Technical Analysis is probably the most common and successful means of making trading decisions and analyzing forex and commodities markets.
Technical analysis differs from fundamental analysis in that technical analysis is applied only to the price action of the market, ignoring fundamental factors. As fundamental data can often provide only a long-term or "delayed" forecast of exchange rate movements, technical analysis has become the primary tool with which to successfully trade shorter-term price movements, and to set stop loss and profit targets.
Technical analysis consists primarily of a variety of technical studies, each of which can be interpreted to generate buy and sell signals or to predict market direction. Please see our Technical Studies page for a detailed description of these studies and their uses.
Support and Resistance Levels
One use of technical analysis, apart from technical studies, is in deriving "support" and "resistance" levels. The concept here is that the market will tend to trade above its support levels and trade below its resistance levels. If a support or resistance level is broken, the market is then expected to follow through in that direction. These levels are determined by analyzing the chart and assessing where the market has encountered unbroken support or resistance in the past.
For example, in chart below EURUSD has established a resistance level at approximately .9015. In other words, EURUSD has risen up to .9015 repeatedly, but has been unable to move above that point:
The trading strategy would then be to sell EURUSD the next time it gets close to .9015, with a stop placed just above .9015, say at .9025. This would have indeed been a good trade as EURUSD proceeded to fall sharply, without breaking the .9015 resistance. Hence a substantial upside can be achieved while only risking 10 or 15 pips (.0010 or .0015 in EURUSD).
On GCI's integrated charting system (GCI Multi-Currency Charts), the red support line shown above can be drawn by clicking on the "Trend" button at the top of the chart window, and then drawing a line by clicking the mouse once at the beginning of the line, and again at the end of the line.
Technical Analysis
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This site contains information which will allow the novice to develop an understanding of basic trading techniques, risk control, and finally opening and managing a Live trading account.
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|Trading Forex by definition is never going to be easy and will always involve a high degree of risk. We suggest following basic step before you trade forex online. Finding a good Forex broker, also known as a market maker is essential to having an advantage in the currency exchange trading market. They initiate and execute our trades so they play a significant roll in our trading efforts. Before choosing a Forex broker you should be aware of just what you need to look for. No matter where you live in the world, you can find a Forex broker in your area of the planet.
When trading Forex, you are putting your money at risk. Not only with the risk of not knowing how to trade effectively but there is also a risk of contacting scammers and people who commit fraudulent online activities. You need a broker who is qualified and credible. They need to be registered with two major organizations to qualify as a legitimate broker. The first one is the Commodity Futures Trading Commission and the other is the Futures Commission Merchants. By only using brokers with these credentials, you are protecting yourself from online scammers as well as any unethical trading behavior. You should also make sure that your money is kept separate from your brokers funds. You can do this by making sure that they are regulated. This will also provide insurance for your account which protects you against fraud.
Find a fantastic system for trading Forex, you cannot afford to scrimp on this. You absolutely need to get the best Forex trading system there is, do not hesitate to spend some time searching and testing. This is where you will make your money so it needs to be a system that works well for your style of trading. It also needs to have the ability to generate a positive cash flow most of the time. This part of the learning process can take some time. You may find it necessary to test a few different Forex trading systems before something really great emerges. Don't take someone's word that a system will work for you, everyone has their individual trading style. In fact, it's almost as unique as a fingerprint because every individual has a different risk and tolerance level. The only way to be sure what will work best for you is through careful testing. Once you discover the Forex trading system that is indeed best for you, you will be well on your way to becoming financially independent.
Practice, you should also invest a good amount of time trading with practice accounts and paper trading. If you go through a period of time with a practice account and discover that you aren't making any progress, don't give up. Just keep in mind that there is money to be made and there are ways of getting lots of it. Change up your methods while practicing and don't stop until you discover how to make Forex trading work for you. This not only gives you much needed practice but it also gives you a chance to test out your newly discovered trading systems.
Forex Justice - The Fair Forex Trading Forum
|Don’t Get Eaten Alive
Forex ReviewForeign exchange currency trading is a risky business with much to lose and much to gain. As a professional forex broker and personal trader, I have realized the fast profits this market can reap, while witnessing the dog-eat-dog nature of the beast, in which buyers lose their shirts every minute.
Whether you are a forex trader or just curious about forex currency trading, you owe it to yourself to separate the wheat from the chafe. The Internet is awash in foreign exchange currency trading websites whose sole existences are dependent upon ignorant forex investors. From get-rich-quick forex software schemes to free forex training, forex educational seminars, free forex signals, forex forums, and more, the fraudulence that surrounds the fx trading market is frightening.
Forex trading is very different from the U.S. stock market. The major differences include:
* Forex has no central exchange
* Forex trading can be done around the clock
* Forex has no overseeing regulatory commission, such as the SEC
The forex market is a wild, open arena without rules, laws, or a governing body. No one cares if your money is taken. No one will lose any sleep if you’ve been lied to. There are no repercussions if you’re treated unfairly. Investors trade at their own risk and have no legal recourse to enforce justice.
I know. I’ve been there. The scammers have burned me more than once. In an attempt to further my own knowledge, I fell for the magical software sales pitches and followed the crooked paths to the stolen treasures, only to be let down ad nauseam.
I served my time as a forex broker, which was an eye-opening experience. I heard and saw the manipulation of client profits that was business as usual. It quickly shifted my interest in trading and brokering forex to that of protecting forex traders. I redirected my efforts from studying daily forex signals to researching forex websites. I was determined to devise a resource on which forex investors could rely for honest, fair information exchange.
Know the Scammers
The best advice I can give is don’t trust anyone whose reputation you cannot validate and whose association is not legitimately tied to the actual forex market. This is especially important when selecting your forex broker.
The allure of trading forex can be overwhelming. It attracts many eager fx traders willing to gamble away their life’s earnings. Unscrupulous forex brokers, signal providers, fx educators, software peddlers, and forex frauds are waiting, with baited breath, to take your money and turn it into a profit for themselves – all at your expense!
The good news is that many forex professionals are honest and reliable, capable of assisting the most inexperienced fx trader succeed. Following forex signals and making profitable currency trades happens 24-hours a day, all around the world. The philosophy behind Forex Justice is to even out the playing field so everyone has a fair chance at winning.
Straight Shooting, Unedited Forex Reviews
Many Forex review websites are thinly veiled as informative, unbiased forex opinion forums. In actuality, they’re doing little more than championing their own causes. These supposedly neutral pages give the broker, forex trader, and interested parties a skewed view of reality.
Alternatively, Forex Justice is a revolutionary idea in forex trading. An open, two-way patented forex exchange system, reviews are considered from both the broker’s perspective and the trader’s. This unconventional method of publishing truthful forex stories to the investor and anyone else interested in forex has proven beneficial in reducing the number of forex scam websites and helped traders establish ethical business relationships.
This valuable tool, Forex Justice, doesn’t allow peer bashing yet encourages honest communication. Content is always reviewed but never edited so you get straight facts from real experiences. Learn about the way forex trades are conducted and quickly size up the scam artists. The more reviews we receive, the clearer the picture will become.
How the Two-Way Forum Works
Participants, including forex traders and others who have valuable information to contribute, submit reviews for consideration. Once approved, reviews are posted almost immediately. Vendors and professionals reply with comments in the aggregate to the reviews, addressing specific points or with general answers. The communication is limited to one reply per vendor or professional with a limitation on length. This encourages a fair, open forum, without back-and-forth bickering and unnecessary criticism.
Sign-up now and join the Forex Justice Forum. Only with the help of real-life forex scenarios and two-way communication, can we turn forex trading into an ethical, trustworthy investment option.
Forex Forecasts - FX Forecasting
|A few points to understand when planning your strategy
If you are interested in Forex forecasts, it is important to understand that Forex trends are
easy to see in retrospect. Foreign currency markets are predictable, at least in a broad sense – however, they still bow to a certain set of variables.
Once a trend is in place in the Forex market, it tends to stay around indefinitely. It can last for months, even years. These types of Forex forecasts open a window of opportunity for longer-term investing
Watch the trends, but remember that Forex is unique.
The Forex marketplace is highly liquid, with rapid changes that take place around the clock. You can make a profit Forex trading by adhering to a trading strategy that you have created for yourself. Enter your stops only when the odds are stacked in your favor.
Keep in mind, when making or analyzing Forex forecasts:
* Forex is a truly seamless 24-hour market. Trades are conducted while you’re sleeping, eating, and working.
* Forex is a true zero-sum game. This means that a gain is often offset by an equal loss.
* Forex has no secondary measures, unlike other marketplaces. This means it has no upside/downside volume figures or P/E ratios.
* Major Forex players end their days mostly flat – this is because they are often handling billions of dollars - during their time zone.
* Central banks openly declare their intentions and impact trends in the Forex marketplace.
The truth is although there are overall trends to forecast in the marketplace, Forex is a highly volatile market. Like the stock market, Forex markets are ruled predominantly by emotions, perceptions and the reactions to these. There are many cultural differences to be aware of when working with a large span of currencies. A spike in your candlestick chart may be the reaction to a new story in another country, and the ripple may settle by the time the business day has closed in that geographical region.
Take the time to gain an understanding of the market, and analyze reactions. Forex forecasts can be the key to meeting longer-term financial targets, but it’s up to you to choose the best strategy for your needs. Make a plan, set a goal, and monitor your progress in the upcoming weeks and months.
What should you know about your managed Forex account?
|Basic information to get from your Forex broker.
Once you have decided that you prefer a managed Forex account, the next step is choosing the right Forex broker to fit your needs. Your broker needs to be a professional that you trust completely, so it’s important that you take the time to do your research.
Shop around, ask questions, and don’t be afraid to dig deep into your broker’s practices and terms of service. If there is something you don’t understand in the disclosure documents, pick up the phone and get the answers you need.
Why choose a managed Forex account in the first place?
A managed Forex account is about freedom and flexibility. These types of accounts are meant for people on the go who simply don’t have the time to monitor the market all day. Ideally, a managed account works your money hard for the best return. You should feel comfortable with your Forex broker – this is the person, and company, on your side – think of them as your personal marketplace expert. A managed account puts capital management in the hands of professionals who have extensive experience in the currency markets.
What strategy does your managed account broker intend to employ?
Make sure to find out about your broker’s strategy when trading in the Forex market. Many firms use a complicated algorithm (a combination of discretionary trading, technical trading, and leverages) to explain the way they trade on managed accounts, so if you’re confused about the language, ask them to break it down for you in layman’s terms.
Choose your account type wisely.
Most managed account brokers have accounts that are ideal for investors seeking a moderate risk, lower return investment strategy. If you’re looking at long-term growth, this is the type of account you’ll likely be interested in. If you’re interested in something with higher risk (and potential for higher rewards) there is usually an account that is geared more toward a daytrader mentality - these accounts are considered aggressive and use a number of tactics capitalize on both market volatility and fundamental-based trends.
Discuss your financial goals with your broker so they can help you choose the account that’s right for you.
A few other things to consider when choosing your managed Forex account broker:
* Years of experience. Just make sure to check out the credentials of the firm, as well as your actual contact person.
* Ranking. Industry publications as well as mainstream publications, such as Forbes, often publish the name of the top-rated firms on a regular basis.
* Deposits and fee policies. What is the minimum deposit? Can you make deposits at any time? When will the funds be available for trading? How many days written notice do you need to give if you want to withdraw funds? What is the fee structure and how is it assessed – on a monthly basis? Weekly? Are there any penalties that you should be aware of?
Choosing the right managed Forex account can help you build wealth and reach your financial goals, whether you are looking for short-term growth or long-term investment. Take your time -- do your research -- and you’ll be able to build a financially rewarding relationship that benefits you for years to come.
Forex System - FX Trading Software Systems
|Choose and Use Your Forex Software Wisely
There are plenty of Forex systems available on the web. Choosing the right Forex software can sometimes be perplexing, even for the experienced trader. Most brokers offer a Forex software package as a premium for users of their trading accounts. Just because it’s free, however, doesn’t mean it’s the right choice. It is important to evaluate different software platforms and get experience in using it correctly.
Trying out your Forex system
The software your broker gives you is most likely a very basic system. You may be able to add features to your program for a specific price. Initially, get comfortable with the software your broker provides. Once you’ve gotten familiar with it, download and try some different packages using a demo account. This will help you get an idea of what is available to Forex traders.
Desktop or Web-based?
Forex trading systems are available either online, as an application service, or via your desktop. No matter which platform you select, it is important to have a reliable and secure internet connection. A cable modem or broadband ISP is an ideal connection for trading.
Web based Forex software is the most secure type of software. Information stored in a desktop application can be penetrated by malicious software, viruses, and other unwanted intruders.
If you plan on desktop trading, it is important to have a firewall in place with constantly updated virus protection. You don’t want hackers somehow getting access to your account! You should also back up your hard drive regularly so you don’t accidentally lose information if your computer crashes.
Keeping your trading software secure
If you plan on using desktop applications for your trading, you’ll probably want to have a dedicated computer (not on a network) to serve your trading needs. A few things to help you keep your account information secure:
• Password protect any software or documents relating to your Forex trading system.
• Make regular backups of your trading information – past trades, current trades, and items that you are watching.
• Add protective software. It’s not enough to just use an anti-virus software program anymore. Don’t use the free versions – you often get what you pay for. You should have a firewall program (not just the Windows version) as well as a professional spy ware scanner. Make sure you schedule your scans to happen once a day – preferably, when you are NOT running your Forex software.
• Update your trading software, operating system, and other programs regularly.
Choosing the right Forex system solution is not just about the type of Forex software. It is also important to examine capabilities and learn more about the charts and other technical indicators available. Luckily, there are plenty of resources to help you make the right choice. Your software is directly related to your broker, so make sure that you read up on how to find the right broker for your needs as well. Welcome to the world of Forex trading!