FOREX MARKET

When you trade in the forex exchange, you’re engaged with foreign stocks, currency and the goods of these nations. One country’s currency is weighed against the currency from a different country to figure the worth. The final worth of that currency is calculated when trading stocks on the FX markets. Many outside markets will be in control over the adjusted worth their country brings involving the currency, or money. Individuals who are often concerned in the FX market exchange accepts many large businesses, banking institutions international administrations and finance companies.

What are the things that make the forex exchange so different from the US stock market? A trade on the forex market is one between two countries, and it can take place worldwide. Each country involved should be either 1, that of the investor, and 2, the country the money is being invested in. The greater amount of transactions that occur in the forex market are going to take place through a broker, such as a bank.

What are the ingredients of trading in the forex market? The overseas market is comprised of a mixture of financial exchanges amongst nations. For those invested in the forex exchange generally trade in massive bulk with vast amounts of currency. For those deep into the forex stock market are likely to have companies who are cash businesses or are in the market of buying and selling liquid assets. The US market is massive but it is correct to think of the forex exchange as a giant in comparison than an individual market exchange in any one country. Those involved in the forex market are trading every single hour of every single day and sometimes on the week-ends.

You may be shocked to know the number of people that are involved in forex trading. In 2004, as much as two trillion dollars was the mean forex trading volume This is an immense number of trades for the number of daily dealings at a time. You can imagine how much one trillion dollars might be and multiply that by two, and this figure is the number of financial transactions every day on forex!

The forex market is not something new, as it has been used for over thirty years but with the introduction of computers, and the world wide web, the forex market multiplies as more everyday people and businesses start to understand the power of the forex market. Forex trading only makes up around ten percent of the total trades between countries but with greater popularity will come a greater volume.

When looking into trading in the Forex market, you will find a number of websites that offer different forex trading platforms for you to execute your trades on. Without knowing just what to look for, new traders often find themselves picking their forex broker without studying their trading platform, still hoping that they will get rich overnight. Don't let yourself fall into this trap. It is always best to paper trade or demo the forex platform before you put your own money up for the trade. Once you find a forex trading platform that works for you, you will be a step ahead of the game.

When trying out a Forex system there are a few things you should look for if you want the best Forex trading system for you. First, make sure that you understand how to use it. Forex is already complex on its own and if you get a trading system that is hard for you to understand, you aren't very likely to have good results with it. Make sure you can use every trading method available in the system before you try to use it. By understanding how it works, you will gain the advantage you need to make lots of money.

It is absolutely essential that you have a good working trading system when you are involved in the Forex method. The best way to figure that out is by using the system and keeping track of the results. However, like I said, always test on paper first. Be sure that the methods will work in any market for better trading endurance. Forex can be traded in both directions, up or down, so you want a system that will allow for that. There is nothing worse than being left out of the trade for half the time from a lack of a good Forex trading system.

Expect to start out slow and increase your trades as you earn. This will decrease your chance of risk while you are learning a new system. Remember, if you are not watchful of your trades, it is just as easy to lose as it is to gain in the Forex market. Be consistent and careful until you are sure the system works well.

The best Forex trading systems use the simplest trading methods. Although it is possible to make a killing very fast, you can also be killed just as quickly if the trade is too complex for you to grasp right away. After you learn how to make simple trades effectively, then you could benefit by trying out a few more complex situations. Chances are that you will earn your best profits with careful and consistent trades. You need a Forex trading system that has been proven to provide results like this to truly do well in the market.

Foreign exchange currency trading is a risky business with much to lose and much to gain. As a professional forex broker and personal trader, I have realized the fast profits this market can reap, while witnessing the dog-eat-dog nature of the beast, in which buyers lose their shirts every minute.

Whether you are a forex trader or just curious about forex currency trading, you owe it to yourself to separate the wheat from the chafe. The Internet is awash in foreign exchange currency trading websites whose sole existences are dependent upon ignorant forex investors. From get-rich-quick forex software schemes to free forex training, forex educational seminars, free forex signals, forex forums, and more, the fraudulence that surrounds the fx trading market is frightening.

Forex trading is very different from the U.S. stock market. The major differences include:

• Forex has no central exchange
• Forex trading can be done around the clock
• Forex has no overseeing regulatory commission, such as the SEC

The forex market is a wild, open arena without rules, laws, or a governing body. No one cares if your money is taken. No one will lose any sleep if you’ve been lied to. There are no repercussions if you’re treated unfairly. Investors trade at their own risk and have no legal recourse to enforce justice.

I know. I’ve been there. The scammers have burned me more than once. In an attempt to further my own knowledge, I fell for the magical software sales pitches and followed the crooked paths to the stolen treasures, only to be let down ad nauseam.

I served my time as a forex broker, which was an eye-opening experience. I heard and saw the manipulation of client profits that was business as usual. It quickly shifted my interest in trading and brokering forex to that of protecting forex traders. I redirected my efforts from studying daily forex signals to researching forex websites. I was determined to devise a resource on which forex investors could rely for honest, fair information exchange.

Know the Scammers

The best advice I can give is don’t trust anyone whose reputation you cannot validate and whose association is not legitimately tied to the actual forex market. This is especially important when selecting your forex broker.

The allure of trading forex can be overwhelming. It attracts many eager fx traders willing to gamble away their life’s earnings. Unscrupulous forex brokers, signal providers, fx educators, software peddlers, and forex frauds are waiting, with baited breath, to take your money and turn it into a profit for themselves – all at your expense!

The good news is that many forex professionals are honest and reliable, capable of assisting the most inexperienced fx trader succeed. Following forex signals and making profitable currency trades happens 24-hours a day, all around the world. The philosophy behind Forex Justice is to even out the playing field so everyone has a fair chance at winning.

Straight Shooting, Unedited Forex Reviews

Many Forex review websites are thinly veiled as informative, unbiased forex opinion forums. In actuality, they’re doing little more than championing their own causes. These supposedly neutral pages give the broker, forex trader, and interested parties a skewed view of reality.

Alternatively, Forex Justice is a revolutionary idea in forex trading. An open, two-way patented forex exchange system, reviews are considered from both the broker’s perspective and the trader’s. This unconventional method of publishing truthful forex stories to the investor and anyone else interested in forex has proven beneficial in reducing the number of forex scam websites and helped traders establish ethical business relationships.

This valuable tool, Forex Justice, doesn’t allow peer bashing yet encourages honest communication. Content is always reviewed but never edited so you get straight facts from real experiences. Learn about the way forex trades are conducted and quickly size up the scam artists. The more reviews we receive, the clearer the picture will become.

How the Two-Way Forum Works

Participants, including forex traders and others who have valuable information to contribute, submit reviews for consideration. Once approved, reviews are posted almost immediately. Vendors and professionals reply with comments in the aggregate to the reviews, addressing specific points or with general answers. The communication is limited to one reply per vendor or professional with a limitation on length. This encourages a fair, open forum, without back-and-forth bickering and unnecessary criticism.

Sign-up now and join the Forex Justice Forum. Only with the help of real-life forex scenarios and two-way communication, can we turn forex trading into an ethical, trustworthy investment option.

The Forex market is a great opportunity for those who like to make some extra money and even for those who would like to make a living through forex trading. However, the forex market is also a big opportunity for scams and rip off artists. Commonly seen Forex scams are useless trading robots, e-books, training courses, trading systems, buy-sell signals. Another typical scam type is when brokerage companies try to make more money through fake or unreal spreads.

We have created a collection of forex related products and services here to help people to distinguish between the legitimate, legal products and services from the scams.

If you would like to know about a product or service, or you would like to share your experience about a forex related product or service you have tried, you can browse the below category or simply make a search through our search box at top right side of the page, locate that program and submit your review. If you cannot find a product/service, maybe it is not listed here as of yet. So please click here and let us know about it. This can be your own product/service too.

We read all reviews before we allow them to be published on the site. We do not let products/services to be ranked higher or lower than their real place because of fake and spam reviews. We have seen many scam programs that are ranked high on other forex review websites because of the fake reviews that their owners submit.

News and economic data are the main drivers of market developments, but in a little different way than many traders think. While many novice traders expect important economic events and news releases to be reflected on the price immediately, complain about the irrationality of the market when that doesn’t occur and protest that trading the news is not possible, in fact it is possible, and extremely lucrative in the long term, if one is willing to wait for the payback to arrive. In this article we will take a look at various data types, and attempt to classify them according to a few basic criteria. We will also try to explain how news releases determine market prices in the long term, especially those of greater value and impact on the market. Finally, we will say a couple of word on short term news trading, and how this could be achieved on the basis

In the US most major news releases occur between 8:30 am and 10 am New York time, and consequently trading is also most active and volatile in this period. Option expiries, and market openings take place during this period also, when traders are busy at their desks absorbing and evaluating overnight data, attempting to place all the developments in a general context for usage later in the day. Since volatility is so high in this period, the profit/loss potential is also the highest. It is obvious that proper risk controls and money management techniques will play a major role in our trading method, if we want to avoid being caught in false breakouts and whipsaws.

The markets’ reaction to any type of data is unpredictable. This is not only the case when the news release is in line with analyst expectations, as published by news channels and financial news providers, but also when the release surprised significantly. Sometimes it’s not even possible to predict how volatile the markets reaction will be to the news release. Sometimes the market will move within a range of fifty or more pips in response to data released. Sometimes a 100-pip movements in the span of one or two minutes will be reversed and completely negated by the price action during the rest of the day. Conversely, while news releases are usually the most volatile periods of a typical trading day, a very unusual release may be welcomed with relative calm if the market decides to do so. What is the cause of all this great unpredictability?

During a news release a number of speculators will react immediately, hoping to gain a quick profit and exit. These will create a very brief ballooning of spreads and volume in the immediate term, but also will distort the underlying technical picture greatly. As these initial buyers or sellers exit, momentum traders will attempt to join in and fuel a more sustainable short-term trend with their actions. Depending on the time and liquidity in the market, they may well be successful, but sometimes they too are checked by previously unknown order layers that check the advance of the price. When these absorb the momentum traders, and short term speculative entrants, the initial reaction of the price may be reversed or negated also.

But while this is so, we do not imply that it is not possible to trade the news in the forex market. All that must be born in mind by the trader is that he’s engaging in a game of probability; he must be very well aware that there doesn’t exist a news release that will ensure that the market will move in this or that fashion. Stop loss orders must not be very tight, and leverage must be kept quite low, so that the order we enter can survive more than a few seconds of the initial shock reaction by short-term actors.

The two major problems of trading the news arise out of the difficulty in gaining timely information, and evaluating that in a fast enough manner to facilitate quick entry into a trade. Hence, it is clear that the trader must have a very good idea of what he expects from the news release. Will he only open a position if the data shock the market? What is the threshold value for the data, above or below which a trade is justified? How long will the position be held? Which technical levels constitute the take-profit, or stop-loss orders for the trade? All these must be discussed and determined even before a trade order is entered. News releases must not be periods when the trader will be hesitating and vacillating between the various paths he can take. Instead, he must act like a machine, with almost automated movements, so that he can be immune to the emotional pressures created by the irrational short-term behavior of the market.

The last issue with trading news releases is born of the unreliable nature of the first versions. In fact, studies have shown that the BLS (the Bureau of Labor Statistics), for instance, consistently underestimates job losses in a recession, and underestimates job gains at the beginning of the boom. Nor does the experienced trader have any trouble in acknowledging this fact: revisions which reverse the meaning and character of the initial release are not at all exceptional in the markets. The short-term trader is not much bothered by this fact, but it has great significance for decisions on the long-term positioning.

There are two ways of trading the news.

1.Long term: Several academic studies have established that the impact of some news announcements have their immediate impact spread over a period of weeks and months, instead of the single day in which the markets are thought to discount them. Non-farm payrolls, and to a greater extent, the interest rate decisions of the federal reserve are good examples for this kind of news flow. While the markets react violently and unpredictably in the short term, the mechanisms set up by low interest rates, and full employment (or conversely, high unemployment) have consequences that are relevant to many sectors of the economy, and trading them on a long term basis is certainly possible. The trader who uses this strategy will build up his positions slowly, and will attach greater value to low frequency releases (such as GDP reports), and will wait until the overall picture offers clarity, before he makes his trade decisions.

2.Short term: To trade news on a short term basis, the trader must have a clear criterion on what kind of news will justify a trade. Many news traders seek at least a 50 percent surprise in the data to consider the release tradeable. The novice trader, in turn, can use the initial period of his trading career for perfecting his money management skills. Trading the news on a short term basis can be easy and lucrative if the trader is disciplined enough to cut losses, and accumulate profits, but panic and mood swings, and undisciplined methodology will quickly erase all the gains through shocks and volatility.

These are the various types of indicators which have the potential to cause the greatest short term movements in the markets

Technical strategies aim to predict future prices on the basis of past developments. All that the technical analyst is interested in is the price, and news, or data have no bearing on his decisions. In this article we will examine some of the basic concepts behind technical strategies, and will attempt to summarize the main tools used by technical traders in braking down price patterns.

As we noted technical analysis chooses to ignore everything except the price in its decisions. A technical strategy will usually involve several phases, each clarifying some aspect of the price action, until a credible entry or exit point is determined. The phases for this are.

1. Identify the type of the market and the type of the trade..

Needless to say, the first step in technical analysis must be the identification of the market with which the trader is interacting. After that he must determine the time period of the trade he will enter. What kind of charts will the trader use for his trade? Will it be a monthly trade, or an hourly one? If it’s a monthly trade, there’s no need to worry about the hourly changes in the price, provided that the strategy regards the present value as an acceptable monthly entry or exit point. Conversely, if the trade is for the short term, the trader may desire to examine charts of longer periods to gain an understanding of the bigger picture which may guide him with respect to his stop loss or take profit orders.

The trader will use trend lines, oscillators, and visual identification to determine the type of market that the price action is presenting. Strategies in a flat, ranging, or trending market are bound to contrast strongly with each other, and it is not possible to identify a useful strategy without first filtering the tools on the basis of the market’s character. Once this is done, and the time frame of the trade is determined, the second stage is -

2. Picking the technical tools

On the basis of the criteria discussed in the previous item, we must pick the appropriate technical tools for the chart we examine. If the market is trending, there’s little point to using the RSI. If it’s ranging, the moving averages are unlikely to be of much use. If the underlying currency pair is strongly cyclical (for example, if the currency is issued by a commodity exporting nation) the commodity channel index could be a good choice. If it is highly volatile, smoothing out the fluctuations with moving average crossovers could be very beneficial for identifying the trend.

Of course the list can be extended. The trader must refine his approach to trade over time by deciding on the kind of indicators which he understands best, and then combining them later to form a simple and concise method.

3. Refine the periods, and other inputs

Upon deciding on the technical tools, the analyst must decide on the periods, and ranges for which values must be supplied to the software. Today’s traders have many advantages over those in the past, but diligence and patience may not be one of those. As we’re so used to having everything automated and performed by the computer with no questions asked, many don’t even bother to tinker with the minutiae that can in fact be all the difference between success and failure for the trader’s analysis.

Thus, before going any further, the trader must check which periods, which values provide the pattern that is most fitting for the price action on the chart. For example, for the RSI, will we pick a period of 14, 10, or 7 for the chart we examine? Or what will be the periods of the moving averages that constitute the MACD indicator? These can only be answered through trial and error, and for each price pattern, a different value may be necessary.

4. Seek the signals

Once the technical tools are setup, we must now seek the signals that will show us the trade opportunities created by investor sentiment and temporary imbalances in the supply and demand for a currency pair. The signals that we seek are the ones created by the interaction between a number of indicators, such as that between moving averages, various oscillators, or between the price and the indicator. Our purpose is to confirm our ideas with various aspects of technical analysis. If there’s an oversold or overbough level, we will confirm it with a divergence/convergence. If there’s a breakout, we will seek to ascertain it with studies of crossovers.

We will examine the signals in greater detail a bit later, but in summary they are channels, crossovers, divergence or convergences, breakouts, consolidation patterns, the various price patterns like triangles, flags, and head and shoulders. We will keep our indicators simple, but we will make sure that the signals generated by them are examined and exploited to the full, allowing us to draw a complete picture of the price action.

5. Perform the analysis

After deciding on the signals and their meaning, we will perform our analysis by identifying actionable signals, and deciding on capital allocation in light of proper money management techniques. When analyzing the data we must make our utmost exertion to ensure that we focus on signals relevant to our selected period and trading plan. This stage of analysis will involve the separation of wheat from chaff, and data from noise.

6. Compare the results, execute the trade

After examining the various scenarios presented by the charts, and determining on which of them are actionable, the trader will compare them in terms of credibility and profit potential (for example, how extreme are the indicator values, how much profit or loss will be generated in case a take- profit or stop-loss order is realized?) Once that is done, he will pick the trade that offers the highest returns with the lowest risk on the basis of the technical scenario that is the most contrarian.

What the above implies is that, when a trend follower trades, he will wait for the corrections, acting on a contrarian basis to the short term movement, while conforming to the main trend. When he desires to bet against the trend, he will await the most extreme valuations generated by the trend, and when the momentum is highest, he will make a contrarian bet at the first credible reversal.

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A forex trading strategy is created by using many different types of price phenomena that are manifested on many different kinds of indicators. We will examine strategies later, but at this stage let us examine the signal types that are used to create them.

1. Channels

Channels are two parallel trend lines that constrain the price action in opposite directions. The upper line prevents bullish breakouts, while the lower line checks the bearish ones. A channel is a very regular formation, and offers great potential for realizing a profitable trade, but it’s also relatively rare.

Channels are used to generate signals that help us identify breakout points. If the indicator used to analyze the channel stayed above or below a certain level for a long period of time, a breakout can be confirmed by excessive values. But given how regular and controlled the price movement must be while inside a channel, the trader can devise many other ways of trading it, and some of his methods can be based on fundamental analysis too.

The existence of a channel will allow the trader to use other tools, such as overbought, oversold indicators, to generate additional signals. A channel also signals that market participants are expecting a major development to decide the direction of the trend, and that the trader must be alert about potential

2. Crossovers

Crossovers occur when one indicator’s value suddenly rises or falls below that of another one which is used as a signal line. Crossovers signal momentum change in the market, and are often used to generate trade signals that are more reliable than those indicated by single indicators.

In the hourly chart of AUD/USD we see the 14-day moving average shown by the yellow line falling below the 100- day moving average shown by red, and we notice that the price later made a major move in the same direction. Crossovers are not limited to one type of indicator, and of course, the trader can use them in many different situations for analyzing price patterns.

The disadvantage with crossovers is born of the fact that they’re fairly common, and thus prone to generate conflicting and false signals. Unless confirmed by other, more reliable phenomena like divergence/convergence, the trader should be cautious about regarding the crossover as an actionable signal.

3. Breakthroughs, breakouts

This signal is generated when a range or a consolidation pattern breaks down, allowing the price to move violently and rapidly in the direction of the breakout. Potential breakouts are identified first by direct visual examination (for instance, an uptrend is fluctuating around a price level for a prolonged period ), and then confirmed by the behavior of indicators (a very calm MACD registering strong values, or an moving average crossover).

A consolidation occurs when a trend fluctuates around a value for a relatively long period without jeopardizing its strength. A breakout is when a range pattern breaks down, and the price action is no longer constrained. A breakthrough is the situation where a previously strong resistance level is breached by an ongoing trend.

Consolidation, breakout and breakthrough may all occur on the price chart, or on the indicators themselves. The interpretation will differ depending on the significance of the levels breached (for example, the price breaking through a multi-year resistance line is more important than the RSI reaching a previously unbreached level.)

False breakouts are relatively common in the markets, and many traders try to avoid them by getting into the trade when the breakout is going through its correction phase. Deciding on the nature of a breakout will of course depend on probability analysis. Experience, and proper money management methods are our best friends.

4. Divergence/convergence

The tendency of all indicators to create false signals is well-known among technical traders, and to overcome this problem, traders have been looking at divergences between indicators, or between an indicator and the price for quite some time. Convergence occurs when successive values of two indicators are closer to each other with the passage of time. Divergence occurs when the values are farther apart as time passes. In both cases, the principle behind convergence/divergence dictates that the indicators make movements in opposing directions, and the phenomenon is used to signal that the ongoing trend is getting weaker.

In the above example of AUD/USD, we see that the MACD is making lower values even as the price keeps getting higher. In other words, the price action is not only comfirmed, but contradicted by the indicator. Traders seek these signals to decide on opportunities that offer a greater risk-reward potential.

Currencies are the basic building blocks of all economic activity. A grocery, a military contractor, a mortgage borrower, and even gangsters evaluate their economic plans in terms of currencies. Consequently, the forex universe encompasses all the other fields of financial activity including the bond, commodity and stock markets.

Most traders possess at least a basic conception of the relationship between forex and the stock markets. As large amounts of money is injected into the stock market, the resulting currency flows cause the value of currency pairs to fluctuate simultaneously. Similarly, commodity market trends have an easily demonstrable impact on the short term fluctuations of commodity currencies, and a slightly less clear impact on those of others. The same dynamics that cause these markets to influence currency quotes also ensure that fluctuations in the bond market affect the short and long term dynamics of the forex market powerfully, but there are also certain aspects peculiar to the bond market which we’ll try to examine in this article.

The bond market is very large, with the US treasury market reaching a size of about 10.7 trillion dollars as of December 2008. Needless to say, bonds are not issued by government entities alone, as townships, corporates, and many other types of institutions regularly issue their own papers to benefit from this vast and liquid market. Actors in the US treasury and corporate bond markets range from small individual savers to foreign governments with gigantic amounts to spend, and the impact of all kinds of economic developments is felt in the bond market on a daily basis.

What is the use of the bond market? For buyers of corporate bonds, the purpose is benefiting from the various yield options available while controlling risk exposure through bond ratings, and the maturity term of the paper bought. As bond investors are always higher in the payment structure in case of default or bankruptcy, many investors and traders choose to purchase bonds in place of stocks in order to achieve a favorable balance between risk and yield. Purchasing the bond of a corporation allows us to benefit from the growth of the firm while taking minimal risk, but at the same time minimizes our control over the capital lent, since bond investors have no say in how the management of a firm uses the borrowed funds. The significance of the corporate bond market is more limited for the retail forex trader than that of the treasury market. On the other hand, as corporate bond rates are powerful indicators of risk perception in the markets in general, the forex trader is well-advised to adjust his leverage in response to spikes in the rates of speculative, or low level investment grade corporate bonds. If sustained, such spikes would have long-lasting and deeper consequences for the economy at large, and recessions are often preceded by turmoil in the corporate bond market.

The role of the government bond market is different in a number of ways. First of all, we must keep in mind that, as long as a government possesses the legal right to create money, it is in no danger of defaulting on its obligations. Consequently, if there is anywhere a risk-free investment, it is clear that a government bond is the most credible candidate. Secondly, since government bonds are almost certain to be paid in time, they serve as a general benchmark against which all other kinds investments are measured. The success or failure of a professional money manager, for instance, is not measured in the absolute value of dollar gains or losses, but in comparison to the yield on the treasury bond of a comparable term. This method is useful because it allows us to evaluate the risk/reward ratio of an investment in a much more constructive way: if by holding a three-month government bond we can achieve greater returns than that offered by our forex manager, what is the point of investing anyway? Thirdly, the government bond market finances the spending of governments. Thus, fluctuations in this market have far greater significance for the value of a currency, since the changes directly influence the credibility of the government’s policies, and the sustainability of its deficits. And finally, since bond yields are strongly dependent on inflation, and inflation is closely related to growth, the term-yield structure of the government bond market provides a very powerful early warning system for predicting periods of boom and bust.

Forex traders with some experience will be quick to recognize the intra-day relationship between treasury bond yield, stock prices, and currency values. This is not surprising, since in many cases, the fluctuations in the value of a currency represents the movements of foreign investors between bonds and stocks as the events of the day progress. In addition, the strong relationship between inflation expectations and bond yields makes government bond yields a very useful indicator for evaluating the financial world’s opinion on the success or failure of US Federal Reserve in controlling inflation. As inflation is a significant component of the equation that decides currency values, the importance of the data provided by the treasury market is evident. But beyond all the short term sound and fury, developments in the bond market have important long term implication for currency trends too. As an important component of the financial account, external flows into bonds have a direct role in establishing long-term currency trends. The fact that the US dollar still has not collapsed in spite of the massive spending and borrowing of the US government is in part explained by the continued health, at least on surface, of the US Treasury market. We hope to return back to this subject in future articles, and examine the bond market in greater detail.

In the article I wrote about technical analysis, I explained that everything you see on the price charts, including trendlines, triangles, pennants, flags and … are all created by support and resistance levels which are in fact selling and buying limit levels. In this article I want to talk about these formations in more details and show you some strategies that you can use to take proper positions. You can use the techniques you learn here both in forex and stock market.

A trendline is the direction of the price movement which is formed by different peaks and valleys (highs and lows).

Some traders use only trendline to trade. It means when they see a trend, they just take the proper position and follow the trend. When there is an uptrend, they take a long position and when there is a downtrend, they take a short position.

A trend is called uptrend we have higher lows and downtrend when we have lower highs.

Some other traders don’t trust the trendlines. They think that it is always possible that a reversing happens. So they don’t take any position when there is a trend. They wait for a reversal. Both strategies have some advantages and disadvantages.

Here below, you see a big uptrend in the EUR-USD daily chart. It is a big uptrend but as you see there are a lot of smaller trendlines too.

We can always see some false signals. True signals are easier to catch because they are strong and obvious. A good trader is someone who can distinguish and avoid the false signals.

There are false range breakouts and also false reversal signals. Those who like to trade reversals will be encountered with more false signals because a trend can be continued for a long time and it is not easy to say when a reversal happens. If you like to avoid being trapped by false reversal signals just ignore the very first two reversal signala when there is a strong trend. Of course if you really wait for a big and strong breakout and you don’t rush to take a position when you see a weak and partial breakout you will have less number of false reversal. For example some traders take a short position when they see the below signal but as you see this is not a strong signal in comparison to the signals I showed above:

Why is the above signal a false signal?

1. The uptrend is a strong uptrend and this signal is the very first reversal signal. What do I mean by strong uptrend? Look at the uptrend slope. It is a sharp slope that is going up strongly. There is no sign of exhaustion in it yet. A trend should show the exhaustion signals to tell us that reversal is close.
2. Although about 50% of both #1 and #2 candlesticks are placed out of the Bollinger Upper Band, this can not be considered as a strong signal because

• Both candles are not long enough and are relatively short candles.

• They don’t have any big upper shadow that reflects the power of a downward pressure.

• The second candle is very short and the first candle is not covered by it strongly.

Can you mention any more reason?

Here is two other examples for such a false reversal signal:

Bollinger Bands are the second indicators I use after the candlesticks. In fact the combination of candlesticks and Bollinger Bands makes the signals for me.

There are some awesome features in the Bollinger Bands that can not be found in the other indicators. Before talking about the signals lets see what Bollinger Bands are and how they look like. If you don’t have them on your chart, please add them and let the setting to be the default setting which is 20.

Bollinger Bands are consist of three lines: Bollinger Upper Band, Bollinger Lower Band and Bollinger Middle Band.

Bollinger Middle Band is nothing but a simple moving average. Bollinger Upper and Lower Bands measure deviations. I can bring their formula here but it will not have any usage for your trading. The only thing we should know is that they are so strong in diagnosing the trends and reversals.

Note: In all the below examples, the Bollinger Band setting is the default setting which is 20 period and 2 deviations.

1. Trend Trading:

One of the most important features of Bollinger Bands is that when the market is slow and there is no reasonable volatility, the upper and lower bands become close to each other:

As you see on the above image, Bollinger upper and lower bands have become so close to each other in the area that I have placed those white arrows. Keep in your mind that when the market becomes slow like that and it makes a narrow range a breakout that can be the beginning of a big trend is on the way. You can easily predict the direction of the breakout with the signals that the market already has shown. Just follow the numbers at the above image and you will see what I mean.

The candlestick #1 has a long lower shadow. What does that mean? It means a big Bullish pressure is imposed to the market suddenly. So the price wants to go up. This is the first signal. You could take a long position after this candle but if you did not, the market would show you some more signals to go long. After candle #1, market becomes slow and Bollinger upper and lower bands become so close to each other. Candle #2 shows a breakdown with the Bollinger lower band but it is closed above it. This candle also has a long lower shadow that reflects the upward pressure. Then the market becomes slow for several candles BUT candle #3 assures you that the range is broken up. So if you didn’t have a long position, you could go long at the close of #3 candle. Then some red candles are appeared but you should know that after a range breakout, the very first reversal signal is not in fact a reversal signal. It is a continuation signal.

The above breakout could be the beginning of a big trend but it is not. I just brought it here as an example of ranging and breakout. If the candlesticks movements make you confused, you can shift to the line chart from time to time and find the real support and resistance of the range. Line chart is plotted based on the close signal. Close signal is the most important thing specially when you want to interpret the signals with Bollinger Bands and predict the market. Lets shift to line chart and see how it looks like:

As you see the support and resistance of the range are shown much better in the line chart (blue circles). Numbers 1, 2 and 3 are where the candles #1, #2 and #3 formed on the last image. In the above line chart the range breakout is conformed while candle #3 was forming. The price line goes up, touches and rides the Bollinger Upper Band. This means the range is broken up and we have an uptrend.

So we learned that the close price is very important when we work with Bollinger Bands. A Bollinger Lower Band is not broken down as long as the candlesticks are closed above it and a Bollinger Upper Band is not broken up as long as the candlesticks are closed below it.

Like the Fibonacci system I explained earlier, one of the ways to trade using the Bollinger Bands is finding a range and then waiting for its breakout.

Bollinger Bands are really good in trend following. Please follow the numbers in the below image. #1 shows a good reversal signal (I will talk about the Bollinger Bands reversal signals later in this article). If I wanted to take a long position I would wait for more confirmation which is the #2 candle. I would go long at the close of #2 candle.

The next a few candles break up the Bollinger Middle Band and the candles after them make a small ranging BUT as you see all of them are closed above the Bollinger Middle Band (zone #3). Some of them tried to break down the Bollinger Middle Band but they couldn’t. What does that mean??? It is another confirmation for the beginning of an uptrend. Zone #3 is the most important part of the below image. More conservative traders prefer to take their long positions after formation of such a confirmation. They go long when the thin red line is broken up (#4). They place the stop loss below the low of the last candle that its shadow is broken down the Bollinger Middle Band. As you see it goes up strongly (first red big arrow). There are some small red candles but they should not be considered as reversal signals. At #5 the price goes down to retest the Bollinger Middle Band. This is the beginning of the second Elliott Wave. It is where some traders wait for the retrace (continuation) to go long. I have explained it in another article I wrote about Fibonacci.

Can you take a short position at #5 ? You can but you’d better not to do that. It is against the trend direction and when you see the price has been going up strongly and for a long time, you should ignore the first and even the second reversal signal. They are not reversal. They are continuation signals in fact.

So the price goes down, retests the Bollinger Middle Band and it even succeeds to break down the middle band but keeps on going up again. As I have explained above, although it could break down the middle band we should not go short.

It starts going up again (#6) and the next candles are all closed above the Bollinger Middle Band. Fibonacci can be a big help here. As you see at #7 and when it wants to break above the 100.0% level, it shows a bearish reaction but the next candle is closed above the Bollinger Middle Band and the next candle break up the 100.0% level (#8). We should expect that it breaks above the 161.80% level because it is a strong trend and as you see it can even reach the 261.80% level (#9) and break above it (#11).

Both when the uptrend is started seriously (#4) and when the 100.0% level is broken up (#8), candles touch and ride the Bollinger Upper Band. It is the same as when we have a downtrend. Candles touch and ride the Bollinger Lower Band.

2. Reversal Trading:

Bollinger Bands are great in showing the reversal signals too. Usually a nice reversal signal becomes formed when a candlestick breaks out of one of the Bollinger Upper or Lower Bands and then it is followed by another candle which has a different color. One of the best examples can be seen in the above image at #1. I am going to make the signal bigger and show it once again here:

As you see the candlestick #1 which is a bearish candlestick is formed completely out of the Bollinger Lower Band and the next candlestick (#2) which is a bullish candlestick has covered the body and upper shadow and also most of the lower shadow of candlestick #1. These two candlesticks form a signal which is called Piercing Line. A Piercing Line which breaks out of the Bollinger Band is much much stronger. A Piercing Line is called Dark Cloud Cover when it happens at the top of a pick. I strongly recommend you to learn the candlestick signals.

Currency pairs are among the most popular questions I am always asked. Sometimes it surprises me how someone wants to trade forex while he/she still doesn’t know about currency pairs. But I should not be surprised, because we always focus on advanced topics like technical analysis, candlesticks and indicators and … that we forget about the basics. We do not consider that beginners may have difficulties in understanding the currency pairs that are the foundation of forex and forex trading.

What are the currency pairs in the forex world?

In stock market, you trade shares of companies. You buy and sell them. You pay money to buy stocks. But what if you wanted to trade or buy and sell a currency?

In the stock market, companies’ shares are commodities and the currency you pay to buy them is the money. It is the same in any other kind of trading. You pay money to buy a commodity. In forex or foreign currency exchange, you trade currencies. So again, you have to pay something to buy something else. You pay a currency to buy another currency. You sell a currency against another currency. To be able to do that, they have created currency pairs. For example EUR-USD is a currency pair. In each currency pair, the first currency is the commodity and the second currency is the money. In EUR-USD, the first currency which is Euro is the commodity and the second currency which is USD is the money. When you buy EUR-USD, in fact you pay USD to buy Euro. No matter in what currency your forex trading account is. You can have a trading account in USD, GBP, CAD or any other currency. When you want to buy EUR-USD, your broker changes your trading account capital into USD and then pays that USD to buy Euro. This is how it works. Any trade in forex market has to be done through USD. US dollar is the main currency and is the axis of all transactions in the forex market. Any currency pair that you buy or sell has to be done through USD. However, all of these process will be done automatically and you just need to click on the buy or sell buttons.

Lets get back to our example, EUR-USD. I told you that when you buy EUR-USD, in fact you pay USD to buy Euro or you buy Euro against USD. In forex market it is possible to sell EUR-USD even before you buy it. How? Let me give you an example. You borrow my car for two weeks. Suddenly you see someone wants to buy the car from you with a good price like $5000 above the real price. You sell my car. But you have to return my car after two weeks, right? When it is time to return my car, you go and buy the same car exactly, but with the real price which is $5000 lower than the price that you sold my car. You return my car while you have made a $5000 profit.

This is what we do when we sell a currency pair before we buy it. You sell EUR-USD high and buy it low. You sell it low and buy it lower.

When you buy a currency pair, you take a “long” position and when you sell a currency pair, you take a “short” position. Long and short are just the terms we use in forex and stock market and they have nothing to do with the length of anything. They are just terms. Of course usually it takes longer for the price to go up and shorter to go down. That’s why when you buy, they say you have a long position because it may take a long time for the price to go up. And when you sell, they say you have a short position because it may take a shorter time for the price to go down.

Anyway! So when we say we go long with EUR-USD it means we buy it and visa versa.

Now lets answer the “frequently asked questions” I always receive about currency pairs:

1. What are the forex major currency pairs? There are four major currency pairs in the forex market: EUR-USD ; GBP-USD ; USD-JPY and USD-CHF.

2. What are the most popular currency pairs? Among the four major currency pairs, EUR-USD is the most popular and has the highest volume of transactions. They say more than 70% of transactions in the forex world is focused on EUR-USD. But it doesn’t mean that 70% of personal forex trader like you and me trade EUR-USD only. Forex market is not limited to what forex traders do. In fact, forex traders are a very small portion of the forex market. The big transactions are done by the big InterBanks and central banks. Sometimes they do it not because of making profit, they do it because they have to. Sometime a country has to sell its own currency against another currency to lower its currency value and control its price.

The most popular currency among personal forex traders is GBP-JPY and EUR-JPY and also GBP-USD. GBP-JPY is the king of the currency pairs for private forex traders. The reason is it is so volatile and strong. Its trading signals are sharp and strong and it has a wide movement scale. Forex traders trade GBP-JPY to make more profit, but this sword has two sharp edges. Your losses can also be bigger.

3. What are the most liquid currency pairs? EUR-USD is the most liquid currency pair because it has the highest trading volume. However, you will not have any liquidity problem in the forex market because it is such a huge market. It is not like the stock market that sometimes you can not find a buyer for the shares that you have already bought and you want to sell.

4. What are the most active currency pairs or the most volatile currency pairs? As I said, GBP-JPY is the most active and the most volatile currency pair. EUR-JPY has the second position in volatility and activity. GBP-JPY and EUR-JPY usually have the same direction. It means when one of them goes up the other one goes up too and visa versa. GBP-JPY and then EUR-JPY are the most traded currency pairs among forex traders.

5. What are the best currency pairs to trade? I don’t know about the other traders, but if you ask me about the best currency pairs to trade, I say any currency pair that shows a strong and sharp signal at a time, is the best currency pair to trade. I see some traders who fall in love with a special currency pair and try to trade only that one. This is wrong. You limit yourself and ignore the free opportunities that the forex market has given you. There are several currency pairs on the forex market that you can trade. Why should you ignore all of them and focus on one pair?

They say you should focus on one currency pair and “master” it. This is another “nonsense idea”. Currency pairs are not like different jobs that you have to focus and master one of them. It has the the same rules and techniques for all of the currency pairs trading. A support line breakout is a sell signal in any currency pair. Find a valid support line in a currency pair and go short after its breakout. No matter what currency pair it is. You make money. Of course don’t forget to set your stop loss

All joking aside! Do not believe everything you read and hear. Some people start writing articles and e-books when they give up on becoming a profitable forex trader. So they try to make money through selling their e-books and training courses. Unfortunately 95% of the books, articles and training courses are written and managed by these people. And those articles, books and training courses are the main sources of “nonsense ideas” like the one that I explained above.

Anyway

6. What are the best times to trade currency pairs? Again I have my own answer to this question and my answer can be different from the others’ answer you may find over the internet. The best time to trade a currency pair is when it forms a strong and sharp signal. Period!

This question is mainly asked by intraday traders who trade using small time frames like 5min or 15min. They want to have a trading session every day and they do not like to have any open position during the night. Whether I agree with this idea or not, I will not focus on it here because this article is about currency pairs.

There are three main sessions in forex market: London session, New York session and Asian session. London session is from 8am to 4am GMT. New York session is from 8am to 4pm EST and Asian session is from 7pm to 3am EST. Forex market has the highest volatility when both of the London and New York markets are open which is about 8am to 1pm EST. Then at 4pm EST that they close the New York, the forex market becomes so slow. But after a few hours, Japan and then Australia start working and so forex market becomes volatile again.

Back to the question that “what are the best times to trade currency pairs?”, I have to say that when forex market become active and volatile, all of the currency pairs move, not just some special currency pairs. It doesn’t matter what session it is. So basically this question is not a correct question. You can trade any currency pair when market is moving and there is a forex signal.

7. What are the exotic currency pairs? USD-SEK (Swedish krona), USD-DKK (Danish krone) and USD-NOK (Norwegian krone) are the most famous exotic currency pairs. They are called exotic because of their pip value. Their pip value is much smaller than the other currency pairs like EUR-USD. When you trade one of these pairs for the first time, you may not believe your eyes when you calculate your stop loss and take profit. A stop loss that has to be placed above the previous candlestick, has a several hundreds of pips value. But don’t scare. Those pips are not like the ones your see in other currency pairs. I call them mini pips. They are about 1/10 of the value of the normal pips.

Exotic currency pairs are not limited to those three. EUR-NOK, EUR-SEK, EUR-DKK and GBP-NOK, GBP-SEK and GBP-DKK are even more exotic

There are also many other exotic currency pairs like USD-RUB (Russian Ruble), USD-CCK (Czech Krouna), USD-HKD (Hong Kong Dollar), USD-HUF (Hungarian Forint), USD-LVL (Latvian Lats), USD-MXN (Mexican Pesos), USD-PLN (Polish Zloty), USD-ZAR (South African Rand) and … … … .

8. Do you have the currency pairs list? Each forex broker supports different number of currency pairs. However all of them support the 4 major currency pairs and most of the other popular and known currency pairs. Here is the list of the currency pairs that I check every day in Forexoma Live Market Analysis:

EUR-USD
GBP-USD
AUD-USD
NZD-USD

USD-JPY
GBP-JPY
EUR-JPY
CAD-JPY
AUD-JPY
NZD-JPY

USD-CAD
EUR-CAD
GBP-CAD

USD-CHF
EUR-CHF
GBP-CHF
CAD-CHF

USD-SGD
USD-DKK
USD-SEK
USD-NOK

EUR-AUD
GBP-AUD

EUR-GBP
AUD-NZD

What Is Forex?

Forex is the knowledge and business of making money through trading foreign currencies. Forex is not a new business and its history is as old as the history of money.

There are people who have been making money through Forex from many years ago. Fortunately, with the help of computer and internet, Forex trading has become much easier. You can sit at your personal computer and trade from home without having to make any phone call or referring to any bank.

How is it possible?

There are brokerage companies that enable you to buy and sell different currencies through the Internet and some simple softwares. For any trade that you make, you pay a small commission to the brokerage company that you are trading through it.

You need to find a good, reliable and well-known brokerage company and sign up for an account with it. Then you have to fund your account. You use the money you have in your account to trade. Any profit that you make, will be added to your account and visa versa. Then you can withdraw the money you have made.

What currencies can you trade?

In Forex, you deal with currency pairs. There are four main currency pairs: British Pound and USD (GBP/USD), Euro and USD (EUR/USD), USD and Japanese Yen (USD/JPY), USD and Swiss Frank (USD/CHF).

In each currency pair, the first currency works as commodity and the second one works as money. For example when you choose GBP/USD to trade, if you buy, you buy British Pound against USD and if you sell, you sell British Pound against USD. It doesn’t matter what currency you have in your account. The trading software takes care of the exchanges and transactions automatically.

How can you make money?

Buying low and selling high or selling high and buying low is the base of making money in Forex. For example If you buy GBP against USD when each GBP is equal to $1.9554USD and then sell it when it is $2.0235USD, you have made a profit. I don’t want to focus on more details in this article and explain how the profits and the money you make will be calculated. I will talk about these topics in other articles.

But the big question is that how you can find out the best time to buy and how you can predict that if you buy, the price will go up and you will make a profit? This is the most important question that makes you a successful trader.

There are two methods to know the optimum time to buy and sell: Technical and Fundamental Analysis.

In technical analysis, you can predict the direction of the price using the the price chart analysis and also with the help of some special tools that are called Indicators.

Technical Analysis is a science and if you want to start working on Forex, you have to learn it properly, especially if you want to work as an intraday trader. It is not too hard to learn the technical analysis. If you are a focused and a serious person, you can learn technical analysis in a few months. There are a lot of free resources over the web that you can use to learn. There are some expensive training courses but those who sign up for them are not happy and believe that they have learned nothing. So don’t waste your money. If you are serious to learn, there are a lot of free resources over the Internet. You can also visit this weblog every now and then or subscribe for my RSS feed. I will try to share my experiences with you.

The other method is the Fundamental Analysis. This method is used to predict the future movements of currencies’ prices, according to the economic and even political situation of the world and important developed countries like USA, UK, Germany, Japan and… .

Fundamental analysis has a long term usage but good traders can predict the sudden changes that happen after releasing an important news about economic situation of an important country. For example when the news says that economic situation of USA is improved for 5% in comparison to the last month, USD will become stronger and people start buying it. So the value of USD will go up because of the sudden increase of demand. If you know the effect of the news on the price, you can take the proper position and make money. Of course there are two sides in this story which means if you take the wrong position, you will lose.

Experienced and professional traders take the advantage of both technical and fundamental analysis whereas 99% of traders are dependent on the technical analysis.

Some good things about Forex:

1- Forex is an online home based business that doesn’t need referring, recruiting and advertising. You only deal with the currencies through the Internet. So you will not have to reply any email, make any phone call and spend any money on advertising.

2- If you learn Forex trading properly, you can make a lot of money. Forex can be your full time job that makes thousands of dollars for you every month. I have to emphasize again that if you start working on Forex before you learn it properly, it can be risky and you will lose your money. It is like driving. If you drive a car, before you learn to drive properly, you will hurt yourself and others but if you learn it properly first, it will be pleasant and funny.

3- You can make a lot of money by spending a small amount of money. Unlike other investments like stock market that you have to invest a lot of money to make a reasonable profit, you can make a good income through investing small amount of money. For example, with a $5000 account, you can make about $5000 per month. Of course it highly depends on the way that you trade and the strategy that you follow but good and experienced traders can double their money every month.

4- Forex - and of course stock market - are the only businesses that competition has positive impact on them. It is amazing, isn’t it? Competition is the biggest problem in all other businesses but in Forex, it helps the traders to make more money. Why?

Supply and demand are the factors that determine the price in any market. When there are too many buyers and sellers, price volatility will be much higher and market will be more dynamic. Price will go up and down more frequently and this is what we need to make money. When price goes up we buy and when it goes down we sell and make profit.

So if you choose Forex as your business, you will not have to be worried about competition.

Excessive Euro appreciation against USD has made the economy ministers of European Union so worried and angry, specially in 16 European countries that Euro is their currency. Since March 2009, Euro value is increased up to 20% against USD. EUR/USD rate is now 1.4718 whereas when Euro became accepted as the currency of 16 European countries at the beginning of 2000, EUR/USD rate was 0.8200.

USA wants USD to become weaker or stays week by keeping the interest rates low. Currently the interest rate in USA is 0.25 - which is almost zero. This means more orders to American factories, more jobs, more production and economic improvement. But at the same time this is what Europe doesn’t like. A weak USD against Euro means transferring and investing more Euro to USA. It means lower tendency to buy European products by the Americans and higher tendency to buy American products by Europeans. It also means less tourists from America and many other countries to Europe and more tourists from Europe to America and so more investing and spending in America. This is what Canada is also suffering from and you will see its effects on Canada’s Employment Change which is predicted to be much lower than the previous month (it will be released on Nov 06 at 08:00am EST).

This is the USA treasury policy to help US economy grow after the economic recession. However, as the economic recession has come to an end, Europe requested USA and China to increase their currencies values, because they believe there is no point to keep them low anymore. At the same time, having a stronger Euro has an advantage for European countries. Buying crude oil and its derivatives will be easier for them.

Unfair EUR/USD rate has another reason. The extremely low USD interest rate makes big investors to borrow billions of dollars from the American banks, change it to Euro and deposit it in Europeans banks to enjoy the Euro high interest rate. At the same time they also use this money to buy the shares of some European companies that are recovering from the recession very fast and are getting back to the level that they were before the economic recession.

On the other hand, European economic growth rate is very slow. Unemployment rate reached 7.9% which is the highest in the past 10 years. European economic growth rate decreased over 8.4% by the end of June 2009. Economists believe that Europe economic growth will become positive by the end of 2009. However, BASF which is the biggest European chemical company alerted that there are still a lot of negative factors threatening Europe economy. Volkswagen the biggest automobile producing company in Europe announced that their third-quarter net profit tumbled 86%. World economy will have a slow growth rate during 2010 too. Europe and America will be faced with two big challenges: increasing unemployment rate and governments debts.

What do all these mean? Will EUR/USD go down or it will keep on going up?

Lets see what the price charts say. We are at the first hours of the new monthly candlestick. Last month candlestick (October) went up strongly but obviously it was stopped by the broken support line which is working as a resistance now. On the other hand, it seems 61.80% Fibonacci level is working as a strong support line. The strong bullish movement we had since December 2008 can not be stopped easily. EUR/USD will stay below the broken support line and 61.80% level, trying to scratch these two resistance/support lines. It can still keep on going up below the broken support line.

Although the last weekly candlestick has formed a strong sell signal, we should not expect to see a strong bearish movement so easily. Obviously the 61.80% Fibonacci level will resist and will not let the price go down easily. On the other hand, the Bollinger Middle Band is about 300 pips below the current price and even if EUR/USD can break below the 61.80% level, it will have to fight the Bollinger Middle Band which will work as a strong support line.

I wish you had already joined some of the other forex trading advisory and buy-sell signal programs. If so, you would see the difference and I would not need to say anything. To know how my competitors work and what they offer their clients, and to have an idea about my program here on forexoma.com, I already joined almost all of these programs. From the most famous programs that are directed and managed by the most famous people in forex industry, to many other programs with a lot of exaggerative claims. I would be grateful and happy, if they had something to teach, or at least, their buy-sell signals could help me to make money in forex market, without having to sit at the computer and analyzing the market everyday, but I regret to say that they are all wasting of time and money.

I am so sorry that I have to inform you that there is no reliable forex advisory, education and buy-sell signal program over the internet and I am so sorry that I have to say that unfortunately most of them, are scam. They know nothing about trading and if they know, they don’t want to teach people. All they know is that…

• There are a lot of people who know it is possible to make money through forex trading.
• Most of these people want to make money through forex trading but they don’t know how. Most of them don’t know what forex is. They just know that it makes money.
• Most of these people are trying to learn forex trading and will be happy to pay for a reliable program that teaches them how to trade or at least, gives them some buy/sell signals every week and helps them to make some money.
• Most of these people have already lost a lot of money in forex market and are frustrated. But they are not disappointed yet and still want to learn forex because they know that some people are making a lot of money through forex trading.

So this is a big opportunity for scams to rip people off. People want to make money through forex trading and they love to pay to learn it or receive buy/sell signals. So it is possible to launch a website with loads of fake videos and testimonials, exaggerating about the program and convincing people to join and pay for a huge nonrefundable membership fee. You join and pay, at least for a couple of months, before you realize that they not only don’t teach you anything, but even their buy/sell signals are useless. You unsubscribe while you have already paid a few monthly membership fees.

I am not trying to say that my program is the best and most reliable program, and I am not going to convince you to sign up for my program. In contrast, if you have not already been scammed by these programs and it is hard for you to believe what I said above and it is hard for you to trust me, I want to ask you to google for forex advisory programs, choose those that look better than the others and join them. Then, come back to me, only when you are realized that they teach you and give you nothing, and they just take your money. Try my program as the last program you will try in this industry and then see the difference by yourself.

I am not trying to say that I am a forex trading mentor and guru. Maybe there are many traders who know much more than me. But something that has made me different from the others is that I love to teach and share my knowledge with the others and fortunately I am really good in teaching, in the easiest and simplest way. And I am really good in forex market analysis. Just spend some time and browse my websites pages, read my articles and see what people have commented. Most of these people are not new to the forex world. They know what they are saying.

I am not trying to say that my program, here on forexoma.com is the best of the best - both in training and market analysis and signals. This is what my clients say and you will say, if you join. Something I am trying to say and I am sure about it, is that, my clients have something to take home everyday. They really feel that they have learned something and they become a better and more experienced trader everyday. They see a big difference and they enjoy reading my reports and analysis and trading based on them. I have some friends with over 25 years of experience in stock and then forex trading. Even these traders enjoy following my reports and they admit that my reports help them to see many things that they have not been used to see before.

Forexoma Live Market Analysis is a program designed to help you to learn forex trading through live forex market analysis. I do not give you a bunch of videos or pdf files. I teach you several different and profitable systems and at the same time, I help you and accompany you to trade forex lively and dynamically.

Before you go ahead and read the rest of the current page, if you are new to the forex trading industry and/or you want to know about this website and me, I recommend you to visit the website home page first and then come back here to learn about “Forexoma Live Market Analysis” program.

Whether you are new to forex trading, or you have some experiences with it and you want to learn more and improve your knowledge and skill and become a profitable forex trader finally - OR - you are already an advanced forex trader and you want to have more trading opportunities and hire two more eyes to watch the market for you to make more money, Forexoma Live Market Analysis is the right program for you.

When you sign up for Forexoma Live Market Analysis, you will receive some primary instructions. Some part of these instructions help new forex traders to know what forex is and how it makes money. Some other parts of these instructions teach all the members to use Forexoma Live Market Analysis to learn forex trading and make money at the same time.

What you will receive if you join Forexoma Live Market Analysis program?

• Weekly Reports:
  Forexoma Live Market Analysis program includes a weekly report the covers several different currency pairs. The next week probable movements of currency pairs will be predicted in my weekly reports. Weekly reports include a lot of valuable forex trading detailed instructions and so you not only learn to analyze the forex market, but you can take proper positions for the next week days, based on the predictions that can be found on the weekly reports. My weekly reports will be published on Saturdays morning at 10:00AM EST and will be updated for several hours. You will have enough time to read the reports and learn the analysis and also make your decision about the positions that you will take when forex market becomes opened on Sunday afternoon.

  Those who have no time to follow the forex market during the week days, can spend just an hour every week, before the forex market starts working, to take a look at my weekly report, learn the analysis and take some trading positions and make money.
  

• Daily Reports:
  You will receive a daily report from Monday to Thursday. These daily reports include the detailed analysis of one currency pair for training purposes and also the illustration of all of the forming trade setups. Therefore, you not only keep on learning and educating yourself, but you will be informed about the trading opportunities to take proper positions and make money.
  

• Daily Candle Signals:
  In addition to the trade setups that are reported on the weekly reports and on the daily reports during the week days, everyday at the close of the daily candlestick, which is at 04:00pm or 05:00pm EST, you will receive another set of trade setups which is based on the daily charts. These trade setups are for those traders who like to have long term trades with a higher profit range.
  

• Forex Email and SMS Alerts:
  The buy-sell signals will be sent to you through email and SMS.

• Forex Email Alerts:
  You will be informed about the forming or formed trade setups through email.
  

• Fundamental Trading:
  In addition to the analysis of several different currency pairs, both the weekly and daily reports include all the incoming important economic news and fundamentals, their definition and effect on the market and the exact date and time that you can use them to take proper positions and trade based on them. This is for those who are also interested in fundamental trading. It also helps the technical traders to have confirmation for the trade setups, they find on the price charts and so they can trade with more confidence.
  

• Downloadable Analyzed Charts:
  My reports are not limited to the above items. I know what kind of problems forex traders - specially beginner traders - have. Some of them do not even know how to plot a line on the price chart.How can they see the chart screenshots I have on the market reports and then find all the lines, Fibonacci levels, support and resistance lines and levels … and then plot them on their own charts, exactly as they are on my charts?Even if you are an experienced and skilled trader, it will be too hard and time consuming to follow the lines and analysis, done by someone else and then applying them on your trading platform charts.

  I have a very easy solution for it. All the analysis I do on several currency pairs and their monthly, weekly, daily, 4 hours and 1 hour charts, can be copied on your computer and MetaTrader platform, in just one minute through downloading a single file that I give you everyday before your start reading reports. So you will have everything I have on my charts. It saves you several hours of time and a lot of energy. You will have the live forex market analysis on several currency pairs and their different time frames everyday. It automatically tells you how and where the analysis are done and what you should do to trade and what you should look and wait for. So when I talk about a support or resistance line or a set of Fibonacci levels, you already have them on your platform charts and you know how they are plotted. All you need to do is just taking the positions, when it is time to.

• New York Session Intraday Trading:
  For those who are interested in intraday trading, I have intraday trading program everyday morning at 10am EST for EUR-USD. We have our intraday trading analysis everyday morning before New York session starts and you will know what positions you should take and what kind of trade setups you should wait for.
  

• More signals by Forexoma Auto Trading Robot:
  In addition to the routine analysis and signals we publish on our Forex market analysis report, we have an auto trading robot that its buy-sell signals will be shared with the members. For some reasons, we have stopped publishing the robot signals as separate signals and under the name of the robot signals. They come with the other trade setups that we publish.

• Trend Following System:
  I have the best trend following system for those who are interested in following the trends in Forex market. Like my other systems, the trend trading system charts, will be downloadable and installable on your computer and you already know what currency pair and on what time frame is trending, and when is the best time to take positions.Our trend following system may have less number of trade setups but it is highly profitable. Those who want to be more conservative in trading, can wait for a trade setup that all of our systems confirm and admit. For example, they take a short position with GBP-USD, only when both our daily technical analysis and trend following systems, show the downward direction and at the same time, the daily candle system generate a sell signal.

• Training Videos:
  I will have training videos about the simplest things in forex trading, like setting up the meta trader platform, to the most complicated discussions about trading and analysis. My clients can request for training videos about the problems and questions they have. My training videos are not completed yet, but I will have a few videos every week to cover most of the main forex related topics as soon as possible.

What Currency Pairs Are Covered by Forexoma Live Market Analysis program?

and also Gold and Silver for traders who are interested in trading metals or use Gold market movements to predict the direction of currencies like USD and CAD.

What are the lessons derived from this example? First, the correspondence between technical values and actual prices is weak. And as we stated in the beginning, it’s not possible to base our trade timing on a price and an indicator at the same time. Second, technical indicators have a tendency to surprise, and how much a trader relies on them will depend on both his risk tolerance and trading preferences. Lastly, technical divergences, while useful as indicators, can also be dangerous when they occur at the time when we are willing to realize a profit.

So what is the use of technical analysis in timing our trades? Most importantly, how are we going to ensure that we don’t suffer great losses when divergences on the indicators appear and invalidate our strategy, and blur our power of foresight?

The potential of the divergence/convergence phenomenon for creating entry points has been examined extensively by the trader community, but its tendency to complicate the exit point has not received much attention. But it is just one of the many aspects of trade timing that is complicated by the unexpected inconsistencies which appear between price and everything else. So if we had the choice, we would prefer to exclude price from all the calculations made in order to reduce the degree of uncertainty and chaos from our trades. Unfortunately that is not possible, as price is the only determinant of profit and loss in our trades.

In trade timing, the trader has to take some risk. The best way of taking the risk and avoiding excessive losses is using a layered defense line, so to speak, against market fluctuations and adverse movements and we discussed how to do this in our article on stop loss orders. The best way of taking the risk and maximizing our profits is the subject of entry timing, and the best way of doing so is using an attack line that is also layered. What do we mean by that?

In ancient warfare, it was well-understood that the commander must keep some of his forces fresh and uncommitted to exploit the opportunities and crises that arise during the course of a battle. For instance, if the commander had run out of cavalry reserves when the enemy launched a major charge against one of his flanks, he might have found himself in an extremely unpleasant situation. Similarly, if he had no rested and ready troops to mount a charge at the time his opponent demonstrated signs of exhaustion, a major opportunity would have been lost.

The layered attack technique of the trader aims to utilize the same principle with the purpose of not running out of capital at the crucial moment. In essence we want to make sure that we commit our assets (that is our capital) in a layered, gradual manner for the dual purpose of eliminating the problems caused by faulty timing, and also outlasting the periods associated with greatest volatility. By opening a position with only a small portion of our capital, we ensure that the initial risk taken is small. By adding to it gradually, we make sure that our rising profits are riding a trend that has the potential to last long. Finally, by committing our capital when the trend shows signs of weakness, we build up our own confidence, while controlling our risk properly by placing our stop-loss orders on a price level that may bring profits instead of losses.

To sum it up, the golden rule of trade timing is to keep it small, and to avoid timing by entering a position gradually. Since it is not possible to know anything about the markets with certainty, we will seek to have our scenario confirmed by market action through gradual, small positions that are built up in time. This scheme will eliminate the complicated issues associated with trade timing, while allowing us great comfort while entering and exiting trades.

Of course, there are cases where the risk/reward ratio is so positive that there is no great necessity for gradual entries. In such cases, the exact price where the position is opened is not very important. So we will not be discussing such situations in this article.

Conclusion

In surveys on what traders find most difficult about trading, timing often comes up as the top issue. Since timing is the only variable that directly influences the profit or loss of a position, the emotional intensity of the decision is great. While it is expected that every successful trader will achieve a degree of emotional control and confidence, the pressures of trade timing are often so severe for many beginners that the process that leads to a calm and patient attitude to trading never has a chance to develop.

To avoid this problem, the role of trade timing must be minimized, at least at the beginning of a trader’s career. And this can only be achieved if the size of the position is built up along with the trader’s confidence in it, and stop-loss orders are created where the closing of the position may result in gains, albeit small. All these factors lead us to consider the gradual method to the best one for trade timing, while minimizing our risk.

If money management is one half-of trading, determination of entry/exit points constitutes the other half. No amount of successful analysis will be useful if we can't determine good trigger points for our trades. Even if we know that the value of a currency pair will appreciate in the future, unless we have a clear conception of when that appreciation will occur, and where it will end, our knowledge is unlikely to bring us great profits. Similarly, even in the unfortunate situation where the analysis that justified the opening of a position is false, mastery of trade timing might allow us to register positive returns due to the high volatility in the forex market. Clearly, we need powerful strategies to help us calculate the best trigger values for a trade justified by careful and patient analysis.

We have discussed the various ways of creating stop-loss orders on this website, and in this article we'll continue on that theme by handling this subject in a more general way by identifying some principles for the management of our positions. The opening and closing of a position are the most frequent activities of any trader; it is obvious that this should also be the subject to which we devote the greatest attention. However, as in the case of a doctor or an engineer, the final task that is performed routinely and most frequently depends on certain skills, education and study which for the most part lack any obvious relationship to it. Thus, it is important to note that the study of trade timing is one of the final lessons for which the trader must prepare himself. The other courses that would lead us to this subject, such as technical and fundamental analysis, may not always have clearly definable benefits at first sight, but they pave the way to our ultimate goal of timing our trades successfully and profiting from them.

Before going into the technical aspects that complicate our trading decisions, we must say a few words on the necessity of emotional control in ensuring a successful and meaningful trading process. Let's repeat again, as we've done many times on this site, that without proper control over our feelings not a single word in this text would help us to trade profitably. The psychological endurance necessary for achieving a successful trading career is an important precursor to both money management and trade timing. Consequently, even before beginning the study of trade timing, we must concentrate our energies toward the goal of understanding and restraining our emotions, and gaining control over the psychological aspects of decision-making in a trading career. The Main Principle of Trade Timing

The first principle of trade timing is that it’s impossible to be certain about both the price and the technical pattern at the same time. The trader can base his timing on the actualization of a technical formation, or he can base it on a price level, and he can ensure that his trade is only executed when either of these events occur, but he cannot formulate a strategy where his trade will be executed when both of these occur at the same time. Of course it is possible that by chance a predefined price level is reached precisely at the time that the desired technical pattern occurs, but this is rare, and unpredictable.

Supposing that the trader is desiring to buy one lot of the EURUSD pair, he has the option of basing his entry point on the realization of a technical pattern, or the reaching of a price. For example, he may decide that he’ll buy the pair when the RSI indicator is at an oversold level. Or he may decide, for money management purposes, that he’ll buy it at 1.35, to reduce his risk. Similarly, he may choose to place his stop-loss order at the price point where the RSI reaches 50, or he may choose to enter an absolute stop-loss order at 1.345, to cut losses short. But due to the unpredictability of the price action it is not possible to define an RSI level, and a price level at the same time for the same trade.

We may examine this further on a chart.

This is an hourly chart of the GBPUSD pair between 5 December 2008 and 5 January 2009. We’re supposing that we opened a long position at around 1.5, where the RSI registered an extreme value at 24. In this case we expect to close our position when the value of the indicator rises above 50, to acquire healthy profits while not risking too much by staying in the market for long. We could have alternatively placed a real stop-loss order at 1.48, for example, but we decide not to do so because of the high volatility in the market. However we do expect that if the RSI rises, we will not need a stop-loss order, because the price would have been at a higher level indicating a profit, since it’s supposed to rise with a rising price.

But such is not the case, as we can see in the picture above. When the RSI had risen to 49.35 on the chart, which is a close enough point for our goal on the indicator, our position is, surprisingly, in the red. Not only do we fail to match our stop-loss to a lower price, but we actually match a lower price with our take profit point, which was 50 as mentioned. To put it shortly, the indicator converged on the price action, contrary to our expectation that it would move in parallel.