Forex Trading Strategies
The current economic climate is leaving many people uneasy about Share Trading, one only has to observe the charts and listen to reports of companies in trouble, to realise just how unpredictable the Share market is. Yes there is still profits in it, and with many stocks available at relative bargain prices, there is plenty of chance to make good long term profits.
With the deregulation of the Foreign Currency Markets or Forex in the 1990s, increasing numbers of people are exploring this as an alternative source or income. There are many ways to trade Forex, Day Trading or swing trading, the list goes on, but there is one thing they all offer the unwary, a high level of risk if you start trading thinking it’s easy.
There are two core analysis techniques; Fundamental Analysis, basing trading decisions on news events and Technical Analysis, which involves interpreting the charts using a variety of indicators. This is how I like to trade as I am not reliant on news feeds. It doesn’t matter which you choose, to minimize potential losses, you are going to have to learn Forex trading before you start committing any hard earned cash.
A good starting introduction to the basics is offered by Babypips.com, it’s free and you will get to know some important terms, but they do not teach into how to develop Forex trading strategies.
What is a Forex trading strategy? Simply put, it is a system for setting money management rules, analysing the progression of a chart, establishing a possible trade entry point (Setup), confirming the entry point, opening a trade, establishing an exist strategy to both minimise losses and to take profits.
A trading strategy is of the utmost importance when Forex trading, it establishes and guides your every move when formulating, entering and exiting a trade, and without it, you will find it very difficult to work out why things work and why they fail.
When you begin trading, a trading strategy provides the system for trading your Demo account. These are provided by most brokers and allow you to get your feet wet, without risking real money. You give yourself an account balance and trade it real time testing your trading strategy and watch your account either grow or vanish. You’ll soon see if the strategy you are testing stacks up!
To learn how to develop a a specific trading strategy for profiting from market rebounds, there is a free video course which will teach you a trade called the “Rubber Band Trade” and shows you what is involved in developing a trading strategy.
It’s a very profitable trading strategy developed by a Professional Trader and covers the technical analysis for all stages of this specific trade. Once you have watched this strategy on a Demo account and made it work consistently, you can make it work on a real account and start catching some profitable pips whilst you develop and test other trading strategies that will make your Forex trading a success.
I regularly use this trading strategy and still trade it when the charts set up correctly. A quick 20-30 pips? Why would you miss the chance?
To start grabbing rebound pip profits get the Free 5 Day Video Trading Course.
An Introduction To Stock Screening
With more than 17,000 stocks being traded in the United States stock market nowadays, choosing profitable stocks to invest in has become the toughest task for stock brokers and dealers. If you are an independent investor in stocks, then you will find it even tougher to find stocks that meet your selection criteria for stock trading without any advanced tools. However, the problem can easily be solved by using a stock screener. Stock screening software is now abundantly available online, and these software programs can actually help you achieve a long term winning streak with stocks.
Some of the main advantages of using stock screening software for stock trading are:
Once you have your stock selection variables decided, stock screening can make investment decisions fast and easy. By using a stock screener, you get to know about all the stocks that meet your selection criteria with a single click. Stock screeners can screen thousands of stocks within seconds. Doing the same thing manually is simply not possible, especially considering the time frames that you are required to work with.
Stock screening takes emotions out of stock trading. And unless you always have amazing stock intuition, this is the best course to follow. Investing without letting your emotions get in the way will definitely increase your wins and cut down on losses, provided you are using the correct variables for screening.
Stock screeners screen thousands of stocks within seconds. While you might still not want to base your decision to buy or sell simply on a stock screen result, these programs definitely narrow down the list of stocks with which you have to work drastically.
Current stock screeners in the market not only perform complete technical analysis of stocks based on the provided criteria, but they also give users the screened information in an easy to read and convenient format. What is more is that most of the stock screeners in the market today will also provide you with company profiles, comparative reports and intra day charting. With all this information on hand, taking stock trading decisions becomes more balanced, prudent and safe.
Getting Started With Stock Screening
If you are just getting started with stock screeners, then you can start using a basic screening version. Basic stock screeners let you set your screening criteria based on a predetermined set of variables that already exist for screening. This kind of screening is perfect for beginners and those who do not want to spend a lot of time in setting their screens. Experienced investors can try out advanced stock screeners, which require users to not just provide the criterion variable, but also to provide the value and the condition. Most basic stock screeners are available online for free, while some advanced programs are provided at a nominal fee.
Forex Charts – Line, Bar, and Candlestick Charts
Forex technical analysis is one of two ways to analyze the foreign exchange markets. It works by studying the movement of prices, while the other method, fundamental analysis, looks at external economic factors such as the strength of the national economy, political events and so forth.
Studying price movement with Forex technical analysis involves charts. The theory of it is that if you look at the historical records of how prices have moved in the past, you can identify tendencies and trends which will mean that you can predict how the prices will move in the future. Then as soon as you spot an emerging pattern that fits your system, you have a trading opportunity.
The following three chart types are widely used:
1. Line charts
The name of line chart tells it all. It is a line connecting the closing prices. Ups and downs of that line show the movement of the currency pair. Unfortunately this type of price does not show you any information on price behavior within the time period. You can see only the close price.
- Second chart type is called bar chart
A bar chart will show a series of vertical lines or bars. The top of the line represents the highest price during that time period. The bottom of the line represents the low. A short horizontal bar on the left side indicates the opening price and a short horizontal bar on the right side indicates the closing price.
That’s why the bar charts also called OHLC charts. It stands for open, high, low and close.
3. Candlestick charts
Candlestick chart gives the same information as bar chart. The only difference is that candlestick chart gives better visual representation of price tendency inside the time period.
You have the same vertical line with the high at the top and the low at the bottom, but there is also a wide block in the middle showing the gap between the opening and closing price. The blocks will be filled white (for a rising price) and black (for a falling price) or more often these days they are colored. Colors can vary but a common combination is green or blue for rising and red for falling.
Most people prefer candlestick charts over bar charts because they are easier to interpret. It is much easier to see turning points in the market using candlestick charts. You can immediately see where the market reversed from an upward to a downward trend and vice versa.
Successful traders always take advantage of emerging trend. You probably heard the famous expression ‘Trend is your friend’. Therefore the ability to recognize the forming trend is of the major importance of trader’s success. Candlestick chart is a great tool in helping to develop this skill.