Forex Technical Analysis

With over 6 million global searches, “Forex” is basically about teaching people and companies how to profit with foreign currency trading.

The Forex markets are huge, with over $4 trillion traded daily. Most of this is traded by huge organizations – central banks, hedge funds and the like – but individuals can also trade Forex, and it’s these individuals that the “how to trade with Forex market caters to. Teaching people is big business.

What’s Forex?

“Forex” stands for FOReign EXchange; it’s also known as FX. In a Forex trade, you buy one currency while simultaneously selling another. Currencies trade in pairs, like the Euro-US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY). Forex trading is used to speculate on the relative strength of one currency against another. The foreign exchange market is an over-the-counter market, which means that it is a decentralized market with no central exchange.

Most traders focus on the biggest, most liquid currency pairs. “The Majors” include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily Forex trading happens in the major currency pairs.

The world’s most traded market, trading 24 hours a day With average daily turnover of US$3.2 trillion, Forex is the most traded market in the world. A true 24-hour market from Sunday 10 PM GMT to Friday 10 PM GMT, Forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.
Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur – day or night.

Successful Trading?

To be successful in trading the Forex market you would have to have a system in place that would take care of your trades. There are such services available, and require you to purchase their services.
You could learn to do it yourself with wealth of information available on the Internet and with help of a few tools.

Forex Trading Tools

Fibonacci Retracement Calculator

Fibonacci Retracements Levels are known are not only the most popular but also the most effective retracement levels currency traders can use. The provided Fibonacci Calculator allows you to calculate Fibonacci Levels on up to 4 currency pairs at the same time.

Pivot Point Calculator

Pivot Points have been proven to be very helpful for all kind of trading styles. Not knowing the actual Pivot Points is an absolutely “no go” for traders who want to succeed. The Pivot Point Calculator helps to calculate Pivots quickly.

Woodie Calculator

If you ever heard or participated in the Woodie CCi Club from Ken Wood you already know that the Woodie Levels are a very good alternative to Pivot Points and Fibonacci Levels as well. The provided Woodie Calculator can be used to determine “Woodies” support and resistance levels with one click.

Camarilla Calculator

Usage from Camarilla support and resistance levels where first used from day trading legend Nick Scott and has been proven to be a powerful way to calculate possible market turning points. The Camarilla calculator can be used to calculate Camarilla levels on multiple Forex trading pairs.

What Next?

It all can be very complicated if you are new to the Forex Market, but it doesn’t have to be. You don’t need to know anything about the Forex market or how to trade it. You can learn how to profit from the Forex Market with little or no experience go to Resource Box or my profile page.

Forex trading can involve the risk of loss beyond your initial deposit. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary

By: Martin H Homer

Foreign exchange calculators are not only applicable when you partake in the forex market. You can also use them as you travel or you calculate some currency values in relation to your personal or business needs.

Depending on your needs and intention, here are the types of foreign exchange calculators that you might want to think of buying:

The shortlist currency calculators – This is the type of foreign exchange calculator that can be utilized to access the principal currencies used all over the world. To date, there are 171 currencies used in the entire world and the list goes on. However, not all of them are used in the international trade. If you want to access the major currencies, then a shortlist currency calculator will be useful. It is currently updated and gives a precise conversion.

The longform currency calculator – This allows the conversion of even the less popular and seldom used currencies. This is generally cheaper than the shortlist calculator.

The currency converter with history – The step in using this is basically more complicated. Besides its numerical conversion of one currency towards another, it likewise involves the information regarding the history of the currencies. This is helpful in your quest for the performance of the currencies in the history of forex trade.

The crossrate calculator – This arranges the currency rates and converts each into the commonly used ones for a faster glance at their comparisons.

The mobile currency converters – These are actually installed in the mobile device so that it can be accessed at anytime. This type of calculator connects to an online database that feeds the most recent rates existing in the market.

Sure enough, there are a lot of foreign exchange calculators out there for sale and the best thing to do is to track down which is going to work best for your purpose. You can also use the free versions which are available from many websites online.

By: Tony Newton

When developing your own forex trading style, there is a danger in becoming fascinated with indicators. The newer trader experiments with one, finds it doesn’t work so well, then switches to another, then another, etc.

The list below highlights 7 key indicators that can be woven into your forex trading style. You may not need to go any further than this. Stick with the 7, practice them, get to know them inside out, and get the satisfaction of developing your own successful forex trading style.

#1: Candlesticks

Watch for a hammer, doji, head and shoulders pattern, 1-2-3 formation, double top or bottom.

#2: Trendlines

Draw common sense trendlines across the highs in a downtrend or lows in an uptrend. Watch for price to break the trendline and come back and test it.

#3: MACD

Watch for a difference between the highs and lows of MACD and price. When there is divergence watch closely for a good entry point once price has shifted in the direction of the divergence.

#4: 200 EMA

This indicator is an all time favorite for traders across the board. On higher time frames (1 hour, 4 hour, daily) take note whether price is above or below the 200 EMA to give you the sense of price direction.

#5: Pivot points

Take note of previous support and resistance lines as price will come back to retest these levels time and time again.

#6: Fibonacci

Learn how to use this tool well and take particular note of the 50 and 62 retracement levels, especially when they coincide with trendlines or previous support/resistance.

#7 Price Itself

Let price prove to you where it wants to go by setting entry orders rather than market orders when entering a trade. By setting an entry order, price has to reach the target you specify before pulling you into the trade.

Using Technical Indicators

It is important to acknowledge the probability that no indicator on its own is a good enough reason for entering or exiting a trade.

Your individual Forex trading style will evolve in time as you become familiar with the key indicators and probably rely heavily on just 2 or 3 out of the 7. However, it is crucial to get a combination factor when considering a trade. Ask questions such as:

While one indicator may show a clear signal, how do the other indicators line up? Is that one signal running against the general conclusion drawn from the other indicators?

This is where your skill as a trader comes in as you assess the clues the indicators give and make a decision based on your perception and experience in the market.

Only time and practice can give you that. Once you are familiar with the top 7 indicators, spend most of your time and energy on developing the emotional and mental disciplines necessary for successful trading. This will eventually make up the most important part of your Forex trading style.

By: Michael A Jones

News, especially international news, is the lifeblood of every Forex trader. However, not all Forex news sites offer the best, or the most complete information. And since timing and global market analysis is everything in the Forex world, having the most current and thorough information on global events and market conditions will likely influence investment decisions. As in war, getting critical information is the key to victory.

One of the most widely acknowledged Forex news site is BusinessWeek. It is the website of the same magazine bearing its name, and its main advantage is the efficient organization of its news. The latest events on any part of the globe can be easily pinpointed and accessed by viewing the different sections and through a handy search box. And the news reports carried within these sections are of very good quality, being uploaded continuously throughout the day as it happens. There are plenty of topics on forex and even include free access videos. Another great thing about this site is that there are dedicated sections for small businesses and investing, which contain annual reports and stock information. All of these make the site a veritable goldmine of current business events.

Another well acknowledged site is Reuters. This group is well known for its global and very thorough coverage (facilitated by its staff of 15,000 people scattered over 91 countries), and the quality of their site reflects this dedication. What’s useful to forex traders will be the Investing section, and a page called Reuters Financial Products which seeks to educate investors on various business aspects. Reuters also supports FX trading, and a lot of news about the market is available at the site.

Then there is Bloomberg. It also has global and thorough coverage, but what sets this site apart is its dedication to financial data analysis. As such it has a dedicated portion on its home page which displays FX rates, equity indexes, and a lot of other financial information. There is also a dedicated section tackling stocks, mutual funds and even an economic calculator. There are even investment tools provided on site to further assist the investors in analysis.

These three forex news sites are among the most well-cited by several reviews, which all attest to their usefulness in the financial realm. It is best to see each one individually to determine if they will actually be suitable for one’s specific needs and information requirements.

By: James C. Feldon

Your currency trading strategy will be based to a large extent on forex trading signals. These signals will be activated depending on the market conditions that will make you decide to enter or exit a trade.

Many online vendors will sell you their own forex signals direct to your computer, or even your cell phone. This is a very attractive option if you travel a lot and are not always at your computer.

While these signal services are useful, before you use them you would be well advised to learn how they are generated and what specific parameters are used to decide on the signals. If you don’t understand these fundamentals, your money is at unnecessary risk.

Let me ask you a question: do you know how to use a calculator? Of course you do. Can you tell if the answer it gives you is reasonable or if it is an obvious mistake? If you know something about fundamental arithmetic, you do, and that can save you relying on answers that are completely wrong. The same principle applies with forex trading signals: you need to understand how they are generated so that you can judge the reasonableness of the signals you are getting.

You need to know how they are generated so that you will know whether to trust them. You need to either make and follow your own rules, or objective rules purchased from a trusted source. Are the rules generated using objective tools, such as RSI stochastic crossovers or ADX divergences? If so, that’s good. Don’t depend on subjective indicators like Elliot wave or cycles, as they are much less reliable indicators.

You also want to avoid the trap of making trades based on emotion, and good signals can help you do this. Set the conditions you want for your trades, and then stick to following the signals. When you do set your parameters, make sure you balance the risk/reward in your favor, as that’s how long terms success in foreign currency trading comes about.

Software for Trading Signals

Another alternative is to purchase and use specialized software that generates trading signals for you. But again, I would give you the same words of caution: understand how the software is generating the signals. This way you will always know when trades make sense before you enter or exit them on signal.

Because currency trading is so complex, there are many many things to consider and things to undertake as you trade. It’s for that reason that so many online tools have sprung up to help make trading less time intensive and labor intensive. But my advice is always to study and understand the principles yourself before letting some robot or automated forex trading signal take charge of your success or failure in forex trading.?

By: Martin Miller