Forex trading is a major currency trading which has potential to make good amount of profits. Thus this business has been developed and various ways and strategies are planned for making best out of it. The Forex trading market is constantly moving. It works for 24 hours a day and five days a week. It is closed only during the weekends. There are various strategies which can be utilized for Forex trading. Currency day trading could be one of them. Here the Forex trader opens and closes his trade on the same day.
Forex charts are the good options to use. A Forex trader notices the price movement and time frame on the chart. The Forex charts are of various types. They include bar charts, line charts, points, figure and Japanese candle sticks. Japanese candle sticks are favorite amongst the Forex traders. This type of Forex chart was first invented in Japan somewhere in the beginning of 18th century. One can observe a Japanese patter or style in these Forex charts. This type can be used in currency intra-day trading or day trading and other methods of trading as well.
There are certain other things which can be combined with Forex charts and used for the business. The objective behind this is reducing the risks and increasing the profits. Let us have a look on the things that could be added.
Channel/Trend lines
Price movement takes place in three directions. Price shall either move up or down or side ways. One has to decide in which direction the currency price change is taking place. One can draw lines on the chart using high points of the candle sticks selected from the chosen time frame. The price movement can be decided upon what is been formed i.e. a channel or trend line.
Support and resistance
A technical analyst who is involved in day trading should understand this thing very well. The support and resistance are the levels of safety with respect to the previous levels. Both can be called as areas where the price shall move and stand. When the Forex trading market rises, the price shall increase to resistance level and stand and later a retracement is observed. On the contrary, if the price falls down in lowering Forex trading market then the price inclines to support level where the chances of trend reversal are high.
Relative Strength Index (RSI) and Bollinger Bands
Both of these are helpful in making good Forex strategies. Bollinger bands are efficient in recognizing the price volatility. The Relative Strength Index provides a relative strength of price movement. For a prominent indication, RSI should be either at the top of the scale or at the bottom. If it is oscillating somewhere in the middle then the price movement and its strength should not be considered to be effective.
If you are willing to increase your income using forex charts and technical analysis, no doubt, you can do it. However, you have to avoid a very mistake made by most of the forex trader that makes them lose their income, Assured. Let us have a detailed look at this mistake and the best way to generate revenue using the forex charts.
The very common mistake is making an effort in predicting the forex rates before time. Keep in mind that you can never predict in terms of forex. And if you do so, you are just guessing where the rate might move and this will never make your sum in anything. You have to trade in forex or say any other business on due confirmation. A forex trader might observe that a rate reaches a support level and so they purchase just a bit above it, assuming that they would get a better price, however it is only better price, if the level holds. All you are doing is foreseeing what can happen in future and thus, it will only make you lose and nothing else.
Foreseeing the forex rates is somewhat similar to what our horoscopes. So, now let us consider how to execute your forex trade on confirmation. What are you supposed to do from your side is keep waiting for the rates to reach the support level and be ready to purchase, however never implement your trading indicator unless you observe that there is a precise turn in the price momentums. When this price momentum turn, then indeed you can make your purchase.
You would never know anything in advance, no ways. Therefore, it is useless t try predicting in the forex business about the currency exchange rates. If you execute your trade on confirmation along with the momentum, you will be able to bring the odds in your favor and this is the only possible way of trading to enjoy the grand success made in forex.
Then, a question arises regarding how will you verify the momentum?
You will require some momentum signals and the best of these are the Relative Strength Index and Stochastic. You might come across people foreseeing the rates and having great profitable track records. No doubt, it has however; they are not of real time and always have some disclaimer in it. No doubt, any person can foresee the forex rates, therefore no need to give it a try. Always ensure that you are trading on the odds based on the forex charts and trade only on confirmation, nothing else. This will make your forex trading approach generate greater profits than usual or expected.
So, what are you waiting for? Go ahead and start trading in forex confidently rather than predicting the different rates of currency exchange.
USD Dollar (USD)
The Dollar gained versus 15 of the 16 majors as Industrial Production rose by 0.8% versus 0.6% expected signaling U.S economy is expanding. The FOMC is still expected to keep the Interest Rate today at 0.25% but more economists expect a rate increase to 0.5% until June 2010. PPI came out stronger with 1.8% versus 0.8% expected and TIC Long Term Purchases came out weaker with 20.7B versus 38.3B prior. NASDAQ and Dow Jones declined by -0.50% and -0.47% respectively as wholesale inflation raised concerns the Fed will be forced to raise interest rates. Crude gained by 0.17% closing at 70.81$ a barrel ending a 9 day declining streak. Gold (XAU) gained by 0.29% closing at 1125.70$ an ounce. Today, Building Permits are expected with 0.58M versus 0.55M prior. CPI is expected with 0.4% versus 0.3% prior and Core CPI is expected with 0.1% versus 0.2% prior. Investors are waiting for the FOMC Interest Rate decision that is expected to remain at 0.25%.
EURO (EUR)
The Euro fell versus the Dollar and the Pound after weaker French CPI results, which triggered the Euro\’s decline. German ZEW Economic Sentiment came out 50.4 slightly better than 50.1 expected but ZEW Economic Sentiment came out weaker with 48 versus 50.9 expected. More countries in the Euro zone show signs the recession is still alive. Greece is struggling with its debt and Austria nationalized Hypo Bank. Overall, EUR/USD traded with a low of 1.4503 and a high of 1.4659. Today, German and French Manufacturing PMI are expected slightly stronger. CPI and Core CPI are expected unchanged with 0.6% and 1.2% accordingly.
EUR/USD – Last: 1.4535
|
Resistance
|
1.4575
|
1.4625
|
1.4685
|
|
Support
|
1.4500
|
1.4445
|
1.4410
|
British Pound (GBP)
The Pound weakened versus the Dollar but gained versus the Euro after CPI came out 1.9% versus 1.8% expected. The CPI figures show inflation is advancing and the U.K won\’t be able to keep interest rates at their record lows. Overall, GBP/USD traded with a low of 1.6205 and a high of 1.6319. Today, Claimant Count Change is expected with 13.9K versus 12.9K and MPC Member Miles will speak in London.
GBP/USD – Last: 1.6275
|
Resistance
|
1.6315
|
1.6350
|
1.6380
|
|
Support
|
1.6210
|
1.6160
|
1.6105
|
Japanese Yen (JPY)
The Yen dropped versus the Dollar and the Euro as a near US interest rate increase seems likely in the upcoming year. Overall, USD/JPY traded with a low of 88.61 and a high of 89.95 and EUR/JPY traded with a low of 129.54 and a high of 130.73. No economic data expected today in Japan.
USD/JPY-Last: 89.65
|
Resistance
|
89.95
|
90.40
|
90.75
|
|
Support
|
89.30
|
88.75
|
88.35
|
Canadian Dollar (CAD)
The Canadian Dollar followed the trend and fell against the Dollar but gained versus most other majors as Crude prices rose slightly ending its 9 day decline. Leading Index came out better with 1.3% versus 0.6% and Labor Productivity came out weaker with -0.2% versus -0.4% expected. Overall, USD/CAD traded with a low of 1.0552 and a high of 1.0611. Today, Manufacturing Sales is expected with 1% versus 1.4% prior.
USD/CAD – Last: 1.0615
|
Resistance
|
1.0670
|
1.0700
|
1.0750
|
|
Support
|
1.0580
|
1.0550
|
1.0515
|
Research by http://www.ufxbank.com
NZD Beginning to Falter by GoLearn Forex
NZD/USD:
The New Zealand Dollar is starting to falter and like most of its G-10 counterparts it is holding at pivotal levels against the Greenback. One slip either way may send the currency tumbling or ready to resume its advance on the Dollar. We have mentioned the Kiwi in the past as we feel it may yield the biggest percentage loss when the Dollar does finally rally.
In the graph below we see the formation of a downward sloping Triangle beginning to emerge. The Kiwi has been riding the 50 day SMA as support on its path to .7600. You can observe that NZD peaked in late October but after 3 attempts it has failed to break the October high.
Short term support has been holding near .7100 represented by the bottom leg of the triangle. As the hypotenuse converges on near term support the more likely it is that a breakout will occur in the direction of the slope. We have also diagrammed a pattern we use often to identify trend and that is a step pattern whereby there are lower high’s and lower lows (or vice versa as the case maybe). Typically we like to see more obvious lower lows than what the Kiwi has shown us thus far.
The NZD is currently sitting below its 50 day MA, which we mentioned prior, represented support for the NZD’s move over the last 9 months. During the Dollar’s rally last week the Kiwi was able to bounce off of the 100 day MA but was not able to bounce back above the 50 SMA. As price action moves into the wedge of the triangle it may force price below the 100 SMA.
For good measure we added a Fibonacci Retrace starting back in March when the Kiwi dipped below .50 running through its most recent high in October when the NZD struck .7635. This data range produces the 23.6% Fibo Retrace at a handle of .6988. To trigger a strong short signal the Kiwi would need to take out the 100 day MA, near term support (the base leg of the triangle), and the Fibo 23.6% level, as we then target a .6500 handle. In order to resume a Long NZD position at this point the NZD would need to break north of the hypotenuse, the 50 day MA, and near term resistance at .7525.
Abu Dhabi Sending Financial Aid for Dubai World by GoLearn Forex
World Equity Markets gained some ground Monday amid assurances from Abu Dhabi that they would provide $10 billion in immediate financial aid to ensure Dubai World meets its $4.1 billion debt obligation due yesterday. The DJIA closed a shade above 10,500 after picking up 29.55 points.
The Greenback gave up a little ground yesterday as the DXY was down marginally to 75.352. Gold advanced slightly to 1,126.70 as the dollar showed some weakness. Oil was unchanged as it continued to hold below $70 a barrel.
In the U.K CPI data is set to print today. The Euro-zone’s Current Sentiment/Survey will publish today. In the U.S a number of economic releases are slated for today; Crude Oil Inventories, Gasoline Inventories, Total Net TIC Flows, Empire Manufacturing Index, and lastly PPI figures will print. In light of the Dollar’s recent rally expect that traders will be watching these numbers very carefully ahead of tomorrow’s FOMC rate decision.
Upcoming Forex Events for December 15, 2009
EUR German ZEW Economic Sentiment Forecast 50.20 Previous 51.10
CAD Leading Indicators (MoM) Forecast 0.60% Previous 0.70%
USD TIC Net Long-Term Transactions Forecast 43.00B Previous 40.70B
AUD GDP (QoQ) Forecast 0.40% Previous 0.60%
USD Dollar (USD)
The Dollar weakened slightly versus the majors as the Dollar rally took a relief. NASDAQ and Dow Jones gained by 0.99% and 0.28% respectively as Dubai\’s bailout calmed investor fears. Crude weakened for the 9th straight day lowering by -0.43% closing at 69.57$ a barrel. Gold (XAU) gained by 0.54% closing at 1123.30$ an ounce. Today, PPI is expected with 0.8% versus 0.3% prior. Industrial Production is expected with 0.6% versus 0.1% prior. TIC Long Term Purchases is expected with 38.3B versus 40.7B prior.
EURO (EUR)
The Euro gained slightly versus the Dollar as Dubai World\’s bailout eased banks concerns of major write downs. Industrial Production came out as expected with -0.6%. Overall, EUR/USD traded with a low of 1.4607 and with a high of 1.4685. Today, German ZEW Economic Sentiment is expected weaker with 50.1 versus 51.1 prior.
EUR/USD – Last: 1.4655
|
Resistance
|
1.4685
|
1.4775
|
1.4825
|
|
Support
|
1.4585
|
1.4535
|
1.4470
|
British Pound (GBP)
The Pound gained slightly versus the Dollar but is still unable to break above or below the 1.6350 and 1.62 range. RICS House Price Balance came out weaker with 35% versus 39% forecast. Overall, GBP/USD traded with a low of 1.6188 and a high of 1.6324. Today, CPI is expected with 1.8% versus 1.5% prior.
GBP/USD – Last: 1.6300
|
Resistance
|
1.6340
|
1.6380
|
1.6425
|
|
Support
|
1.6250
|
1.6190
|
1.6150
|
Japanese Yen (JPY)
The Yen gained versus the Dollar and other majors after Tanken Manufacturing Index came out stronger than expected. The Yen is set to replace the Dollar in the Carry Trading as borrowing costs in Japan became almost as cheap as U.S loans. Overall, USD/JPY traded with a low of 88.32 and a high of 89.29 and EUR/JPY traded with a low of 129.18 and a high of 130.64. Today, Tertiary Industry Activity is expected with 0.5% versus -0.5% prior.
USD/JPY-Last: 88.75
|
Resistance
|
89.00
|
89.25
|
89.85
|
|
Support
|
88.35
|
88.00
|
87.40
|
Canadian Dollar (CAD)
The Canadian Dollar remained unchanged versus the Dollar as no major news was released and Crude prices were merely changed. Overall, USD/CAD traded with a low of 1.0484 and a high of 1.0623. Today, Leading Index is expected with 0.6% versus 0.7% prior and Labor Productivity is expected with -0.4% versus 0.0% prior.
USD/CAD – Last: 1.0580
|
Resistance
|
1.0635
|
1.0670
|
1.0700
|
|
Support
|
1.0550
|
1.0515
|
1.0480
|
Research by http://www.ufxbank.com
First and the foremost important thing that each and every aspiring trader should know is that what exactly FOREX is all about: The Foreign Exchange market or the trading market that is popularly known as FOREX is actually believed to be the biggest and the leading financial market of the world. It is the only trading market that possesses a volume of approximately $1.5 trillion and that too on daily basis. It is the only trading market of the world that deals with quite a large number of currencies and makes transactions of trillions and trillions of dollars daily. Unlike all the other financial markets of the world, the FOREX market is the one that has no physical or a central location from where it operates, there is no such central exchange office. It is the market that operates through the source of an electronic network made by quite a large number of banks, financial corporations and by various individuals who wants to carry out the process of trading. This FOREX trading market is based on a basic concept of exchanging one currency with some other one.
What do you mean by the word “Analysis”?
Analysis is defined as the Research that is being used in order to assist all the FOREX traders in making a prediction about the right direction of the different types of markets, based on large amount of technical data that is related to the various movements of price, that are being shown by the market.
The analysis of the relative strength of trading is supposed to be a technical kind of report that allows all their investors and trading brokers to take well well-versed decisions about the process of trading on the surface of FOREX market. The FOREX market of trading is also known as the FX or market of foreign exchange. FOREX market is thought to be the most liquid of all financial markets of the world. Around monetary value of two trillion dollars is being exchanged everyday through the market of foreign exchange. There are quite a large number of factors which have a hard and a big time affect on both the types of market; that means on stock market as well as on the market of foreign exchange. Some of the factors which have a strong affect on trading market are as follows:
The first factor is about the events that are happening in the political world, various policies of governmental agencies, price rises, and trading trends that are happening in current market, and even about the various aspects of the import as well as export business. There are some other factors also, about which you need to take care in order to be successful.
The current economy of the world has gone down very bad. Due to this, people throughout the world are looking for some way or the other to make money unconventionally. The current trend running through the world is to make huge money in the most minimum time. People desire to make huge money in the shortest period of time, as the future of the world economy has become unpredictable. Therefore, everyone is trying to find the answer for the question of how to earn maximum amount of money in the minimum most time. The answer to the question is simple. The only solution to make huge profit in very less time is to participate in the Forex Market. Forex Traders do earn large amount of gain in the shortest period of time. All that one needs to participate in the Forex Market is a computer, internet connection and a little investment. This simple solution is possible only because of the existence of the auto Forex Trading Software in the market.
Everyone wants to participate in an industry which provides high margins of gain. But the thing that worries people is the amount of investment that has to be made, in order to participate in the trading. People worry whether a good enough return will be obtained for the amount invested. Now, there is no need to worry. Thanks to the auto Forex Trading Software in the market. It is the program with which one can enter the Forex Market with all the confidence required. It is not necessary that all using the software will be winners. The thing is that the software will do everything to make a trader win. The trick is how one makes the maximum use of the software. This software will reduce the chances of losing, and increase the chances of winning.
The auto Forex Trading Software can analyze the large market information, which is based on the past market and current market sources and trade deals. There are four predictions that the program will take based on the information. First one is what to trade. Second is how much to be traded. Third one is which currency to be cautious about and involved. The fourth prediction is for how long one should take part in the trade. One thing that the trader has to do wise is to decide wise based on the predictions. There are also traders, who trade manually. There is no problem is trading manually, but the chances of losing will be always higher that the chances of winning. Therefore it is recommended best for the Forex Traders to use the auto Forex Trading Software in order to be on the safer side in the trading business.
EUR/USD:
The EUR is perilously close to falling into a tailspin. We have been stating for some time that a candle appearing below the 50 day Moving Average (MA) would generate a strong signal for a Short entry. As you can see in the Graph below that signal occurred last week, with the 50 day MA currently holding at 1.4880 while the EUR is trading at 1.46.
The EUR is now on the cusp of an even larger fall. It closed last Friday’s session at the 100 day MA an even more significant breach than the 50 day MA. Perhaps even more troublesome for the EUR is that it is just a hairsbreadth above 61.8% Fibonacci level at a handle of 1.4621.
INSERT CHART EUR
A close below the 61.8% Fibo level coupled with a close below the 100 day MA as they converge may equal real trouble for the EUR. The EUR has not been south of the 100 day MA since April 2009 which coincidently occurred when the 100 day MA and Fibo 23.6% level converged. The EUR proceeded to advance 14.6% from that point. We therefore target the 50% Fibo level with a handle of 1.4184 as the next support level should the EUR breach the 61.8% Fibo level.
USD/CHF:
The CHF is another currency holding at a very pivotal level. With Friday’s session closing just below the 100 day MA the CHF is trying to hold its ground against the Greenback. The Swiss Franc has been one of the benefactors of Gold’s jump in value. However, as the Dollar has rallied and Gold prices have begun to fall so has the CHF.
The Franc closed above its 50 day MA for the first time since August, representing only the 3rd such close since April of 2009. This coincided with it’s last close above the 100 day MA. The Franc has another issue to contend with and that is the 23.6% Fibonacci Retrace level created from the CHF low of 1.20 back in March of 2009.
INSERT CHART CHF
If the CHF closes above the 100 day MA and the 23.6% Fibonacci level at a handle of 1.0402 is breached then we would expect the CHF to test support at the 38.2% Fibo level or 1.0701.
Bona Fide Recovery Seems in Order by GoLearn Forex
Global Equity Markets closed higher as the prospect for a bona fide recovery now seems assured. The Markets were able to shake off credit fears and focus on continued positive economic data coming out of the U.S. On Wall Street the DJIA closed up 65.67 points to 10,471.50 on better than expected Advanced Retail Sales figures.
The Greenback continued it rally as it advanced on positive economic data, breaking the 9 month long “positive equities to poor dollar” correlation, for a second time in 1 week. The DXY touched 76.725 before retreating slightly to close at 76.573. Another positive session for the Greenback and it may take out the 100 day MA.
In the commodity space both Gold and Oil were down. Gold lost 15.60 to close Friday’s session at 1,115.40 while Oil closed just below $70 a barrel for the first time since September 29th. Gold has lost nearly 9.5% since its high on December 3rd and is just a few dollars away from closing below its 50 day Moving Average.
In the Euro-zone for Monday, Employment figures will be published on Tuesday. U.S. PPI numbers will print as well as the Empire Manufacturing data. In Australia, GDP numbers will hit the wire on Wednesday, as will Housing Starts and Building Permits in the U.S. However, investors will be tuned in on Wednesday to the FOMC rate decision. Although no change in rate is expected, traders are hoping for the accompanying statement to shed light on future rate hikes and economic policy as continued positive economic data continues to print.
Upcoming Forex Events for December 14, 2009-12-14
CHF PPI (MoM) Forecast 0.20% Previous -0.40%
EUR Industrial Production (MoM) Forecast -0.50% Previous 0.30%
CAD Capacity Utilization Rate Forecast 67.80% Previous 67.40%
AUD RBA Meeting Minutes
One of the most popular forex strategy is the scalping of small profits. A tremendous amount of discipline and focus is required. An approximate 10 to 100 trades are made by a professional forex scalper. It is better to quit when something goes against them rather than waiting for the situation to improve. A forex scalping system looks to earn somewhere around 5-15 pips per trade.
A forex scalper buys or sells the pair of currency at bid or ask price and quits immediately when there is a profit by few pips. With the help of this strategy large amount of gains can be achieved by cumulating small profits from the market and exiting at the right time. In order to avoid losses, a very strict exit strategy is followed.
These are few tips by which a forex scalper can improve his odds:
Always make sure when the news corresponding to your currency pair is released. It is very important to keep a track of the previous day’s Open, High, Low and Close. It is very essential to learn and study few candlestick patterns so that when they occur, you are in the position to identify them. Always make sure to draw at the right time. For example, draw in major trend lines, pivot points and according to the hourly charts of the currency pair. It is very important to establish the major trend during the day, whether it is bullish or it is bearish; there are more chances of the trades to be successful if they are long term trends. If you are not comfortable with the trade and it is taking a long time to convert into a profit, it is always better to exit.
A profit of 5-15 pips can be easily achieved by forex scalping. Difficulty arises when the market trend moves in the reverse direction because the forex scalpers are in the market for a very short span of time and they don’t expect this to happen. Forex scalping is considered to be a good trading technique because there are proofs of people being successful as forex scalpers. But it also has its downside. The risk to reward ratio can be sometime very low. If for some reason, the profit associated per trade is low, a single loss can wash away all the gains made during the entire day. Therefore it becomes essential to set and move a stop loss.
There are certain loopholes which the forex traders are not aware of when they start forex scalping. The first important trap is the addiction to make quick profits. New forex scalpers get addicted to making quick profits if they are successful at the initial stages. The result is that, the trader takes risky steps and forgets to the stick to the set plan. The second most important trap is thinking of losses made in the previous day. The trader gets so involved in making up for previous day’s losses that they lose their power of decision making and make trades that are destined for failure.
The forex dealers are increasing in number as well as their services these days. It appears as if all are dependent on a forex broker these days to make progress in their successive forex trade. However a number of brokers are quite less who can be termed as reliable and honest. You need to look for the following in a forex broker while hiring him for your trade.
Basically, while looking for a broker you might come across a question that where could you search for a broker who will provide about one or two pip spread. The answer to this is that it all depends on situation. For a macro or a mini account, one generally cannot. The smallest spread seen until now was about 1.5 pips provided by the interactive forex brokers.
Nevertheless, they needed an account size of a trader to be at least twenty five thousand dollars. If the broker seems to offer you a fixed pip spread and allows you to trade the account of about two hundred dollars only, then it would create a problem. It is assured that in such a case, there is some shading of the rats taking place. That means you are not getting the actual price.
You are getting a rate that is in the favor of your broker. It simply means that you are executing more of the losing trades. It is very well said in the olden phrase that “Buyer’s Beware”, this phrase has got a great meaning in the world of forex brokers.
You should never use a leverage of more than four hundred is to one in forex. This is so because the more the leverage you make use of, it is quite difficult for you to make gains. Sing much of the leverage adds more value to each pip. As the pip is more valuable, you are supposed to risk only some pips every trade in order to avoid the risk on your account.
The actual risk lies here. Whenever you are risking some pips, you would be getting a stop in a great proximity to the present price in the market. Then any problematic conditions in the market will be able to take you out the losses. If in case you are the one with a lower level of leverage, then you will have more space for trading and there are great possibilities of you becoming a winner.
A number of novice traders are making an effort to trade such tight stops i.e. from ten to fifteen pips. This is a great way. Reduce your amount of leverage and offer your forex trade some space to breathe in. You will definitely come across a number of winning trades.
These were some of valuable tips that will help you from becoming a prey of the broker.