Learn Forex The Easy Way

Japanese Candlestick Charts for Beginners

2010-08-10T09:17:00.000-07:00

If you’ve never heard of Japanese candlestick charts, you’re not alone. Outside of Asia, they are still relatively unknown, except among some very knowledgeable traders. And the knowledge that is available about these 130 year old trading tools can be attributed to Steve Nison. In the middle of the 1980’s, Nison was working as a broker. One day he happened to catch a glimpse of some unusual charts hanging in the office of another trader – one who happened to be Japanese. Later, he learned these were candlestick charts and made it his personal mission to find out everything there was to know about them.

Unfortunately, nothing was known about them in the West at the time. Instead, he had a colleague purchase books for him directly from Japan during a visit. Then the books were all translated so Nison could read them. In about a year, he was able to start using candlestick charts to make trades and he saw the returns go up. In 1989, he published the first article on these ancient charts ever in the United States. And from then on, he became the Western expert on this Japanese art form.

An Explanation of the Candlestick Chart

These charts are an excellent tool for Forex trading. A candlestick chart is basically a visual interpretation of currency activity. Because the chart is easy to interpret (once you understand all of the symbols), it can provide easy-to-follow guidance on when to buy and sell currency. The name of the chart comes from the shape of the designs drawn on the chart.

The design consists of two parts: the body and the shadows. The shadows represent the closing and opening price of the currency on a given day. If the currency closed at a higher price than it opened with, the body is left hollow or blank. If the currency closed at a lower price than it opened with, the body is colored in. When you have hollow candles, this indicates a stronger pressure to buy because the currency’s value seems to be increasing. When the candle is colored in, you’ll have a stronger need to sell your currency because the value seems to be taking a downturn. Longer candles increase the pressure because they illustrate a more active change in currency value than short candles.

Some Candlestick Chart Formations

One of the important formations to look for on the chart is called the doji. You’ll see these whenever the currency opens and closes at almost the same value. The result is a very short candle. On their own, doji are not significant but you look for patterns of these symbols on the chart. These patterns can help you get a better idea of what is going on in the market and how it should affect your trading decisions.

The hammer and the hanging man are similar to the doji. They are also important symbols on the chart. The hammer shows things are turning around after a slump in the value. The hanging man, on the other hand, suggests selling might be a better option.

Top 7 Forex Trading Tips for a Succesful Forex Experience

2010-08-01T11:19:00.000-07:00

These are my top seven tips for making sure I stick to my trading plan in order to minimise losses and maximise my profits. There are many tips and tricks to being a successful Forex trader. The more you learn and the more knowledge you gain, not just about the technical side of trading but also the emotional side, the better you will become at the exciting business of Foreign Exchange trading.

TIP 1: Plan Your Trade & Trade Your Plan:
Stick to your trading plan and DON'T ever deviate. It is too easy to do crazy things like add money to a losing trade or change your stop loss in the heat of the moment!
TIP 2: Never overtrade:
If you have a good trade, turn off and go and do something relaxing and fun. Bask in the glory of a nice profit! If you have a bad trade, do the same thing......walk away. Don't get into a new trade because you've just lost money! This is almost always gauranteed to LOSE YOU MORE! Believe I know, I've been there!
TIP 3: Only Trade After a News Item:
All too often there is a spike after a high impact news item which could go either way and lose you a pot load of cash! Make sure you know what news item is due to come out, at what time and what level of impact it is likely to be, then plan your trade around that.
TIP 4: Learn from your mistakes:
Keep a trade diary and see where you are being impulsive or inefficient. Learn your weaknesses and
then avoid those behaviours at all costs. My worst weakness and probably the most common in the beginning is thinking you know what the markets going to do. Don't get cocky and be a know all.......it could cost you!
TIP 5: Paper Trade First:
If you are just getting into the game, paper trade for a while. This means that you only trade on paper (not using any cash) by keeping a record of trades using your pre determined trading plan. Most spreadbetting companies offer this option before you get stuck in, in the form of a deom trading account where you have a bank of virtual money which you can trade with It is an excellent way to get to know how you handle the trading arena and what style you enjoy and excel in most.
TIP 6: Only Use What You Can Afford To Lose:
Remeber, this is a high risk business and you can lose your entire investment in a few seconds. You should NEVER use funds that you can't afford to lose. You should never BET more than 3% of your entire bank. This is the GOLDEN RULE and this hugely minimizes your risk. If you are still nervous after paper trasding, then deposit a small bank and use only 3% of this until you feel more confident and have a very good grasp on your trading style and ability.
TIP 7: Finally, Never Be In A Hurry To Make Money From Trading:
This is a very important tip and often overlooked by new traders who think that this is a get rich quick scheme. You must be very clear that it isn't. It can be a very profitable and unpredictable business and the market can change as quick as you can blink.If you approach it as a business first and foremost and apply the same time and effort as you would to a new business venture then you have a much better chance of success.

Fibonacci Retracement Made Easy Enough For Granny To Understand!

2010-08-01T11:17:00.000-07:00

The Fibonacci Sequence is a special and intriguing set of whole numbers that, as far as anyone knows, runs on indefinitely. It begins:

1,1,2,3,5,8,13,21...

This sequence was first discovered and written of by the mathematician and philosopher Leonardo of Pisa (aka "Fibonacci") in the year 1202. Some have speculated that it actually was first known to the ancient mathematicians of the Indus Valley region.

Now, the Fibonacci Sequence has many intriguing properties--not the least of which is that it was first discovered by Leonardo when he was trying to figure out how many pairs of rabbits he could have by the end of one year's time if he started off breeding just one young pair (barring any accidents, rabbits don't die in only one year, so he would have all of the rabbits that were bred, plus the two he started off with, at the end of one year). This fact of how he discovered his famous sequence means that it has its roots in very practical applications, not abstract mathematical theories.

This quality of practical application has found its way into the world of Forex trading (and other market trading). In Forex trading, we use what's known as "Fibonacci Retracement".

Fibonacci Retracement is a technical trading tool for predicting the probability that a given financial asset's price will "retrace" by a significant amount and, then, find "support" or come up against "resistance" at certain key Fibonacci levels before then moving once more in the original direction it took before the retracement.

Incidentally, these key Fibonacci levels are found by making use of the key Fibonacci ratios, which are 23.6%, 38.2%, 50%, 61.8%, and 100%.

Got that? Well, I know it probably sounds abstruse, but the fact is that this is a very popular technical tool and widely used, because it really works to help traders pinpoint strategic moments for their transactions to be placed, and helps them to set target prices as well as stop losses.

Well, why do you need to have some technical aspect to your trading? Because if you don't, you're at the mercy of your emotions, and that spells B-R-O-K-E in the end. Only by taking your emotions out of your trading strategy can you hope to be successful and possibly make your fortune, and the Fibonacci Retracement tool is marvelous for helping you do this.

What's a retracement? It is a reversal, which tends to be sudden, in the direction of an asset's price trend--so if it's been steadily rising it falls, and if steadily falling it rises. A retracement counters a prevailing trend in the asset's pricing--or, that is, causes a "correction". This could happen because of sudden bad news about the industry the asset is held within, such as if Iran decides to blockade the oil tankers in the Persian Gulf and you're trading in oil futures. But, with the Fibonacci Retracement tool, traders find that they can accurately pinpoint how much of a correction there will be before the asset stops reversing its pricing trend and returns to it. This is because the sequence is able to predict the probability of mass human behavior with surprising accuracy.

Now, "support" is a historical price level below which, once an asset reaches it, the asset has always tenaciously resisted falling any lower--and this is because at this point, many more buyers choose to buy the asset because they expect it to rise from there. "Resistance" is a historically known price level at which an asset will trade for a time, but in all probability will not exceed; this is because at this price, more sellers than buyers enter into trading of this asset and drive the price back down. As you might have guessed, the key Fibonacci ratios are accurate predictors of support and resistance, too.

So, by learning how to use Fibonacci Retracement, you can learn how make enough money to buy all the rabbits you want.

2009-09-21T14:08:00.000-07:00

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2009-09-21T13:47:00.000-07:00

Forex Mommy Makes Money While She Sleeps

2009-05-26T06:35:00.000-07:00

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Learn Forex The Easy Way

Japanese Candlestick Charts for Beginners

Top 7 Forex Trading Tips for a Succesful Forex Experience

Fibonacci Retracement Made Easy Enough For Granny To Understand!

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Forex Mommy Makes Money While She Sleeps