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?How To? Start Trading The Forex Market? (Part 7)

HOW DO Economic Events impact Global Currencies:



When I asked several traders about their thoughts about using fundamental analysis as a part of their trading decisions, I have received two opposite responses.



RESPONSE of Trader A



Fundamentals that you read about are typically useless as the market has already discounted the price. I am looking at (1) the long term trend, (2) the current chart pattern and (3) identifying a good entry point to buy or to sell.



RESPONSE of Trader B



I almost always trade on a market view. I don't trade simply on technical information alone. I use technical analysis and it is terrific, but I can't initiate or hold a position unless I understand why the market should move.



There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future.



Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders say about the future activity of other traders.



For me, technical analysis is like a thermometer.



Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he's not going to take a patient's temperature. If you want to be a successful trader in the market, you always want to know where the market is- up ? down- trending or choppy .You want to know everything you can about the market to give you an edge.



Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual.



It is very important to study the details of price action to see and observe. Studying the charts is absolutely crucial and alerts to existing disequilibrium and potential changes.



For forex traders, the fundamentals are everything that makes a country tick.



The release of economic & inflation indicators (i.e., consumer spending, employment cost index, government spending, producer price index, etc.), political actors, government policy or an individual event can set the market in a frenzy. These have to be considered when making the decision ? to trade or not to trade.?



Technical analysis, is a way of using historical price data in different ways to predict the future price of a currency pair.



Fundamental analysis is a very effective way to forecast economic conditions, but not necessarily exact market prices, and you SHOULD trade in agreement with the supporting technical indicators.



Foreign exchange traders put the most emphasis on technical analysis, because traders around the world use similar charts and tools in predicting market trends.



The reason the FOREX market can be so predictable some times is that if the majority are using the same graph for determining patterns and trends, then it is highly likely that they will act in a similar manner.



So several thousand traders who have all charted the same resistance line, for example, will most likely either set their trades and direction conform to that line.



When fundamental data is made available to the public there is a reaction from investors and speculators.



Information in the form of news and economic indicators is more vague than that of technical indicators. There is a lot of gray area in this type of analysis. The market will ultimately react to how people think the economic data compares to the current market situation.



Economic indicators usually reveal information that "Should cause a currency to go up in price" or "May cause a currency to go down". The words ?SHOULD? & ?MAY? in the quotes above reveal the ambiguity of the fundamental data.



Here is an example of what analyzing fundamental data is like. Let's suppose there are six economic indicators (there are a lot more).



Let's call our six indicators 1, 2, 3, 4, 5, and 6. Now we wait for the data from our indicators to be published in a financial magazine or at an online source. We get the readings for our economic data for the EURO as following:



Indicator 1: is in a range where the Euro may go up

Indicator 2: is in a range where the Euro should go up

Indicator 3: is in a range where the Euro could go down

Indicator 4: is in a range where the Euro usually goes down

Indicator 5: is in a range where the Euro could go up

Indicator 6: is in a range where the Euro may go down



By looking at the above indicators, you don't know what the Euro is going to do. Furthermore, currencies are always traded in pairs. So you would have to get the fundamental data for another currency pair and compare it with the EURO. I think you can image that this is not a simple task.



I do not want to discourage you away from fundamental data. The best way to learn is to learn about one piece of economic data at a time. Eventually you will build a puzzle from all of the fundamental and technical data and make more informed trading decisions.

About the Author:

Veteran Trader Martin Maier is the Founder of Fenix Capital Management LLC He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Rating Companies such as STAR and MAR.

A Look Back At Forex Trading - 4/18/06

Cable final broke through the super resistance at 1.7600 yesterday. Even though we had a losing trade last night, I have to say I am glad to see that tight range behind us. Maybe now we will see a few prolonged and definable trends.

If this is the case it will make it much easier to make a good profitable trade. On the other hand Cable could just as easily slide right back into a consolidation sideway market. Only time will tell.

We we lick our wound from last night and bid farewell to the 1.7600 resistance level. It served us well over the past few months holding on at least a half a dozen occasions. Lets take a look at last night and see what it took to break that resistance. Was it a 20, 40 or 60 pip move, no way? It took a lot more than that to break through, it was a 150 pip move that did the job. Only a move of this magnitude would have the momentum to break and hold above the established resistance.

Last weeks trades were not bad, but last night was not so much. We now have a possible trending market to play for the first time since the first of February.

Tonight we are trading around 1.7710. We are looking for a buy for the first time in months, and some of our traders are going to play both a buy and a sell at opposite end of the expected range.

There is some support around 1.7706, and even more around 1.7680. The first resistance is going to be around 1.7750. We do like to caution traders on making too aggressive of an entry, the 1 hour MACD is still on the sell side of the signal line, although there appears to be some divergence on this chart recently. To learn more about how we teach traders to successfully trade the forex market, be sure to get yourself a top quality forex trading education. One that includes either a forex seminar or a forex trading course.

We find these support and resistance levels using a set of technical indicators and other variables that we have found to be most successful for us. We use several other indicators and a variety of technical analysis techniques to enter and exit all of our trades. Every trader will have a different combination of indicators that makes the most sense to them. Learn how to develop your own successful Forex Trading style with our Elite Forex Trading Course.or Forex Seminar

About the Author

Learn about any of Eddie's amazing trading tools:
Forex Seminar | Forex Trading Course | Forex Trading Education

Forex Price Charts

There are two kinds of Forex traders- the traders who use fundamental analysis and the traders who use technical analysis.
I prefer the technical analysis, which ignores fundamental factors. Technical analysis is applied to the price action of the market.
By using technical analysis traders can make short-term forecasts, which are very difficult with fundamental analysis, more suitable to making long-term forecasts.

Technical analysts use different technical studies and interpret them to predict market direction or to generate buy and sell signals.
By using charts in Forex technical analysis we can predict price movements.

You might think that reading the charts is very difficult, but you must know that FOREX charts, as opposed to charts used for day trading stocks, are easier to interpret and use. The Forex charts are reflection of a country's economy, which is slower moving and is more stable compared to the future and daily drama of company reports, Wall Street analysts and shareholder demands.

Currency charts have also the tendency to develop strong trends, and although the Forex market is volatile, it is more predictable than other markets. The good thing is that you have only a few currencies to analyze, not tens of thousands of stocks.

The complimentary charting software provided by good brokers is sufficient for predicting currencies pair's movements, but you must learn to read the charts and you must learn how to interpret your technical studies.

As I mentioned the technical analysis in the Forex market is easier than in the other markets, but it still might seem a difficult task for new traders.
There are a lot of different resources which are helpful in learning technical analysis. The easiest way is watching videos which explain it, and although the Forex video courses are usually expensive, you can find some cheaper video courses, too.

If you want to learn more about Forex and if you want to get access to high quality FREE Forex Videos go to: http://www.currencytradingmethod.com

About the Author

The author is a currency trader and an internet marketer. On his website http://www.currencytradingmethod.com he promotes FREE high quality Forex Videos, previously available only to Forex elite, who could afford their high price.

Forex Trading System.

Some likes to play lotto or casino, and others loves the excitement of trading with stocks and currency . They all want to find a system with a high profit and no risk but believe me it does not exist and never will.

Forex has developed a few trading systems adjusted to the risk you are willing to take with your investments . There are systems for the careful broker/trader, where the risk of loosing your money is minimal, which also affects the profit and there are systems for those who are willing to take a higher risk, which also will increase the profit, and then there are systems for the hardcore who are willing to take the chance and trade with a high risk to increase the profit. So all in one Forex has a trading system for the beginner, the skilled and the expert.

You can see that the systems made by Forex is efficient as more and more people are using them. As a new started investor you have the possibility to learn all about trading with stocks, currency or anything else you want to try out, by using the Forex trading system with help from either e-books or personal assistance. Trading can be an expensive pleasure with great loos of money, if you don't use the possibilities and tools which exist. Forex has made some systems which is a great help to avoid such loses, and combined with common sense , you have a very good foundation to make a good and profitable investment.

Good luck with your investment, but don't use more money than you can afford to loose, as there is always a risk connected with any investment.
You can get more info on http://www.broker-trading-system.com/ or http://www.brokers-and-traders.com/.

About the Author

Kenneth Langlet is an independent writer who owns the website http://www.broker-trading-system.com/ and http://www.brokers-and-traders.com/ where you can find more information about Forex trading system.

forex new Updates

How The Matrix Will Boost Your Forex Profits?

Perhaps you remember one of the most impactful movies of our time, the Matrix?
Morpheus believed totally in Neo to the point where he almost sacrificed his life to save him. Yet Neo did not believe in himself at the beginning, he was most uncertain about whether he was the One or not. So when he went to see the Oracle, she told him that being the One is like being in love, nobody tells you that you are in love, you just know it. The Oracle pointed to a sign hanging on the door: "Know Thyself"...

Still Neo didn't believe in himself but when agent Smith captured Morpheus and a member of his crew suggested to pull the plug so the agents of the Matrix won't get access to Zion, something in Neo changed and he began to believe...

A little further down the path of the One, Neo "accomplished miracles" because he learned how to believe in himself fully and completely. And remember Neo had a mentor who believed in him beyond any doubt and who taught him how to use his mind to defeat the Matrix and its dangerous agents. Neo's mentor, Morpheus, showed him the path and helped him empower his mind, yet Neo walked the path to his own success after he started believing in himself and mastered his own mind.

Perhaps you were wondering, yes and what has this to do with trading the Forex market?

"Know Thyself"

Forex trading or any trading for that matter is a mind game in the first place. Some people spend a lot of time and efforts perfecting certain trading skills and knowledge like reading the charts and data, entry and exit skills but any normally intelligent person can learn these skills, they are the easiest part of the trading game. They are no doubt necessary tools to your Forex success but they don't make the biggest difference between a really successful Forex trader and the one who is not successful. So what does make the difference?

Let's ask the question: what is your goal in trading the Forex? It is to make money. Period!
Surely while you're making the money and great profits you can have fun too and you should but what you need are specific mental attitudes and strengths, that is if you want to be a successful Forex trader. These mental states are an asset that will help you in many other situations and contexts of your life.

As my Forex mentor told me, the major three mental and emotional frames of mind that characterize the majority of successful FOREX traders are:

1.Discipline & Passion
2.Confidence & Courage
3.Patience & Smart Persistence

We'll touch upon all three briefly to make it as clear as crystal to you so you succeed in the Forex market.

Like trading a Pair of Currencies these mental and emotional mindsets go hand in hand.

Discipline & Passion

Discipline, say the most successful Forex traders, is really important! It helps you be more effective in planning your trades and in sticking to the good plans you established before entering the trade. Always have an action plan for stop and limit levels for the trade before you enter it, your analysis should cover up the expected upside and downside.

Passion means commitment and love for what you do. It is your passion for something that keeps you going, improving, constantly learning (willing to buy excellent Forex courses from experienced and successful traders, remember Morpheus mentoring Neo) and persist beyond the ups and downs of the business. You need to know why you are trading the Forex because it is an awesome opportunity that you have to take, so develop a passion for it. Simply do what it takes to be successful, learn from the best.

A word of Caution: Never mistake your "Forex passion" for emotion that you might feel while trading the Forex, when trying to enter a trade without using clear and sound entry/exit indicators and rules.
Have fun, learn, and stay tuned for future developments and grow as a person in strength and character in "your Forex business" while remaining emotionally detached when you get in and out of a trade. If you do, you are bound to incredible success in the Forex trading business.

Confidence & Courage

Successful Forex traders believe in themselves and their abilities to learn and grow, to acquire more competence learning from a mentor.
There is no reality only perception, the Matrix can trick you but you can have your own special Matrix inside your mind that empowers you with an unwavering belief in yourself!

Have the confidence and courage to stick to your plan and stay with your rules even if others are doing the opposite. Keep your vision (end result) that you can make it in the Forex market in your mind until you are successful in it.

If you experience a situation where you know exactly how a currency pair will go and have a sound trading plan, go for it! Sometimes people fail to follow their own good plans because all sorts of emotions get in their way, emotions like greed and fear. Stay calm and act with confidence and courage otherwise your planning, analyzing and information gathering will be totally useless to you.

You become more competent when you educate yourself about the markets and learn from successful traders. Self develop: "Know Thyself", get into the habit of monitoring your emotions and questioning your limiting beliefs so that your mind works for you and not against you. Don't take things too personally, if you make a mistake then consider it to be valuable feedback so you become more successful, never a failure!

Patience & Smart Persistence

An Indian wisdom says: "Life is always right!" we say: "the market knows much better than you do!"

Learn to listen and read the signs the Forex market is giving you. Learn how to wait, observe and only enter a trade when it is the right time to do so, before you can reap the profits.

It can be hard to wait before your Forex trading screen and not jump into action but The successful FOREX trader will enter a trade according to the direction of the prevailing trend or will wait until a new trend shows up and establishes itself. The waiting ranges from a few hours to days or even weeks before a winning trend appears.

even if you day trade and are not a long-term or position trader, you still are well advised to keep impatience from ruining your profit chances.
Also be patient means you stick with winning trades. But be most impatient with losing trades.

Practice "Know Thyself" and continue learning your Forex trading from the best and we are sure you will be a successful Forex trader. You will be on the path of Neo, the One himself!

Karima Begag

P.S. Karima Begag is an Internet Entrepreneur with special interest and "passion" for Forex Trading and Knows it is a Life Time Opportunity to generate income for anyone who is willing to give it a chance. For outstanding Free Forex Information go here: http://www.forexprofitsecrets.com

This is only one of the many profit making lessons and winning tips taught at Forex Profit Secrets. To get instant access to a Free gem of Forex Freedom Course click here now: http://www.forexprofitsecrets.com

About the Author

None

The Though Side Of Forex Trading

You are sitting in front of your PC. Your heart is racing, sweat is starting to pearl on your forehead and adrenalin is pulsating through your veins at the speed of white light. You have live trade on the very popular Forex Market and your emotions are going mad.

If you ever wanted to feel like pregnant woman ( no offense intended) then this just the way to do it. A magnitude of pips and candles and fibs is glaring at you from the computer screen. Your money is gangling around in the air with your perspiration and the only thing that you can do is to have faith that you made the right move with you're trade.

This is all very scary and exhilarating at the same time. Some times trading the Forex Market should be compared to teasing a hungry lion with an open cage gate. Sometimes it is just downright tough. Why you ask? Because your emotions are out of control and that makes you scared money and scared money always lose. Why would you lose your money when you are scared because you will jump out with you winning trades with small gains and stay in with your loser hoping that the market will not hit you stop and take your money.

How can you prevent your emotions form ruining your trading career? First off never trade money you can not afford to lose, you can not use money that you saved up for your retirement or study money for college, or any money that if it is gone you are in deep... trouble. That will make your trading very difficult, now you need a plan of attack to trade the market if you do not have a plan do not live trade use a demo account to build your strategy. Demo trade until you make constant winning trades and see your demo account grow then you are starting to get your emotions under control. The most important rule of them all never trade with out a STOP other wise you're out of control. If your system tells you that you must take this lost never move your stop it will only worsen your losing trade.

What must I have in place before I start trading live? You must have a plan of attack and have the strength and discipline to stay with your Plan. If you lose, you have to go back and check if you followed you strategy if not to not trade again until you fix it. Every strategy will lose sometimes and you'll have to learn that losing it part of trading. Learn form every lost you take, by writing down the fault why you lost, so next you will not make the same mistake again.

Trading is like exercise, jogging you need to practice, to be come emotionally free to be in control when you are trading. When you have your emotions under control then you will succeed and make yourself a great big bundle of money.

Good luck on building your winning strategy!!!!

About the Author

Thank you for taking the time to read my article for tips and strategy's visit: http://www.Forexpippirate.com

Forex, A Week In Review - 3/20/06 To 3/24/06

We like to wrap up every week with a review of the previous week's trading. So, here goes.

Cable gave us a run for our money last week. We were able to end the week up anywhere from 100 to 200 Pips based on personal exit strategies, so we are not complaining, but the daily trading range has been very tight and very unpredictable making big profit targets was almost impossible.

It was important this week to work your trades, we were able to nail 3 out of 5 entries but if you were not watching and working an exit strategy, all but one trade could have gone against you.

If you were not using good trade management strategy you would not have closed the trade around 9:00 AM (before you were actually in the trade) and it would have gone against you for your stop loss. Remember, not taking a trade is a position, often time the best position.

For those of you watching our daily newsletters, we had another good week. We had three winning trades, although only one was for our full target, and more importantly no losing trades.

With that said we have nothing to complain about, going 3 for 3 with two days with no trades, remember taking no trade is as much a position as taking a trade.

And no losing days means we did not give back any of our gains and can add the full gain into our account for compounding. This is what the week looked like;

3/20/06

Short @ 1.7570, Stop @ 1.7615, Target @ 1.7520 & 1.7490

Did not fill either trade but had plenty of reason to get out of trade around 1.7530 on three separate occasions during the day, and there was no reason to not have protected your trade by at the very least moving your stop loss to break even. For 0 to 40, Pips on both trades.

3/21/06

Short @ 1.7540, Stop @ 1.7580, Target @ 1.7500 & 1.7440 - We filled the first trade for 40 and the second trade we closed at 1.7470 for 70 Pips.

3/22/06

Short @ 1.7490, Stop @ 1.7530, Target @ 1.7450 & 1.7410 - We filled both trades we an early exit at 1.7460 for 30 & 30 Pips.

3/23/06

Short @ 1.7460, Stop @ 1.7500, Target 1.7420 & 1.7380 - Missed entry by 11 Pips.

3/24/06

Short @ 1.7370, Stop @ 1.7420, Target @ 1.7310 & 1.7290 - Missed entry by 18 Pips. Closed both trades around 9:00 Am due to reversal indicator. Saved a 100 Pip loss.

About the Author

Eddie has trained traders for 10 years. His Forex trading course, or Forex seminar, is the only Forex Trading Education you need to make money Forex trading.

FOREX A to Z: all you need to know to start trading FOREX

Being new to FOREX trading? Don't worry, getting started in FOREX trading
is easy and you can always test your skills first in a demo account before you
go 'live' with real money. To get started in Forex trading, we have
to get to know what FOREX is. FOREX trading involves buying and selling the
different currencies of the world. Buying one currency and selling another at
the same time make a FOREX deal. FOREX market is the largest trading market
in the world. It yields an average turnover of $1.9 trillion daily and the figure
is nearly 30 times larger than the total volume of equity trades in United States.

Who are the major players in FOREX market?

Although FOREX trading involves such a big volume of trades nowadays, it is
not made available for the publics until year 1998. In the past, the FOREX market
was not offered to small speculators or individual traders due to the large
minimum business sizes and extremely strict financial requirements. At that
time, only banks, big multi-national cooperation and major currency dealers
were able to take advantage of the currency exchange market's extraordinary
liquidity and strong trending nature of world's main currency exchange rates.
Only until the late 90s, FOREX brokers are allowed to break huge sized inter-bank
units into smaller units and offer these units to individual traders like you
and me. As a fact in FOREX trading, FOREX is mainly traded in large international
bank. According to Wall Street Journal Europe, 73% of the trade volume is covered
by the major ten. Deutsche Bank, topping the table, had covered 17% of the total
currency trades; followed by UBS in the second and Citi Group in third; taking
12.5% and 7.5% of the market. Other large financial cooperation in the list
is HSBC, Barclays, Merril Lynch, J. P. Morgan Chase, Coldman Sachs, ABN Amro,
and Morgan Stanley.

Starting in FOREX trading

To start trading on FOREX, one must first learn how to read FOREX quotes. Foreign
exchange quotes are always listed in pairs (e.g. USD/JPY 109.2): the first listed
currency is known as the base currency with a constant value of 1 unit; while
the currency listed in the second is known as counter. In our given example,
USD/JPY 109.2 means a dollar of United States Dollar is equal to 109.2 Japanese
Yen. In other words, the quote shows the relative value of one currency compare
to the other. It means the value USD had been increased when USD/JPY quote goes
up

However, a two-sided quote (e.g. EUR/USD 1.2435/1.2440) consisting of a 'bid'
and 'ask' is often seen. The 'bid' price is the price
at which you can sell the base currency; while the 'ask' price is
where you can buy the base currency. The different of 'bid & ask'
price is commonly known as 'spread'. In the example of EUR/USD 1.2435/1.2440,
this means you can buy 1 Euro Dollar with 1.2440 USD or sell 1 Euro 1.2435.
Currency brokers make their profit through these differences of 'bid &
ask' price and this is how they manage to provide their services to individual
investors without charging them commission fees. If you are new to trading it
makes sense to deal in the more popular currencies. There are two main reasons
for this. Firstly you do not want to be left with a currency where there is
little interest and you may have difficulty selling. Secondly the spread between
the bid/ask prices is likely to be narrower, making it easier to make a profit.

Major currency traded in FOREX market

There are seven major currencies, the US dollar (USD), Euro (EUR), Japanese
yen (JPY) British pound (GBP), Swiss Franc (CHF) Canadian dollar (CAD) and Australian
dollar (AUD). The US dollar is the most traded currency followed by the Euro
and the Yen. The Euro is the relatively new currency of the European Union although
some member states, including the UK, have not changed their currency. Also,
if you live in a country using one of the major currencies, when you first start
trading it makes sense to begin with that currency. Not only are you familiar
and comfortable with the currency, but you are in a better position to judge
its strength. The internet has a wealth of information on the financial climate
of a country, but if you live there you have access to all newspaper content,
as well being in the unique position of experiencing first hand changes at the
consumer level.

Why I should trade FOREX?

Main Question raised in your mind might be: Why should you trade FOREX? There
are lots of reasons why you should involve in FOREX trading. FOREX market is
truly a global market where it opens 24 hours a day through out the whole week
(weekends excluded). With the ease of Internet access, transaction in FOREX
can be done in anytime regardless on your location. This gives you the convenience
to work on any time, anywhere - which in turns gives you the freedom you
cannot have in investing other kind of trading.

More over, trading in FOREX gives you an equal prospective in rising and falling
market. As trades are always done in pair of currency pairs, FOREX traders can
always find chance to make money in anytime, regardless on the fall or rise
period of one single country currency. Also, FOREX trading offers incredibly
high leverage rates to the traders. By trading currency in margin up to 200
to 1, you can start off your FOREX trade with minimum capital and huge ROI.

Conclusion

Wrapping things up, I hope that the article gives you a better general understanding
about FOREX trading. With the flexibility you can get, FOREX trading suits perfectly
into most people investment plans. Like with any new form of trading you need
to know what you are doing, especially as there is margin involved. If you are
new to FOREX, take all the time you need to learn this new trading skill well
-- practice everything you learn with a demo account before you consider going
'live' with your own money. Investors should read books, attend seminars and
paper trade until they are comfortable with there strategy.

About the Author

"It's okay to be a newbie!" Learn Forex trading from scratch at www.golearnforex.net.