shooting star on weekly Chart

Watch out for a Bottom @ 1.7047. This is where the Pair found support in October '06. shooting star on weekly Chart comfirmed that the pair can get to this level (1.7047).

http://www.babypips.com/school/reversal_patterns.html learn more about candle sticks







Current Low @ 1.7334. It could break this and go lower.. This could be a bouncing point as the pair has found resistance here before. High to break if an Up move is going to come back into play is 1.8667 (The larger the time frame the stronger the Candlestick patterm)

Commodity Prices and Currency Movements



Predicting the next move in the markets is the key to making money in trading, but putting this simple concept into action is much harder then it sounds. Professional traders have long known that trading currencies requires looking beyoud the the world of forex.





The fact is that currencies are move by many factors; supply and demand, politices, interest rates, economic growth and so on. More specifically, since economic growth and exports are directly related to country's domestic industry, it is natural for some currencies to be heavily correlated with commodity prices . the top three currencies that have the tightest correlation with commodities are the Australian dollar (AUD), the Canadian dollar (CAD) and the New zealand dollar (NZD). Other currencies that are also impacted by commodity prices, but have lesser correlation, are the Swiss franc (CHF) and the Japanese yen (JPY). Knowing which currency is correlated with what commodity and why can help trades understand and predict market movements. Here we look at currencies correlated with Oil and Gold and show you how you can use this information in your trading.In 2005, Oil and Gold sets record highs and were two of the biggest drivers of currency movements that year. Infact, the dollar reacted very differently across various currencies simply because of that particular currency's correlation with commodity prices. therefore, knowing what type movement to expect in the Canadian dollar if Oil prices drop, will definitely help you make smarter decisions. Example




OIL AND THE CANADIAN DOLLAR


Oil is one of the world's basic necessities, at least for now, most people in developed countries cannot live without it. In 2005, the price of oil at it peak was close to 65% highest than where it started in January of he same year. Since hitting a high above $70 a bearrel in August 2005, oil prices retraced 18%, ending 2005 approximately 40% higher. The rise oil prices has brought a great big smile to the oil producers, and a nice fat boost to their pocked books. Oil consumers, on the other hand, have had to pinch pennie throughout the rally. As a net Oil exporter, Canada has benefited the most from the rally in oil, while Japan, a majoy net oil importer has suffer the most.


Over the past three years (2003-2005), the correlation between the canadian dollar and oil prices has been approximately 80%. Canada is the ninth largest producer of crude oil in the world, and it continues to climb up the list with production in oil sands increasing regularly. In 2000, Canada surpassed saudi arabia as the United states' most significant oil supplier. Unbeknownst to many, the size of Canada's oil reserves is second only to those in saudi arabia.



The geographical proximity between the US and Canada, as growing political uncertainty in the Middle East and South america, makes canada one of the more desirable places from which the U.S can import oil. but canada does not service only the U.S. demand, the country's vast oil resource are beginning to get a lot of attention from China, espcailly since Canada has recently stumble upon a new stash of oil after a reclassification of its Alberta oil sands to the " economically recoverable" category.





This make the canadian dollar one of the currencie best positioned to benefit from an ongoing surge in oil prices.The chart below shows the clearly positive relationship between oil and the Canadian Ioonie. In fact, It is should come as no surprise that the price of oil acually act as a leading indicator for the price action in the CAD/USD. Since the traded instrument is the inverse, or USD/CAD, it's important to note that based on the historical relatiionship, when oil price go up, USD falls.


Oil and the Japanese EconomyAt the other end of the spectrum, Japan imports 99% of its oil (compare to the U.S., which import 50%). It is one of the world's largests net oil importer. Japan's lack of domestic sources of energy, and it's neeed to import vast amount of crude oil, natural gas and other energy resources, make it particularly sensitive to charge in oil prices. Japan also lacks the flexibility to switch to nuclear power because it is a huge net importer of uranium for its nuclear power plants. In 2003, the country's dependence on import for primary energy stood at more then 79%. Oil provided Japan with 50% of its total energy needs, coal with 17%, nuclear power 14%, natural gas 14%, hydroelectric power 4%, and renewable source a mere 1.1%. Therefore, when oil price skyrocket, the Japanese economy suffers.


An Attractive oil Play: CAD/JPYLoooking at this from a net oil exporter/importer perpective, the currency pair that tops the list of currency to trade express a view on oil price is the Canadian dollar against the Japanese yen. In fact, over the past two years, CAD/JPY has had an 85% positive correlation with oil prices. As we can see below, more often than not, oil prices tend to be the leading indicators (as with USD/CAD) for CAD/JPY price action with a noticeable delay. As oil prices continued to rally, CAD/JPY easily broke the the $100 level to hit a high of $105 (Dec 2002-Sep 2005) before reversing. The " Oil vs CAD/JPY" chart also clearly shows the delay reversal in CAD/JPY, whcih would have been a perfect trading opportunity.

You can always check the price of Oil from this link. http://www.bloomberg.com/energy

Discuss The GBP/USD Forex Analyst Technically

The sterling pound also reached the 23.6% correction after strong bullish movements that ended trading last week. We could witness high volatility on the pair as short term momentum indicators show a downside correction for the vigorous upside movements. If trading remains below the 1.8080 level, this will confirm furthe downside movements today. But we still have to wait for the Exponential Moving Average 3 (which has Red colour)and the Exponential Moving Average 21 (which has Yellow colour) to go above the Exponential Moving Average 55 (which has Blue colour) in the 4hour chart.
The trading range for today is among the key support at 1.7780 and the key resistance at 1.8370.
The general trend is to the downside for now

Strong USD

Hello every body,
The GBP/USD has gone fallen more then 2034pips from the signal i generated from my trading system called three siseter.
I hope you made a lot money with that system? or are you still demo trading the system?
Well the trend is still down until Exponential Moving Average 3 and Exponential Moving Average 21 crosses above Exponential Moving Average 55. remmeber?
So keep watching for that signal.

The best way to trade forex is to keep it real and simple.

All about the wonderful world of forex

I will like to welcome you to my new forex blog.

Forex is the backbone of all international capital transaction, compared to the slim profit margins rendered in other areas of commercial banking. Huge profits are generally produced in a matter of minutes from minor currency market movement. Some banks generate 60% of their profit from forex trading

Transaction in foreign currencies take place when one country’s currency is purchased (exchanged) with another country’s currency. The price agreed upon or negotiated for the currency for the currency purchased is referred to as the foreign exchange rate. Major commercial banks in the money market centers throughout the world are responsible for the majority of foreign currencies bought and sold. Unlike trading on the stock market the forex market is not conducted by any central exchange but on the ‘’interbank’’ market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic network (Trading platform) all over the world.

You don’t have to be a active forex trader to take advantage of the forex market. Every time you travel overseas and exchange your currency you are participating in the foreign exchange (Forex) market.

What is forex? Forex is acronym of Foreign Exchange. According to the 2007 Triennial Central Bank survey of Foreign Exchange and Derivative Market Activity conducted by the bank for international settlements, the forex market generated $3.2 trillion dollar worth of transactions each day. This makes the forex markets quiet giant of finance, dwarfing over all the other capital market in the world.

Forex give you the opportunity to profit form both falling market (bearish) and raising market (bullish). Unlike the stock market where investor have thousands of stocks to choose from, in the currency market, you only need to follow eight major economies and then determine which will provide the best undervalued or overvalued opportunities. The following eight countries make up the majority of trade in the currency market.

1. United states
2. Euro zone (the once to watch are Germany, France, Italy and Spain)
3. Japan
4. United kingdom
5. Switerzerland
6. Canada
7. Australia
8. New Zealand

These economies have the largest and most sophisticated financial markets in the world. Economic data are released from these countries on an almost daily basis, allowing investors to stay on top of the game when it comes to assessing the health of each country and its economy.
Forex trading is always traded in pairs and the most commonly traded currency pairs are traded against the US Dollar (USD). They are called ‘the Majors’. The major currency pairs are Euro against the Dollar (EUR/USD); the British pound against the Dollar (GBP/USD); the Dollar against the Japanese Yen (USD/JPY) and the Dollar against the Swiss Franc (USD/CHF). The notable ‘commodity’ currency pairs traded are the Canadian Dollar (USD/CAD) and the Australian Dollar (USD/AUD).

Traditionally, currency trading has been a “professionals only” market, available exclusively to banks and large institutions, however, because of the invention of the new e-economy, online forex trading firms are now able offer trading accounts to retail traders like you and i. now almost everyone with a computer and Internet connection can trade currencies just like the world’s largest bank do.

Here is an example of one of my indicators that gave me 300pips. although the signal generated 1292 pips.

ATTRIBUTES AND BENEFITS IN FOREX

1. LEVERAGE: In forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make extra ordinary profits and at the same time keep capital risk to a minimum. Some forex firm offer as high as 500:1, 400:1, 200:1, 100:1 leverage. From my experience as a forex trader using above 100:1 leverage is like playing with a sharp double edged sword (very dangerous). Using leverage like 100:1 means you can control $10,000 worth of asserts with as little. One must be careful when choosing leverage because using high leverage like 200:1, 400:1, or 500:1 can create massive profits when you are correct on your trade but may also generate huge looses when you are wrong.

Because of the high leverage that forex offers, forex position require a much smaller account size than stock trading. Similar sized position as forex margin requirement are much smaller then stock margin requirement. And so the reward can be much greater with forex, but at the same time, the risk is much greater. But this can be dealt with effectively with good trading tactics and good money management rules that allow for maximizing profit potential and minimizing risk. (I will tell you more on trading tactics and good money management rules as we advance on this blog)

In a lay man sense the deposit (money) you have in your trading account with a broker is referred to as collateral (margin) for getting a loan (leverage) from the broker to trade any required amount of currencies.

2. LIQUIDITY: because the forex market is so larger it is also extremely liquid. This means that with a click of a mouse you can instantaneously buy and sell at will. You are never ‘stuck’ in a trade. You can even set the online trading platform to automatically close your position at your desired profit level (limit order) and or close your trade if the trade is going against you (stop order).

3. PROFIT IN BOTH ‘RISING AND FALLING’ MARKETS: On the stock markets, you can only make money if shares are rising, but in economic recession and falling ‘bear’ market, there is little chance of making big money. Forex is different. One other most exciting advantages of forex trading is the ability to generate profits whether a currency pair is “up/bullish” or “down/bearish”. For example, if you think the US dollar will increase in value vs. the Japanese Yen the you will buy Dollars and sell Yen (go long). If you think the Yen will increase in values against the Dollar then you will sell Dollars and buy Yen (go short). As long as the trade picks the right direction, a potential for profit always exits.

4. 24 HRS TRADING: from Sunday evening to Friday afternoon EST the forex markets sleeps. This is very desirable for dose who want to trade on a part time basis, because you can choose when you want to trade – morning, noon or night

5. FREE “DEMO” ACCOUNTS, NEWS, CHARTS AND ANALYSIS: Most online forex firm offers free “demo” account to practice trading, along with breaking forex news and charting services. These are very valuable resource for traders who would like to hone their trading skill with ‘virtual money’ before opening a live trading account, newbie’s are advise to “DEMO TRADE” for at least two months uninterruptedly, if u are successful with your results you can now go live. Demo trading for at least two months will help built up strong emotion in live trading. Also, demo trade with what you wish to fund your life account with. Take for instance, you wish to fund your life account with $500, then don’t demo trade with more than $500.

6. MINI TRADING: Online forex firms/ brokers now offer “mini” trading account with a minimum deposit of $1-$500 without no commission trading. Click Here to know about trading with as low as $1.My personal perspective about the forex market is that the more money you have to trade with, the more you will enjoy trading.

7. BID AND ASK PRICE: Currency is traded in pairs as mentioned before; where one is base and the other is counter currency. The currencies have a two sided quote, consisting “Bid” and “Ask” e.g. GBP/USD 2.0440/2.0443. The Bid is always lower than the Ask price. The Bid is the price at which the dealer is will to buy the Base currency in exchange for the quoted currency. This means the Bid is the price at which you (as the trader) will sell i.e. 2.0440. The Ask is the price the dealer will sell the base currency in exchange for the quoted currency. This means the Ask is the price at which you will buy i.e. 2.0443

8. PIPS: PIPS is the percentage interest point and the last decimal point in a quoted price of any currency. Example the movement of GBP/USD of 1.7896 to 1.7897 signifies a pip movement. A positive or negative pip value is how you calculate your profits or loss.


HOW TO GET STARTED:
Before you can take part in the huge profit in forex, you have to first know the secret behind market. Forex trading is not a Get-Rich-Quick Scheme (sorry if that is what was on your mind). You have to know what drive the market up and down.
Currency trading is a skill that takes time to learn. Skilled traders can make money in this field. However like any other occupation or career, success doesn’t just hap-pen overnight. Here is a great formula for success in forex market.
Practice + Patience + Persistence = Profits.

There are 2 basic types of analysis you can take when approaching the forex:
Fundamental analysis Technical analysis. There has always been a constant debate as to which analysis is better, but to tell you the truth, you need to know a little bit of both. So let’s break each one down and then come back and put them together.

FUNDAMENTAL ANALYSIS:Fundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand. In other words, you look at whose economy is doing well, and whose economy sucks. The idea behind this type of analysis is that if a country’s economy is doing well, their currency will also be doing well. This is because the better a country’s economy, the more trust other countries have in that currency.
For example, the U.S. dollar has been gaining strength because the U.S. economy is gaining strength. As the economy gets better, interest rates get higher to control inflation and as a result, the value of the dollar continues to increase. In a nutshell, that is basically what fundamental analysis is. Later on in the course you will learn which specific news events drive currency prices the most. For now, just know that the fundamental analysis of the Forex is a way of analyzing a currency through the strength of that country’s economy.

TECHNICAL ANALYSIS:Technical analysis is the study of price movement. In one word, technical analysis = charts. The idea is that a person can look at historical price movements, and, based on the price action, can determine at some level where the price will go. By looking at charts, you can identify trends and patterns which can help you find good trading opportunities.
The most IMPORTANT thing you will ever learn in technical analysis is the trend! Many people have a saying that goes, “The trend is your friend”. The reason for this is that you are much more likely to make money when you can find a trend and trade in the same direction. Technical analysis can help you identify these trends in its earliest stages and therefore provide you with very profitable trading opportunities.
So which type of analysis is better?Throughout your journey as an aspiring Forex trader you will find strong advocates for both fundamental and technical trading. You will have those who argue that it is the fundamentals alone that drive the market and that any patterns found on a chart are simply coincidence. On the other hand, there will be those who argue that it is the technicals that traders pay attention to and because traders pay attention to it, common market patterns can be found to help predict future price movements.
Do not be fooled by these one sided extremists! One is not better than the other...
In order to become a true Forex master you will need to know how to effectively use both types of analysis.

To have a better Knowledge of how to trade forex go to site like babypips.com

You can always come back to this blog for signals once you get started.

Signals:

This signal is called Three moving sisters, reason because it uses three exponential moving average.

EMA 3, 21, 55. applied to the close

The colour of 3 is red, while 21 is yellow and 55 is blue.

Time frame: 15 mins.

MACD: Default setting

Entry Rules:

Go long (Buy) if 3 (Red) and 21 (Yellow) crosses above 55 (Blue) on 15mins chart.

MACD histogram is above 0(zero) or increasing in value. Example see pic.

Go short (Sell) if 3 (Red) and 21 (Yellow) crosses below 55 (Blue) on 15mins chart.

MACD histogram is below 0 (zero) or decreasing in value. Example see pic.

Before you take the decision on 15mins chart first look at a longer time frame to see the direction of the main trend. Example is looking at the 4hour chart. using the same indicators.