congestion phase and trades sideways. This means the trend will most likely continue downwards, with the break of the lower rectangle line. The price target is again the height of the rectangle.

Wedges
A wedge is another continuation pattern. A bullish wedge forms during an uptrend, as the price trades inside converging trendlines. These converging trendlines imply that sellers are trying to push the price lower, but don’t have enough strength to win against the buyers. Ultimately, the buyers win and the price breaks through the upper trendline, indicating that the uptrend will resume. Target prices are calculated as the maximal height of the wedge, which is then projected to the point of break-out. A bearish wedge is similar to a bullish one, with the difference that it is appearing during downtrends, and the slope of the wedge is up. Converging trendlines are again showing that buyers interrupted the downtrend, trying to push prices higher. A break-out through the lower trendline indicates that sellers won the battle, and the downtrend is resuming. The target price is, like by bullish wedges, the maximal height of the wedge which is then projected to the point of break-out.

Flags
A flag is very similar to a wedge, with the difference that the trendlines which form the flag are parallel, and not converging. A flagpole is also a part of the flag pattern because the target price is measured in a different way than by other chart patterns. Flags can be bullish and bearish, with a bullish flag shown on the chart above. A bullish flag forms during an uptrend, with parallel trendlines above and below the price-action, which form a downslope. A break-out above confirms that the uptrend is resuming. A bearish flag is pretty much the same as a bullish flag, with the difference that it forms during downtrends and has an upslope. The price target is measured as the height of the flagpole (green arrow) to the top of the flag, which is then projected to the lowest point of a bullish flag (or highest point of a bearish flag).

TRADING FOREX WITH CANDLESTICK CHARTS

Triangles
Triangles can be ascending, descending and symmetrical. All three types of triangles look pretty much the same, with the difference that ascending triangles have a flat upper trendline, and descending triangles a flat lower trendline. The asymmetrical trendline is the most common, and forms during both up- and downtrend. It has converging trendlines, just like a wedge pattern, but the slope is neither pointing up or down. The breakout point of the lower trendline during downtrends confirms that the downtrend is resuming, while a breakout of the upper trendline during uptrends confirm the underlying uptrend. The target price is the height of the triangle, projected to the point of the breakout.

Cup and Handle
A Cup and Handle pattern is a Rounding Top pattern with an additional pullback (the handle). It is a continuation pattern which shows that in middle of an uptrend, the sellers tried to push the price lower, but the sentiment is again gradually changing from the sellers to the buyers. Additionally, a pullback occurs as the last attempt of the sellers to dominate. After a break-out of the resistance line (green dotted line), the target price is calculated as the height of the Cup & Handle pattern. An Inverse Cup & Handle pattern appears during downtrends, and the inverse rules of a regular Cup & Handle apply for it.

Every reversal pattern is said to have a target for which to shoot for. Most of these patterns will hit their target, but not all of the time. In fact, there are three different things that can happen when one of these patterns form.

Another thing that can happen is the forex market heads up once it breaks out. Then it goes and hits its target. Once it hits its target however the stock may actually crash. People see the forex as overvalued and a selloff occurs.

The third thing that can happen is the pattern can just fail. The forex doesn’t go up and actually breaks down lower.

All this uncertainty is why trend reversal trades need to cut their losses short and let their winners ride.

Chart patterns your way to success every trader should know.

This chart patterns your way to success might help you determine trend direction, but you should not rely solely on them. I have covered the major 10 chart patterns every trader should know. I believe that these are the most important ones, but if you feel like I have omitted an important one, please share.

Chart Trend Patterns

How To Catch Trend For Big Gains

Chitika   November 27, 2017

How To Catch Trend For Big Gains

How To Catch Trend For Big Gains In Forex

This forex blog from forex friend loan will look at the most important key to success in the forex market about how to catch trend for big gains in forex.

Recognizing positive trends is difficult in the forex market, getting in or out too late could mean your entire bankroll. You do not have to be the best of the best in order to make a profit, but you do need to get in at a low enough point and get out at a high enough point to make a profit. If you do not recognize the right forex trading strategy, you will wind up getting buried and be out of the game before you ever even got your feet wet.

If you take the proper precautions before trading you can help yourself a great deal. I personally know a number of traders who have been interested in getting into the forex market but don't want to stake the risk associated with it. I've been a regular forex trader for a few years and stand by my claims that there's only as much risk as you leave room for. If you take the proper precautions before trading you can help yourself a great deal.

A trend indicator is an important tool which I use daily in each of my forex campaigns. For those who are unaware, this is a program which you use in conjunction with your campaign and it essentially predicts where the market will go before it happens. If you read and use this information to its full potential, you can dominate sects of the market.

CATCHING BIG TREND CAN BE EASY WITH THE RIGHT FOREX INDICATOR

We shall look at how to trade the trend in forex.

It has happened to us all before. We open the charts to see what the market holds in store for the day, and all that beams back to us is a confusing maze of candlesticks with no apparent pattern. When confronted with such a chart, the dilemma for the trader is whether to go long, go short or stay out of the market altogether.

Now to the untrained eye, it may all look pretty confusing, but it actually is not. Opportunities can be found in the midst of strong trends by following the steps set out below.

The first step is usually to establish that the asset has some form of a defined trend. This can be detected on a long-term chart if we see the candlesticks that depict price movement making higher highs and higher lows (uptrend) or making lower highs and lower lows (downtrend).

There are basically two things that can happen when an asset is a trend:

a) It will keep on trending strongly and only allow the trader to buy on dips and to sell any rallies.
b) The trend may dissolve into a period of consolidation, after which it either continues in the pre-existing trend or experiences a reversal.

How To Trade A Strong Trend In Forex Market

A strong trend usually occurs when there is a very strong fundamental force driving the currency pair which lingers in the market for a long time. When there is a strong trend in the asset, the best bet for a trader who wants to capitalize on what is going on is to buy whenever there is a dip in the price of the currency pair, or sell whenever there is a brief rally. What does it mean to sell a rally and buy a dip?

1. Buying The Dips, Selling The Rallies
Buying a dip and selling a rally is simply a popular market lingo which means to buy low and sell high. The buying at lows is done in a currency pair that is in a strong uptrend while selling at highs is done when the asset is in a downtrend. The driving force behind buying dips and selling rallies is that the price of an asset never moves in a straight line, but sometimes huffs and puffs along the way as it marches to its new levels. Such “huffs and puffs” as we call it are simply periods of profit-taking when traders who got into trades following the trend at an early stage have made some money and want to cash out some or all of it. At other times, some market events may make a good proportion of traders to have a rethink, or to re-evaluate positions before continuing to hold on to them. Sometimes there is a little of trade exiting and the entrance of new traders or addition to existing positions by those who still believe there is more money to be made on the trend. All these accounts for the brief periods when there are pullbacks that present the opportunity to either buy on dips or sell on rallies.

Now is it wise to simply buy on dips and sell on rallies? No. The dips must be buyable and the rallies must be sellable, otherwise what the trader may think was a dip to be bought or a rally to be sold may turn into full-fledged trend reversals which will cause the trades to end on the losing side. It is, therefore, good practice to use confirmatory filters for such trades. One way I do this is to look for the following:

a) Where such a retracement dip or retracement rally exists. For this, I use the Fibonacci retracement tool. I also consult lower time frame charts to confirm that there is indeed a retracement going on. If you use the daily chart for this, there may be some confusion as candles may be too close together to allow for visualization of clear retracements. Sometimes, only a single candle will show this retracement action, but if the lower time frame chart is used, what may look like a small single candle movement may well be a 300 pip retracement! Do not forget that in a daily chart, one candle represents the price activity for a whole trading day.

b) If the time is right to buy a dip or sell a rally. This is best deciphered by using oscillators that show where the asset is oversold or overbought. My favorite here is the Stochastics oscillator set to 10,3,3 which shows oversold status at 25 or below, and overbought status at 75 and above.

It is quite easy. Apply the Fibo retracement tool from swing high to low (downtrend) or from the swing low to high (uptrend). Then apply the Stochs oscillator, and look for where the price hits a retracement level when the asset is oversold to buy the dip, or when the asset is overbought to sell the rally.

Buy the dip…
Apply the Stochs oscillator, and look for where the price hits a retracement level

Sell the rally…
Sell the rally

Remember to always buy the dip in an uptrend, and sell the rally in a downtrend. Do not get these mixed up.

2. Trading The Breakouts
As identified earlier, there will be periods when the asset goes into consolidation as if unsure of what to do next. It may stay in consolidation for some time, presenting yet more opportunities to either buy low or sell high. Once the currency pair has made up its mind to keep moving like a traveler who just completed a stopover en route to the final destination, it takes off once more in the direction of the initial trend. This is a breakout and is yet another way to trade a strong trend.

We can see the initial trend, followed by a consolidation period and then a breakout. Within the area of consolidation, we can see the areas where the trader can buy on dips and sell on rallies. It is not hard to see why this is the case: there are a well-defined support and resistance, something which is not obvious if you are trading an active trend where the dip buying and really selling points must be deciphered as described above. Furthermore, there are other chart patterns which are classical continuation patterns where the price consolidates within their boundaries and eventually breaks out. Such continuation patterns are the ascending/descending triangles, flags and pennants.

Here, we are more concerned with the breakout. In a breakout, the trader is actually buying into highs and selling into lows, a direct opposite of the dip and really trade described above. You could call it selling the dips and buying the rallies. But why would this be another trading strategy for trading the trend?

Breakouts are usually the result of market fundamentals driving the asset in the direction of the initial trend. It could be due to a high-impact news release which drives traders into mass buying or selling following a period of waiting (the consolidation). It could also be due to technical plays where more players in the market assume a buying posture than a selling one (ascending triangle, bullish flag, bullish pennant) or assume a selling posture than a buying one (descending triangle, bearish flag, bearish pennant).

Whatever the case, a breakout presents fantastic trade opportunities. We have written about this in some of our earlier posts. It is easy to confirm if an asset has truly broken out or merely performed a fakeout move. Refer to our article on breakout trading to refresh your memory about how to identify a true breakout (which is tradable) and a fakeout (which is a trap).

We can clearly see the breakout bullish candle which produced the key to trade entry.

Conclusion
In summary, You can get in a profitable trade at the ground floor, then get out right as it peaks before it comes back down. This is the secret to success and owning this market, it's been the same for years ever since people began trading, but now thanks to trend indicators it's a great deal more reliable to trade this way, in getting back to reducing the risk factor.

When you open your charts for the day, first determine what the trend for the asset is. Then assess its suitability for a breakout trade or for a buy on dip/sell on rally strategy. With a little practice on a demo, the charts will not faze you anymore and you can then use the knowledge to make profits for yourself and transfer knowledge to others for a fee if you like.

How To Catch Trend For Big Gains

How To Choose A Forex Broker

Chitika   November 06, 2017

How To Choose A Forex Broker

What To Look For In A Forex Broker

Read this forex blog from forex friend loan about how to choose a forex broker. The retail forex market is so competitive that just thinking about having to sift through all the available brokers can give you a major headache. The best place to find the top forex brokers is to search the internet. You can find many full-service brokerage firms with forex brokers providing you with reliable trading and advice. Do some research to compare firms and their success rates with other.

The best place to find the top forex brokers is to search the internet. You can find many full-service brokerage firms with forex brokers providing you with reliable trading and advice. Do some research to compare firms and their success rates with other.

Since forex brokers operate differently than other brokers their commissions are paid from the spread the offer you. A spread is measured in pips and is the difference between the values of one bid from another bid. Make sure you understand the terms and conditions around charges and fees you will pay your broker on these trades.

Your broker should give you advice on the best spread for your trade and be readily accessible to you, and have a direct reliable access to the market. They should be accredited so they are familiar with all the terms and rules established by the exchanges you are trading.

When trading forex it is important that your broker is familiar with and offer stop losses. If they do offer this then you need to understand the charges and fees associated with stop losses. Your broker should also provide you information and advice around slippage and how to avoid this in your trading.

If you are experiencing slippage with your trading then you would do well to find a different forex broker. Slippage is the difference in the price you ask for compared to the price you obtain. Your broker should minimize this risk by holding your trading funds in an established credible bank and not in the brokerage holding accounts.

It is best not to use a brokerage firm that holds your funds in their holding account. It is also wise to test your new broker. Start out with small sums of money and determine whether your return is viable before you begin trading larger amounts.

Forex Trader Tips To When Choosing A Forex Broker

Most forex brokers would make use of online tools to facilitate faster transactions among their clients. Top forex brokers are usually formed by a group of individuals who are all in the field of forex brokerage.
Choosing which forex broker to trade with can be a very overwhelming task especially if you don’t know what you should be looking for.

In this section, To help you find the best professionals out there who can help you with the trade, here are some important things you need to consider for when picking a forex broker.

1. Security
The first and foremost characteristic that a good broker must have is a high level of security. After all, you’re not going to hand over thousands of dollars to a person who simply claims he’s legit, right?

Fortunately, checking the credibility of a forex broker isn’t very hard. There are regulatory agencies all over the world that separate the trustworthy from the fraudulent.

Below is a list of countries with their corresponding regulatory bodies:

United States: National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
United Kingdom: Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)
Australia: Australian Securities and Investment Commission (ASIC)
Switzerland: Swiss Federal Banking Commission (SFBC)
Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
France: Autorité des Marchés Financiers (AMF)
Canada:  Autorité des Marchés Financiers (AMF)

Before even THINKING of putting your money in a broker, make sure that the broker is a member of the regulatory bodies mentioned above.

2. Transaction Costs
No matter what kind of currency trader you are, like it or not, you will always be subject to transaction costs.

Every single time you enter a trade, you will have to pay for either the spread or a commission so it is only natural to look for the most affordable and cheapest rates.
Sometimes you may need to sacrifice low transaction for a more reliable broker.

Make sure you know if you need tight spreads for your type of trading, and then review your available options. It’s all about finding the correct balance between security and low transaction costs.

3. Deposit and Withdrawal
Good FX brokers will allow you to deposit funds and withdraw your earnings hassle-free.

Brokers really have no reason to make it hard for you to withdraw your profits because the only reason they hold your funds is to facilitate trading.

Your broker only holds your money to make trading easier so there is no reason for you to have a hard time getting the profits you have earned. Your broker should make sure that the withdrawal process is speedy and smooth.

4. Trading Platform
In online forex trading, most trading activity happens through the brokers’ trading platform. This means that the trading platform of your broker must be user-friendly and stable.

When looking for a broker, always check what its trading platform has to offer.

Does it offer free news feed? How about easy-to-use technical and charting tools? Does it present you with all the information you will need to trade properly?

5. Execution
It is mandatory that your broker fills you at the best possible price for your orders.

Under normal market conditions (e.g. normal liquidity, no important news releases or surprise events), there really is no reason for your broker to not fill you at, or very close to, the market price you see when you click the “buy” or “sell” button.
For example, assuming you have a stable internet connection, if you click “buy” EUR/USD for 1.3000, you should get filled at that price or within micro-pips of it. The speed at which your orders get filled is very important, especially if you’re a scalper.

A few pips difference in price can make that much harder for you to win that trade.

6. Customer Service
Forex broker customer service isn't perfect, and therefore you must pick a broker that you could easily contact when problems arise.

The competence of brokers when dealing with an account or technical support issues is just as important as their performance on executing trades.

Brokers may be kind and helpful during the account opening process but have terrible “after sales” support.

7. Consultancy Services Offered
Top forex brokers would actually give you their consultancy services for free. This is like their premium offer if you choose to take hold of their services in the forex market. You should also inquire what specific type of consultancy will be given to you and if there are corresponding information collaterals that will be given in the process. After allFree Reprint Articles, it is also your broker's responsibility to update you on current forex market trends.

8. Reasonable Leverage
Leverage, in general, is what gives the Forex market a strong appeal to retail traders. However, the risks of trading with high leverage are just as great as the perks. Most serious brokers offer leverage ratios starting at 100:1 and going all the way up to 400:1. The greater the leverage, the greater the risk for the broker. If a broker offers a leverage that seems too high to you, this might be a good indication of the future of that broker or lack thereof.

-Stop Loss Protection: This is a feature that enables you to ensure that your losses do not exceed a certain amount. Most brokers offer this feature, but it is still important to verify with your broker before signing

To summarize, there are many things one must do before becoming a successful Forex trader, but one of the most important of all, if not the number one most crucial task, is finding a trustworthy professional broker. The above steps will assist you in doing just that.

How To Choose A Forex Broker

Winning Tactics For Make Profit From Forex Trading

Winning Tactics For Make Profit From Forex Trading

Chitika   April 14, 2017

Forex trading, as one of the leading markets worldwide, is a very lucrative opportunity and it can bring huge profits to traders. Forex trading can also be very risky, especially to the new inexperienced traders. That is why every trader should trade smart and develop his/her own trading strategy that works and follow it consistently.

First, learn as much as you can about forex before you even consider actual trading. Knowledge and experience cannot be substituted when it comes to trading forex. You can find a lot of forex trading resources and e-books online that can help you get started.

A very good way to understand forex trading better is to start trading with demo accounts. These demo accounts represent simulation of real trading where you trade with “virtual” money instead of real money. Demo accounts are completely risk free and excellent way to see if you are capable of making money with forex, or not. They are also very good for practicing forex trading and sharpening your skills as a forex trader.

Once you feel you are ready, choose forex broker and start real trading. Be also careful with broker selection. Brokers should be regulated by globally recognized institution and must be able to provide registration or license number. Also avoid trading with brokers that offer higher leverage than 100:1. Most brokers should offer help and training to their traders. Forex brokers should also offer ability to open demo accounts and trade with virtual money.

Keep in mind that trading with virtual money can be different from trading with real money and some traders that trade successfully with demo accounts don’t experience same success with real accounts.

Only Trade with Money You Can Afford to Lose. In the forex market, scared money is lost money. A trader who is placing trades with scared money may as well just give it to a charity. The reason this is the case is because when a trader is fearful, they will make trading decisions that reflect that. The trader who is playing with scared money will commit all types of psychological trading mistakes that will ensure that money is lost.

Learn to Trade on Higher Time Frames. Many traders have the misconception that the lower the time-frame chart, the more chances they have to make trades, and thus, make money. While it is true that traders will get more signals on lower-time-frame charts, it is also true the lower the time frame, the more false signals there are and the harder it becomes to make money.

Traders can begin to turn their trading around by taking just this point on alone! The higher-time-frame charts are where most trading should be done for beginning traders.

One of the best reasons the daily chart is a lot more powerful than a lower-time-frame chart such as the one-hour chart is because of the time that goes into making the signals. An example of this is an inside bar.

If we see an inside bar on the one-hour chart, we know that price could not break out of the previous candle's range for one hour. If, however, we see an inside bar on the daily chart, it means price has gone through all trading sessions including the UK and US sessions and has been unable to break out of the previous day's range.

One of the explanations why this happens lies in human psychology and emotions. When you trade with virtual money, you can’t really lose anything while in real accounts you can and this fear of loss emotion usually leads to bad decisions.

Emotions in forex are your enemy and you have to always stay cool. Develop your trading strategy and follow it no matter if some trades may feel right or wrong. Also trade with money you can afford to lose so you won’t have to bump your head against the wall if some trades go wrong. Remember, forex is not a way to get out of a debt and stay out of it if you are in desperate need for money. Forex trading requires patience and lack of emotions. In time, when you become experienced trader, you will know more what you can and what you can’t do and how much money you can earn.

How The Forex Market Works

How The Forex Market Works

Chitika   Januari 09, 2017

Foreign exchange trading, also known as Forex or FX, is a trading investment vehicle that is used by plenty of big banks, but how exactly do they make money trading currencies? Read on to find out.

Foreign exchange trading, also known as Forex or FX, is a trading investment vehicle that some of the world’s largest companies and banks from around the world invest in. The basics of the forex market are similar to that of the stock market, but on a much larger scale that’s open around the clock and involves international currencies.

During the day, currencies fluctuate hundreds of times, similar to the stock market. While the value of the dollar may be higher one day, the very next could be lower. Trading on the forex market usually requires you to pay close attention to your trader, especially if you’re investing huge amounts of money, since the markets are open twenty four hours a day.

The three main trading areas for Forex happen in Tokyo, New York and London. The results of any forex trading in one country could affect what happens in other countries as they take turns opening and closing with the time zones. Exchange rates are always fluctuating, and if you’re learning about the forex markets, you’ll want to know what the rates are on any given day before making your trades.

Although there are hundreds of currencies exchanged, the most heavily traded ones include (in no particular order) the Swiss franc, the Euro zone euro, the Australian dollar, the British pound sterling, the Japanese yen, and the United States dollar. When you trade between currencies, you always have to trade pairs. For example, USD and JPY is the exchange of U.S. dollars for Japanese Yen. You can also trade from the currency you’ve invested in to yet another currency to build up additional profits and interest on a daily basis.

If a person knows what is going to happen to the stock market before the general public knows, it’s known as insider trading – which is very illegal by the way. The Forex market differs because there is very little (if any) inside information in the forex trading markets. Within the Forex market, more emphasis is placed on the currency, the value of the economy of a country at that specific time.

Every currency that can be traded on the Forex markets has a three letter code associated with it, similar to a stock has a symbol.

Learn to Trade Forex Successful Using the 4 Types of Forex Trading Indicators

Learn to Trade Forex Successful Using the 4 Types of Forex Trading Indicators

Chitika   Oktober 23, 2016

If you are already an experienced forex trader, are you using the correct combinations of technical indicators to help you profit consistently in the forex market? If you are still not sure, we'll 

If you are already an experienced forex trader, are you using the correct combinations of technical indicators to help you profit consistently in the forex market? If you are still not sure, we'll discuss the following 4 different types of forex technical indicators below:

1. Trend Indicators - Also known as Directional Indicators. I have always reminded my students, 'Trend is your best friend and always trade in the direction of a trend'. A forex trend may be quite subjective to different traders as they may have different views on trendiness. So those trend indicators out there in the forex market can help traders detect the starting and ending of a trend. Some of the more popular trend following indicators includes MACD (Moving Average Convergence Divergence), MA (Moving Average), Parabolic SAR. Depending just on trend indicators is not enough, you may need Momentum Indicator(s) to enter and/or exit a trade.

2. Momentum indicator - Also known as Strength Indicators. It is described as the speed of a move in price over a period of time. They are oscillators which are able to indicate whether the forex market is in the overbought or oversold regions. If they have risen to the overbought zone, there is high possibility that the price will be going down, and if they have fallen to oversold zone, there is high possibility price will be going up. Some of the more popular oscillating indicators in forex trading include Stochastic, Momentum, RSI (Relative Strength Index), CCI (Commodity Channel Index).

3. Volatility indicators - Also known as Bands Indicators. Often, a change in volatility will lead to a change in price. Therefore, we can see how active the forex market is just by looking at the price ranges. You may want to trade when there is a dramatic change in price movements, which suggests that the market is actively trading forex. Some of the more popular Volatility Indicator includes BB (Bollinger Bands), ATR (Average True Range), Envelopes.

4. Volume indicator - They are used to show the volume of forex trading and are useful to confirm the direction of a trend, a reversal or a breakout. Price movements increase when the volume increases, low volume may warn of a reversal in a forex trade. If a currency pair trades from a narrow range and then breaks out on high volume, this is a strong signal and may suggest a breakout. Some of the more widely used Volume Indicator includes Demand Index, Chaikin Money Flow, Money Flow Index, Ease Of Movement, OBV (On Balance Volume).

I'm sure that after the above discussions, you should have a better idea of the different types of forex technical indicators. While they can greatly help you in technical analysis and make trading decisions, I want to stress that NO forex indicators is holy grail. The indicators are just a confirmation of history and a guide for the future. Most importantly, you need to know the right combination of the forex technical indicators to get you profitable consistently in the long haul. You can find a forex trading system which has a very good combination of indicators in my forex ebook which I give for FREE. Good trading to all.

Currency Day Trading Tips You Must Know

Currency Day Trading Tips You Must Know

Chitika   Agustus 29, 2016

I believe that proper training is essential if you are going to achieve success when forex trading. Without the appropriate training and expertise, your (a trader's) odds of succeeding are reduced dramatically. That is why I created this article to get you started on the right foot in training for success in forex trading. This article will cover the most important points you will need to understand before trading forex.

Each and every day there are hundreds of thousands of online investors that do their trading on the forex market. Most of them are making money, while some are not. Some of the investors that are making money are making a huge incomes by day trading. These people have studied the forex market and figured out a Trading System that they can use to generate a large amount of money in a short amount of time by doing forex trading. If you take the time to learn about this market, and study a few forex-trading tips, then you can find yourself making a lot of money as well.

When you do fx trading online what you are doing is trading currencies, and the first thing you need to do is learn everything you can about forex trading tips. In this way, you will be prepared for making your first trade online. You want to get into foreign exchange trading by studying it first so that you do not end up losing a lot of money. You want to make the most of your investments, and while it is expected for you to lose a little when you are first starting out, you do not want to lose a lot. Start out slowly while learning you should begin trading small amounts slowly minimizing losses.

Forex trading tips will help you learn how to trade like a professional. You need to learn about different currencies, and when you are trading, you have to understand the relationship between both of the currencies that you will be trading. Foreign exchange trading tips need to be used consistently so that you get used to them and are able to understand them perfectly. When you first start forex trading, it will seem complicated, but by practicing with hands-on training, you will learn all about it in no time.

More fx trading tips include working with a qualified broker that is registered and comes highly recommended, and using a system that has proven workability to see maximum results in the quickest amount of time. You should stick to one system, and if your broker is good, he will help you out with this.

You should always follow his advice, and not start taking all sorts of advice from different people because this will break the system down you will experience heavy losses. Use foreign exchange trading tips to get started, and continue to get more as you learn everything you can about trading. If you want more information, go to a website that can help you stay on top of any new forex developments as they happen.

In the meantime, start with these tips.

. Forex risk strategies

. Market volatility

. How much you are willing to lose.

. Risk management issues in the Forex Market

. Exiting your forex market trading at profit targets

. Control risk by capping losses

. Placing your Stop-Loss and Take-Profit

. Avoiding or reducing your risk when trading forex

Getting knowledgeable with those points will increase your chances for successful forex trading considerably!

Online Trading: Determine Your Risk Tolerance

Online Trading: Determine Your Risk Tolerance

Chitika   Desember 10, 2015

Each individual has a risk tolerance that should not be ignored. Any good  trader or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.

What is risk tolerance?
Risk tolerance is the degree of variability in investment returns that an investor is willing to withstand. Risk tolerance is an important component in investing.

Each individual has a risk tolerance that should not be ignored. Any good trader or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.

Determining one’s risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.

For instance, if you plan to retire in ten years, and you’ve not saved a single penny towards that end, you need to have a high risk tolerance – because you will need to do some aggressive – risky – investing in order to reach your financial goal. 

On the other side of the coin, if you are in your early twenties and you want to start investing for your retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.

Realize of course, that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot in determining your tolerance.

For instance, if you invested in the forex market and you watched the movement of that forex daily and saw that it was dropping slightly, what would you do?

Would you sell out or would you let your money ride? If you have a low tolerance for risk, you would want to sell out… if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money! 

Again, a good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.

Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.

Forex Trading - Should You Invest?

Forex Trading - Should You Invest?

Chitika   Desember 06, 2015

Forex trading is all about putting your money into other currencies, so you can gain the interest for the night, for time period or the difference in trading money all around. Forex trading does involve other assets along with money, but because you are investing in other countries and in other businesses that are dealing in other currencies the basis for the money you make or lose will be based on the trading of money.

What is investing in forex?
The foreign exchange market, also called the currency market or forex (FX), is the world's largest financial market, accounting for more than $4 trillion average traded value each day. ... Forex. The Forex market is a 24-hour cash (spot) market where currency pairs, such as the Euro/US dollar (EUR/USD) pair, are traded.

Constant trading is done in the forex markets as time zones will vary and the markets will open in one country while another is near closing. What happens in one market will have an effect on the other countries forex markets, but it is not always bad or good, sometimes the margins of trading are near each other. 

A forex market will be present when two countries are involved in trading, and when money is traded for goods, services or a combination of these things. Currency is the money that trades hands, from one to another. Often times, a bank is going to be the source of forex trading, as millions of dollars are traded daily. There is nearly two trillion dollars traded daily on the forex market. 

Should you get involved in forex trading? 
If you are already involved in the stock market, you have some idea of what forex trading really is all about. The stock market involves buying shares of a company, and you watch how that company does, waiting for a bigger return. In the forex markets, you are purchasing items or products, or goods, and you are paying money for them. As you do this, you are gaining or losing as the currency exchange differs daily from country to country. 

To better prepare you for the forex markets you can learn about trading and purchasing online using free 'game' like software. You will log on and create an account. Entering information about what you are interested in and what you want to do. The 'game' will allow you to make purchases and trades, involving different currencies, so you can then see first hand what a gain or loss will be like. As you continue on with this fake account you will see first hand how to make decisions based on what you know, which means you will have to read about the market changes or you will have to take a brokers information at value and play from there. If you, as an individual want to be involved in forex trading, you must get involved through broker, or a financial institution. Individuals are also known as spectators, even if you are investing money because the amount of money you are investing is minimal compared to the millions of dollars that are invested by governments and by banks at any given time. 

This does not mean you can't get involved.  Your broker or investment advisor will be able to tell you more about how you can be involved in forex trading. In the US, there are many regulations and laws in regards to who can handle forex trading for US citizens so if you are searching the internet for a broker, be sure you read the print, and the information about where the company is located and if it is legal for you to do business with that company.