Learn More About Forex and Stock Market

  Breakouts are a common phenomenon in the Forex market and occur across different chart intervals. It is therefore no surprise that break out trading strategies have become one of the most popular ways of trading Forex , besides other strategies such as trend following methods. What is Breakout in Forex? A breakout is a price movement of a security through an identified level of resistance, which is usually followed by heavy volume and an increased amount of volatility. Traders buy the underlying asset when the price breaks above a level of resistance or when it breaks below a level of support. A breakout is the point at which the market price breaks away, or moves out of a trading range . The trading range can be for any length of time but once prices exceeds the high or low of the range, a breakout has occurred. The accepted market wisdom is “buy low sell high”. What is False Breakout in Forex? A false breakout is when price temporarily moves above or below a key support or...

EURUSD EUR/USD is consolidating in the lower end of the weekly range around 1.1280 as market participants continue to adjust to the appointment of IMF’s Christine Lagarde to succeed  Mario Draghi  at ECB. EUR/USD comes under pressure near 1.1280. Yields of the 10-year Bund drop to all time lows near 0.40% The renewed dovish stance from the  ECB  and USD-dynamics should dictate the price action around the pair in the near term, helped at the same time by the broad risk-appetite trends and the recent positive developments from the US-China trade front.  USDJPY USD/JPY struggles near weekly lows, just above mid-107.00s Reviving safe-haven demand benefits the JPY and keeps exerting downward pressure.  USD/JPY struggles near weekly lows, just above mid-107.00s Having failed to capitalize on the weekly bullish gap, the pair remained under some selling pressure for the second consecutive session. The latest optimism over the US-China tra...

As the prefix “macro” in the name suggests, macroeconomics deals with the bigger picture. It is not only one specific economy that traders consider, but the implications in the overall global picture.  Forex market is primarily driven by overarching macroeconomic factors. These factors influence a trader's decisions and ultimately determine the value of a currency at any given point in time. GDP- Gross Domestic Product This is the measurement for goods and services that were finished over a period of time. GDP may be the most obvious economic report, as it is the baseline of a country's economic performance and strength.  The GDP is broken down into 4 categories: Business Spending Government Spending Private Consumption Total Net Exports Inflation Inflation is also a very important indicator, as it sends a signal of increasing price levels and falling purchasing power.  This is the measure of increases or decreases in pricing levels over a ...

What is the need of Currency Exchange? There has never been a more challenging and exciting time to be trading in the  foreign exchange market . What started out as a market for professionals is now attracting traders from all over the world and of all experience levels.  The forex market  mainly exists because of the need to ease or facilitate currency exchange. There is a need to  exchange currencies  because one country’s currency is not accepted in another. Currencies are needed everywhere to facilitate trade of goods and services. How Currency Exchange Works? The forex market works just like the other financial markets.  Currencies  are sold and bought at the current rate. The price of a currency with respect to another currency is called the exchange rate. Since the U.S. dollar is the currency that dominates in financial markets,  exchange rates  are expressed mostly in US dollars. Except when the exchange rate is pegged or fix...

Traders can get conflicting views of a currency pair by examining different  time frames . While the daily might be showing an up-trend, the hourly can be showing a down-trend. It can be really confusing for beginning traders, which time frame to build strategy on? Perhaps the best way to explain this variation is that the time periods these commonly used terms refer to tend to depend on the usual time a position is held given the type of trading strategy that a trader employs. Some of the most common incremental time frames used by technical analysts when reviewing exchange rate movements for Forex currency pairs include the following: The one minute time frame The five minute time frame The fifteen minute time frame The thirty minute The one hour time frame The four hour or 240 minute timeframe: The one day or daily time frame The one week time frame The one month time frame The one year time frame Forex Time Frames by Trading Strategy Although trading time fr...

BASIC CURRENCY AND QUOTE CURRENCY A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency. Currency pairs compare the value of one currency to another — the base currency (or the first one) versus the second, or the quote currency. It indicates how much of the quote currency is needed to purchase one unit of the base currency. EXCHANGE RATE An exchange rate is the price of a nation’s currency in terms of another currency. Thus, an exchange rate has two components, the domestic currency and a foreign currency, and can be quoted either directly or indirectly. In a direct quotation , the price of a unit of foreign currency is expressed in terms of the domestic currency. In an indirect quotation , the price of a unit of domestic currency is express...

With  forex trading , the thrill of the chase when executing a series of trades can be intoxicating. However, it is important not to lose your shirt in the process. Even the best traders can go on multi-trade losing streaks that can last for weeks, only to recover later. If the same trader is using too much of their  trading capital  with each trade, they can be wiped out. This is where good  risk management  policies come into play to ensure that they can stay in the (trading) game long enough for future trades to recover earlier trading losses. You can't be 100 percent safe when trading forex. However, you can take steps to lower your exposure to large losses. Careful planning, execution and monitoring of trades will help you keep losses to a minimum without sacrificing profit potential. In order to trade safely you should have a successful  trading strategy . Forex traders use technical and fundamental analysis  of the  currency markets ...

You may have noticed that the value of  currencies  goes up and down every day. What most people don't realize is that there is a  foreign exchange market  - or 'Forex' for short - where you can potentially profit from the movement of these currencies. As technologies have improved,  the forex market  has become more accessible resulting in an unprecedented growth in  online trading . One of the great things about  trading currencies  now is that you no longer have to be a big money manager to trade this market; traders and investors like you can trade this market. Advantages of Trading Forex 24 Hours Trading The single biggest advantage the forex market has over other markets is its 24-hour nature. A  trader  can put on or take off positions literally any time of day or night, regardless of their base of operations. Consider, for example, the working person with a 9 to 5 type of job. Most folks like that cannot be expecte...

What is Swing Trading? Swing trading are short term strategies to take advantage of price swings, either reversing back to the median or fading a rally. Swing trading attempts to capture gains in a stock (or any financial instrument) within an overnight hold to several weeks. Why Swing Trade? Swing trading involves holding a position either long or short at least overnight and or up to several weeks. The goal is to capture a larger price move than is possible on an intra-day basis. Swing trading assumes a larger price range and price move and therefore requires careful position sizing to minimize downside risk. Swing Trading is a strategy that focuses on taking smaller gains in short term trends and cutting losses quicker. The gains might be smaller, but done consistently over time they can compound into excellent annual returns. Swing Trading positions are usually held a few days to a couple of weeks, but can be held longer. Swing Trading Strat...

People always want to find the best type of trade to invest in. This particularly holds true for short-term and long-term trading. This decision, however, varies from person to person. Ideally, the trader must decide on a trading type that best suits his/her personality. Let’s us take a closer look at short and long-term trading to gain some insight. Short-term trading  When the duration between buying and selling ranges from a few days to a few weeks, it is considered as short-term trading. Pros of short-term trading Faster means of making money: The benefits of a trade can be realized in a short period through this method. You can earn profits within a day by investing in intraday trading. Short-term risk: If you discover that a wrong decision was taken on a trade, you can free up the capital invested and reinvest it in fresh stocks. This is because capital is at risk for a shorter period. Cons of short-term trading Volatile market: There are chances that you m...

The Forex Insight for 24th May for major currency pairs are as follows: EUR/USD The EUR/USD pair held on to its modest recovery gains above the 1.1700 handle. The ongoing US Dollar profit-taking slide, triggered by a dovish assessment of Wednesday's FOMC meeting minutes. USD showed little signs of easing amid a sharp retracement in the US Treasury bond yields and following an unexpected rise in the US initial weekly jobless claims. The pair would need to advance beyond 1.1790 to gain some further upward traction and retest the weekly high at 1.1829. GBP/USD GBP/USD: bulls capped by the 100-hr SMA, but if that were to give, opens risk towards key 1.3450 (50-W SMA). GBP/USD is trading at 1.3387, with a high of 1.3422 and a low of 13349. The technical readings lean bearish and are stacked up against the bulls. However, 1.3301 comes as the Dec 14 low and a potentially strong level of support. 1.3040 is a key downside t...

Different market entry and exit orders are being required for different trading scenarios and Forex Trading. The following are some basic types of Forex Orders: Market Order   This is the simplest way to enter the market, whether you are going long or shorting. By taking a market order, a trader enters the market at the best possible price at that given time. The order is filled straight away. Buy Limit   This order anticipates a bounce in an upward direction from the current down-trend. Therefore, an entry point is created below the current market price. Once the entry price is reached the order is triggered to go long. The stop loss is below and the profit target is above the entry level. Sell Limit Opposite to the Buy Limit, this order type anticipates the market to bounce downwards from the current up-trend. An entry point is created above the current market price. Once that price level is reached, the order is triggered to go short. The stop loss is above ...

Emotions should you watch for in yourself while trading: 1. Greed:   Traders are greedy when they don’t take profits because they think a trade is going to go forever in their favor. Another thing that greedy traders do is add to a position simply because the market has moved in their favor, you can add to your trades if you do so for logical price action-based reasons, but doing so only because the market has moved in your favor a little bit, is usually an action born out of greed. Obviously, risking too much on a trade from the very start is a greedy thing to do too. The point here is that you need to be very careful of greed, because it can sneak up on you and quickly destroy your trading account. 2. Fear:  Traders become fearful of entering the market usually when they are new to trading and have not yet mastered an effective trading strategy.Fear can also arise in a trader after they hit a series of losing trades or after suffering a loss larger than what th...

EUR/USD The EUR/USD pair finally broke down of its European session consolidation phase and tumbled below the 1.1900 handle in the last hour. The pair extended overnight rejection slide from the vicinity of the key 1.2000 psychological mark and traded with a bearish bias for the second consecutive session on Tuesday. The USd Dollar continued gaining positive traction, further supported by resurgent US Treasury bond yields, and kept exerting downward pressure on the major.  The selling pressure remained unabated following the release of US monthly retail sales data, coming in to show a m-o-m growth of 0.3% for April. The positive in-line figure were further complemented by an upward revision of previous month's sales, now showing a growth of 0.8% m-o-m as against 0.6% reported earlier, and stronger than expected Empire State manufacturing index, which rose to 20.1 for May from 15.8 in April. GBP/USD The GBP/USD is trading around 1.3460, down 0.65% on the day. US 10-year ...

NO TRADING PLANS: A trading plan is a strict set of rules, half of which a trader draws from their trading strategy and the other one from their money management strategy. The plan may be then complemented by as many more points as the trader sees fit. WHAT IS TRADING PLAN: Specific market conditions for entering a trade; The amount of money to risk in a trade; Specific market conditions to get out if you are wrong (stop-loss); Specific market conditions to get out if you are right (take-profit); Approximate time for the market to reach your target; Note down and record everything! Write this list down as postulates and have it front of you before, after, and during your trading. RISKING TOO MUCH ON ONE TRADE: Never take too much risk in one trade. Forex brokers are allowed a lot of freedom in terms of leveraging their trading account, while beginner Traders lag behind in money management discipline. A combination of these two leads to high risk, hazard trading. Always...

Oil prices eased slightly on Tue, 08-052018, a day after hitting 3-1/2 year highs, as investors braced for President Donald Trump’s decision on whether to withdraw the United States from the Iran nuclear deal, a move that could disrupt global oil supply. US Dollar is currency of international trade, so for all practical purpose all buy and sales on international level is defined in terms of USD. Also,  US is the biggest importer of crude  oil. So say when crude price go up, it means US will be shelling out more dollars to buy it, which means more dollars are going out of the country and hence the dollar  will weaken. US is also one of the biggest oil producer – so when oil price will go up, its own oil revenue will also go up – this impact might counter the fall in dollar a little but not significantly because it is a net importer. A hidden string ties together currencies and crude oil, with price actions in one venue forcing a symp...

Forex trading – or foreign exchange trading – is all about buying and selling currencies in pairs. For the buying and selling of currencies, you need to have information about how much the currencies in the pair are worth in terms of the other. This relationship is what defines a  currency pair . A currency pair quotes two currency abbreviations followed by the value of the base currency based on the currency counter. MAJOR BEST CURRENCY PAIR The US dollar is the preferred reference in most currency exchange transactions worldwide. It is the dominant reserve currency of the world. The following are not necessarily the best Forex pairs to trade, as they are the ones that have high liquidity and occupy the most foreign exchange transactions: EUR/USD (Euro – US dollar) USD/JPY (US dollar – Japanese yen) GBP/USD (British pound – US dollar) AUD/USD (Australian dollar – US dollar) USD/CHF (US dollar – Swiss franc) USD/CAD (US dollar – Canadian dollar) The valu...