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1 Thu August 09 2007 - 21:26:35 Fullname: Forex Email: forexthingy@hotmail.com Where are your from?: finance Homepage name: forex trading Homepage URL: Reference: Just Surfed On It! How good do you think this site is: Looks nice Comments: It is important in Forex Trading, as in other forms of trading, that you use MACD in different time frames to get a handle on where price action really is going. Don’t just depend on any one time frame. It’s best to view this indicator at different levels, starting at higher levels – i.e., longer-time duration – and then cranking the microscope down to lower levels. To explain, a downtrend can persist in spite of higher MACD lows on a shorter time frame, indicating that, if the price range has been huge, it has progressively reduced the effectiveness of this indicator on the shorter time frame. The higher time frame can remain in a “sell” mode, and confirm a downtrend, even though the shorter time frame is faking you out with what appears to be a buy signal. Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. For example, again a long signal generated by a MA crossover as the market approaches an important resistance level. If the price suddenly starts to bounce back off that important level there is no point on taking this signal, price action is telling us the market doesn’t want to go up. Most of the time, under this circumstances, the market will continue to fall down, disregarding the MA crossover. Don’t get me wrong here, technical indicators are a very important aspect of trading. They help us see certain conditions that are otherwise difficult to see by watching pure price action. But when it comes to pull the trigger, price action incorporation into our Forex trading system will definitely put the odds in our favor, it will generate higher probability trades. Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously. This indicator involves plotting two momentum lines. The MACD line is the difference between two exponential moving averages and the signal or trigger line, which is an exponential moving average of the difference. If the MACD and trigger lines cross, then this is taken as a signal that a change in the trend is likely. The usual contract size for ordinary FX traders is USD $100,000. This is one lot, which is the minimum size normally traded. You put up a margin, usually $1000-$2000 depending on your broker. Some FX brokers now offer mini-contracts. These are 1/10 the size of regular FX contracts, and represent $10,000. The margin is proportionately smaller. The cost of trading mini-contracts is higher, as there is more work for the broker to do in fitting the mini-contracts into the market. However mini-contracts are a great opportunity to start trading without having to risk a lot of money, and can help new traders become familiar with the market before moving on to the full size contracts. Foreign Exchange Market, or Forex as it is commonly called, is an international exchange market to buy and sell different currencies from around the world. An investor has the ability to buy and sell these currencies in order to create gains from small movements in the value of one currency over another. The forex market is open from Monday at 0:00 GMT until Friday at 10:00 GMT. For this reason Forex traders are not limited to the general time constraints of the New York Stock Exchange or NASDAQ. This versatility attracts many investors to become Forex traders. The liquidity of the Foreign Exchange Market is also very attractive for the Forex investor as trades range from 1 to 1.5 trillion dollars on a daily basis. These massive amounts of trades make it extremely difficult for any one trader to affect the market. Foreign Exchange Trading is simply the purchase and sales of currency based on the strength of the currency and the fluctuation in the value of that currency. For example, if one were to invest $1,000 against the British pound at 1.7999 with a 1% margin and anticipate the exchange rate to climb. If that occurs and you close the exchange rate at 1.8050 you would earn roughly $400. Forex is giving you a 40% return on your investment. Forex trading is well known as a lucrative way to make money online. It has become an essential part for investor’s portfolio as you can gain thousands in minutes by trading currencies. For those who are new to the forex trading, Forex means Foreign Exchange Market where it involves buying and selling the different currencies of the world. Profits are made through the difference of selling and buying price - you earn when you buy-low and sell-high. Forex market is a 24-hour market. The trade begins each day in Sydney, and moves around the globe to Tokyo, London, and then New York. Unlike any other financial market, investors can respond to money-value fluctuations caused by economic, social and political events at the time they occur - day or night. Major currencies traded nowadays are U.S. dollars, Australian Dollars, Japanese Yens, British Pounds, Swiss Francs, Canadian Dollars, and the Euro Dollars. In the past, small speculators are not allowed to trade Forex freely as it is now. The minimum required business sizes are large and the financial requirements for trading foreign currencies are strict. Only huge multi-national cooperation and banks are able to fit into the business. In fact, large international banks are still the main players in currency exchange market. Deutsche Bank is one of the top currency traders; along with other major banks like UBS, Citi Group, HSBC, Barclays, J. P. Morgan Chase, Coldman Sachs, ABN Amro, Morgan Stanley, and Merril Lynch; these banks are said to be responsible for more than 70% trades in currency market. Forex trade is not open to the publics until year 1998, where big sized inter-bank units are sliced into smaller pieces and offered to individual traders. It is simple to get started in Forex trading, an funded Forex account and a computer connected to the Internet is more than enough to get started. However, to start trading and become a successful Forex trader are totally different. Trading Forex is a high risks game and traders should always follow certain principals, listed below are a few of must-do’s when trading in Forex market. Understanding risk management is a very important reality when trading the Forex Markets. Losing trades will happen,and managing those losses are the key to success.A good rule of thumb when setting your stop losses is the 5-7% rule. If your trading account is at $2000,then set your stop loss so that you don ’t lose more than 5-7%of the total value of your account. If you used this rule in this case,you would stop out a losing trade when you were down $100-$140. This is important,because if you don’ t manage your losses well, you can easily lose 50%of your trading account on 1 bad trade. You do that a couple of times and you will lose all of your risk capital. It is better to take smaller losses and try to maximize your winning trades.So be careful and deliberate when setting your stops on your trading platform. A trend refers to the direction of prices. Rising peaks and troughs constitute an up trend; falling peaks and troughs constitute a downtrend that determines the steepness of the current trend. The breaking of a trend line usually signals a trend reversal. Horizontal peaks and troughs characterize a trading range. Moving averages are forex trading used to smooth price information in order to confirm trends and support and resistance levels. They are also useful in deciding on a trading strategy, particularly in futures trading or a market with a strong up or down trend. To trade successfully you also must have good charting software and instantaneous data feeds critical to helping you analysis and interpret the movement of currencies moment to moment so you know when/why to buy or sell — this you subscribe to monthly. You can get a 2 week or more demo to familiarize yourself with one that has the features you like. The costs also vary, and some companies
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