Monitoring Market Trend With COT Metrics - easiest forex trading system

Monitoring Market Trend With COT Metrics ~ easiest forex trading system

In case you are not familiar with it, lets have a quick overview of the widely proclaimed and yet widely misunderstood Commitments of Traders (COT) report. The primary agency with regulatory supervision of commodity futures and options markets in the United States is the Commodity Futures Trading Commission (CFTC). The CFTCs stated mandate is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets".

In line with this mandate, the CFTC collects and circulates data on Open Interest (number of contracts held, long and short) for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. In practical terms, this means almost any liquid financial market publicly traded in the United States, including currencies. The reason for doing so is to nurture a level playing field, so that the price effects that could result from large swings in market participants buying and selling activities can be known in a reasonably timely and open manner.

Now, the question is, why should we care about the futures markets since we are trading the cash market? This is because the futures market for currencies leads the cash market, and both markets actually trend in a parallel fashion. This means that, if we were to overlay the price plot for the EUR/USD Forex pair on top of the price plot for Euro futures, they would look pretty much the same. We can therefore assume that the currency futures price is a proxy for the Forex market. In simple terms, changes in buying and selling activity in the futures world would eventually affect Forex price movement.

The primary groups of traders traditionally covered by the COT report include the following:

• Commercials - Large corporate entities that use futures markets to hedge against business risks pertaining to the commodity which they manufacture or distribute (e.g. a grain pool which sells wheat on the open market). Commercial traders are typically counter-trend traders, not speculators.
• Large Traders - Financial market entities who speculate on the price movements of the underlying commodity without either providing or taking physical delivery of it (e.g. a hedge fund which trades and invests in various assets on behalf of its clients). Large Traders are typically trendfollowers.
• Small Traders - Primarily private traders holding positions in futures or options that are below the reporting threshold specified by the CFTC. Since Small Traders do not report to the CFTC, their positions are inferred as the residual of Commercials and Large Traders open interest in each market from the known total.

The COT report is published every Friday by the CFTC, based on reporting data submitted the Tuesday prior. COT data can show us the Net Long or Net Short positions taken by the above three categories of market participant, and highlight significant changes from one week to the next which may warn us in advance of accumulation/distribution campaigns that could affect price. The CFTC does not publish corresponding price data, but this critically important data can be obtained from other sources.

There are many different ways in which COT data can be interpreted. Some analysts look for extremes within a range of 6, 12, 24 or 36-month look-back periods by calculating a simple Stochastics index on the respective positions, often with the corresponding price series plotted as an overlay. This will tend to reveal when one category of trader hits a multi-period extreme of buying or selling activity (particularly at an apparent price high or low), which is thought to act as a warning of a potential price reversal.

While this method maybe perfectly sensible, I believe the best and simplest way to use COT data is to confirm a high level trend, and most importantly, changes in the trend. To confirm a high level trend, I do not look at the Commercial Traders position data, but rather at the Large Traders. Again, this group has a primary focus on trend following. As independent traders, isnt that exactly what we are trying to do as well?

In addition to the fact that Commercial Traders are counter-trend traders, studies have shown that Commercial Traders tend not to make money from futures trading, but rather to lose! Again, their primary interest is to hedge against risk in the markets in which they operate - not to speculate on price movement. Losses from futures market trading are therefore merely a cost of doing business for Commercials - just like buying insurance. In other words, go long when the Commercials are going long (or short when they are going short) and most of the time we will lose.

We want to trade with the trend, not against it. We want to pay attention to the group that is going to help with our trading, and its usually not the Commercials! Therefore, my primary use of COT is simply to look at how Large Traders are positioned in relation to price action itself. I do not over burdened myself with look-back periods, Stochastics formula, or anything like these. Every Friday I obtain the latest COT positions data and corresponding price series, enter them into an Excel spreadsheet which then calculates the Net Position (i.e. long contracts minus short contracts) and then chart the respective series side-by-side.

If I see evidence of a high-level trend on price, and that Large Traders are on the same side of the market, I have reason to believe the trend is valid. Alternatively, if my price chart analysis shows that a high level reversal is setting up and that Large Traders have flipped from Net Short to Net Long (on a bottom), or Net Long to Net Short (on a top) consistent with the anticipated price reversal, then I have further reason to believe the reversal is actually happening. COT is therefore a high level trend confirmation tool, not usually a timing tool.

To accomplish the above objectives, I plot weekly Tuesday closing price on one chart panel, and concurrent net positions of Commercial versus Large Traders on the adjacent panel (bearing in mind that because the Commercials are always on the opposite side of the market from both Large and Small Speculators, the two plots will be perfectly symmetrical) as shown in the chart below.

In conjunction with standard trendline and Swing Point analysis, I then look for the following types of readings on the COT display:

Reading	Description
Bullish	Large Trader net positions line is above zero and rising: Net Long and following the uptrend.
Bullish Crossover	Large Trader net positions line crosses the central axis from below: changing bias from Net Short to Net Long, which may confirm a price bottom.
Positive Divergence	Large Trader net positions line makes a higher low in relation to a lower low on price: a price bottom (they are not following through to the downside).
Bearish	Large Trader net positions line is below zero and falling: Net Short and following the downtrend.
Bearish Crossover	Large Trader net positions line crosses the central axis from above: changing bias from Net Long to Net Short, which may confirm a price top.
Negative Divergence	Large Trader net positions line makes a lower high in relation to a higher high on price: a price top, (they are not following through to the upside).

It should be noted however that not all readings mean what they appear to mean, and not all actions of Large Traders can be assumed to be correct at all times. Thus, when Large Traders add to a net position but price thereafter does not penetrate an important level in line with trend, we can assume the undertaking was a failure, which could verify a technical analysis calling for a reversal of some kind. Failure signals can therefore be as useful as confirmation signals.

To some seasoned traders, the approach described above may seem to be too simple and hence questionable. However, the proof, as they say, is in the pudding. The sample COT chart for the US Dollar Index covering the period from January 2007 through December 2009 as shown above plots price versus Commercial and Large Trader net positions. I have labeled all crossovers, readings which are expected to confirm tops or bottoms based on price chart analysis undertaken separately. The results of these crossovers in relation to subsequent price action are summarized below:

• Reversal #1: Bearish crossover on Feb. 20th, 2007. Price on the USDX was 8410. Large Traders remained Net Short from that point through to Dec. 18th, 2007, when price had fallen to 7743. A short on the USDX using these two crossover signals to confirm the entry and subsequent cover long was worth (8410 -7743) = +667 points.
• Reversal #2: Bullish crossover on Dec. 18th, 2007. Price on the USDX was 7743. Large Traders went Net Short on an abortive move that ended up quickly resolving to the prior downtrend (an example of a failure), and thus their position reversed again on Dec. 31st, 2007, when price had actually fallen further, to 7670. The maximum loss on this failure signal was limited to (7670 - 7743) = -73 points.
• Reversal #3: Bearish crossover on Dec. 31st, 2007. Price on the USDX was 7670. Large Traders went Net Short again, and remained on that side of the market through to May 13th, 2008, when price had fallen to 7350. A short on the two crossover signals was worth up to (7670 - 7350) = +320 points.
• Reversal #4: Bullish crossover on May 13th, 2008. Price on the USDX was 7350. Large Traders flipped Net Long, and remained on that side of the market through both an interim top, which came Mar. 3rd, 2009 at a price of 8952, and beyond to the next crossover date of May 19th, 2009, when price had come down to 8215. To the highest high in March, the long was worth up to (8952 -7350) = +1602 points. To the May crossover date, the position was worth (8215 - 7350) = +865 points.
• Reversal #5: Bearish crossover on May 19th, 2009. Price on the USDX was 8215. Large Traders flipped short, and remained on that side of the market through to Nov. 24th, 2009, when price had come down to 7517. Using the crossover signals again to confirm an entry short and cover long yielded an opportunity worth (8215 -7517) = +698 points.

The above examples show that from February, 2007 through November, 2009, a straightforward analysis of Large Trader net position reversals on the US Dollar Index confirmed tradable opportunity in the range of 3,000 points. Note that this is not to suggest that you should approach COT data looking for extremely simplistic, black-box trading signals; but rather, that you use the information to confirm other forms of analysis.

More info for Monitoring Market Trend With COT Metrics ~ easiest forex trading system:

What You Didn’t Know About The Psychology Of Forex Market Trading – And How It Might Bankrupt You - forex king kong trading system

What You Didn’t Know About The Psychology Of Forex Market Trading – And How It Might Bankrupt You ~ forex king kong trading system

by: Joseph Plazo


When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who’s been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market.

Studying the psychology of the market is nothing new. It doesn’t take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others – including the mass psychology of the people that use the currency on a daily basis – but neglect to know what moves you, you’re going to end up hurting your own position. The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying ‘Huh?” about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.

Anything involving winning or losing large sums of money becomes emotionally charged.

All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info – if it’s math, there’s only one right answer, right?

The answer lies in interpretation. The numbers don’t lie, but your mind does. Your hopes and fears can make you see things that just aren’t there. When you invest in a currency, you’re investing more than just money – you make an emotional investment. Being ‘right’ becomes important. Being ‘wrong’ doesn’t just cost you money when you let yourself be ruled by your emotions – it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It’s that little thing inside your head that says, “I KNOW I’m right on this, dammit!”

Bottom line: You can’t keep emotions out of the picture, but you can learn not to let them control your decisions.

To most people, being right is more important than making money.

Here’s the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade. You’ve got to accept that picking a loser is NOT an indication of your self-worth, it’s not a reflection on who you are. It’s simply a loss, and the best way to deal with it is to stop losing money by moving on – and really move on. Moving on means you don’t keep a running total of how many losses you’ve had – that’s the way to paralyze yourself. This brings us to the next point:

Losing traders see loss as failure. Winning traders see loss as learning.

Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn’t work. But he didn’t give up – because he knew that creating a source of light from electricity was possible. He believed in his overall theory – so when one design didn’t work, he simply knew that he’d eliminated one possibility. Keep eliminating possibilities long enough, and you’ll eventually find the possibility that works.

Winning traders see loss in the same way. They haven’t failed – they’ve learned something new about the way that they and the market work.

Winning traders can look at the big picture while playing in the small arena.

Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I’m wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades – but I made $250,000, making my overall profit $175,000. It’s a pretty clear numbers game – but how do you keep on trading when you’re losing in trade after trade? Simple – just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you’ve set up – but define yourself by what really matters – the overall record.
More info for What You Didn’t Know About The Psychology Of Forex Market Trading – And How It Might Bankrupt You ~ forex king kong trading system:

Currency Converters And The Foreign Exchange Market Explained - forex h1 trading system

Currency Converters And The Foreign Exchange Market Explained ~ forex h1 trading system

Vast amounts of money are being poured into the foreign exchange money each year. It has been reported that many billions of dollars are benefiting investors all over the world- making many the fortune of a lifetime. But before a lifetime on easy street can be obtained, theres much to learn. But not to worry, an investors life is made easier thanks to forex calculators.

A foreign exchange calculators most basic use is to determine what may or may not be a good investment. One can easily find updated rates on many different currencies, past rates, and even projections on how the rates will continue to fare. Armed with this knowledge, investors will be able to make a huge sum of money off each bit of money invested- assuming market conditions are pristine.

When investing in another currency, the investor hopes that the currency being converted from raises in value so that converting back will create a large return on the initial investment. Of course there are other ways of making money in the foreign exchange market, but this provides some of the quickest and biggest gains, depending on the investment amount.

The foreign exchange market uses currency as its basis for working- meaning there are many different ways to work the market to ones advantage. Doing so will cause need for a multi-purpose forex calculator that will be able to display multiple currencies at a time in relation to a specific currency. Some advanced calculators even show results starting with the most popular currencies, so as to better appeal to the common investor.

The next stage in the process is to track all currencies that an investor is watching. After all, if a currency increases in value over time, isnt it safe to say it will continue to do so in the near future? This isnt always true, but more often than not, this simple rule makes investors quite a bit of money. Foreign exchange calculators should be able to track several different currencies for investors in this case, which usually requires a user registration for tracking purposes.

As a final note, the perfect foreign exchange calculator should be able to make use of newer technologies for a quick and simple solution to an investors problem. Technologies such as AJAX or Java should be used, where results can be displayed quickly and effectively- even without a page refresh. This is in comparison to technologies such as PHP, where the process can be lagged down by the constant need to refresh the page after each calculation.

Closing Comments

The foreign exchange market is a very risky game. If one is to play it, it should be done so in a wise manner. There is a need for a handy calculator for foreign exchange market calculations and tracking methods, not to mention an effective way to check values without and delay or latency. In obtaining such a calculator, odds of making a successful return on investment are much improved, and investors are better off as a result.

By Chris Channing
More info for Currency Converters And The Foreign Exchange Market Explained ~ forex h1 trading system:

Online Stock Market How Trade In Stock and Forex - professional forex trading system free download

Online Stock Market How Trade In Stock and Forex ~ professional forex trading system free download

For someone who has no stock market experience, but wants to invest some capital in the stock markets, it can be difficult to know where to start. The important thing is, to not let that hold you back, as there are many options or paths you can take to invest your money in the stock market and find your stock trading picks.

The most important thing to do is to answer some basic questions before you make your decision on which investing path to take. Some important points for consideration are:

    How much time do you have to commit?
    How much money do you want to invest?
    Do you want to learn how to invest in the Stock Markets?
    What Leverage do you want to trade with?
    What type of instruments do you want to trade? Stocks, Options, Forex?

Using a Managed Fund Portfolio

Using a managed fund can be a solution for investors who have very little time to devote to stock market investing.

Essentially with a Managed Fund you open an account and deposit your investment capital into a larger fund account, which is managed by a professional Fund Manager.

The fund manager is responsible for buying and selling a diversified range of stock and other investments in different classes, and has access to a large selection of market research. There are a large range managed funds that are focused on different objectives and strategies, so its important to choose one that fits your purpose.

Key points for Managed Funds:

    Largely diversified portfolio
    Usually the minimum investment amount of $1000.
    Like all investments, managed funds do not guarantee returns.
    There are associated costs with participating in managed funds.
    Typically expect a reduced performance, usually closely mirroring the market average.
    Managed Funds dont give you control over which stocks your money is invested.

Using a Stock Trading Picks Service & Auto-Trading Services.

There are many Stock Trading Picks Services available out there, all of which can offer a range of different services and strategies, some of which include:

    Stock Trading
    Stock and Option Trading
    Option Spreads recommendations
    Forex Trading Services
    Commodity Trading Services.

Usually an investor would subscribe to a stock trading service and pay a monthly or annual fee, for which the investor would be emailed Entry and Exit notification of Stock Trading Picks.

The investor can then execute the trades in his/her own trading account, for which the investor has total control over what and how trades are executed. Some services and brokers offer an Auto-Trading Service, which means that the trade picks are emailed directly to your broker, which will automatically be execute as per the trade instruction, without any effort from the investor.

This can be a handy service for people who have little time to devote to stock market investing, or who are asleep when the market is open.

Its important to be aware that quality of some services vary quite a bit, for example some only offer trade entry notification for stock trading picks, and do not give trade exit notifications. Whether youre new to trading, or do not have much time to watch your positions, its just as important to know when to exit your position as well as enter.

Finding your own Stock Trading Picks

Some investors just arent comfortable with relying on other people to make investment decisions on their hard-earned money. If you have the time to devote to stock market investing, and want total control over your investments, finding your own stock market picks is both rewarding and fulfilling.

Of course if you not already an expert in the stock market, its recommended to educate yourself about the stock market and decide on a trading style, method, and develop a trading plan.

There are many ways in which you can filter down to your chosen stock market picks, and using some stock scanning software can help you quickly zero in on stocks that fit you stock trading criteria.

With a bit of stock market knowledge you find high probability stock trading picks again and again, grow your trading account, and far exceed overall market performance.
More info for Online Stock Market How Trade In Stock and Forex ~ professional forex trading system free download:

The Average Trader Is Being Set Up By The Market - ddfx forex trading system free download

The Average Trader Is Being Set Up By The Market ~ ddfx forex trading system free download

The legendary trade Jesse Livermore once remarked very aptly that "The market is designed to fool most people most of the time." He has also been quoted in saying that "Markets never change, because human nature never changes." Although many aspects of this mans life may not be worth learning from, his perceptivities into the financial markets are timelessly invaluable to anyone who is serious about achieving success in trading.

If you have ever had some experience in investing or trading, have you ever felt that the market seems to have a way of going against you "most of the time"? For instance, if you have traded Forex before, have you ever felt that "it always goes down whenever I buy, and it always goes up whenever I sell"? Is it a matter of bad luck? Or are there some fundamental reasons why most traders lose money?

Think about it. If you do not have a highly systematic and controlled way of approaching the markets, the fact is that the markets are always rigged against you. It is not unlike going to a casino, where your chances of making money in the long term are practically zero. In the casino, all the games are rigged against us in the sense that they always have an edge over us. An "edge" is simply a statistical advantage that ensures that you will lose money if you stay long enough in the game.

So, how do some people devise strategies to take money out of the casinos? They do so by systematically eliminating the "house edge", and establishing "an edge over the house". Professional gambling syndicates win the games they play by playing only when the odds are in their favour, and knowing when to walk away without allowing the joy of winnings to get them carried away.

In very much the same way, the Forex market (and any financial markets, for that matter) is being "set up" against us. Firstly, we know that we start from a losing position from the very first moment after entering into a position. This is due to the transaction cost of entering a trade, i.e. the difference between the bid and ask price, known as spread which immediately shows up as a floating loss from the very first instance after entering a position. Psychologically, many traders are affected by the floating negative number that is displayed on the trading statement, and spend a lot of time scrutinizing the moment-by-moment increases and decreases of that number.

Our psychological reactions to market movements, and the ups and downs of the numbers in open positions, will almost certainly leads us to make counter-productive trading decisions. The interaction between human emotions and price movements naturally cause us to buy high and sell low most of the time!

What we see on price charts is essentially a graphical representation of the ebb and flow of mass market psychology, which involves millions of trading decisions at any one point in time. These trading decisions are the outcome of human nature at work in the market, involving many instinctive trading habits and attitudes.

The more we understand these and overcome the same habits and attitudes ourselves, the more we are able to eliminate the markets edge over us and stand out above the majority of traders and win successfully. Successful trading is about eliminating the markets edge over us and developing an edge over the market. It is only possible if and when you realize how the market is naturally "designed" to beat you. This involves not only understanding the market behaviour, but also understanding your own psychology as a trader.
More info for The Average Trader Is Being Set Up By The Market ~ ddfx forex trading system free download:

How Do You Approach The Market - forex early morning trading system

How Do You Approach The Market ~ forex early morning trading system

The first step in trading the Forex market is to determine how you are going to approach the market itself, i.e. defining your style of trading. Personally, I consider myself as an adaptive trader, which means I adapt my trading style (defined primarily by time in the trade and size of profit objective) to suit the structural implications of chart analysis.

For instance, if I spot an upcoming corrective sequence that is expected to move 100 pips, then I will approach the opportunity as a day trader seeking a more immediate exit for fewer pips. Alternatively, if a Weekly-degree turn appears to be setting up for an expected rally of 1,000 pips, then I will approach the setup as a position trader planning to carry the trade longer with a more aggressive limit exit.

No matter what the trading scenarios might be, it is the implications of a structural analysis of price action that determines the decision as to what type of trading style to apply. The reason why I prefer an adaptive trading style is because it is much more flexible than a single-minded approach focusing only on one style of trading. It is certainly not profit-maximizing to scalp for 20 pips in a fast-moving market offering 500 pips potential; and conversely, theres no point asserting on a very large trade when the market is not breaking out on a higher degree of trend.

Regardless of these considerations, I always require a Reward/Risk ratio of at least 3:1 to
consider entering a trade. This is equivalent to a minimum profit target of approximately 100 pips with an average 30-pip stop loss, including the dealing spread. If the trade setup does not appear to be offering this potential, then I do not take the trade.

The table below summarizes the different types of trading style I use by parameters of duration, profit and risk:

Based on my trading experiences, the single most important factor that determines long-term success in Forex trading is not the individual trading methods being chosen or the level of detail of technical analysis being conducted. Instead, it is the ability to consistently apply a risk management model that completely integrates the elements of risk, reward, profit target and position sizing into a smooth decision-making system.

Put it simply, a successful trader does not spend a lot of time researching about whether Gartley patterns is better than trendline analysis, or whether Stochastics is better than MACD, but rather: what is the combination of risk and reward that will best serve his/her trading objectives over time? As long as your trading system allows for the achievement of these objectives, then it is probably the right one for you, or at least as right as it needs to be.

The above principle is illustrated in the following table which shows a series of 10 trades with various Win/Loss situations, targeting a minimum Reward/Risk ratio of 3:1. By using such a systematic approach, it is possible to trade profitably even with a Win/Loss ratio of well under 50%. In fact, in this scenario, breakeven does not occur until below 30%!

Professional traders know this to be virtually an obvious truth: its not important to make the right call every time (or even most of the time), but it is important to manage risk as a variable within a system.

The reason why a trading system like this is so critical is that it allows the trader to maintain a sense of confidence and assurance even after experiencing a series of losses over time. On the contrary, to make money with an unplanned approach that realizes a Reward/Risk ratio of less than 1:1 would require an extremely high Win/Loss ratio, which may be difficult to maintain over time. In the latter scenario, when the trader hits the unavoidable bad stretch and loses several consecutive trades, emotional stress and lack of confidence can then easily take their toll resulting in even worse tendencies, like over-trading.

The following table shows the profitability impact of a low Reward/Risk system (in this example, risking 20 pips to make 20 pips). As you can see, the breakeven point in this system occurs at a much higher win ratio (50%), and the highest Average Net of 20 pips per trade requires a 100% win ratio, whereas with a 3:1 ratio as shown in the table above, a win ratio of less than 40% could produce the same Average Net. In other words, a high Reward/Risk trading system is much more forgiving of failures than is a low Reward/Risk trading system.

With this in mind, its time for you to determine your trading system to approach the market.
More info for How Do You Approach The Market ~ forex early morning trading system:

Understanding The Forex Market - eamt automated forex trading system

Understanding The Forex Market ~ eamt automated forex trading system

An important aspect in trading the Forex market is to understand what drives the market and equally critical, what doesnt. Regardless of whether they can be proven practically or theoretically, the following is a summary of my core beliefs about how the market moves and why so:

• The market may react to news and fundamentals, but that reaction is often short-lived and irrational (e.g. the news is positive but the market goes down, only to go up again later) and therefore do not usually indicate high quality swing or position trades. In other words, any quality trade that does occur in connection with a specific news event is likely to be predicted by a technical setup. This simply means that you need to pay attention to chart technicals in order to trade fundamentals.
  
• The market is also driven by crowd psychology - which contains news and fundamentals - and is revealed by way of fractals. A fractal is simply a chart pattern that may be found at all degrees of trend possessing the same basic form and function regardless of where it occurs. The only difference between a fractal found on the Weekly chart and one found on the 30m chart is the distance the market is likely to travel more on higher timeframes, less on lower.
  
• As a result of the above, my belief is that it is possible to trade profitably based primarily on technical analysis, supported only by a specifically contrarian reading of fundamentals. For instance, being aware of how the Carry Trade was likely to be impacted by the Sub-Prime mortgage crisis of 2007 helped position informed traders to the short side of that market.

The reason these core beliefs are mentioned is not to say whether they are right or wrong, but rather to point out that as traders, we all hold beliefs about the market. These beliefs directly affect how we trade and why, so regardless of whether you agree with those listed above, the point is you should take the time to clearly document what your personal beliefs about the market are.

Perhaps you have reason to believe, for example, that news does drive the market. How is that belief going to affect your trading plan? How are you going to trade the news, whats your game plan? When you have the answers to those questions, write them down.

Also, it is important to note that certain markets tend to maintain a strong positive (or negative) correlation over time. To put it simply, we can characterize this as a dollar-versus-everything-else scenario. As more speculators enter the market (from the former Carry Trade, to oil, stocks and gold), the US dollar has tended to weaken. Conversely, as liquidity declines, the US Dollar has tended to strengthen.

According to some commentators, this reflects the fact that the global debt market is denominated primarily in US dollars, and as these debts are retired in a deflationary trend, demand for dollars accelerates; moreover, at a faster pace than would allow for the kind of price inflation many people expect when dollars are being printed and liquidity is being expanded.

The point here is that knowing how the dollar is faring in relation to stocks and other markets can give you a much clearer perspective as to which way a Forex major pair is likely to trend over time. In addition, it is important to be aware of certain long standing rule-of-thumb relationships, such as the fact that EUR/USD and the USDX (US Dollar index) are almost perfectly inverse of one another, due to the high weighting of the Euro within the basket of currencies comprising the USDX.

Specific correlation values among individual currency pairs are available through many online services or brokers such as Oanda. If you know with a high level of probability, for example, that EUR/USD is in a prolonged downtrend, and that EUR/USD has an extremely strong inverse correlation with USD/CHF (in excess of -0.95 over time), then the probability of success with a position trade to the long side on USD/CHF will tend to increase, regardless of the intraday picture for that pair.
More info for Understanding The Forex Market ~ eamt automated forex trading system:

How is the job market for quants these days - forex trading systems and strategies

How is the job market for quants these days ~ forex trading systems and strategies

Felix Salmon claimed in this post (hat tip: J. Rigg) that the quant job market is alive and well. However, I havent heard much from the usually diligent headhunters in the last few months, which doesnt bode well. Maybe some of our readers can comment on the current state of the quant job market?

In that same post, Felix wondered whether to incorporate the extraordinary period of 2008 as part of backtesting data. Actually, I dont see much of a problem here -- of course one should include 2008. The only reason a trading model would have performed poorly in 2008, as opposed to 2006, 2007 or 2009, would be that its parameters are fitted too tightly to historical data. If you try out some parameterless trading models like I advocated, 2008 is not that unusual except for its higher volatility.
More info for How is the job market for quants these days ~ forex trading systems and strategies:

Forex Market 3 Powerful Strategies Big Money - highest rated forex trading system

Forex Market 3 Powerful Strategies Big Money ~ highest rated forex trading system

If you want to catch the serious profit in forex trading you need to w the forex trends which are medium term. Here we are going to give you a 3 step simple methods which if you use it correctly, will help you catch most forex trend sand lead you to long-term term currency trading success.

Most beginner traders dont bother trying to follow the trend that has come about long term - instead they try to trade by forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate and sending the trader broke.

Also make sure you are using the Best Forex Broker when trading, which a good broker should have great charts so that you can look at the short term movements as well as long term trend lines.

The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.

Breakouts- Trading on Confirmation of Break outs

By far the best way of catching the serious moves is to use a forex trading strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.

Its a fact that most leading moves start from new highs or lows. Right this an sit it next to your computer so that you dont forget it.

While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur. So you will the boat and therefore profits.

Most traders dont buy or sell breakouts and thats exactly why its such a powerful method.

The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.

Confirmation- Dont Guess it, Confirm IT

Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.

These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We dont have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI

Stops and Targets

Stop points are easy with breakouts - Simply behind the breakout point.

If you have a serious trend then you need to be careful but you can milk it, so dont move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.

You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You dont know when the trend is going to end, so dont predict it.

Its ok to give a little bit back, as thats the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.

The above is a simple way to trade forex and catch the high odds moves that yield the serious profit. If you are learning forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.

Now that you have all the winning strategies, you now need to have a winning broker, recently the CFD FX Report has reviewed these brokers and have come up with Best Forex Broker to find out this visit the website or email us support@cfdfxreport.com

By forex broker
More info for Forex Market 3 Powerful Strategies Big Money ~ highest rated forex trading system:

LARGE CANDLE LEADS TO NZD USD REVERSAL AS EXPECTED - launch pad forex trading system

LARGE CANDLE LEADS TO NZD USD REVERSAL AS EXPECTED ~ launch pad forex trading system

As was predicted in a recent Private Video Analysis for Subscribers, the NZD USD has begun to show volatility that is typically associated with Large Candles. This Candle appeared as part of an ABC Setup at the Support Boundary of a Range Setup on the Daily Chart as the pair heads to Resistance. Despite the strength of this Signal, I warned that trading this Candle or any other that followed would be too risky based on the theory behind Large Candles across all time frames. 

As we would see the following day, the market began to pullback with a strong Bear Candle that would have taken out Long Positions that may have been opened - justifying our decision to avoid trading this pair.

The video below shows the analysis that was done last week and the rationale provided about Large Candles.

There are 3 main types of Candlestick Signals. One of these is the Large Candle that is very risky to trade. It is usually associated with pullbacks and sideways movements instead of profitable trades. This can be very tempting to trade because of their strength but unfortunately this is one of the traps of the Forex Market that can take us by surprise. As long as you are aware of this type of Candle and the reason they are dangerous to trade, you can focus your trading on the other 2 Candles that lead to profitable trade.

________________________________

More info for LARGE CANDLE LEADS TO NZD USD REVERSAL AS EXPECTED ~ launch pad forex trading system:

Feds Ben Bernanke Rings the Forex Market Bell - immortal forex trading system

Feds Ben Bernanke Rings the Forex Market Bell ~ immortal forex trading system

By Taipan

The Chairman of the US Federal Reserve Bank, Ben Bernanke, rings the forex market bell at a speech he made yesterday at an economic conference in Barcelona Spain. Helicopter Ben said the following:

"In collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets. The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation. We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of erosion in longer-term inflation expectations.

Bernanke continues, "Over time, the Federal Reserves commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy--including flexible markets and robust innovation and productivity--will be key factors ensuring that the dollar remains a strong and stable currency."

Those of you who are long time stock traders probably have heard the saying that "they dont ring a bell" to announce market tops, bottoms or significant turning points. However, Mr. Bernanke while speaking in Spain came as close as you will probably ever see a Fed chairman come to ringing a bell to let you know the the US has seen the errors of its ways in letting the Dollar slide to historic low levels against most currencies.

While only one speech by a Fed chairman will not in itself turn the Dollar around it does serve notice that Dollar bears had best be very careful with their forex positions and that Dollar bulls may be about to gain the upper hand. Against the Yen the Dollar immediately gained about 125 pips on Bernankes comments and the Euro gave up about 100 pips fast. Very fast. Forex traders did take notice of the change in tone.

Today the Dollar has given back some of yesterdays gains as forex traders mull over Bernankes comments. However, the Dollar looks like it is consolidating and will soon move higher. The big question, of course, is will the Fed stick to its resolve should additional bad economic data continue to be released every month? Should the Fed start to raise rates to help strengthen the Dollar that action would likely ring another bell for the stock market. With the stock market already soft higher interest rates could send it South in a hurry.

Ben Bernanke and the Fed are in a no win situation. Lower interest rates will speed up the Dollars decline and higher rates will probably weight heavily on the stock market and add to the housing markets woes. However, with inflation zooming to the upside the forex market will, at least for now, likely listen to the bell ringing by Mr. Bernanke and count on a bit of inflation fighting by the Fed to strengthen the Dollar.

Conclusion: The Fed is becoming fearful of an inflation tiger that it will not be able to control. It looks like it is ready to risk placing further pressure on the US economy by taking steps to fight inflation. The quickest way to do this is by raising interest rates and helping the Dollar to strengthen. Look for a stronger Dollar policy to start kicking in over the next few days.
More info for Feds Ben Bernanke Rings the Forex Market Bell ~ immortal forex trading system: