Technical Overview
• Euro Topped?
• Japanese Yen 119 is Key
• British Pound Falters Before 1.9700
• Swiss Franc Reversal at 61.8%
• Canadian Dollar Nearing Important Support
• Australian Dollar Indecisive
• New Zealand Dollar In Small 5th Down
EURUSD – Our analysis from yesterday that “a likely level for a reversal is 1.3257/64. 1.3257 is the 78.6% fibo of 1.3364-1.2865 and 1.3264 is the monthly R1 pivot. Additionally, the 61.8% extension of waves 1 through 3 is at 1.3253 (1.3081 + (.618 x (1.3190 – 1.2911))” has proved correct so far. A break below yesterday’s low at 1.3160 would bolster the bearish case. Near term resistance is at former intraday support of 1.3211. Yesterday’s high at 1.3262 needs to hold in order for the bearish structure to remain intact. Short term bearish support on a break below 1.3160 is at 1.3080. Also keep in mind that this decline is expected to take prices below 1.2865 (eventually and barring a break above 1.3262).
USDJPY – The vicious decline from 121.66 looks like a C wave that completed the correction of strength from 122.21. Price has held near the previous 4th wave low at 117.98 (dipping below to 117.49 intraday yesterday). Additional support is at the 200 day SMA (117.36), the 61.8% of 114.42-122.21 at 117.41, and a potential trendline drawn off of the May 2006 and December 2006 lows. That line is at 116.69 today and increases about 2 pips per day. With the shelf of support just below current price, risk is now to the upside. A break above 119.00 warrants a bullish bias.
GBPUSD – The longer term wave structure suggests that a major top is in place at 1.9915. In fact, the rally from 1.8090 traced out an ending diagonal. Ending diagonals are often fully retraced. A decline below 1.9260 strongly suggests that a top is in place at 1.9915. The rally to 1.9675 may have completed a correction of the 1.9915-1.9401 decline. Only a decline below 1.9401 gives scope to more additional potential.
USDCHF – From yesterday “the pair is currently in the C wave position of the A-B-C correction. Although the pair has bounced this morning at the 50% fibo of 1.1878-1.2575 at 1.2227, the intraday charts suggest that the decline has more to go. Watch the 61.8% fibo of 1.1878-1.2575 at 1.2145 for a bottom.” Price has rallied over 60 pips off of yesterday’s low at 1.2144 but price needs to rally above the 2/20 low at 1.2312 to more confidently say that at least a near term low is in place. Still, downside risk is limited.
USDCAD – The USDCAD is most likely in a wave 3 that has the potential to reach the 161.8% extension of wave 1 at 1.1297 in the next few weeks (1.1719 – (1.618 x (1.1879 – 1.1620)). 1.1719 needs to hold in order for the near term bearish outlook to remain intact. Potential support prior to 1.1297 is the point where the decline from 1.1719 would equal the 1.1879-1.1620 decline. This is at 1.1458, which intersects with both the 50% of 1.1028-1.1879 at 1.1455 and the 7/24/2006 high at 1.1461. Resistance shifts to the 61.8% of 1.1879-1.1564 at 1.1758 on a rally above 1.1719.
AUDUSD – As long as price remains above .7827, the potential exists for a wave 5 rally to above .7950 before a larger pullback. On the other hand, .7827 is the bearish pivot. Daily CCI has rolled over from above 100, which is often a reliable turn signal. In the very short term, it looks like a 5th wave down from .7887 will take price below .7853.
NZDUSD – Analysis is unchanged from yesterday – “Given the long term head and shoulders pattern along with the 78.6% fibo of .7470-.5927 at .7138, it is possible that Kiwi is near a major top. The best interpretation on the daily accounts for an extended wave 1 from .5927. As mentioned with the USDJPY, a correction following a 5 wave sequence where the 1st wave is extended tends to bottom near the bottom of the 2nd wave. Thus, expectations are for a decline to .6528 from near current price. The 78.6% fibo at .7138 is risk.” Similar to the AUDUSD, it looks like a small 5th wave is working down (from .7028).
FOREX SYGNALS SYSTEM
Wednesday, February 28, 2007
Intraday Signals
GBP/USD
Pivot : 1.9576
Our preference : Short @ 1.9566 with targets @ 1.951 & 1.95 in extension.
Alternative scenario : Above 1.9576 look for further upside with 1.9602 & 1.964 as targets.
Comment : intraday technical indicators are calling for further weakness. A down move is expected with the 1.95 key support in sight (a bounce should then, shape off this area).
Trend: ST Ltd upside; MT Bullish
Key levels Comment
1.97** Fib projection
1.9679** Fib projection
1.9655*** Intraday pivot point
1.9621 Last
1.9601* Fib retracement (50%)
1.9585** Fib retracement (61.8%)
1.9562** Fib retracement (50%)
EUR/USD
Pivot : 1.321
Our preference : Short @ 1.32 with targets @ 1.317 & 1.3149 in extension.
Alternative scenario : Above 1.321 look for further upside with 1.3227 & 1.326 as targets.
Comments : the 30-min RSIU has broken below a rising trend line.
Trend: ST Ltd upside; MT Bullish
Key levels Comment
1.3272** Fib projection
1.326** Intraday resistance
1.323*** Intraday pivot point
1.3219 Last
1.3192** Fib retracement (38.2%)
1.3171** Fib retracement (50%)
1.3149*** Fib retracement (61.8%)
USD/JPY
Pivot : 118
Our preference : Long @ 118.1 with targets @ 118.75 & 119.09 in extension.
Alternative scenario : Below 118 look for further downside with 117.5 & 117.4 as targets.
Comment : the 30-min RSI validated a bullish divergence calling for an upturn.
Trend: ST Ltd downside; MT Bearish
Key levels Comment
120.86** Fib retracement (50%)
120.79** Intraday resistance
120.67* Fib retracement (38.2%)
120.19 Last
120*** Intraday pivot point
119.7** Intraday support
119.5** Intraday support
USD/CHF
Pivot : 1.22
Our preference : Long @ 1.221 with targets @ 1.2246 & 1.2279 in extension.
Alternative scenario : Below 1.22 look for further downside with 1.2163 & 1.2145 as targets.
Comment : the 30-min RSI has broken above a resistance area. This calls for a further rise.
Pivot : 1.9576
Our preference : Short @ 1.9566 with targets @ 1.951 & 1.95 in extension.
Alternative scenario : Above 1.9576 look for further upside with 1.9602 & 1.964 as targets.
Comment : intraday technical indicators are calling for further weakness. A down move is expected with the 1.95 key support in sight (a bounce should then, shape off this area).
Trend: ST Ltd upside; MT Bullish
Key levels Comment
1.97** Fib projection
1.9679** Fib projection
1.9655*** Intraday pivot point
1.9621 Last
1.9601* Fib retracement (50%)
1.9585** Fib retracement (61.8%)
1.9562** Fib retracement (50%)
EUR/USD
Pivot : 1.321
Our preference : Short @ 1.32 with targets @ 1.317 & 1.3149 in extension.
Alternative scenario : Above 1.321 look for further upside with 1.3227 & 1.326 as targets.
Comments : the 30-min RSIU has broken below a rising trend line.
Trend: ST Ltd upside; MT Bullish
Key levels Comment
1.3272** Fib projection
1.326** Intraday resistance
1.323*** Intraday pivot point
1.3219 Last
1.3192** Fib retracement (38.2%)
1.3171** Fib retracement (50%)
1.3149*** Fib retracement (61.8%)
USD/JPY
Pivot : 118
Our preference : Long @ 118.1 with targets @ 118.75 & 119.09 in extension.
Alternative scenario : Below 118 look for further downside with 117.5 & 117.4 as targets.
Comment : the 30-min RSI validated a bullish divergence calling for an upturn.
Trend: ST Ltd downside; MT Bearish
Key levels Comment
120.86** Fib retracement (50%)
120.79** Intraday resistance
120.67* Fib retracement (38.2%)
120.19 Last
120*** Intraday pivot point
119.7** Intraday support
119.5** Intraday support
USD/CHF
Pivot : 1.22
Our preference : Long @ 1.221 with targets @ 1.2246 & 1.2279 in extension.
Alternative scenario : Below 1.22 look for further downside with 1.2163 & 1.2145 as targets.
Comment : the 30-min RSI has broken above a resistance area. This calls for a further rise.
Friday, February 23, 2007
Forex Trading Tips - Part 5
Part 5: These forex trading tips may be of help to the budding or hardened professional trader. Knowledge is certainly power.
Welcome to part FIVE. If you haven’t read part one, two, three or four please take some time to read and understand them at forextradinghq.com. If you have - congratulations, you probably understand more then most traders gambling their savings away on the forex markets. Take notes of what I say, but it is your choice whether to follow them or not. I am simply sharing my personal experiences, so some of my ideas and opinions may not cover your overall goals in trading forex. So we shall start off to rehash the forex trading tips we covered in part 3.
In part four of our forex trading tip series we discussed three major points. We told you to have a trading goal of at least 20 pips a trade. Why? Simply because of your risk and reward ratio – it is worthwhile holding out for a larger profit if you are going to lose out every so often.. Just as long as you have a system with a stop loss, this goal should work for you. Impose a trading goal of 20 pips a trade. Risk reward; KISS, exits in profit and loss
It would be perfect if you can pick tops and bottoms perfectly. But you would be extremely lucky if you did. Lucky because it is purely by chance that you happened to enter into or exit a position at the absolute high or low of the trend. Everyone would love to pick out tops and bottoms. This is where amateur forex traders falter and professionals exceed. Professional forex traders do not pick bottoms or tops. It is more wise to ride trends, with the aim of getting a small piece of the action at a time. It is just human nature to want to buy at the absolute rock bottom bargain price and it is also human nature to want to sell at the highest price. But in the markets, aiming to always squeeze out the money in the ‘tops’ and ‘bottoms’ are just an equation for failure. Think about it – it is simply greed in play there. Greed, just a human emotion of greed to want more, when you can already have a slice of the action.
Don’t forget your technicals. A large part of forex trading is understanding and analysing your technicals. Understand what the market is doing – whether it is in a long term uptrend or downtrend or if it is bouncing around a tight support/resistance zone. Also remember that there can be spikes in the day to day movement of forex, and that these spikes can lure you away from the bigger picture. Of course, this tip all depends on your trading goals, namely your time horizon for the trade. For example, if your goal was to make a profit off an intra day trade, and the technicals were showing you a long term downtrend, but in that particular day there is a short term breakout or spike in the other way around. So you take your chances. But suddenly the trade goes sour. What should you do? Think now, and not when the heat is on and prepare your trading plan.
Emotional trading. All traders are at the whim of their emotions. Fear and greed are the main culprits of failure at trading the markets for a profit. Even professional traders who have been in the business for years have succumbed to the evils of fear and greed. It is simply human to be tempted by fear and greed and the only weapon traders have against them are having a trading system in place. Without the trading system that will tell you when to get into the forex market and when to exit most of your trades will be decided from the gut – that is from your emotions. The success of your trading without having a system lies on how good your gut feeling is. And let me tell you, trading the forex markets in that way is highly stressful and inconsistent. Systems are all the rage – with people selling them as black box trading systems and people educating traders about their successful system… but that is a totally different story.
We’ll see you soon for part six of the forex trading tip series.
Welcome to part FIVE. If you haven’t read part one, two, three or four please take some time to read and understand them at forextradinghq.com. If you have - congratulations, you probably understand more then most traders gambling their savings away on the forex markets. Take notes of what I say, but it is your choice whether to follow them or not. I am simply sharing my personal experiences, so some of my ideas and opinions may not cover your overall goals in trading forex. So we shall start off to rehash the forex trading tips we covered in part 3.
In part four of our forex trading tip series we discussed three major points. We told you to have a trading goal of at least 20 pips a trade. Why? Simply because of your risk and reward ratio – it is worthwhile holding out for a larger profit if you are going to lose out every so often.. Just as long as you have a system with a stop loss, this goal should work for you. Impose a trading goal of 20 pips a trade. Risk reward; KISS, exits in profit and loss
It would be perfect if you can pick tops and bottoms perfectly. But you would be extremely lucky if you did. Lucky because it is purely by chance that you happened to enter into or exit a position at the absolute high or low of the trend. Everyone would love to pick out tops and bottoms. This is where amateur forex traders falter and professionals exceed. Professional forex traders do not pick bottoms or tops. It is more wise to ride trends, with the aim of getting a small piece of the action at a time. It is just human nature to want to buy at the absolute rock bottom bargain price and it is also human nature to want to sell at the highest price. But in the markets, aiming to always squeeze out the money in the ‘tops’ and ‘bottoms’ are just an equation for failure. Think about it – it is simply greed in play there. Greed, just a human emotion of greed to want more, when you can already have a slice of the action.
Don’t forget your technicals. A large part of forex trading is understanding and analysing your technicals. Understand what the market is doing – whether it is in a long term uptrend or downtrend or if it is bouncing around a tight support/resistance zone. Also remember that there can be spikes in the day to day movement of forex, and that these spikes can lure you away from the bigger picture. Of course, this tip all depends on your trading goals, namely your time horizon for the trade. For example, if your goal was to make a profit off an intra day trade, and the technicals were showing you a long term downtrend, but in that particular day there is a short term breakout or spike in the other way around. So you take your chances. But suddenly the trade goes sour. What should you do? Think now, and not when the heat is on and prepare your trading plan.
Emotional trading. All traders are at the whim of their emotions. Fear and greed are the main culprits of failure at trading the markets for a profit. Even professional traders who have been in the business for years have succumbed to the evils of fear and greed. It is simply human to be tempted by fear and greed and the only weapon traders have against them are having a trading system in place. Without the trading system that will tell you when to get into the forex market and when to exit most of your trades will be decided from the gut – that is from your emotions. The success of your trading without having a system lies on how good your gut feeling is. And let me tell you, trading the forex markets in that way is highly stressful and inconsistent. Systems are all the rage – with people selling them as black box trading systems and people educating traders about their successful system… but that is a totally different story.
We’ll see you soon for part six of the forex trading tip series.
Friday, February 16, 2007
Forex Trading Tips - Part 4
Part 4: These forex trading tips may be of help to the budding or hardened professional trader. Knowledge is certainly power.
Welcome to part 4 of the forex trading tips series. If you haven’t read part one, two or three, please take some time to read and understand them at www.forextradinghq.com/forex-information/forex-resources. If you have - congratulations, you probably understand more then most traders gambling their savings away on the forex markets. Take notes of what I say, but it is your choice whether to follow them or not. I am simply sharing my personal experiences, so some of my ideas and opinions may not cover your overall goals in trading forex. So we shall start off to rehash the forex trading tips we covered in part 3.
In part three we discussed three major points. These three points are important, and most successful forex traders trade the markets on the basis of these trading principles. The first forex trading tip we had a look at was to trade during a peak time since that was when the most volume of forex was traded on the markets. Another point we discussed was to trade foreign exchange in the peak times only as that was when the most volume was traded – it is safer to walk with the crowd than in a quiet and lonely alleyway. Finally, we also discussed the possibility of you making profits from the volatile moves the forex market experiences when news and data releases are made public. Most of the key dates that you need to know are published on key financial websites or the company or government organisation responsible for keeping tabs of economic data figures.
Exit with style. If a trade is going sour, get out. That’s it. Get out. Don’t let your emotions or greed toy with the idea of any future possibility of the currency price recovering. Assuming you have an exit plan specifying your stop loss level, you should comfortably let yourself out of the markets at that level, no matter what second thoughts you have. Show the markets any hesitancy and the markets will slaughter you. Now, if you were on the other side of the coin – that is, if you are sitting on unrealized trading profit, don’t let boredom or stress make the exit for you. Let your plan instruct you on what you should do. Most traders would simply be stopped out, if they were following a trailing-stop strategy.
Impose a trading goal of 20 pips a trade. Question yourself – is the trade worth your while? Is it worth your time? Is it worth the risk? The answer depends on your trading plan, your dealers’ spread and your financial goals. Some traders would say, a trading goal of 10 pips profit a trade is too small – and you are risking far too much for such a little profit. In the end, it is your call, so make your calculations and see if your risk:reward ratio is well worth your while.
Keep It Simple Stupid! Some traders may succumb to implementing a great trading plan with many technical indicators showing them, when to take a trade. But sometimes, the best trades, well in truth, all of your best trades would be made from very simple principles such as support and resistance and trendlines. The lesson here is not to overanalyse a trade. Keep your trading light, keep it simple.
Want to know more? Well, there’s going to be a part 5 in this forex tips series.
George Polizogopoulos is a staff writer for ForexTradingHQ.com, the information hub for forex (foreign exchange) traders. More information about learning forex is available on our forex trading website.
This article "Forex Trading Tips - Part 4" can be found in our Foreign Exchange (FX) Markets Resources category.
Welcome to part 4 of the forex trading tips series. If you haven’t read part one, two or three, please take some time to read and understand them at www.forextradinghq.com/forex-information/forex-resources. If you have - congratulations, you probably understand more then most traders gambling their savings away on the forex markets. Take notes of what I say, but it is your choice whether to follow them or not. I am simply sharing my personal experiences, so some of my ideas and opinions may not cover your overall goals in trading forex. So we shall start off to rehash the forex trading tips we covered in part 3.
In part three we discussed three major points. These three points are important, and most successful forex traders trade the markets on the basis of these trading principles. The first forex trading tip we had a look at was to trade during a peak time since that was when the most volume of forex was traded on the markets. Another point we discussed was to trade foreign exchange in the peak times only as that was when the most volume was traded – it is safer to walk with the crowd than in a quiet and lonely alleyway. Finally, we also discussed the possibility of you making profits from the volatile moves the forex market experiences when news and data releases are made public. Most of the key dates that you need to know are published on key financial websites or the company or government organisation responsible for keeping tabs of economic data figures.
Exit with style. If a trade is going sour, get out. That’s it. Get out. Don’t let your emotions or greed toy with the idea of any future possibility of the currency price recovering. Assuming you have an exit plan specifying your stop loss level, you should comfortably let yourself out of the markets at that level, no matter what second thoughts you have. Show the markets any hesitancy and the markets will slaughter you. Now, if you were on the other side of the coin – that is, if you are sitting on unrealized trading profit, don’t let boredom or stress make the exit for you. Let your plan instruct you on what you should do. Most traders would simply be stopped out, if they were following a trailing-stop strategy.
Impose a trading goal of 20 pips a trade. Question yourself – is the trade worth your while? Is it worth your time? Is it worth the risk? The answer depends on your trading plan, your dealers’ spread and your financial goals. Some traders would say, a trading goal of 10 pips profit a trade is too small – and you are risking far too much for such a little profit. In the end, it is your call, so make your calculations and see if your risk:reward ratio is well worth your while.
Keep It Simple Stupid! Some traders may succumb to implementing a great trading plan with many technical indicators showing them, when to take a trade. But sometimes, the best trades, well in truth, all of your best trades would be made from very simple principles such as support and resistance and trendlines. The lesson here is not to overanalyse a trade. Keep your trading light, keep it simple.
Want to know more? Well, there’s going to be a part 5 in this forex tips series.
George Polizogopoulos is a staff writer for ForexTradingHQ.com, the information hub for forex (foreign exchange) traders. More information about learning forex is available on our forex trading website.
This article "Forex Trading Tips - Part 4" can be found in our Foreign Exchange (FX) Markets Resources category.
Tuesday, February 13, 2007
Today Recommendation / Signals
Tuesday 02.13.2007 Print E-mail
EUR/USD
The Euro traded in a narrow range of 20 pips after it declined on yesterday and it found support at 1.2955. Support backs 1.2955 at 1.2940 at 1.2915. Resistance is seen at 1.2970 followed by 1.2980, 1.3 and 1.3035. While the lower zone remains intact, below 1.2950, a potential recovery aiming towards the 1.3 mark is possible. Daily sentiment is neutral and the hourly is slightly bullish. Current quote is 1.2970 @ 06:51 GMT
Recommended trades:
Long in the 1.2960 area, stop below 1.2930, objectives at and above 1.3010.
EUR/USD
The Euro traded in a narrow range of 20 pips after it declined on yesterday and it found support at 1.2955. Support backs 1.2955 at 1.2940 at 1.2915. Resistance is seen at 1.2970 followed by 1.2980, 1.3 and 1.3035. While the lower zone remains intact, below 1.2950, a potential recovery aiming towards the 1.3 mark is possible. Daily sentiment is neutral and the hourly is slightly bullish. Current quote is 1.2970 @ 06:51 GMT
Recommended trades:
Long in the 1.2960 area, stop below 1.2930, objectives at and above 1.3010.
Forex Trading Tips - Part 3
Part 3: These forex trading tips may be of help to the budding or hardened professional trader. Knowledge is certainly power
Welcome to part 3. If you have bothered to keep reading until now, you must be enjoying my articles, right? We continue on, our journey, exploring some new forex trading tips to help you either get started or improve your trading skills. Make sure you have read part two before you keep reading. I hope you are taking notes about these secrets to trading the forex markets successfully.
In the last article (part two) of forex trading tips, we went through the concepts of keeping your greed in check with respect to the amount of leverage you take with your trades. Also, I recommended you go out and sort yourself out with a trading strategy. You must be independent when you trade as well as confident in your trading. We also discussed you, "the trader" are a LOSER.
Trade with the volume. Don’t trade in the off-peak hours. (unless you are really confident) The reason is that there is no volume, and the larger institutional traders may be using this time to hedge their positions. So as you watch the markets when you first start off, notice when your currency pais are especially active. Note when the markets for the countries whose currency pairs you are trading open and close. Knowing this information is vital, as sometimes these are the times when forex prices gap by large amounts.
Follow the white rabbit. Or rather, the black rabbit. What I mean is, follow that black line on your screen. Yes, that line. What line? I’m talking about the trendline that you arbitrarily drew on your trading screen. It depends on your system what time scale you are looking at with your trendline, but always remember to trade with the trend. If the market is going up, it’s going up. If it is going down, it’s going down. Simple. Bullish markets. Bearish markets. You can’t predict the future from past trends but acknowledge that sometimes there is a pattern – the trend that the market usually follows for a certain amount of time. Trade with the crowd – not against it. Think about what happens to you if you try to walk against a herd of people exiting a football stadium? You would find you would probably make no progress.
Trade forex on news and data releases. Almost all foreign exchange currency movements occur when news or some critical data is released. As a retail trader, you have to be careful. Sometimes, there may be some delay between the release of the news and when it reaches us. Assume that the banks know everything far in advance of us, the retail traders. Because it is true. They are in the industry, word spreads fast in industry as some of you can attest in your own professions. So give in to the fact that sometimes, or almost all the time, you as a trader would not be fully disclosed to everything the big institutional traders know. Just follow their tails. Follow the white rabbit.
So, we’ve covered three more things: trade with the volume, trade with the trend and be wary about news releases as those are the times that the forex markets are especially active.
Welcome to part 3. If you have bothered to keep reading until now, you must be enjoying my articles, right? We continue on, our journey, exploring some new forex trading tips to help you either get started or improve your trading skills. Make sure you have read part two before you keep reading. I hope you are taking notes about these secrets to trading the forex markets successfully.
In the last article (part two) of forex trading tips, we went through the concepts of keeping your greed in check with respect to the amount of leverage you take with your trades. Also, I recommended you go out and sort yourself out with a trading strategy. You must be independent when you trade as well as confident in your trading. We also discussed you, "the trader" are a LOSER.
Trade with the volume. Don’t trade in the off-peak hours. (unless you are really confident) The reason is that there is no volume, and the larger institutional traders may be using this time to hedge their positions. So as you watch the markets when you first start off, notice when your currency pais are especially active. Note when the markets for the countries whose currency pairs you are trading open and close. Knowing this information is vital, as sometimes these are the times when forex prices gap by large amounts.
Follow the white rabbit. Or rather, the black rabbit. What I mean is, follow that black line on your screen. Yes, that line. What line? I’m talking about the trendline that you arbitrarily drew on your trading screen. It depends on your system what time scale you are looking at with your trendline, but always remember to trade with the trend. If the market is going up, it’s going up. If it is going down, it’s going down. Simple. Bullish markets. Bearish markets. You can’t predict the future from past trends but acknowledge that sometimes there is a pattern – the trend that the market usually follows for a certain amount of time. Trade with the crowd – not against it. Think about what happens to you if you try to walk against a herd of people exiting a football stadium? You would find you would probably make no progress.
Trade forex on news and data releases. Almost all foreign exchange currency movements occur when news or some critical data is released. As a retail trader, you have to be careful. Sometimes, there may be some delay between the release of the news and when it reaches us. Assume that the banks know everything far in advance of us, the retail traders. Because it is true. They are in the industry, word spreads fast in industry as some of you can attest in your own professions. So give in to the fact that sometimes, or almost all the time, you as a trader would not be fully disclosed to everything the big institutional traders know. Just follow their tails. Follow the white rabbit.
So, we’ve covered three more things: trade with the volume, trade with the trend and be wary about news releases as those are the times that the forex markets are especially active.
Monday, February 12, 2007
Forex Trading Tips - Part 2
Part 2: These forex trading tips may be of help to the budding or hardened professional trader. Knowledge is certainly power
Welcome to part 2. Still reading about the forex markets are we? Looking for more forex trading tips to help you either get started or improve your trading skills? Maybe you are just curious about how the your friend is making a killing at the forex markets, and not getting killed like you are. Whatever your case, make sure you have read part one of this series of forex trading tips before you keep reading. So here, we continue on our journey of discovery about finding the secret of trading the forex markets successfully.
In the last article of forex trading tips, I said something about being ambitious yet humble. Well in other words, the type of trading you want to avoid is being overly cautious. Being over cautious tells me one thing about your trading. And that is, you aren’t confident enough about your trading and it is too risky for you to trade the markets effectively. When you take a position, you must be confident. And when you have confidently opened a position you should give your position a chance to give a result.
Be independent. You have your own personality, be yourself, don’t be someone else. Be true to yourself in your trading and you will succeed. If you pretend to be someone else in the markets, the markets will quickly take profits from you. When you start listening to too many people, people who may have more experience, or people who simply have opinions, be careful with the information and advice you receive. Make your trades by yourself, be accountable to yourself.
You are a loser. And will always be a loser. That is, be humble. Remind yourself, that every day spent in the market increases the chance for you losing. Be confident in your trading, but not too over-confident to consider yourself bulletproof. You will lose for sure – but it is up to you on how much of a realized loss you will take.
Greed with respect to leverage. Be careful with the amount of leverage you place in every forex trade you make. Question your motivation to increase your leverage amount – is it because you are mastering your system, and know that your system delivers or is it because of plain greed? Did you do the calculations in your head? “Hmm, If I put more money into the trade, with more leverage, IF I turn a profit, the profit will be HEAPS larger than simply putting XXX amount.” STOP! Question yourself – is this calculation due to greed? Thinking along these lines is almost certainly a trap due to greed. Watch out.
You must have a trading strategy. Trading without one, is simply gambling. Are you a gambler? Hopefully not, because it is almost a certain fact, if you do all your homework, backtest your system, and assess your system as you trade, you will make money. (Unless you are simply very unlucky) A strategy is a must. The strategy is the route map to your success in the forex markets. Your strategy should detail how you trade: how much leverage you use, what currencies to trade, and how you manage your risk. Have a strategy or be one of the 90% of losers.
Welcome to part 2. Still reading about the forex markets are we? Looking for more forex trading tips to help you either get started or improve your trading skills? Maybe you are just curious about how the your friend is making a killing at the forex markets, and not getting killed like you are. Whatever your case, make sure you have read part one of this series of forex trading tips before you keep reading. So here, we continue on our journey of discovery about finding the secret of trading the forex markets successfully.
In the last article of forex trading tips, I said something about being ambitious yet humble. Well in other words, the type of trading you want to avoid is being overly cautious. Being over cautious tells me one thing about your trading. And that is, you aren’t confident enough about your trading and it is too risky for you to trade the markets effectively. When you take a position, you must be confident. And when you have confidently opened a position you should give your position a chance to give a result.
Be independent. You have your own personality, be yourself, don’t be someone else. Be true to yourself in your trading and you will succeed. If you pretend to be someone else in the markets, the markets will quickly take profits from you. When you start listening to too many people, people who may have more experience, or people who simply have opinions, be careful with the information and advice you receive. Make your trades by yourself, be accountable to yourself.
You are a loser. And will always be a loser. That is, be humble. Remind yourself, that every day spent in the market increases the chance for you losing. Be confident in your trading, but not too over-confident to consider yourself bulletproof. You will lose for sure – but it is up to you on how much of a realized loss you will take.
Greed with respect to leverage. Be careful with the amount of leverage you place in every forex trade you make. Question your motivation to increase your leverage amount – is it because you are mastering your system, and know that your system delivers or is it because of plain greed? Did you do the calculations in your head? “Hmm, If I put more money into the trade, with more leverage, IF I turn a profit, the profit will be HEAPS larger than simply putting XXX amount.” STOP! Question yourself – is this calculation due to greed? Thinking along these lines is almost certainly a trap due to greed. Watch out.
You must have a trading strategy. Trading without one, is simply gambling. Are you a gambler? Hopefully not, because it is almost a certain fact, if you do all your homework, backtest your system, and assess your system as you trade, you will make money. (Unless you are simply very unlucky) A strategy is a must. The strategy is the route map to your success in the forex markets. Your strategy should detail how you trade: how much leverage you use, what currencies to trade, and how you manage your risk. Have a strategy or be one of the 90% of losers.
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