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Forex Price Charts

May 10, 2011 — 3:54 am

There are two kinds of Forex traders- the traders who use fundamental analysis and the traders who use technical analysis.
I prefer the technical analysis, which ignores fundamental factors. Technical analysis is applied to the price action of the market.
By using technical analysis traders can make short-term forecasts, which are very difficult with fundamental analysis, more suitable to making long-term forecasts.

Technical analysts use different technical studies and interpret them to predict market direction or to generate buy and sell signals.
By using charts in Forex technical analysis we can predict price movements.

You might think that reading the charts is very difficult, but you must know that FOREX charts, as opposed to charts used for day trading stocks, are easier to interpret and use. The Forex charts are reflection of a country’s economy, which is slower moving and is more stable compared to the future and daily drama of company reports, Wall Street analysts and shareholder demands.

Currency charts have also the tendency to develop strong trends, and although the Forex market is volatile, it is more predictable than other markets. The good thing is that you have only a few currencies to analyze, not tens of thousands of stocks.

The complimentary charting software provided by good brokers is sufficient for predicting currencies pair’s movements, but you must learn to read the charts and you must learn how to interpret your technical studies.

As I mentioned the technical analysis in the Forex market is easier than in the other markets, but it still might seem a difficult task for new traders.
There are a lot of different resources which are helpful in learning technical analysis. The easiest way is watching videos which explain it, and although the Forex video courses are usually expensive, you can find some cheaper video courses, too.

If you want to learn more about Forex and if you want to get access to high quality FREE Forex Videos go to: http://www.currencytradingmethod.com or check out Forex trading training to be skilled in no time!

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Forex
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Hassam
 

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Using Forex Technical Analysis To Profit From Forex Trading

December 7, 2010 — 9:12 am

Forex technical analysis is based on the simple principle that the history of the markets will repeat itself. Students of technical analysis follow the theory that particular market formations and trends can be identified within the market. These repeating formations and patterns are identified by the use technical indicators and chart formations. This is the very thinking behind technical analysis. That past events or conditions in the market will always play out in the same way in the future.

As a result of this technical analysis does not accommodate random market events or news flow. Such an approach stands in direct opposition to that of followers of fundamental analysts. Fundamental analysts instead view the market as efficient and driven by economic news flow.Market news flow and economic releases are seen as the determinant of the markets price at any single point in time.

If it doesn’t work, why do Forex traders use it?

The question as to whether technical analysis works has long been debated. However from studying past chart formations, repetition of market events can be clearly seen. Any study shows that they do this on a regular basis. Therefore the main question should not be about whether technical analysis works but rather if it works frequently enough for the trader to profit.

That technical analysis works some of the time is often attributed to the number of traders who follow technical approaches. With many traders reacting to specific points in the market it is often said asserted that traders themselves help to make technical analysis a self fulfilling prophecy.

How to trade Forex with Technical Analysis

A central consideration for a trader is whether the approach followed identifies sufficient repeatable opportunities to profit.The profits generated should also be sufficient in that they are able to make up for the losses from when the analysis is wrong.

There are many branches and different approaches to technical analysis. Some of the most common approaches used include Fibonacci retracement levels, Elliot Wave theory and Candlestick charting. With so many schools of thought available it becomes evident that no one particular method will work all the time . If it did there would only be a need for one technical method.

Even though no single school of technical analysis is 100% accurate you can still use technical analysis to profit from your trading. By combining indicators you will be able to gain a greater validity to your trading method. This will help to increase the accuracy of your trade entries and increase the profitability of your Forex trading.

Increasing your validation need not only come by combining technical indicators .It is recommended that when applying a technical approach you should also reference the market fundamentals. Forex technical analysis should not be regarded as mutually exclusive. By combining both approaches you will gain greater validation for your trade decisions which will ultimately help to increase your trading accuracy the therefore your profits

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Forex
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Hassam

Using Pivot Point Trading In Forex

November 19, 2010 — 8:12 am

Pivot point trading is an effective Forex trading tool that be applied by traders as part of their technical analysis. Pivot points orginate from floor traders who used them as an easy way to calculate the direction of markets during the day. Learning Pivot point trading provides you with an effective trading approach which can be combined with other technical approaches to help your Forex trading profit.

The use of pivot points as trading strategy was originally started by floor traders in the futures markets. This provided traders with an easy way to determine the most likely market direction during the coming day.

Forex pivot points center on the use of a primary pivot and a number of associated levels. These are set levels in the market where it is viewed that the market may slow up or retrace.

Most commonly seven pivot levels are used in this trading approach. Three of the levels calculated are above the pivot point and are viewed as resistance levels. Three levels given are below the pivot point and are regarded as levels of support. The final level is the actual market pivot point itself. This is regarded as the most important level. If the market opens above this level for the day the market is considered to be showing bullish tendancies. If the market opens below this level for the day, it is considered bearish.

Pivot points are calculated by the use of a formula. The high, low and close prices of a currency pair are used to work out a series of pivot trading levels for your Forex trading. The calculated pivot levels are then applied to the charts. The pivot points can easily be calculated by the use of a pivot point calculator.

Pivot point trading is very popular trading approach used by Forex traders. This is because unlike most technical indicators which are considered lagging, pivot points are considered to be leading indicators. Pivot points provide a prediction of where the market is likely to move in the session. This is quite different from many technical indicators which will only tell the trader where the market has been.

Due to the number of Forex traders who follow pivot points, it is common for markets to react as expected by these levels.

Pivot point trading is particularly flexible and can be used in a wide range of trading approaches. For example pivot levels are often used to trade ranging and breakout strategies as they can be used to identify both breakout and reversal levels. They are also suited to short term traders who are looking to dip in and out of the market quickly for a few pips profit.

As with all technical trading approaches, pivot points should not be relied upon exclusively. However pivot points are a useful tool in helping to balance the trading odds more in your favour.

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Forex
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Hassam

Using Technical Analysis To Improve Your Profits

September 19, 2010 — 9:11 pm

Technical analysis can be a big deal in the stock market, it can greatly increase your profits. But what exactly is it?

Technical analysis studies the price movements of the stock. Technical analysis looks at patterns that have occured in the past to determine what will happen in the future.

So, the first thing any short term trader needs to understand is how to read stock trading charts. There are things like support and resistence that can be helpful to understand. It is also important to look for different price patterns. You probably also want to look for easy to read stock trading charts so you can find patterns more easily.

Technical analysis can give you great insight on the future of a stock, however by itself it will not make you a profitable trader. There is simply no such thing as a chart pattern, candlestick pattern, or oscillator that is 100% accurate.

The thing that really matters is a traders ability to cut their losses short and let their winners ride. Moneym management is a powerful strategy and all successful traders have some way of knowing when to get out and cut their losses short.

The less money you lose when you are wrong the less often you have to be right to be profitable.

It is also important to work on your emotions. If you lose a few trades in a row you need to be able to shrug it off, and better yet see if you can determine why. You need to understand that losing is just part of the game, it is not uncommon to have a losing streak now and then. That is how life works and trading is similar.

In the end understanding technical analysis is going to help you trade the market in the short term. But only when it is combined with things like risk management and emotional control will it be profitable.

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Exchange Traded Funds ( ETFs), Stocks, Wealth Building
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Hassam

Two Most Used Methods Of Forex Markets Analysis.

July 18, 2010 — 9:23 pm

In Singapore Forex market, where the number of traders is very high, investors are forced to turn to the technical analysis. Technical analysis of the Forex market is based on such instruments as study of candle charts, trend lines and others.

Leading world experts of the technical analysis note that for the last few years the interest in technical analysis increased due to the appearance of big investors in Asian markets such as Singapore, Japan and China. These markets are too complex and as a result fundamental analysis doesn’t provide investors with enough info for their trading decisions.

Therefore almost every Singapore trader concentrates on the technical analysis of the online markets rather than the fundamental one. But fundamental analysis also has found its usage. Now it is mostly applied to analyze marginal revenue, industry trends, etc. Technical analysis gives the traders more detailed data about the market’s direction and involves the use of levels and patters in the charts. Investors who use the technical analysis study how to see the market’s psychology by using its visual display on the graphs.

As the world economy experiences many changes it becomes very hard to forcast the direction of the online markets. That’s why the experts of markets’ analysis try to mix technical and fundamental analysis and diminish the differences between them.

There is nothing new in a desire to predict the future changes on Forex market. Even one hundred years ago traders used the technical analysis for the Asian markets trying to predict the prices for rice. Today we havea lot of different techniques for the technical analysis: Fibonacci levels, Elliot Waves, etc. Thought there is no single method that can guarantee you high level of probability. That’s why the possiblities of the traders are very different as well. Some of them believe in technical analysis, some of them focus only on the fundamental analysis, some do both.

According to the recent researches, technical analysis is gaining its popularity in Singapore trading. Most of the financial market’s analysis are based on the candlestick charts, pins, tweezers, saucers and other tools that are specific for the technical method of markets’ analysis. In order to interpret the laws that move the market, most investors will always refer to formulas and indicators that reflect the market’s psychology and directions. Whatever strategy is dominant, the proponents of fundamental and technical methods will always blame each other for mistakes that they made in their own predictions.

When you are looking for ideal method of market’s analysis, we recommend you to try different techniques of trading and market analysis. Don’t forget that market’s directions consider all factors and your trading strategy will only improve if you use different ways of its analysis.

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Forex
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Hassam

The Theory Of Elliot Wave

October 21, 2009 — 4:00 am

Elliott wave theory enjoys massive popularity. It was described as the best technical analysis by many brokers and publishers.

Elliott wave theory is a huge and devoted.This theory has a basis of sound logic, which can help you make money!

Let’s look at the Elliott wave theory in more detail, and then look for a reasonable analysis of the market.

The theory was named after Ralph Nelson Elliott, who concluded in his book “The nature of law” that the movement of financial markets can be predicted by observing and identifying repeating patterns of waves.

Elliott’s profound observation

Elliott came to a stunning conclusion that all natural phenomena are cyclical and that includes the financial markets. That’s true, but we know that in any case – we know that at some time in our lives, we feel like rain when we venture outside, the question of when exactly?

Thus, markets are cyclical – Big deal! What we want from the investment theory is the probability of the event – that is, when it is most likely.

Elliott Wave Theory is an objective theory of investment, but there is no objectivity in it!

It’s all subjective interpretation of the peaks and troughs, at any time you like!

Does this sound logical intellectual theory to you?

Theory

Based on the rhythms found in nature, theory suggests that the market is moving upward in a series of five waves and down in a series of three waves.

The difference between the Elliott Wave principles and other cyclical theories is that the theory suggests, there is no absolute requirement for full-time – Well, that’s great help!

Subjectivity is so high in the Elliott Wave, which, like most theories, everything is explainable in hindsight, but in reality the difficulty of predicting the future.

There are so many interpretations of the actual peaks and valleys at different times that everyone will see them differently; this is hardly the basis of predictive theory.

Elliott Wave Theory says that it is able to predict the market, but did not give an objective opportunity to do so in practice.

Who uses the Elliott Wave Theory?

1. Investors who want an easy way to earn money, and attracted to the mysticism of tools such as the number of the Fibonacci sequence, to predict market recovery.

2. Investors who believe in the false assumption that you can predict the behavior of the market in advance – and want an easy way to earn money.

What markets really Move

Market prices is a reflection of the following:

Supply and demand fundamentals of human psychology + = price action

It seems simple, but in reality a complex equation – which can not be predicted in advance.

Retail markets with the help of technical analysis to put all the odds and probability in your favor, and nothing more. This is not a way to predict the future.

Are there more effective than the theory of Elliott wave around to make money from the markets? – Good exercise was to interview all the best performing fund managers in the world and see how many of them take the theory seriously.

Intelligent and subjectivity not mix!

The theory of Elliott wave theory is predictive, which leaves all the subjective analysis.

If Elliott has developed a theory of intellectual, why not give an objective way to make money from it? – As with most predictive theory is not working.

If investors can predict the market in advance, we would all know what would happen – and there is virtually no market at all, as we all know the market price in advance!

Elliott Wave Theory should be the intellectual theory, but the only thing that can be predicted with him, so you will lose money.
learn forex trading forex free trading forex tip trading

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Forex
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Hassam

Technical Analysis

October 19, 2009 — 10:48 pm

Let’s first define what Technical Analysis is. Technical Analysis is the study of historical and ongoing price data through charts, price patterns and chart indicators. Charts display price in time intervals using bars and candlesticks. Technical Analysis is based on the Dow Theory and there a number of assumptions in that theory. The most important is that all available information is immediately impounded into the market prices of the currencies. The second assumption made is that prices always move in trends or patterns. The third assumption that is made is that history repeats itself. This means you can predict the future price action by studying the past prices.

YouTube Preview ImageWe follow trends because experience has shown that once a trend is in motion, it is most likely to continue rather than reverse it. The more one studies chart patterns, the clearer it becomes that reading and interpreting chart patterns are more an art form than a skill. Two charts are important in technical analysis. Bar charts and Candlesticks charts. Bar charts display price data in vertical lines that represents price action during a given time period. The tip at the bottom of a bar chart is the low for the period. The tip at the top is the high for the period. The open and close are represented by small horizontal dashes called tics. The tic to the left of the vertical line is the open. The tic to the right of the line is the close.

YouTube Preview ImageCandlestick charts are similar to bar charts in many ways but different in other ways. Candlestick charts were developed by Japanese rice traders. They are used extensively in technical analysis. Like the bar charts, the top of the vertical line represent the high. The bottom of the vertical line represents the low. However, the price action between the open and the close is represented differently by the use of candlestick bodies. A shaded body represents a lower closing price below a higher opening price. A hollow body represents a higher closing price above a lower opening price. The price action above and below the body is referred to as tails or wicks.  A forex day trader may use any one of the 3, 5, 10, 15, 30, 60 and 180 minutes charts. A swing and position trader may use a daily, weekly or a monthly chart while doing technical analysis. These charts all use the Greenwich Mean Time (GMT) or the Eastern Standard Time (EST) depending on the software that your broker platform uses. But you can always adjust these times according to your local time.

YouTube Preview ImageWhile doing technical analysis, you need to understand what are markets patterns? What are Uptrends? What are downtrends and what are sideway trends? Markets expand and retrace constantly. Market prices may continue to expand for sometimes either upward or downward. It is the nature of the markets to surge then pause and retrace. Trends in currency markets make a series of peaks and troughs as they move. An uptrend consists of a series of ascending peaks and troughs. Each peak higher than the last peak! Each trough lower than the last trough! A downtrend consists of a series of descending peaks and troughs. A sidways trend consists of a series of horizontal peaks and troughs. All peaks and all troughs almost on the same level indicate a sideways market. 

Technical analysis is the study of past prices to predict future price action. It depends on the use of technical indicators in finding the best points for entry and exit for each trade. A number of advanced technical indicators have been developed. They are used by the traders to confirm a particular market pattern. Two or more technical indicators are used in conjunction to confirm whether the markets are trending, ranging etc. You need to master these technical indicators if you want to become a successful trader. Each chart and technical indicator plays a unique role in the overall analysis process. You need to learn how to use these technical indicators to confirm trending or non trending conditions. The time periods and the technical indicators are useful in spotting interday or intraday turning points caused by large moves, retracements, continuances or reversals.

Each technical indicator performs differently in both trending and non trending markets. You should understand how each technical indicator shows direction, entry, exit or weaknesses or strength of price action in trending or non trending market conditions. You should memorize these differences to make the best use of these tools in your trading.

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Day Trading, Forex, Futures, Options, Stocks, Swing Trading
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