Swing Trading Plan » Currency

Swing Trading – A Simple and Easy to Learn Currency Trading Strategy for Triple Digit Gains!

James Johnson — Sun, 23 Jan 2011 15:49:41 +0000

If you want to make money at Forex trading with a method which is exciting and fun and generates huge profits in just 30 minutes a day then, swing trading is the perfect currency trading strategy. Here we will look at a simple swing trading strategy which can help you enjoy currency trading success.

Swing trading is based on the fact that humans are emotional beings and when greed is present they push prices to far to the upside and when fear is present they push prices to far to the downside and you will see this on any currency trading chart in the form of a price spike. These sharp price spikes though never last long and prices soon come back from overbought or oversold levels, as prices return to fair value.

Forex swing trading is simply a method where a trader looks for a short shapr price spike to occur and then sells into greed or buys into fear. Below, we will give you some simple tips on how to make money from these price spikes and our example, is based on selling into greed but the same logic is also applicable in a bear market.

- Once a price spike has occurred you need to see how overbought the market is and for this you can use some momentum oscillators which will show you this. There are numerous momentum indicators but the best for Forex swing trading in my view are – The MACD, the relative strength Index and the stochastic. There very easy to learn and when you see a currency is overbought, you can use them to enter your trading signal.

- To generate your trading signal, simply wait until the momentum indicators you are using turn down, while the price of the currency is still rising. This is known as divergence which warns of a trend change and when divergence occurs, you can open a short position.

- As soon as you place the trade, enter a stop above resistance and set a downside target and this should be above a major support level. You never want to wait for the level to be tested in case, prices bounce back up against you and eat into your profit. Don’t be greedy, take your profit and get out and wait for the next trade.

- When swing trading, always trade levels that are near or at, historical overbought extremes on the chart. The more overbought a market is the harder the fall will be when greed peaks, so be selective with your swing trades.

So there you have a simple swing trading strategy which makes big gains and even better, it will only take you 30 minutes a day to apply. Swing trading is a great way to trade and will always work, because human nature will always push prices to far up or down which creates, trading opportunities which will allow you to build a great second income.

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Currency Crosses: Technical Outlook

James Johnson — Wed, 24 Nov 2010 05:42:40 +0000

AGRI-BIZ & COMMODITIES

Currency Technical Analysis ? a Beginners Guide to Bigger Profits

James Johnson — Sat, 30 Oct 2010 20:42:45 +0000

{As you know, I am incessantly on the lookout for excellent articles on Swing Trading, recognising that good information is required to learn how to swing trade.|As you are probably aware, I am constantly on the lookout for excellent information on Swing Trading, realizing that good information is required to learn how to swing trade.} {Now, I discovered a very good article that explains Swing Trading in simple language.|Recently, I ran across a really good piece of content that explains Swing Trading in easy to understand language.}{ Make sure you look over this article and let me know your opinion.|Make sure you look into this and let me know your thoughts on it.} {Today’s post is titled and you should find the entire article provided below for your convenience:|Todays piece of content is titled title and you could find the complete piece of content written below for your convenience:}

This article gives you a complete guide to currency technical analysis. We explain why it works, and show you how you can use technical analysis in the currency markets, to make huge profits.

Many traders don’t fully understand the advantages of technical analysis – and scoff at it, saying that it can’t work.

We will however, show you how to use currency technical analysis the right way, to make big profits – so let’s get started.

What is Currency Technical Analysis?

It is simply defined as the study of price action through the use of charts – for the purpose of identifying price trends. It’s not a science, as many chartists claim – it’s an art, and it works! Why? Because technical analysis reflects human psychology. What about the supply and demand fundamentals, you may ask – well it takes them into account too.

Currency technical analysis uses the following equation:

Market Perception (trader psychology) + Fundamentals = Price Action

All currency technical analysis does, is postulate that all fundamentals are quickly reflected in price action (and in the 21st century with our advanced communications this is truer than ever) – so it simply concentrates on price action. It really is that simple!

Price action reflects all the fundamentals, and more importantly, how the participants perceive them.

Traders who study fundamentals claim that you can’t use technical analysis – because you need to know and study the fundamentals, to know where prices are going – this is simply not true! Some of the largest price moves in history, have occurred with little or no change in the fundamentals.

It’s a fact that markets are generally most bullish at market tops and most bearish at market bottoms – and these markets occurred with little or no change in the fundamentals. Human psychology was at work here – and currency technical analysis studies this, as well as fundamentals.

Learn to use technical analysis, and you will see the reality as it is – rather than listening to the opinions of others. Keep in mind that 90% of traders lose money – because they’re influenced by greed and fear created by the news services.

Charts allow you to see the reality – and that’s a huge advantage.

Currency technical analysis makes the following assumptions:

1. Markets Discount

All fundamentals show up quickly in the price action, when you use technical analysis. You are therefore studying the fundamentals as they are – not trying to guess their impact – and of course, you’re studying human psychology as well.

2. Trends Persist

Currency technical analysis can prove this – just get out a chart of any currency, and you’ll see long term trends – many lasting for several years.

History Repeats

The basis of currency technical analysis, is that what has happened in the past, will happen again – and that’s why it’s so effective.

Human behaviour repeats itself – and since price patterns reflect shifts in human psychology, we can assume that certain patterns and trends will repeat themselves.

Your Aim

Your aim is to use technical analysis to catch, and hold the longer-term trends. Keep in mind that human behaviour does repeat itself – but humans can be unpredictable as well!

Keep in mind that technical analysis is an art, not a science. Be wary of theories that say they can predict with scientific accuracy – they can’t! – If they could, we’d all know the price in advance – and there’d be no market.

The good news is that by using technical analysis in the money markets, you can get the odds on your favour – and make big long-term profits.

Trade the Odds with Currency Technical Analysis

In gambling, the aim is to get the odds in your favour – and in trading, your aim should be to trade only when the odds are in your favour. You won’t win every trade – but neither can the top football players score from every kick at the goal.

By following the information outlined here, and putting in a little work and preparation, you could soon be racking up huge long-term profits by using currency technical analysis.

Currency Crosses: Technical Outlook 10-13

James Johnson — Fri, 15 Oct 2010 20:37:27 +0000

Pinning Hopes on Expiration Friday

Currency Trading – Are You Really Into Forex Day Trading?

James Johnson — Sat, 28 Aug 2010 11:37:49 +0000

There are many ways to trade the forex market and forex day trading is one of them. Although it is gaining popularity, forex day trading or forex scalping as it is more commonly called, is one of the more risky way to trade the currency market. It is a high paced game and requires a different skill set as compared to other forms of forex investments.If you’re the type who likes the excitement and high adrenalin game of trading, forex day trading could be the one for you. It may even be more profitable than long term forex trading. This is because you can do more trades per day and assuming you are able to consistently make some profits from most of the trades, your profitability can actually be higher than that of long term traders.Another advantage of day trading is you do not have to worry about holding the trades overnight. You will close all your trades at the end of each day and if something happens that will affect the currency of certain country over the weekends, you can still sleep in peace. On the other hand, the long term forex investor will be pouring cold sweat while waiting for the forex market to open.Having said that, I must emphasize that forex day trading is not a bed of roses. It is a fact that more than 80% of forex day traders end up losing money. One of the reason is due to the high risk involved. Another is these traders are in the market to make quick buck and did not make an effort to do the necessary forex training to be a successful day trader.In additoin, many of the day traders are trading on borrowed money. They have high leverage against their trading account. If they risk too much on one trade and if the trade went awry, it could potentially wipe out all their previous gains and they could end up in massive debt. The risk can be minimized if a day trader put in effort to master the skills of forex day trading.If you are keen on day trading, you can try it out, but do it with care. There are many successful day traders who take the time and effort to create a successful forex trading system that is able to make them consistent profits day in and day out. If you find that you do not have the time and energy for day trading, you should explore other forms of forex trading that suits you as there is plenty of money to be made in the currency market.

The Advantages of Technical Analysis for Currency Trading

James Johnson — Tue, 06 Jul 2010 10:08:06 +0000

We have already looked at the difference between fundamental and technical analysis of currency trading in our â??currency trading successâ? article, here we will concentrate more on the advantages of technical analysis for currency trading and how to build a successful system.

There are many different methods and tools utilized in technical analysis, but they all rely on the same principles – that price patterns and price trends exist in the market and that they can be identified and turned into profit opportunities.

Technical Analysis in currency trading is based on three core principles:

Markets Discount

The actual price is a reflection of everything known to the market that could possibly have an affect on price movement and includes supply and demand, political factors, and the market sentiment.

The pure technical analyst is only concerned with price movements, NOT the reasons behind the price movements.

Prices Move in Trends

Prices can move in three directions – they can move up, down or sideways.

Once a trend in any of these directions is in effect it usually, will persist and create a trend.

The market trend is simply defined as the direction of market prices, a concept that is essential to the success of technical analysis in currency trading.

Identifying trends in theory is simple; a price chart will usually indicate the prevailing trend as characterized by a series of waves with obvious peaks and troughs.

It is the direction of these peaks and troughs that constitutes the market trend, if they move up, the trend is bullish, if they move down the trend is bearish and of course if they move sideways then the market is in a period of consolidation.

History Tends to Repeat Itself

To a technical analyst in currency trading, the trader psychology that affects prices is extremely important, as human nature is repetitive and this shows up in repetitive price patterns.

This allows anyone using technical analysis in currency trading to predict where prices are likely to go next and traders can then act upon this information for profit.

The market price reflects everything

Technical analysis in currency trading is primarily concerned with price trends and everything that can possibly affect a currency is reflected in price action.

Technical Indicators

The logic of technical analysis for currency trading is universally accepted, and there are numerous ways to execute technical trading systems, with the huge amount of available indictors used either alone, or in combination.

We will look at the different indicators below and some that have proved highly effective in the technical analysis of currency trading. Any traders, who wish to profit from the currency markets, should consider these indicators.

Trend Indicators

A trend is a term used to describe the persistence of price movement in one direction over time. The easiest way to spot trends is via trend lines, drawn below price lows or above price highs.

While basic trend lines have gone out of fashion in recent years in favor of more complicated indicators, they are still one of the most effective ways to technically analyze currency movements.

Support/Resistance Indicators

Support and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon reflects basic supply and demand and when prices break above or below significant support or resistance, a big move can follow very quickly.

Again, the best method for spotting and acting on these breaks is the humble trend line.

We believe that trend lines should be the basis on which ANY technical analysis of currencies should be based on – and the indicators below are for confirmation:

Volatility Indicators

Volatility is a general term used to describe the magnitude, or size, of day-to-day price fluctuations independent of their direction. Generally, changes in volatility tend to lead changes in prices.

One great indicator to use is the Bollinger band.

Any trader should look at Bollinger Bands, as they represent one of the most effective indicators for the technical analysis of currency markets.

Not only is it good for predicting trend movements, but also it is useful for timing entry and exit levels, as well as when to increase or decrease position size.

Cycle Indicators

A cycle is a term to indicate repeating patterns of market movement, specific to recurrent events, such as elections, year-end monetary repatriation etc.

Cycle indicators determine the timing of a particular market patterns. A good example would be Elliott Wave theory. Cycle indicators however in our view are of little or no use, in the technical analysis of currencies.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over given time periods.

Momentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is generally highest at the start of a trend and lowest at market turning points.

Any divergence of directions in price and momentum is a warning of weakness; if price extremes occur with weak momentum, then an end of movement in the current direction could occur.

If however momentum is trending strongly and prices are flat, it signals a potential change in price direction. Examples of momentum indicators include Stochastics, MACD and RSI.

The most effective momentum indictor is the stochastic and using stochastic crossovers to time entry and exit levels, can be highly effective.

Sentiment Indicators

Many technical analysts in currency trading monitor surveys of investor sentiment such as net traderâ??s positions and bullish consensus.

These indicators attempt to gauge the general attitude of the investment community, to determine whether investors are bearish or bullish.

These indicators are only to be used when extremes of sentiment are reached, either bullish or bearish.

If used in this way, they are one of the most powerful warning signs of significant market turning points and can be used in technical analysis of currency markets to huge effect.

Putting it all Together

Traders make money from the technical analysis of currency markets in many different ways, however we believe that trend lines backed up by just a few additional indicators (to help time market entry exit and stop levels) can be very effective.

The ones we favor are: Bollinger bands, stochastics and market sentiment indicators, as filters for traditional trend lines.

The best way to succeed in technical analysis of currency trading is to use a simple robust system based on trendlines and just a few filter indicators such as the ones above and you will soon find yourself catching the big trends that yield the big profits.

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Currency Trading – He’S Just Not That Into Forex Day Trading

James Johnson — Fri, 02 Jul 2010 16:08:34 +0000

To say forex day trading is not risky would be a lie because it is definitely the riskiest form of trading in the forex market, but you can make money if you know what you are doing and have the ability to contain your emotions in this high paced environment. The risk and tempo are what keep a lot of people out of this aspect of it and going the long term way.I once had a student Alvin who attended my forex training course and one day, he asked me if he should go for forex day trading using the forex scalping methods I’ve thought him. I told him forex day trading may be lucrative but may not be suitable for everyone. I went on to analyze the pros and cons of forex day trading with him.Firstly, something that is a draw to forex day trading is the fast trading cycle. Many traders like the rush and potentially, it could actually be more fruitful than long term trading. Each individual trade may not make as much as a long term trade, but because you may be making 10 trades to every one of theirs, if not more, your profitability can actually be higher than that of the long term forex trader.Another drawing characteristic of day trading is that you do not have the overnight worries of the long term trader. Your money is out of the market at the end of the day and if anything happens to affect the currency of a certain country, you just roll over and go back to sleep. The long term investor will be chewing on their nails waiting for the market to reopen.Of course, with any positive there are negatives that have to be considered. The first of these is that the plain fact of the matter is that about 4 out of every 5 people that day trade end up losing money. There are several reasons for this. One of them we have already mentioned in the risk factor and another is that traders are pulled in by the lure of making very fast money and don’t do the work that is necessary to be a successful day trader.Also, a lot of the people that are day trading are doing so on borrowed money. They are leveraging against their forex account and they end risking too much on one trade and then they end up in massive debt when a trade goes bad. It is not the forex market that is causing this, it is the trader that is not putting in the necessary work and effort to be an effective day trader.Another thing about forex day trading you should know is that it will take up quite a fair bit of your time as you need to monitor the forex market very closely. Some part time forex traders overcome this by using automated forex trading system that trades for them.If you’re having a full time job, it can also be quite distracting. Having heard my analysis, Alvin said he’s just not that into forex day trading as he has a full time job and he does not have the time to monitor the forex market. Also, he said he does not need the extra excitement as his job is already stressful enough for him.If you are still interested in day trading and have the time, give it a shot, but just do it conservatively. There are plenty of very successful day traders, but they take the time to create a successful forex day trading system that works and gives them an overall profit day in and day out. If you find that it is too much for you, just explore the long term aspect of this market niche as there is plenty of money to be made!