Once you¡ve identified a trading opportunity, the next step is to decide EXACTLY when to buy - and this is where many traders go wrong.
Here we explain how to incorporate better market timing into your FOREX strategy - so that you can make bigger profits.
Most traders time their entry levels incorrectly, so here¡s the right way to do it:
Using Support and Resistance Correctly
A basic wisdom of market timing is ¡°buy low, sell high¡± - well, the reality is, if you try this in FOREX trading, you¡ll end up losing money. First, let¡¯s define what support and resistance means
A support level is a historical price that traders come in, and buy to ¡°support the market¡± ¨C and the more times it¡¯s tested, the more valid the support will be.
Conversely, a resistance level is a level on the charts that ¡°resisted prices from moving higher¡±- again the more times it¡¯s tested, the more significant it becomes.
Why Buy Low and Sell High doesn't¡t Work
¡ Buy low, sell high¡± is accepted wisdom by the majority of traders - but this logic is fundamentally flawed - use it in FOREX trading, and you¡¯re asking for trouble. Why? - If you wait for a pullback, you¡¯re going to miss some of the biggest moves.
Think about it - what if a currency starts to trend and doesn't¡t pullback? (How often have you seen this?) If you¡¯re waiting for a pullback that never comes, you¡¯ll never get in on the trade ¨C and you¡ll miss a major opportunity.
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An individual who is responsible for the entire financial portfolio of another individual or another entity. A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client.
Benefits of being a Money Manager with [ForexGen]:
* Providing three different commission sources.
* Weekly commission plan.
* Easy & fast commission withdrawals.
* Fixed percentage of the profits.
* P = k * D “P=Profit, k=Variable Parameter, D=Deposits”
The money manager gets a fixed percentage of the profit previously agreed upon with the client for managing the client funds as a bonus feature.
The most competitive trading conditions:
* 2 pips spread on six currency pairs.
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* Liquidity and 24/5 availability are the characteristic factors of the Forex market compared with other financial markets.
FOREX Trading Strategy - The Secret of Timing
Achieving Trading Perfection
Achieving Trading Perfection - Trade quality, not quantity.
Take the best of the best. Get the big picture. If you haven’t previously come across such advice, or if you have and are not following it, it is time that you take these words to heart. But how?
Trade selection and adequate planning go hand in hand. This is where most would-be professional traders miss the boat.
Much more money is made as a result of proper planning than from sitting and trading everything that comes along or "looks" good.
It’s difficult to fully understand why people think they have to trade so much. It’s difficult to truly grasp why people think that they have to take as many trades as they do.
Just the opposite is true. There is a correct approach to each and every trade. That is what achieving perfection is all about.
It all starts with proper management: planning, organizing, delegating, directing, and controlling.
These facets of management must be woven together into your trading; they do overlap.
Although planning is the major management function involved in achieving perfection, you can’t possibly plan well unless you are organized to do so.
You must have your tools at hand: your trading software, your data, the proper equipment. All of the rudiments for planning must be in place, which in itself is a part of organizing.
You must be physically fit when you plan: well nourished, properly exercised, well rested and mentally alert - all part of having your life organized, all part of achieving perfection as a trader.
To be a winning trader, you have to be among the best. There can be no middle ground. There are only winners and losers, and to be a winner you have to be a champion. And, just like any champion, you must have discipline, self-control, and a willingness to train, train, train.
There are no runners-up in trading, you either get the gold or you give the gold. Often, while others are busy going to parties or watching sports events, you are busy poring over charts, studying, thinking, planning. When others are listening to music or watching TV, you are busy practicing your trading, practicing trade selection, working hard to become a more astute trader.
Part of achieving perfection involves the diligent study of charts. The data, as presented on your screen and preserved as charts, are, for the most part, all you have for making trading decisions. They are a picture, a visualization of what is taking place in the reality of the market. Your job in achieving perfection and becoming an adequate trader is to picture and imagine in your mind what makes prices move and form the way they do. Ask yourself, "How does what I see in front of me relate to the supply and demand for the underlying?" Ask yourself, "Is what I am seeing on the chart even related to supply and demand, or is what I am seeing related to an engineered move by some insider or market mover?"
Supply and demand are not what makes prices move or fail to move most of the time. The sooner you realize that fact, the better off you will be. Markets are engineered, manipulated ¾ you need to know that.
But there’s more to a chart than merely price patterns. Reflected in the chart are the emotional reactions of human beings. Reactions to rumors and news; to national and world events; to government reports - these, too, are on the charts.
You might say that price movement, or the lack thereof, is the net effect of all the perceptions of all the traders who are participating in the market for a particular futures
[ForexGen Introducing Brokers]
Introducing Brokers may be individuals or institutions who gain their income from the commissions and/or rebates by introducing customers to ForexGen trading.
WHAT are the advantages of being an INTRODUCING BROKERS with ForexGen?
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* Providing several ways for our IB's to charge commission.
* ForexGen IB can also charge commission for each lot the traders execute.
* Moreover, ForexGen IB is able to increase the spread for all or certain clients and have ForexGen Investments rebate the difference.
In case the IB does not increase the spread or charge their clients a commission, ForexGen rebate the IB a minor predefined amount for every client's executed lot.
Commission is paid out every month.
Individualized service
[ForexGen] offers our IB's individualized service created according to the individual needs and specified business situation for each IB.
Our Introducing Broker program provides a highly organized program for individualized services and organizations in order to introduce their clients to the online foreign currency exchange market, moreover they will enjoy the benefits of being a part of the ForexGen family.
ForexGen offers 1 pip spread on 10 pairs with high trading techniques that make ForexGen
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You An Make Use Of Their Advice For Your Own Good, And Even To Your Advantage.
Not all people are familiar with forex trading. In fact, most people think that when you talk about forex trading, it has something to do with stocks or bonds. But forex trading is different from stocks or bonds. It involves the trading of currency pairs. Currencies are traded in pairs, and you can’t find a particular currency without a pair. The major currencies being traded are chosen above the rest because they are stable and have a greater value than other foreign currencies. Every time a new comer arrives in the market, the very first ones to take notice of them are what you call frauds. That is why, if you’re new in forex trading, you need to take some advice. It doesn’t hurt to ask for advice from the ones who are already engaged in forex trading. In fact, you can make use of their advice for your own good, and even to your advantage.
READ THE FULL POST HERE
A Look At Economic Developments Around the World
A look at economic developments, activity in stock markets around the world Tuesday
A look at economic developments and stock-market activity around the world Tuesday:
LONDON -- Lower energy costs helped inflation in Britain fall to a five-month low in November, prompting the Bank of England's chief to suggest interest rates could drop further in the months ahead. The office for National Statistics said the consumer price index (CPI), the government's preferred measure of inflation, was up 4.1 percent in the year to November, less than October's equivalent rate of 4.5 percent and September's peak of 5.2 percent. The consensus in the markets was for inflation to have fallen to around 3.9 percent. Despite the smaller than anticipated drop, the Bank of England's governor Mervyn King remained hopeful inflation will fall back toward the target in the coming months because of lower commodity prices, the recession and the government's recent decision to cut sales taxes. However, he warned that the recent fall in the pound will likely moderate the scale of the decline as it will push up the cost of imported goods. The FTSE 100 index of leading British shares closed up 31.52 points, or 0.7 percent, at 4,309.08.
FRANKFURT, Germany -- German Chancellor Angela Merkel said her government will wait to see whether the new U.S. administration passes another economic stimulus package before considering further measures for Germany in a keynote speech before the Center for European Economic Research in the southwestern German city of Mannheim. Meanwhile, the euro zone economy contracted at a sharper pace in December, a closely watched survey showed Tuesday, suggesting the European Central Bank is likely to cut interest rates again early next year to prevent the economy from sliding deeper into recession. The preliminary estimate of the purchasing managers index (PMI) for the services sector in the 15-nation single currency zone fell to 42.0 in December from 42.5 the previous month, the lowest in the survey's 10-year history. Meanwhile, the equivalent manufacturing PMI slumped to 34.5 in December from 35.6 in November -- also the lowest in the survey's history. The composite reading, which combines both PMIs, dropped to 38.3 from 38.9. Again this was the lowest in the survey's 10-year history. The DAX closed 75.09 points, or 1.6 percent, higher at 4,729.91, while the CAC-40 in France rose 66.00 points, or 2.1 percent, at 3,251.66.
SHANGHAI, China -- China's domestic investment in assets grew by 26.8 percent in the first 11 months of the year over a year earlier, cooling as companies crimped spending on real estate and factories. The January-November figure, released by the National Bureau of Statistics, compared with a 27.2 percent increase in the first 10 months of the year. Stocks opened in the red but bounced back modestly after the head of China's central bank said more rate cuts could be in the offing. Shanghai's key index rose 0.5 percent to 1,975.01.
ROME -- Fiat Group SpA has for the first time shut down most of its Italian plants for a month, laying off nearly 50,000 workers for an extended holiday as it copes with the precipitous drop in demand for new cars. The shutdowns through mid-January affect 14 of Fiat's 20 Italian plants, and 48,000 blue collar workers out of its nearly 80,000-strong Italian work force. Under the temporary layoff scheme, part of the workers' salaries are paid by a government-administered fund that includes industry contributions. Italy's MIB 30 index finished up 1.1 percent at 20,036.
SAO PAULO, Brazil -- Most Latin American stocks closed higher in response to the U.S. Federal Reserve's rate cut. Brazil's Ibovespa index rose 4.4 percent to close at 39,993, while Mexico's IPC index jumped 4.7 percent to close at 22,033. Chile's IPSA rose 0.5 percent to close at 2,336 and Argentina's Merval index climbed 2.5 percent to close at 1,143. Colombia was the exception: The IGBC index slid 0.1 percent to close at 7,803.
TOKYO -- Japan's Nikkei 225 stock average closed down 96.64 points, or 1.1 percent, to 8,568.02. Elsewhere in Asia, Hong Kong's Hang Seng index was 83.26 points, or 0.6 percent, higher at 15,130.21, and South Korea's Kospi edged up 0.3 percent to 1,161.56. Thailand's key SET index rose 1.9 percent to 445.31, while Australia's benchmark index declined about 1 percent.
MOSCOW -- Russia's industrial production plunged beyond expectations in November, fresh evidence that the economy may be entering a recession that will be deeper than previously feared. Output fell a stunning 10.8 percent from October to November, an official from the Federal Statistics Service's press office said. Production contracted 8.7 percent in November from the same month last year, marking the biggest falls since the 1998 financial crash. Manufacturers have been strangled by choked credit markets and plunging demand for commodities, particularly metals.
CAIRO, Egypt -- Saudi Arabia's central bank cut two key lending rates by 50 basis points, as the Arab economic powerhouse pivotal to the region's economic health battles the effects of the global financial crisis. The Saudi Arabian Monetary Agency's decision to cut the repurchase rate and the reverse repurchase rate marked its latest efforts at boosting liquidity and supporting private sector growth in the kingdom. SAMA lowered the repo rate -- the rate at which it lends money to commercial banks -- to 2.5 percent from 3 percent, and reduced the reverse repo rate to 1.5 percent from 2 percent.
STOCKHOLM, Sweden -- Sweden's government cut its forecasts for economic growth until 2011 due to the effects of the global financial crisis.The government now expects gross domestic product to fall by 0.8 percent in 2009. It had previously forecast an increase of 1.3 percent. The unemployment rate is now expected to reach 7.7 percent in 2009, compared with 6 percent in previous forecasts. It is then expected to continue climbing to 8.5 percent in 2010 before falling back to 8.2 percent in 2011. The 2010 GDP forecast was downgraded to a growth rate of 1.5 percent from 3.1 percent previously, while the growth prediction for 2011 was cut to 3 percent from 3.5 percent. The OMX Stockholm 30 index ended down 1.3 percent at 651.18.
PODGORICA, Montenegro -- The International Monetary Fund warned that Montenegro's economy -- one of the fastest growing in Europe -- will slow down dramatically next year amid the global financial crisis. An IMF official said Montenegro's growth rate in 2009 could slide to only 2 percent, way down on the 8 percent expected this year, because of the expected slowdown of foreign investments.
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Oil touches $50-a-barrel mark as OPEC preps cut
Oil prices retreated after briefly topping $50 a barrel Monday as concerns about the economy overshadowed a possible production cut from OPEC.
U.S. crude for January delivery rose $1.13 to $47.41 a barrel, but not before touching a high of $50.05. The January contract expires at the end of this week.
Reports indicate that ministers from the Organization of Petroleum Exporting Countries, a trade organization that produces about 40% of the world's oil, will call for a production cut at its meeting in Algeria on Wednesday.
"They must cut production to maintain the price," said Jim Williams, energy economist with WTRG Economics in Arkansas.
OPEC nations have expressed concern about oil prices, which have fallen rapidly since hitting a record high of $147.27 a barrel in mid-July. The group pledged in late October to cut production by 1.5 million barrels a day in order to bolster prices, but the cut had little effect on the market at that time.
After prices dipped below $45 a barrel earlier this month, OPEC President Chakib Khelil said in an Associated Press interview that the market would see another "severe" cut in production at its meeting on Dec. 17 in Algeria.
"If their goal is to stem the price (decline) 1.5 million to 2 million (barrels a day) will do it," said Williams. However, if they want to get the price back up to about $70 a barrel, the cartel needs to cut "3 million at least by the end of February, early spring."
OPEC Secretary General Abdalla Salem El-Badri said at the beginning of the month that the ideal price for crude was between $70 a barrel to $90 a barrel, according to Dow Jones.
However, OPEC has a tough road to travel if it wants to overcome the dour economy, according to Phil Flynn, senior market analyst with Alaron Trading in Chicago.
"Even if they cut production, if the economy is weak, who's going to buy their oil?" asked Flynn. Raising prices is not going to spur demand, he added.
Auto bailout: The White House said Friday it may use part of the $700 billion allocated for banking sector bailouts to keep automakers General Motors and Chrysler from collapsing.
A plan to provide $14 billion in loans to the automakers to keep them from going bankrupt before March failed in the Senate last week.
"If they don't bail them out [the recession] will get much worse," said Williams, pointing out the increasing number of jobs that have been lost in the U.S. already.
Last week, the Labor Department said that the number of Americans applying for state unemployment benefits rose to a 26-year high.
The U.S. auto industry employs about 2 million workers, according to the Center for Automotive Research. That total includes GM, Ford and Chrysler workers, as well as dealers and workers at parts manufacturers.
As the economy slows, consumers and businesses have cut back on the consumption of petroleum-based fuels.
Americans drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the prior year, according to the Transportation Department.
"The weaker the (U.S.) economy gets, generally the weaker the world economy gets, and the weaker the world economy gets, the lower oil prices go," said Williams.
Dollar: Oil prices gained some measure of support as the dollar weakened against the 15-nation euro and the British pound.
Since oil, like other commodities, is priced in dollars, a decline in the U.S. currency makes oil cheaper for foreign investors, which spurs buying.
"The strength in commodities is the follow-through in dollar weakness," said Brian Dolan chief currency strategist with online brokerage Forex.com.
The dollar has declined in value as an easing credit crunch has caused investors to unwind some of their dollar hedges, and a deepening recession continues to weigh on the U.S. economy, according to Dolan.
Plus, the existing relationship between the two types of investments is being amplified because one of the mathematical models used in trading software is triggering dollar-oil trading orders, he added.
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[ForexGen.com] is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.
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