Indicators For Forex Trading

May 30, 2009 by  
Filed under Forex Trading


Some people find Forex trading very difficult. The reason behind this is because they did not spend adequate time in studying the market trends and they did not conduct thorough technical analysis. Forex charts are very important and you need to know how these charts are developed. As you probably know by now, the Forex market is a fast-paced environment and you need to keep up with it if you want to earn good profits. Technical analysis can definitely help you and so can market indicators.

Indicators are quite helpful especially when you’re about to make a transaction in the Forex market. Most of the time, these indicators provide you with market’s probability behavior but it can’t exactly tell the certainty of currency prices.

Technical indicators are very important in Forex trading. You can combine the indicators to create your very own trading strategy in order to recognize the market trends. As an effective trader, you must be able to identify the current or major trends, the short-trends, and intermediate trends; if you can do this, you will be able to hold a good position in the Forex market where you can earn great profits.

Since the Forex market is changing constantly, you need set a criterion for using the technical indicators. If you want to get the highest probability and accurate predictions, you must be able to combine required indicators. By doing so, you can determine the price behaviors of the currencies you would like to invest on.

Supposing that your judgment is correct, you should still consider other factors in order to gain maximum profits from your trades. If you’re having a bad day in the Forex market, take your profits and stop trading for the moment. This is a smart decision because if you stay longer (hoping to regain your lost money), you might lose more of your investment. When the prices of the currencies are moving within a so-called narrow range and isn’t going anywhere, there is no need to anticipate for a big movement. Find another currency to trade with better profit potentials.

With so many technical indicators to use, you will surely find combinations that will work best for you. Don’t be discouraged if ever you encounter some downfalls in Forex trading because that’s natural. When using technical indicators, you must give yourself enough time in doing the analysis and studies. There are so many things to consider and you can’t just do it in minutes. However, make sure that you don’t take too long in making your trading decisions because the Forex market will not slow down just to work for you. You’re the one who needs to adjust to its fast-paced environment. Keep in mind that there are also lots of traders out there who want to earn profits. You need to keep up with the competition.

Technical analysis is not very easy to do and so you will need all the help you can get. You can consult a broker or some online Forex trading tools if you want to learn more about this kind of trade. The internet is widely available and you can use it to your advantage. Educate yourself about these various technical indicators so that you can use them in identifying the market trends. For successful Forex trading, you must learn about these technical indicators.


Forex Trading- Are You Gaining Or Losing?

May 30, 2009 by  
Filed under Forex Trading


Did you know that you can find a market that is open 24 hours a day? The market is called Forex market and if you go there, you can’t find services, commodities and goods. The Forex market is the place where different kinds of currencies are traded. In every trade, two currencies are involved. For instance, you can sell your Canadian dollars for Euros; or you can pay Japanese Yen for US dollars. Forex rates or exchange rates can change unexpectedly. You need to monitor these exchange rates in order to determine if the price of a certain currency increased or decreased.

Changes in the Forex market usually occur quickly and so it is important for traders to keep track of the market. Political and economic events can influence the changes in the Forex market. If you want to determine whether you’re gaining or losing in Forex trading, this article can help you with the calculations.

The Forex investment is greatly affected by the exchange rate and in order to understand the relationship between the two, you should also be familiar with Forex quotes. Like the currency pairs, Forex quotes can be found in pairs as well. Here is a very good example:

1.Suppose the currency pair is USD (US dollar) and CAD (Canadian dollar)

The Forex quote for this pair is USD/CAD=170.50; this is interpreted as ‘every one US dollar is equivalent to 170.50 CAD. The currency found at the left side is known as the base currency and it is always equivalent to 1. The currency found at the right side is called counter currency. The stronger currency is always the base currency and in this case, the USD. The Forex quote’s central currency is USD and so you can find it in most Forex quotes.

How can you determine if you’re earning profits or not? You can use another example.

2.This time use EUR to USD. Assuming that the Forex rate is 1.0857; in this example, the USD is the weaker currency. If you bought 1,000 Euros, you will need to pay $1,085.70. After a year, the Forex rate was at 1.2083 and this means that the Euro’s value increased. If you decide to sell the 1,000 Euros now, you will get $1,208.30; now, in this transaction, you gained $122.60. What if the Forex rate a year after was 1.0576? This means that the Euro’s value weakened. If you still decide to sell the 1,000 Euros, you will only receive $1,057.60 which means that you lost $28.10; did you get it?

Forex trading involves a lot of risks just like mutual funds and stocks. The fluctuations in the exchange market are responsible for such risks. Low level risks like government bonds in the long-term can give returns but are quite low. If you want to get higher returns, you need to invest in Forex trading but you need to face higher level risks.

You must set financial goals for the short term, as well as for the long term. By doing so, it will be much easier to balance the risks involved and the security. You will be able to conduct your trades with ease and comfort. Make use of all the available Forex trading tools so that you can make wise and profitable trades. After reading this article, you can already calculate if you’re gaining profits or not.