Forex Technical Analysis

Daily Forex Analysis – October 8, 2009

2009-10-08T01:41:00.000Z

GBPUSD Analysis.
GBPUSD continues to trade in a range between 1.5770 and 1.6125. As long as 1.6125 resistance holds, the price action from 1.5770 is treated as consolidation of downtrend from 1.6741. Moving sideways in the range is still in favor later today. Another fall below 1.5770 would more likely be seen after consolidation, a break below 1.5770 will indicate that the downtrend has resume, then deeper decline could be seen to 1.5600 zone.

USDCHF Analysis.
USDCHF’s downtrend from 1.0452 extended to 1.0237 only, the following rebound suggests that a short term cycle bottom has been formed on 4-hour chart. Consolidation above 1.0237 is expected in a couple of days. However, another fall below 1.0186 is still possible after consolidation and a break below 1.0237 will confirm the resumption of downtrend.

USDJPY Analysis.
USDJPY broke below 88.24 previous low and reached as low as 88.01, suggesting that the downtrend from 97.78 (Aug 7 high) has resumed. Deeper decline is still possible in a couple of days, and next target would be at 87.50 zone. Resistance level is now at 89.40, as long as this level holds, the fall from 90.40 will continue.

Forex Signals

Daily Forex Analysis – October 6, 2009

2009-10-06T02:50:00.000Z

USDJPY Analysis.
USDJPY stays in a trading range between 88.24 and 90.40. As long as 90.40 key resistance holds, the price action from 88.24 is treated as consolidation of downtrend from 97.78 (Aug 7 high) and deeper decline to test 87.12 (Jan 21 low) support is possible after consolidation. However, a break above 90.40 will suggest that the downtrend from 97.78 has completed at 88.24 level already, then the following uptrend will take price to 92.00 or even 94.00.

EURUSD Analysis.
EURUSD breaks above 1.4673 key resistance, suggesting that a short term cycle bottom has been formed at 1.4484 level on 4-hour chart and the downtrend from 1.4843 has completed. Rise towards 1.4843 previous high is expected in a couple of days, a break above this level will indicate that the uptrend from 1.3748 (June 16 low) has resumed, then further rise could be seen to 1.5000-1.5500 area.

GBPUSD Analysis.
GBPUSD continues trading in range between 1.5770 and 1.6125. Moving sideways without trend in the range is expected in a couple of days. As long as 1.6125 resistance holds, the price action from 1.5770 is treated as consolidation of downtrend from 1.6741, deeper decline towards 1.5600 area is still possible after consolidation.

Daily Forex Analysis

Daily Forex Analysis – October 1, 2009

2009-10-01T02:45:00.000Z

GBPUSD Analysis.
GBPUSD’s rebound from 1.5770 extended further to as high as 1.6125 level, subsequent pullback could possibly be resumption of downtrend from 1.6741. Deeper decline to re-test 1.5770 previous low support is now in favor, a breakdown below this level will confirm the downside continuation, then further fall could be seen to 1.5600 area. Near term resistance remains at 1.6150, only rise above this level will indicate that the fall from 1.6741 has completed at 1.5770 level already, then the following uptrend will take price to 1.6400 zone.

USDJPY Analysis.
USDJPY pulled back form 90.40 level. Range trading between 88.24 and 90.40 is now in favor and deeper decline to 88.75 would more likely be seen later today. Key support is at 88.24, a break below this level will suggest that the downtrend from 92.53 has resumed, then deeper decline to test 87.12 (Jan 21 low) long term critical support could be seen to follow. However, above 90.40 resistance will indicate that the downward trend from 92.53 has completed at 88.24 level already.

EURUSD Analysis.
EURUSD may be forming a short term cycle bottom at 1.4527 level on 4-hour chart. Further rise to test 1.4724 key resistance is possible later today, a break above this level will confirm the cycle bottom and indicate that the short term downtrend from 1.4843 has completed at 1.4527 already. Near term support is at 1.4527, only fall below this level will signal deeper decline to 1.4450-1.4500 area.

Forex Signals

Daily Forex Analysis – September 29, 2009

2009-09-30T01:46:00.000Z

GBPUSD Analysis.
GBPUSD remains in downward trend from 1.6741 and the rebound from 1.5770 is treated as consolidation of downtrend. Range trading between 1.5770 and 1.6150 is expected in a couple of days. As long as 1.6150 resistance holds, we’d expect downtrend to resume and further fall to 1.5600 zone is still possible after consolidation. Only rise above 1.6150 will suggest that a short term cycle bottom has been formed at 1.5770 level on 4-hour chart, and the downtrend from 1.6741 has completed.

USDJPY Analysis.
USDJPY formed a short term cycle bottom at 88.24 level on 4-hour chart. Range trading between 88.24 and 90.60 is expected in a couple of days. However, the price action from 88.24 would possible be consolidation of downtrend. As long as 90.60 resistance holds, we’d expect downtrend to resume and deeper decline to test 87.12 (Jan 21 low) long term critical support is still possible after consolidation. However, a break above 90.60 resistance will indicate that downtrend from 92.53 has completed, then further rise could be seen to 91.00 or even higher.

EURUSD Analysis.
EURUSD remains in downward trend from 1.4843 and the fall extends further to as low as 1.4527 level. Deeper decline is still in favor later today and target would be at 1.4500 zone. Near term resistance is at 1.4645, as long as this level holds, downtrend will continue. Key resistance is located at 1.4724, above this level will indicate that a short term cycle bottom has been formed, then rebound towards 1.4843 could be seen to follow.

Forex Signals

Daily Forex Analysis – September 28, 2009

2009-09-28T02:21:00.000Z

EURUSD Analysis.
EURUSD has formed a short term cycle top at 1.4843 level on 4-hour chart. Further decline to 1.4500 zone would more likely be seen later today. Near term resistance is at 1.4724, as long as this level holds, we’d expect downtrend from 1.4843 to continue, however, a break above this level will suggest sideways consolidation between 1.4611 and 1.4843 is underway.

USDJPY Analysis.
USDJPY drops sharply to as low as 88.24 level. Further fall to test 87.12 (Jan 21 low) long term critical support is possible in a couple of days. Near term resistance is at 89.50, as long as this level holds, downtrend from 92.53 will continue.

USDCAD Analysis.
USDCAD broke above 1.0925 key resistance and is now in uptrend from 1.0590. Near term support is located at 1.0859, as long as this level holds, we’d expect uptrend to continue and further rise to 1.1050-1.1100 area is possible later today.

Daily Forex Signals

Daily Forex Analysis – September 24, 2009

2009-09-24T01:59:00.000Z

USDJPY Analysis.
Being contained by 90.12 precious low support, USDJPY rebounded from 90.48 level. Further rise to test 92.53 resistance would more likely be seen later today, a break above this level will confirm that the fall from 97.78 has completed at 90.12 level already, then the following uptrend will take price to 94.00 zone. Near term support is at 90.48 and key support is located at 90.12, only fall below 90.12 will indicate that the downtrend from 97.78 has resumed, then deeper decline is expected to 89.00 level.

EURUSD Analysis.
EURUSD is testing the support of rising trend line on 4-hour chart, a clear break below the trend line support will suggest that a short term cycle top is being formed at 1.4843 level, then pullback 1.4450 zone could be seen to follow. Near term resistance is now located at 1.4843, only rise above this level will indicate that the uptrend from 1.4177 has resumed, then the next target would be at 1.5000 zone.

USDCAD Analysis.
USDCAD stays in a trading range between 1.0590 and 1.0925. Deeper decline to test 1.0590 is still possible in a couple of days, a break below this level will signal further fall towards 1.0500 zone. Key resistance is located at 1.0925, above this level will indicate that the fall form 1.1124 has completed at 1.0590 level already, and the following uptrend will take price to 1.1200 zone.

Forex Trading

Daily Forex Analysis – September 23, 2009

2009-09-23T02:11:00.000Z

EURUSD Analysis.
EURUSD breaks above 1.4765 previous high and reaches as high as 1.4841 level. As long as the price stays above the rising trend line on 4-hour chart, we’d expect uptrend to continue and further rally is possible to 1.5000 zone in a couple of days. However, a clear break below the trend line support will suggesting that the rise from 1.4177 has completed, then pullback to test 1.4611 support could be seen to follow.

USDCAD Analysis.
USDCAD trades sideways in a range between 1.0590 and 1.0925. Deeper decline is expected to test 1.0590 previous low support, a break below this level will signal further fall towards 1.0500 zone. Key resistance is located at 1.0925, above this level will indicate that the fall form 1.1124 has completed at 1.0590 level already, and the following uptrend will take price to 1.1200 zone.

USDJPY Analysis.
USDJPY dropped sharply from 92.53, suggesting that a short term cycle top has been formed at 92.53 level on 4-hour chart. Consolidation in a range between 90.12 and 92.53 could be seen in a couple of day and move towards 94.00 would more likely be seen after consolidation. Near term support is at 90.12, only fall below this level will indicate that the downtrend from 97.78 has resumed, then deeper decline is expected to 89.00 level.

Written by ForexCycle.com

Daily Forex Analysis – September 21, 2009

2009-09-21T03:06:00.000Z

USDJPY Analysis.
USDJPY is testing 91.62 key resistance, a break above this level will indicate that a short term cycle bottom has been formed at 91.12 level on 4-hour chart and indicate that the downtrend from 97.89 has completed, then further rally could be seen to 92.50-93.00 area. As long as 91.62 resistance holds, the price action from 90.20 is treated as consolidation of downtrend from 97.78 and another fall towards 89.00 is still possible after consolidation.

GBPUSD Analysis.
GBPUSD drops sharply to as low as 1.6209 level. Deeper decline is still possible later today and target is to test 1.6113 previous low support, a break below this level will indicate that the uptrend from 1.3503 (Jan 23 low) has completed at 1.7042 level already. Near term resistance is at 1.6350, as long as this level holds, we’d expect downtrend from 1.6741 to continue.

AUDUSD Analysis.
AUDUSD remains in uptrend from 0.8543 and the pullback from 0.8775 is treated as consolidation of uptrend. Near term support is at 0.8600, as long as this level holds, we’d expect uptrend to resume, and further rise to 0.8800 zone is possible after consolidation, and a break above 0.8775 will signal resumption of uptrend. However, below 0.8600 level will take price back to re-test 0.8543 support.

Forex Analysis

Daily Forex Analysis – September 17, 2009

2009-09-17T02:22:00.000Z

USDJPY Analysis.
After touching 90.20 previous low, USDJPY rebounded sharply from 90.12, suggesting that a short term cycle bottom is being formed. Key resistance is now located at 91.62, a break above this level will confirm the cycle bottom and indicate that the downtrend from 97.78 has completed at 90.12 level already, then the following uptrend will take price back to 94.00 zone. Near term support is at 90.12, only fall below this level will signal deeper decline to 89.00-89.50 area.

GBPUSD Analysis.
GBPUSD is now in short term downtrend from 1.6741 and the rebound from 1.6403 is more likely consolidation of downtrend. Deeper decline is in favor and target would be at 1.6250 zone. Near term resistance is at 1.6550, as long as this level holds, downtrend will continue. However, above 1.6550 will take price to range trading between 1.6403 and 1.6741.

AUDUSD Analysis.
AUDUSD’s uptrend extended to as high as 0.8748 level. Further rise is now in favor and next target would be at 0.8800 zone. Initial support is at 0.8710 followed by 86.75, as long as these levels hold, uptrend from 0.8543 will continue.

Forex Analysis

2009-09-16T04:17:00.000Z

USDJPY Analysis.
USDJPY stays below the falling trend line from 97.78 to 93.29 and remains in downtrend, and the rebound from 90.20 is more likely consolidation of downtrend. As long as the trend line resistance holds, we’d expect downtrend to resumed and deeper decline to 89.00 is still possible after consolidation. However, a clear break above the trend line resistance will indicate that the fall from 97.78 has completed.

GBPUSD Analysis.
GBPUSD broke below 1.6454 key support, suggesting that the short term uptrend form 1.6113 has completed at 1.6741 level already. Deeper decline is still possible later today and next target would be at 1.6250 zone. Near term resistance is at 1.6550, as long as this level holds, we’d expect downtrend to continue. However, above 1.6550 will take price to range trading between 1.6403 and 1.6741.

AUDUSD Analysis.
AUDUSD stays in a trading range between 0.8528 and 0.8674. Pullback to 0.8450 zone to reach next short term cycle bottom is possible later today. Initial resistance is at 0.8674, above this level will indicate that the uptrend from 0.8155 has resumed, then further rally could be seen to 0.8800 zone.

Written by ForexCycle.com

Daily Forex Analysis – September 15, 2009

2009-09-15T02:50:00.000Z

GBPUSD Analysis.
GBPUSD broke below the lower border of the rising price channel on 4-hour chart. Range trading between 1.6454 and 1.6741 is expected in a couple of days. However, the price action from 1.6741 is more likely consolidation of uptrend from 1.6113, one more rise towards 1.6900 zone is still possible after consolidation and a break above 1.6741 will signal resumption of uptrend. Key support is at 1.6454, only fall below this level will indicate that the rise from 1.6113 has completed at 1.6741 level already, then the following downtrend will take price back to re-test 1.6113 support.

AUDUSD Analysis.
AUDUSD might be forming a short term cycle top at 0.8674 level on 4-hour chart. Key support is located at 0.8528, a break down below this level will confirm the cycle top. Moving sideways in a range between 0.8450 and 0.8667 would more likely be seen in a couple of days. However, the price action from 0.8674 is treated as consolidation of uptrend from 0.8155, further rise towards 0.8800 zone is still possible after consolidation.

EURUSD Analysis.
EURUSD’s uptrend extends to as high as 1.4651 level. As long as 1.4515 key support holds, we’d expect uptrend from 1.4177 to continue and further rise to 1.4700-1.4800 area is possible. However, a break below 1.4515 level will indicate that a short term cycle top has been formed, then sideways consolidation could be seen to follow.

Forex Signals

Daily Forex Analysis – September 14, 2009

2009-09-14T02:34:00.000Z

GBPUSD Analysis.
Being contained by the upper border of the rising price channel, GBPUSD pulled back from 1.6741 level. Deeper decline is expected to the lower border of the price channel. However the fall from 1.6741 is treated as consolidation of uptrend from 1.6113. As long as the channel support holds, we’d expect the uptrend to resume and further rise to 1.6850-1.6900 area is possible after consolidation, and a break above 1.6741 will signal resumption of uptrend.

AUDUSD Analysis.
After touching 0.8667 resistance, AUDUSD pulled back from 0.8674 level, suggesting that lengthier consolidation is underway. Range trading between 0.8450 and 0.8667 is expected in a couple of days. Near term resistance is now at 0.8674, only rise above this level will signal resumption of uptrend.

EURUSD Analysis.
EURUSD remains in uptrend from 1.4177. Further rise is still possible to 1.4700 zone in a couple of days. Near term support is at 1.4500 and key support is located at 1.4467, below this level will indicate that a short term cycle top has been formed on 4-hour chart, then pullback to 1.4400 could be seen to follow.

Written by ForexCycle.com

Daily Forex Analysis – September 11, 2009

2009-09-11T02:44:00.000Z

AUDUSD Analysis.
AUDUSD might be forming a short term cycle top at 0.8667 level on 4-hour chart, key support is located at 0.8528, a break below this level will confirm the cycle top, then consolidation in a range between 0.8450 and 0.8667 could be seen to follow. However, a break above 0.8667 will indicate that the uptrend from 0.0.8239 has resumed and the next target would be at 0.8750-0.8800 area.

EURUSD Analysis.
EURUSD stays above 1.4467 key support and remains in uptrend from 1.4177. Further rise to 1.4700 zone is still possible in a couple of days. Near term support is at 1.4500, as long as this level holds, we’d expect uptrend to continue. However, below 1.4467 key support will suggesting that a short term cycle top has been formed on 4-hour chart, then pullback to 1.4400 could be seen to follow.

GBPUSD Analysis.
GBPUSD broke above 1.6623 resistance, suggesting that the downtrend from 1.7042 has completed at 1.6113 level already. Further rise is still possible to 1.6800 zone in a couple of days. Near term support is at the lower border of the rising price channel on 4-hour chart and key support is at 1.6454 level, only break below this level will indicate that the uptrend from 1.6113 has terminated.

Forex Analysis

Daily Forex Analysis – September 10, 2009

2009-09-10T02:33:00.000Z

EURUSD Analysis.
EURUSD’s uptrend from 1.4177 extends to as high as 1.4599 level. Further rise is still in favor and next target would be at 1.4650-1.4700 area. Near term support is at 1.4467, as long as this level holds, uptrend will continue. However, a break below 1.4467 level will indicate that a short term cycle top has been formed on 4-hour chart, then deeper decline is expected to follow and target would be at 1.4400 zone.

GBPUSD Analysis.
GBPUSD stays in a rising price channel on 4-hour chart and remains in sort term uptrend form 1.6113. As long as the channel support holds, we’d expect uptrend to continue. Key support is now located at 1.6454, below this level will suggest that a short term cycle top has been formed, then pullback to 1.6250 could be seen to follow.

USDCAD Analysis.
USDCAD is forming a short term cycle bottom at 1.0673 level on 4-hour chart. Consolidation in a range between 1.0673 and 1.0900 is expected in a couple of days. Key support is now located at 1.0632, below this level will indicate that the downtrend from 1.1723 has resumed.

Forex Signals

Daily Forex Analysis – September 8, 2009

2009-09-08T04:03:00.000Z

GBPUSD Analysis.
Being contained by the upper border of the falling price channel on 4-hour chart, GBPUSD pulls back from 1.6441 level, suggesting that a short term cycle top is being formed. Key support is now located at 1.6286, a break below this level will confirm the cycle top and indicate that the fall from 1.6441 is resumption of downtrend from 1.7042, then deeper decline could be seen to re-test 1.6113 previous low support.

USDCAD Analysis.
After breaking below 1.0966 level, USDCAD dropped sharply to as low as 1.0740 level. Small consolidation is expected before breaking below 1.0718 previous low support. Near term resistance is at 1.0850, as long as this level holds, we’d expect downtrend from 1.1101 to continue and deeper decline could be seen to test 1.0632 key support.

AUDUSD Analysis.
AUDUSD remains in uptrend from 0.8239, further rise is still possible to 0.8700 zone in a couple of days. Near term support is at 0.8500 followed by 0.8450, as long as these levels hold, we would expect uptrend to continue.

Forex Signal

Daily Forex Analysis - September 4, 2009

2009-09-04T02:50:00.000Z

Being contained by 1.1124 previous high resistance, USDCAD pulled back from 1.1101 level. Sideways consolidation below 1.1124 would more likely be seen before breaking above this level. Near term support is located at 1.0966 followed by the rising trend line on 4-hour chart now at 1.0900, as long as the trend line support holds, we’d expect uptrend to resume and a break above 1.1124 resistance will signal further rally towards 1.1400 zone.

AUDUSD Analysis.
AUDUSD formed a short term cycle bottom at 0.8239 level on 4-hour chart. Range trading between 0.8238 and 0.8477 is expected in a couple of days. Key support is at 0.8238, a break below this level will indicate that the uptrend from 0.7703 has completed, then pullback towards 0.7900 could be seen to follow. However, above 0.8477 will suggest that the uptrend from 0.7703 has resumed, and then further rise is expected to 0.8600 zone.

USDJPY Analysis.
USDJPY stays below the falling trend line on 4-hour chart and remains in downtrend from 95.05. The rebound from 91.94 is more likely consolidation of downtrend. As long as the trend line resistance holds, we’d expect downtrend to continue. However, a clear break above the trend line resistance will suggest that a short term cycle bottom is being formed, then lengthier consolidation in a range between 91.94 and 93.42 could be seen to follow.

Forex Trading

Daily Forex Analysis - September 3, 2009

2009-09-03T03:16:00.000Z

AUDUSD Analysis.
Being supported by 0.8238, AUDUSD rebounded from 0.8239 level. Consolidation in a range between 0.8238 and 0.8400 would more likely be seen in a couple of days. As long as 0.8477 level holds, another fall to test 0.8155 support is expected after consolidation, a break below this level will suggest that the uptrend from 0.7703 has completed at 0.8477 level already, then the following downtrend will take price back to 0.7900 zone. Key resistance is at 0.8477, above this level will indicate that the uptrend from 0.7703 has resumed, then next target would be at 0.8600-0.8700 area.

USDJPY Analysis.
As expected, USDJPY drops to as low as 91.94 level. Near term resistance remains at the upper border of the falling price channel on 4-hour chart, as long as the channel resistance holds, downtrend will continue, and next target is to test 91.73 (July 13 low) support. Key resistance is now located at 93.42, only rise above this level will indicate that the downtrend from 95.05 has completed.

GBPUSD Analysis.
GBPUSD is testing the resistance of the falling trend line on 4-hour chart. As long as the trend line resistance holds, we’d expect downtrend to continue. However, a clear break above the trend line resistance will indicate that the downtrend from 1.6623 has completed and further rise to 1.6460 zone could be seen to follow.

Daily Forex Signals

Daily Forex Analysis - September 1, 2009

2009-09-01T03:46:00.000Z

AUDUSD Analysis.
Being contained by 0.8477 previous high resistance, AUDUSD pulled back from 0.8470 level. Sideways consolidation in a range between 0.8300 and 0.8470 would more likely be seen before breaking above 0.8477 level and another fall towards 0.8300 is expected later today. However a break of 0.8477 will suggest that the uptrend from 0.7703 has resumed, then the next target would be at 0.8600-0.8700 area.

GBPUSD Analysis.
GBPUSD formed a short term cycle bottom at 1.6153 level on 4-hour chart. Range trading between 1.6153 and 1.6500 is expected in a couple of days. However the price action from 1.6153 is treated as consolidation of downtrend from 1.7042, further fall towards 1.6000 is still possible after consolidation, and a break below 1.6153 will signal resumption of downtrend.

EURUSD Analysis.
EURUSD is now in short term uptrend from 1.4045. Further rise to test 1.4447 is still in favor, and a break above this level will suggest that the uptrend from 1.3748 (June 16 low) has resumed, then next target could be at 1.4600-1.4700 area. Key support is at 1.4200, only fall below this level will take price back to 1.4100 zone.

Forex Signal

Daily Forex Analysis - August 31, 2009

2009-08-31T00:46:00.000Z

GBPUSD Analysis.
GBPUSD broke above the upper border of the price channel, suggesting that a short term cycle bottom is being formed at 1.6153 level on 4-hour chart. Range trading between 1.6153 and 1.6500 is expected in a couple of days. However the price action from 1.6153 is treated as consolidation of downtrend from 1.7042, further fall towards 1.6000 is still possible after consolidation, and a break below 1.6153 will signal resumption of downtrend.

EURUSD Analysis.
EURUSD broke above 1.4375 resistance last week. Further rise to re-test 1.4447 is now in favor, and a break above this level will suggest that the uptrend from 1.3748 (June 16 low) has resumed. Key support is at 1.4200, only fall below this level will take price back to 1.4100 zone.

AUDUSD Analysis.
AUDUSD is testing 0.8477 previous high resistance. As long as this level holds, we’d expect downtrend to resume and pullback to 0.8250-0.8300 would more likely be seen before breaking above 0.8477 level. However a break of 0.8477 will suggest that the uptrend from 0.7703 has resumed, then the next target would be at 0.8600-0.8700 area.

Daily Forex Signals

Daily Forex Analysis - August 28, 2009

2009-08-28T02:39:00.000Z

GBPUSD Analysis.
GBPUSD remains in downtrend from 1.6623 and the fall extended to as low as 1.6153 level. The rebound from 1.6153 is treated as consolidation of downtrend. Near term resistance is at the upper border of the falling price channel on 4-hour chart, as long as the channel resistance holds, we’d expect downtrend to resume, and deeper decline to 1.6000 is possible. However a clear break above the channel resistance will suggest that a short term cycle bottom is being formed at 1.6153 level, then lengthier consolidation in a range between 1.6153 and 1.6400 could be seen to follow.

EURUSD Analysis.
EURUSD failed to test 1.4200 key support and rebounded sharply form 1.4207 level, suggesting that a short term cycle bottom has been formed on 4-hour chart. Further rise could be seen to test 1.4447 previous high resistance, a break above this level will signal further rally towards 1.4700 zone. Near term support is at 1.4300, and key support is now located at 1.4207, only fall below this level will take price back to 1.4100 zone.

AUDUSD Analysis.
AUDUSD rebounded from 0.8238, suggesting that a short term cycle bottom is being formed. Further rise to re-test 0.8477 previous high resistance is now in favor. Near term support is at 0.8350, as long as this level holds, we’d expect uptrend from 0.8238 to continue.

USDCAD Analysis.
USDCAD has formed a short term cycle bottom at 1.0718 level on 4-hour chart and is now in short term uptrend, the pullback from 1.1019 is more likely correction of uptrend. As long as 1.0718 support holds, we would expect uptrend to resume and one more rise towards 1.1400 is still possible.

USDJPY Analysis.
USDJPY breaks below 93.42 previous low support and the fall from 95.05 is treated as resumption of downtrend. Deeper decline is now in favor and next target would be at 92.75 zone. Near term resistance is at the falling trend line on 4-hour chart, as long as the trend line resistance holds, downtrend from 95.05 will continue.

USDCHF Analysis.
USDCHF breaks below 1.0553 support, suggesting that a short term cycle top has been formed at 1.0714 level on 4-hour chart, and the fall from 1.0714 is treated as resumption of downtrend from 1.0883. Deeper decline is now in favor and next target would be at 1.0450-1.0500 area. Key resistance is now located at 1.0714, a break above this level will indicate that the downtrend from 1.0883 has completed.

Daily Forex Analysis - August 27, 2009

2009-08-27T01:19:00.000Z

EURUSD Analysis.
EURUSD has formed a short term cycle top at 1.4375 on 4-hour chart. Deeper decline to test 1.4200 support is possible later today, a break down below this level will suggest that the uptrend from 1.4045 has completed at 1.4375 already, then further fall could be seen to follow and target is to test 1.4045 previous low support. Near term resistance is at 1.4290, and key resistance is at 1.4375, only rise above this level will indicate that the uptrend from 1.4145 has resumed, then further rise towards 1.4500 is expected.

AUDUSD Analysis.
AUDUSD drops sharply to as low as 0.8252 level, suggesting that a short term cycle top has been formed at 0.8428 on 4-hour chart. Deeper decline is now in favor and next target is to test 0.8155 support. Near term resistance is at 0.8335, as long as this level holds, downtrend from 0.8428 will continue.

GBPUSD Analysis.
GBPUSD broke below 1.6275 support and dropped sharply to as low as 1.6159 level. Deeper decline towards 1.6000 is still possible in a couple of days. Near term resistance is at 1.6310 followed by 1.6445, as long as these levels hold, downtrend from 1.6623 will continue.

USDCAD Analysis.
USDCAD failed to break below 1.0632 and rebounded sharply from 1.0718. The pair has formed a short term cycle bottom at 1.0718 level on 4-hour chart. Further rise is still possible to test 1.1124 previous high resistance, a break above this level will signal further rally towards 1.1400 zone. Near term support is at 1.0925 followed by 1.0890, as long as these levels hold, uptrend from 1.0718 will continue.

USDJPY Analysis.
No changed in our view, USDJPY stays in a trading range between 93.42 and 95.05. Moving sideways in this range is expected in a couple of days. As long as 95.28 key resistance holds, we’d expect downtrend to resume and deeper decline to 90.00 zone is still possible after consolidation.

USDCHF Analysis.
USDCHF breaks above the resistance of the upper border of the falling price channel. Further rise to 1.0750 zone is expected. However, the rise from 1.0553 is more likely correction of downtrend from 1.0883, and another fall is still possible after correction.

Daily Forex Signal

Daily Forex Analysis - August 26, 2009

2009-08-26T03:28:00.001Z

AUDUSD Analysis.
AUDUSD remains in short term uptrend from 0.8155. Further rise to test 0.8477 previous high resistance is still possible in a couple of days. Downtrend is expected to resume before breaking above this level, and pullback towards 1.0700 would more likely be seen. However, a break above 0.8477 resistance will suggest that the uptrend from 0.7703 has resumed, then further rally is expected to 0.8700 zone.

GBPUSD Analysis.
GBPUSD breaks below 1.6375 key support, suggesting that a short term cycle top has been formed at 1.6623 level on 4-hour chart. Now the fall from 1.6623 is treated as resumption of downtrend. Deeper decline is expected to test 1.6275 previous low support, a break down below this level will signal further fall towards 1.6000 zone. Near term resistance is at 1.6445, as long as this level holds, downtrend from 1.6623 will continue.

USDCAD Analysis.
USDCAD might be forming a short term cycle bottom at 1.0718 level on 4-hour chart. Further rise is now in favor and target is to test 1.1124 previous high resistance. Near term support is at 1.0718, only fall below this level will suggest that the downtrend from 1.1124 has resumed and deeper decline to re-test 1.0632 could be seen to follow.

USDJPY Analysis.
As expected, USDJPY stays in a trading range between 93.42 and 95.05. Moving sideways in this range is expected in a couple of days. As long as 95.28 key resistance holds, we’d expect downtrend to resume and deeper decline to 90.00 zone is still possible after consolidation.

EURUSD Analysis.
EURUSD is forming a short term cycle top at 1.4375 level on 4-hour chart. Range trading between 1.4200 and 1.4375 is expected in a couple of days. Key support is located at 1.4200, below this level will indicate that the short term uptrend from 1.4045 has completed at 1.4375 level already, then deeper decline could be seen to test 1.4045 support.

USDCHF Analysis.
USDCHF remains in downtrend from 1.0883 and the rebound from 1.0553 is treated as consolidation of downtrend. Further rise towards the upper border of the falling price channel is expected in a couple of days. As long as the channel resistance holds, we would expect downtrend to resume and another fall towards 1.0500 is still possible after consolidation.

Forex Signals

Daily Forex Analysis - August 25, 2009

2009-08-25T02:32:00.001Z

GBPUSD Analysis.
GBPUSD failed to test 1.6663 resistance and fell down from 1.6623 level. The pair is forming a short term cycle top on 4-hour chart, key support is located at 1.6375, a break below this level will confirm the cycle top, and signal deeper decline to re-test 1.6275 previous low support. Key resistance remains at 1.6663, only rise above this level will suggest that the downtrend from 1.7042 has completed at 1.6275 level already, then further rally could be seen to 1.6800-1.6850 area.

USDCAD Analysis.
USDCAD’s short term downtrend from 1.1124 extends further to as low as 1.0725 level. Deeper decline is still possible alter today and target is at 1.0650-1.0700 area. Near term resistance is at 1.0805 followed by 1.0865, as long as these levels hold, downtrend will continue.

USDJPY Analysis.
Being contained by 95.28 resistance, USDJPY drops from 95.05 level. The pair might be forming a short term cycle top on 4-hour chart. Consolidation between 93.42 and 95.05 is expected in a couple of day, and deeper decline to 90.00 zone could be seen after consolidation.

EURUSD Analysis.
EURUSD remains in uptrend from 1.4045 and the fall from 1.4375 is treated as consolidation of uptrend. Further rise to test 1.4447 previous high resistance is still possible after consolidation. Key support is now located at 1.4200, only fall below this level will indicate that a short term cycle top has been formed at 1.4375 level and the uptrend from 1.4145 has completed, then the fallowing downtrend will take price back to re-test 1.4045 support.

USDCHF Analysis.
USDCHF rebounded from 1.0553 level. Range trading between 1.0553 and 1.0650 is expected in a couple of days. Key resistance is at the upper border of the falling price channel on 4-hour chart. As long as channel resistance holds, we’d expect downtrend from 1.0883 to resume and another fall is still possible.

AUDUSD Analysis.
AUDUSD remains in short term uptrend from 0.8155. Further rise to test 0.8477 previous high resistance is still possible later today. As long as this level holds, we’d expect downtrend to resume, and pullback towards 1.0700 is possible. However, a break above 0.8477 previous high resistance will suggest that the uptrend from 0.7703 has resumed, then further rally could be seen to 0.8700 zone.

USDCAD formed a cycle bottom at 1.0632 level

2009-08-22T04:21:00.000Z

USDCAD formed a cycle bottom at 1.0632 level on daily chart and is now in uptrend. The fall from 1.1124 is treated as consolidation of uptrend. As long as 1.0632 support holds, we'd expect uptrend to resume and one more rise to 1.1400-1.1500 area is still possible. However, below 1.0632 will suggest that the downtrend from 1.1723 has resumed, then deeper decline could be seen to 1.0200 zone.

For long term analysis, USDCAD breaks below 1.0784, suggesting the long term downtrend from 1.3063 has resumed. Deeper decline is now in favor, and next target would be at 1.0000 zone.

Weekly Forex Signals

Daily Forex Analysis - August 21, 2009

2009-08-21T02:42:00.001Z

USDJPY Analysis.
USDJPY remains in downtrend from 97.78 and the price action from 93.67 is treated as consolidation of downtrend. Deeper decline is still possible later today, next target would be at 93.25 zone, and a break below 93.67 will signal resumption of downtrend. Near term resistance is at 94.55, as long as this level holds, downtrend will continue. However a break above 94.55 level will suggest that a short term cycle bottom has been formed on 4-hour chart, then further rise could be seen to 95.00 zone.

GBPUSD Analysis.
GBPUSD trades in range between 1.6275 and 1.6663. The price action in the trading range is more likely consolidation of downtrend from 1.7042. Deeper decline to 1.6000 zone is still possible after consolidation. Key resistance is located at 1.6663, only rise above this level will indicate that the fall from 1.7042 has completed at 1.6275 level already.

EURUSD Analysis.
EURUSD consolidates in a range between 1.4045 and 1.4327. As long as 1.4327 resistance holds, we’d expect downtrend to resume and another fall towards 1.3800 zone is possible after consolidation. However, a break above 1.4327 key resistance will indicate that the uptrend from 1.3748 (June 16 low) has resumed, then one more rise above 1.4447 could be seen.

USDCHF Analysis.
USDCHF stays in a trading range between 1.0562 and 1.1021. The price action in this range is treated as consolidation of downtrend from 1.1963 (Mar 12 high), one more rise towards 1.1000 zone to complete the consolidation would more likely be seen.

USDCAD Analysis.
USDCAD breaks below the support of the rising trend line from 1.0632 to 1.0795. Deeper decline to test 1.0795 could be seen later today. However, the price action from 1.1075 is treated as consolidation of uptrend from 1.0632, further rise towards 1.1400 is possible after consolidation.

AUDUSD Analysis.
No changed in our view, AUDUSD is in short term downtrend from 0.8477 and the rebound from 0.8155 is treated as consolidation of downtrend. Deeper decline is still possible to 0.7900 zone after consolidation. Key resistance is at 0.8477, only rise above this level will suggest that the uptrend from 0.7703 has resumed, then further rally could be seen to 0.8700 zone.

Daily Forex Analysis - August 19, 2009

2009-08-19T00:33:00.000Z

GBPUSD Analysis.
GBPUSD rebounds from 1.6275 and the rise extends to as high as 1.6592 level. Further rally to test 1.6663 previous high resistance is still possible later today. As long as this level holds, we’d expect downtrend to resume and deeper decline to 1.6000 zone is possible. However a break above 1.6663 level will indicate that the downtrend from 1.7042 has completed, then the following uptrend could take price back to re-test 1.7042 resistance.

EURUSD Analysis.
After breaking below 1.4086 support, EURUSD moves sideways and trades in a narrow range between 1.4045 and 1.4148. Further rise to 1.4250 zone to reach the next short term cycle top on 4-hour chart could be seen in a couple of days. However, the rise from 1.4045 is treated as consolidation of downtrend, as long as 1.4327 key resistance holds, we’d expect downtrend to resume and deeper decline to 1.3800 is still possible.

USDCHF Analysis.
USDCHF trades in a range between 1.0670 and 1.0883. Moving sideways without trend in this range is expected in a couple of days. As long as 1.0670 support holds, we’d expect uptrend to resume and one more rise to test 1.0883 is still possible.

USDCAD Analysis.
After breaking above 1.1075 resistance, USDCAD pulls back from 1.1124 level. However, the fall from 1.1124 is more likely consolidation of uptrend. Range trading between 1.0950 and 1.1124 is expected in a couple of days. Key support is at the rising trend line from 1.0632 to 1.0795, as long as the trend line support holds, uptrend will continue.

USDJPY Analysis.
USDJPY remains in downtrend from 97.78 and the rebound from 94.20 is treated as consolidation of downtrend. Deeper decline is still possible to 93.50-94.00 area after consolidation. Key resistance is now located at 95.28, only break above this level will indicate that a short term cycle bottom has been formed at 94.20 level on 4-hour chart, then further rally could be seen to 95.70 zone.

AUDUSD Analysis.
After touching 0.8180 support, AUDUSD rebounds from 0.8155 level. However, the rise from 0.8155 is more likely consolidation of downtrend. Deeper decline is still possible to 0.7900 zone after consolidation. Near term resistance is at 0.8330 and key resistance is at 0.8477.

Daily Forex Analysis - August 18, 2009

2009-08-18T01:17:00.001Z

EURUSD Analysis.
EURUSD breaks below 1.4086 support, suggesting that the uptrend from 1.3748 (June 16 low) has completed at 1.4447 level already. Deeper decline is now in favor and target would be at 1.3800 zone. Now the pair is in short term downtrend from 1.4327, as long as 1.4150 resistance holds, we’d expect downtrend to continue. However, above 1.4150 level will take price back to 1.4200-1.4250 area to reach the next cycle top on 4-hour chart.

GBPUSD Analysis.
GBPUSD breaks below 1.6391 and drops sharply to as low as 1.6275 level. Deeper decline is now in favor and target would be at 1.6000 zone. Near term resistance is at 1.6430, as long as this level holds, downtrend from 1.6663 will continue. However, above 1.6430 level will signal further rally to 1.6550 level.

USDCHF Analysis.
USDCHF’s rise from 1.0670 extends to 1.0834 level only. Range trading between 1.0730 and 1.0834 would more likely be seen in a couple of days. As long as 1.0670 support holds, we’d expect uptrend to resume and one more rise to test 1.0883 is still possible.

USDCAD Analysis.
USDCAD breaks above 1.1075 previous high resistance, suggesting that a short term cycle bottom has been formed at 1.0795 level on 4-hour chart. Further rise to 1.1400-1.1450 area is expected in next several days. Near term support is at 1.0950, and key support is now at the rising trend line from 1.0632 to 1.0795, as long as the trend line support holds, uptrend will continue.

USDJPY Analysis.
USDJPY breaks below 94.36 support, suggesting that the fall from 97.78 is resumption of medium term downtrend from 101.43 (Apr 6 high). Deeper decline is expected to 93.50 in a couple of days. Near term resistance is at 95.15, as long as this level holds, short term downtrend from 97.78 will continue.

AUDUSD Analysis.
AUDUSD breaks below 0.8180 support, suggesting that the uptrend from 0.7703 has completed at 0.8477 level already. Further fall is still possible to 0.7900 zone in next several days. Near term resistance is at 0.8280 followed by 0.8330.

Daily Forex Signals

GBPUSD has formed a short term cycle bottom

2009-08-14T03:09:00.002Z

GBPUSD has formed a short term cycle bottom at 1.6391 level on 4-hour chart. Further rise is expected later today and target would be at 1.6750 zone. Near term support is at 1.6391, below this level will suggest that the downtrend from 1.7042 has resumed, then deeper decline could be seen to 1.6000 level.
Forex Signal

EURUSD rebounds from 1.4086

2009-08-13T02:53:00.002Z

After breaking below the support of the up trend line from 1.3832 to 1.4007, EURUSD rebounds from 1.4086 and breaks above 1.4218 key resistance, suggesting that a short term cycle bottom has been formed at 1.4086 level on 4-hour chart. Range trading between 1.4086 and 1.4350 is expected in a couple of days. However, the rise from 1.4086 is more likely consolidation of downtrend from 1.4447, deeper decline to 1.3900 zone is still possible after consolidation.
Daily Forex Signals

AUDUSD is testing the support of the lower border of the rising price channel

2009-08-10T02:56:00.002Z

AUDUSD is testing the support of the lower border of the rising price channel, as long as channel support holds, we would expect uptrend to resume, and one more rise above 0.8469 is still possible in a couple of days. However, a clear break below the channel support will indicate that the uptrend from 0.7703 has completed at 0.8469 level already, then the follow downtrend will take price back to 0.8000 zone. Daily Forex Signals.

EURUSD remains in uptrend from 1.4007

2009-08-07T05:28:00.003Z

EURUSD remains in uptrend from 1.4007 and the price action from 1.4444 is treated as consolidation of uptrend. Near term support is now at 1.4250, as long as this level holds, we’d expect the uptrend to resume and further rise towards 1.4600 is still possible after consolidation . However, below 1.4250 level will indicate that a short term cycle top has been formed at 1.4447, then deeper decline could be seen to 1.4150 zone. More Forex Signal

USDCAD drops from 1.0783

2009-08-06T03:19:00.002Z

Being contained by the falling trend line from 1.1113 to 1.0933, USDCAD drops from 1.0783, suggesting that a short term cycle top is being formed on 4-hour chart. Deeper decline is expected to test 1.0632 previous low support later today, a break down below this level will confirm the cycle top and signal deeper decline to 1.0500 zone. Near term resistance is at the falling trend line now at 1.0765, above this level will indicate that lengthier consolidation of downtrend is underway.

Daily Forex Signal

AUDUSD remains in uptrend from 0.6248

2009-08-02T14:10:00.004Z

AUDUSD remains in uptrend from 0.6248, and the rise extends to as high as 0.8365 level. Further rally to 0.8500 zone to reach the next cycle top is still possible next week. Near term support is at 0.8100, as long as this level holds, the uptrend from 0.7703 will continue, however, below this level will suggest that a cycle top has been formed on daily chart, then pullback to 0.7800 -0.7900 area could be seen to follow.

For long term analysis, AUDUSD has formed a cycle bottom at 0.6008 (2008 low) level on monthly chart. Further rise to 0.8300-0.8500 area is still possible.

Weekly Forex Analysis

The Many Faces of the Payday Loan

2007-10-12T19:13:00.000Z

There are many avenues a consumer can use to obtain a loan, each with both advantages and disadvantages. As far as the pay day loan is concerned, they are available both online and in traditional brick and mortar stores, both of which are easily found. While the gist of the loan is the same regardless of where you go, there are inherent differences in each method.

Most brick and mortar payday loan stores take your information on the spot and when you are approved, the money is given to you while you are there. The only drawback is that you may have to wait in line, whereas with online loans, this is not the case. Many people look down on the payday loan, but the fact is that these companies provide an invaluable service and provide many jobs in the community and help people out in many ways by offering many other financial services as well as the payday loans themselves.

Most often, people use the money from their payday loans for everyday expenses, but more and more savvy consumers are using this money for investments for their future. Money market accounts, CD’s, and penny stocks are just a few of the possible investment opportunities available to those who wish to start saving for the future. Payday loans can truly open up an all new dynamic for your financial future.

Trading with Strategy

2007-05-01T02:51:00.000Z

Trading successfully is by no means a simple matter. It requires time, market knowledge and market understanding and a large amount of self restraint. ACM does not manage accounts, nor does it give market advice, that is the job of money managers and introducing brokers. As market professionals, we can however point the novice in the right direction and indicate what are correct trading tactics and considerations and what is total nonsense.

Anyone who says you can consistently make money in foreign exchange markets is being untruthful. Foreign exchange by nature, is a volatile market. The practice of trading it by way of margin increases that volatility exponentially. We are therefore talking about a very 'fast market' which is naturally inconsistent. Following that precept, it is logical to say that in order to make a successful trade, a trader has to take into account technical and fundamental data and make an informed decision based on his perception of market sentiment and market expectation. Timing a trade correctly is probably the most important variable in trading successfully but invariably there will be times where a traders' timing will be off. Don't expect to generate returns on every trade.

Let's enumerate what a trader needs to do in order to put the best chances for profitable trades on his side:

Trade with money you can afford to lose:
Trading fx markets is speculative and can result in loss, it is also exciting, exhilarating and can be addictive. The more you are 'involved with your money' the harder it is to make a clear-headed decision. Money you have earned is precious, but money you need to survive should never be traded.

Identify the state of the market:
What is the market doing? Is it trending upwards, downwards, is it in a trading range. Is the trend strong or weak, did it begin long ago or does it look like a new trend that's forming. Getting a clear picture of the market situation is laying the groundwork for a successful trade.

Determine what time frame you're trading on:
Many traders get in the market without thinking when they would like to get out, after all the goal is to make money. This is true but when trading, one must extrapolate in his mind's eye the movement that one expects to happen. Within this extrapolation, resides a price evolution during a certain period of time. Attached to this is the idea of exit price. The importance of this is to mentally put your trade in perspective and although it is clearly impossible to know exactly when you will exit the market, it is important to define from the outset if you'll be 'scalping' (trying to get a few points off the market) trading intra-day, or going longer term. This will also determine what chart period you're looking at. If you trade many times a day, there's no point basing your technical analysis on a daily graph, you'll probably want to analyse 30 minute or hour graphs. Additionally it is important to know the different time periods when various financial centers enter and exit the market as this creates more or less volatility and liquidity and can influence market movements.

Time your trade:
You can be right about a potential market movement but be too early or too late when you enter the trade. Timing considerations are twofold, an expected market figure like CPI, retail sales or a federal reserve decision can consolidate a movement that's already underway. Timing your move means knowing what's expected and taking into account all considerations before trading. Technical analysis can help you identify when and at what price a move may occur. We will look at technical analysis in more detail later.

If in doubt, stay out:
If you're unsure about a trade and find you're hesitating, stay on the sidelines.

Trade logical transaction sizes:
Margin trading allows the fx trader a very large amount of leverage, trading at full margin capacity (in ACM's case 1% or 0.5%) can make for some very large profits or losses on an account. Scaling your trades so that you may re-enter the market or make transactions on other currencies is generally wiser. In short, don't trade amounts that can potentially wipe you out and don't put all your eggs in one basket. ACM offers the same rates regardless of transaction sizes so a customer has nothing to lose by starting small.

Gauge market sentiment:
Market sentiment is what most of the market is perceived to be feeling about the market and therefore what it is doing or will do. This is basically about trend. You may have heard the term 'the trend is your friend', this basically means that if you're in the right direction with a strong trend you will make successful trades. This of course is very simplistic, a trend is capable of reversal at any time. Technical and fundamental data can indicate however if the trend has begun long ago and if it is strong or weak.

Market expectation:
Market expectation relates to what most people are expecting as far as upcoming news is concerned. If people are expecting an interest rate to rise and it does, then there usually will not be much of a movement because the information will already have been 'discounted' by the market, alternatively if the adverse happens, markets will usually react violently.

Use what other traders use:
In a perfect world, every trader would be looking at a 14 day RSI and making trading decisions based on that. If that was the case, when RSI would go under the 30 level, everyone would buy and by consequence the price would rise. Needless to say, the world is not perfect and not all market participants follow the same technical indicators, draw the same trendlines and identify the same support & resistance levels. The great diversity of opinions and techniques used translates directly into price diversity. Traders however have a tendency to use a limited variety of technical tools. The most common are 9 and 14 day RSI, obvious trendlines and support levels, fibonnacci retracement, MACD and 9, 20 & 40 day exponential moving averages. The closer you get to what most traders are looking at, the more precise your estimations will be. The reason for this is simple arithmetic, larger numbers of buyers than sellers at a certain price will move the market up from that price and vice-versa.

by Nicholas H. Bang

ac-markets.com

Online Payment Services Provider (PSP)

2007-03-14T07:58:00.000Z

Increasingly organizations are looking for ways to collect payment for goods and services online. To accept Credit Card Payments online you will need to obtain an Internet Merchant Account and an Online Payment Services Provider (PSP).

Online payments can be fast convenient way for your users to pay for goods and services over the Internet using their credit card, debit card or other methods. For example:

You may wish to accept payment for events such as conferences online
You may wish to fundraise via your website
You may have publications or other merchandise to sell

Advantages of collecting payments online include:

Convenience
Immediacy
Potential to reach a wider audience and hence more "customers"

UK Payment Service Providers provide software that allows card details to be processed, and acts as a gateway between your e-commerce system and the banks. The UK PSP takes payment details from your customer, checks the details with the appropriate bank, and sends the result of the check back to your system. Authorization or rejection of the transaction is completed within seconds, so you know whether or not to proceed with your customer’s order. The PSP also takes care of the final settlement of the transaction (i.e. when the money is paid into your merchant account).

Here is a UK Payment Service Provider: Axiar PSP

Frequency of Trading is Critical

2007-02-28T07:58:00.000Z

When building or evaluating trading systems the many benefits of systems that trade very frequently are often overlooked. A system that trades frequently has many advantages over less active systems that appear to be more desirable because they have better performance ratios.

If a strategy is profitable the more it trades the more money we should make. I apologize for stating what should be obvious but you would be surprised at how often I hear discussions about selecting systems with the highest level of "expectancy" or highest "profit factor" without relating these measurements to the system's trading frequency. Simply stated, our goal should be to show the most profit with the least amount of risk and trading frequency plays a critical role in maximizing profitability and controlling our risk.

Trading frequency represents opportunity for profit. The more opportunities we can find the more profit we should expect. For example, a strategy that has a very high profit factor of 4 (profit factor is total profits divided by total losses) may not produce as much profit as a more active system that has a profit factor of only 2. Since the strategy with the lower profit factor is profitable and it has many more opportunities it may easily produce more total profit than the system with the much higher profit factor.

Active systems should give us a higher confidence level when analyzing our test data. In addition to increasing total profits, a very active system gives us much more data to analyze when doing our preliminary research. If we have a long-term trend-following strategy that produces only 50 trades over five years of data our positive results may not be nearly as reliable as the results from analyzing a more active strategy that produced 1000 trades over the same data sample. I would be willing to bet that the system with the larger sample of trades is more likely to produce profitable results in the future because our level of confidence must relate to the number of samples in our testing.

Active systems should produce more reliable results and a smoother equity curve. If we flip a coin only ten times our odds of having 50% heads and 50% tails are not very good. However if we flip the coin one thousand times we are likely to come much closer to obtaining 50% heads and 50% tails. The same logic applies to our real-time trading. If we have a large sample of real trades then our results should come closer to our expectations than if we only have a one or two trades. The active system will approach our expectations much quicker than the system that trades infrequently. If we have 50 or more trades per month with a good system we might reasonably expect to be profitable every month. However if we have a system that is only producing two or three trades per month then our monthly results will less predictable and inconsistent. The infrequent trading system might be expected to produce a profit every year but it would not be realistic to expect it to show a profit every month because the sample size in a month will be very small.
Here is a quick summary:

1. Active systems give bigger samples in testing which make the test results more reliable.
2. Active systems have more opportunity for profits and should produce more total profit over time.
3. Active systems should produce a smoother equity curve.

When setting your goals for a trading system you should give trading frequency a high priority even if it means that some of the usual performance measurements may suffer.

How to increase trading frequency:

1. Use quicker parameters for entries. Trading frequency can usually be increased in a system by using more sensitive (usually shorter) parameters for the indicators that determine the entries and exits.
2. Be aggressive when taking profits. Quicker exits that lock in profits will tend to increase the number of trades but may reduce the average profit per trade. That trade-off may prove to be worthwhile and may substantially increase the total profit over the long run.
3. Trade multiple markets. Diversification among markets should produce more trades and more consistent results.
4. Trade multiple systems. Adding more trading systems will increase the activity level. Use as many systems as you believe to be practical in terms of available capital and as many systems as you can accurately monitor.
5. Trade multiple time frames. A system that works well on daily charts may also produce positive results on hourly charts or weekly charts. Don't make the mistake of assuming that only one time frame must be used.

Here are a few final thoughts.

Drawdowns: I have found that adjusting a system to be more active will almost always increase the size of the drawdowns. However in many cases the larger drawdowns are simply the result of having a much larger sample size over the period being tested. If you perform a Monte Carlo simulation on a system that trades infrequently you will observe that larger drawdowns become more likely as the number of trades in the simulation increases. This means that your test data on the inactive system is showing an unrealistic drawdown that is probably lower than what you might expect to actually experience when trading that system over the long run. If you don't have a program to perform Monte Carlo simulations and you are analyzing a system that trades infrequently you should double the size of the historical drawdown to give you a more realistic idea of what to expect in real trading with a larger sample size.
Increased costs: Trading more often will increase your trading costs in terms of commissions and slippage. Be sure to factor in realistic costs when doing your testing. The idea of trading frequently is to make more money. At some point increased trading will begin to reduce your total profitability. You should know where that point of diminishing returns kicks in.

I'm not a mathematician but I think that system traders need a formula for comparing systems that includes the frequency of trading. (For example: Expectancy times frequency or Profit Factor times frequency.) Any other suggestions?

by Chuck LeBeau

Trailing Stops

2007-01-19T14:53:00.000Z

Now that we have taken the necessary precautions to avoid catastrophic losses by using disciplined money management stops, it is appropriate to concentrate on strategies that are designed to accumulate and retain profits in the market. When properly implemented these strategies are intended to accomplish two important goals in trade management: they should allow profits to run, while at the same time they should protect open trade profits.

While their application is extremely wide, we do not believe that trailing stops are appropriate in all trading circumstances. Most of the trailing exits we will describe are specifically designed to allow profits to run indefinitely. Therefore they are best used with trend following type systems. In counter-trend trading, more aggressive exits are more suitable. The “when you’ve got a profit, take it” philosophy works best when you are trading counter-trend, since the anticipated amount of profits is limited. However, to take quick profits in a trend is usually an exercise in frustration: we exit the market with a small profit only to watch the huge trend continue to move in our direction for days or months after our untimely exit. We therefore recommend using different exit strategies based on the underlying market condition. We will discuss the more aggressive exits later; for now we will concentrate on exits designed to accumulate large profits over time.

A thorough understanding of trailing stops is critical for trend-following traders. This is because trend following is typically associated with a lower percentage of profitable trades; which makes it particularly important to capture as much profit as possible when those large but infrequent trends occur. Typical trend followers make most of their profits by capturing only a few infrequent but very large trends, while managing to cut losses effectively during the more frequent sideways markets.

The rationale behind the use of the trailing stop is based on the anticipation of occasional extremely large trends and the possibilities of capturing substantial profits during these major trends. If the entry is timely and the market continues to trend in the direction of the trade, trailing stops are an excellent exit strategy that can enable us to capture a significant portion of that trend.

The trailing stops we will describe in this and following articles have similar characteristics that are important to understand as we use them to design our trading systems. Effective trailing stops can significantly increase the net profits gained in a trend-following system by allowing us to maximize and capture large profitable trades. The ratio of the average winning trade to the average losing trade is usually improved substantially by the use of trailing stops. However there are some negative characteristics of these stops. The number of profitable trades is sometimes reduced since these stops may allow modestly profitable trades to turn into losers. Also, occasional large retracements in open trade profits can make the use of these stops quite difficult psychologically. No trader enjoys seeing large profits reduced to small profits or watching profitable trades become unprofitable.

The Channel Exit

The simplest process for following a trend is to establish a stop that continuously moves in the direction of the trend using recent highest high or lowest low prices. For example, to follow prices in an uptrend, a stopmay be placed at the lowest low of the last few bars; for a downtrend, the stop is placed at the highest high of the last few bars. The number of bars used to calculate the highest high or lowest low price depends onthe room we wish to give the trade. The more bars back we use to set the stop, the more room we give the trade and consequently the larger the retracement of profits before the stop is triggered. Using a veryrecent high or low point enables us to take a quick exit on the trade.

This type of trailing stop is commonly referred to as a “Channel Exit”. The “channel” name comes from the appearance of a channel formed from using the highest high of X bars and the lowest low of X bars for shortand long exits respectively. The name also derives from the popular entry strategy that uses these same points to enter trades on breakouts. Since we are focusing on exits and will be using only one boundary ofthe channel, the term “channel” may be a slight misnomer, but we will continue to refer to these trailing exits by their commonly used name.

For most of our examples we will assume that we are working with daily bars but we could be working with bars of any magnitude depending on the type of system we are designing. A channel exit is extremelyversatile and can work equally well with weekly bars or five-minute bars. Also keep in mind that any examples referring to long trades can be equally applicable to short trades.

The implementation of a channel exit is very simple. Suppose we have decided to use a 20-day channel exit for a long trade. For each day in the trade, we would determine the lowest low price of the last 20 daysand place our exit stop at that point. Many traders may place their stops a few points nearer or further than the actual low price depending on their preferences. As the prices move in the direction of the trade, thelowest price of the last twenty days continually moves up, thus “trailing” under the trade and serving to protect some of the profits accumulated. It is important to note that the channel stop moves only in thedirection of the trade but never reverses direction. When prices fall back through the lowest low price of the last twenty days, the trade is exited using a sell stop order.

The first and obvious question to answer about channel exits is how many bars to use to pick the exit point. For example, should we set our stop at the lowest low of 5 days or the lowest low of 20 days, or someother number of days? The answer depends on the objectives of our system. A clearly stated set of objectives for the system is always very helpful at these important decision points. Do we want a long-termsystem with slow exits or do we want a short-term system with quicker exits? A longer channel length will usually allow more profits to accumulate over a long run if there are big trends. A shorter channel willusually capture more profits if there are smaller trends. In our research, we have found that long-term systems generally work well with a trailing exit at the lowest low or the highest high of the last 20 days or more.For intermediate term systems, use the lowest or highest price of between 5 to 20 days. For short-term systems, the lowest or highest price of between 1 to 5 days is usually optimal.

Trailing stops with a long-term channel accumulate the largest open profits if there is a sustained trend. However this method will also give back the largest amount of open profits when the stop is eventuallytriggered. Using a shorter channel can create a closer stop in order to preserve more open trade profits. As can be expected, the closer stop often does not allow profits to accumulate as nicely as the longerchannel, and often causes us to be prematurely stopped out of a large trend. However, we have noticed that a very short channel length of between 1 to 3 bars is still highly effective in trailing a profitable trade in arunaway trend. The best type of channel exit to use in a runaway trend is a very short channel, for example 3 bars in length. We have observed that this exit in a strong trend often keeps us in a trade until we areclose to the end of the trend.

It appears that there is a conflict of exit objectives here. A longer channel length will capture more profit but give back a large proportion of that profit; a shorter channel length will capture less profit, but protect moreof what it has captured. How can we resolve this issue and create an exit that can both accumulate large profits, as well as protect these profits closely? A very effective exit technique calls for a long-term channelto be implemented at the beginning of the trade with the length of the channel gradually shortened as larger profits are accumulated. Once the trade is significantly profitable, or in a strongly trending move, the goalis to have a very short channel that gives back very little of the large open profit.

Here is an example of how this method might be implemented. At the beginning of a long trade, after setting our previously described money management stop to avoid any catastrophic losses, we will trail a stopat the lowest low of the last 20 days. This 20-day channel stop is usually far enough from the trade to avoid needless whipsaws and keep us in the trade long enough to begin accumulating some worthwhile profits.At some pre-determined level of profitability, which can be based on a multiple of the average true-range or some specific dollar amount of open profit, the channel length can be shortened to take us out of the tradeat the lowest low of 10 days. If we are fortunate enough to reach another higher level of profitability, like 5 average true ranges of profit or some other large dollar amount, we can shorten the channel further so thatwe will exit at the lowest low of 5 days. At the highest level of profitability, perhaps a very rare occurrence, we might even be able to place our exit stop at the previous day’s low to protect the great profit we have accumulated. As you can see, this strategy allows plenty of room for profits to accumulate at the beginning of a trade and then tightens up the stops as profits are accumulated. The larger the profits, the tighter ourexit stop. The more we have, the less we want to give back.

There is another way of improving the channel exit that is worthwhile to discuss: this is to contract (or expand) the traditional channels using the height of the channel, or some multiple of the average true range. How this might work is as follows: Supposing you are working with a 20-day channel exit. First you calculate the height of the channel, as measured by the distance between the highest 20-day high and the lowest 20-day low. Then you contract the channel by increasing the lowest low value and decreasing the highest high value previously obtained to determine the exit points. For instance, in a long trade, you could increase the lowest low price by 5% of the channel height or 5% of the average true range, and use that adjusted price as your exit stop. This creates a slightly tighter stop than the conventional channel. More importantly, it allows you to execute your trade before the multitude of stops that are already placed in the market at the 20-day low.

The last point can be considered an important disadvantage of the channel exit. The channel breakout methods are popular enough to cause a large number of entry and exit stops to be placed at previous lowest low and highest high prices. This can cause a significant amount of slippage when attempting to implement these techniques in your own trading. The method of adjusting the actual lowest low or highest high price by a percentage of the overall channel height or the average true range is one possible way to move your stops away from the stops placed by the general public and thereby achieve better executions on your exits.

by Chuck LeBeau

Forex 1-2-3 Method

2006-12-25T10:22:00.000Z

This particular technique has been around for a long time and I first saw it used in the futures market. Since then I have seen traders using it on just about every market and when applied well, can give amazingly accurate entry levels.

Lets first start with the basic concept. During the course of any trend, either up or down, the market will form little peaks and valleys. see the chart below:

The problem is, how do you know when to enter the market and where do you get out. This is where the 1-2-3 method comes in. First let's look at a typical 1-2-3 set up:

Nice and simple, but it still doesn't tell us if we should take the trade. For this we add an indictor. You could use just about any indictor with this method but my preferred indictor is MACD with the standard settings of 12,26,9. With the indictor added, it now looks like this:

Now here is where it gets interesting. The rules for the trade are as follows:

Uptrend

1. This works best as a reversal pattern so identify a previous downtrend
2. Wait for the MACD to signal a buy and for the 1-2-3 set up to be in place.
3. As the market pulls back to point 3, the MACD should remain in buy mode or just slightly dip into sell.
4. Place a buy entry order 1 pip above point 2
5. Place a stop loss order 1 pip below point 3
6. Measure the distance between point 2 and 3 and project that forward for your exit.
7. Point 2, should not be lower than point 1

The reverse is true for short trades. As the market progresses you can trail your stop to 1 pip below the most recent low (Valley in an uptrend). You can also use a break in a trend line as an exit.

Some examples:

There are a lot of variations on the 1-2-3 setup but the basic concept is always the same. Try experimenting with it on your favorite time frame.

Written by Surefire Forex Trading

A Different Type of Moving Average Cross

2006-12-15T13:51:00.000Z

Virtually every trader has dabbled with or experimented with some sort of moving average. What I want to introduce you to in this lesson is a different sort of moving average cross method, which I have found to be very good at identifying short term trend changes.

As we know a moving average is normally plotted using the close of a bar e.g. if you were plotting a 3 period moving average, then you would add the last three closes and divide the total by three to get a simple moving average.

This is where I want you to think a little differently. I have always been an advocate of taking traditional thinking and changing it around. What if you used the open instead of the close? What if you used the close of one period of a moving average and the open of another?

First, most charting packages will allow you to use the open, high, low or close to plot a moving average.

In the example below of the daily Dow Jones, I have used a 5 period exponential moving average of the close and a 6 period exponential moving average of the open. As you can see it catches the short term trend changes really nicely.

In the next example of the 1 hour EUR/USD, you can see that the close/open combination worked really well. Of course you will go through periods of consolidation with any market and any moving average method you use will be whipsawed. To get around this you need some sort of filter or approach that helps you keep out of the low probability trades.

You could use ADX, Stochastic or MACD to help filter the noise but I also like to add a time frame.

In the next example of the 4 hour GBP/USD you can see that on the 24th September 04 at 4:00 there was a cross of the 5 period exponential moving average of the close above the 6 period exponential moving average of the open. This signal has remained in place until today as I write on the 27th September.

Although there was a signal on the 4 hour, to help identify even better entry points you can drop down a few time frames to the 30 minute chart. As you can see from the 30 minute chart there have been quite a few crosses of the 5 period exponential moving of the close above or below the 6 period exponential moving average of the open.

There are lots of ways to trade this but a neat little trick is to wait for the signal on a higher time frame and then drop down a few time frames and wait for a pullback. The first signal after the pullback on the lower time frame is normally a pretty good entry point e.g. If there were a cross up on the large time frame then drop down to a lower time frame and wait for the market to retrace and then give another buy signal (cross up). The opposite is true for short signals.

Once you get the signal on the shorter time frame depending on where support is you can usually place your first stop loss under the nearest support area (valley). If the market begins to make progress you can move your stop so that it trails the market by moving your stop to just under the most recent support area.

In this lesson I have use an exponential moving average but experiment with different types of average such as weighted, smoothed or simple. You can also experiment with different lengths of moving average.

surefire-trading.com

How To Handle A String Of Investment Losses

2006-11-25T12:33:00.000Z

Everybody hates to lose and unfortunately no one is blessed with the ability of foresight, therefore losses are an unavoidable part of trading. When we enter a trade we will either be right, or wrong, and even if we broke-even we'd still be classed as being wrong - as nobody enters into a trade just to break-even! When unsuccessful traders encounter a string of losses they begin to engage in self-destructive patterns that help them escape the pain they are experiencing.

Bring to light these self-destructive actions that can help you realize what you are doing before it takes hold of your physical health. If you find yourself already engaged in these patterns hopefully this article can help you to get you back on track as quickly as possible.

What are the destructive patterns?

If you find yourself caught in a string of losses or a bad performing week/month be sure to monitor your behavior. It is during this time that you will be at your most vulnerable. You will begin to indulge in activities that at first seem harmless, but upon excessive use (or in time), begin to cause physical damage to your health.

Ask yourself the following question: during drawdown periods do I find myself over-indulging in these activities:

Food (especially junk food - e.g. chocolate, ice-cream, chips)?

Sex (includes viewing pornography)?

Alcohol?

Drugs (includes excessive smoking)?

Laziness (find it difficult to wake up in the morning)?

Entertainment?

All of the above taken in excessive doses can be detrimental to your own physical health (some even in small doses!).

These activities above during your losing period are only covering up the pain of confronting the true issue, and your body tries to rid the emotional pain by trying to "fix" it with physical pleasures. Unfortunately it is going about it in the wrong way, so what should you do?

Firstly... REALIZE WHAT YOU ARE DOING AND STOP IT!

You need to realize what you're doing and you need to STOP doing it immediately! You can either decide to stop, or you'll be forced to stop when your body eventually breaks down and prevents you from any form of movement. It will be much more beneficial to you in the long-term if you can decide to stop *NOW*.

Once you have stopped you now need to figure out a way to solve the pain - not by cutting out or neglecting it, but by staring it in the face. Bring your problems out into the light, be honest with yourself. There can be no growth without pain; you are experiencing the emotional pain, now it is time to find the error and therefore your growth.

Begin Your Review

The review process begins in two separate areas: You & Your System. Here are some checklists for you to go through to find out where the problem could lie:

"YOUR SYSTEM" CHECKLIST

Was your system thoroughly tested prior to trading it (or paper traded if you do not have the capacity to program your system into back testing software)?

Did you test with out-of-sample data?

Do you even have a system???? If you do not, how do you even know if the method that you are trading is even profitable??

Is your system's code correct?

Did you over-optimize your system? (What have we discussed about over-indulging?)

Did you paper trade your system prior to placing capital on it?

Did you trade with a small amount of capital prior to placing the rest of your funds on it?

Do you know the system's limitations?

Did you properly drill your system? (See our blog article on why I am the system designer from hell)

"YOU" CHECKLIST

Is the current drawdown you are exhibiting with your system normal?

Are you comfortable with your system's historical drawdown performance?

Are you fully aware of the risks involved with your system and the instrument(s) you are trading?

Are you trading with funds that you are comfortable risking?

Are you relying too heavily on your performance?

Have you set realistic goals?

As you can see there are generally two areas that you need to explore: the mechanical aspect - your system - and the emotional aspect - you. Both can be responsible for making the way you feel the way you do. It will either be an error on the system's side with how the system was tested and/or programmed, or it can be your own psychological profile not being comfortable with the system's performance.

Your Answers = Change = Your Growth

What steps should we now take? Now that we have begun a corrective process where we have stopped the evil nature of our over-indulging ways to take control we should continue our "corrective nature" by invoking our findings and taking ACTION in correcting our errors.

If the problem was mechanical - fix it, if the problem was emotional either go about setting up new thought patterns, or change your current system. The answers lie in whether you need to expand your knowledge in system development, or whether you need to grow emotionally as a person.

Unfortunately there is no easy road, and even if there was everybody would be doing it. Hopefully this article has made you ponder over some of your behaviors during drawdown periods, be sure to keep an eye on yourself and as always take care of your body, because there's no use in making all the money in the world when you don't have the physical capacity to enjoy it

Article Source: kokkada.com

See also:
How To Use MACD
Easy-Forex? The best trading platform available today.
Forex Trading Explained
Institutional Forex System
The MasterTrader eBook
Forex Profits

Combining RSI and ADX

2006-10-31T14:35:00.000Z

Now that I am spending seven hours a day doing trading for the new hedge fund I haven't had much time for research or writing new Bulletins. However a comment in one of the trading newsgroups that I monitor got me thinking about the potential benefits of combining our knowledge of RSI and ADX into a simple system. Both the ADX and RSI are valuable trading tools and a combination of the two would seem to offer some interesting possibilities. I like to use the RSI primarily as an indicator for buying on dips in an uptrend. The ADX is my primary indicator of trend strength.

Here are a few ideas on how the two indicators might compliment each other in a system that "knows" when to enter on strength and when to buys on dips. (I'm only going to use the long side for examples but the logic should apply to short trades as well.)

When the ADX is rising it usually indicates that a strong trend is underway. In many cases waiting for any sizeable dip would be costly because the market could run away and the dip entry would be too late to maximize our profits. In this case we must enter on strength. To make this idea into a simple trading rule we might state that if the ADX is rising (and we have some indication it is rising because an uptrend is underway) we will buy whenever the RSI is below some very high threshold like 85. This rule would give us a very prompt entry in most cases and the result would be almost identical to simply trading whenever the ADX is rising which seems to be a good idea. The RSI has little, if any, benefit in this situation except it might occasionally keep us from buying into an extremely overbought market where the RSI was above 85. In this case a slight delay on the entry might be prudent.

The RSI, however, can play a much more important role when the ADX is flat or declining. In this case the rule would be that when the ADX is not rising we should postpone our entry until the RSI is below some more typical threshold like 45 or 50. Since the ADX is not giving us a signal that the trend is unusually strong we would need some additional indicator to show that the market has some minimal amount of upward direction. Otherwise we would not be buying a dip within the framework of an uptrend. Something simple like an upward sloping 20-bar moving average might work in this application.

Now that we have combined the ADX and RSI for our entries we might also want to combine them for our exits. When a market is rising but the trend is not particularly strong any spike in the RSI represents a good opportunity to take a profit. For example when trading in stocks the 9-bar RSI rising above 75 or 80 often signals that a correction is imminent. If the market trend is not unusually strong we would probably be happy with taking our profit on strength rather than waiting to get stopped out on weakness. However if the ADX is rising we might want to risk a correction in hopes of riding the trend even further. In this case when the ADX was rising we would ignore the RSI signal to take our profit. However, once our patience has allowed us to accumulate a very substantial open profit we might be best served by acting on the next RSI signal and nailing down the big winner. Also, when the ADX is rising it would not make much sense to be buying at a high RSI level and also selling at a high RSI level. We would be in and out of our trades almost immediately. Therefore we need to ignore the RSI extremes until our profit has had a chance to accumulate.

In summary, the important concept to remember is that our knowledge of the ADX can make the RSI a much more useful trading tool. When the ADX is rising the RSI tends to get overbought and it can often remain overbought for a surprising length of time. On the other hand when the ADX is flat or declining any spike to the upside in the RSI is an opportunity to nail down a profit. Conversely, any spike to the downside can be a potentially profitable entry point.

Here is the logic of a simple little system based on this discussion. (Just the rules in text form, you will have to do your own coding.) The parameters selected have not been tested or optimized. For example the 20-day moving average is just a number I picked out of the air. This is enough information to get you started and you can vary the rules to make the system trade over whatever time frame you prefer.

Long Entries:
1. The 20-bar moving average must be rising.
2. If the ADX is rising (ADX today is 0.20 or more higher than yesterday) then buy if the 14 bar RSI is less than 85.
3. If the ADX is not rising (ADX today is not 0.20 higher than yesterday) then buy if the 14 bar RSI is less than 50. Here is where you can influence the frequency of trading. For more trades use a higher threshold like 60. For fewer trades use a lower threshold like 40.

Long Exits
1. If the ADX is not rising (ADX today is not 0.20 higher than yesterday) then sell (long exit) if the 9-bar RSI is greater than 75.
2. If the ADX is rising (ADX today is 0.20 or more higher than yesterday) and the open profit is greater than (pick some amount - maybe 4 ATRs or some unit of price) then sell if the 9-bar RSI is greater than 75.
3. You need some additional exit rule for the losing trades. Use your favorite loss-limiting exit or you might want to exit when the price goes below the 20-dat moving average or when the 20-day moving average turns down. (See entry rule 1.)

Good luck and good trading.

by Chuck LeBeau

What is Technical Analysis

2006-09-20T15:01:00.000Z

When trading in the foreign exchange market, part of the process involves forecasting future price movements in order to determine the best time to buy and sell. One method, called technical analysis, takes a look at the market’s past price movements to determine where the numbers will go in the future. Most investors who employ this type of analysis look mostly at price data, but sometimes information such as volume and open interest in futures contracts are also taken into consideration. If you’re just starting out in forex, the rule of thumb is to keep your methods simple - follow the basics, which have been proven over time, and only when you have gained some experience introduce more difficult techniques into your plans.

Technical analysis is almost always used on some level because price charts provide a good visual representation of the price history of a particular currency. At the very least, they can help you determine ideal entry and exit points for a trade based on the historical data. You can decide whether or not you’re buying at a fair price, selling at the top of a cycle, or entering into a shaky market.

It may seem as if adherents of technical analysis disregard market fundamentals in favor of mounds of charts and data, but they argue that these fundamentals are ingrained in the actual numbers. Something unpredictable may cause the numbers to unexpectedly spike, but you can still analyze the data, and identify patterns that will aid you in forecasting future prices.

Essentially, technical analysis can be summed up in three points. First of all, as mentioned above, technical traders assume that market fundamentals are tied to the price data. This is why factors such as the fear, hope, and mood of market participants are not contemplated directly.

Secondly, the idea that history repeats itself is core to this system of analysis. It is possible to look for patterns in price movement (called signals) because the market is predictable. When you look at past market signals you should be able to predict future signals.

Lastly, technicians rely on trends. From this analytical perspective, the market is not irregular or unpredictable. Rather, you can determine, to a high degree of accuracy, what direction a price will take: up, down, or sideways. In addition, trends are expected to continue for a period of time, making it possible to formulate predictions.

But it’s important to understand that technical analysts use more than price charts to determine good entry and exit points. Price charts are used in conjunction with volume charts, and other mathematical representations of market signals. Called studies, these additional pieces of information add another layer of data to the analysis. They let the trader look at the strength and sustainability of trends, in addition to the bare statistics.

Technical analysis is, of course, quite complicated - but for the new trader just starting out in forex, following the basics is a good place to begin. After you gain some experience and learn more about the foreign exchange market, you can delve into more complex research strategies.

Article Source: kokkada.com

See also:
How To Use MACD
Easy-Forex? The best trading platform available today.
Forex Trading Explained
Institutional Forex System
The MasterTrader eBook
Forex Profits

Short Term Analysis - September 8, 2006

2006-09-08T00:37:00.000Z

AUDUSD

Key support at 0.7626 is broken below, AUDUSD will fall towards 0.7550 to reach the next cycle bottom. If 0.7550 support gives way, further fall towards 0.7400 area is possible in the next one or two weeks.

EURUSD

EURUSD fell below the support at 0.2725, further fall towards 1.2650 area to reach the next cycle bottom is possible in the next several days. Key resistance is now at 1.2830, break above this level may signal the cycle bottom.

USDCAD

USDCAD rebound from the support at 1.1030. It is forming a sideways consolidation on 4 hours chart. Key resistance is at 1.1137, a break above this level may signal the cycle bottom at 1.1030. On the other side, if near term support at 1.1030 gives way, the pair would fall towards 1.0950.

GBPUSD

GBPUSD fall below the key support at 1.8793, further fall towards 1.8600 area to reach the next cycle bottom is still possible in the next several days. Key resistance is at 1.8955, only break above this level may signal the reversal to the down trend.

USDJPY

USDJPY stay in the rising price channel. Further rise above 117.49 is possible in the next several days. Key support is at 115.57, as long as this support holds, up trend will continue.

USDCHF

USDCHF rose above 1.2444. Further rise towards 1.2500 area is still possible later today. Key support is at 1.2326, only break below this level may signal the reversal to the up trend.

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Our server downed. We post the Short Term Analysis here temporary.

Franco
ForexCycle.com

How to stop loss

2006-09-04T13:38:00.000Z

Using Stop Loss in anytime we enter the market is one way to manage our risk in trading. While some other traders might consider it as the sissy way, I don't….. I like to trade using Stop Loss. And it brings me to good results in the end of the day. Keeps me stick with well-controlled trading system.

When we decide to use stop loss, then we must be discipline in implementing it. If market price is heading so close to our stop loss, then we must not do anything. Do not ever try to replace your stop loss at further level from your open position level.

Replace your stop loss only for one reason:
For Trailing Stop Strategy (although I hardly ever use trailing stop strategy).

Now the problem is… where should we put our stop loss in each trading? Here are some tips I could give you:

1. Measure the gap between your stop loss and your open position level.
Usually I use these rules:

Eur/Usd: gap between stop loss and open position = 35 pips

Gbp/Usd: gap between stop loss and open position = 50 pips

These are representing maximum losses that you could handle in each trade. Keep that always in mind. We're not going to enter the market without this gap rule.

2. Entry strategy
Then you could predict your best entry level using your trading system. And when you decide to enter the market at certain level (using your trading strategy), do not forget to pay attention to your stop loss. Where will your stop loss be placed using the gap rule on tips #1.

Try to put your stop loss below Support Level (for Long position) or above Resistance Level (for short position).

For example:

We had Eur/Usd support and resistance levels are at:

R3 1.3052

R2 1.2962

R1 1.2906

Pivot 1.2816

S1 1.2760

S2 1.2670

S3 1.2614

Then after measuring the trend, you noticed that 1.2870 is the best place to short on eur/usd. That means, by using 35 gaps rule (see point#1), your Stop Loss would be at 1.2905.

Unfortunately, 1.2905 is not a good level to place your Stop Loss. Why? It is not protected by resistance level. When market moves upward, your Stop Loss is not well protected by its technical factor. So it would be quite easy for the market to hit your Stop Loss. Nearest resistance is 1.2906, above 1.2905. So what do we do here is to move our Stop Loss a little above 1.2905. Let's say we move it to 1.2910. Now technically, you have a well protected stop loss.

When you move Stop Loss, do not forget about the gap rule (as said in point#1). So we have to move also our open position plan.

And now, your plan becomes Short at 1.2875 (5 pips above 1.2870) and Stop Loss at 1.2910 (5 pips above 1.2905).

3. Keep calm when market heading so close to your stop loss.
Anything could happen in Forex in very short time. No one can control people madness when they enter the market. But the most important thing in dealing with this mad world is 'risk management'. Successful traders realize that sometimes they had to deal with fail trades.

So if your stop loss is hit, let it go. That's just the way it is.

Article Source: kokkada.com

See also:
How To Use MACD
Easy-Forex? The best trading platform available today.
Forex Trading Explained
Institutional Forex System
The MasterTrader eBook
Forex Profits

Head and shoulders appears in the GBPUSD chart

2006-08-29T13:55:00.000Z

GBPUSD has formed a Head and Shoulder pattern, neck line has been broken above, and up trend has been confirmed. Target is expected at 1.9250 level.

How To Use MACD

2006-08-24T15:02:00.000Z

I love a good love-hate relationship, and that's what I've got with technical indicators Technical indicators are those fancy computerized studies that you frequently see at the bottom of price charts that are supposed to tell you what the market is going to do next (as if they really could). The most common studies include MACD, Stochastics, RSI and ADX, just to name a few.

The No.1 (and Only) Reason To Hate Technical Indicators
I often hate technical studies because they divert my attention from what's most important – PRICE.

Have you ever been to a magic show? Isn't it amazing how magicians pull rabbits out of hats and make all those things disappear? Of course, the "amazing" is only possible because you're looking at one hand when you should be watching the other. Magicians succeed at performing their tricks to the extent that they succeed at diverting your attention.

That's why I hate technical indicators; they dived my attention the same way magicians do Nevertheless, I have found a way to live with them, and I do use them Here's how: Rather than using technical indicators as a means to gauge momentum or pick tops and bottoms, I use them to identify potential trade setups.

Three Reasons To Learn To Love Technical Indicators
Out of the hundreds of technical indicators I have worked with over the years, my favorite study is MACD (an acronym for Moving Average Convergence-Divergence) MACD, which was developed by Gerald Appel, uses two exponential moving averages (12-period and 26-period). The difference between these two moving averages is the MACD line. The trigger or Signal line is a 9-period exponential moving average of the MACD line (usually seen as 12/26/9…so don't misinterpret it as a date) Even though the standard settings for MACD are 12/26/9, I like to use 12/25/9 (it's just me being different). An example of MACD is shown in Figure 10-1 (Coffee).

The simplest trading rule for MACD is to buy when the Signal line (the thin line) crosses above the MACD line (the thick line), and sell when the Signal line crosses below the MACD line Some charting systems (like Genesis or CQG) may refer to the Signal line as MACD and the MACD line as MACDA Figure 10-2 (Coffee) highlights the buy-and-sell signals generated Item this very basic interpretation.

Although many people use MACD this way, I choose not to, primarily because MACD is a t rend-following or momentum indicator. An indicator that follows trends in a sideways market (which some say is the state of markets 80% of time) will get you killed For that reason, I like to locus on different information that I've observed and named: Hooks, Slingshots and Zero-Line Reversals Once I explain these, you'll understand why I've learned to love technical indicators.

Hooks
A Hook occurs when the Signal line penetrates, or attempts to penetrate, the MACD line and then reverses at the last moment. An example era Hook is illustrated in Figure 10-3 (Coffee).

I like Hooks because they fit my personality as a trader. As I have mentioned before. I like to buy pullbacks in uptrends and sell bounces in downtrends. And Hooks do just that - they identify countertrend moves within trending markets.

In addition to identifying potential trade setups, you can also use Hooks as confirmation. Rather than entering a position on a cross-over between the Signal line and MACD line, wait for a Hook to occur to provide confirmation that a trend change has indeed occurred Doing so increases your confidence in the signal, because now you have two pieces of information in agreement.

Figure 10-4 (Live Cattle) illustrates exactly what I want this indicator to do: alert me to the possibility of rejoining the trend In Figure 10-5 (Soybeans), I highlight two instances where the Hook technique worked and two where it didn't.

But is it really fair to say that the signal didn't work? Probably not, because a Hook should really just be a big red flag, saying that the larger trend may be ready to resume. It's not a trading system that I blindly follow All I'm looking for is a heads-up that the larger trend is possibly resuming. From that point on, I am comfortable making my own trading decisions. If you use it simply as an alert mechanism, it does work 100% of the time.

Slingshots
Another pattern I look for when using MACD is called a Slingshot. To get a mental picture of this indicator pattern, think the opposite of divergence. Divergence occurs when prices move in one direction (up or down) and an indicator based on those prices moves in the opposite direction.

A bullish Slingshot occurs when the current swing low is above a previous swing low (swing lows or highs are simply previous extremes in price), while the corresponding readings in MACD are just the opposite Notice in Figure 10-6 (Sugar) how the May low was above the late March swing low However, in May, the MACD reading tell below the level that occurred in March. This is a bullish Slingshot, which usually identifies a market that is about to make a sizable move to the upside (which Sugar did).

A bearish Slingshot is just the opposite: Prices make a lower swing high than the previous swing high, but the corresponding extreme in MACD is above the previous extreme Figure 10-7 (Soybeans) shows an example era bearish Slingshot.

Zero-Line Reversals
The final trade setup that MACD provides me with is something I call a Zero-Line Reversal (ZLR). A Zero-Line Reversal occurs when either the Signal line or the MACD line Falls (or rallies) to near zero, and then reverses It's similar in concept to the hook technique described above The difference is that instead of looking for the Signal line to reverse near the MACD line, you're looking for reversals in either the Signal line or the MACD line near zero. Let's look at some examples of Zero-Line Reversals and I'm sure you'll see what I mean.

In Figure 10-8 (Sugar), you can see two Zero-Line Reversals Each time, MACD reversed above the zero-line, which means they were both bullish signals When a Zero-Line Reversal occurs from below, it's bearish. Figure 10-9 (Soybeans) shows an example of one bullish ZLR from above, and three bearish reversals from below. If you recall what happened with Soybeans in September 2005, the bearish ZLR that occurred early that month was part of our bearish Slingshot from Figure 10-7 These combined signals were a great indication that the August advance was merely a correction within the larger sell-off that began in April That meant that lower prices were forthcoming, as forecast in tile August and September issues of Monthly Futures Junctures.

So there you have it, a quick rundown on how I use MACD to alert me to potential trading opportunities (which I love) Rather than using MACD as a mechanical buy-sell system or using it to identify strength or weakness in a market, I use MACD to help me spot trades And the Hook, Sling-shot and Zero-Line Reversal are just a few trade setups that MACD of offers.

Article Source: elliottwave.com

Why trading diary is important to improve your forex trading

2006-08-22T11:18:00.000Z

Do you have a habit to write trading diaries? I think it's important for a trader to write down their trading records. Most traders spend all their time for searching news of the market, looking at the charts they planning to trade. Of course, all of these are important for your trading. Recording your trading transactions is just as important.

Traders always lost himself in mass of trading records. What currency pair did you trade? Why did you place these orders? Are all of these trading decisions according to your strategies, if you really have some? In order to answer all of these questions, mark up all your trading records in a diary.

What should it contain?

Currency pairs
Buy/sell date and price
profit/loss
Entry strategy
Exit Strategy
Comments

You can review the results of your trading by the end of every week or month and benefit from this good habit. This method is key to improving your trading skills.

Timing Is Everything

2006-08-15T04:26:00.000Z

They say that 'timing is everything' and it's never more than true when looking to commit to an online investment. For the comedian, actor, athlete and politician timing is a key skill in success. Being in the right place at the right time is part of the skill (or luck) of any kind of success. The basketball or football player needs to be doing the right thing when the scout is about. The busker singing on the street can have their lives changed if a record producer happens to be walking past.

So is success down to luck - well yes and no. I'm a big believer in creating your own luck. If you put yourself about, take risks (albeit calculated ones) and put yourself in situations where opportunity can be seized.

The most common piece of investment advice given is 'get into property' and as a general rule it's sound advice. Property in general appreciates in value over time and delivers a return on investment significantly better than any bank or savings scheme can offer. However - timing can make or break the investment opportunity. Many have been caught short by entering the property market at the wrong time and making very little - and in some sad cases ending up in negative equity. If you buy in a town that is on the rise - then you'll make money from your investment. If you buy in town and a factory then lays of 1,000 employees causing widespread unemployment - there's a good chance that you could lose money, see very little growth or have to wait a long time to see a return on your investment.

If I could give only one piece of investment advice it would be to develop the skill of being able to spot opportunities. Broaden your perspective – think laterally and learn how to read how events will shape things financially and then make calculated decisions based on those factors. If you can learn this new kind of thinking – then you will see investment opportunities others miss – and most importantly you will see them in time to get in early.

For a prime example of a time sensitive online investment opportunity that will give you a fantastic return on investment go to http://online-investment-secrets.com.

Article Source: kokkada.com

How To Handle A String Of Investment Losses

2006-08-14T13:50:00.000Z

Article Source: kokkada.com

Don’t Loose Money, Invest In Forex Accounts

2006-08-13T14:39:00.000Z

Have you lost money because your local currency depreciated against major currencies?I believe you should try investing in forex accounts.

A Forex Trading Managed Account (or, hedging fund account) is the investment vehicle that beats devaluation far more than traditional portfolios. A Forex Managed Account is an investment portfolio, privately owned by an individual or institution, but managed professionally by experienced traders in the global currency market.

Here are a few advantages of a forex managed account:

You also have access to check the activity of your account 24 hours around the clock showing you the net value via internet.

You are not affected by the declining value (prices) of any of the currencies your trader will invest in.

You earn above average returns on your investment.

Your funds are kept in a world-wide accepted convertible currency at a first class bank.

You are the only person having access to your account.

Due to all these reasons, I believe that investment portfolios are an excellent foreign exchange generating opportunity for developing countries.