Archive for March, 2010

The Trend Is Your Buddy

March 30th, 2010 No Comments

If the price isn’t going anywhere, then the lines that you draw thru the highest highs and the lowest lows will either be horizontal and parallel to one another, or they’re going to be converging (drawing closer together) or diverging (drawing apart). If they are horizontal, you could use them as support and resistance lines in the same way. If they are diverging, it is not a good time to trade. Wait for a trend to form.

If the lines are converging, they might point to a breakout. In this example you should not treat the lines as support and resistance lines but wait for the price to go past any one of them and continue in that way. So if the price breaks above the upper line you would buy, expecting it to resume in that way for some time. Similarly, if the price breaks above the lower line, you would sell.

Like all currency exchange systems, these aren’t warranted. There is always a chance of trades going against you, so you check your signals against other indicators and always use stop losses. Always test your system in a demo account before going live. These steps will help you to develop a successful forex trading strategy.

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Best Tips To Learn Day Trading

March 28th, 2010 No Comments

1. Track Everything

although you have to work fast when you are using day trading methods it is worth making the effort to write everything down. Again this is a habit you can train yourself into while in demo. You’ll be dazzled how much it helps you to grasp why things went wrong or right when they actually did. This can enable to to tweak a marginal system into a moneymaking one and make all the difference to your bottom line. A straightforward spreadsheet recording your position, the signal(s) and the opening and closing costs is enough during trading. Afterward you may need to add a comment.

2. If In Doubt, Keep Out

This is a well known trading and investment rule. Do not gamble on something that nearly fits your system but not actually. It may work once but over the long run this will lead to disaster. There’s probably a reason why the system is set up for the signals that it has and if the market doesn’t fit, do not force it.

equally if you’re sick or under pressure about another area of your life, it can be better to stay away from the market, especially while you are still a relative beginner. There will be other and better occasions to learn day trading when you’re feeling in peak condition.

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How Foreign Exchange Works

March 28th, 2010 No Comments

The currency market, unlike the stockmarket, is open 24 hours a day in the business week. This again is because of its international nature. It is always business hours somewhere in the world, except on weekends and vacations. This means that currency exchange traders can operate at just about any time or night, according to what suits their schedule and their trading technique. Some traders work business hours in their own time sector, others log on in the evenings or early mornings before heading off for a real job.

Speculative trading is dangerous, if it is undertaken in stocks or currency. If you’re searching for a safe investment then forex trading is not for you. Risk is the trade off for the chance of making large profits from the high leverage that is available thru currency exchange brokers. Controlling a position size that’s 100 times your committed funds is common ; two hundred times is not peculiar and 400 times is possible with some brokers. This implies that a small change in the cost of a selected currency pair can have a big impact.

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The Trend Is Your Friend

March 28th, 2010 No Comments

It is widely known in the currency trading world that the trend is your friend and any currency trading strategy based around following a trend, such as No Loss Robot, is probably going to be both easy and effective.

It is easy to create trend lines on any foreign exchange chart, but most folks prefer to use candlestick charts for this as the candlesticks are such a clear visible signal. When trend lines are forming, you may use them as a signal to buy or sell the currency pair.

The first step in using trend lines for a foreign exchange trading strategy is to ascertain whether the market is rising, falling or is stable within certain parameters. Of course there’ll always be fluctuations, but at certain times you’ll see clear patterns.

1. If the price is rising

If the price is going up, first draw a straight line through the highest highs on the chart. This line will be sloping upward. Then draw another line through the lowest lows on the chart. If this line is also going upward and is roughly parallel to the first, you’ve got an upward trend.

You can then use these two lines as support and resistance lines. This means that you can assume that while the trend continues, the price will remain in the area between these 2 lines. any time the price hits the top line you might sell, on the presumption that it’ll fall back. In a way this strategy means going against the trend, but you would only hold that position for a short while.

or, any time that the price hits the final analysis you could buy, on the assumption that it’ll soon rise again. In this case you are following the trend which is commonly a better methodology. However, you should keep in mind that there will at some specific point be a true reversal and you could be caught out by this.

2. If the price is falling

If the price is going down, you can follow a similar method to the prior system. The lines you draw will be going downward but you would still buy when the price hits the lower line and sell when it hits the upper line.

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