Swing Trading – Use Momentum Indicators For Huge Profits, Live Examples

(by Sacha Tarkovsky)

If you have been following our articles you will know we love the stochastic indicator it’s simply the best timing indicator you can use and here’s the proof:

We showed you 5 trades and got 4 profits and 1 break even and have 3 open trades all in profit- So why is momentum so important let’s find out.

Trade with The Trend

One of the biggest mistakes you can make in trading is to trade against price momentum.

A Fatal Mistake

Many traders make the fatal mistake of simply buying near support and selling near resistance, even when price momentum is moving strongly to these levels.

However if you trade and “hope” these levels hold then you will be trading against momentum and increase your chances of losing.

Traders do this because they want to sell market tops and buy market bottoms.

This is not a good way to trade!

You are better off waiting for momentum to turn before trading this means that prices have tested the level and then you can get in with the odds on your side.

The Ultimate Timing Indicator For Swing Trades

The best momentum indicator in our view is the stochastic (explained more filly in our other articles) as it measures short term price momentum.

You can see it on many free sites such as futuresource.com.

It’s a visual indicator and you don’t actually need to know the equation behind it to use it – Same as you don’t need to know how an internal combustion engine works to drive a car.

If you look at the Dollar Yen trade we gave a few days ago, you will see both stochastic lines were pointing down as prices zeroed in on support.

To time an entry long and indicate support will hold you look for the following:

A cross of both lines to the upside.

This is referred to as bullish divergence, shows short term price momentum is reversing and the bulls are taking control above support.

The exact opposite applies when you are swing trading into resistance.

Don’t Predict Get Confirmation

By waiting for the crossover, you don’t buy the bottom, but you get in when the odds of an up move are higher and this will mean more profitable trading.

All three trades we picked as live examples are in profit and you can spot similar trade set ups.

Watch stochastic momentum above support or below resistance and watch for bearish or bullish divergence crossovers to time your trades.

If you do, you will get more high odds trades and take the hope out of your trading:

You will trade on the facts and this will increase your odds of success.

Try this method in your swing trading and see how effective it can be.

FREE ESSENTIAL TRADER PDF'S AND MUCH MORE

On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

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If you're looking for a forex trading platform, I can highly recommend Easy Forex. They offer competitive spreads, guaranteed stop-losses if required, live training and support, and you can start trading with as little as $25.

Small Investor Dilemma - Forex Or Stocks?

(by John H Beiler)

If you had a limited amount of capital to invest, would you invest it in the foreign exchange (FOREX) or the stock market? This is a question that is, undoubtedly, pondered daily by small potential investors worldwide. In the ideal world, there should be a well-balanced portfolio including stocks, FOREX and other types of asset holdings. However, due to limited capital and the real need to start somewhere, the investor may not be able to immediately diversify. Incidentally, the investor could seek out some sort of diversified mutual fund, leaving all the ultimate control and decision-making to a fund manager. Nevertheless, for the small investor who wants to maintain full control and decision-making capacity over trading decisions, both the FOREX and the stock market offer such opportunity.

How does one decide which avenue to pursue, FOREX or stocks? Naturally, some sort of meaningful analysis needs to precede any decision on the matter. One approach would be to weigh the advantages and disadvantages of each. Let’s first look at the advantages and disadvantages of the stock market.

Advantages:
1. It is a regulated market; traders have more protection, generally speaking;
2. Some brokers have in-house researchers to help with trade recommendations;
3. A company would have to be virtually defunct for the stock to be totally worthless;
4. The retail market is well-established and has been around a long time; and,
5. The stock market has a greater abundance of books written about it; and,
6. Stocks may (or may not) pay out dividends, according to the vote of the Board;
Disadvantages:
1. Does not offer great leverage, comparatively speaking;
2. Not as volatile as FOREX, and, thus, lacks better potential for short-term profits;
3. There are thousands of stocks to be researched before deciding on the right stock;
4. Generally requires more capital due to the relatively high per share cost; and,
5. Margin calls may occur more frequently due to lower leverage; and,
6. Limited trading hours, compared to the FOREX.

By comparison, the advantages and disadvantages of FOREX trading are as follows:

Advantages:
1. High leverage is possible, in some cases up to an incredible 400:1;
2. There is a low barrier to entry, with some brokers allowing margin as low as $1.00;
3. Extreme volatility in FOREX makes for great short-term profits;
4. Only few dozen currency pairs are available for trading, making choosing easier;
5. Largest market size of any financial market, moving almost $2.0 trillion daily;
6. It offers 24/7 trading, closing only from 4:00 p.m. Friday to 4:00 p.m. Sunday; and,
7. Pays above-bank interest on margin funds, even when no trading is being done.
Disadvantages:
1 High leverage can result in substantial losses, if leverage is not used properly;
2 Because it is an unregulated market, some brokers may take advantage of traders;
3 The retail side is relatively new, so there are not as many well-written resource materials.
4. There is substantial risk involved and one can literally lose all of their investment in one trade.

After viewing the advantages and disadvantages highlighted above, this writer is of the opinion that the FOREX offers the best opportunities for profitability both long and short term. Of course, the underlying assumption here is that a profitable trader, prior to getting involved, will obtain the necessary education and learn strategies for properly managing risks while achieving profitability. To do otherwise would be courting financial disaster.

Starting with a relatively small amount of risk capital, such as $300, a trader in the FOREX, using proper money management techniques, can theoretically build a substantial nest egg by compounding the profits consistently over a period of time. Albert Einstein once commented that compounding is the greatest force in the universe. Whether or not that is true, it is readily apparent through mathematical computation that compounding can lead to the amassing of large amounts over a rather short period of time. Test this conclusion for yourself on paper by starting with $200 and compounding returns of 10% per month for 24 months. The results may astound you.

In conclusion, it would take substantially longer to accomplish the same financial results in the stock market as it would in the FOREX under the same economic circumstances and with the same amount of limited capital. Such likelihood would seem to favor investing in the FOREX, given a choice. As would any prudent investor, diversify your portfolio as soon as you are in a position to do so.

by: S. C. Robinson, III, J.D. copyright 2007

WTA is a forex trader's club of 2800 members. http://www.winningtradersassociation.com

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If you're looking for a forex trading platform, I can highly recommend Easy Forex. They offer competitive spreads, guaranteed stop-losses if required, live training and support, and you can start trading with as little as $25.

Swing Trading For Profit a Live Example

(by Sacha Tarkovsky)

Swing trading is one of the best ways to make money in forex trading, it’s also a lot easier psychologically than trend following.

It’s therefore a great way to trade for novice traders. Over the last few weeks we have looked at some live examples:

Banked 4 profits, scratched one trade at break even and have one open. Let’s look at it and another potential opportunity.

First why is swing trading an easy way to trade?

When we say is easy, we mean psychologically.

You get in quick with low pre defined risk and you’re normally out in 2 – 5 days with a good profit.

This is much easier than long term trend following, in that you do not have to wait for months and see dips eat into your open profit.

Long term trend following is highly profitable but requires a lot more discipline.

We personally mix the two ways of trading to gain some diversification of style and smooth the equity curve.

Swing trading basics

We normally look for important chart support and resistance and trade contrary to it.

We wait for prices to test these areas and watch for stochastic momentum to fall against resistance or rise against support.

Then we know the level has held and trade off it.

We also use RSI and Bollinger bands to define targets and that’s it.

Nice ands simple, but can be very profitable you can read more about this method in our other articles.

British Pound

We are short at recent nearby highs and would look for a pop to the downside to Fridays low or near the middle of the Bollinger band.

Stochastic is weak at present and odds favor a bit more to the downside.

With swing trading you don’t want to hang around to long, get out on specific target and that’s very close now.

Another opportunity

Lets look at another potential opportunity that’s could be shaping up. The euro is trading near its highs and the spike high on the chart is resistance. Stochastic momentum is waning and a cross with bearish divergence will put the odds in favor of the bears.

The important point is to wait for confirmation of the crossover – the target is then Fridays low just above the middle of the center of the Bollinger band.

Finally

The tools used swing trade are simple and easy to use, but that doesn’t mean they can’t make profits as we have shown.

Importantly, for novice traders the discipline needed to trade this way is a lot easier.

If you practice a bit and learn to spot the set ups you will soon be able to spot some great low risk high reward trades – Good Luck

FREE ESSENTIAL TRADER PDF'S AND MUCH MORE

On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

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If you're looking for a forex trading platform, I can highly recommend Easy Forex. They offer competitive spreads, guaranteed stop-losses if required, live training and support, and you can start trading with as little as $25.

Forex Trading And Its Tactics

(by Tamil Selvi)

Trading the Online Forex market has many advantages over other fiscal markets, among the most significant are: better liquidity, 24hrs online market, superior execution, and many others. Traders and investor see the Forex market as a fresh speculation or expanding chances because of above mentioned benefits. Does this mean that it is quite simple to earn money trading the Forex Market? Not at all…!

The précising the forex market incoming/quitting time all based on technological an analysis that is specific for very short-term life of such forex analyses. It is resolute by days, hours, and some times even by minutes, but not by weeks or months. In all the above cases, the same technological tools are used. Having successful forex trading system carries the following tactics.

Tactics for Price Breaks

There are three different trader’s actions at price breaks:

To take a place in advance, predicting the break;
To open a place when the break is actually in progress;
To wait for the predictable rollback after break.

When you work with several lots, you as a trader could open one position at every of the three stages. One could open a small place before the predicted break, and then purchase some more straight away after the break, and then lastly open extra place at an unimportant price fall during correction, which follows the break. If one trades with small place, two questions would have force on one's decisions first of all.

Gaps - Price gaps that are created on bar charts could also be used to select a proper flash to open or close forex trading positions. For example, gaps created during price development frequently become support levels. That is why, at a forex up-trend, it is sensible to open extended positions when prices actually fall to the upper border of the gap or even sometimes a bit below it. A stop order could even be placed below the gap. At a down-trend, an open place needs to be opened when prices arrive at the lower border of the gap or even at bit above it. The defensive stop order is placed above the gap, in this above case.

Averaging - Averaging is a forex trading strategy used when one has made an error or simply made a trade (the first thing that comes to one's mind) and the price has moved beside, and one makes a fresh forex operation of the same kind but at a more money-making price. The most significant drawback of averaging is that one cannot know to what price the market would go beside the trader.

The averaging looks for investing a double amount of money when compared to that invested before. Trading productively is no simple task; it is a procedure and could take years to attain the preferred results. There are a few things though every forex trader needs to take in thought that could go faster the process: having a trading system, using money management, education, being conscious of psychological things, discipline to follow your forex trading system and your forex trading plan, and others.

Tamil is a Copywriter of forex trading education. She written many articles in various topics such as forex trading strategies, online forex trading.For more information : contact her at 1worldforex1@gmail.com

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If you're looking for a forex trading platform, I can highly recommend Easy Forex. They offer competitive spreads, guaranteed stop-losses if required, live training and support, and you can start trading with as little as $25.

Successful Forex Trading – 6 Essential Traits of the Great Traders

(by Kelly Price)

There are many different types of traders and there are many different methods you can use to trade yet, all the great traders have similar character traits when it comes to Successful forex trading.

Here are some traits the great traders have and you need them to make big profits from forex trading.

1. They Rely On Themselves

They have devised a method that suits their trading personality and they apply it for profits.

They know tat success comes from within and the only person that can give you success is you.

They don’t give or seek opinions, don’t sell their, methods and are generally very private about their trading

2. They have iron discipline and confidence.

They have constructed a method that suits them and this gives them confidence in their ability. From confidence comes one of the essential traits of all great traders.

Discipline.

This is simply the discipline to apply the method through losing periods without deviating from their system.

To trade successfully discipline is a must. If you don’t have the discipline to apply your method you don’t have a method in the first place.

3. Perseverance and the will to succeed

Many of the great traders got wiped out several times before they made money but had the perseverance to continue and the will to succeed and get it right.

Losing all your money is not pleasant, but a necessary experience for many to eventually succeed.

4. Patience

All the great traders have patience to wait for losing periods to end and for profits to emerge and to only take signals that are consistent with their methodology.

You can’t force profits in timescales you need to be patient.

5. Money management

An essential trait of all great traders.

You will have losses and you need to ride them out – Playing great defense is as important as playing great offense.

You need to preserve your capital and keep losses small and run profits.

Most traders fail because they don’t know how to tale calculated risks when the odds are in their favor – Poor money management is one of the major reasons novice traders lose.

6. Work smart not hard

Trading is essentially simple.

If you look or read about eh great traders you will be struck by how simple their trading methodologies are.

They know that working smart not working hard is what makes a great trader.

The basics of trading can be learned by anyone however acquiring the traits of confidence and discipline to make the method work can take a little while to acquire but if you persevere you can succeed.

MORE INFO

A couple of essential books any trader should read are Jack Shwagers excellent Market Wizards and The New Market Wizards.

These books interview some of the top traders of all time and these are essential books for any novice forex trader.

Anyone can become a successful trader as everything about trading can be learned. Apply yourself to learn the necessary skills and you will succeed.

FREE ESSENTIAL TRADER PDF'S AND MUCH MORE

On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

--------------------------------------------------------------------------------------

If you're looking for a forex trading platform, I can highly recommend Easy Forex. They offer competitive spreads, guaranteed stop-losses if required, live training and support, and you can start trading with as little as $25.

First post

This blog will contain various forex-related articles, as well as tips and trading ideas.