The fundamentals

The fundamentals are important long term - but in the short term prices are determined by the greed and fear of the investors, it's what they all think as group that determines price.

Many traders think because human nature is constant, there is a scientific theory of market movement - but of course there isn't. If there was, we would all know the price in advance and there would be no market at all.

Forex is an odds game and your aim is to trade high odds set ups, when the patterns of forex price movement dictate you should and the best way to do this is to use a simple robust trend following forex trading system.

Forex charts show you the supply and demand situation (they simply assume that all fundamentals show up in price action) but they do so something more - they tell you how all the investors perceive them.

Forex charting and technical analysis is not a science, it's an art. You're in fact, playing a similar role to a good poker player. You are looking to bet big on high odds sets, fold ones that don't go right and pass by low odds set ups.

Just like the poker player, you won't win every hand - but if you play the odds, you can win more than you lose and make a lot of money.

Forex charting is easy to learn and if you make it part of your forex education, you can learn it in about 2 weeks and get a robust forex trading strategy together which, you can apply in around 30 minutes a day.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5283; (P) 1.5355; (R1) 1.5428; More

GBP/USD's break of 1.5178 minor support indicates that corrective rise from 1.4557 should have completed with three waves up to 1.5534. Intraday bias flipped back to the downside for retesting 1.4557 low first and break will confirm that recent decline has resumed for next medium term target at 1.3680. On the upside, while another another rise cannot be ruled out, upside is still expected to be limited by 1.5600 cluster resistance (50% retracement of 1.6671 to 1.4557 at 1.5614). However, decisive break of 1.5600/14 will be the first alert that whole fall from 1.8668 has completed and strong rebound might follow targeting 1.6671 resistance.

In the bigger picture, there are some different interpretations of the structure of the whole down trend from 2.1161, with different projection targets. Main question is whether fall from 1.8668 is the fifth wave in the five wave sequence from 2.1161 (1.9337, 2.0158, 1.7445, 1.8668, ?) or it's the third wave inside the fall from 2.0158. In either case, fall from 1.8668 is possibly completing a five wave sequence of its own. Strong rebound above 1.4278/4310 cluster projection target (100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310, 161.8% projection of 2.0158 to 1.7445 from 1.8668 at 1.4278), followed by break of 1.5600 resistance will suggests that a medium term bottom is formed and bring larger scale correction. Though, sustained trading below 1.4278/4310 will target 1.3680 key long term support (01 low).

Forex Technical Analysis:

The difference between technical analysis and f fundamental analysis is that forex technical analysis ignores fundamental factors and is applied only to the price action of the market. Forex technical analysis primarily consists of a variety of forex technical studies, each of which can be interpreted to predict market direction or to generate buy and sell signals. The technical analysis works by correlating the results and moves of current markets to create a short-term outlook for currencies. The rolling data that is produced throughout the trading day creates the interest in the markets and informs traders of the strong markets to back.

The Trend is Your Friend

Forex technical analysis is largely based around forex market movement trends, thus creating the widely used phrase ’the trend is your friend’ amongst traders. Buying and selling at the right time is the key in maintaining good levels of profits, following a trend is also about knowing where to entry a trade and more importantly where to exit.

Support and Resistance

Support and resistance is the basic of forex technical analysis. Support and resistance levels are points where a chart experiences recurring upward or downward pressure. A support level is usually the low point in any chart pattern (hourly, weekly or annually), whereas a resistance level is the high or the peak point of the pattern. Buying and selling at the support and resistance points makes a greater profit margin as long as they remain unbroken.

History Tends To Repeat Itself

Another important idea in technical analysis is that history tends to repeat itself, mainly in terms of price movement. The repetitive nature of price movements is attributed to market psychology; in other words, market participants tend to provide a consistent reaction to similar market stimuli over time. Forex technical analysis uses chart patterns to analyze forex market movements and understand trends. Although many of these charts have been used for more than 30 years, they are still believed to be relevant because they illustrate patterns in price movements that often repeat themselves.

is Broker-Bashing one Gigantic Witch Hunt?

Choose your forex broker accordingly: If you use forex broker competition with a dealing desk then you are more likely (in theory) to experience slippage than if you use an ECN style broker. It is likely that a human will actually be matching and filling orders on a dealing desk which leaves you open to an added delay, especially at busy times. forex broker competition doesn't have this limitation and that fraction of a second saved can make a huge difference. In conclusion, if you are actively trading at busy times then forex broker is probably most suited to your needs. On the other hand if you trade infrequently or you have a small account and cannot afford the commission fees that forex brokers charge then a broker with a dealing desk may be adequate.

My forex Broker is Trading Against Me

This is an extremely common complaint that has lead to the conspiracy theory that most forex brokers competition actually want you to lose your money because they are on the other side of your trades. Let us step away from this theory for the moment and consider the fact that there is ALWAYS someone on the other side of your trades. For you to go short someone else must go long and vice versa so someone somewhere always wants you to lose! Now, some forex brokers competition claim that they match client orders at the dealing desk while others use their dealing desk to offset their clients' trades with their own overall position in the market, which is known as hedging. If forex broker competitive is perfectly hedged then they simply collect the spread that you pay them (which is greater than the spread they pay in the interbank market) and that is their profit. The conspiracy theory has come from the notion that most traders lose and so it would be more beneficial for forex brokers to trade in the opposite direction to their clients rather than go in the same direction and hedge themselves. Experiences of delayed orders, slippage and stop hunting have added fuel to this fire because they can be easily explained as forex brokers competitive stealing your money rather than potentially legitimate problems incurred at busy trading times.

Conclusion

In this article we have attempted to point out to you alternatives to forex broker malpractice theories and a few ways in which you can minimize their effects. If you are a firm believer that your forex broker competition is trading against you and wants you to lose then you are developing a potentially self-destructive frame of mind. This belief may prevent you from identifying problems closer to home such as trading psychology and strategy inadequacies. But the fact remains that if you are unhappy with your forex broker or you are experiencing excessive slippage, multiple re-quotes, poor customer service, possible stop hunting, platform freezing and held orders then you should change forex brokers competitive. At the end of the day the reasons for poor service are of secondary importance behind the effect it has on your trading. It may be that your forex broker is honest but technologically inept or it may be that you are the victim of a bucket shop but try to keep your complaints within the context of market dynamics. If none of the coping strategies listed above make any positive difference then it is definitely time to find a new broker.

ForexGen Explains Forex Market

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Trading Volume

Forex trading is unlike any other type of trading or investment simply because of the massive amount of turnover that the market will see on any given day. The daily turnover for the Forex market is over $3 trillion. Yes, that means that over $3 trillion dollars moves on the market every single day. This number has moved up as the years go by, and is reaching $3.25 trillion a day at a fairly rapid rate.

Number & Variety of Traders and Currency

Another major unique feature of Forex trading is simply the number and variety of those trading on the Forex market. Because the market is broken up into tiers (instead of a wide market making everything available for everyone), the entire Forex market features a vast variety of traders and counties. Of the top 10 currency traders, however, 5 are from the United States and 3 are from the United Kingdom. The top trader in the Forex system is Deutsche Bank from Germany.

The Forex market also has a mass amount of currency that is being traded daily. The United States Dollar is the top currency traded daily, followed by the Euro, the Japanese Yen, the British Pound, and the Swiss Franc. Rounding out the top ten is the Australian Dollar, the Canadian Dollar, the Swedish Krona, the Hong Kong Dollar, and the Norwegian Krone. These ten currencies control the major portion of the traded currencies in the Forex market.

Day trading

Another incredibly unique aspect of trading on the Forex market is the fact that you have the ability to trade 24 hours a day. There are the three major markets (The US, Europe, and Asia), and at any given time there is at least one market open. Because of the wide array of markets and times, the market is technically trading and moving 24 hours a day. The markets are not going as crazy on the weekends; however, as the 24 hour trading only takes place during the weekdays.