Using forex technical analysis can and does help traders make big profits however you have to know how to use it correctly, to achieve currency trading success and that's what this article is all about.
Let's look at six tips to make your forex technical analysis successful. 1. Trade Valid Data
Using technical analysis on forex charts is designed to get the odds in your favour and to trade the odds you need meaningful data. Do NOT day trade - day traders never win as all short term volatility is random.
Either swing trade look for trades that last a week or long term trend follow.
2. Use Weekly and daily charts
Don't just use daily charts - use the weekly chart as well to spot the major trends - remember in currency trading currency trends follow economic cycles and these can last for several years and they are apparent on the weekly chart.
You can then use the daily chart to time your trading signals and entry and exit points.
3. Understand Support and Resistance
All successful forex traders need to understand support and resistance and you want to look for valid levels - These are levels that have been tested several times ( at least 3 ) and preferably in two different time frames.
Try and trade these valid levels and again start with the weekly chart first and see if they line up with the daily levels - these are the very best set ups.
4. Understand Breakout Methodology
While support and resistance can hold they can obviously break as well and it's a fact that many of the major trends in forex trading take place form new market highs NOT market lows.
Many forex traders hate buying new highs as they feel they have missed a bit of the move - while this is true these trends simply accelerate away and you should grit your teeth and enter.
5. Use Momentum to your advantage
So will support or resistance break or hold? You don't know and you should never predict or hope you should use momentum indicators.
Whenever you enter a trade your view should always be supported by price momentum. Two of the best indicators are the stochastic and Relative Strength Index. They will help you time your trades better get the odds on your side and help you make bigger profits.
Never make the major mistake that most traders do in forex technical analysis of trying to trade without momentum if you do you will lose.
6. Keep it simple
Your system should be simple - simple systems work best as they have less elements to break and are more robust in real time trading.
You can trade successfully and make a lot of money just basing your system on the tools we have outlined above.
6. Be Patient and be disciplined
Be patient don't trade for the sake of trading.
Only execute treading signals that your forex technical analysis system generates and don't lose discipline and chase losses or try and hurry profits.
When you have entered a trade maintain discipline and make sure you place a stop and have a realistic target.
Our view of forex technical analysis may strike you as simplistic and it is but after trading for 25 years and trying just about every method out there we have found the above works and makes us money and maybe it can help you to.
About the Author
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Minggu, 29 Juli 2007
Accurate FREE FOREX SIGNAL TRADING
Great British Pound(GBP)
The British pound has formed a bearish move yesterday to reach to the bottom at a low of 2.0420sm which is a good support for the currency, then it managed to create a new bullish move since it has gathered enough levels of bullish momentum leading the pound towards the upside again in order to cover the drop in the first session, therefore; we see a another bullish move for today.
The trading range for today might be between the key resistance level at 2.0625 and the key support level at 2.0470.
The general trend is up as far as 1.9900 remains intact targets now at 2.0635 and 2.0740
Support
Resistance
Recommendation
.....
(EURO)
A slight drop yesterday until the major support level at 1.3690s allowed the European currency to gather enough momentum to form a bullish scenario again, which is leading the currency towards the upside again, the close above the critical level at 1.3720s could be a sign for upside move.
The trading range for today might be between the key resistance level at 1.3830 and the key support level at 1.3700.
The general trend is up as far as 1.1.3420 remains intact targets now at 1.3915 and 1.4000
Support
Resistance
Recommendation
We expect buying Euro above 1.3740with a target at 1.3805, stop loss below 1.3690
SWISS Frank(CHF)
The major strong resistance level at 1.2140s stopped the bullish wave to force the dollar against the SWISS Frank to drop down after it got ready for a new downside wave. The currency still within the critical area and the downside tendency has been seen since yesterday.
The trading range for today will be between the key resistances at 1.2100 the key support at 1.1990s.
The general trend is down as far as 1.2540 remains intact, targets at 1.1875 and 1.1665.
Support
Resistance
Recommendation
.....
Disclaimer: The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies , nor an offer to buy or sell currencies, gold, silver & energies . The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver & energies presented should be considered speculative with a high degree of volatility and risk.
The British pound has formed a bearish move yesterday to reach to the bottom at a low of 2.0420sm which is a good support for the currency, then it managed to create a new bullish move since it has gathered enough levels of bullish momentum leading the pound towards the upside again in order to cover the drop in the first session, therefore; we see a another bullish move for today.
The trading range for today might be between the key resistance level at 2.0625 and the key support level at 2.0470.
The general trend is up as far as 1.9900 remains intact targets now at 2.0635 and 2.0740
Support
Resistance
Recommendation
.....
(EURO)
A slight drop yesterday until the major support level at 1.3690s allowed the European currency to gather enough momentum to form a bullish scenario again, which is leading the currency towards the upside again, the close above the critical level at 1.3720s could be a sign for upside move.
The trading range for today might be between the key resistance level at 1.3830 and the key support level at 1.3700.
The general trend is up as far as 1.1.3420 remains intact targets now at 1.3915 and 1.4000
Support
Resistance
Recommendation
We expect buying Euro above 1.3740with a target at 1.3805, stop loss below 1.3690
SWISS Frank(CHF)
The major strong resistance level at 1.2140s stopped the bullish wave to force the dollar against the SWISS Frank to drop down after it got ready for a new downside wave. The currency still within the critical area and the downside tendency has been seen since yesterday.
The trading range for today will be between the key resistances at 1.2100 the key support at 1.1990s.
The general trend is down as far as 1.2540 remains intact, targets at 1.1875 and 1.1665.
Support
Resistance
Recommendation
.....
Disclaimer: The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies , nor an offer to buy or sell currencies, gold, silver & energies . The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver & energies presented should be considered speculative with a high degree of volatility and risk.
Bollinger Bands - An Amazing Forex Technical Indicator by Kenneth Aikens
Do you know why only 5% of all currency traders are successful? Do they know something that we don't? The truth is that successful currency traders use the same technical indicators that you and I use. The difference lies in accurately interpreting these indicators. A common indicator used by forex traders is Bollinger Bands. Let us see how Bollinger Bands are used in forex trading.
Bollinger Bands are forex trading indicators that were first developed by John Bollinger during the 1980s. Bollinger Bands are one of the most powerful concepts available to the technically based investor, indicating whether prices are high or low on a relative basis. Bollinger Bands are based upon a simple moving average. The very popular Bollinger bands are actually a set of three horizontal lines. Bollinger Bands are plotted at standard deviation levels above and below a moving average. Bollinger Bands are a technical tool used to determine whether a currency pair is high or low relative to its recent trading history. The difference between Bollinger Bands and envelopes is envelopes are plotted at a fixed percentage above and below a moving average, whereas Bollinger Bands are plotted at standard deviation levels above and below a moving average.
The default setting for Bollinger bands is 20 and 2, which means the indicator takes the past 20 time periods into account and bases its calculations based on two standard deviations from the mean. Bollinger recommends using 20 for the number of periods in the moving average and using 2 standard deviations. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility.
Bollinger Bands can also be used for identifying when trend reversals may occur. Trending patterns and continuation signals In general, during an upswing, the price will stay within the upper band and the central moving average. The bands will often remain tight as long as the trend is strong. A trend that hugs one band signals that the trend is strong and likely to continue. If the bands are close and then begin to widen, it may signify that the trend is weakening and may possibly be due for a reversal.
Bollinger created his bands at a time when many analysts did not understand that volatility was a dynamic variable that fluctuated and not a static one (like percentage based envelopes). It was John Bollinger that standardized the format by adding volatility as a key variable, using standard deviation as the way to set band width. The distinctive characteristic of Bollinger Bands is that the spacing between the bands varies based on the volatility of the prices. A narrow envelope indicates a lower amount of volatility while a wide envelope indicates a higher amount. High volatility levels can sometimes be used to time trend reversals, such as market tops and bottoms and low volatility levels are sometimes used to time the beginning of new upward price trends following periods of consolidation.
Take action immediately! Research Bollinger Bands as well as other technical indicators. Demo trade using different forex technical indicators. Practice - practice - practice until you completely master interpreting technical indicators. Financial and personal freedom is yours for the taking if you do.
About the Author
So you want to trade the forex market from the comfort of your own home? Visit the author's (Kenneth Aikens) currency trading site for more information: forex article directory | forex training | forex trading system.
Bollinger Bands are forex trading indicators that were first developed by John Bollinger during the 1980s. Bollinger Bands are one of the most powerful concepts available to the technically based investor, indicating whether prices are high or low on a relative basis. Bollinger Bands are based upon a simple moving average. The very popular Bollinger bands are actually a set of three horizontal lines. Bollinger Bands are plotted at standard deviation levels above and below a moving average. Bollinger Bands are a technical tool used to determine whether a currency pair is high or low relative to its recent trading history. The difference between Bollinger Bands and envelopes is envelopes are plotted at a fixed percentage above and below a moving average, whereas Bollinger Bands are plotted at standard deviation levels above and below a moving average.
The default setting for Bollinger bands is 20 and 2, which means the indicator takes the past 20 time periods into account and bases its calculations based on two standard deviations from the mean. Bollinger recommends using 20 for the number of periods in the moving average and using 2 standard deviations. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility.
Bollinger Bands can also be used for identifying when trend reversals may occur. Trending patterns and continuation signals In general, during an upswing, the price will stay within the upper band and the central moving average. The bands will often remain tight as long as the trend is strong. A trend that hugs one band signals that the trend is strong and likely to continue. If the bands are close and then begin to widen, it may signify that the trend is weakening and may possibly be due for a reversal.
Bollinger created his bands at a time when many analysts did not understand that volatility was a dynamic variable that fluctuated and not a static one (like percentage based envelopes). It was John Bollinger that standardized the format by adding volatility as a key variable, using standard deviation as the way to set band width. The distinctive characteristic of Bollinger Bands is that the spacing between the bands varies based on the volatility of the prices. A narrow envelope indicates a lower amount of volatility while a wide envelope indicates a higher amount. High volatility levels can sometimes be used to time trend reversals, such as market tops and bottoms and low volatility levels are sometimes used to time the beginning of new upward price trends following periods of consolidation.
Take action immediately! Research Bollinger Bands as well as other technical indicators. Demo trade using different forex technical indicators. Practice - practice - practice until you completely master interpreting technical indicators. Financial and personal freedom is yours for the taking if you do.
About the Author
So you want to trade the forex market from the comfort of your own home? Visit the author's (Kenneth Aikens) currency trading site for more information: forex article directory | forex training | forex trading system.
Trading Forex- outside the dollar. by Mike P. Kulej
Almost all newcomers to the currency trading start their journey with the so called "majors". And not surprisingly so. These instruments are the most popular, most liquid, and most prominent. They are also all dollar based.
What are the "majors"? While there is no formal definition for that term, "majors" are the USD denominated currency pairs. Virtually every time you enter a forex broker's site, you will see a rates table. This table will always contain quotes for following pairs : EUR-USD, USD-JPY, GBP-USD and USD-CHF. These are the "majors", followed closely by a smaller group of so called "commodity pairs": USD-CAD, AUD-USD and NZD-USD.
USD dominance in Forex trading should come as no surprise to anybody. After all, United States is the world's single largest economy, most commodities are priced in USD and international trade in goods and services is mostly quoted in green back. To top it all off, dollar is also the core of foreign reserves held by central banks of most nations.
Times are slowly changing, however, and anybody who trades Forex should take a closer look at some of the other instruments available in foreign exchange arena. Those are commonly referred as "crosses", which could be any combination currencies mentioned above. Bear in mind, that not all brokers offer a full spectrum of "crosses", but generally they offer enough to make it a worthwhile pursuit.
Some of the most popular combinations of late include JPY, due to the much vaunted "carry" trade. Especially currencies with relatively high interest rates, like NZD and AUD, have enjoyed a massive rise in volume in their respective JPY crosses. Another one of very popular Yen crosses is EUR-JPY. This one has bigger daily ranges then USD-JPY and, depending on the trading platform, comparable spread, a very compelling factor.
Other very popular and important crosses involve EUR, the European currency. EUR-CHF, for example, is, in fact, more active at times then USD-CHF. Currently, Euro is regarded as world second most imported currency, so it can be traded against virtually any currency in existence, just like the dollar.
Let's not forget GBP, the speculators favorite. Due to large daily moves , GBP-JPY and GBP-CHF have long been attractive to traders seeking a lot of action and fast moves. It's not unusual to see a daily range of 300-400 pips in GBP-JPY. A lot of money can be made or lost in a day on moves like that. As a matter of fact, all GBP crosses can experience truly dramatic daily moves. While the spreads here are not as attractive, they have come down over last few years, no doubt because of increased interest in cross trading.
There is a wide selection of other crosses available for trading, but that is different from broker to broker. Some offer more, some less and the terms of trading vary widely. Those include CAD, NZD, AUD and, frankly, a myriad of other combinations. Not all of them are necessarily suitable for everybody but they are available. We'll leave that for some other time.
We just scratched a surface of Forex landscape here, but as you can see currencies trading is not limited to a handful of majors. There is a lot more going on outside the dollar. Take a look, do some homework and explore. A world of opportunities awaits.
About the Author
Mike Kulej is a Chief Forex Strategist for Spectrum Forex LLC., and a creator of highly effective "Rainbow" trading system. He specializes in mechanical trading systems as explained on www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com.
What are the "majors"? While there is no formal definition for that term, "majors" are the USD denominated currency pairs. Virtually every time you enter a forex broker's site, you will see a rates table. This table will always contain quotes for following pairs : EUR-USD, USD-JPY, GBP-USD and USD-CHF. These are the "majors", followed closely by a smaller group of so called "commodity pairs": USD-CAD, AUD-USD and NZD-USD.
USD dominance in Forex trading should come as no surprise to anybody. After all, United States is the world's single largest economy, most commodities are priced in USD and international trade in goods and services is mostly quoted in green back. To top it all off, dollar is also the core of foreign reserves held by central banks of most nations.
Times are slowly changing, however, and anybody who trades Forex should take a closer look at some of the other instruments available in foreign exchange arena. Those are commonly referred as "crosses", which could be any combination currencies mentioned above. Bear in mind, that not all brokers offer a full spectrum of "crosses", but generally they offer enough to make it a worthwhile pursuit.
Some of the most popular combinations of late include JPY, due to the much vaunted "carry" trade. Especially currencies with relatively high interest rates, like NZD and AUD, have enjoyed a massive rise in volume in their respective JPY crosses. Another one of very popular Yen crosses is EUR-JPY. This one has bigger daily ranges then USD-JPY and, depending on the trading platform, comparable spread, a very compelling factor.
Other very popular and important crosses involve EUR, the European currency. EUR-CHF, for example, is, in fact, more active at times then USD-CHF. Currently, Euro is regarded as world second most imported currency, so it can be traded against virtually any currency in existence, just like the dollar.
Let's not forget GBP, the speculators favorite. Due to large daily moves , GBP-JPY and GBP-CHF have long been attractive to traders seeking a lot of action and fast moves. It's not unusual to see a daily range of 300-400 pips in GBP-JPY. A lot of money can be made or lost in a day on moves like that. As a matter of fact, all GBP crosses can experience truly dramatic daily moves. While the spreads here are not as attractive, they have come down over last few years, no doubt because of increased interest in cross trading.
There is a wide selection of other crosses available for trading, but that is different from broker to broker. Some offer more, some less and the terms of trading vary widely. Those include CAD, NZD, AUD and, frankly, a myriad of other combinations. Not all of them are necessarily suitable for everybody but they are available. We'll leave that for some other time.
We just scratched a surface of Forex landscape here, but as you can see currencies trading is not limited to a handful of majors. There is a lot more going on outside the dollar. Take a look, do some homework and explore. A world of opportunities awaits.
About the Author
Mike Kulej is a Chief Forex Strategist for Spectrum Forex LLC., and a creator of highly effective "Rainbow" trading system. He specializes in mechanical trading systems as explained on www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com.
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