Thursday, July 20, 2006

Crossing currency in Forex

“Crossing currency” in the Forex market is one of the most profitable ways to earn money for many investors. This market is unlike any other type of market in the world. The foreign exchange market is extremely liquid and involves over two trillion dollars everyday. The top three currencies that are most traded on the market are the US dollar, the Japanese yen and the Euro. All of these currencies are traded the most out of all other forms of currency.

With the foreign exchange market being so large, it is very liquid. Crossing currency allows a large amount of flexibility for the trader and investor. The market allows the ability to buy and sell currency quickly so that they are never stuck in any investment. When investors use online trading as their form of crossing currency, the trading platform can be pre-set to the preferences of the trader. If the trade is not going as expected, the platform can be set to stop the trade, allowing the trader to lose less money while using the Forex.

Learning to trade on the foreign exchange market can be both exciting and profitable. In order to trade successfully it is essential to understand the way the market works, the terminology and the trends. Brokers and financial institutions are often the best way for traders to learn how to use it for profit.

When an investor or individual wants to trade one type of currency for another, it is called exchanging currency, or crossing currency. Currency crossing is the main goal of trading on the Forex market. Many investors trade currency to make a profit. When a certain type of currency is bought at a low exchange rate, the currency can be sold once the rate increases to turn a profit.

Thursday, July 13, 2006

Pivot point in Forex

One of the tools used in forex, to enhance your profits via technical analysis, is the Pivot Point calculation.

A pivot point literal definition is a point of rotation. The prices used to calculate the pivot point are the previous period's high, low and closing prices for a security. These prices are usually taken from a stock's daily charts, but the pivot point can also be calculated using information from hourly charts. Most traders prefer to take the pivots, as well as the support and resistance levels, off of the daily forex charts and then apply those to the intraday charts. If a pivot point is calculated using price information from a shorter time frame, this tends to reduce its accuracy

and significance. The textbook calculation for a pivot point is: Central Pivot Point (P) = Avg(High,Low,Close) Support and resistance

levels are then calculated off of this pivot point using the following formulas:

First level support and resistance:
First Resistance (R1) = (2*P) - Low
First Support (S1) = (2*P) - High

Likewise, the second level of support and resistance is calculated as follows:
Second Resistance (R2) = P + (R1-S1)
Second Support (S2) = P - (R1- S1)

Calculating two support and resistance levels is common practice, but it's not unusual to derive a third support and resistance level as well. (However, third-level support and resistances are a bit too esoteric to be useful for the purposes of trading strategies.) It's also possible to delve deeper into pivot point analysis - for example, some traders go beyond the traditional support and resistance levels and also track the mid-point between each of those levels.

Forex charts are very powerful, and so are the tools that derived from these charts. Learn to use them wisely and you’ll find out you can increase your profits.

Tuesday, July 11, 2006

Forex Trend Trading: Accumulation and Distribution

Forex market, like any other market, works in a very simple way. It accumulates in a certain area for awhile, and once the accumulation is over, it advances to a certain distance until distribution starts. Then accumulation happens again and advances to a certain distance again and repeat and so on.

Day trading may not yield the best results while the accumulation and distribution work out itself, being double-murdered by up and down moves, while the forex market starts advancing out of accumulation area, day trading is a sure way of cutting profit short. In general, day trading is not the best form of yielding the most profits in my experience contrary to what some writers who never made real money in this game try to say.

The safe and better way in making some money must be wait for "accumulation" to be over and ride the whole length of advance until "distribution" starts and reverse as the market dictates as a short-term trade for 2-10 days, as the case may be.

Please study 8 hour or 4 hour line charts or candle charts, especially the patterns and 20 MA inside the charts for a few months everyday, and you will discover what I mean by accumulation and distribution for short-term trades in the market. The market always needs this process, so you can decide what tactics you will use at a given stage.

The forex market may not always be there for you, but if you learn it’s behavior well, you can be there for him, and take the profits it hands out for those who read it well.

Wednesday, July 05, 2006

Today’s forex recommendations

A big forex site I visited wrote this segment today, about the EUR/USD:
“Advice: Today is the day for breaking last day consolidation. A lot of important data during all the day, and the culmination - FOMC Interest Rate Statement at 20:15 CET, followed by FOMC Interest Rate Announcement at 21:15 CET. We can see both side movements, but the market and the fundamental is more pro USD oriented (sell at current levels) and first serious support will be 1.2400 (50% ret.). Here we'll set first target. Largest upward movement after that is possible too so set stop loss at 0 if there opportunity for this. Good luck.”

The trade range, according to the site, of the day is predicted at 1.2400 to 1.2620, which means a pretty wide range. This range has several support points and of-course several resistance points.

The information publicized in these sites is very interesting, but I personally think you can draw your own conclusions out of the internet (news sites and other financial sites) with little financial knowledge. I mean - you really don’t have to be a forex genius with tons of skills to know that if the US is about to increase the rate, the euro would grow much stronger in the near future, and vice versa.

These sites mainly help the financial situation of those who run it, out of the banners and commercials. Forex is not the first thing they think about when they get up in the morning, it’s their pocket they think of…that’s why I wouldn’t place my money according to their recommendation only.

Wednesday, June 21, 2006

Forex Master - the story

Let me tell you something about Forex trading. I’m sure you heard about it in the last couple of months - but it passed you by. And you’re right, tons of figures and nothing seems to be appealing.

But…

I thought exactly the same ‘till I found out you can actually earn money out of this thing. As it appears, these sites and platforms allow you to be your own broker, and trade forex, stocks, quotes and other goodies in the global market, and you don’t have to trust anyone to do it for you. You can do it in the privacy of your own home or close a deal urgently in the office - you don’t have to be dependant on anyone else to take care of you interests.

Plus - its way easier than it looks like. You can be dumb as an ass - and by staying true and loyal to your strategy you will be a winner and earn yourself some more cash.

Seriously, I used to be just like that, didn’t want to even look at figures and charts, but now I take one snap look and I know what I should do with my money, so that in 20 days from today I’ll have a positive cash flow of about 10,000$ - and it’s just the beginning. The more you trade - you get better and better and know what you should do next time.

Forex, who’d have believed.