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Various types of FOREX trading tools

December 21, 2009 at 9:30 am

There are large numbers of FOREX trading tools that are available in the trading market. Some of the best available FOREX trading tools are standard indicators which have been put into use for some years now. You may be really very surprised to know that how effectual as well as widely spread these basic types of trading indicators are. Two of the best tools of trading that are available in the FOREX market, in order to make a successful trade are as follows:

The first type of tool of trading is known as moving averages and the second important type of tools of trading are known as momentum based indicators. These tools of trading may appear to be really very simple, but the real hard core fact is that they can prove to be really very priceless and precious to your long lasting career of trading.

Moving averages are the type of trading indicator that have been around for quite a large number of years, but this is not the reason that make them any less useful. The most efficient as well as the best movement based averages are the ones having a really very simple moving average. Most of the people think that if the will be making use of a complicated type of trading tool, then they will be able to make hand some amount of money, but believe me that’s not at all true. Simple moving average is the best available key to the lock of your success. There are quite a large number of different kinds of moving indicators, which are some times also known as MA indicators, but the basic detail that I want to give through this article is that only simple moving averages are being put in use by all these market players of large corporate such as big financial banks and funding agencies or institutes. One of the most important and the foremost use of these trading indicators by some of the professional traders of this FOREX market are to provide assistance to them so that they can identify the ongoing trend of trading.

The second most important as well as crucial type of indicator are the Momentum based indicators. They are supposed to be the second best tools that are available to any trader. These are certain necessities that should be present in the trading tool kit of each and every trader. Momentum based trading indicators are the ones that measure the momentum that is present in the particular trading market. Momentum is the characteristic that always precedes the price. This actually means that when ever these trading indicators are used properly, they are bound to make really big profits for you. Any trader can make use of these indicators.

How to use Charts and Patterns in the Forex Trade

December 21, 2009 at 9:29 am

There are a number of instruments available in the forex trade to aid you in understanding the forex market and its policies. Factually speaking, there do exits a variety of forex tools, that you might not even understand from where to begin and which one to consider. Once you start understanding the forex market, you can start exploring each tool that can assist you in predicting the changes taking place in the forex trade.

A number of automated forex robots and forex software’s are seen on the internet. Each of these helps you in making your life a bit easy, simple and comfortable one while trading in the global currency exchange market. The forex trading podiums provide tools that help the forex traders to tune up their decisions. There, understanding these tools might be somewhat difficult or complicated. In such cases, you can take help of the forex patterns or forex charts to understand them easily.

The Japanese rice traders in the eighteenth century invested an instrument that helped them to judge the fluctuations in the rates. This became popular as a candlestick pattern. In this pattern, there was a line grasp that displayed the price that was being used. Some years later, traders made some advancement in it and they finally generated the bar chart. This bar chart demonstrated the closings, openings, highs and lows of a particular rate over a specific time span. All this was displayed in a 2-D chart pattern. This made adequate data visible on a single chart and occupied less space, as well.

Then, the candlestick chart was discovered by C. Dow in the Stock market of USA during the twentieth century. This was indeed invested as this chart pattern was visually very easy to understand. This was so as this chart had a bar graph with numerous rectangular boxes in it. A vertical line was seen above and beneath all the boxes that was named as upper wick and lower wick, respectively. Varied colors were utilized based on the market conditions to color each box. A single color was used in the chart pattern if the closing rates were greater than that of the opening ones. In case of the opposite situation, different colors were used to denote varied situations.

You might have come to know by now that how easy it is to make use of the candlestick chart. If you observe the forex chart wherein most of the candles are of the same color, then you can come to conclusion that the trend present in the market is bullish. Such kind of charts provides an instant view of the prevailing market conditions or trend. In the currency exchange market, one needs all the benefits that they can acquire in order to make their decision quicker and wiser.

A forex strategy that can ensure you long term gains

December 18, 2009 at 10:19 am

You do not require complicated algorithms and formulas driving your strategies to be successful as a forex trader. The complex formulas and algorithms are only to trick you into believing that what you are doing is totally scientific. Unfortunately nothing in the forex market is scientific. If you believe that you would be able to win by a trick, or if you are on a lookout for the perfect method to fool the market, you will be sorry to hear that there is not any such method. One has to think logically, but not scientifically. The strategy of a forex trader should not be scientific, but should be logical. It should be simple enough to understand. A simple forex trading strategy will help you a lot when it comes to trading in the forex market.
There are many strategies for which help from professionals in not a requirement. Many people invest a lot of money of forex training guides, besides pouring thousands in the forex market. There are many examples of simple strategies deleivering big results in the market trading. There is one such strategy which you will be told via the medium of this article. The strategy that you will come to know will be very simple and easy to understand besides giving you good returns.

However you would need the qualities of diligence, patience and discipline in order to implement this strategy successfully. In the long run, this strategy ensures good returns and takes less time to execute. Buying a currency at the moment when it is at a 4 week new high, and selling it when it is at 4 week new low is the strategy that can deliver wonders. You cannot find a strategy simpler that the one that you were notified above. Many forex traders have found this system very efficient and the strategy ahs been around for a while now.

The other alternative is that instead of selling at 4 week low, one may also try to filter the exit and then sell it in the next week, i.e. the second week. The strategy is based on certain principles. All of you are aware that the forex trading starts when the market is at a high base. You need to know that it is important to bear short term losses in order to gain in the long term. There is no foolproof way in which you can be able to avoid losses in the market.  There are many systems in the market these days that claim to be perfect, that claim to ensure that you do not make a loss.

However please understand that these systems are 100% fake. There is no foolproof solutions; just imagine if the systems are as good as they claim won’t everyone buy them and become rich?  Use simple strategies to win big.

Advantages of automated trading robot

December 18, 2009 at 10:10 am

The forex market is flooded by a wide range of automated currency trading. This has created a big commotion amongst the traders. The forex market is penetrated rapidly by the automated currency trading systems. The people who invest their money in such automated software have always sided with the idea of using these automated trading robots in various trades.
The forex robots have gained a very good reputation and due to that they are also gaining a lot of popularity in the forex market. The users of these robots are vey satisfied with it and claim that the robots have helped a lot because of the spare time it gives them by taking full charge over the trade.

The major advantages of using automations are that it can work without stress. A trader can be stressed when he keeps looking into the monitor for a long time. The traders need to get the right software. . In order to assist such investors, the programmers have developed various software products which would help in assisting the investors. But there is always a risk of getting ineffective or unreliable software products. Hence various aspects need to be taken into consideration to choose the right software from bogus and software that will not be useful for us.

The other major advantages are it has high security. A wide range of automated forex robots based on the internet are also available. The internet based automated forex robots are more practical. The internet based automated forex robots can be accessed in any place that has an internet connection. The growth of free wireless fidelity has been so rapid that even coffee shops and burger shops have it. This helps you to stay in touch with the forex market which helps you to plan your strategy well. The other major advantage of automated forex robots is that highly confidential information need not be stored in your personal computer or laptop which is quite vulnerable to security threats. This helps to keep all the confidential data in a safe place.

The automated robots can be classified into two types, the profitable and the non profitable. The major issue that distinguishes the profitable robot from the non profitable robot is its ability to work in different market conditions. Non profitable robots are monotonic and can work only in a single environment. The non profitable robots are designed only for this single market condition. It tends to lose a huge margin or sometimes even the whole investment when the market condition is not one in which it is programmed to be in. This causes total loss for the investor but it’s not the case with profitable robots which are capable of handling all situations. The profitable robots do not incur a loss to the investor most of the times.

Daily Review 18/11/2009

December 18, 2009 at 10:05 am

USD Dollar (USD)

The Dollar gained versus most majors as Industrial Production came out weaker, lowering risk appetite. Industrial Production came out 0.1% versus 0.4% expected. PPI came out weaker with 0.3% versus 0.6% forecast. TIC Long-Term Purchases came out better with 40.7B versus 27.3B expected. NASDAQ and Dow Jones rose slightly by 0.27% and 0.29%. Crude gained by 0.68% closing at 79.44$ a barrel and Gold (XAU) remained almost unchanged with 0.16% change closing at 1140.5$ an ounce. Today, Building Permits are expected higher with 0.59M versus 0.57M prior and Core CPI is expected with 0.1% versus 0.2% prior. Housing Starts are expected higher with 0.61M versus 0.59M and Crude Inventories are expected with 1.2M versus 1.8M prior.

EURO (EUR)

The Euro weakened versus the Dollar and the Pound as risk appetite weakened and ECB\’s president Trichet said a strong Dollar is important for the world economy. European Trade Balance came out better than expected with 6.8B versus -0.9B expected. EUR/USD traded with a low of 1.4806 and with a high of 1.4998. Today, European Current Account is expected with 0.6B versus -1.3B prior. ECB President Trichet will speak in Frankfurt.

EUR/USD – Last: 1.4870

Resistance

1.4900

1.4925

1.4955

Support

1.4810

1.4740

1.4703

British Pound (GBP)

The Pound remained almost unchanged versus the Dollar as CPI figures came out better than expected but Industrial Production in the U.S lowered investors Risk Appetite. CPI came out 1.5% versus 1.4% expected and RPI came out -0.8% versus -0.9% expected. Overall, GBP/USD traded with a low of 1.6755 and a high of 1.6872. Today, MPC Meeting Minutes will be released. CBI Industrial Order Expectations are expected with -47 versus -51 prior.

GBP/USD – Last: 1.6800

Resistance

1.6850

1.6900

1.6955

Support

1.6750

1.6670

1.6625

Japanese Yen (JPY)

The Yen gained versus the Euro and weakened versus the Dollar as risk appetite lowered after Industrial Production in the U.S came out weaker than expected. Overall, USD/JPY traded with a low of 88.73 and a high of 89.53 and EUR/JPY traded with a low of 132.44 and a high of 133.58. Today, All Industries Activity is expected with -0.1% versus 0.9% prior.

USD/JPY-Last: 89.17

Resistance

89.65

90.00

90.18

Support

88.80

88.60

88.25

Canadian dollar (CAD)

The Canadian Dollar dropped as Risk Appetite weakened following U.S production data. Overall, USD/CAD traded with a low of 1.0464 and a high of 1.0617. Today, Canadian CPI is expected with 0.2% versus 0% prior and Core CPI is expected with 0% versus 0.3% prior.

CAD/USD – Last: 1.0535

Resistance

1.0620

1.0680

1.0735

Support

1.0475

1.0450

1.0425

Research by http://www.ufxbank.com

GoLearn Forex Analysis 17/12/2009

December 17, 2009 at 10:06 am

Is the CAD Headed for a Breakout?  By GoLearn Forex

USD/CAD:

The Canadian Dollar from a technical standpoint is giving every indication it is going to breakout.   Price has been consolidating for several weeks.  You can see more clearly the consolidation in the Chart below depicted by the orange triangle.

Typically we draw a triangle where only one side represents the slope.  However, the triangle drawn below is indicative of investor’s uncertainty with regards to the CAD.  The Canadian economy is holding strong.  The CAD is a commodity currency and will rise and fall as commodity prices rise and fall (in particular Oil).  The Dollar has been rallying which should mean a weaker Loonie, but this rally stems from positive U.S economic data.  The U.S economy and that of their northern neighbor are linked to a certain extent as they feed off of one another.  Therefore, positive U.S data should also be good for the CAD.  Therein lies the conflict and thus you have a dual sided sloping triangle.

CAD1612

The CAD is currently trading above its 50 day MA.  Similar to the AUD and NZD it failed to breach the 100 day MA in spite of the Dollar rally.  As the CAD wedges itself into the triangle we are looking for the following to occur in order to trip an entry signal.  If the Loonie produces a candle south of the 50 day MA and south of the bottom slope of the triangle then look to enter a Long CAD position.  Alternatively, if the CAD produces a candle body north up the upper slope of the triangle and the 100 day MA then enter a Short CAD position.  Lastly, if a Short CAD signal triggers we see a near term take profit level at 1.0880 coinciding with the Fibonacci 23.6% Retrace level.  We view this level as strong point of resistance.

Oil Takes Off by GoLearn Forex

The FOMC meeting came and went without stirring the waters.  In the Euro-zone and London, Equity Markets finished their sessions in positive territory ahead of the highly anticipated U.S FED rate decision.  The accompanying FOMC statement was intentionally left mostly unchanged so as not to roil markets. It served its purpose well as the DJIA finished the day off slightly lower by 10.88 points to close at 10,441.12 while the tech heavy NASDAQ closed up 5.86 points to 2,206.91.

In the Currency Markets the Dollar followed Equity Markets finishing the session nearly flat against its G-7 counterparts.  The AUD gave up .61% still reeling from CB comments that took on a more dovish tone in regards to any near term future rate hikes.

Oil soared to 73.54 during intra-day trading before leveling off the day at 72.66, a gain of $1.97.  Gold climbed $12.70 an ounce to 1,137.90.  On the Agricultural front Soybeans, Cotton and Sugar continued to rally while Copper, Wheat and Corn declined on Dollar strength.

On the economic data docket for today we have the BOJ rate decision to be announced, although no change is expected.  In the U.K, Retails Sales are set to be released while in Canada CPI data will hit the wire.  In the U.S, Jobless Claims will print as will the measure of Leading Indicators and the Philadelphia FED survey.

Upcoming Forex Events for December 17, 2009

GBP  Retail Sales (MoM) Forecast  0.50%  Previous  0.40%

CAD  Core CPI (MoM) Forecast  0.10%  Previous  0.10%

USD Initial Jobless Claims Forecast    470.00K  Previous  474.00K

JPY Interest Rate Decision  Forecast  0.10%  Previous  0.10%

Analysis by http://www.golearnforex.net

Can one use the Free Forex Charts for Forex Trading?

December 17, 2009 at 9:47 am

The idea of using the forex charts has become very significant to operate the foreign transactions. With the help of such kind of a tool, it becomes quite easy to recognize the technical patterns as well as analyzing the evolution of currencies. It is due to these forex charts that the forex analysts can forecast the evolution of the forex market as well as the possible future trends. All the significant online courses offering trading to individuals on brokerage do emphasize on the analysis of the forex charts. If the same is your case, then you can begin by making use of a number of free forex charts to widen your knowledge about the forex market.

The progression of numerous pairs of currencies can be tracked through the forex charts. However, very complicated tools need a trained or an experienced eye, or else they do remain a mystery for the novice traders. Based on ones needs, you can zoom in the various chart segments or even prefer to select the alternate kinds of charts to maximize your purpose of observation. All the studies made on the basis of these forex charts has to be saved or they can be used for observational purposes and hence become an initiating point to create your distinct system.

There are some of the free forex charts that are made available to you in the flash format and they offer live feeds of information along with immediate details on currency crosses. You, as a user can opt to add different signals, which do not exist in a readymade format like the Envelopes, Bollinger Bands or Price Oscillator. One can observe these charts based on the time frame set by you according to your personal needs. It is always suggested to move from simple to complicated, as a proper course in order to train for better business in forex.

It is however, quite risky to make use of these free forex charts for the purpose of day trading. The loss of money here would be considerable if you are only a newbie. The ideal way to begin your apprenticeship is by learning the long term trends or the swing trade. It generates the essence that is needed to follow in a number of charts. A user who is disciplined as well as patient is aware of the fact that the bigger possibilities for profits indeed is present in these long term trends. So, it is advisable to select easy, yet simple forex charts as they are very easy for analysis, interpretation and following. This is so as these contain very few elements that need to break.

Last, but not the least, never foresee or predict s it often results in loss of money; instead it is better to make an effort to analyze, evaluate and know the odds.

Forex charts in combination

December 17, 2009 at 9:46 am

If anyone is using Forex technical analysis along with Forex charts then he may earn good amount of profits in Forex trading. Here are some simple combinations given below. If anybody uses these given combinations, then they shall surely turn their profits up. Anybody can incorporate the directions given below in their strategies.

Many Forex traders go for weekly charts. These weekly charts give information on longer term trends. And also these charts effectively segregate the important things from the rest of information. If one plans to go for weekly charts, he is advised to look for a valid support and resistance. Here valid has a different meaning. It has nothing to do with meaning “legal”. Here valid support means support considered to be significant by the Forex trading market. They are also tested in different time frames as well.

Daily charts are also used by some Forex traders. If one has valid support and resistance, then there is a probability of getting stops. When the levels are broken, the break is continued. Thus a new trend is followed. When these breaks take place they try to move quickly. One is needed to be ready to buy the break. A breakout is valid when it takes place. One has to trade on confirmation.

If one wants to observe that the break is going to continue or no then he is required to look at the price momentum. There are many momenta to utilize for the Forex trading. But there are two who really deliver a good job. They are stochastic and Relative Strength Index (RSI). One should observe the rising stochastic or RSI lines if they are in the direction of break.

One should take a professional education of Forex trading before entering into the market for trading. And he must have a good knowledge of all the indicators and charts as well. Once if these Forex charts are learnt thoroughly, they are easy to use and apply. If one goes through all the expert advices then he can really make out good profits from big moves. If one starts buying or selling breakouts then he can accumulate the profits. So it does not matter if the initial part of the move is missed. The Forex trader can achieve much more ahead in the move.

Most of the traders do not like buying breakouts. They think that they have missed the first part of move and wait till the prices become well. But when the breaks are valid, the prices move quickly. One has to keep watch on that.

As said earlier that the majority of Forex traders do not buy breakouts because of a specific psychology. But then the most of the Forex traders do not win as well. Thus one has to think over it and properly utilize the analysis and charts in the strategies.

Daily Review 17/12/2009

December 17, 2009 at 9:12 am

USD Dollar (USD)

The Dollar gained massively across the board on the day the Federal Reserve decided to leave rates as expected at 0.25%. The Dollar rose after the announcement and continued its gaining after Asia markets opened. Earlier, the Building Permits came out 0.58M better than expected 0.57M. CPI came out unchanged as expected at 0.4%. Wall Street finished mix after being unable to hold in the positive side. Stocks turned to the negative after the statement of the FED about monetary policy. The Dow Jones fell 0.10% and NASDAQ rose by 0.28%. Crude Oil kept gaining for the second day closing at 72.77$ a barrel after the oil inventories showed a 3.7M drop. Gold (XAU) gained also closing at 1137$ an ounce. Today, the Initial Jobless Claims expected at 470K vs. 474K previously. The Philadelphia Fed Manufacturing Index expected at 16 vs. 16.7 previously.

EURO (EUR)

The Euro fell against the Dollar and the Pound, breaking through the 1.4500 and 1.4400 support levels, after the CPI came out 0.5% worse than expected 0.6%. The breakdown of this level could bring the pair to fresh new lows. Manufacturing PMI came out 51.6 better than expected 51.5. Overall, EUR/USD traded with a low of 1.4379 and a high of 1.4590. Today, the Italian Unemployment Rate expected 7.7% vs. 7.4% previously.

EUR/USD – Last: 1.4410

Resistance

1.4500

1.4600

1.4675

Support

1.4345

1.4300

1.4235

British Pound (GBP)

The Cable was the best performer among majors. GBP/USD momentarily broke above 1.6370 and rose to 1.6404, reaching a one-week high but then pulled back, breaking below the 1.6300 support level, reaching lows of 1.6230. Claimant Count Change came out -6.3K better than the expected 14K. Overall, GBP/USD traded with a low of 1.6230 and a high of 1.6409. Today, the Retail Sales expected at 0.5% vs. 0.4% previously. The CBI DTS expected at 16 vs. 13 previously.

GBP/USD – Last: 1.6275

Resistance

1.6425

1.6475

1.6525

Support

1.6275

1.6210

1.6170

Japanese Yen (JPY)

The Yen fell against the Pound and the Dollar. The Dollar reached a one-week high against the Yen as the Federal Reserve said deterioration in the labor market is abating while it will keep its low rate for an extended period. Overall, USD/JPY traded with a low of 89.37 and a high of 89.96. Today, the interest rate decision of The Bank of Japan (BOJ) expected unchanged at 0.1%.

USD/JPY-Last: 89.65

Resistance

89.95

90.40

90.75

Support

89.30

88.75

88.35

Canadian Dollar (CAD)

The Canadian currency gained as crude oil and stocks rose. It was little changed after policy makers in the nation and the U.S. made commitments to keep interest rates at historic lows. The Manufacturing Sales came out 2% better than expected 0.5%. Overall, USD/CAD traded with a low of 1.0570 and a high of 1.0641. Today, The Core CPI expected unchanged at 0.1%. The Foreign Securities Purchases expected at 10B vs. 13.59B previously.

USD/CAD – Last: 1.0615

Resistance

1.0640

1.0670

1.0700

Support

1.0570

1.0550

1.0515

Research by http://www.ufxbank.com

GoLearn Forex Analysis 16/12/2009

December 16, 2009 at 9:44 am

Review Key Support and Resistance Levels for USD by GoLearn Forex

Key Support & Resistance (S/R) Levels:

As the Greenback continues to rally heading into the end of the year we thought it would be a good time to review a couple key S/R levels.  Traders generate S/R based on a number of factors.  One key factor is based on the tenor of the chart the trader is using.  A trader using a tick or minute chart will be less concerned about S/R generated from a 4 hour chart that is 100+ pips from the current handle.  However, that same trader will want to know where the longer term S/R levels sit. If price moves towards those points he can integrate them into his trading strategies thereby profiting and or avoiding losses.

GBP/USD:

The Cable is currently sitting below its 100 day MA which generates an already negative bias.  A candle body below 1.6198 would generate the next Short entry point  Near term profit taking would be the 200 day MA.  If the 200 day MA is breached we would target the low of this range bound period near 1.5683 which also represents the Fibonacci  38.2% Retrace level.  The 38.2% Retrace level was generated from the Sterlings turn around in January of this year.

AUD/USD:

The Aussie has shown great resilience and for good reason.  The RBA had taken a hawkish stance on rates as it was amongst the first to raise rates.  The Australian economy is in relatively good shape.  Additionally, the AUD is a commodity currency and it has ridden the commodity rally. Currently the AUD is sitting just below the 50 day MA.  A candle body appearing below .8944 equal to the Fibonacci 76.4% Retrace level, which also coincides with recent support levels would trigger a near term Short entry.  We would increase the Short position with a close below the 100 day MA, currently holding at .8834.  A long signal would be generated with a close well above near term resistance at .9325.

With the EUR taking a sharp nose dive yesterday it prompts us to look at recent relative price levels on the G-7.  The EUR/USD is the most commonly traded pair in the world.  The price of the EUR has broad implications on the relative value of other G-7 currencies.  Although the below data can be shown graphically it is easier to view price differentials in a table.  If the EUR is a leading indicator of relative  value then the CAD, AUD, and GBP may be in for a minor drop.

Historical

Date  EUR  CAD  AUD  NZD  JPY  GBP

2009-10-02 1.4576  1.0797 0.8652 0.7160  89.8050 1.5946

2009-10-01 1.4545  1.0839  0.8697  0.7149  89.6050 1.5955

2009-09-30 1.4640  1.0695  0.8828  0.7232  89.7050 1.5982

2009-09-29 1.4587  1.0846  0.8703  0.7143  90.0885 1.5961

Current

Date  EUR  CAD  AUD  NZD  JPY  GBP

2009-12-15 1.4533  1.0611 0.9067 0.7224  89.6355 1.6272

chart

US Producer Prices Climb by GoLearn Forex

Global Equity Markets were mixed on Tuesday as Dubai continues to sort out its debt repayment obligations.  In the U.S Producer Prices climbed 1.8% which was more than double expectations.  This caused stocks to retreat as it may engage the U.S Fed to raise rates out of necessity instead of a planned withdrawal from its current quantitative easing policies.  The DJIA slid 49.05 points to close at 10,452. Ahead of the rate decision today traders have consolidated positions as markets may move drastically depending on what language the Fed uses.

There are a number of other economic data releases on the docket for today.  Oil traders will be watching Crude Oil Inventory figures.  CPI data as well as Housing Starts and Building Permits will also be on the wire today.  In the U.K Jobless Claims will print although no major changes are expected.  GDP in Australia has already printed slightly below expectations.

The Greenback continued to advance against its G-10 counterparts with the AUD giving up 1.15% for the day.  The DXY closed above the 100 day MA to 76.961 helping to legitimizing the recent rally.  Gold and Oil were essentially unchanged finishing the U.S session at 1.125.20 and 70.69 respectively.

Upcoming Forex Events for December 16, 2009

EUR CPI (YoY) Forecast   8.00%  Previous  7.80%

USD Core CPI (MoM) Forecast  0.20%  Previous  0.20%

USD CPI (MoM) Forecast    0.40%  Previous  0.30%

USD Interest Rate Decision  Forecast  0.25%  Previous  0.25%

Analysis by http://www.golearnforex.net