October 29, 2009 at 9:15 am
AUD/USD:
The AUD continues its recent retrace. Many traders use different time frames for different currency pairs. The longer the time frame the more valid the pattern you are charting is. Moving Averages are basic tool that even the most sophisticated trader needs to always be cognizant of. The markets tend follow the moving averages generated off of the daily charts.
In Chart below I use a moving average from an 8 hour chart. I strongly encourage traders to be vigilant of at least checking a weekly, daily, 8 and or 4 hour chart and then any time frame less than 4 hours that you may want to look at.
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You can see that the yellow line representing the SMA 50 was breeched and prices continued a steady fall (The Red line is the 100 SMA). There are also a number of near candle formations that support this price depreciation.
Circled in blue is a near Falling Three Candle pattern. Typically you have a red candle followed by 3 or so small green candles that are contained by the original red candle. Following the last green candle is another red candle with price closing below the original red. The Falling Three pattern is nearly followed by Three Black Crows. This candle pattern forms when you have the candles each open in the midsection of the proceeding candle but also close lower than the proceeding candle. This pattern nearly forms between the 2 white lines.
GBP/USD:
This pair has been range bound since May. When a pair trades in a range, price is confined to a narrow margin of highs and lows. In the Chart below the 2 red lines represent the range support and resistance lines.
The 2 red boxes indicate when minor breakouts have occurred. The tops and bottoms of the boxes would be your absolute stops depending on the handle you entered the trade at. Another point of consideration is the 50 SMA and 100 SMA. You can see that the SMA’s are also moving sideways. Price typically pops when it passes above/below a significant SMA. With SMA moving into a sideways march we are approaching congestion on this pair and that should signal another breakout. Obviously if the dollar continues to strengthen as it has GBP should be headed south.
INSERT CHART
Analysis by http://www.golearnforex.net
August 17, 2009 at 10:12 am
This article would describe about how technical analysis and forex charts would work and help you win the trade. The technical analysis and the forex charts are the most efficient and effective ways to win the trades in the forex market. This can be helpful to all may it be a newbie or an existing forex trader.
Forex charts are a kind of forex tools that give you visual information about all the factors that are go into making up the price. You may come across people who believe that fundamentals are necessary for trading and to some extent they are right. But then the technical analysis in forex takes into account the fundamentals. For instance:
Fundamentals (supply and demand) + investor view of = Price.
All that is important is how the trader’s kook at the fundamentals and this makes the price. The facts are all the same but it’s just how the trader looks at it. This mass of opinion makes the market price. The quick showing up of fundamentals in the price action is the assumption of the technical analysis. This also lets you know about how the traders distinguish them.
The study of charts in the forex market is important because the market moves on the investor sentiments. The human nature is always stable and this is what reflects in the forex chart always. The formations in the market are thus sometimes reflected by the human psychology. And if the trader spots these odds he can make use of some trading signals which can help him carry out profitable forex trade. The traders are under a wrong impression that the market has to be predicted. But then this is wrong.
If the trader thinks that he can just sit back and relax after predicting the market then it’s wrong. You cannot just afford to keep guessing in the forex market. You have to trade the truth that you see on the chart and by doing so you can surely increase4 your chances of winning the trade. While you trade with the charts you just need a simple trading system. As it is always said that simple systems have an edge over the complex ones as they do not breakout easily.
It is also important that the trader trades the data that is valid. This is the data where you can get all the odds on your side which means there is neither day trading nor forex scalping. This is because the data is not reliable and the prices can fluctuate going high or low. Measuring investor sentiment is not possible in short term but can be done in long term. If the trader possess a trading strategy is simple and if the trader trades the reality of price showing discipline then there are high chances of you winning the trade.
Charting is a kind of art and not a science but if you practice this art, you will soon have a commanding way of trading which will allow you to seek bigger forex profits.
August 13, 2009 at 9:45 am
Forex charts and technical analysis are the two forex trading tools that work and will keep on working for you in your trades and so it is very essential for you be familiar with the fundamentals of forex charts and how to be successful with it. But prior we get started with it let us avoid some of the forex myths like charts of FX are capable of reading future, this is not the truth. However this does not at all man that the charts cannot help in winning.
The nature of humans is unpredictable and so there is no accuracy which is mirrored in the charts actions. This will help you to trace the reality of the price changes and when you adopt robust forex management, it will help you in making profits and cutting down on the losses. The reason behind charts being effective in trade forex is that the trends will are present and will always be for weeks, months and years. These trends will help you to make profits; this is because if you think that you are wrong you can cut down on your profits. The fundamental of technical analysis are Human nature is constant which shows in he charts, trends develop and retain and the trends will probably continue rather than turning around.
If you have a look at any chart you will find that this really true, but how this can help you in making profits. A very good way for this is to observe the long run trends and utilize breakout methodology with your forex trading strategies. The realities is that majority of the trends from market high or low begins and keep on being which is why you need not do any guess work and go long with these breakouts. Majority of the traders fail to do this. Therefore you need to trade forex when price change at these breakouts, this will allow the odds to be on your side and be a winner.
To be a successful trader in forex trading a very important key is that the forex trading system that you select must be easy to use. There are many people who are of the opinion that if the system is complicated it will be highly advantageous. A trading system that is complex will involve many components to break as compared to that of the simple one. A system that is based on the breakouts will help you to earn a good amount of money.
So start trading in the foreign exchange market today making the use of chart as it will work out quite effectively for you, earning for you descent amount!
