Techniques Of Fibinacci Sequence On Trading

By John Eather

Fibonacci was the great mathematician from Italy. He founded the new sequence of numbers and it was named after him called as fibonacci. The 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377,610 etc are the numbers of this sequence which has the starting of 0 and 1. Each number in this sequence is the sum of the preceding two numbers.

While moving forward with the larger numbers in the sequence, the division of the two closer consecutive numbers results in the golden ratio. And this golden ratio's where used by trading stocks , they produce primary and secondary results. Onward direction refers in the primary result and opposite direction refers the secondary result.

In primary trend,the most common Fibonacci retracement levels are 38.2%,50%,61.8%.These standard levels are used by most basic stock charting applications.These Fibonacci retracement levels act almost as magnets once the countertrend rally takes place.Apart from above three there are few other levels that can provide resistance.These are 75%, 78.6%, 87.5%, and 88.7% retracement levels.

The thumb rule states that the retracement levels makes about 50%, and the earlier mentioned levels attracts the price by behaving like magnets. The price must be analyzed by the persons who are familiar on those levels. Always the prices do not move in constant. Stocks, futures, forex,all instruments which are liquid,will often oscilate in Fibonacci proportions.

The charts of price scale and time scale can be enhanced with the applications of Fibonacci numbers. With the few simple indicators of Fibonacci ratio, can be used to determine robable price turning points,optimum entry,exit and stop-loss levels.

After identifying the primary trend, use price reversal pattern recognition to coincide with a fibonacci retracement level to confirm that the countertrend move has ceased.Then look for the stock to test the recent lows and double bottom or break through that level.

The trader must have the clear idea and knowledge of the international markets because of the "risk arbitrage" in the existing market situations mainly in "forex trading". For help "forex signal trading" can be used by the trader. While performing "forex rading" the transaction of currency between nations take place, so the trader must be aware of that.

For beginner traders it might be too complex for using the applications of Fibonacci towards trading and takes time to make him perfect. These Fibonacci retracement levels are being used by many beginning traders. And it is also used by the advanced traders also to become a self-fulfilling prophecy. - 23210

About the Author:

Take a look at John Eather's Free eCourse on Forex Trading and discover how to Become Financially Successful. Go to http://www.moneymakingfxtrader.com and find out more details regarding Automated Trading.

Dollar Guru (Part II)

By Ahmad Hassam

Knowing currency correlations between the major pairs can help you a lot in your trading. Suppose you have the data about the currency correlations of the major currency pairs. The correlation between GBP/USD and EUR/USD is 0.68. This correlation coefficient is positive and it means both the pairs move in the same direction 68% of the time.

USD/CHF and EUR/USD have a correlation coefficient of -0.975. This is pretty close to (-1). It means both these pairs move in the opposite direction almost all the time. To be precise 97.5% of the time if USD/CHF moves up, the pair EUR/USD will move down!

You have this information. It tells you how much these pairs move in the same or opposite directions. Suppose you trade both the pairs USD/CHF and EUR/USD by going long at the same time. What you will be doing is in fact canceling both the positions.

If you win on USD/CHF pair, you will lose on EUR/USD pair. Due to the negative correlation between the two pairs, the two trades would effectively cancel each other. A savvy investor would go long on USD/CHF. At the same time he/she will go short on EUR/USD. So he/she will be shorting USD in both the trades and diversifying the USD bearish investment.

You can make trade entry and exit decisions based on currency correlations. Suppose GBP/USD starts showing volatility and approaches a resistance level. You anticipate going long on a breakout.

However, you notice on the charts that the other three major currency pairs are not showing volatility and moving as much as the GBP/USD. EUR/USD is not showing volatility and moving up on the chart. USD/CHF is not showing much volatility and moving down on the chart. USD/JPY is also not showing much volatility and not moving down on the chart. This means that the volatility in GBP/USD is solely GBP driven. The move is maybe related to some news in the British economy about Bank of England raising or lowering interest rates or some big companies merging.

Now you know that the move in GBP/USD pair is Pound driven and not US Dollar driven. You can take advantage of this information by ignoring the GBP driven move and waiting for a later opportunity that involves simultaneous correlated moves of all the major pairs.

Lets take another example. Suppose you have taken a short position on EUR/USD pair. You want to be sure whether the pair will proceed down towards your profit target. You also want to know can it go against you and cause you to exit the trade with a small loss.

Your EUR/USD has broken the S1 support pivot level. It is heading towards M1. Take a look at the pair EUR/GBP. You find that it has paused at its S1 support pivot level and is showing signs of reversing to the upside.

In this type of a situation, knowledge of currency correlations can tell you if EUR/GBP breaks through the S1 level, you are poised for a profitable trade. However, if it reverses and heads back to the upside, you should watch the indicators and exit before taking a big loss. As you mature in forex trading, you might consider trading a basket of all the major currencies. - 23210

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Learn Forex Nitty Gritty. Try Netpicks Forex Signal Service.

How To Determine A Good Trading Strategy.

By John Eather

An effective trading strategy largely depends on the way planning is executed. Trading strategy can be determined by observing the methods and the current market situations. The primary strategy that needs to be decided is the basic standard of profit that is to be obtained which also determines the annual rate of return. It is essential that we minimise the loss that may arise in trade as far as possible.

The strategies are considered on the basis of the period of trade whether it is for short term or long term. According to the requirements we have to amend our strategy as well. For instance if we are involved with stock trading then it is essential to hold stocks that yields high profit and it is better not to retain those that has an average growth prospect.

We are suppose to ensure that the expected return is larger than the transaction cost. If we maintain this strategy strictly then there won't be any kind of loss in the trade which we are handling. You should have to investigate yourself that what trade we are going to do , what return we are expecting from that trade.

It is always better to avoid risk as far as possible in the highly fluctuating trading environment. It is not wise to invest our whole wealth in just a single entity but rather broaden your horizons by investing in a number of entities. Hence to attain success and to earn profit always minimise your risk and avoid following your instincts.

And for the traders with the less capital or principle should always go in hand with the up to date trends. And they should not have the stock of the entities. strategies to be used this way is to improve your odds , is to have at least two accounts.

Whether you follow your own strategy or someone elseas strategy it is important that you understand it well especially when it is with the entry and exit. Do not be carried away with the new trading ideas and techniques.

Sufficient know how and training is the stepping stone to a successful trader strategy. Day trades involve higher risk factor especially if you are a beginner and are not acquainted with proper money management. Day trading can yield high profit if you are able to study the market thoroughly, follow sound strategy and have an inspiration to thrive.

Every profitable trader will tell you that the key to trading success is an effective, reliable trading strategy. You, as a trader, need to identify a winning system, implement it, and have the discipline to stick to it. And we should follow the same. - 23210

About the Author:

Before you begin trading forex online, please check out John's informative ecourse and reports about Online Forex Trading. Get the latest info concerning trading forex online. Go to MoneyMakingFxTrader.com to learn more.

The Truth About Fap Turbo

By Pete Slipe

Because we have essentially been bombarded with a multitude of websites and sales page that all preach about the effectiveness of a product, we often feel cynical about every one of them.

And most of us are just fed up with that that we instantaneously classify any sort of thing that falls into that category as a scam. So when I found out of a new product and I tested it just to make sure that I dont fall for those fake reviews.

The FAP Turbo is an automate Forex program that aims to help its users make money through the foreign exchange market. There are four things that you should always be in the look out for when selecting a good program: efficient system, ease of use, consistency of results and degree of profitability.

What FAP Turbo claims to do is to help you start earning without having to do anything because the program can work on autopilot. All you had to do was to install the software and then you can start bringing in the money. The program asserts that you only need $500 to earn as much as a million in the end of the year.

These are all amazing claims which were all put to the test. When it came to the efficiency of the software, we can check the efficiency of the program through its background.

When I googled the program, I found out that it actually had a precursor called the Forex Autopilot system. This older version worked pretty well and its users were able to earn as much as $3,000 to $6,000. Thats quite decent already but the FAP Turbo triples that amount. After the test trial, I found out that the user can earn as much as $30,000 in 90 days with the FAP Turbo.

One thing that I observed with the FAP Turbo was that it was extremely easy to use. You literally only need 5 minutes to install the software to your computer and the step by step instructions were very convenient and helpful.

Right after the installation, you can start running the program immediately. This is perfect for those who are not tech savvy, newbies who have just started trading and experienced traders looking for a way to simplify things.

Finally, FAP Turbo has impressive customer support so that you can go through unforeseen glitches that might pop up. Test queries sent took less than 24 hours to receive a response.

But whats really wonderful about FAP Turbo is that you have a 60 days money back guarantee if you decide that the program isnt for you. - 23210

About the Author:

Stop. Before you purchase fap turbo wait and see my honest fap turbo review right this second!

Mastering The Forex Trade

By Fred Todle

There are some misconceptions regarding the forex trading system. Some people equate the trading of foreign currency with the stock market. While it is true that some similarities exist, there are major differences between the two. Basically, forex is the trading currencies. It is essentially the exchanging one currency for another.

In the forex trading business, one currency is purchased with the hope that it will go up in value in comparison the one we are selling. Forex trading can only entail buying one currency while selling another..

In layman's terms, a hypothetical trade involving dollars and Euros would go somewhat like this; the exchange rate of the euro to the dollar is roughly $1.25. This means that there is $1.25 for every euro. When you buy euros, yoy are hoping that the euro will increase in comparison to the dollar. Then when you sell the euros, you get more dollars and that is your profit. Again, this is a simplistic approach but it highlights the motions that are involved in forex trading.

In the past decade, forex used to be the sole domain of large banks, financial institutions and corporations dealing in international goods and service. Many import/export firms also doubled as forex trading entities. The volume of foreign currency traded daily is staggering. It ranges in the tune of $7 trillion dollars. This means that forex is a very lucrative enterprise indeed.

A new trend has emerged. Ordinary people like you and me and now trading in forex which was not quite possible before. This is because one can actually enter the forex market with very little funds. One can start trading with as little as $50.00.

A great facilitator of forex trading is software. There is now specialized software that automates the forex trading process. In the past, one of the main hindrances to trading was the lack of knowledge and skill. This means that only experienced dealers such as banks were positioned to trade. Ordinary people were essentially locked out. But come the advent of special software that places trades and also tutors the user, more and more ordinary traders have entered the fray. It is now possible, with little or no experience in trading, to engage in very profitable trades by the click of a button.

The forex business has gained a lot of popularity. This is because more and more people are looking for additional ways to supplement their daily income. The circumstances surrounding this hinge on a shaky world economy and an uncertain job market. More and more companies are looking to downside while others announce "restructuring" which is another term for mass layoffs. Because of the absence of job security, people are looking for extra income outside their jobs. One of these sources is in forex trading.

Forex trading can be done even while keeping your current job. This because it has a low learning curve and there are many tutorials and courses online. There is also software available to assist in automatic the whole process. - 23210

About the Author:

Author is writer and regular contributor to Forex Trading, a website with resources and information about forex market. One of the most popular post's caterogy there is Fx Market.