Forex Signals: Learning the Basics

By Bart Icles

One of the biggest buzzwords in the foreign exchange market is forex signals. If you are new to this trading market and not sure what a forex signals is, then you better start learning about it now. Having knowledge of the different forex signals can determine much about your success or failure in this trading arena. Do not allow yourself to become one of the forex investors who have been trading for a certain period of time but still do not have an idea of what they are actually doing because they have simply failed at learning the basics. And forex signals are part of these basics.

If you think you have already learned the forex basics, then you should be familiar with what forex signals are. If you are still not, forex signals are simply indicators of historical trends in the market. They are mainly based on a technical analysis of the different conditions of this volatile market. These trading signals do not only indicate the major trends in the market, they also help in determining various market entry and exit points.

Following newscasts, newspaper articles, and finance journals can give you much idea about the different forex trading signals. If you do not plan to spend hours and hours in front of the computer each day to keep you from missing on an economic indicator, you might as well subscribe to forex signal services. These are companies that monitor different indicators that are used in currency trading. The forex trading signals are then collected and included in a report that they send to their subscribers through email, fax or instant messages. There are also companies who do not only monitor signals for you, they can also act on these indicators and execute the actual trade for you.

Traders also make use of currency charts. Using a combination of technical analyses, these helpful bars, lines, and pips can give you various trading signals. They can tell you more about SMAs or simple moving averages that show the buy signals at times when prices of currencies reach their peaks above the actual average line. When you notice that prices are going under the average line, this signals the time for you to sell currencies.

There are many other kinds of forex signals. There are MACDs or moving average convergence divergence, DMIs or directional movement indicators, SARs or what most investors refer to as the parabolic system, and many others. The important thing is, you should learn to understand what these indicators really mean and how they affect market trading. - 23204

About the Author:

Succeeding with a forex trading strategy starts with a desire to learn and a drive to become a great trader. Learning forex strategies takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Do You Have The Forex Traders Mindset? (Part II)

By Ahmad Hassam

Greed is a form of fear which is the fear of missing out. So you need to control and face your fears in trading. The first step in overcoming fear is to recognize the various forms of fear connected with trading. The second step is knowing how to control those fears.

Why so many people bought tech stocks during the dot com boom? Everyday their mouths would salivate on reading rosy pictures of potential gains that could be made in investing in those stocks further fueling the bubble that was going to burst all of a sudden. Have you ever thought why do so many people rush to the departmental store during the sales season? Is it is the fear of missing out. Any kind of buying mania stems from the fear of missing out. People are afraid of missing out a good opportunity. This form of fear is a kind of greed.

In forex trading, this fear manifests itself especially during a sharp rally or decline of a currency pair. Suppose, you see on your computer monitor that the EUR/USD pair is making new highs, as it keeps on going up and up.

You start imaging that by entering into the market at this time; you can make a windfall fortune. Immediately buy, buy, and buy signals start ringing in your mind. Your heart starts pounding. Your pulse gets fast. You start feeling the acute pain of not being in the market when the EUR/USD pair continues to move higher and higher. Your mouth is watering with the thoughts of making potential huge profits. You dont want to miss out this opportunity. Others cant be wrong in buying the currency pair, you reason out with yourself.

You start thinking, Everyone is buying and I am not buying. I am losing out a highly profitable trade. This fear of losing out hypnotizes you into placing buy orders frantically. You have some doubts at the far back of your mind but you simply ignore them.

This type of trading is very dangerous. It compels you to enter into a trend very late when most of the buying has been done. The mindset, How can I not be buying/selling when everyone else is buying/selling, is extremely dangerous. Be disciplined! Be glad to think that most of the traders are pouring dumb money into buying a currency pair that is already overbought.

There will be winners. There will be losers. Trading is like a game. Sometime you win. Sometimes you will lose some of your trades. You should know that the fear of losing out is the most prominent among the new traders.

New traders become afraid of pulling the trigger when it comes to entering or exiting a trade as they fear losing money. Many new traders become victims of analysis paralysis. New traders dont yet have the adequate skills and knowledge to help assess and evaluate trading opportunities with a high level of confidence. This leads to trading paralysis. They become victims of procrastination. They dont know when to enter and when to exit.

Now you should not be afraid of pulling the trigger and being fearful of damaging the account based on only one trade. How to overcome this type of trading paralysis? Decide before entering into a trade, how much you can afford to lose. Use a stop loss order that is in accordance with your money management rules.

Do not get caught up feeling invincible or pessimistic after a win or a loss. It is very easy for traders to oscillate between emotional high and low. The outcome of just one trade should not affect your overall performance. Try to develop your own winning forex trading system that can give more winner than losers in the long run. - 23204

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Know These Forex Charts. Learn Forex Trading!

Strategies For Trading Stocks

By Mike Swanson

You and I both know there are no guarantees on how to make money on investing in stocks. From which stocks to buy, through when to buy or sell, the variables. You can only do your homework and believe your investigations are sound. There are three stock market trends that you may not be aware of and they are detailed below.

DEAD CAT BOUNCE: This is the effect seen when a stock price rises after a sustained period of downward movement. Often people start to buy again thinking the turn around has happened and then the stock drops even further.

What does it mean for me in stock trading? It is usually difficult to determine when a slide is going to turn around, so don't bank your house on a reversal. However for short term investors a dead cat bounce may present a selling opportunity.

THE BELLWETHER STOCK: This is a market indicating stock, one that predicts the direction of the market.

Why is this important? These sorts of stocks usually have a history of correctly indicating which way the market is going to go. They on themselves may not be attractive in terms of gains to be made, but will be useful to watch to get a general feel for the market sentiment.

THE JANUARY EFFECT: this is pattern that is often seen at the beginning of the calendar year when markets traditionally rise. Often the rise starts in the last few days of December and strengthens through January. Sometimes this is due to tax implications and psychological influences of the investor.

Why is this important? It has been shown in investigations that the January effect is real. However in recent years it has become more difficult to take advantage of. So it may be useful to watch for, but it is unlikely to be a reliable way to make money. - 23204

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Stock Market Survival Tips: Avoiding Institutional Traders

By Steve Wyzeck

Unleashed on the individual trader for the first time...if you keep getting sniped by false breakouts in the stock market and are losing money, this article could change your stock trading forever...

I am going to tell you a stock trading secret that is so powerful, it will save you thousands of dollars. I should know, that is how much it saved me.

You are about to discover the unfair trading tactics that institutional and professional traders use against you in the stock market.

After reading this article, these dirty tricks might make you angry.

You may even want to forget you ever read this...

But you need to know what they are doing...

And I promise you you'll be glad you did.

Because you will learn an entirely new way of looking at the stock market and in particular false breakouts...

We must define support and resistance and then look at in more depth what false breakouts really are.

Learning the how and why resistance lines and support lines form will help protect you against false breakouts.

When traders buy and sell a stock, they commit emotion to the trade. It is their emotions that will keep a market trending higher or send it into a reversal.

When stocks fall, a few traders will exit their position and take profits, a few traders will exit their position for a loss, and a few traders will stay in their position and hold on.

What you see on a chart is the emotional commitment, or lack thereof, coming from the crowd that is trading that stock.

Pain Is the #1 Reason Why Support and Resistance Lines Form

If a trader is holding on to a stock and hoping that it is going to come back, and it finally does, she is probably going to sell that stock. Staying in that loser of a stock is just too painful as she laments her entry. This selling to relieve the pain will momentarily stop a rally. These painful memories are precisely why support lines and resistance lines form at certain price levels.

I am going to give you an example so you can better comprehend what I am talking about here. Say a $40 stock sells off and falls to $35. It then stays at $35 for several weeks. Traders get confident that $35 is "the bottom" the longer this level holds. A trader finally buys the stock at $35. Right after buying, the stock drops to $32. Seasoned traders would have set their stop loss right under the $35 level and so would have exited around $34. Amateur traders will stay in their position refusing to take a loss. They will hold this losing position until the stock finally comes back to $35 where they entered. They eagerly jump at the chance to "get out even". This "get out even" selling will temporarily stall a rally and cause a resistance level to form.

Support and Resistance Lines Are Caused By Regret

Traders who discover a stock that has spiked up feel like they have "missed the gravy train". When the stock falls back to a certain level, the traders who felt regret at missing the first spike up are eager to jump in for a chance at a second spike up or upward move. Their buying forms a support level.

Whenever you work with a chart, draw support and resistance lines across recent tops and bottoms. Expect a trend to slow down in those areas, and use them to enter positions or take profits.

False Breakouts Are Caused By Institutional Traders

A false upside breakout occurs when the market rises above resistance and sucks in buyers before reversing and falling.

A false downside breakout happens when a stock falls below support, attracting more bears just before a rally.

All stocks are fair game but especially any stock that has a high percentage of institutional ownership.

False breakouts provide institutional traders with most of their best trading opportunities which is why institutional traders most often are the ones who cause these patterns to form in charts.

All limit orders are displayed on the screens of Institutional traders. They have the exact number of buy orders above a given resistance level.

Institutional traders have a secret practice they call "running the stops". A false breakout happens when institutions engage in hunting expeditions to run stops.

Take the following example: when a stock is just under resistance at $20, the buy limit orders come flowing in near $18.50. The institutions calculate the liquidity ratio which measures how much the stock will go up if all buy limit orders are executed at $18.50. They calculate that the stock will run to $21 if all the buy limit orders at $18.50 are executed. They short the stock at $20 to push it down to $18.50. At $18.50 they cover their short position and go long as the wave of buy orders are automatically executed pushing the stock up to $21. If greedy traders start piling in, the institutional trader will stay long the trade. As soon as the buy orders start drying up, they sell short and the price falls back below $20. A false upside breakout will show on your chart.

If you are knocked out of a trade because of a false breakout, do not be afraid to get back into the stock. Amateurs usually make a single run at a stock and stay out if they are stopped out. Professional traders will make several runs at a stock before nailing down the trade they want. - 23204

About the Author:

Written by Steve Wyzeck. To turn your stock trading around go to stock market

Trading Spot Forex - The Advantages

By Jane MacRae

Trading spot forex is actually trading in the world's currencies. The principle behind it is simply - you purchase one currency when it is low and sell another when it is high. And, you make a profit with the balance.

Compared to many other investment options, spot forex trading is gaining its popularity. Many people, even those who are new to investing, find that forex trading is a better choice for them than playing in the stock market or futures market, and there are good reasons for that.

* Lower Capital Requirement

Unlike many other forms of financial investment, you do not have to already have a big fortune to enter the forex market. Hence, trading spot forex has become a good investment choice for average players.

There was a time in the past when forex market was dominated by large multinational banks and major financial institutions. In that climate, it is easy to see why smaller investors did not feel they could even begin to compete.

Over the years, however, this situation has changed. Now, almost anyone with any amount of capital can enter the forex market. You simply play with whatever amount you feel comfortable.

* East to Learn and Manage

Forex trading has been around for many many years already. Due to its historical evolution, the practice in the forex market is very much standardized by now. This, together the modern technologies available to investors today, has made the operation of forex trading very easy to learn and use. WIth an automated trading system, you can constantly monitor the market, make quick transactions and get complete stats any time you like. Whether you are eating, sleeping, or running errands, you can still be making money .

* An Ever-growing Market

The forex market is live 24 hours a days and 5 days a week. There is always something happening, and new money-making opportunities and systems never cease to turn up. In this exciting market, you can hardly stay inactive. You should keep in mind, though, focusing is just as important to your success as being responsive to new events.

* Lower Transaction Cost

We have already mentioned that it does not require a big sum to start with forex trading. Another advantage of spot forex is that the transaction fee tends to be lower compared to stock trading, and so are the charges by forex brokers.

We have discussed many advantages to trading spot forex and, as you can see, they do count for the increasing popularity of this type of investment. Regardless of how much you are willing to invest and regardless of whether you have any prior experience, you have a good chance of success in this huge market. - 23204

About the Author:

Click here for our review of a leading forex trading tool in the market, which will grant you an unfair advantage over your competitors. Also check out this related article about currency trading software.