Are you looking for the best swing trading indicators? There are a wide variety of indicators that swing traders can implement into their trading. However, there are only a few indicators that the top banks and market traders use in their trading. These are moving averages and momentum based indicators.
Moving averages are widely used by banks and other corporate players. While there are many different kinds of moving averages available, surprisingly the main players still use simple moving averages. The most popular simple moving average is the 150 day and 200 day. Why is this time frame so popular? The 150 and 200 day simple moving average are often used to show the main trend. With price above, the trend is up, with price below, the trend is down.
Momentum based indicators are also a popular amongst professional traders. The two most popular momentum based indicators are Relative Strength Index (RSI) and Stochastics. These indicators measure the momentum or speed of price change in the market and can show areas where price may potentially be overbought or oversold. When momentum drops, but price continues down, traders may start to tighten their stoplosses as they know a pullback in price may be coming.
While the above swing trading indicators are by no means complex, this doesn't stop the largest banks and deepest pockets in the world from using them to trade. Professional traders use these indicators to swing trade successfully and manage to earn billions each year from the stock and forex markets.
Article Source: http://www.articlesbase.com/currency-trading-articles/trading-indicators-whats-the-best-indicators-for-swing-trading-1052056.html
Monday, July 20, 2009
Thursday, July 16, 2009
How does global economy affect Forex Trading?
Like any other financial sector, global economy affects the forex trading sector as well. The impact of the highly volatile fluctuations or the continued recession in the global economy is as significant as in other financial markets like stocks, real estate and banking. This is very clear by considering the trading prices of usd and euro against other currencies. Good investment decisions can be done only by the perfect analysis of global economy and in a way a perfect analysis of American economy is a primary requirement for selective and profitable investment in currency trading.
Unemployment, industrial growth, housing, banking and many other financial indicators directly influence the forex trading. Global economic changes are the prime factors dictating the variations in all these financial indications. When the world economy is in doldrums, it will be closely followed by all the financial indicators and markets. These correlations can directly put pressure on currency trading markets. The downward trends in the global economic scenario will be reflected immediately in the trading market as the currencies become weak or strong in tune with the changes in the global economy. Typically when the currency trading is carried out with usd or euro against each other and other currencies, the weakening or strengthening of usd or euro can affect the prospects of the forex trading investments.
Gross domestic product (GDP), the broadcaster of the financial condition of a country, is the financial lead for the analysis of the forex trading. With the GDP shows less growth in tune with the global economic recession, the currency trading market can be affected with dull trading. As the currencies are used in pairs in foreign exchange trading, the weakening or strengthening of one currency against the other can give playing room for the forex investing communities. Perfect analysis of the county’s economy and the global economy through various financial reports from governmental and private agencies can help the investing fraternity to opt for best pairs for currency trading.
Unemployment, industrial growth, housing, banking and many other financial indicators directly influence the forex trading. Global economic changes are the prime factors dictating the variations in all these financial indications. When the world economy is in doldrums, it will be closely followed by all the financial indicators and markets. These correlations can directly put pressure on currency trading markets. The downward trends in the global economic scenario will be reflected immediately in the trading market as the currencies become weak or strong in tune with the changes in the global economy. Typically when the currency trading is carried out with usd or euro against each other and other currencies, the weakening or strengthening of usd or euro can affect the prospects of the forex trading investments.
Gross domestic product (GDP), the broadcaster of the financial condition of a country, is the financial lead for the analysis of the forex trading. With the GDP shows less growth in tune with the global economic recession, the currency trading market can be affected with dull trading. As the currencies are used in pairs in foreign exchange trading, the weakening or strengthening of one currency against the other can give playing room for the forex investing communities. Perfect analysis of the county’s economy and the global economy through various financial reports from governmental and private agencies can help the investing fraternity to opt for best pairs for currency trading.
Sunday, July 12, 2009
Forex trading strategies - day-trading, swing trading, long term.
Forex trading strategies have been evolved over the years. Mostly currency trading happens with either USD or Euro as one of the currency in the pair. It is essential to follow well proven strategies to achieve great successes in foreign exchange trading. Efficient, simple and consistent strategies are to be understood before jumping into the currency trading business. The important strategies include day trading, swing trading, position trading, short term and long term trading.
It is essential to understand each of the strategies. Day trading stands for the method of trading for a few minutes to few hours in a day and all of the trades will be closed at the end of the day. This strategy is good to cash out the temporal fluctuations in the forex trading market. Swing trading stands for the trading practice in which the investor trade for few hours to a week or two. This is a trading practice suitable for short term investments. This is advised when there are not much intraday variations and is suitable to exit the trading when the market is profitable. Position trading is the trade spanning for months to years. The long term trading strategies are under these types of currency trading.
As an investor you have to analyze clearly the financial indicators before finalizing the strategy or strategies to be adopted. You should be watchful about the currency rates of USD and Euro to understand the movements of the foreign exchange rates and forex trading. Each of the forex trading strategies requires different skills and expertise. For example, day traders need to be very vigilant about the market moving trends. Day traders should be well equipped with a set of indicators or signals which can help them in taking quick decisions on day trading so they can enter or exit the currency trading with the perfect signals available to them just in front of their online computer. Even 5 minutes and 15 minutes charts will help you to finalize the entry and exit in the forex trading.
In my futere posts I'll explain all strategies individually
It is essential to understand each of the strategies. Day trading stands for the method of trading for a few minutes to few hours in a day and all of the trades will be closed at the end of the day. This strategy is good to cash out the temporal fluctuations in the forex trading market. Swing trading stands for the trading practice in which the investor trade for few hours to a week or two. This is a trading practice suitable for short term investments. This is advised when there are not much intraday variations and is suitable to exit the trading when the market is profitable. Position trading is the trade spanning for months to years. The long term trading strategies are under these types of currency trading.
As an investor you have to analyze clearly the financial indicators before finalizing the strategy or strategies to be adopted. You should be watchful about the currency rates of USD and Euro to understand the movements of the foreign exchange rates and forex trading. Each of the forex trading strategies requires different skills and expertise. For example, day traders need to be very vigilant about the market moving trends. Day traders should be well equipped with a set of indicators or signals which can help them in taking quick decisions on day trading so they can enter or exit the currency trading with the perfect signals available to them just in front of their online computer. Even 5 minutes and 15 minutes charts will help you to finalize the entry and exit in the forex trading.
In my futere posts I'll explain all strategies individually
Thursday, July 2, 2009
Leverage in Forex Trading
Margin trading refers to the leverage amount given to the traders to trade in the market.
One of the best features in Forex trading is that traders are able to trade foreign currencies with high margin.
You get 1:1 margin for stock exchanges, 2:1 margin for equity trading, 15:1 margin for futures market; but in Forex, normal trade margins are 100:1 and 150:1, or even 200:1 trade margins.
Typically the broker will require a minimum account size, also known as account margin or initial margin. Once you have deposited your money you will then be able to trade. The broker will also specify how much they require per position (lot) traded.
For example, for every $1,000 you have, you can trade 1 lot of $100,000. So if you have $5,000 they may allow you to trade up to $500,000 of Forex.
The minimum security (margin) for each lot will vary from broker to broker. In the example above, the broker required a one percent margin. This means that for every $100,000 traded, the broker wants $1,000 as a deposit on the position.
Trading Forex in huge margin with allows traders to control a large sum of money with little cash put on the tables. This in turns magnify the ROI dramatically.
One of the best features in Forex trading is that traders are able to trade foreign currencies with high margin.
You get 1:1 margin for stock exchanges, 2:1 margin for equity trading, 15:1 margin for futures market; but in Forex, normal trade margins are 100:1 and 150:1, or even 200:1 trade margins.
Typically the broker will require a minimum account size, also known as account margin or initial margin. Once you have deposited your money you will then be able to trade. The broker will also specify how much they require per position (lot) traded.
For example, for every $1,000 you have, you can trade 1 lot of $100,000. So if you have $5,000 they may allow you to trade up to $500,000 of Forex.
The minimum security (margin) for each lot will vary from broker to broker. In the example above, the broker required a one percent margin. This means that for every $100,000 traded, the broker wants $1,000 as a deposit on the position.
Trading Forex in huge margin with allows traders to control a large sum of money with little cash put on the tables. This in turns magnify the ROI dramatically.
Monday, June 22, 2009
High Leverage Margin
High Leverage Margin
Forex brokers offer trade margin of 50, 100, 150, or even 200 to 1 of trade margin.
Forex traders often find themselves controlling a huge sum of money with little cash outlay on the table. For example, a $1,000 in a 150:1 Forex account will gives you the purchase power of $150,000 in the currency market.
While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people incorrectly assume, leverage is essential in the Forex market.
This is because the average daily percentage move of a major currency is less than 1%, whereas a stock can easily have a 10% price move on any given day.
High Liquidity Market
Turnover value in Forex is $1.9 trillion per day. It is the largest trade market in the world and the liquidity of the market is huge. Traders can easily cash in or cash out their capital in Forex market.
Forex brokers offer trade margin of 50, 100, 150, or even 200 to 1 of trade margin.
Forex traders often find themselves controlling a huge sum of money with little cash outlay on the table. For example, a $1,000 in a 150:1 Forex account will gives you the purchase power of $150,000 in the currency market.
While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people incorrectly assume, leverage is essential in the Forex market.
This is because the average daily percentage move of a major currency is less than 1%, whereas a stock can easily have a 10% price move on any given day.
High Liquidity Market
Turnover value in Forex is $1.9 trillion per day. It is the largest trade market in the world and the liquidity of the market is huge. Traders can easily cash in or cash out their capital in Forex market.
How to read Forex Quotes ?
Reading Forex quotes is easy although it looks a bit confusing at the beginning
Currencies are always quoted in pairs. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed.
The first currency in the quotes act as the 'base currency'.
For example USD/JPY, EUR/GBP, and GBP/AUD, in such cases, USD, Euro Dollar, and Britain Pound are acting as the base currency. Base currency in a Forex quote will always has a value of 1. USD/JPY indicates how much Japanese Yens you can buy with 1 United States Dollar; similarly EUR/GBP indicates the exchange rate of Great Britain Pound with 1 Euro Dollar.
FX Quoting: Bid/Ask and Spread
There are sometimes that you can only see one price but often currency exchange price are display in pairs with 'bid price and ask price'.
For example EUR/USD 1.2385/1.2390, 1.2385 is known as the bidding price, while 1.2390 is the asking price. Bidding price is the price that you sell the base currency (EUR in our case here); asking price is the price that you buy the base currency. The different of the bidding and the asking price is called 'spread'.
You might notice that bidding price is always lower than the asking price. Ever wonder why? The different of the bid-ask price (socall 'spread') is how currency brokers make profits without charging commissions to their clients (sell high and buy low in the same time
What's a pip?
A pip is the smallest value in a Forex quote. Take our example earlier on EUR/USD. If the exchange rate goes from 1.2385 to 1.2386; that's one pip. In mathematical definition, a pip means the last decimal place of a quotation.
Note that as each currency has its own value, the value of a pip is different from one another. Say USD/JPY rate at 120.75, a pip would be 0.01 (the second decimal place); while for EUR/USD 1.2385, a pip would be 0.0001 (the fourth decimal place).
Example of Forex Quotes
Confused about the quotes? Don't worry too much about it, you'll get used to them as soon as you move on and start your trades.
For the beginners, here are some quick examples. Try not look at the answer and determine the value of bid price, ask price, spread value, and the pip value.
EUR/USD 1.2385/1.2390
Base currency= Eur
Bid price= 1.2385; Ask price= 1.2390
When selling Euros, 1 Euro = USD$1.2385; when buying Euros, USD$1.2390 = 1 Euro.
Spread = 1.2385 - 1.2390 = 0.0005
Pip value= 0.0001
EUR/JPY 127.95/128.00
Base currency= Eur
Bid price= 127.95; Ask price= 128.00
When selling Euros, 1 Euro = JPY127.95; when buying Euros, JPY128.00 = 1 Euro.
Spread = 127.95 - 128.00 = 0.05
Pip value= 0.01
GBP/USD 1.7400/10
Base currency= GBP
Bid price= 1.7400; Ask price= 1.7410
When selling Pound, 1 Pound = USD$1.7400; when buying Pound, USD$1.7410 = 1 Pound.
Spread = 1.7400 - 1.7410 = 0.001
Pip value= 0.0001
USD/JPY 119.8
Base currency= USD
No bid-ask price is displayed, spread value not available.
Pip value= 0.1
Getting used to the quotes now? Well, don't feel down if you're still slow... you'll be picking up on reading them as you move along.
Currencies are always quoted in pairs. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed.
The first currency in the quotes act as the 'base currency'.
For example USD/JPY, EUR/GBP, and GBP/AUD, in such cases, USD, Euro Dollar, and Britain Pound are acting as the base currency. Base currency in a Forex quote will always has a value of 1. USD/JPY indicates how much Japanese Yens you can buy with 1 United States Dollar; similarly EUR/GBP indicates the exchange rate of Great Britain Pound with 1 Euro Dollar.
FX Quoting: Bid/Ask and Spread
There are sometimes that you can only see one price but often currency exchange price are display in pairs with 'bid price and ask price'.
For example EUR/USD 1.2385/1.2390, 1.2385 is known as the bidding price, while 1.2390 is the asking price. Bidding price is the price that you sell the base currency (EUR in our case here); asking price is the price that you buy the base currency. The different of the bidding and the asking price is called 'spread'.
You might notice that bidding price is always lower than the asking price. Ever wonder why? The different of the bid-ask price (socall 'spread') is how currency brokers make profits without charging commissions to their clients (sell high and buy low in the same time
What's a pip?
A pip is the smallest value in a Forex quote. Take our example earlier on EUR/USD. If the exchange rate goes from 1.2385 to 1.2386; that's one pip. In mathematical definition, a pip means the last decimal place of a quotation.
Note that as each currency has its own value, the value of a pip is different from one another. Say USD/JPY rate at 120.75, a pip would be 0.01 (the second decimal place); while for EUR/USD 1.2385, a pip would be 0.0001 (the fourth decimal place).
Example of Forex Quotes
Confused about the quotes? Don't worry too much about it, you'll get used to them as soon as you move on and start your trades.
For the beginners, here are some quick examples. Try not look at the answer and determine the value of bid price, ask price, spread value, and the pip value.
EUR/USD 1.2385/1.2390
Base currency= Eur
Bid price= 1.2385; Ask price= 1.2390
When selling Euros, 1 Euro = USD$1.2385; when buying Euros, USD$1.2390 = 1 Euro.
Spread = 1.2385 - 1.2390 = 0.0005
Pip value= 0.0001
EUR/JPY 127.95/128.00
Base currency= Eur
Bid price= 127.95; Ask price= 128.00
When selling Euros, 1 Euro = JPY127.95; when buying Euros, JPY128.00 = 1 Euro.
Spread = 127.95 - 128.00 = 0.05
Pip value= 0.01
GBP/USD 1.7400/10
Base currency= GBP
Bid price= 1.7400; Ask price= 1.7410
When selling Pound, 1 Pound = USD$1.7400; when buying Pound, USD$1.7410 = 1 Pound.
Spread = 1.7400 - 1.7410 = 0.001
Pip value= 0.0001
USD/JPY 119.8
Base currency= USD
No bid-ask price is displayed, spread value not available.
Pip value= 0.1
Getting used to the quotes now? Well, don't feel down if you're still slow... you'll be picking up on reading them as you move along.
What is forex ?
So, you wanna make some bucks via Forex trading. Before you read further, let us warn you that 7 out of 10 traders keep losing money in Forex market; while the rest of the 30% work freely at home and earn millions annually.
What makes the difference is that the top 30% are either those with insider news, or those with skills and knowledge.
It is no secret that the foreign currency exchange (FOREX) market is a market full with crocodiles that you will lose your hard-earned money in a fraction of second. Yes, that's right! If you wanna make money in Forex trading, you either have to build up the network with so-call insiders (which seems a wasteful of time and energy to us); or, educate yourself well enough.
If you ever wish to get into this trading game, you better LEARN Forex trading before you start trading Forex. Forex market is definitely not a game for newbie and you need to brush up your skills before getting your hands wet.
A very brief intro on Forex trading
Foreign currency exchange (Forex) market is the largest trading market in the world. It yields an average turnover of $1.9 trillion daily. The figure is nearly 30 times larger than the total volume of equity trades in United States.
Forex is a very unique market.
Trades are always done in pairs, traders are basically buying and selling money in the same time. Beside of trading in pairs, Forex is also very special as it has no centralized trade location and trades are done around the clock.
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.
What makes the difference is that the top 30% are either those with insider news, or those with skills and knowledge.
It is no secret that the foreign currency exchange (FOREX) market is a market full with crocodiles that you will lose your hard-earned money in a fraction of second. Yes, that's right! If you wanna make money in Forex trading, you either have to build up the network with so-call insiders (which seems a wasteful of time and energy to us); or, educate yourself well enough.
If you ever wish to get into this trading game, you better LEARN Forex trading before you start trading Forex. Forex market is definitely not a game for newbie and you need to brush up your skills before getting your hands wet.
A very brief intro on Forex trading
Foreign currency exchange (Forex) market is the largest trading market in the world. It yields an average turnover of $1.9 trillion daily. The figure is nearly 30 times larger than the total volume of equity trades in United States.
Forex is a very unique market.
Trades are always done in pairs, traders are basically buying and selling money in the same time. Beside of trading in pairs, Forex is also very special as it has no centralized trade location and trades are done around the clock.
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.
Subscribe to:
Posts (Atom)
Posts
