Forex Trading

Basic strategies - where the education for all beginner traders starts.

Basic strategies use simple chart pattern recognition rules and one or two basic indicators. By learning to recognize and trade simple patterns, novice Forex traders will be able to make a much smoother transition to more advanced trading systems and methods.

We start from the very basic Forex trading strategies that will help beginner traders to identify entry and exit points and foresee market turns; and we will gradually advance to more advanced Forex trading systems.

Before we start: two words about Stop Loss orders – they should be set either in fixed amount of pips (you may try to use 20-30 pips with those simple Forex systems) or, if chart permits, slightly over the last highest/lowest price swing point.

Attention all traders: trading strategies are posted for their educational purpose only। Trading rules may be subject to interpretation. Planned risk levels may be increased dramatically under extreme market conditions. Use the ideas and/or modify them to suit your trading style, but only at your own risk. We recommend testing your trading system on demo account before investing real money.

Simple Forex strategies — simple to use, easy to try out.

This collection of Forex trading strategies and techniques is dedicated to help traders in their research and developing of workable trading styles and trading systems।

Simple Forex strategies — simple to use, easy to try out.

This collection of Forex trading strategies and techniques is dedicated to help traders in their research and developing of workable trading styles and trading systems.

Attention all traders: trading strategies are posted for their educational purpose only. Trading rules may be subject to interpretation. Planned risk levels may be increased dramatically under extreme market conditions. Use the ideas and/or modify them to suit your trading style, but only at your own risk. We recommend testing your trading system on demo account before investing real money.

Simple trading systems are good for skilled beginners and intermediate traders, but may not suit more experienced traders. Either way, do not skip those strategies as they will preserve consistency in your learning progress. Advanced strategies were all at some point simple, but later were improved by traders. So, learning the basic ideas behind simple strategies will help you in the long run to advance in your own strategy making.

We hope you enjoy staying with us!

There are several Psychological Market Indicators investors can use to help them determine when a Market Bottom or Top is nearing. One of the more important ones is the Bullish-Bearish Indicator which shows the % of Bullish and Bearish Investment Advisors. This data is available from Investors Intelligence and is also published by Investors Business Daily as well.

Generally when there is a large difference ( >30%) between the % of Bullish and Bearish Investment Advisors there is an excessive amount of Bullishness in the market which usually is indicative of a nearing top. The chart below compares the S&P 500 versus the % difference between the Bullish and Bearish Investment Advisors since 1998. As you can see when the % difference between the Bullish and Bearish Investment Advisors is >30% the S&P 500 has generally made a top and then reversed strongly to the downside. Some examples include last Summer (point A), the early part of 2001 (point B), the Spring of 2000 (point C), the early part of 2000 (point D), the Summer of 1999 (point E) and even further back in the Summer of 1998 (point F). Recently the % difference between the % of Bullish and Bearish Advisors reached near 30% again in January (point G) which was a warning sign that the S&P 500 was likely nearing a top after rallying strongly for three months.

Meanwhile on the flip side when the % difference between the Bullish and Bearish Investment Advisors narrows and approaches a very low value ( <= 0%) then there is an excess of Bearishness which is a signal the market is likely nearing a bottom and will begin to reverse strongly to the upside। Once again using the chart of the S&P 500 versus the % difference between the Bullish and Bearish Investment Advisors below shows there have been four cases of this over the past four years। They include last Fall (point H), last Spring (point I), in the Fall of 1999 (point J) and further back in the Fall of 1998 (point K).

As of mid February the chart of the % of Bullish and Bearish Investment Advisors versus the S&P 500 shown below indicates there is still a rather large difference between the Bullish (point L) and Bearish (point M) Investment Advisors. Thus until the % difference narrows again and trends towards zero there may be more downside pressure in the market before a bottom is reached.

Thursday, July 9, 2009

Foreign exchange market is different from the stock market

The foreign exchange market is also known as the FX market, and the forex market. Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970's. The forex market is one that is not based on any one business or investing in any one business, but the trading and selling of currencies.

The difference between the stock market and the forex market is the vast trading that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions and those similar types of institutions from other countries. The

What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country.

The difference between the stock market and the forex market is that the forex market is global, worldwide. The stock market is something that takes place only within a country. The stock market is based on businesses and products that are within a country, and the forex market takes that a step further to include any country.

The stock market has set business hours. Generally, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open generally twenty four hours a day because the vast number of countries that are involved in forex trading, buying and selling are located in so many different times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market trading occurs.

The stock market in any country is going to be based on only that countries currency, say for example the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you are involved with many types of countries, and many currencies. You will find references to a variety of currencies, and this is a big difference between the stock market and the forex market.