Trade Away to Prepare for the Rainy Day

By Rick Amorey

Thinking of the future is hard, especially when you are constantly bothered by the spending of the past. Why think of putting more money into your savings when you are still constantly reminded of your student loan? How can you think of how you'll spend your retirement years if you have to worry about mortgages today?

In this time and year, even the current events present problems that will make you think twice before investing for the future. What if the total amount you have from ten years of frugality devalues by more than 50% in the stocks in less than a month? With the recession in full swing, this is unfortunately a very likely scenario.

That is why many people live for the moment, rather than think ahead and invest. It is simply easier to think of this month's bills, or this year's financial situation, then think of what may happen in the years or even decades to come. I don't blame them for thinking this way, but I also feel sorry for them because of this oversight.

You see, as humans, we will all face the reality that we will all get old eventually. And when your body has wrinkled and your bones are aching, you just wouldn?t be able to work as efficiently as your younger peers. Unlike other petty concerns, this is reality, and the best course of action at that time would be to rely on your investments' yield.

Obviously, you can't do that if all your money is stored in simple savings accounts with negligible interest rates. So think of investing as saving up for that rainy day; it may seem like it's so far away, but that doesn't mean that it does not matter at present. Save up, invest, and make wise decisions. Who knows? If you do it well, then you may have the capacity to retire earlier than expected. - 23167

About the Author:

The trading business carries no guarantee that you'll profit, and don't let anyone tell you otherwise. Rick Amorey instead suggests the comprehensive program of Emini Trading. Build up your portfolio with the help of Emini Trading System, and watch your money grow like a carefully monitored seedling.

The effects of Politics on Forex

By Stuart Baker

When you think of forex and its contributing factors, one that is often forgotten but plays a very large roll, is Politics.

There are endless political issues that can cause a currency to go up or to go down, traders take note of this as it affects their intentions to dabble in a particular currency. Here are some examples to better explain this.

If, for example, a particular government is quite unstable, that government could in fact change tomorrow without anyone knowing exactly why. They do know however, that as the government is so unstable a change could have adverse effects on economic growth. Using Zimbabwe as an example, they have a ten million dollar note, yet its value is almost nothing.

If a new government that is known to be more economically responsible, then this would have a good effect on the Forex market. This means that traders believe that when they invest in this particular currency, it has a good chance of going up over time as there won't be any tragic currency issues because the economy has responsible people at the wheel.

Interestingly enough, when there are a lot of problems going on in the economic world, one of the currencies that are always gobbled up is the Swiss Franc because it is known to be very safe.

These currencies that people call 'safe havens' are ones that might not have as much movement because they're so steady, but they're safe to put money into. They won't collapse the next day. The Swiss Franc is especially an example of this because Switzerland is an isolationist.

It is important to note these kinds of political situations as a trader. But there are more economic factors that play a role in how the Forex market behaves. - 23167

About the Author:

Stuart Baker has been online forex trading for a number of years and has used a number of different expert advisors. One such robot which has been designed with the current economic environment in mind is The Forex Phantom. You can visit his blog here at The Forex Phantom Blog

The Essentials of technical Analysis: Part II

By Jack Haddad

Charting:

The time frame used for forming a chart depends on the compression of the data: intraday, daily, weekly, monthly, quarterly, or annual data. Traders usually concentrate on charts made up of daily and intraday data to forecast shorterm price movements.

The shorter the time frame and the less compressed data is, the more detail that is available. While long on detail, short term charts can be volatile and contain a lot of noise. Large sudden price movements, wide high-low ranges and price gaps can effect volatility, which can distort the overall picture. Long term charts care good for analyzing the large picture to get a broad perspective of the historical price action. Once the general picture is analyzed, a daily chart can be used to zoom in on the last few months. Four of the most popular methods of displaying price data are by the following charts: line bar, candlestick, and point & figure. The line chart is one of the simplest charts. It is formed by plotting one price point, usually the close. For that matter, I don't favor them because I personally consider the open, low, and high to be as important as the close in technical analysis. However, at times, only closing data are available for certain indices, thinly traded stocks and intraday prices. Bar charts are perhaps the most popular charting method. The high, low, and close are required to form the price plot for each period of a bar chart. The high and low are represented by the top and bottom of the vertical bar and the close is the short horizontal line crossing the vertical bar. On a daily chart, each bar represents the high, low, and close for a particular day. Weekly charts would have a bar for each week based on Friday's close and the high and low for that week. Bar charts can be effective for displaying a large amount of data.

Using candlesticks, 200 data points can take up a lot of room and look cluttered. Line charts show less clutter, but do not offer as much detail (no high-low range). The individual bars that make up the bar chart are relatively skinny, which allows users the ability to fit more bars before the chart gets cluttered. If you're not interested in the opening price, bar charts are an ideal method for analyzing the close relative to the high and low. In addition, bar charts that include the open will tend to get cluttered quicker. If you're interested in the opening price, candlestick charts probably offer a better alternative. The beauty of Point & Figure charts is their simplicity. Little or no price movement is deemed irrelevant and therefore not duplicated on the chart. Only price movements that exceed specified levels are recorded. This focus on price movement makes it easier to identify support and resistance levels, bullish breakouts and bearish breakdowns. Contrary to this methodology, Point & Figure charts are based solely on price movement and do not take time into consideration. The topic on candlestick charting is broad and beyond the scope of this article. This method of charting originated in Japan over 300 years ago, and have become quite popular in recent years. For a candlestick chart, the open, high, low, and close are all required. A daily candlestick is based on the open price, the intraday high and low, and the close. A weekly candlestick is based on Monday's open, the weekly high-low range, and Friday's close.

Trendlines:

Trendlines are an important tool in technical analysis for both trend identification and confirmation. The general rule in technical analysis is that it takes two points to draw a trendline and the third point confirms the validity. An up trendline is formed by connecting two of more low points. The second low must be higher than the first for the line to have a positive slope.

Up trendlines act as support and indicate that net-demand (demand less supply) is increasing even as the price rises. A downtrend is formed by connecting two or more high points. The second high must be lower than the first for the line to have a negative slope. Down trendlines act as a resistance and indicate that net-supply is increasing even as the price declines. - 23167

About the Author:

Dr. Jack Haddad, MD, MBA has been professionally trading the stock market since 1997 and had an annualized return of 39.4%. Dr. Haddad has recently launched MD Capital Management, an Investment Fund with Charles Schwab. The fund utilizes option hedging techniques to generate returns while minimizing risks. For more info, visit Jack's online group: MD Capital Management.

Getting Started in Forex Trading

By John Eather

Investors who realise how to apply a proven system can benefit from the foreign exchange market. This article's aim is to get you set off on your way with Forex basic principles so that you can make the best of this unbelievable market.

In days gone by, foreign exchange trading was limited to national banks and large corporations. All of this changed in the 1980s when the rules were modified to allow investors of modest means to join in by using margin accounts. Margin accounts are what have made Forex trading so popular. With a 200:1 margin account, you are able to control $200,000 with an investment of only $1,000.

Forex is undeniably difficult, therefore it's crucial to acquire the knowledge you want for the purpose of making sound decisions. Although Forex trading is easy to get going in, it has some risks. You had better learn all you possibly can about the Forex market ahead of starting out to trade.

Forex traders typically require a broker to manage transactions. Almost all brokers are respectable members of large financial institutions. A reputable broker will be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) for protection against fraud and predatory trading practices.

Opening a Forex account is as simple as completing a form and providing the required ID. This form will include a margin agreement that explains that the broker may interrupt any trade that seems too risky. This is designed to protect the broker's interests, since most trades are carried out using the broker's funds. Once your account has been accepted, you are ready to fund it and get started with trading.

Many brokers provide a number of different types of accounts to accommodate the needs of individual investors. Mini accounts let you get started in Forex trading with a little as a $50 investment. Standard accounts have minimum deposit requirements ranging from $1,000 to $2,500, depending on the broker. The amount of leverage available varies from one kind of account to another. High leverage accounts let you control greater sums of currency.

Trades aren't charged a commission, allowing you to trade as often as you like each day without having to pay up expensive brokerage fees. Brokers make their profit by way of the "spread" which is price difference of the bid and ask.

Virgin traders are strongly advised to get some experience in Forex by executing "paper trades" for a time. Paper trades are fundamentally practice transactions that don't require real money. They allow for a way for you to determine how the Forex system acts whilst you discover how to use the large range of software tools at the service of virtually all Forex brokers. - 23167

About the Author:

Before you begin online trading forex, make sure you check John Eather's excellent free ecourse and reports on Forex Trading. Receive the latest info on the most effective trading robots and trading systems available on the market today. Go to MoneyMakingFxTrader.com to learn more.

Where To Place Stop Losses?

By Hass67

The forex markets are highly volatile. There is so much noise in the intra day forex market; it becomes difficult for new retail forex traders to know where to put the stop loss. The prices in the intra day market keeps on jumping 10-20 pips for no apparent reason.

Most of the new forex traders get frustrated to find their stop loss being constantly tripped due to noise even when the market is going in the anticipated direction.

A static 10-20 pip stop loss is an arbitrary choice many traders make. Many new traders also use Trailing Stop Loss. Place your trailing stop loss too close and you will find your stop hit too early. Place it too far and you will have to forgo potential profits if the price retraces.

You should place your stop loss on dynamic levels. Most of the professional traders do use stop loss but mostly place it on their computers making them invisible to their brokers.

No body will ever tell you that your broker may be stop hunting against you. When a broker finds many stop loss orders at a particular rate on his price feed; he will try to trip these stops using a momentary blip in the feed. If you complain the broker will explain that the momentary spike happened due to a sudden large transaction in the market.

Do you know this many professional forex traders only use a stop loss in their mind. They plan entry/exit for each position. Keep on monitoring it changing, the stop loss in their mind as the rate fluctuates. When they reach the desired outcome, they close the position. With experience, you will also learn to do the same.

Using dynamic stop losses such as Moving Averages, Bollinger Bands, SARs etc is a better way to reduce your risk while allowing the markets to do what it wants.

With more experience, you will learn that placing fixed stop losses actually harms more. Rather than helping, using a fixed stop loss can hurt you more emotionally, psychologically and profit wise.

Try not to trade just before or after a major economic news release. Try not to place stop loss close to/at round numbers. And try not trade in times of thin liquidity in the currency markets.

Stop hunting is something that you should know. Many forex brokers pry on new traders and keep on tripping their stop losses terming it market noise. - 23167

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in investing; stock and forex trading. Discover a revolutionary new broker buster Forex Robot. Learn Forex Trading!