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Sunday, April 13, 2008
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Featured Easy Forex Article
Forex Strategy- Trading with Stochastics
Stochastics are amongst the most popular technical indicators when it comes to Forex Trading. Unfortunately most traders use them incorrectly. In this article we will review the correct way to use this popular technical indicator.
George Lane developed this indicator in the late 1950s. Stochastics measure the current close relative to the range (high/low) over a set of periods.
Stochastics consist of two lines:
%K � Is the main line and is usually displayed as a solid line
%D � Is simply a moving average of the %K and is usually displayed as a dotted line
There are three types of Stochastics: Full, fast and slow stochastics. Slow stochastics are simply a smother version of the fast stochastics, and full stochastics are even a smother version of the slow stochastics.
Interpretation:
Buy when %K falls below the oversold level (below 20) and rises back above the same level.
Sell when %K rises above de overbought level (above 80) and falls back below the same level.
The interpretation above is how most traders and investors use them; however, it only works when the market is trendless or ranging. When the market is trending, a reading above the overbought territory isn't necessary a bearish signal, while a reading below de oversold territory isn't necessary bullish signal.
Trending market
When the market is trending is necessary to adapt the oscillator to the same conditions: When the market is trending up, then the signals with the higher probability of success are those in direction of the trend �Buy signals�, on the other hand when the market is trending down, selling signals offer the lowest risk opportunities.
Thus when the market is trending up, we will only look for oversold conditions (when the stochastics fall below the oversold level [below 20] and rises back above the same level) to get ready to trade, and in the same way, when the market is trending down we will only look for overbought conditions (when the stochastics rise above de overbought level [above 80] and falls back below the same level. Taking all overbought/oversold signals during a trending market will lead us to many whipsaws. If you are not comfortable with the number of signals given, try expanding your trading to other currency pairs.
Trend-less market
During a ranging market we could use the interpretation explained above to trade off stochastics.
Divergence
Divergence trades are amongst the most reliable trading signals in the Forex market. A divergence occurs either when the indicator reaches new highs/lows and the market fails to do it or the market reaches new highs/lows and the indicator fails to do it. Both conditions mean that the market isn't as strong as it used to be giving us opportunities to profit from the market.
Stochastics can also be used to trade off divergences.
Price behavior
A price behavior can be incorporated into any kind of system or Forex strategy. When using divergences or overbought/oversold condition with a price behavior approach, the probability of success of our signals increases enormously. Why? Because price dictates at the end, how all indicators will behave, it also gives us a lot of information about the probable direction it will take in the future.
I hope this article helps you become a better trader.
Don't forget to read our risk disclaimer.
Quick Forex Ideas
foreign exchange market
Online forex trading training is convenient because you can choose which topics to study or pay particular attention to. You can decide which time of day or night to study or participate in online discussion of the curriculum.
More info on a great Forex system
online forex trading
Many factors affect Forex trading. It is critical to know and understand the various factors that cause the Forex to fluctuate from day to day. The foreign exchange market will change depending on the economic factors that play a role in the movement of currency.
More info on a great Forex system
currency
Let�s take a concrete example of getting a profit from the changing the rate of the Euro, from 0,9162 to 0,9292. If you have anticipated this change by using technical or fundamental analysis, you can buy the Euro cheaper for dollars, and then sell it back at a higher price. For example, if you choose leverage 1:100, then 99,000 dollars of the credit line, granted by the Internet broker, is added to 1000 dollars, and you buy the Euro at the price of 0.9162. As a result of this transaction we get: $ 100,000 / 0.9162 = Euro 109.146, 47.
Your Latest Easy Forex News
The U.S. dollar took a step forward this morning
Fri, 09 Nov 2007 06:51:35 GMT
The U.
Forex Day Trading | How To Trade Forex
¶ 1:48 PM 0 comments
Featured Easy Forex Article
Forex Strategy- Trading with Stochastics
Stochastics are amongst the most popular technical indicators when it comes to Forex Trading. Unfortunately most traders use them incorrectly. In this article we will review the correct way to use this popular technical indicator.
George Lane developed this indicator in the late 1950s. Stochastics measure the current close relative to the range (high/low) over a set of periods.
Stochastics consist of two lines:
%K � Is the main line and is usually displayed as a solid line
%D � Is simply a moving average of the %K and is usually displayed as a dotted line
There are three types of Stochastics: Full, fast and slow stochastics. Slow stochastics are simply a smother version of the fast stochastics, and full stochastics are even a smother version of the slow stochastics.
Interpretation:
Buy when %K falls below the oversold level (below 20) and rises back above the same level.
Sell when %K rises above de overbought level (above 80) and falls back below the same level.
The interpretation above is how most traders and investors use them; however, it only works when the market is trendless or ranging. When the market is trending, a reading above the overbought territory isn't necessary a bearish signal, while a reading below de oversold territory isn't necessary bullish signal.
Trending market
When the market is trending is necessary to adapt the oscillator to the same conditions: When the market is trending up, then the signals with the higher probability of success are those in direction of the trend �Buy signals�, on the other hand when the market is trending down, selling signals offer the lowest risk opportunities.
Thus when the market is trending up, we will only look for oversold conditions (when the stochastics fall below the oversold level [below 20] and rises back above the same level) to get ready to trade, and in the same way, when the market is trending down we will only look for overbought conditions (when the stochastics rise above de overbought level [above 80] and falls back below the same level. Taking all overbought/oversold signals during a trending market will lead us to many whipsaws. If you are not comfortable with the number of signals given, try expanding your trading to other currency pairs.
Trend-less market
During a ranging market we could use the interpretation explained above to trade off stochastics.
Divergence
Divergence trades are amongst the most reliable trading signals in the Forex market. A divergence occurs either when the indicator reaches new highs/lows and the market fails to do it or the market reaches new highs/lows and the indicator fails to do it. Both conditions mean that the market isn't as strong as it used to be giving us opportunities to profit from the market.
Stochastics can also be used to trade off divergences.
Price behavior
A price behavior can be incorporated into any kind of system or Forex strategy. When using divergences or overbought/oversold condition with a price behavior approach, the probability of success of our signals increases enormously. Why? Because price dictates at the end, how all indicators will behave, it also gives us a lot of information about the probable direction it will take in the future.
I hope this article helps you become a better trader.
Don't forget to read our risk disclaimer.
Quick Forex Ideas
foreign exchange market
Online forex trading training is convenient because you can choose which topics to study or pay particular attention to. You can decide which time of day or night to study or participate in online discussion of the curriculum.
More info on a great Forex system
online forex trading
Many factors affect Forex trading. It is critical to know and understand the various factors that cause the Forex to fluctuate from day to day. The foreign exchange market will change depending on the economic factors that play a role in the movement of currency.
More info on a great Forex system
currency
Let�s take a concrete example of getting a profit from the changing the rate of the Euro, from 0,9162 to 0,9292. If you have anticipated this change by using technical or fundamental analysis, you can buy the Euro cheaper for dollars, and then sell it back at a higher price. For example, if you choose leverage 1:100, then 99,000 dollars of the credit line, granted by the Internet broker, is added to 1000 dollars, and you buy the Euro at the price of 0.9162. As a result of this transaction we get: $ 100,000 / 0.9162 = Euro 109.146, 47.
Your Latest Easy Forex News
The U.S. dollar took a step forward this morning
Fri, 09 Nov 2007 06:51:35 GMT
The U.
Forex Day Trading | How To Trade Forex
Labels: Online Forex Trading | Forex Trading Software
Headline News About Forex And Forex Trading
Forex Software Article Of The Month
How to Value Currency Pairs
By: James Theiss
Typically, in the FOREX market, currencies are traded in pairs. For example, Euro/US Dollar or US Dollar/Japanese Yen. Whenever you trade currencies online, you are then, buying one currency and selling another. Currency pairs are abbreviated. The above pairs would be EUR/USD and USD/JPY. The currency on the left is called the base currency, and the one on the right is the cross currency.
The value of a currency pair is determined by the strength or weakness of the base currency in relation to the cross currency. The base currency value is always 1. That means when you see a quote of 1.4652 for the EUR/USD, its value means 1 Euro will buy 1.4652 dollars. The next day you may see a quote for the EUR/USD of 1.4725. If you listen to the financial news you will hear them say something along the lines of, "the Euro gained strength against the Dollar today", or "the Dollar fell today against the Euro". In pocketbook english, that simply means it takes more dollars today to buy 1 Euro than yesterday.
Let's say you have an online FOREX account and bought the EUR/USD yesterday at the above price of 1.4652 and today you sold, or closed out your trade at 1.4725. That would leave a profit of 73 pips. What the heck is a pip you might ask. Well a pip has two definitions but they both mean the same thing, dollar wise at least: Price Interest Point and Percentage In Point. I have never been able to get a clear difference in the definitions no matter who I have asked, and don't really worry about it anymore because, like I said, they mean the same thing dollar wise.
When you trade currencies online you will have to open an account with a forex dealer. You can open either a standard account or a mini account. In the standard account a pip is worth approximately $10 dollars, and in the mini account it is worth approximately $1 dollar. It used to be the pip was the smallest unit of value in the FOREX market. Today however, many forex dealers quote in tenths of a pip. They have carried out the quote one extra decimal number to give better and more accurate spreads. So the above quote might have read 1.47253, where the 3 is the tenth of a pip. So its value would be either $3 dollars or $.30 cents depending on the type of account you have.
You may have noticed that I said pip values are approximately $1 dollar. That's because each currency pair has its own pip value. The true value is determined by mathematical formulas and the exchange rate of the currency pair. Some pip values are fixed and others fluctuate slightly as one currency rises or falls in value relative to the other currency in the pair.
Currency trades are made in fixed dollar amounts called lots. One lot in a standard account is equal to $1000, which controls $100,000. One lot in the mini account is equal to $100, and controls $10,000. Both standard and mini accounts typically have a 1% margin which allows the FOREX trader 100 to 1 leverage on their investment dollars.
If you trade currencies online, the ultimate goal is to capture as many pips as you can, and not get bogged down in the details of what the exact value of each currency pair is. Unless you are interested in becoming an economist or some such thing, the information presented here is more than enough to let you get on with putting as many pips in your account as possible.
James is a successful online currency trader and also runs the popular website www.todayscurrencytrading.com
Some Quick Forex Information
forex capital markets
Before starting the forex trading, you should begin your Forex training. A professional instructor can assist you in learning different terminologies, concepts and process as a whole in forex trading. In a good Forex training, there are no high-pressure sales pitches, no tricks, and no hidden agendas, but just plain knowledge. Forex training provides traders the ability to take advantage of the foreign currency exchange. This Forex training empowers investors to become world-class forex traders.
foreign exchange rate
I guess if you are a daytrader, 30 minute and 15 minute candle charts and line charts in combination with MACD and MA could be more useful than hourly charts or even daily charts. Especially watch out for the down-sign and up-sign with long tails in candle charts and confirmation of the change of short-term trend in line charts breaking accumulation area in these charts. If you are a nimble trader, even a candle-sign is enough to start moving in with stops above or below the long tail end. For dollar/yen trade, read swiss/yen, pound/yen and euro/yen together to confirm the top or bottom. For Eurodollar or dollar/swiss trade, read pound/swiss and euro/pound together to confirm the same. If you are a daytrader, what matters is the flow of that particular day, not the bull or bear bias, so, 30 Min and 15 Min Candle Charts and Line charts are not bad tools to follow these flows. Good trades.
forex trade
Currency prices are affected by a variety of economic and political conditions. The beginner trading forex currency should take note to probably the most important influences to the currency prices are interest rates, international trade, inflation, and political stability. Governments participate in the foreign exchange market to influence the value of their currencies. The governments flood the market with their domestic currency in an attempt to lower the currency price or conversely, buying in order to raise the price. This is generally known as central bank intervention. The beginner trading forex currency should be aware that large market orders can cause high volatility in currency prices. Due to the size and volume of the forex market its impossible for any entity to drive the market for any length of time.
managed forex
Forex Mentality
When I interview prospective young traders, I always look for disciplined and strong-willed person as my first priority as long as one has decent education, but strangely in many cases, it is some kind of genius or half-genius with lots of brains with no disciplines who turn up for an interview thinking only bright people can make good traders.
More info on a great Forex system
Forex Software News
U.S. near recession amid global slump - IMF
Wed, 09 Apr 2008 10:24:57 EDT
Read full story for latest details.
Global Forex Trading | What Is Forex
¶ 1:39 PM 0 comments
Forex Software Article Of The Month
How to Value Currency Pairs
By: James Theiss
Typically, in the FOREX market, currencies are traded in pairs. For example, Euro/US Dollar or US Dollar/Japanese Yen. Whenever you trade currencies online, you are then, buying one currency and selling another. Currency pairs are abbreviated. The above pairs would be EUR/USD and USD/JPY. The currency on the left is called the base currency, and the one on the right is the cross currency.
The value of a currency pair is determined by the strength or weakness of the base currency in relation to the cross currency. The base currency value is always 1. That means when you see a quote of 1.4652 for the EUR/USD, its value means 1 Euro will buy 1.4652 dollars. The next day you may see a quote for the EUR/USD of 1.4725. If you listen to the financial news you will hear them say something along the lines of, "the Euro gained strength against the Dollar today", or "the Dollar fell today against the Euro". In pocketbook english, that simply means it takes more dollars today to buy 1 Euro than yesterday.
Let's say you have an online FOREX account and bought the EUR/USD yesterday at the above price of 1.4652 and today you sold, or closed out your trade at 1.4725. That would leave a profit of 73 pips. What the heck is a pip you might ask. Well a pip has two definitions but they both mean the same thing, dollar wise at least: Price Interest Point and Percentage In Point. I have never been able to get a clear difference in the definitions no matter who I have asked, and don't really worry about it anymore because, like I said, they mean the same thing dollar wise.
When you trade currencies online you will have to open an account with a forex dealer. You can open either a standard account or a mini account. In the standard account a pip is worth approximately $10 dollars, and in the mini account it is worth approximately $1 dollar. It used to be the pip was the smallest unit of value in the FOREX market. Today however, many forex dealers quote in tenths of a pip. They have carried out the quote one extra decimal number to give better and more accurate spreads. So the above quote might have read 1.47253, where the 3 is the tenth of a pip. So its value would be either $3 dollars or $.30 cents depending on the type of account you have.
You may have noticed that I said pip values are approximately $1 dollar. That's because each currency pair has its own pip value. The true value is determined by mathematical formulas and the exchange rate of the currency pair. Some pip values are fixed and others fluctuate slightly as one currency rises or falls in value relative to the other currency in the pair.
Currency trades are made in fixed dollar amounts called lots. One lot in a standard account is equal to $1000, which controls $100,000. One lot in the mini account is equal to $100, and controls $10,000. Both standard and mini accounts typically have a 1% margin which allows the FOREX trader 100 to 1 leverage on their investment dollars.
If you trade currencies online, the ultimate goal is to capture as many pips as you can, and not get bogged down in the details of what the exact value of each currency pair is. Unless you are interested in becoming an economist or some such thing, the information presented here is more than enough to let you get on with putting as many pips in your account as possible.
James is a successful online currency trader and also runs the popular website www.todayscurrencytrading.com
Some Quick Forex Information
forex capital markets
Before starting the forex trading, you should begin your Forex training. A professional instructor can assist you in learning different terminologies, concepts and process as a whole in forex trading. In a good Forex training, there are no high-pressure sales pitches, no tricks, and no hidden agendas, but just plain knowledge. Forex training provides traders the ability to take advantage of the foreign currency exchange. This Forex training empowers investors to become world-class forex traders.
foreign exchange rate
I guess if you are a daytrader, 30 minute and 15 minute candle charts and line charts in combination with MACD and MA could be more useful than hourly charts or even daily charts. Especially watch out for the down-sign and up-sign with long tails in candle charts and confirmation of the change of short-term trend in line charts breaking accumulation area in these charts. If you are a nimble trader, even a candle-sign is enough to start moving in with stops above or below the long tail end. For dollar/yen trade, read swiss/yen, pound/yen and euro/yen together to confirm the top or bottom. For Eurodollar or dollar/swiss trade, read pound/swiss and euro/pound together to confirm the same. If you are a daytrader, what matters is the flow of that particular day, not the bull or bear bias, so, 30 Min and 15 Min Candle Charts and Line charts are not bad tools to follow these flows. Good trades.
forex trade
Currency prices are affected by a variety of economic and political conditions. The beginner trading forex currency should take note to probably the most important influences to the currency prices are interest rates, international trade, inflation, and political stability. Governments participate in the foreign exchange market to influence the value of their currencies. The governments flood the market with their domestic currency in an attempt to lower the currency price or conversely, buying in order to raise the price. This is generally known as central bank intervention. The beginner trading forex currency should be aware that large market orders can cause high volatility in currency prices. Due to the size and volume of the forex market its impossible for any entity to drive the market for any length of time.
managed forex
Forex Mentality
When I interview prospective young traders, I always look for disciplined and strong-willed person as my first priority as long as one has decent education, but strangely in many cases, it is some kind of genius or half-genius with lots of brains with no disciplines who turn up for an interview thinking only bright people can make good traders.
More info on a great Forex system
Forex Software News
U.S. near recession amid global slump - IMF
Wed, 09 Apr 2008 10:24:57 EDT
Read full story for latest details.
Global Forex Trading | What Is Forex
Labels: Forex Trade | Online Forex
