'Goddess of fortune' Views on Currencies

Tape Reading skills required for currency trading.

2009-02-19T06:03:00.000-08:00

"Trading technique is simply the ability through study, observation and experience to recognize the signals in each of the several phases of market movement" George Douglas Taylor.Tape reading is nothing more than monitoring the current price action and asking 'Is the price going up or down right now?'Even most novice observer has the ability to see that prices are moving higher or lower at any particular moment or for that matter when prices seem to be going nowhere or sideways.It is also fairly easy to watch a price go up and then tell when it stops going up-even if it turns out to be only a momentary pause.
If you can learn to follow the price action, you will be two steps ahead of the game because price is faster than any derivative."The only truth is current price". Your job as a currency trader will become ten times easier once you accept this.
There are two main tricks to monitoring price action.The first is to watch the price relative to another reference point.It is the easiest way to tell if the market is moving closer to or further away from a particular point.Some reference points, such as a swing high or the days opening price will have much more significance than those points involving some type of calculation.When watching price, the currency trader wants to know the following, how fast,how far, and in which direction.It takes two points to measure these things.One will always be the current price and pivot levels.
Watch the price with the intent to do something or to anticipate a certain response." The study of responses is an unerring guide to the technical position of the market" Richard Wycliff 1910.
The second main trick to monitoring price action is to watch for the markets response to a particular condition, in other words, anticipating a particular behavior.For example, if the market has been at a very low volatility point and just begins breaking-out of its particular trading range, one might anticipate that the price would begin to accelerate in an impulsive manner and not run into immediate resistance or on a directional play, if the price is moving in an impulsive manner in a trending market and then pauses to catch its breath on a mild reaction, one would expect it, then to continue on in the direction of the trend.When there is a particular behavior to anticipate it is easier to watch the price to see if it acts according to ones expectations.
Is the market failing to break on bad news?Is it find support after a series of advances?Does it run into an invisible overhead wall and sharply back off implying strong resistance?These are market responses to certain conditions.Part of studying price behavior and gaining experience as a currency trader is gradually learning what actions to anticipate.Then you must learn what the markets most probable response or outcome should be.
However it can also be a profitable strategy to recognize when a given signal or expected response is failing.Sometimes a failed signal can be more profitable than the normal expected response.For example, a classic failed response might be a scenario wherein price was consolidating in a pattern higher lows and higher highs-a classic triangle pattern.One would expect a break-out from a chart formation to have some follow through.However if price only penetrates the lows by a small amount and then turns upward, picking up volume and momentum as it goes, and comes out the upside, a very significant reversal has probably occured and there may be much more price advance to unfold.
One last trick to watching price action is to learn to think in terms of handles or levels.Use big round numbers as reference points for levels.It does not mean that you are placing orders at those numbers.It is just a simple way of organizing data that professional traders practice subconsciously.
PIVOT POINTS.An astute trader will always have the previous day's close in his head.He also knows the previous day's high and low.He also knows the opening price, for that tells if the buyers or sellers are in control for the day.The previous day's high and low and today's open have very strong psychological implications and are the most important pivot points to recognize.By concentrating on price action near these points, we can eliminate much of the hard work in tape reading.Many times the market will let us know right away if this is going to be an area of support or resistance.The previous day's high and low tend to overlap in congestion areas.Look to exit profitable trades immediately at these points in sideways markets.In trending markets the price will run through these points a bit before pausing.When the market is strongly trending the opening price becomes the most important.
If we are watching a high, low or opening price as a pivot point, we are watching to see whether there is any impulsive price action as the market approaches the point or moves further away from it.What is impulsive action?"A whoosh"The market moves rapidly as if just coming to life for the first time.It is usually a series of ticks in one direction without a tick in the opposite direction.A sequence like this tends to consolidate or pause a bit before being followed by more impulsive action.If we quantify these 'whooshes' which we can do in several ways, we will see that the market tends to have continuation moves at least 2/3's of the time.Not bad for arriving at a 'positive expectation' simply by following price action.
In conclusion, tape reading is not watching every trade that passes by but rather keeping an eye out for unusual impulsive action, unusual volume, or just observing the way the price trades at significant levels.Each price swing has forecasting value as to what the next most immediate move should be.We then follow the price action to see if that move plays out.
Tape reading is at the heart of swing trading.When looking for short term moves, price based derivative indicators will be too late to be of value.Ultimately, currency traders should feel a great sense of freedom when they can rely on simple charts to formulate a game plan or a conceptual road map in their heads and the movement on the tape to tell them their game plan is correct. Muraleedharan.

Be an Expert in your chosen approach.

2009-02-18T20:27:00.000-08:00

You must devise a methodology and then use it.By practice, you become an expert in its application and then money flows in your way.To be truly successful you have to become intuitive, and this simply means you become an expert, in which you do, some thing you achieve through experience. You can observe market action and draw appropriate conclusions from that.But whichever style you adopt you need to decide what triggers you into a trade and also how to get out.To master trade selectivity, you have to become an expert in your chosen approach.The key aspect of your approach is that you filter out a vast amount of market information and just focus on those factors which you need to know.It is a lot easier becoming an expert in a narrow field than a wide one.The various sources of market information's are so vast, that is not possible to take it all in.Let alone become an expert in your chosen approach.You must decide what information you want, design your approach and then use it.Become an expert and you will find you become intuitive, that is when you can select only the best trading positions, the low risk ones.Then it will all go the right way.Muraleedharan.

Trade mangement Currency Trading.

2009-01-22T19:28:00.000-08:00

Trading and money management professions are expensive to learn an not everyone who attempts to learn succeeds.Those who do succeed may profit handsomely.In this respect the trading profession is no different from the medical, engineering,technical,artistic,sporting and political professions.
Trade management ( Two approaches).
1) Scaling out approach.
Putting on the entire position upon the initial entry and then liquidating positions, of that positions (a) to cover costs (b) take a small profit (c) and finally to ride the trade as far as it will go with what remains of the position after partial liquidation.
2) Pyramiding approach.
Build the position by entering a position of it to test the waters.If the initial position becomes profitable, you then add to the position in stages until you have put on the entire position.
Much of any acceptability of the approaches depends upon your personal comfort level in handling risk and your financial capacity for handling risk Muraleedharan http://stockscentral.blogspot.com and http://spiritualcentral.blogspot.com

Levels of Currency Traders.

2009-01-20T22:23:00.000-08:00

The most important asset to you as a currency trader is your raw intelligence, common sense, intuition, emotional control and skills developed through dedication, time and copious amounts of hard work.
Level one. Beginner Trader. Beginners study and paper trade for a minimum of one moth with pretend currency, gaining the experience required to establish a track record of profitable performance.
Level Two. Advanced Beginner.Trades one or two lots with real money, learning to overcome emotions and at the same time establish a track record of making money.
Level Three. Competent Trader.Trades with control over his emotional distractions, utilizes proper equity management and achieves a financial return.
Level Four.Proficient Trader. Trades are made utilizing confidence, education, experience and the trader achieves financial returns.
Level Five. Expert Trader.Instinctively executes profitable trades without emotion.
Muraleedharan. http://stockscentral.blogspot.com

Currency Trading is a Specialised Knowledge.

2009-01-19T07:32:00.000-08:00

Knowledge will not attract money, unless it is organized and intelligently directed through practical plans of actions, to the definite end of accumulation of money. Knowledge is only potential power.It becomes power only when, and if, it is organized into definite plans of action and directed to a definite end.The meaning of the word 'education' is to 'develop within'.An educated man is one who has developed the faculties of his mind, that he may acquire anything he wants, or its equivalent, without violating the rights of others. Knowledge has no value except that which can be gained from its application towards some worthy end.Successful men in all domains never stop acquiring specialized knowledge related to their major purpose, business or profession.The order of the day is specialization. Hence in order to succeed in currency trading you should acquire and practice the knowledge and skills required for currency trading.How long one has to practice? The answer is ' till you succeed' using P3R principle which is discussed elsewhere in this blog series.Do you have the resources to pass through the learning curve which leads you to build expertise in currency trading? The answer is 'You have to decide whether you have it or not'.This is the hard truth of the reality.But once you pass through the learning artist's phase and build your expertise, you can enjoy the wonderful results too like the legend of value trading' Warren Buffet'.You should get specialized in currency trading and get specialized in a single currency pair of your choice so that you can become an expert in that one pair which is enough to give you financial freedom. Muraleedharan http://stockscentral.blogspot.com

Own your future focussing on what you want and use currency trading as a vehicle to reach your goals.

2009-01-14T20:51:00.000-08:00

You always find what you are looking for? " In the high desert, the buzzard circles looking for decaying flesh and he finds it.In the same sky humming bird is focused on sweet nectar of brilliant flowers blooming in the cactus, in the same desert and she finds it" Own your future focusing on what you want, leveraging your time and activities that advance you directly towards definite dreams and goals.It is your future and you are only responsible for it.You can have broadly the following goal setting areas. Spiritual,Social,Family,Mental,Physical and Financial. The following are some of that people want from life.You can have your own choices
1 ) Peace of mind.
2 ) Currency Trading Business.
3 ) More time with family and good family relationships.
4 ) Meaningful work with sense of accomplishment.
5 ) More time for hobbies and recreation.
6 ) More friends, deeper relationships, acceptance.
7 ) Excellent Health.
8 )Happiness, opportunities for having fun.
9 )Recognition for achievement.
10) Education of self and children without financial strain.
11)Be able to contribute generously to charities.
12)First class travel, no more vacations on relative route.
13)Financial security and no debt.
14)Be able to support family members financially.
15)Nicer House.
16)Nicer Car
17)Prosperity,financial independence.
18)Be able to buy luxuries and material processions.
19)Not having to worry about unexpected expenses.
20)To leave an estate to heirs.
These are some of goals people desire to achieve.You can have your own goals.The Currency Trading career can serve as a good vehicle to take you to your goals.
Muraleedharan

Multimodel Processing of information & trainning in extremity.

2009-01-13T21:34:00.000-08:00

There are different learning styles and most people have strengths and weaknesses as learners.An acronym that is useful in remembering learning styles is VARK .V for visual, A for auditory, R for read and write, K for kinesthetic (kinesthetic learners learns by doing).If we hear it , see it,read it and do it the skill and information is more likely to become your second nature.You internalise the skills. TIE (Trainning in extremity).Successful trainning and development of expertise commonly involves performing skills under highly challenging and even adverse conditions.The expert performer builds mental toughness and develops the inner confidence that he or she can handle anything.Speed of processing and executing skills is every bit as important as acquiring these skills.Expertise consists of taking what starts out as effortful and making it automatic more and more efficient.Currency trading is a crucible of life, it distills in a matter of minutes, the basic human challenge, the need to judge,plan and seek values under conditions of risk and uncertainity.In mastering currency trading, we necesarily face and master oursleves.

The Cardinal Rules of Currency Trading.

2009-01-08T19:43:00.000-08:00

CUT YOUR LOSSESS

Decide your trading float, set your maximum loss,Calculate your stop loss, calculate your position sizing before you enter into the trade .You should 'plan your trade and trade your plan' with utmost discipline to generate consistent profits from currency trading.Once you have set your initial stop loss, you have ensured a mechanism to cut your losses short.

LET YOUR PROFITS RUN

How do you handle your profits, once the trade moves in favor of you? There are two types of exits. The stop loss exits and trailing stop exits.Trailing stop is the one you implement once you are in a profitable situation.Trailing stop losses will allow you to follow a trend as it develops and exit the position at trailing stops or at the point (Target) where you can realistically maximize your profits. You should have a way to look into your profits.Profit management is equally or more important in currency trading.This form of trailing stop is adjusted on a periodic basis according to a mathematical formula that keeps it moving upwards as the price moves upwards.The key to trailing stop is that you need to continually make adjustments to it,make sure that the stop is moved in your favor.With a trailing stop loss in place you will be able to let your profits run and let your trading system deliver the maximum profit.Stay with the trend as it develops and let your profits run.Then when the price turns you can exit.You have to monitor your position.Theoretically these lines look very simple.But when you are in the trade you will find it difficult to manage your positions.But practice over a period in the right way makes you comfortable which appeared uncomfortable in the beginning.Good trading readers.Muraleedharan http://forexcentral.googlepages.com

'Stops' are Risk control and Profit management tool in currency trading.

2009-01-06T17:44:00.000-08:00

Stops are 1) Risk control tool 2) Profit management tool.The first protective stop (stop loss) is the initial risk control tool.Placing a stop loss limits our losses to a predetermined level in the event of an unfavorable move in the currency markets which often occurs in currency markets.How much you want to lose is a money management decision. Keeping a planned loss below 2% of your equity is a good money management rule.'Market goes your way'.You move your stop loss to entry point, then the stop now becomes the profit management tool.You are now holding a risk free trade, continue to let the profits run until your objective is reached.If something changes you simply exit the trade with what you have in it at that point.Your profit potential improves when you allow the market to behave as it needs to move on the way to your objective.You should also be aware of the negative characteristics of the stops.The number of profitable trades is sometimes reduced since these stops may allow modestly profitable trades to turn into losses .Also occasional large retracement in open trade profits can make the use of these stops quite difficult psychologically. No currency trader enjoys seeing large profits reduced to small profits or watching profitable trades become unprofitable.Your trading capital is your life blood in currency trading.Hence your first goal is to protect your 'currency trading capital'. Your second rule is only 'to maximize your profits'. Good trading for all readers.Muraleedharan http://forexcentral.googlepages.com

The Process of development in currency trading.

2009-01-05T16:55:00.000-08:00

The process of development in currency trading can be described in three stages. 1)SKILL. A trading skill or pattern to trade currency is taught to the currency trader or identified by the currency trader as having profit potential.This corresponds to observe phase in Boyd's OODA loop.2)DRILL.The trading skill or pattern is rehearsed first via walk through' s (Simulated trades on historical data ) and then paper trading live market.The currency trader learns to recognize opportunities to utilize the skills and patterns as trading conditions unfold and formulate trading plans based upon the incoming data.This corresponds to the orient and decide phases of Boyds loop. 3) FULFILL .The traders development culminates in the fulfilment of actual trades in real time utilizing the entry, exit and money management skills that have been rehearsed.This provides practice in 'pulling the trigger' on ones decisions the act phase of Boyds loop.Successful trading is the result of learning process.The weeks of consistent ,hands on, real time rehearsal are more valuable than months or years of leisurely activity.The steepness of the currency traders learning curve is a function of several factors including the breaking down of skills into bite sized components, the relentless rehearsal of those skills in realistic conditions and the practice of skills in the face of extreme environmental ,emotinal and physical challenges.For example we may have traders rehearse their skills under conditions of high fatigue,distraction or time pressure as ways of simulating decision making under pressure.This really would train traders in a realistic way.Good trading for my readers.Muraleedharan http://forexcentral.googlepages.com

The Principle of ' P3R ' in currency trading.

2009-01-04T21:59:00.000-08:00

Many of the highly successful currency traders have acquired their skills through self development and relative minimum of guidance from senior traders.In these situations we can break-down their learning activities into four compartments that can be called 'P3R' prepare,plan,perform and review.'Prepare' refers to activities that orient the performer to the upcoming challenge.Reviewing charts and market data prepares a currency trader for the upcoming trading sessin..'Plan' relies on the assessment of strengths and weaknessess to guide how the performance will be undertaken.A currency traders plan includes the patterns he or she will trade, the capital to be allocated to trades,allowable risk etc.'Perform' is the execution of the plan with mid-course currection as needed.A currency trader may reassess a plan in the light of unexpected economic news and a price break-out.'Review' comes after performance as part of assessing what was done right or wrong.A currency trader utilizes review to identify flaws in trading plans and the execution of those plans, using the feed back to begin a new cycle of 'P3R'.Trading journals are a timebound tool for self mentoring, structuring and documenting 'P3R' process.How does your P & L break-down as a function of a day in a week?Do you make or lose more money in a particular day compared to other days? You must keep the size of the losers much smaller than the average winners to make your system profitable.Good trading to my readers. Muraleedharan http://forexcentral.googlepages.com

The 'ODDA' Principle and importance of Demo Currency Trading.

2009-01-03T17:38:00.000-08:00

The currency trading offers an environment typified by financial risk, danger and uncertainity.The currency trading also occurs in an environment that immensely, financially rewards the efficiency of mental processing.The successful currency trader is one who can, rapidly observe market conditions, orient himself, integrate information into effective decisions and quickly act upon those decisions.Larger currency traders may even issue their own disinformation, masking their intentions to buy or sell or leaking misleading informations to draw in the bulls or bears.The currency markets sometimes masks its intentions with false moves, quick thrusts and large periods of inaction.All these creates an atmosphere of risk, dander and uncertainity. This is the context in which 'ODDA' principle has its relevance.OBSERVE what market is doing? Rising, falling or consolidating.Is volatility increasing or waning? ORIENT by placing the market's present action into context.DECIDE upon the cource of action, once the currency trader has integrated the market's current action with in the broader context of financial and economic forces.ACT and place orders based upon the currncy traders analysis.This requires an ability to rapidly orient and assess whether the currency trader is in trending or non-trending markets, volatile conditions or non-volatile, near support or resistance or away from it etc.From the observation currency trader must rapidly create and update trading decisins and then find the will and clarity to act on the plan, approach or method.Making complex skills instinctive and familiar is the key to tightening OODA loops.This can only happen, if they have broken their trading down into easily identifiable processess that can be rehearsed under pressure until they are second nature.This is where the importance of rehearsing your method on demo trading account lies.You have to trnsform yourself into the level of an expert by continuous practice and evaluation.Good Trading for my readers. Muraleedharan. http://tradinglifeinc.googlepages.com

Emotions like fear and euphoria in currency trading

2009-01-02T22:56:00.000-08:00

Emotional currency trading is detrimental to the capital , the life blood of trading.However emphatically it is stated that emotional trading will take away all your capital, it is very difficult to keep away emotions from currency trading.Once you have a position in the market you will experience this swings of emotions.Fear and Greed are the two basic emotions that controls the market.When the market is adversely moving the fear creeps in and when the market moves favourably you will be engrossed by greed.The effect of fear is it drives out knowledge, it leads to myopia, it immobilises us and leads to inaction.The mirrror image of fear is euphoria, the feeling that we can do no wrong.As much as fear, euphoria will ultimately lead to trading failure.Since currency trading is a game of probabilities, we will experience times when we can do no wrong.But these times will come to an end.The trader caught in the euphoric trance will not recognise this and taking on risks too many will evenmtually get caught in a heavy loss.If the trader is lucky , the loss will not be a catastrophic loss.Fear and euphoria can catch not only newbies but also the most experienced and successful trader.The emotinal trading can be eliminted only by having an approach (Method) to the currency markets and keeping commitment and discipline to your approach all the time.Good trading to my readers. Muraleedharan http://tradinglifeinc.googlepages.com

Philosophy of Zen Buddism in Currency Trading.

2009-01-01T00:57:00.000-08:00

How Zen Buddism is related to currency trading? As soon as the performer consciously think of his
performance he is no longer one with it.Trying harder at a task only compounds this seperation.The discipline of the zen archer can be found in the performers ability to still the mind, remove mental interference, and allow instinctively honed skills to manifest themselves naturally.Trading in the 'Zone',
emphasise the importance of focus and concentrating in reaching ' a state when trading flaws without seeming effort'. This is the level a trader should aim for.Once the trader is lost in the patterns of fear,greed and frustration, the zone is lost and instincts born of long hours of observing market patterns cannot emerge.For the trader as for the zen archer, turning off the mind is a crucial element in success.Or to put it in other way the state in which the performance is one and the same with the performer , that is the expert level in which an expert trader gets intutive feeling of the market.This level cannot be reached all of a sudden or overnight.This takes years of dliberate practice with defenite goals and innumerable hours of experiencing varied market under different conditions to internalise the nature of the market and to act instinctively.All successful traders who make their living has transformed to this level over a period of time.Muraleedharan http://forexcentral.googlepages.com

QUARTERLY INCOME PROGRAM FROM CURRENCY TRADING.

2008-12-29T19:10:00.000-08:00

Hai all readers of this blog " A very happy and prosperous new year 2009 for all of you".

SALIENT FEATURES OF' QUIP'

1) Investment is only to the minimum of USD 5000.
2)The operational control of the account is always with the investor which ensures safety.
3) A minimum of 36% ROI annually or more is the targeted profit for twelve months.
4)There is a device called circuit breaker to minimise loss.
5) Performance fee is payable only if profits are made in the account.
6)Performance fee is to be paid only after the end of the first quarter.No other fees like entry fee, exit fee or even maintainance fee on managing your accounts.
7)The entire profits generated can be withdrawn at the end of the 4th quarter.
8) Your capital will be doubled in three years by this Program.
9) You will be dealing with the best forex maker in the industry.
Fore more details visit http://tradinglifeinc.googlepages.com

Method, Money and Mind

2008-12-28T06:01:00.000-08:00

Trading is a life experience , it is not like any other business.As you become a better trader, you become a better person. But as you evolve it is difficult to look back at where you were.Dr.Alexander Elder describes about three M's. Method, Money and Mind.Method refers to how you find your trades- how you decide what to buy and sell.Each trader needs a method for choosing specefic stocks, bullions, commodities, currencies, futures, or options as well as rules for ' pulling the trigger' deciding exactly when to buy and sell.Money refers to how you manage your trading capital.You may have a brilliant trading system , but if your money management is poor, you are guranteed to lose money.You have good system, money management and if you dont have the commitment and discipline to stick to your system and money management , then also you are sure to lose in the currency markets.Hence Mehtod, Money Management and your Mind are important in trading.Traders go through three stages of development.In the first stage they are more focussed on Method.Those who survive that stage get focussed on both Method and Money Management. Those who survive that stage add one more component, Mind and all the three put together the trader will be able to make consistent profits from the market.Those who reach that stage become more relaxed, quieter, not jumpy in the markes.They are focussed well on money management and risk orientation.Their trading system is in place, they are at peace with themselves and they spent more and more time thinking how to allocate their trading capital in order to reduce overall risks.This takes years of experience to reach this stage.Forex trading is not get rich quick scheme.Like any other profession in medicine, law or arts , to become an expert trader and to trade for living also takes time.Muraleedharan http://forexcentral.googlepages.com

Trading Plan for currency Trading.

2008-12-27T04:01:00.000-08:00

Your trading plan consists of your entry , stop loss exit , profit target exit and risk to reward ratio.You have a set up you trade and entry trigger signal.Before entering itself you should plan for two exits. One is a stop loss exit and the second is a profit target exit.Your risk to reward should be 1:2.5 for swing trading in my opinion.Imagine you have an entry signal where your stop loss need to be placed 2 dollars and your target is only 1 dollar. This is a high risk condition and you should pass on the trade even though you have an entry signal. You should wait for low risk entries.When a trader becomes risk oriented that is the stage in which currency trader can pull out consistent profits from the market.If you have multiple trades you can plan for two profit target exits one with 1:1.5 risk to reward ratio and move the stop loss to entry point for the other remaining position to let the profits run.By moving the stop to entry level you have cut your lossess. Here you have incorporated all the three simple rules of trading in your plan ie 1)Cut your lossess 2) Let the profits run 3) Trade selectivity.You have become risk oriented and you take only selected low risk entries.Muraleedharan http://forexcentral.googlepages.com

Currency Trading Structure

2008-12-25T03:20:00.000-08:00

You must learn to initiate and manage your own trades, nothing else is going to work.John Piper explains about the trading pyramid.The trading pyramid consists of You, Commitment,Discipline,Money Management, Risk Control, The Three Simple Rues( ie 1) Cut Your Lossess 2) Run Your Profits 3)Trade Selectively , )System Parameters , Your Methodology, Operation of your methodology in markets, The result ie profit or loss.This is the structure of the Pyramid.Each trader already has such a structure in place but if trading and losing then the pyramid needs to be rebuilt.There should be harmony with each level of this structure.The first three levels You, Commitment and Discipline are personel levels.You have never looked to any markets for these three levels.The next five levels have to do with developing your methodology.Your evolution as a trader will sum up all the levels into you inherently and you develop yourself as a expert trader with intution.This requires hours of deliberate practice in the currency markets.Muraleedharan http://forexcentral.googlepages.com

Belief in your version of the Currency Market

2008-12-02T20:39:00.000-08:00

How you think of the currency market is unique and exists only in your head.To win in in the currency market consistently and make currency trading for your living, you have to ensure that your version of the currency market is useful and then make use of it.What you see as currency market is shrouded with in the emotional whirlwind.The whirlwind may get a lot faster when you have a trading position in the currency market.The currency trading is not difficult, although nor is it easy, but the emotional problems we bring with us to the currency market mean that few only win.
In trading environment there is no absolute truth.We never know what is the right thing to do in any one situation and what is the right for one trader is wrong for another.We therefore have to formulate 'useful beliefs' which work for us.Given the fact that nothing in currency trading is cast in iron, it is important you discover useful beliefs that will form the basis of your trading philosophy.In similar vein it is your personality which should guide you in your search for the right approach.You have to formulate your own useful beliefs and use in the market with good money management and risk control to make consistent profits from the market and to have a good living from the currency markets.Muraleedharan http://forexcentral.googlepages.com

You are important in currency trading.

2008-11-29T20:37:00.000-08:00

Trading is a life experience, it is not like any other business.As you become a better trader, you become a better person.But as you evolve it is difficult to look back at where you were.There is no right or wrong ways to trade.You cannot copy trades of others.You have to find an approach which works for and in which you are comfortable. That is the most difficult part of trading.To find out your own way to success. That requires commitment and discipline.When you think of discipline the first question springs into your mind is that how can you be disciplined? You should have found out your approach to the currency markets to be disciplined.Once you have your own approach you should be disciplined follow your approach strictly in word and spirit.This is where the discipline comes. If you don't have your approach you cannot be disciplined and you trade emotionally and loose your capital.
This is why I said you are the important factor in keeping commitment, finding out your approach, and keeping strict discipline to your approach and all the more erasing harmful personality traits which is detrimental to the success in currency trading. You, commitment and discipline are three basic ingredients to keep you consistently successful in currency markets. Muraleedharan http://forexcentral.googlepages.com

MANAGING RISK IN CURRENCY TRADING

2008-11-27T22:30:00.000-08:00

It is needless to say the importance of managing risk to make money consistently in currency trading.With out risk orientation it is impossible to make money from currency markets.All successful and seasoned traders are good risk managers.Learning to manage risk leads to two important age old and most of the time ignored rules of trading one is to cut your loosess and second is to run your profits.You put two successful and seasoned traders on the opposite sides one on bearish side and the other on the bullish side.You will see both of them make money. You put in the same way novice traders on opposite sides. Invariably both of them loose money.The reason is that good traders are very good risk managers.The third important rule is to trade selectively. To trade selectively low risk trades you should become an expert in your chosen approach.Becoming an an expert in any performance field takes time.A currency trader has to undergo experiences of executing and experiencing innumerable number of trades before he gets uplifted to the level of an expert.You should practice your chosen single approach in varied market conditions to build implicitly the expertise into you.Once you have mastered the above three rules you will not have any difficulty in making money consistently from currency markets.Muraleedharan http://forexcentral.googlepages.com

EURUSD Weekly Commentary 22nd Novmber 2008

2008-11-22T01:26:00.000-08:00

Next Week for EURUSD 24th,25th,26th,27th and 28th November 2008. The Weekly Chart is showing a down trend.This week ended with a harami candle stick pattern on weekly chart with a H P 1.2812 and LP 1.2424. The Daily chart is showing an Engulfing Candlestick pattern. 20 SMA on the daily chart is showing Resistance level of 1.2682. Four hour chart price trend is flat and in the UB 1.2673 and LB 1.2430. Strategy for the next week is to sell rallies OR stand aside till there is daily price closure above daily 20 SMA resistance 1.2682.Good Trading.

Triangle on EURUSD 4 Hour Chart

2008-11-14T17:57:00.000-08:00

The Trend is down on Weekly and Daily Chart. The Strategy is to sell rallies or stand aside.In 4 hour chart price is flat and in a consolidation.A triangle consolidation pattern is formed in the 4 hour chart.The triangle pattern is shown above.

Currency Markets.

2008-11-14T08:47:00.000-08:00

The currency markets will either be trending or in sideways action.The other important factor is the currency markets will be trending in one time frame and will be in sideways action in another time frame.For example in a daily time frame chart it will be showing a trend and in 4 hour chart it will be showing a sideways action.EURUSD Daily time frame chart is shown above wherein the price is trending down.The 20 SMA is slanting down and price is below 20 SMA .Hence the price is trending down.The 4 Hour chart of EURUSD is also shown above where you can observe the 20SMA is flat and the price is in sideways action.

Daily chart 20 SMA failure and hanging man

2008-09-18T18:45:00.000-07:00

Here on the daily chart price assaulted 20 SMA broke and could not hold and closed below 20 SMA. The short term trend is also down. The good strategy here is to Sell rallies or stand aside.

The 20 SMA is slanting down.Price closed below 20 SMA . MACD is in sell Mode.Target can be the Low Price touched and Strop Loss can be placed 10 pips above 20 SMA
Forexcentral

SPRINGS & UPTHRUSTS

2008-09-18T18:06:00.000-07:00

Most of the time , the markets are not in a trending mode but rather in a lateral range.On such occations, the market is in a relative state of harmony with neither the bulls nor the bears in charge.As previously mentioned when the markets are in a state of 'WA' , they will trade in a quiet, horizontal band.At times , however, the bears or bulls may assault a prior high or low level.
Trading opportunities can arise in these occations, specifically if there is an un sustained break-out from either a support or resistance level, it can present an attractive trading opportunity.
In such a scenareo there is a strong probability there will be return to the opposite side of the congestion band.This type of false break-out is called upthrust.If the upthrust coincides with a bearish candle stick indicator it is an appealing opportunity to short.
The opposite of an upthrust is the spring.The spring develops when prices break through aprior low.Then prices spring back above the broken support area.In other words new lows could not hold.Buy if prices push back above the old lows.The objective would be for a retest of the congestion zones upperband.The stop would be under the lows made on the day of the spring.
Trading springs and upthrust is so effective because they provide a clear target(the opposite end of the trading range) and protective stop(the new high or low made with the false break out).Springs and upthrust work very well. Muraleedharan http://forexcentral.googlepages.com

The Line of Least Resistance

2008-09-17T20:16:00.000-07:00

The Price always move through the line of least Resistance.The traders task is to identify and determine the speculative line of least resistance at the moment of trading and trade in the direction of least resistance.A trader should wait for this moment when the line defines itself and that is the traders signal to get in.
In other words by crossing a support or resistance the line of least resistance is established.It will not be difficult to make money if a trader always stick to his speculative guns, that is waited for the line of least resistance to define itself and began buying only when the price said up or selling only when the price said down breaking key levels of support or resistance.
The major task of the trader at this point is to find out real break-outs.Most of the time the break-outs are false and there is a high possibility of traders being caught in false break-outs loosing both material and mental capital.

EUR/USD Daily chart Failed Hammer pattern

2008-09-04T18:34:00.000-07:00

The hammer pattern that on 3rd September is a failed pattern.The price broke the hammer HP of 1.4523 and touched 1.4544. But could not sustain the break out and fell below the break out point signalling a false break out.The price retraced and broke below the LP of hammer1.4384. Ten pips below is a good place to short the market. The daily chart is given for illustration.This another example of MACD positive divergence which did not get a trigger signal by a real break out from hammer HPLevel.Some time pattern failure give better set ups and opportunity for entry point.Lowest Price reached after the break down is 1.4222 and closed below the break down level indicating dollar stength and EUR weakness.The days sentiment is buying of USD and selling of EUR. Strategy is to short EUR/USD pair on rallies or stand aside.Muraleedharan

EUR USD Hammer pattern on BB Low Band

2008-09-03T19:25:00.000-07:00

A hammer pattern is formed on the EURUSD daily chart and the chart is shown below for readers of this blog.MACD 5/32/5 is shown on the chart .The price is going down and the MACD is rising up ,an instance of positive divergence.After a series of down days a hammer is formed inside the circle.You may also notice the price is closed inside the Lower Band.The set-up is the following 1) MACD is showing a positive divergence in the oversold zone.2)There a series of down days to reverse. 3)A hammer pattern is formed on the Bollinger band ,Lower band and closed inside the lower band. This is a set-up which signals the short term reversal of the price.The USD is going to be weak against EUR in the short term.Hence the theme in the comming sessions will be USD selling and EUR buying as per the set-up.
Entry trigger and confirmation is, if the price breaks above 1.4523 , that confirms the USD weakness against the EUR and a long position can be initiated with a stop loss 10 pips below the Low Price of the hammer and targer 10 pips below the UB of the Bollinger band.
The Risk for the day is the news items, USD mortgauge deliquencis, EUR Europen Central bank rate decision.Both events can cause high volatility in the market. Muraleedharan

EUR USD 27th RSI Positive Divergence

2008-08-26T19:23:00.000-07:00

There is a positive divergence appeared in the EUR USD graph.The graph is posted here.The price is gone down but the RSI(14) is is gone up indicationg a positive divergence.This positive divergence is occured in the oversold area.The selling is reduced.This is an indication for liquidating the short positions in the market.However based on the divergence alone entering the long position is dangerous.Wait for other confirmation of further USD weakness before entering long positions.Murlaeedharan http://forexcentral.googlepages.com

Patterns

2008-07-29T03:42:00.000-07:00

Traders love patterns. We trade chart patterns,oscillator patterns,historical patterns-you name the pattern, chances are there is some one trading it.Much of trading boils down to pattern recognition and the ability to to quickly identify and act upon possible pattern as they occur .Processing market patterns in the midst of our own emotional patterns our tendencies toward impulsivity, hesitation,frustration and regret is one of the greatest challenges of active trading.

EURUSD This currency pair is still timid in moving up.Eventhough it broke HP 5753 of 25th and touched 5767 .The price moved down and closed on 5743 below 20 SMA resistance on 5775.If it breaks today the price target is 5949.The inherent buying strength continues. Buy a break above 5775 or stand aside.

Game of Averages

2008-07-28T09:00:00.000-07:00

When a trader first enter in the arena of trading with full of energy, enthusiasm, and hopping to make good money looks for perfect methods which will give success every time.He changes from system to system just like searching a black cat in a dark room. It is nowhere. He gets dssipated of all his enrgies.
There is no holy grail in trading.It is a game of probability and averages.If you can find a method which gives you 40 and above winning percentage with a good risk reward ratio and you can trade the method day out and day in you make good money in trading.Easily said but very difficult to practice
EURUSD pair in a tight range .Broke HP of 25th July 08 ,1.5753 to touch 1.5769.There is no follow through of the break-out.Be on the side line waiting for a clear direction this week.