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Forex Articles |
Written by TheLFB-Forex.com |
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The US dollar index (USDX) is an important analytical tool for traders in just about any market. The USDX is actually a futures contract which means that if you have a futures trading account you could trade this instrument like corn, oil, gold or currency futures contracts. However rather than trading the USDX most retail traders use it as way to analyze the relative strength or weakness of the US Dollar in general. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Trading the OTC (over the counter) currency markets offers an opportunity to hedge stock and bond investing, but really is more of a traded market following the ebbs and flows of global commerce than it is an investment arena to plan retirement from. Getting to know six major currency pairs would seem an easy task when compared to the tens of thousands of stock and bond options available for analysis. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Forex traders hear a lot about Risk; whether the markets are tolerant, averse, or neutral. It is a headline that is bandied about on a regular basis. Quantifying the value of risk, and its forex impact, may be so much harder to do in the trading arena, than reporting each day on whether the herd was charging towards, or away from risk. |
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Forex Articles |
Written by TheLFB-Forex.com |
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The U.S. session, trader's daily 09:45 EDT question; "Oh dear, do we now want to take a U.S. based trade and run the risk of a price move stranding things with no momentum, as 80% of U.S. sessions do?" The law of probability says that U.S. trade will not follow through with sustainable breaks on new positions, and with what came before the Wall Street open, we already have seen that the bullish S&P start could literally go anywhere. TheLFB equity tracking system shows that the main components that we use to gauge S&P momentum has only four out of thirty companies trading in the green. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Historically speaking, crude oil and the Canadian dollar have had a very strong relationship, most of the time, the two assets having a high degree of correlation. This can be explained by the fact that Canada holds the second biggest oil reserves in the world after Saudi Arabia. Moreover, a large amount of these oil reserves are pumped into the United States, making Canada the biggest energy source for the U.S. economy. Thus, investors focus on crude oil prices to gauge the Cad’s direction of trading. |
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Forex Articles |
Written by FX Solutions |
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Technical analysis is sometimes studied as if it contains a grain of secret knowledge or portrays an intrinsic truth about currency movements. Often it is said that a specific chart formation will produce a specific price movement. Technical analysis does nothing of the sort. A chart is a reflection of past prices, nothing more. In itself a graph cannot predict future price movements. A currency does not trade up or down because of a formation on a chart. It moves because market participants make basic assumptions about future price behavior based on the record of past price action. A charted history of price action is the cumulative story of thousands of trading decisions; it is a record of the past behavior of thousands of individual traders. |
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Forex Articles |
Written by TradersChoiceFX |
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Statistically speaking, correlation is the measured relationship between two units over a series of time. Correlation is measured on a range of -1 (perfect negative correlation) to 1 (perfect positive correlation). A positive correlation implies that the two units move in similar directions, the higher the correlation the closer and more accurately these moves are. Conversely, a negative correlation represents opposite movements with a smaller (more negative) number representing a stronger relationship between the opposite movements. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Traders are at a stage in the market cycle that is one of the most frustrating to deal with, and where the most money gets squandered trying to work things out. This stage is when we go through a phase of consolidation, moving sideways consolidating the recent moves made, while anticipating a continuation of the previous trend. Consolidation can extend itself so far, and for so long, that it actually turns naturally into distribution, (where the asset starts to get sold as the realization that the original trend has expired), when there is no more forward momentum. Add in low volume levels, as we have right now, and volatility starts to decrease a little. As market participants get comfortable with the status quo. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Trading the OTC (over the counter) currency markets offers an opportunity to hedge stock and bond investing, but really is more of a traded market following the ebbs and flows of global commerce than it is an investment arena to plan retirement from. Getting to know six major currency pairs would seem an easy task when compared to the tens of thousands of stock and bond options available for analysis. But it seems that it is not necessarily how each currency will move against the Usd; more importantly it seems is knowing when the market will have momentum is key to not getting caught in reversals and snap-backs whilst leveraged at 100:1. |
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Forex Articles |
Written by TradersChoiceFX |
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With thousands of Metatrader EAs out there, it can be tough to cut through the noise and find one suitable for your trading style and risk tolerance. To help you in this search, I've compiled the statistics that many traders find to be very beneficial when analyzing any Metatrader EA. |
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Forex Articles |
Written by BKTraderFX |
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In this past Friday's day trading session in our chat room many subscribers asked me to explain in detail my approach to short term trading. So I could think of nothing better for an end of the year column then sharing with you my evidence based approach to the markets. Before I begin let me preface by saying that I am the first to admit that this trading technique is far from bulletproof. Markets at their core are simply pools of sentiment and can therefore be wildly irrational and unpredictable. Nevertheless, over the long run trading is a game of probabilities and I try to put the odds in my favor every time I trade. As Daymon Runyan once said, "The race is not always to the swift, nor the battle to the strong, but that's the way to bet." |
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Forex Articles |
Written by Kathy Lien |
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Quantitative Easing (QE) are the latest buzz words in the financial markets. It is important to become intimately comfortable with these words because they will be the catch phrase of 2009 thanks to the latest interest rate cuts by the Federal Reserve and the Bank of Japan. |
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Forex Articles |
Written by Online Forex Trading |
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One of the most popular currency trading strategies in recent history, the carry trade has been successfully used by traders for years. With recent market conditions, this very popular strategy is beginning to look like a losing proposition. Traders find themselves wondering is this strategy ever going to be back en vogue or will it remain taboo for generations to come? The answer is murky at best and highly dependent on the global economy and the foreign exchange market. Let's start to evaluate this by taking a look at current market conditions. |
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Forex Articles |
Written by Online Forex Trading |
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Increased volatility leads many traders to seeing an increase in trading opportunities. The huge market swings trigger thoughts of monumental upside, but also for potential loss especially if traders do not take the necessary precautions. During times of volatility, traders need to adjust their strategy to compensate for erratic market. When trading during these market conditions, traders should follow the rules below. |
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Forex Articles |
Written by BKTraderFX |
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About two weeks I went on CNBC and predicted that range will rule the currency markets for the foreseeable future. The price of EURUSD at the time of broadcast? 1.2630. The price of EURUSD at close of trade today? 1.2590. So range reigns in the currency market as every rally fails and every decline proves false breaking the hearts of both bulls and bears and that dynamic will probably last for the rest of this year. Thus with little new to say and holiday shortened week ahead of us I thought we'd change the format this week and skips the price action review concentrating instead understanding the basic building blocks of successful trading. |
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Forex Articles |
Written by BKTraderFX |
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I love to trade. 10, 20, 30, 40 round turns per day - the more the merrier! After all anyone who is really honest with themselves will admit that we trade not only for money, but for excitement. For a trader there is nothing sweeter than having the market go your way. Its our drug of choice and we are all junkies to one degree or another. |
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Forex Articles |
Written by BKTraderFX |
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One of the great ironies of life is that as traders we often trust ourselves least of all. Most traders (myself included) approach the whole enterprise with deadly combination of overweening sense of arrogance in our ability and underwhelming sense of confidence in our trade setups. When it comes trading no one can second guess or sabotage us better than ourselves. |
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Forex Articles |
Written by TheLFB-Forex.com |
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The Cad has a unique trading style, moving only one third of the trading day, during the U.S. session. For the rest of the time, the pair tends to hover around a price level, be it the neutral pivot point, a moving average or a support/resistance level. Lately, however, the Cad has started to move during the overnight sessions as well, but the volume continues to be low and insignificant. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Usually, when a bank wants to make a loan for liquidity needs it has two options: either borrow money from the central-bank, through the open market operations, or call another bank to lend money at the LIBOR rate. The London Inter-bank Offered Rate or LIBOR is the reference rate at which banks lend money each other. A major distinction between those two would be that banks need collateral in order to access money from the central bank, while there is no such need when accessing funds from a fellow bank. This would imply that money accessed through the LIBOR rate, would be more expensive (a higher interest rate) because the loans are not secured. |
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Forex Articles |
Written by TheLFB-Forex.com |
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The U.S. economy is now in the Trough phase of the business cycle, after it experienced a steep decline in the last quarter of 2007 and in the first quarter of 2008. The economy was helped in finding a bottom in the second quarter of 2008 by the rebate checks and the strong exports, but the outlook is not too great either. The economy is expected to crawl into the second half of 2008 and find a decent pace of growth only somewhere later in 2009. In the first months of the contraction phase the global economy seemed resilient to the U.S. slowdown. |
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Forex Articles |
Written by TheLFB-Forex.com |
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Central banks are at the heart of the financial system of any given country in that they are the authorities controlling the supply of money, and therefore control how a regions economy functions. They evolved from the lack of stability in financial market that ruined a lot of economies during the 19th century. The first central bank was the Swedish Riksbank, which was created in the 17th century, with many following in the 18th and 19 century. The U.S. Federal Reserve appeared at the beginning of the 20th century. Over time, the roles of central banks in different countries have developed differently. |
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Forex Articles |
Written by TheLFB-Forex.com |
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There have been a lot of headlines recently in regard to Treasury debt and how it will be financed over the coming years. The Federal Reserve has a mandate of full employment and inflation control, and they use Treasury notes as their tool to deliver that mandate. In this article Jack Jones, a founding member of TheLFB-Forex.com and senior commodity analyst gives an introduction to the bond market, and Treasury Note, mechanics. |
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Forex Articles |
Written by Thomas Long |
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One of the best technical tools we can use in our analysis is the status other currency pairs. If you are of the opinion that because of fundamental reasons the US Dollar will weaken, your next step would be to find the currency pair that gives you the best chance for a profitable trade. |
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Forex Articles |
Written by IFTC Financial Studies |
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Last week I was reviewing a website which has a trading signal program for those investors who prefer to not being involved in confusing market analysis and I respect them because such services normally will bring them more time to do other important things in their daily life. But the interesting thing was the most of signalers did not actually place a stop loss point on their recommendations. Is that so because they know they are right all the time? Or that's because they did not lose half of their trading account in an unexpected slump of 200 hundred points and a single trade. |
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Forex Articles |
Written by David Rodriguez |
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Did you know that the Canadian dollar has a very unique trading characteristic at the end of every month? According to our statistical analysis, we found that over the past 10 years, USD/CAD tends to fall in the last week of the month with a 95 percent confidence level. A more granular look at the data reveals that this drop is predominately concentrated around the 24th and 25th day of every month. Interested in knowing why this happens? |
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Forex Articles |
Written by Cornelius Luca |
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The universe of foreign exchange has expanded dramatically since entering the new millennium and its future remains golden. Fresh from the pruning dictated by the introduction of the euro, the wave of banks mergers, and the emerging market crisis of 1998, currency trading benefited greatly from the equity crisis in the aftermath of overinvestment in tech stocks in the late 1990s and the Y2K brouhaha. |
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Forex Articles |
Written by Adam Rosen |
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The FX-market will develop distinctive trends from time to time, as a result of the underlying fundamental factors which make up each currency within the pair traded. Often times these trends occur as one currency offers a significant higher interest rate, which continues to draw investment capital out of another other currency with significantly lower rates. In the midst of these long term trends, the market may establish a number of consolidation patterns. |
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Forex Articles |
Written by Adam Rosen |
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The (FX) market follows a steady cycle of oscillating between a range bound and trending environment, on a long and short term basis. During range bound markets, the buying and selling forces remain more or less equal, and therefore compress the market into a sideways trading pattern such as the triangle consolidation pattern shown below. Once the market reaches a critical point, either the buyers or sellers overtake the opposing side, and force the market into a new trend; to the upside or downside. |
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Forex Articles |
Written by Adam Rosen |
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When the basic applications of technical indicator fail to explain the current market climate, we can experiment with a new and fresh look at the charts. The following (1-hour) chart shows a steady downtrend, with its expected support and resistance levels. Since the trend is to the downside, we should place more emphasize on our current resistance level; which is drawn by connecting the two most significant high prices. |
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Forex Articles |
Written by Jim Wyckoff |
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The largest traded "market" in the world is not the U.S., Japanese or European stock markets. It's the foreign exchange market. It's also called FOREX for short, or called the cash currency or spot currency market. Speculators can and do trade this huge market, in which over 1 trillion dollars (and other currencies) can change hands every day. |
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Forex Articles |
Written by Adam Rosen |
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From time to time, the FX-market will create a trending market environment, perhaps as the result of a disparity in interest rates among the two currencies within the pair traded. When this trend occurs, it may be in our best interest to simply align our own trading account in the same direction, and take advantage of this trend for as long as it takes us. |
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Forex Articles |
Written by Adam Rosen |
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Many traders, from the individual speculator to the large fund will focus on the large round figures or round numbers when applying their analysis to the FX-market for a number of reasons. Option traders tend to select these price levels whether their exercising American, European, or Exotic options, as well as the placement of protective stop orders. |
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Forex Articles |
Written by Ian Copsey |
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In general Candlestick charting developed in the futures and stock markets and thus many of the patterns or techniques are suited more to these markets. Many still claim that Candlestick charting can be applied to the Forex market but there are limitations when the technique is used in Forex charts. |
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Forex Articles |
Written by Ian Copsey |
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Let's get this straight. Technical analysis is a wide ranging group of techniques which obtain information from price action or derivatives of price action and provide indications to the analyst on the expected direction of price. The basic concept that is often said is that it is based on the assumption that market participants will react in the same way to certain events in the market and since these form patterns, once a pattern is recognized it can be projected forward to predict the next move. In a way this is correct but apart from simple pattern recognition it doesn't really explain the concept sufficiently well enough to make it believable. |
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Forex Articles |
Written by Ian Copsey |
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I often hear traders claim that it is impossible to forecast price movement. I can categorically claim that it is possible, and have considerable success and good accuracy in the process utilizing technical analysis in 100% of my forecasting. Economists of course laugh at the idea that there can be any other method than applying economic theory. |
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Forex Articles |
Written by Boris Schlossberg |
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Typically, when multi-strategy hedge funds head to the currency markets to raise funds they will liquidate their most profitable positions first. Over the past six months this has inevitable meant carry trades. For example since its short term bottom on May 17th, USD/JPY with its 500 basis point positive interest rate spread, has appreciated more than 8% rising from 109 to 118. GBP/CHF - another large carry trade pair with a 300 basis point positive spread - has risen more than 1000 points or better than 4% over the past 3 months. |
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Forex Articles |
Written by Jimmy Young |
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This simple exercise will increase Forex profits 100% and works for 99% of all short-term FX traders - stop trading so much - widen out your stops - widen out your profit targets - and only trade in the direction of the trend indicated by 4 hour chart. |
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Forex Articles |
Written by K Ronald |
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What moves Forex? Conventional thinking would imply economic fundamentals or factors such as the strength of a country's economy, which contributes to currency flows. Therefore, one would assume that everyone else would buy the US dollar against the British pound. Why not? The US economy is the largest in the world while that of Great Britain has fallen to fifth, behind the US, Japan, Germany and China. |
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Forex Articles |
Written by John Forman |
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This particular article focuses on observable trading patterns in European currencies, ones based on the calendar. There is some hesitancy to refer to them as "seasonal" patterns, as one would with commodities, for the simple reason that they are not based on some kind of easily discernable pattern of supply creation. |
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Forex Articles |
Written by Shawn-Elyse Tulac |
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If one first takes a look at the market from a monthly perspective, it can be seen that USD/JPY and the JPY-based crosses have months in which they demonstrate clear tendencies. Figure 1 outlines this. The graph takes a month-by-month look at USD/JPY since 1999 (seven years total), which encapsulates the time since the launch of the year, an important watershed moment in the forex market. |
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Forex Articles |
Written by Abe Cofnas |
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The price action in Gold has been the focus of deserving attention, yet further insight can be gained from an inter-market perspective. The usual historical inverse relationship between the USDX, US Dollar Index, and Gold has been out of sync. Both Gold and the dollar have been strengthening. We can see this in the chart below. But this inverse relationship is not likely to last. Is this an omen for a dollar retracement and a Gold sell off? |
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Forex Articles |
Written by Abe Cofnas |
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The market rewards those on the side of surprise. Traders, particularly in Forex, try to avoid surprises. This is not in itself surprising because joining the crowd, is a defensive action that occurs everywhere in nature. A swarm of bees, a flock of birds, and a herd of sheep, provide individual members protection by being part of the larger group. As we enter the last month of 2005 the Forex crowd around the US Dollar is large- but is it stable? Perhaps its time to look beyond the comfort of the crowd. |
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Forex Articles |
Written by Abe Cofnas |
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We are arriving at a convergence of Technical and Fundamental factors pointing to greater trading opportunities in the EUR/USD pair. From a technical point of view the Daily EUR/USD has been descending from the high of 1.25 to recent two year lows near 1.16. Are we at a bottom? While we can't predict a bottom we can see that opportunities to buy the EUR are providing over 100 pip daily ranges. It's getting easier to go counter trend. |
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Forex Articles |
Written by Abe Cofnas |
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When markets move, particularly in Forex, they move fast. We all have witnessed breakouts and have had the occasion to lament a trade that got away. The beginning trader sees breakouts as a way of riding a strong wave of volatility and providing a quick profit. The problem with the strategy of playing a breakout is that breakouts are technically unstable. They present difficult questions to answer, such as: How long will it last? Especially when there is an absence of news, the question of what caused it is difficult to determine. The better way to trade a breakout is letting the breakout occur and waiting for a subsequent pattern to emerge. Often a Fibonacci retracement pattern emerges, providing trading set-ups. Let's look at some patterns. |
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Forex Articles |
Written by Abe Cofnas |
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Why some traders prefer trading one of these pairs versus the other is almost a matter of personal preference. Both pairs will reflect global sentiment regarding the dollar. As a result, it is usually the case that they will share the same trend patterns. If world reaction to economic news is positive for the US economy, as a general rule, both the Euro and the GBP will tend to weaken. The chart below, for example, shows how the EURUSD and the GBP have moved on the 1 hour pattern. Notice how similar the patterns are. The hour charts below show that both pairs provided a similar reaction to the Nov 4th economic release of the non-farm payroll report. |
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Forex Articles |
Written by Darrell Jobman |
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Tired of the vagaries of stocks or the volatility of futures such as energy or gold? Then you might be a candidate for the largest traded "market" in the world. It's not the U.S., Japanese or European stock markets but the foreign exchange ? or forex or just FX ? market, also called the cash currency market. |
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Forex Articles |
Written by Abe Cofnas |
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Until recent years, the opportunity to put on a trade was governed by the cycle of day and night. But a unique characteristic of Forex trading is its round the clock sequence of trading. Starting Sunday when the sun rises in Asia, until Friday late afternoon, when the New York markets close, Forex trading is available. So the question arises, what is a Day trade in Forex, if technically Forex is a continuous week of trading? To answer that question we do not need to delve into the nature of human circadian biorhythms. |
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Forex Articles |
Written by Abe Cofnas |
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A recently published book- The Psychology of the Foreign Exchange Market, Thomas Oberlechner (John Wiley and Sons Ltd) provides the results of research on how professional traders view the markets. In Chapter 7, Professor Oberlechner focuses on how Forex markets are characterized with different metaphors. Metaphors are an important way people organize information, as well as form their own expectations of the market. Professor Oberlechner cites the main metaphors used by Forex traders. Forex is like the following: a Bazaar, Machine, Living Beast, Gambling, Sports, War, and the Ocean. Many of us have probably used one or more of these concepts to characterize the Forex market. |
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Forex Articles |
Written by Abe Cofnas |
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While most Forex traders concentrate on the big 4 Major, which include theEUR/USD, USD/CHF, GBP/USD, and USD/JPY, the opportunities presented by other currency pairs should not be overlooked. An emerging example is the USD/CAD. The "loonie" as it is called, is a classic case where a currency pair reflects theunderlying fundamentals of the economy of that currency. In particular, the recentincrease in prices in the crude oil and the general upward trend in commodity prices has contributed to a strengthening of the Canadian economy. |
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Forex Articles |
Written by AC-Markets |
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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. |
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