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November 7, 2009

Technical Analysis

Filed under: forex analysis — Tags: — admin @ 4:40 am

For Bigger Profit Potential

If you have read the section how and Why Prices Move you will understand that knowing the fundamentals does not guarantee currency trading success – You need to be able to measure trader psychology as well.
Forex technical analysis helps you see both and gives you the overall picture.
Many traders don’t fully understand the advantages of technical analysis – and refuse to believe that it works here, we will show you how Forex technical analysis gives you the complete picture to help you trade successfully.

What is Forex Technical Analysis?

It is simply defined as the study of price action through the use of charts – for the purpose of identifying price trends and if used correctly – it works.
Forex technical analysis uses the following equation:
Market Perception (trader psychology) + Fundamentals = Price Movement
All Forex technical analysis does is assume that all known fundamentals are quickly reflected in price action (and in the 21st century with instant communications this is truer than ever) – so it simply concentrates on following price action.
Price action reflects all the fundamentals, and more importantly, how all the participants in the Forex markets perceive them.
Traders who study fundamentals claim technical analysis can’t work – because you need to know and study the fundamentals, to know where prices are going – this is simply not true.
Some of the largest price moves in history, have occurred with little or no change in the fundamentals.
It’s a fact that markets ( not just Forex Markets ) are most bullish at market tops and most bearish at market bottoms.

Why?

Quite simply human psychology was at work – and Forex technical analysis studies this and the fundamentals together.
Learn to use technical analysis, and you will see the reality as it is – rather than listening to the opinions of others or letting your emotions get involved.
You are in effect trading the truth and the truth is:
The market price itself is the correct true price – not what you or anyone else thinks it should be.
Forex technical analysis makes the following 3 assumptions:

1. Markets Discount

All fundamentals show up quickly in the price action, when you use technical analysis.
You are therefore studying the fundamentals, as they are – and of course, you are seeing how the participants perceive them at the same time.

2. Trends Persist

This is obvious by simply looking at any Forex chart.
Forex technical analysis also assumes that a trend in motion is more likely to continue than reverse.
Your aim is to lock into these trends and trade them for profit.

3. History Repeats

The core belief of Forex chartists is that technical analysis works because what has happened in the past, will happen again.
Human behavior repeats itself – as human nature never changes Price patterns simply reflect shifts in human psychology, we can therefore assume that certain patterns and trends will repeat themselves – time and time again.
Trading the Odds with Currency Technical Analysis
In gambling, the aim is to get the odds in your favor – and in trading; your aim should be to trade only when the odds are in your favor.
Just like the successful gambler you won’t win very hand – but you will win more than you lose and by constantly trading the odds you will achieve currency trading success.
If you have read the section Forex Myths you will understand that technical analysis is an art rather than a science.
You need to devise a Forex Trading strategy that uses technical analysis the right way to enable you to build long term wealth.

How Prices Move

Filed under: forex education — Tags: — admin @ 4:38 am

The Equation For Forex Price Movement

Most novice traders fail to understand how and why prices really move.
Here we will give you an introduction to how and why prices move and how you can take advantage of these movements for profit. Let’s look at some key points in relation to how and why prices move.

Markets Do Not Move To a Scientific Formula

Firstly, let’s get rid of this myth.
Many traders believe this and numerous vendors on the net perpetrate the myth of markets moving to a scientific law which appeals to the greed and naivety of traders.
Common sense tells us that markets don’t move scientifically:
If markets moved scientifically, there’d be no market as we’d all know the price in advance!
A forex market by its nature, involves uncertainty – that’s what makes a market move – the fact that human nature is un-predictable.

Trading the Odds for Profit

While you are not trading certainties but that doesn’t mean you can’t make a lot of money, you can – by trading the odds.
With a sound trading method that runs profits and cuts losses quickly you can build significant long term wealth.
It is no coincidence that many of the world’s top traders started out as either blackjack or poker players. The reason for this is – any good card player knows he won’t win every hand but if they bet when the odds are in their favor and fold when there not, they will make a lot of money longer term.
Trading is simply an odds game.
If you know how to calculate the odds correctly, you can win and build significant long term wealth. Let’s look at how to get the odds in your favor.

Price Movement – The fundamentals

Many traders like to trade off news stories and watch the fundamentals, it’s popular but will trading news stories make traders money? Let’s find out.
A currency trader, who makes trades based upon fundamental analysis, will look at the supply and demand situation relevant to the particular currency studied, and try and predict the impact of such factors as:

  • The health of the economy
  • Economic policy
  • Interest rates
  • Balance of payments
  • Employment
  • Trade deficit
  • Political factors

And many more.

On the face of it fundamental analysis provides a logical and rational basis for investment decisions however there are problems in applying it and traders who try and trade off the news generally lose.
The main problems are:

1. Markets Discounts

We live in a world of instant communications where traders can and do get the news in a split second – the fundamentals are instantly discounted and the market is looking to the future.
By the time you have seen, studied and acted on the news – it’s already been discounted.

2. Investor Psychology

Another major problem is that the fundamentals are there for all to see but individual traders all reach different conclusions based upon what they have seen furthermore, humans are not logical beings!
Prices reflect the fundamentals but they also reflect the emotions of the participants and investor psychology is THE major influence on price.
The equation for market movement is simple:
Fundamentals (supply and demand facts) + Human Perception (investor psychology) = Market Price
To trade successfully you need to be able to see the influence of BOTH parts of the equation and this leads us onto our section – technical analysis

Forex Myths

Filed under: forex article — Tags: — admin @ 4:37 am

Don’t Believe These Forex Myths!

95% of traders lose when trading currencies and they don’t need to – in many cases they believe various myths that are spread by vendors, using hyped advertising copy which appeals to greedy and naive traders to buy courses and forex trading systems, which simply don’t work.
Below you will find the six common myths that cause the bulk of currency traders to lose and if you believe any of them – you will lose too.

1. You should always be in the Market

Many traders love excitement, and their view is, if they are in the market they will catch the big move. Well they may – but chances are they won’t.
The really big trends only come a few times a year in each currency – and you should stay out the market until they come, otherwise you will take losses, as you will be trading low odds trades, with little chance of success.
You don’t earn a reward in currency trading for effort or how often you trade – you earn your reward from being right.
Be selective in your trading and you will see your profits soar.

2. Diversification Reduces Risk

Diversification simply dilutes your profit potential if you have a small currency account.
You catch a big move, and your other trades lose, or give you only marginal profits, reducing your overall profitability.
You need to have confidence to go for the big moves, when they occur, and hit them hard with as much as you can afford.
Currency trading success is all about taking calculated risks when the odds are in your favor.
If the trade looks good, then you need to have the courage and conviction to go for it and risk as much as you can afford.

3. Day Trading Makes Money

This is perhaps the biggest myth in currency trading – Forex day traders DON’T make money!
Many vendors spread this myth, as it makes a good story.
It’s a good story and they make their money from course sales NOT trading.
All short-term volatility is random – prices can and do move anywhere in a day and support and resistance levels are meaningless.
In forex day trading you 100% guaranteed to lose over time as you cant get the odds in your favor – PERIOD.

4. Predicting is the Correct Way to Make Profits

Trying to PREDICT where prices are going to top and bottom will see you lose.

Why?

Because, you are relying on hope and guessing and that’s not a good way to make money in any venture, especially currency trading.
The only way to trade is to wait for the market to CONFIRM a trend is under way, and then execute your trading signal.
You will not buy the bottom or sell the high, but you can’t do that anyway, so there is no point in trying.
By trading with price momentum on your side, you have the odds in your favor.

So Remember:

Don’t predict confirm all your trading signals with momentum before you enter a trade and trade with the odds.

5. Buy Low sell high Is The Best Way To Make Money

This point is related to the above. You cannot do it as you are involved in prediction. Always keep this point in mind:
Most big trends start from new market HIGHS NOT market lows.
So if you fail to trade these moves you will miss a lot of the best moves waiting for pullbacks that never come.

6. Markets Move Scientifically

Again this is related to the myth of predicting currency moves.
You will see many vendors saying they can trade market tops and bottoms with scientific accuracy – RUBBISH!
If markets moved to a scientific theory, we would all know the price in advance and there would be no market!
It’s the difference of opinion and unpredictability of price direction that makes a market – this is common sense.
Despite the above, many Forex traders still believe in scientific theories such as – Elliot Wave and The Fibonacci Number Sequence.
These theories don’t work and never will.
Elliot made no money from his theory and neither will you.
As for the Fibonacci number sequence – This was devised in the 12th century, to solve a problem to do with the copulation of rabbits and has nothing to do with finance.
Leave the above theories to the dreamers and traders who believe it’s easy to make money.
When you trade you are involved in trading odds NOT certainties, don’t believe anyone who tells you otherwise.

7. Markets are the Same Today as they Were Hundreds of Years Ago

No there not!
Trends now are much more volatile than they were even 50 years ago.

Why?

Today, with the Internet, price information and news reaches traders in a split second.
This increases volatility as everyone has the same information at once – and everyone tries to enter and exit the market at the same time.
This was not so even 20 years ago – the trends are still there, but volatility is much higher – traders get the direction of the trend right, but they find themselves stopped out by the volatility of the market and watch as the trade they were stopped out goes on to pile up huge profits.
How often has this happened to you?
It happens to all Forex traders.
Dealing with volatility, is one of the major challenges of any trader wanting to develop a successful Forex trading strategy.

8. You Can Buy Success From Someone Else

You cannot buy success from someone else.
Some vendors can help you but success comes from within.
Even if you follow someone’s advice, always make sure you know the logic it’s based upon.
You need to do this to have the confidence and discipline to stick with your trading plan when you hit a losing period
In conclusion, someone can help you achieve currency trading success but you need to know how and why their methods and not follow them blindly.
The above myths are commonly accepted – avoid them or you will join the majority of traders that lose in currency trading.

FOREX Trading An Opportunity For ALL

Filed under: forex education — Tags: — admin @ 4:33 am

FOREX trading is one of the few ways to start with small stakes and build wealth quickly. The good news is that everything about successful Forex Trading can be learned by those willing to put in the time and effort.
If you want proof of this go to the Forex Education section where you can read how a group traders with no previous experience learned to trade in just 14 days and went on to make over $100 million!
So why is trading Forex so lucrative? Let’s take a look…

1. Leverage

Leverage is the ability to trade more funds than you actually have and if you use it correctly, you can make huge gains and build wealth quickly.
For example, if you deposit $5,000 with a FOREX broker they will allow you to trade with a leverage of at least 100:1. This gives you the ability to trade $1 million and considerably enhances your profit potential.
Leverage of course can work for or against you.
If however you can keep losses small and run profits then you can build wealth quickly
A PROVEN Forex trading system with good money management, combined with leverage, is the secret of making long term capital gains.

2. Profit Opportunities in Bull or Bear Markets

As one currency rises another must be falling and vice versa, this gives profit potential in ANY economic climate. Currencies are volatile and trading opportunities emerge somewhere in the world every day.

3. Currencies Trend

Currencies reflect the overall health of a country’s economy and these economic trends last for months or even years. If you can spot and lock into these long term trends, you can build significant long term wealth.

4. liquidity

The currency markets are the world’s largest investment medium and trillions of dollars are traded daily. This volume of transactions and liquidity means traders are able to open and close positions quickly, to lock in profits, or cut losses.

Turning Opportunity Into Profit

Forex trading is perhaps the ultimate home business and has more profit potential than any other including:

  • You can trade from Home in just an hour a day
  • You only need a computer and an internet connection
  • Money you invest in your business can be leveraged 100 times or more
  • You don’t need staff or stock and you don’t need to market your business
  • There is never a bear market
  • There are opportunities all the time to make profit
  • Anyone can learn this business
  • You can take holidays when you want
  • You can build wealth quickly

Turning Potential Into Profit

Of course you have to turn the above potential into profit and you need a plan and proven tools to get the odds in your favor – If you have the right attitude to achieve success  and a willingness to learn, you could soon be building wealth in the world’s biggest and most exciting business.

Trading Forex From Home and Live The Dream!

Filed under: forex article — Tags: — admin @ 4:29 am

Everything about successful Forex trading can be specifically learned and it represents one of the few ways for people to start with small stakes and build wealth quickly.
If you have the RIGHT mindset and the right tools, you can build big profits in under an hour a day – even if you have never traded before.

Get Advance Warning Of The Big Profitable Moves

Our Forex Course gives you clear, concise Forex education which will enable to quickly trade like a pro with our support. You will also get our daily Forex review which shows you how to spot and trade the big profitable currency trends.
Each day, we outline the best opportunities – in clear, concise, jargon free English – so you can practice and sharpen your trading skills with our support and you get unlimited email support from our traders. Best of all you can take advantage of this service

Why You Can Enjoy Currency Trading Success

Anyone can learn to trade currency Exchange, it’s a specifically learned skill and if want to succeed you can. On this site you will find the currency trading techniques that the pro traders use to make big, consistent Forex profits.
For the amount of effort you have to make no other business can offer you such great rewards as FX currency trading. If you are ready to learn and have the motivation to succeed, then you are all set to become a currency trader from home, earning a great income in 30 minutes a day or less.

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