Strategies, patterns, articles
In this article the author looks at the Seven ‘Sins’ of Trading and what action we can take to avoid them.
By studying at the most frequent reasons for failure, we can avoid making the same mistakes as the crowd, and thus turn these negative points into positives. In this article, I will be looking at the seven most common mistakes I see made by traders.
Any financial instrument that is traded on the market is a position of some active towards some currency. FOREX differs from other markets only in the fact, that another currency is used as an active. As a result in the FOREX market we always deal with the correlation of two currencies, called currency pairs.
The project that started more than a year ago, helped to develop a group of indicators under a joint name cluster indicators. Their task was to divide currency pairs into separate currencies. Since then indicators were changed several times. Moreover, the interest of users and active discussions in forums allowed to develop methods of working with indicators and create trade systems based on them.
The word on the street last Friday was that the federal funds futures market was pricing in a 100% chance of a rate cut by September. But the price of the fed funds futures contract represents a weighted-average of all the potential outcomes in the months ahead, it is not a point forecast.
As a result, suggesting the market was 100% certain the federal funds rate would be 5% in September was a misinterpretation. The 5% federal funds rate expected was a combination of a variety of different forecasts. Some investors thought the economy was crashing and expected many rate cuts in the months ahead, while others (like First Trust) believed the economy would remain in good shape and the Fed would not cut rates at all.
Although traditional trendlines are notoriously subjective, it is possible to develop trendline-drawing rules and trading guidelines that can be applied consistently and objectively.
Technicians use trendlines to identify trends and determine when they end or reverse. The only problem with traditional trendlines is they are subjective — 10 traders could look at a chart and draw 10 different trendlines. Proper trendline application and analysis require consistent, objective rules.
Lincoln (a.k.a. lwoo034 at Forexfactory.com forums)
This tutorial focuses on more advanced pin bar setups. It should only be read after the introductory tutorial as it continues the same themes and assumes some knowledge of pin bars. The source of this material consists of numerous posts by James16 (www.james16group.com) at forexfactory.com and several other members who have experimented with pin bars.
Lincoln (a.k.a. lwoo034 at Forexfactory.com forums)
Jim (a.k.a James16 at the Forexfactory.com forums) has taught many forexfactory.com members how to play pin bars. This instruction has been through demonstration over dozens of posts. This makes it difficult for a learner to quickly pick up key concepts and terminology. This tutorial on how to play the pin bars has been designed as a good first lesson and introduction to pin bars. It provides an explanation of the pin bars and familiarises the reader with terms used by James16 in the examples (such as ‘eyes’ for the pin bar). The Advanced Tutorial covers some higher-risk setups that may appeal to some traders. For further instruction please see the James16 Chart Thread at Forexfactory.com or the James16 private forum (www.james16group.com).
In the midst of a stock market correction, a serious reassessment of the price of risk in world bond markets, and a seizing up of the high-risk mortgage market, the Bernanke Fed voted unanimously yesterday to stay patient and remain calm.
By keeping interest rates unchanged, and continuing to argue that inflation was the predominant risk for the economy, the Fed has officially told the market that the Greenspan Put is dead, or at least has a substantially lower “strike price.” Unless the Fed foresees financial market problems seriously affecting economic growth, it is unlikely to cut rates.
Identifying chart patterns is simply a system for predicting stock market trends and turns!
Hundreds of years of price charts have shown that prices tend to move in trends. (I’m sure we’ve all heard the saying, ‘the trend is your friend’.) Well, a trend is merely an indicator of an imbalance in the supply and demand. These changes can usually be seen by market action through changes in price. These price changes often form meaningful chart patterns that can act as signals in trying to determine possible future trend developments.
Research has proven that some patterns have high forecasting probabilities. These patterns include: The Cup & Handle, Flat Base, Ascending and Descending Triangles, Parabolic Curves, Symmetrical Triangles, Wedges, Flags and Pennants, Channels and the Head and Shoulders Patterns. In my opinion, these are some of the best patterns to trade.
This section is designed to introduce you to some of these chart patterns, as well as teach you to identify repetitions in the market qualities, to make timely and more accurate decisions when predicting market trends.
I first started trading when I was 15. I was fond of the stockmarket, but due to my limited capital I could only buy one share. When I eventually choose the stock I wanted, It didn’t go up or down. It just kept bouncing around. In the end, I sold the stock with a 5% loss. I was still following the stockmarket, but I decided for myself I needed something more volatile with more leverage. I discovered options, futures an CfD’s. But they still were to unpredictable. Eventually, I found my holy grail: Forex. I read all what I could read about it and made some first profits. I discovered the power of something as simple as the BGX system or Vegas. I started studying these methods more closely and realized that these simple models could make you very profitable in the long run. Over time, I started to adapt the systems with my onw rules. The biggest advantage of the Sidus Method is that it is not necessary for adding extra filters. Whipsaws will occor, but less frequent. This system made my trading very profitable as it easy to understand, easy to implement and easy to find the right entry-points.
Here we go again. Jittery financial market participants have extrapolated a case of indigestion, and some heartburn, into the “big one.” But, recent market action looks much more like a panic attack than a heart attack.
Yesterday’s market sell-off (small cap stocks fell 3%, and the Dow Jones Industrial Average was down 226 points), has convinced many that problems in the sub-prime market are spreading.
Significantly worse than expected Q2 earnings at Countrywide Financial, and problems in financing a few large leveraged business deals, have caused pessimistic market participants to fear an economy-wide credit crunch.