Forex Trading-DOUBLE BOTTOM

By fxtrader

Today as the world's economies start to slow down, many people are searching for how to generate extra income to protect themselves for the upcoming tough times ahead. So what are you doing to help you generate extra income? Many smart traders are turning to the stock markets and forex markets to help them generate extra income.

This is a short article on trading technical analysis and we are looking at the great opportunities of what the double bottom trading strategy can offer.

What exactly is The Double Bottom? The Double Bottom is a major reversal pattern - a pattern that is, in fact, one of the most common patterns. This can also be one of the most successful trading systems and works very well.

The Double Bottom Explained:

The double bottom reversal forms after a downtrend. As its name would suggest, the pattern is made up of two consecutive troughs with a moderate peak. The double bottom looks like the letter "W", as shown left. The twice-touched low is considered a support level. Which means that the stock will quiet often bounce of this level. Which opens up the chance of a great trading opportunity to open up Of course, at this point in time, knowing how to identify the Double Bottom will be one crucial piece of the puzzle that helps us know when the best time will be to get back into the market. This can help with the entry price, it is important that tight stop losses are used.

The double bottom theory

So what are the rules of the double bottom? How do we find it?There are no hard and fast rules for the classic double bottom, but it is a pattern that usually occurs after a medium- or long-term change in trend. This is a potential double bottom can be seen forming on the way down, but until the key resistance level is broken, a reversal is not certain. Nor is guaranteed to happen.

How to identify the double bottom:

 In order for a double bottom there has to be an existing trend in the first place for a reversal to happen.  You must first identify the lowest point of the current trend should be in the first trough, not the second.  The peak following this first trough should range from around 10-20%. The high of this peak tends to be rounded out somewhat, owing to a delay before going back down. This delay indicates that demand is increasing, but not to the extent of a breakout.  The decline off this high, forming the second trough, is accompanied by low volume and nears the support level from the previous low.  The scale for the time between troughs can vary, though the scale is usually for one to three months.  When the trend bounces off the second tough, it should be clear that volume and buying pressures are speeding up. If the rise is marked, this means a potential change in sentiment.  To find a good double bottom only occurs when there is a break in resistance from the highest point between the troughs.  Now if you see a broken resistance level could become support; sometimes this new support level can be tested with a first correction.  Check the Distance between the resistance breakout to the lows of the troughs can be added on top of the resistance break to estimate your target. In general, the bigger the formation is, the larger the potential advance.

The most important thing is to wait for the resistance breakout. The double bottom reversal is not complete until this happens - price must rise above the high end of the point that formed the second low.

So Now that you have found it, how to trade it:

Once the share price breaks the middle peak the pattern is confirmed - NOT BEFORE! So this is time to enter the trade.

As we have discussed in the article the most important steps you can make as a trader is education. As you are responsible for creating your own wealth so to continue learning and for more free education lessons please visit the CFD FX REPORT they will be able to satisfy all your education requirements. Also they can help you find the Best Forex Broker and CFD Brokers in the market. Visit them today. Education is knowledge and knowledge helps create wealth. - 23210

About the Author:

The CFD FX REPORT is a real time trading tool that offers clients free trading reports, with trading ideas, stock market and forex market education as well helping them with. Also if you are looking for a Forex Broker, then feel free to visit our broker section as we recently reviewed all the forex brokers and have found the best on the market.

Fx Trading- Don't get Bucked OFF

By fxreport

Today as the world's economies start to slow down, many people are searching for how to generate extra income to protect themselves for the upcoming tough times ahead. So what are you doing to help you generate extra income? Many smart traders are turning to the stock markets and forex markets to help them generate extra income.

The legendary commodities trader Ed Seykota, who turned $5,000 into $15 million over a period of 12 years, was teaching a course in technical trading to a college class many years ago when he decided to conduct an experiment to illustrate to his students the value of money management, or position-sizing - that is, determining how much money you will risk on any single given trade - to the overall success of any trader's trading plan.

He told his class they were going to compete in a trading contest with each other. Each student would start with a hypothetical equity stake of $100,000. The winner, of course, would be the student with the most money at the end of the contest. However, there was a catch: Each student would buy and sell the same stocks at the same exact time, meaning those stocks would rise or fall exactly the same amount. In fact, Seykota pulled each "stock" out of a hat at the front of the room, and simply told the students whether it had gone up or down and by how much.

How do you conduct a trading contest when everyone buys and sells the exact same stocks at the exact same time? It is all about position-sizing - how much money you are willing to bet on each trade. After Seykota chose each stock, but before he announced whether it had gone up or down, each student was required to write down the amount of money he or she was willing to risk on that trade. They could risk as little or as much as they wanted.

The results of the contest provided quite an education for Seykota's students - and should be remembered by anyone who puts their hard-earned money at risk in the market. By the end of the contest some of the students had lost their entire hypothetical stake and were completely "broke". Others had come out about even, making a little money or losing a little money. But a few of the best students - the best traders - had turned that hypothetical $100,000 into over $1 million!

Think about it: Two traders start with the same amount of money and buy and sell the exact same stocks at the exact same time. One goes broke. The other makes 1,000%! Therein lies the secret to survival, and ultimately success, as a trader. All the great traders will tell you that position-sizing is the single most important factor in their success.

So how much should you risk on any single trade - in other words, how much should you be willing to lose? It is best to risk a fixed percentage of your account value on every trade, and not vary that percentage from trade to trade. What that percentage should be depends on several critical factors. The most critical are your win-loss ratio, the size of your average win and the size of your average loss. Given these three numbers, your position sizing will determine whether you live or die as a trader.

The point of position-sizing is to be sure that you don't break the bank during a losing streak. Even a random coin toss can produce 10 tails consecutively, so make no mistake that even the best traders suffer through losing streaks of equal length. If you risk, say 10% of your account on every trade, and your average loss is 7%, a losing streak of 10 in a row could be devastating. On the other hand, if you are a day trader and your average loss is .5%, you can risk more money on each trade without worrying about a losing streak taking you out of the game.

Sykota says he never risks more than 5% of his account on any single trade. Many other highly successful traders think risking anything more than 3% of your account on a single trade makes you a "cowboy". A good starting point for beginning traders is probably 1% of your account. The added advantage of lower risk for beginners is that it helps minimize the emotions that often interfere with good trading.

For a detailed discussion of position-sizing, we highly recommend Van Tharp's book "Trade Your Way to Financial Freedom". An internationally renowned trading coach, Tharp was profiled along with Seykota in "Market Wizards", Jack Schwager's classic collection of profiles of some of the most brilliant traders and trading minds of all time.

Maybe you are looking for Great Forex Broker, the team at CFD FX REPORT recently researched a lot of Forex Brokers, so if you would like to start using the broker that thousands of others are joining simply look at CFD FX REPORT under choosing a broker to find out. Start 2009 off with the winning broker and make it the YEAR OF THE DOLLAR

As we have discussed in the article the most important steps you can make as a trader is education. As you are responsible for creating your own wealth so to continue learning and for more free education lessons please visit the CFD FX REPORT they will be able to satisfy all your education requirements. Also they can help you find the Best Forex Broker and CFD Brokers in the market. Visit them today. Education is knowledge and knowledge helps create wealth. - 23210

About the Author:

The CFD FX REPORT is a real time trading tool that offers clients free trading reports, with trading ideas, stock market and forex market education as well helping them with. Also if you are looking for a Forex Broker, then feel free to visit our broker section as we recently reviewed all the forex brokers and have found the best on the market.

Making Miracles From CFD Trading

By cfd09

The CFD market is the fastest growing market in the world which runs 24 hour day and almost 6 days per week, so you are not limited to the traditional market hours. This allows you trade anytime you want. So even if you have a full time job you are able to trade when you get home, which can help generate a second income.

Learning to trade the CFD market:

The CFD market works on trading countries' currencies, for example the pound versus the Us Dollar. You'll need to learn how the CFD market works in order to be successful, but it's not that difficult to do. To learn to trade you can acquire some books and start learn, attend trading training courses or you can visit the CFD FX REPORT and they can point you in the right direction to start trading.

The fastest way learn trading the CFD market is to do so by doing what's called "demo trading." With demo trading, you practice trades by finding an online CFD broker and then signing up for a demo account. This is similar to paper trading except you are doing it live. All you need to get started is a computer and internet access, so it is not expensive to start to learn to trade the CFD market. With your demo CFD trading account, you don't trade with real money, it is all pretend money. Instead, you learn how to place orders, when to get in, and when to get out of trades. If you are looking for the Best CFD Broker visit the CFD FX REPORTthey have recently reviewed all the brokers and have found who they believe to be the Best CFD Broker.

In addition to you place your first CFD trades, the benefit is that you can place orders and you don't have to be online 24 hours a day. So what you can do place start or stop orders automatically based on your entry and exit points. The other thing with the CFD markets today is that you can also have automated CFD Trading systems which will automatically place orders for you.

Psychology of trading and understanding the CFD market:

Starting out demo trading is the best way to begin as it teaches you how to place orders, the importance of entering and exiting trades. That is, you're going to learn how to both lose and win with CFD trades. That's important, because even the most successful CFD traders don't win on every trade. Instead, they keep their emotions out of their trades and get in and get out when their data tells them they should. That means, you'll need to be able to get out of a trade that's making you money because your data tells you that it's about to take a significant dive south, and you'll need to be able to get out of a trade that is losing money instead of staying in, in hopes of making the money you've lost back.

Finally you should never trade with money that you can't afford to lose, as what it does is put pressure on you before you start and can cause you to make incorrect trading decisions.

These few simple rules can help you become very successful at CFD trading. Take a look at this fast-growing market and see if it's for you as there is a lot of money to be made if you have the right plan. - 23210

About the Author:

The CFD FX REPORT is a real time trading tool that offers clients free trading reports, with trading ideas, stock market and forex market education as well helping them with. Also if you are looking for a Forex Broker, then feel free to visit our broker section as we recently reviewed all the forex brokers and have found the best on the market.

Forex Trading Pays Big Dividends

By fxreport

One of the easiest ways to make money from home today is through forex trading. Since the inception of computers and internet many people are Forex Trading their way to financial freedom. This industry is now turning over in excess of $2 trillion dollars every day and it is growing, making it the most liquid market in the world.

Some of the key benefits to forex trading:

Firstly since the introduction of computers and the internet the forex market is easily accessible from anywhere in the world.

The Forex market's popularity with ordinary home traders means that there are more and more online forex brokers catering specifically for the home forex trader. They offer online training, live helpdesk support, trading platforms that are easy to understand and operate. They also offer demo accounts so you can practice first before using your own capital. You see forex brokers want you to be successful as that is how they make money by you trading so they will give you all the tools you need to become successful.

Secondly, the forex market is relatively simple to understand and trade on and it has less influencing factors than the normal stock markets. As you don't have to rely on fundamentals as much and you can just learn technical analysis. So through proper education you can be up and trading profitably within a couple of weeks. For more education lessons feel free to visit the CFD FX REPORT they specialize in offering free education lessons and can also help you find the best forex broker in the market. This website is a must for any serious trader.

Remember Forex Trading does take a certain amount of skill and it is not a get rich quick scheme, so do not expect instant success. This is why it is important to use a demo account first to build up your knowledge and confidence.

Please start off slow get the feel for placing trades, exiting trades, taking losses and the rewards will soon come. - 23210

About the Author:

The CFD FX REPORT is a real time trading tool that offers clients free trading reports, with trading ideas, stock market and forex market education as well helping them with. Also if you are looking for a Forex Broker, then feel free to visit our broker section as we recently reviewed all the forex brokers and have found the best on the market.

Trading the CFD market- 3 Great Ideas

By cfdreport

Many people today are excited by the possibilities of the CFD Market and how much money can be made. Many of these people want to become a full time CFD trader, either now or very soon. This is the one of the most common thoughts amongst CFD traders, so do you think like this too?

Contracts For Difference- The Big Secrets

To make lots of money from CFD Trading and to survive in the CFD Markets just being a normal CFD trader will not cut it, you need to become a professional CFD Trader. So what are the secrets of the professional trader? What enables them to make lots of money from CFD Trading? So here are some secrets of a Professional CFD Trader , which he uses to make big money?

The Best Idea Number 1- Keep it simple

You do not have to be Einstein to be a professional Trader- They will simply Follow a CFD Trading System. Most of the professional traders are not God, they don't have any exceptional foresight skills. What makes them different to most people is simply because they have a CFD system, which gives great signals and most importantly they stick to this system and there rules. More than likely they have a very simply trading plan, nothing too complicated and nothing over the top.

The Best idea number 2- Think and work smarter, not harder.

When it comes to CFD Trading sometimes it doesn't matter how much you learn, how much time you put in, it comes down to how accurate and how useful the tutorials and education is and also the mindset of the individual. So the key is finding the right information, the right education lessons and the right CFD Broker. The CFD FX REPORT recently researched all the brokers and they have come up with who they believe to be the Best CFD Broker. They also have some excellent education lessons available.

The Best Idea Number 3 - Determination, Discipline, Ability to Take a Loss, Money Management and Belief

Most of the successful CFD Traders have the mindset that they will succeed, they set rules, they stick to them and they can take a loss. They understand that you can't pick the market 100% of the time and if they trade to their plan. They understand to make big profits are not achieved over one or weeks but over years. They will not put anymore then 5-10% of their capital per trade - 23210

About the Author:

The CFD FX REPORT is a real time trading tool that offers clients free trading reports, with trading ideas, stock market and forex market education as well helping them with. Also if you are looking for a Forex Broker, then feel free to visit our broker section as we recently reviewed all the forex brokers and have found the best on the market.