USDCHF has formed a cycle top at 0.9928 level on 4-hour chart. Another fall towards the lower border of the channel is still possible later today, a clear break below the channel support will indicate that the upward movement from 0,9463 has completed, then deeper decline could be seen to 0.9600 zone. However, a break above 0.9928 will indicate that the uptrend from 0.9463 has resumed, then another rise to 1.0000 could be seen.
By Justin Thomas
The Euro benefits customers within the European Union but limits the power to act of the governments in the Eurozone
The adoption of the single European currency in late 1999 had a mixed effect on currency transfer operations and the overall economic performance of the European Union (EU). It lowered some costs but spurred doubts about the ability of national governments to control financial markets in times of crisis. Doubts notwithstanding, the euro has already become a major world reserve currency and is bound to grow even stronger if it manages to replace the U.S. dollar as the oil trading currency.
Speaking about currency transfer operations within the EU, one must admit that the introduction of the single currency benefited individual and business clients because it brought the costs of currency conversion across the continent to naught, thus downsizing the cost of currency transfers. However, the adoption of the euro in the Eurozone resulted in a single monetary policy determined by the European Central Bank, which left little room for national governments to manoeuvre in times of trouble. Moreover, different levels of inflation and unemployment levels within the Eurozone and the EU as a whole were among the factors that have recently been fanning the fire of financial troubles in Europe.
Obviously, euro adoption was a factor to strengthen European financial markets in terms of liquidity because businesses and governments have more sources of funding and are not limited by local currency barriers to borrowing money and gave fresh start to European financial markets.
After its introduction in late 1999 the euro started to depreciate against the dollar and following a series of volatile moves in May 2009 it slid to an exchange rate tantamount to its initial trading value. Meanwhile, individual and institutional brokers around the world managed to heavily profit on these currency fluctuations, and transfers entailing conversion from one currency to another was a matter of survival for some companies. Later, the euro continued to gain against the U.S. currency but the recent recovery of the American economy helped the dollar restore its positions and now it is evident that it finally lost its leading role as the world”??s reserve currency.
Many countries already switched to the euro as a reserve currency and even the oil-rich countries of OPEC are considering options to start trading oil in euro. Such a move will most likely initially shake the financial markets because many currency transfers denominated so far in U.S. dollars will be lastingly switching to the euro.
Euro adoption has its disadvantages, too. The major one is that at present national governments within the Eurozone can only rely on fiscal policy and public investment to adjust economic policy to the needs of specific regions and countries. In times of financial crisis and dangerously high budget deficits across Europe, countries like the United Kingdom, which is not a member of the Eurozone, have more room to act and manipulate the exchange rate of the pound to achieve better economic results. The Bank of England can take measures to devalue the British currency and ease access to cheaper credits, while countries like Greece, which belongs to the Eurozone, is not allowed to do so. On the other hand, positive effects outweigh negatives and most financial analysts are of opinion that the euro has a bright future ahead of it.
This week is expected to be heavy with economic news and traders will want to stay tuned with the rumblings taking place in the US and Japan over further currency interventions. Early this morning, the currencies from both countries experienced a rapid spike which quickly receded.
Some speculations have hinted at an intervention by the Bank of Japan (BOJ), but as of this morning no confirmations have been given. Traders will definitely want to keep an eye on what transpired during the Asian market hours, but may also wish to follow today’s leading events.
9:30 GMT: GBP – Manufacturing PMI
Britain’s Manufacturing Purchasing Manager’s Index (PMI) is a leading indicator of economic health based on business conditions as seen from the perspective of purchasing managers. If this figure comes in line with expectations, or higher, the pound may experience some modest bullishness, continuing with its latest trend.
14:00 GMT: USD – ISM Manufacturing PMI
Similar to Britain’s PMI figures, the US Institute of Supply Management (ISM) will be surveying American purchasing managers to gauge business conditions in the US. As with the British PMI data, if the American counterpart’s figures come in line or above expectations, the USD may pare some of its recent losses, but long term pressure will likely remain constant without a significant difference.
By Andrew Daigle – The recent boom in activity on the forex market is attributed to the large sums of money made by astute traders, very quickly. Fast money often attracts plenty of erratic forex traders, and wreaks havoc on the market until they’ve lost their investment. If you decide that you want to trade in the foreign exchange market, make it your business to learn the information that will help you make the most profitable decisions. There are forex trading strategies that you can use, and forex indicators that will assist you, but nothing is a substitute for good old-fashioned knowledge.
Above all else, you will need to be familiar with the different currencies with which you’ll be dealing. There are too many currencies being traded on the foreign exchange market for you to simply click on one and hope for the best. If you’re just starting out trading foreign currency, it’s best to stick with popular currencies such as the U.S. dollar (USD), the euro (EUR), Great British pound (GBP), Japanese Yen (JPY), or the Swiss Franc (CHF). Exotic currencies from less popular countries are also an option, but you’ll have to improve your education to become knowledgeable about them because they are traded in very small volume and offer few profits.
In addition to familiarizing yourself with the currency, you need to understand more about their pairings. On the currency exchange market you will be trading one currency for another, so it’s imperative to know information such as the conversion rates from some of the most popular pairings. Some of the most popular pairings are; USD/EUR, GBP/USD, and EUR/JPY. When you have a better understanding of the intricacies of the foreign exchange market, you will find trading foreign currency much easier.
Next, a successful trader is familiar with other factors that may have an impact on how a particular currency will do on the market. There are two important types of analysis that every currency trader must do before making a decision; fundamental analysis and technical analysis.
Before you make any investment into the foreign currency exchange, you’ll want to continue your forex education at the library or in the newspaper. Knowing the environmental factors affecting a particular currency can greatly impact how much and if you invest in a specific currency. Events such as political assassinations, natural disasters, and economic meltdowns can all affect how markets are impacted. These events will also affect how long a trend will last, making it vital that you keep up with word events as you trade on the currency market.
Just as important as the fundamental factors are to your forex education, so too are the technical factors. You will use forex indicators and trendlines to study past trends and determine how they are likely to move in the future. When combined with the fundamental factors, the technical analysis of the foreign exchange market can greatly improve the accuracy of any forex trading strategy. The technical analysis will be confirmed by other forex indicators, and combined with an understanding of the fundamentals, will give you the clearest possible picture of where the market is heading. When you know your business through and through, trading foreign currency becomes a fun and easy way to make money.
Andrew Daigle owns many successful websites including ForexBoost , a free Forex educational site to learn Forex trading strategies and partners with FX Instructor for live forex trading sessions and professional educational services.
By Pro Indicators
An expert advisor (EA) main function is to buy or sell currencies at a signal point in time based on a set of forex trading signals generated by forex indicators. This main problem that it overcomes is related to psychological behavior of traders. The program is a kind of “assistant” which traders automatically without your interference. It do not have indicators present, instead it is based on dependencies. These psychological behaviors can be harmful for the traders and that is what these systems try to help avoid.
The Expert Advisor does not consider any human feeling or emotions such as fear, greed, and other related things while making decisions on trade and that is where traders find it most useful. Expert advisor is built using MQL4 language. The way these program help traders is that it does all the work that is tiresome and repetitive and does the trading automatically without the interference of the trader. All the trader has to do is keep the program switched on.
Most of the traders use the metatrader4 platform and that is why this program is specifically built to trade on metatrader4 platform. They can perform all there activities on it without any financial cost. Forex traders have realized that the best way to increase their investment is by the use of platforms such as metatrader4. The foreign exchange market and equity market trading is risky and if you don’t have an automated system and tools to work with, then you are bound to loose. There are not many traders in the market who have developed their own investment strategies. The changes in market are taking place rapidly and if you are not making the use of automated systems, then you are bound to find it difficult.
Individuals based on their own strategies and goals can use Metatrader EA. A trader can increase its revenue by doing trading on metatrader4 platform through the use of metatrader ea. Also metatrader EA is designed differently for different situations. Some are designed to stay in the market for long intervals of time and some for short period of time. Technical indicators and trading indicators are designed by metatrader ea to make best trading decisions. One major benefit that this program provides is that it automatically opens and closes trades based on the market conditions. It takes into account the fluctuations that are taking place in the market with respect to price before automatically doing the required work.
Metatrader EA has different purposes and they are made for different kinds of work. For example News Expert Advisor is used specifically to take full advantage of large prices shifts and also the news events that occur during the night. However, in order to make correct decision from the use of Metatrader EA you need to compare strategy tester reports. Strategy tester report or advisor back test is the test that metatrader ea does on historical data. Historical data modeling is used for the entire tests that are done through with Metatrader 4 built-in strategy tester.
ProIndicators.com is providing high precision TradeStation. Metatrader EA has different purposes and they are made for different kinds of work.
By Daniel Shaw
There are plenty of different Forex books and ebooks online that teach new traders how to trade using the levels of Fibonacci, Elliot Wave, etc. Of course these materials are very good for any new Singapore trader, but the problem is that the authors of these books give 100% guarantee that if you listen to them, you will make profit.
Alas, the reality is not so simple and to justify himself in the loss, a trader begins frantically recall all his steps and decisions in order to make sure there is a reason of his mistake and loss. Someone may has forgotten to take into account a very important indicator while opening a trading positions, another one had miscalculated the Fibonacci levels – and now such traders are making a sad conclusion: “No, the currency market is not for me… And of course everyone who thinks this way is wrong, as Forex has many strategies and some of them are very simple like trading with reverse orders that can give you more than 500 pips monthly.
The advantage of working with a reverse orders strategy is that you have a good chance to catch the market disregarding of its direction. I believe many of you have faced a problem when you predict the direction of the market and open a trading positions. But the market goes against you and your position is closed by stop loss order with a loss. And after that the market changes and goes your direction again. How disappointed we are when it happens.
In order to reduce the chances of losses in such situation a strategy of reverse orders was invented. It is a very simple trading strategy and every newbie trader may apply it. What you need to do is when you open a position on Buy instead of stop-loss level after 25 points you open a position for Sell. The same you do for a position for Sell, you secure it with a position for Buy. The point is that you don’t use a stop loss and if the market goes against you, you will still remain in the market.
By using this strategy you have a chance to correct your trading position any time disregarding of the market’s direction. The correction works the following way. If one of the orders shows the profit of 10 points you should open another order in this direction. This strategy will allow you to minimize the losses. When you have three orders (two sell and one buy) where in overall you are in profit you can start closing the profitable positions if you see that the market turns and takes another direction. Trading this way lets you open many positions and you can also use high leverage for it.
Remember that working on Forex with the strategy of reverse orders you need to open Buy positions when the trend is at the lower level and Sell when it is on the top. We wish you good luck trading with such a simple and effective strategy.
Daniel Shaw has many years of experience in online Forex trading. Visit his site Trading in Singapore to learn more about Singapore Trading.
By Taro Hideyoshi
I wrote about trading volume and how to use it in trading before. Here, we will extend to the application of volume as an indicator in trading. Let’s see how we apply volume as a technical indicator.
Volume plays an important role as an indicator traders use to indicate price direction. Interpretation of volume signals will be one of the handiest tools in your trading toolbox.
Volume is like a form of energy, securities respond to energy. Traders’ energies translate into volume which is the number of shares traded in a specific period of time.
Typically, you can spot representation of trading volume and spikes that run along the bottom of charts we are observing. If you are looking at a daily candlestick chart, a spike below represents the total number of shares trading during that day.
As I mentioned in the beginning, volume is an important indicator, the following are general approaches to read trading signals from the volume.
First, look for high volume on price breakout. When price break its resistance and go up (or break its support and go down). As the price continues their direction, you expect for strong volume. When the price tops off and pullback, you have to make sure that the pullback volume is relatively low. If the pullback volume is strong, it is better to take profit.
Second, scan charts to find the securities that are building their bases by locating the security that increasing in volume while its price continues to trade in the same tight and price range as before. This pattern indicates a high possibility to that institutional investors are quietly accumulating. You have options to wait for the price breaks out or enter a trade while securities are still in the base. If you choose the second, you have to set your stop loss extremely tight to minimize risk.
The third is to use volume and chart pattern together. For example, after 2-3 days up, if today’s price makes a new recent high but the candlesticks form as a doji, star, or other reversal patterns. It’s good time to take profits.
Finally, if climatic volume designated by a huge volume spikes near the end of extended trend, it often indicates that the trend might soon slow or end. Conversely, just because a climatic volume signals a trend reversal, do not take this as a signal to start bottom fishing. The patterns sometimes take a few days or occasionally, misfire.
Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.
If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.
By Andrew Daigle
Forex trading is fast becoming the top method of making money on the internet and plenty of average people are trying their hand at becoming millionaires. For most people, forex trading is a much needed source of a second income, to supplement their current single income from their main profession. However, the true potential to become very wealthy is not tapped by most such investors and they earn mere pennies on the dollar, compared with what they could be earning. While everyone has their own forex currency trading system, this will be in proportion to your risk appetite and will only bring the returns that you strive for.
While there are many ways to invest your money in currency, most people play safe by either investing small amounts or spreading their money very thin across the various currencies they are invested in. This makes for a very small return but practically no risk potential, since the bases are mostly covered so that if one currency depreciates, the other appreciates and the losses are minimal. However, clearly this will never make the forex trader a millionaire.
Life is short, and most forex trading millionaires made their money fast off the forex market. These individuals are generally highly leveraged, because they know that money makes money, and the more money they invest, the greater the risk and the greater the potential reward. Also, betting on unlikely currencies is risky and can have a huge potential upside.
So what exactly will leveraging yourself mean for you? You can start with a portfolio, meaning that you put your investment towards buying a part of the forex trading. Then, you buy shares of the forex trading the world over, depending on what countries appeal to you. The prices of these shares may rise slowly to increase your portfolio, and you are still playing safe. Once your total portfolio value goes over the 5000 dollar mark, you as a forex trader can apply for something known as a console, which now puts you in the position to act as an agent for others. At this point, you can process exchanges for small investors who want to buy and sell currencies through you. For each transaction processed, you will earn a fee of 6% and this can roll into your portfolio, increasing further, making your status as a forex trader more credible.
Other than an unlikely event such as a war or natural calamity, nothing on the forex market will give you a sudden unexpected windfall. Do not expect to become a millionaire over night. You will have to plan and strategize, and most importantly, leverage yourself, to truly make a lot of money. The forex market will generally move like the stock market, in small digits and only when you have plenty of money spread out on the forex market do you stand a chance of making a great deal of profit.
While this type of trading is not for the faint hearted, experience in forex trading will bring some confidence to your forex trading strategy, especially as you learn which systems work for you and which don’t. As your level of confidence grows, the process will seem much less daunting. However, it is great to be cautious and be sure of any risks you take. That said, do remember that millionaires are always highly leveraged in the forex market – take calculated risks.
About The Author
Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost at http://www.ForexBoost.com , a free forex training resource and http://www.CashCurve.com for learning about many different online business opportunities.
By Danielle Franklin
After months of practice and learning, every struggling novice trader begins to wonder whether the decision to enter forex trading was actually a big mistake. Why do other traders make money and I don’t? Do these successful individuals possess any special qualities? Can I improve myself in order to finally start making money? In order to become profitable in forex, you need to not only learn and practice, but work hard in improving yourself.
Below are the major characteristics needed in order to become successful. If you already possess the essential traits – good for you! Just keep practicing and soon you will see the cash flow. If you don’t have the necessary traits yet – don’t give up. Start working on yourself. It is possible to craft yourself into a trader!
So, here goes:
1. Don’t Copy – Copying others is absolutely useless in forex. Every trader is unique and his/her strategies fit their personality and goals. You cannot rely on anyone else but yourself.
2. Be Disciplined – Stick to the plan, even when your self-esteem is over the top. Use your experience and knowledge of the market to make the right decisions, instead of irrational i-can-make-a-million-right-now conclusions, without skipping any important steps in your trading plan.
3. Accept Losses with Grace – Losses are not necessary a bad thing – write down the unfortunate experience in your trading journal, analyze why this happened and voila! You have received one of the valuable lessons by learning from your own mistakes. Practice makes perfect – so don’t freak out over the losses. Instead, learn from it and move on. The main difference between a successful trader and a novice beginner is in accepting the loss. The sooner you learn to lose, the faster you earn money!
4. Be Patient and Reasonable – Know exactly why and when to enter a trade. And here is a great tip – say all those reasons out loud. It is a great way to give a last glance before you make a final click. Don’t expect the profitable opportunities to pop up all day long. Sometimes, it is wise to give it a break and start again the next day with a clear head. Don’t worry about missing out either, because forex market is always on the move. Not catching the big wave doesn’t mean you will be left out without any profits for ages!
5. Control Your Money – Forex is not just about making more and more money, but also keeping what you have already made! You need to have very strict money management rules in order to keep your losses at minimum: * Never trade what you cannot lose * Determine your target gains and losses before opening a position * Use stop/loss orders to minimize the risks
6. Keep It Simple – You don’t need to use all available forex indicators and create a one of a kind Michelangelo-like-masterpiece trading strategy. Keep trading ideas to the minimum – know when to get in and out of the trades and stay away from sentences such as “Let’s stay a bit longer and see what happens”! * Try trading daily during the same hours in order to get full grasp of currency behavior, liquidity and volatility changes. * Don’t trade on Sundays, holidays and opening/closing of the specific market. * Stay informed – read the news, follow the economic calendar, keep your eyes on unemployment rates, decisions on interest rates, gross domestic products, industrial production price, index consumptions, retail sales etc. * Follow the trend – don’t try to find something that there isn’t, just follow the rend and identify the point of inversion.
7. Develop Strategies – Use free demo accounts to develop your own strategy and a good trading plan. List out several possibilities (plan a, plan b, plan c) – and always have a clear instructions from getting out of troubles. The key to success in forex is to know how to behave in different situations, instead of trying hard to predict what market will bring us today.
8. Control Yourself! – Here is the tough part – the psychological issues related to trading. It is important to stay as cold-blooded as possible by controlling your emotions. Most importantly, don’t blame the market – blame only yourself! Are your losses still greater than profits? Stop trading right now and start analyzing your strategy. There is a flow somewhere and it is up to you to fix it.
Forex Broker Reviews – Forex brokers reviews and rating, comprehensive forex tutorials and articles, latest forex news and forex blog.
By Andrew Daigle – Trading in the forex market tends to be a little confusing when you’re first starting, which is why it’s vital to your success as a trader to understand technical indicators and use them within the framework of your forex trading strategy. Forex indicators assist traders in predicting the direction in which the currency market will travel. Following the indicators will give any forex trader the information they need to work their forex trading strategy. Because of its popularity with forex traders, we will begin with the moving average convergence/divergence (MACD) indicator.
The WHAT? – The MACD indicator sounds complicated so it must be, right? Wrong! The MACD indicator is one of the easiest trading indicators to analyze because it allows you to quickly identify and exploit a short-term trend. Composed of two colored lines, generally red and blue, the MACD forex indicator tells you if a currency is experiencing an up trend or a down trend. The first line, the MACD line is the total difference between two exponential moving averages, commonly referred to as EMAs, whereas the second line is the signal line. The signal line (blue) is plotted on top of the MACD line (red) to show you when to buy or sell.
Interpreting MACD – Now that you have a basic understanding of the MACD forex trading indicator, we will discuss two of the most common techniques used to make a forex technical analysis. First, are crossovers, which are indicators based on when the signal line and the MACD line “crossover” one another. When the MACD line crosses below the signal line that’s a technical indicator that you should sell or go short. If however, the MACD cross above the signal line, that’s a sign that it’s a good time to buy.
Next is the divergence technique, which generally signals to traders that a current trend will end soon. You will notice that the price is moving in the opposite direction of the MACD when a trend is coming to an end. With this technique you must also be on the lookout for positive or negative divergence. Positive divergence happens when the foreign exchange rate makes a new low, but the MACD begins to clime. Negative divergence occurs when the currency exchange rate makes a new high, yet the MACD falls and often closes lower than the previous day’s high.
The MACD is the most popular forex technical indicator because its clear signals are a simple indicator to buy or sell. Additionally this indicator eliminates the need to guess which way the trends are going, because the crossover and divergence techniques lets traders know they are trading in the direction of the trends. If you’ve chosen to use a short term forex trading strategy, you will find the MACD indicator especially useful due to its reliability when tracking short term trends in the market.
When using the MACD indicator, traders should be aware of whipsaw patterns that occur in the forex market. Whipsaw patterns involve a foreign exchange rate heading in one direction, and then quickly moving in the opposite direction. These patterns can cause the foreign exchange rate to fall or surge quickly relative to its position prior to the whipsaw.
Andrew Daigle owns many successful websites including http://www.ForexBoost.com , a free Forex educational site to learn Forex trading strategies and partners with http://www.FX-Instructor.com for live forex trading sessions and professional educational services.
