Tuesday, May 27, 2008

A Great forex charts Resource.

Currency Forex Trading System-Opportunity For Swing Trading When Currencies Move Up or Down

Generally, when we trade forex, we can either trade the short term fast moves that characterise the volatility inherent in currencies, or we can trade the longer term swings.

Since our aim is to have a consistent income, there is a need to have a systematic way to trade forex so that we can glean our profits consistently and systematically.

If we look at trading systems today, we find that many forex traders day-trade and these day traders have their own favorite day trading systems. Another way to describe these traders is scalping. Indeed, many forex traders are able to make a living by scalping the markets, working a few hours a day from home.

If we look a bit deeper into what makes scalping possible, then we can discover that prices of a currency do have this characteristic of moving from a low point position to an upper point position, to form a trading range in a daily fashion. As long as prices oscillate within this range, the forex trader can actually scalp and make profits from buying at the low point and selling at the high point.

What is most interesting is that beyond the boundaries of the lower point and the upper point, the currency no longer displays its tendency to oscillate, but break out into a trend. If the price drops below the lower point position, it goes into a downtrend. If it goes above the upper point position, it goes into uptrend. It is no longer under a trading range where the forex trader scalps or actually is range-trading.

It is times like these when the projected lower points positions and the upper point positions are breached and confirmed that trends are apparent, and swing trading comes into play.

For example, the US-Yen currency pair has been in a prolonged downtrend where selling positions could be taken over a period of 8 years to profit from the down swing. Day trading is no longer the focus.

Recognising when the currency pair has moved out of its trading range and has broken out into a confirmed trend is the key to swing trading.

Is the chart displaying a bottoming pattern configuration, with higher bottoms, and higher highs? Is there a double bottom or triple bottoms pattern, a V formation or a W formation in the chart pattern?

Is there slowing downwards price momentum? From the aspects of japanese candlestick, are there short term bottoming patterns such as a hammer, a tweezer bottom, a rising star, a piercing line or a bullish engulfing pattern to lend credence to your initial suspicions of a bottom and an initial upswing?

As forex traders, our objective is to be profitable whether we scalp or we swing trade. As markets trend only around 30% of the time, being able to identify the initial outbreaks of the swings and being able to trade them with our favorite swing trading systems will mean we can capture the sweetest part of the swing moves. While we range-trade 70% of the time, it is the big swing trades that can provide us with big profits. That's why we need a sound proven currency forex trading system for both range trading and swing trading if we are to profit from forex trading.

Peter Lim is a Certified Financial Planner. You can shorten the learning curve and discover 3 powerful trading systems that cover day trading, range trading and swing trading devised by a veteran professional forex trader by visiting the author's blog http://1forex-trading.blogspot.com

Forex Options - The 2 Golden Rules For Huge Profits

Forex options are a great trading tool if used correctly. They give you unlimited profits with a set risk in advance and allow you to ride out short term volatility.

They are an excellent way to stay in the market and seek huge gains, but you
Must use them correctly and most traders don?t.

Here are your golden rules for options trading:

The Odds

Most people don?t look at the odds of the option they buy making money, they simply get obsessed with the potential profit.

They therefore buy options way out of the money and if it gets to the price and trades in the money they will make a killing.

The big word here is ?if?

Buying way out of the money options a long way from the strike price is like backing the outsider at a horse race.

You will win occasionally but most of the time you will lose and the odds are firmly against you.

The real pro?s do the following:

1. Buy close to the strike

That means buying options that are at or close to the money or in the money.

Keep in mind if your option is not in the money at expiry you lose your entire premium.

This therefore puts the odds in your favour, you may not make as much but your chances of winning are greater and these profits will mount up over time.

The second golden rule of options trading is

2. Get time on your side

The closer and option comes to expiry the more the time premium will eat into the profit.

Therefore buying options with just a few days or few weeks to expiry is not a way to put the odds in your favour.

Get plenty of time on your side and make sure time premium doesn?t kill you.

Forex options are a great trading tool if used correctly novice traders simply look at the unlimited gains and forget about the risk that options trading involves as you have to pay for the limited risk.

Don?t make the same mistake use the two rules above as your basic strategy for trading options.

You will win more often and the profits will add up to some great long term gains over time and that?s the aim of all forex traders.


On all aspects of becoming a profitable trader including free trading guides downloads, systems and for more forex articles visit our website at http://www.net-planet.org/index.html

Forex Trading - Are Trading Forums Worth Your Time?

Are trading forums worth your time? Yes and no. (Terribly indecisive answer, I know :-) Let me explain. It depends on how you use them.

If you're very new trading, forums can be an asset, if you proceed with caution. There are a lot of people on those boards who perceive themselves and being something important and skilled. They are neither. The bad part is sometimes they are hard to tell apart from those who offer real value. Don't take anyone's word in a forum as gospel.

So, if you're new, you could find yourself being steered down the wrong path. However, it can be a great way to be exposed to new ideas. The way you want to approach a forum is like hit and run . . .

Take this for example, if you find yourself posting multiple times per day, you are wasting your time, and that is the great danger of these forums. They can become addictive to certain types of people. They leech your time away.

Time that should have been spent trading or something productive. Instead, you wasted it away "chatting."

Here's how I use forums. When I need feedback or an idea, I hop into them. When I've gotten what I want, I hop out. I know, that's not supposed to be how it's done. You're supposed to stay and "add value" to the forum.

You're not taken seriously if you don't have 100 posts along with your name. Who cares? Don't waste your time. You don't need acceptance into that "circle." Get what you need. Move on.

Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".

Download it free here: Forex Trading

Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide


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