Month: April 2011

By David Adams

It’s not unusual to see advertisements for trading education and see a wall of monitors with dozens of indicators and charts adorning the background. This may be understandable if the individual is a professional trader and following half a dozen different markets. This is generally not the case though; it’s been my experience that many retail traders may have up to six monitors with a battery of a dozen indicators following every imaginable market variable. My problem with this approach is a simple one; most of the information you really need is on the price action portion of the chart.

In my trading my primary focus is on the chart itself, support and resistance on the chart, and the chart price action. My primary indicator is always volume, and volume analysis. So I think it would be safe to say that I am not a system trader, and with good reason. The stock market and the futures markets are ever evolving and go through a variety of price patterns. Sometimes the price patterns are well-suited for systems type trading, and other times systems trading is woefully inadequate. By observing several different factors on the chart I am trading I can make some determinations about how I plan to trade during that particular trading session. Some of the factors I consider are:

• Is the market in a consolidation mode, or a channel?
• Are the price breakouts successful? Or do the price breakouts fail?
• Is the price action confined solely to the channel? Or is the price action outside the channel?
• Is the market trending in a straight line?
• Is the market trending with periodic retracements?

By observing the price movement on my daily chart I can make determinations about all these questions. Further, during the morning session the market may exhibit certain price behaviors and then in the afternoon session exhibit different price behaviors. As a trader, it is essential that you adjust your thinking as the market changes in personality. The characteristics I enumerated above are but a few of the many nuances the market displays throughout the course of the year, and it is my opinion that the best system is to observe market behavior and gauge your trading activity accordingly.

I am particularly fond of trading breakouts and breakdowns in the market because they are often very profitable and made indicate the beginning of a longer-term trend, which I can trade very effectively. However, there are many days that the market will begin a breakout or breakdown and then fail. After a couple of these failed breakouts, I can come to the conclusion that trading in a style that is meant to take advantage of breakouts and breakdowns is not going to be in any effective strategy. Further, I will also conclude that most of the price action is going to be within a defined range and can utilize a set of strategies that best utilizes techniques for range bound trading.

Indicators use information generated through past price action. Some of the time periods examined may be as short as five one minute periods, or as long as 200 ten minute periods. The key component and most important concept when utilizing indicators is that they lag the market. There are some indicators that claim to be forward-looking in nature, or leading indicators. I have used these indicators extensively and found them to be of limited value as leading indicators. After all, they use historical information in their algorithms and invariably lag the market, no matter how they are billed.

My point is a simple one; your best information will come from the chart and price action itself and indicators are an excellent way to reinforce the ideas or formulations that you have developed about the market behavior. On the other hand, straight indicator trading is a tough way to make a living and I have watched many traders fail because they relied on indicators as primary information sources and instead of the chart in front of them.

In summary, I have pointed out that the market is a creature of many moods and your intellectual abilities are the most effective method to ascertain the day the behavior of both the stock and futures markets. I have discouraged traders from using indicators as a primary tool to initiate trades or identified trade setups; instead, I have presented the idea that indicators are an excellent way to reinforce market action and trade setups you glean from chart reading.

About the Author

Real Live Trading Doesn’t Lie. Spend several days in my trading room and see if you can benefit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here

By David Adams

Forex trading has gained a large following in recent years as a popular day trading vehicle. It’s not unusual to observe a barrage of Forex firms touting their services on just about any financial news publication. As a longtime institutional stock trader and commodities trader I am often shocked at some of the outrageous claims and advertising techniques this industry utilizes. This type of advertising and verbiage is simply not allowed by the SEC or the CFTC. The Forex industry, on the other hand, is lightly regulated and offers no centralized exchanges like the securities industry in the United States and has virtually no regulation on advertising technique and claims.

From the onset I want to point out that the United States stock and futures exchanges have their share of hucksters and fraudulent activity. You need only peruse the current SEC and CFTC enforcement actions to get an idea of the amount of illegal activities that occur in our highly regulated exchange based trading structure.

On the other hand, the lightly regulated Forex industry has been in recent years the target of both the SEC and the CFTC, with good reason. Exchange traded securities provide potential traders with a high level of transparency and information in regards to the equity product or series they intend to trade. Variables like a leverage, registration of broker-dealers, and capital adequacy requirements are just a few necessary requirements that would go a long way toward establishing much-needed transparency in the Forex industry. Further, and from a personal standpoint, I believe a centralized exchange for Forex trading would be optimal for the industry.

By means of comparison, the futures industry and stock trading exchanges have rigid leverage, registration and capital adequacy requirements. In addition, e-mini trading is all conducted through well-regulated and orderly exchanges that feature reliable data feeds that provide real-time information on volume, trading entities, and pricing to all participants. This transparency in the futures industry is a sharp contrast to the murky Forex industry which is dominated by individual banking interests. Quite simply, there is a shocking lack of transparency in the Forex industry. In an orderly market, all participants ought to have access to accurate real-time information and standardized trading contracts.

Another concern of the SEC and CFTC is the leverage requirements in the Forex industry. The current United States industry standard for leverage and a Forex industry is 100:1. The most recent regulation proposes lowering the leverage standard to 10:1, which is a departure from the current leverage standard that is a quantum leap in scope. For a variety of reasons, Forex traders have been, by and large, fiercely critical of these regulations. Since the CFTC can only regulate firms in the United States, offshore firms would still be able to offer the absurdly high leverage requirements the Forex industry has enjoyed. The obvious result of this new regulation would be a mass migration of Forex traders from United States based firms to offshore firms that would not fall under the proposed US Forex reforms. There is, however, regulation under consideration that is very similar to offshore betting operations; in short, it is unlawful for US citizens to patronize offshore betting firms in order to circumvent current US law regarding betting. The proposed regulation for patronizing offshore Forex trading operations is very similar to the limitations of US citizens circumventing United States Forex regulation. In short, Forex traders based in the United States would be required to trade through domestic Forex trading operations.

In short, I don’t trade Forex because of the lack of transparency and a centralized exchange. In my opinion, there is simply too much potential for manipulation of bid/ask quotes, front running, and outright fraud. Currently the Forex industry leads security related scams by a wide margin, even though it is a small portion of the total day trading aggregate.

To summarize, the Forex industry has great potential to become a legitimate and profitable day trading option. In my opinion, the industry must institute strict regulation before its legitimacy can be truly realized. I think that in time all of the above addressed the problems will be rectified, but until there is true transparency in the Forex industry I believe I will abstain from participating. We have identified problems like over leverage, lack of registration, and the absence of a centralized exchange as problem areas in the Forex industry. Until these problems are addressed, I don’t think the Forex industry will reach its full potential.

About the Author

Real Live Trading Doesn’t Lie. Spend several days in my trading room and see if you can benefit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here

By Cedric Welsch

The potential of earning money on forex is huge and there are many ways to be successful, but only those who are patient enough to learn more about the trading systems and who follow simple principles and rules will succeed. The following are five essential tips that any forex trading beginner should take into consideration:

1) Learn the basics before starting to trade. Forex is like any other career or job where you have to learn a lot and acquire experience. The more you know about the system and the market the better. Find a good, trustworthy source of information and follow it. Do not assume you know everything. There is always something new you can find out that can help you. First, learn what the basics pairs are, what a spread is, what leverage is and what a PIP is. Until you know the basics and how to read a chart, you have no business trading on the market.

2) Be careful what money you invest. Preferably, it should be the capital you do not need for day-to-day living. This is only advisable because you will feel more relaxed about using them as leverage to make even more money.

3) Use a demo account. You need practice, lots of it. You can only learn to take proper actions if you actually trade and it is much easier to learn when your money is not involved, at least in the beginning. New trading systems should be tested only in the demo account at least for a couple of days.

4) Choose a good broker. Find one that suits your needs. The broker should be able to give you advice and react fast. It is very important to have a good relationship with your broker, especially in the beginning.

5) Take it seriously. Treat it like a business and start trading with a single currency pair until you are familiar with it. Maybe the best pair to start with is EUR/USD. After you feel comfortable with it, you can start trading with other pairs too.

Every forex trading beginner has many information providers to choose from. While it is advisable to check multiple opinions and trading systems, choosing one system and sticking with it for a while almost always proves to be the right approach. You have to remember that success in this field is directly related to how much passion and time you put into it.

About the Author

Important currency news trading releases are always included in traders’ daily menu.
Exert effort in discovering forex broker review quality opinions to keep you safe.

By Cedric Welsch

Forex trading for beginners will teach investors the basics of the Forex market and will give investors the tools needed for practice and improvement. Trading in the Forex market is much different than trading on the stock market. Even a seasoned NASDAQ professional can benefit from referencing a beginners strategy guide just to learn the basics of the Foreign Exchange market. If you have been told that making money in the Foreign Exchange platform is simple and risk-free, think again. Just like any type of financial investment, there are risks associated with the market and you are not guaranteed income. If you build your knowledge and learn how to trade Forex than your chances for success are much higher.

Rookie currency investors should start off by researching what exactly Forex is. The Foreign Exchange market involves the trade of currency and is technically the oldest and largest financial trade platform in the world. During times of economic crisis investors turn to Forex to hedge against the risk of investing in stocks and bonds. Recognized as the most liquid market in existence, the Forex market averages a daily turnover of approximately 1.9 trillion dollars. While these figures may seem enticing it is important to have realistic expectations. Where there are gains there are also losses.

When you trade currencies you are technically buying one currency and trading another. Because currencies are very liquid trades can be made any time of the day or any day of the week. Currencies are always traded in pairs. During uncertain times investors choose to invest in currency rather than stocks because currencies are constantly turning over. The reason for the fluctuating values of currencies is because companies and governments export goods and make a profit ultimately affected the value of the country’s currency. When a country is known for focusing on exports to industrial powers their currency is more valuable than the currency of say, a third world country. When you are learning the basics of currency trading you should be advised to do your research on world events. If nations are at war or are advancing significantly in technology you can make your trades accordingly.

Trading of currencies is not centralized on a specific exchange. Because of this trading moves can be made sun up and sun down. If you are interested in learning more on Forex for beginners reference a reliable guide and trading trends and start building your investment portfolio.

About the Author

Many crippling forex news are scattered everywhere often times.
That’s why many are vigilant with forex scams all the time.

EURUSD Weekly Analysis

The EURUSD currency pair has given a close and subsequent upside move above the previous consolidation range highs.  As expected, fiber was rangebound on low liquidity during the UK bank holiday session on Friday but still remains on top of the 1.4500 level, which is a key area, and also inside the ascending channel.

Looking at the recent bullish price action – the upside looks to be the most probable direction towards the 1.4800 level, this level is is a resistance turned support zone.  Any subsequent move higher, going forwards, will have to contend 1.5000 which is a major psychological number followed by the 1.5143 level which is the  2009 swing high point.

Nick can be found writing at this Forex trading blog

By David Adams

If you read the slew of trading websites and Internet advertisements you would think e-mini trading is similar to taking money out of an ATM machine. I wish it were that easy. To be a consistent trader an individual must master a number of disciplines in e-mini trading. Those disciplines are:

• Money management
• Trade management
• Chart reading
• Trading technique

These are the some of the rudimentary skills a beginning trader must learn, along with a plethora of lesser skills. I think it’s important for anybody considering the trading profession to think about the knowledge and hard work required to become successful. On the other hand, it certainly is a wonderful profession once you have learned to trade consistently.

But the question was, how long does it take to trade consistently and profitably? In my opinion, I would not count on the first year of your trading experience as being anything more than a time to learn. Unfortunately, common sense is not a real asset in the world of e-mini trading, as the markets are random and unpredictable at times. But there are underlying patterns to the markets random structure, and your ability to understand the markets machinations will and determine your success or failure.

So I have said it; you probably will not be a millionaire after your first year in the e-mini trading business. I also think it’s important to understand that individuals pick up trading concepts at varying speeds and assimilate those concepts that different levels. (which is a very nice way of saying that some people are smarter than others?) The rate at which each new trader learns will, more or less, determine the level of success and speed of success that individual enjoys.

Another variable to think about when considering learning to trade e-mini’s is the methodology you plan to employ. Are you going to learn through trial and error? This is the slowest and most costly method to learn to trade. Are you going to purchase a canned trading course? This is an improvement, but the failure rate is still very high. Are you going to hire a Mentor and learn trading skills? It seems to me this methodology is the most effective. Regardless of how you decide to learn to trade e-mini’s, it is still not an overnight process and you must prepare yourself for some setbacks and a steep learning curve. On the other hand, there are thousands of day traders who are successful, and you could easily be one of them.

In summary, we have noted that learning to trade e-mini’s profitably is not something that happens overnight. There are skills that we learned, and techniques to master. We have also stated that everyone has a different aptitude in trading; quite simply, some people are better than others at trading e-mini’s. Finally, the means you employ to learn to trade the e-mini’s will greatly affect your ability to trade profitably. Choose the wrong method, and you may struggle for many years. Good luck trading, is the greatest profession on earth.

About the Author

Real Live Trading Doesn’t Lie. Spend several days in my trading room and see if you can benefit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here

When you trade on the Forex market consider using Forex trading indicators. There are several different trend and indicator tools available on the Internet designed to make trading on the Foreign Exchange market more profitable. When you are comparing indicators and charting software you must do your research to insurance you are trusting an intelligent software system. Just like any other computer program on the Internet, Forex indicators are developed by computer programmers using trends in the market and complicated formulas. Technically anyone can develop and publish a Forex indicator program and release it on the Internet. Because of this you must do your research to find the best possible software program. Know what to look for when you are comparing charting software and make a wise decision for the health of your investment portfolio.

The first thing to consider when you are comparing indicators is the features of the software. Some programs are far more advanced than others and will monitor several different aspects of market conditions. It is important to know that no one indicator can sufficiently monitor all marketing conditions and commodities. Because of this you may need to research and choose more than one indicator covering different aspects of the market.

Another very important factor to consider is the percentage of winning trades that are a result of using the indication software. Several different indicator programs advertise success ratios and make guarantees that may seem too good to be true. It is important to realize that no indicator will predict market trends accurately 100 percent of the time. The purpose of the indication software system is to time the perfect moment to trade your currencies. Every trade has a risk. If you are willing to take on this risk and reduce the amount of risk associated with your trade with a reputable tool you could potentially earn a lucrative income.

Charting and indicator software programs will give you the tools you need to better predict market conditions for profitable trades. Charts also offer a great medium to monitor losing trades so that you can make adjustments to your trading strategy. With the right systems you can locate and execute a higher percentage of winning trades in an automated manner. Trading in the Forex market can be rewarding and exciting, but there is no certainty and there is always risk. Find the best Forex trading indicators available and trade at the precise moment for profits.

About the Author

Updated currency trading news must be on your daily trader’s menu.
Those latest forex reviews are definitely helpful to you.

The Lopez family-led First Philippine Holdings (FPH), much like its subsidiary First Gen Corporation (FGEN), is also poised for a move north at least from a technical perspective.

The price canvas of FPH is one of the few to be tagged as a “technical masterpiece.” After trading in a downward slope for the first 2 months of 2011, FPH eventually bottomed out into a symmetrical triangle pattern. It was then able to escape from this coil on March 30 when the bulls finally got the better of the bears. FPH’s breakout on this day was even more pronounced given the bullish breakaway gap. From then on, FPH sprung all the way to a high of PHP 62.6 from PHP 55.00 in just seven trading days before consolidating again into a pennant pattern.

Last Wednesday (April 20), FPH broke out from this pennant pattern. What got me more excited was when I noticed that it also broke out from a coinciding cup and handle formation. You see, since the start of February, FPH has been forming a cup and handle pattern with the symmetrical triangle that I mentioned before as the bottom of the cup and the pennant as its handle. So given the recent breakout and assuming that FPH will be able to hold its head above PHP 62.00, it could aim for just above PHP 69.00 based on the height of the pennant’s pole alone.

More on LaidTrades.com …

By Cedric Welsch

Forex trading has been a great way for people to invest their money into foreign currency to make a profit. Generally when events happen that are on a global scale or incidents that occur within one region the currency rates for exchange are affected greatly. When things such as natural disasters, economic hardships and other similar situations occur to a region its monetary value can be affected greatly. When these rates are lowered it gives people all over the globe the ability to buy a regions currency at lower rates; which can later be traded in when the Forex trading charts show an increase in a particular currencies value.

This method of making money is not for everyone, some people are just not destined to do well with it. Investing in another country’s money as a means of making profit takes an extreme level of discipline and a lot of research to understand the ins and outs of the system. Because trading currency can cause an individual to lose a lot of money it is always wise to be aware of all of the rules and have knowledge of past Forex charts to know when to invest and when not to. There are no investments that are completely fool proof and sure to produce profit, and some that seem sure often are only sure losers in the end. When it comes to investing in foreign currency, knowledge is in fact power; and only power profits in the trading industry.

There are many people who have made millions investing in foreign money as their means of an income. These people are advanced in the knowledge of this system and have spent diligent hours learning the rules every successful trader must know. The most important tools an individual must learn to use are Forex trading charts. Understanding a chart is crucial to the currency trade industry and is the best way to know the happenings each day. Trading in foreign money is a very busy and hectic business, but knowing the up to date information a chart provides keeps it all in perspective.

Forex trading charts are a keen way to keep an eye on the industry and helps determine when to invest and when to trade as the rates fluctuate. A chart will provide up to the minute accurate rates and the fluctuations that help individuals make decisions that are crucial to their financial investments. There are many websites that provide these charts to their clientele so they can make wise investments that will profit all involved. Without these charts the industry would not be what it is today.

About the Author

The very systematic publishing of relevant forex news trading is a lifeline for traders. Do not deny that you need forex scam opinions from other traders so you can avoid scam.

By James McKee

Despite tightening regulations and debt issuances in China the Asian stock market is rallying. Japan has not helped the situation any either given that their production continues to suffer from a lack of production. The stabilization of the nuclear catastrophe in Japan will have some positive outcomes in the months ahead, however they will take time to develop. Japan is the world’s second largest economy and its downfall has a negative impact upon the Asian stock market to no end. China has begun to create a symbiotic relationship with Japan in an effort to secure more imports for its growing economy, time will tell whether or not the relationship will continue.

The JPY will see some false gains on the online forex exchange as the world waits to see whether or not Japan can recover from their disaster in a timely fashion. There are still tens of thousands of Japanese citizens who are misplaced, without homes or any sort of support system. It stands to reason that Japan will have to address its infrastructure and housing issues before there will be any more progress. The Japanese government has promised to aid displaced citizens; however, at the moment they are living in gymnasiums and outdoor tents.

China is on track to be the world’s next superpower and have begun to seek out influence not only in Asia, but Europe and Africa as well. The far reaching implications of the Asian market might not be too clear as of yet, however in some time there could be serious consequences. Japan produces many of the rare minerals necessary to produce electronic devices such as iPads and other devices. A shortage of these devices could have an adverse impact on the US economy and the USD on the online forex exchange. Keep an eye on China’s and Japan’s policies in the near future.

About the Author

Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the online forex trading regularly.