FXQIE

What is Technical Analysis?

2008-03-25T04:33:00.000+08:00

Among the various tools financial analysts utilise for forecasting the markets, there are basically two methods: fundamental and technical analysis. The goal of this article is to familiarise you with the technical approach that the financial community, including economists, considers today a valuable alternative or supplement to the fundamental analysis. This is the case despite the fact that TA (technical analysis), which mainly works with a graphical representation of historical price action (called "the chart"), contradicts the weak form of the market efficiency hypothesis saying that historical facts can not be used to forecast the market development. One reason for this positive attitude towards TA might be that various studies issued by the quantitative researcher's community show that serial dependence refused by advocates of the weak form of market efficiency is one of the most reliable observed patterns in the markets (i.e. forex market). Expressed in a simpler language this means that price movements are not a random walk but unfold in trends. This is exactly one of the three premises that TA consists of. The other two are: History repeats itself and market action discounts everything. The former means that certain price formations like triangles, channels, etc. reoccur throughout time and can be used to foresee the extent of an ensuing price move. The latter premise argues that any available information (public as well as inside information) is reflected in the current price. So instead of analysing the economic environment (i.e. monetary and fiscal policy, balance sheet, etc.) a technical analyst bases his or her research exclusively on historical price data. One obvious advantage of this procedure is that the rather decisive psychological rational of the investor is taken into account and included indirectly into the research which is handled mostly through mathematical or geometrical methods. It is crucial to keep in mind that Technical Analysis is not an exact science. Rather, TA rather deals with probability distributions (by the way, the same thing is true for the economic approach!!!) and as such leaves room for unexpected counterproductive outcomes. This means that a strict and rigorous discipline is a must in the practical use of technical analysis which should actually be true for any other approach as well! The advantage of TA in contrast to the fundamental approach is that the decision of maintaining or abandoning an active scenario depends on rather exact criteria that can improve or deteriorate decisively with every single price change. It is not necessary to wait for the outcome of fundamental figures that are already out-of-date at the time of their release!

The techniques applied in TA are manifold. Diverse mathematical computer supported formulas usually try to measure the strength of an underlying price move and to unveil divergences where new price extremes are not confirmed, pre-indicating a potential trend reversal. Usually the main tool of a technical analyst, however, remains the chart. The Elliott wave theory for example (developed in the first half this century) tries to distinguish between impulsive (trending) waves (wave stands for price move) and corrective (counter trending) waves and this "wave count" gives the technical analyst a hint about the future development of the market. Volume is another aspect that is worth noting. Volume figures can tell you an important and decisive story about the flow of money. Candle charts, a graphical "candle-shaped" representation of a trading session's open, high, low, and closing price, are a Japanese invention dating from the 18th century and provide valuable clue about potential reversal or continuation of trends. They illustrate that TA is not a recent discovery (as often assumed) and that TA is not applied by the western hemisphere exclusively.

All in all the different technical theories can be viewed as puzzle stones, the combination of which should lead us to the ultimate goal of TA, the set-up of the highest probability scenario for a specific market direction. The established scenario will not look the same for every technical analyst. This is due to the fact that a different combination and weighting of technical indicators might be applied and that a subjective interpretation of the technical constellation can decisively influence the outcome.

Depending on the context TA can be used in different ways. We want to highlight one approach because of its strenght in portfolio management where benchmarks are used for performance measurements.

As mentioned above, we are well aware of the fact that TA deals with probabilities and there are times when the probability distribution is especially favourable and shows a specific scenario. These are the situations when a deviation from the benchmark should be seriously considered as one has the best technical starting point for potential outperformance. The corresponding risk is minimised through the application of a near but technically justifiable protective stop-loss.

By starting to promote technical analysis, even well known Universities now send the financial world the signal that TA, as an original approach to the market forecasting dilemma, has become an important and respected tool in professional portfolio management. Last but not least let's mention the following statements from central bankers that might convince any remaining sceptics:

"Technical analysis, the prediction of price movements based on past price movements, has been shown to generate statistically significant profits despite its incompatibility with most economists' notions of efficient markets..." Federal Reserve Bank of New York, C.L. Osler and P.H. Kevin Chang, Staff Report No. 4, August 1995.

Happy New Year

2008-01-01T16:09:00.000+08:00

Goodbye 2007 and Welcome Year 2008,

My resolution in FX:

1. Reduce Mistake in trading and keep on discipline with trading analysis.

2. Analysis and set the Trade only in the morning and evening while at night, will rest and sit down with my family. This is because i have some superstitious that profit is given during that period of time and at night, it is meant for u to take a rest.. :)

3. Of course, make more income from FX market

Good Luck everybody and wish u all a very Happy New Year!

Trade your e-gold at FXEGYPT Broker!

2007-06-28T02:36:00.000+08:00

HI traders out there!! U can trade forex using egold at FX Open.

In fxopen, GBP/USD spreads is only 3pips compare to other broker that GBP/USD is 4pips and sometimes 5pips!!

U also can trade using e-gold, that means u can deposit the money straight away and withdraw instantly..

Other than that, u also can choose to wire ur money to ur account and trade at FXegypt.

Please download the metatrader software at FXegypt and open a real account here.. u will definitely love this broker!

Happy trading!

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2007-06-08T03:59:00.000+08:00

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Forex History - The Evolution OF FX Markets

2007-05-22T12:03:00.000+08:00

The Gold Exchange and the Bretton Woods Agreement

In 1967, a Chicago bank refused a college professor by the name of Milton Friedman a loan in pound sterling because he had intended to use the funds to short the British currency. Friedman, who had perceived sterling to be priced too high against the dollar, wanted to sell the currency, then later buy it back to repay the bank after the currency declined, thus pocketing a quick profit. The bank’s refusal to grant the loan was due to the Bretton Woods Agreement, established twenty years earlier, which fixed national currencies against the dollar, and set the dollar at a rate of $35 per ounce of gold.

The Bretton Woods Agreement, set up in 1944, aimed at installing international monetary stability by preventing money from fleeing across nations, and restricting speculation in the world currencies. Prior to the Agreement, the gold exchange standard--prevailing between 1876 and World War I--dominated the international economic system. Under the gold exchange, currencies gained a new phase of stability as they were backed by the price of gold. It abolished the age-old practice used by kings and rulers of arbitrarily debasing money and triggering inflation.

But the gold exchange standard didn’t lack faults. As an economy strengthened, it would import heavily from abroad until it ran down its gold reserves required to back its money; consequently, the money supply would shrink, interest rates rose and economic activity slowed to the extent of recession. Ultimately, prices of goods had hit bottom, appearing attractive to other nations, who would rush into buying sprees that injected the economy with gold until it increased its money supply, and drive down interest rates and recreate wealth into the economy. Such boom-bust patterns prevailed throughout the gold standard until the outbreak of World War I interrupted trade flows and the free movement of gold.

After the Wars, the Bretton Woods Agreement was founded, where participating countries agreed to try and maintain the value of their currency with a narrow margin against the dollar and a corresponding rate of gold as needed. Countries were prohibited from devaluing their currencies to their trade advantage and were only allowed to do so for devaluations of less than 10%. Into the 1950s, the ever-expanding volume of international trade led to massive movements of capital generated by post-war construction. That destabilized foreign exchange rates as setup in Bretton Woods.

The Agreement was finally abandoned in 1971, and the US dollar would no longer be convertible into gold. By 1973, currencies of major industrialized nations floated more freely, as they were controlled mainly by the forces of supply and demand. Prices were floated daily, with volumes, speed and price volatility all increasing throughout the 1970s, giving rise to new financial instruments, market deregulation and trade liberalization.

In the 1980s, cross-border capital movements accelerated with the advent of computers and technology, extending market continuum through Asian, European and American time zones. Transactions in foreign exchange rocketed from about $70 billion a day in the 1980s, to more than $1.5 trillion a day two decades later.

The Explosion of the Euromarket

A major catalyst to the acceleration of Forex trading was the rapid development of the eurodollar market; where US dollars are deposited in banks outside the US. Similarly, Euromarkets are those where assets are deposited outside the currency of origin. The Eurodollar market first came into being in the 1950s when Russia’s oil revenue-- all in dollars -- was deposited outside the US in fear of being frozen by US regulators. That gave rise to a vast offshore pool of dollars outside the control of US authorities. The US government imposed laws to restrict dollar lending to foreigners. Euromarkets were particularly attractive because they had far less regulations and offered higher yields. From the late 1980s onwards, US companies began to borrow offshore, finding Euromarkets a beneficial center for holding excess liquidity, providing short-term loans and financing imports and exports.

London was, and remains the principal offshore market. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds in order to maintain their leading position in global finance. London’s convenient geographical location (operating during Asian and American markets) is also instrumental in preserving its dominance in the Euromarket.

What Is Forex

2007-05-22T12:01:00.000+08:00

Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange. It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.

Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets. MG Financial Group’s combination of low margin and high leverage has changed the way the Interbank currency market operates. We have done this by opening the doors of Forex to retail investors, giving them the professional tools and services needed to trade effectively in an independent atmosphere.

2007-05-21T13:21:00.000+08:00

Ive short GBP/USD post at 1.9737. My take profit is at 1.9705 that is about 30 pips. my stop lost is at 1.9765.

Happy trading!

2007-05-19T02:37:00.000+08:00

I reveal how i predict the market for today.. I enter market at 1.9747 that is a market price at the moment..

the reason is because at that time, rsi is at 30% and it is going to break the resistant. Market for GU is in downtrend but it move within channel. my take profit is 1.978 because of the fibonaci level at 38.2, unfortunately the market only rose up to 1.9777 only, that is 3 pips below my TP. when the market goes down, it hits my trailing stop so my profit is only 5 pips..

huh.. anyway, better win something other than to lose.. hope my explaination satisfy peoples out there and feels free to ask me how do i trade..

happy weekend holiday! Going to watch Sumolah! Movie this weekend with my wife. :)

2007-05-17T21:19:00.000+08:00

Closed Position For the GBP/USD with 18 pips!!

We are encouraging our friends to consistently wins about 10-20 pips daily. with 10% margin, it is about 1-2% profit daily.. that is 20-40% monthly profit..

Dont be greedy, trade with consistency..

All the best!

2007-05-17T07:42:00.000+08:00

For GBP/USD Ive set sell stop at 1.9754 and take profit at 1.9736 base on break away strategy.

Happy Trading

2007-05-16T01:14:00.000+08:00

This is how u predict the market. First u draw a trendline. As u can see at the picture, the trendline for resistant is in Red.

When RSI(14) had showed Oversold, we place a buy stop order 10 pips above the resistant trendline. The take profit we can put at 38.2 level and 50.0 level. this is a break out strategy.

stop lost we put around 30pips. Hope this will help u in trading in the future. :)

2007-05-15T02:03:00.000+08:00

Opened sell position at 1.9787. Buy stop order canceled.

2007-05-14T17:59:00.000+08:00

set pending order for GBP/USD

current price 1.9813

buy stop 1.9827
take profit 1.9863
stop lost 1.9787

sell stop 1.9787
take profit 1.9758
stop lost 1.9827

open only 10 - 15% from ur trading margin.. All the best and happy trading!

2007-05-14T15:51:00.000+08:00

Position Closed ! 17 pips today.. will update with new position again later if have. next update at 6.45pm

2007-05-14T13:46:00.000+08:00

Ive entered trading short post at 1.3547, targeting my take profit at 1.3530 for EU pair. This is because RSI is at overbought level.

All the best.. good luck in your trading!

2007-04-24T15:46:00.000+08:00

GBP/USD is creating a wave 5 in elliot analysis,so i enter short at the end of wave 4.

my take profit is at 1.9955 that is 10 pips above 1.9945 ( my target for wave 5 to end base on Fibonaci retracement.

Another support analysis is this week many predict that USD will recover and the uptrend should be downtrend.

Good Luck and happy trading

Todays plan..

2007-04-23T08:30:00.000+08:00

We can see pivot area at 2.0030

we will set pending order

pending buy at 2.0050
take profit at 2.0083
stop lost at 2.0010

pending short at 2.0010
take profit at 1.9979
stop lost at 2.0050

trading at your own risk, good luck and happy trading!

2007-04-20T16:46:00.000+08:00

ive opened short at 2.0017 for GBP/USD pair

target for 1.9964

stop lost 30 pips at 2.0047 tq

Good luck!

GBP/USD

2007-04-18T14:43:00.000+08:00

i've opened short position at 2.0096 today..

my stop lost is 30 pips and my target is 1.99 :D
will using trailing stop 20.

All the best!!

Closed 24 pips in GBP/USD

2007-04-16T16:43:00.000+08:00

ive manually closed my trading at 1.9902, thank you

Tips from MATAF.net

2007-04-16T13:38:00.000+08:00

GBP/USD - British Pound Dollar

Short term (Intraday)

1,9875. GBP USD is in an uptrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands are parallel and form the trend. ForexTrend 1H, 4H, daily (Mataf Trend Indicator) is in a bullish configuration. The uptrend should continue to gather momentum. The target is expected at 2,0000. The price should find a resistance below 1,9900.
=> We could take a long position at 1,9875. We will put the stop loss below 1,9840 (-35 pips). The targets are 1,9910 (+35 pips) 1,9950 (+75 pips) 2,0000 (+125 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

*p/s - my personal trading is ive opened a long at 1.9878 and my take profit at 1.9918 and my stop lost at 1.9840.. if my position is about 20 pips, i will just trail and close at min 20pips. As recent market, the price has rise up very high, anyway the trend is still uptrend, i just open 5% from my trading desk to manage my risk..

All the best!!

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2007-04-14T06:53:00.000+08:00

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Tips from Mataf.net

2007-04-11T14:01:00.001+08:00

EUR/USD - Euro Dollar

Short term (Intraday)

1,3420. EUR USD is in an uptrend supported by 4H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The price is just bellow 1,3450 resistance. The volatility decreases. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bullish configuration. 1H ForexSto (Modified Stochastic) indicate a bearish pressure on EUR USD. The price should continue to consolidate. The price should find a support above 1,3380 (-60 pips). We won't take a position. The risk/reward ratio is too high to take a position..

Tips from Mataf.net

2007-04-11T13:58:00.000+08:00

GBP/USD - British Pound Dollar

Short term (Intraday)

1,9755. GBP USD is in a range between 1,9590 and 1,9800. GBP USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility decreases. Bollinger bands are parallel and form the trend. ForexTrend 4H (Mataf Trend Indicator) is in a bullish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on GBP USD. The uptrend should continue on 1,9800 (+45 pips) resistance. We won't take a position. The risk/reward ratio is too high to take a position.

Closed 14 pips in EUR/USD

2007-04-09T16:50:00.000+08:00

RSI for 15 mins chart has reached 70%, so i just closed and take profit at 14pips. I think that is enough for me.. I will wait for confirmation to short GU later.. will update when i have make an entry.

Good Luck and happy trading!!

Forex Trading Software - Winning Solution 9.4.2

2007-04-08T06:37:00.000+08:00

TRADING SYSTEM WSS 9.4.2 Final Version:

1. Actual Trend Prediction(UP/DOWN)

2. Mapping Area (makes your navigation much easier)

3. Signal + Alarm (BUY or SELL) with fixed price (Level, Stoploss and Take Profit), example:

- Sell Area GBPUSD @ (1.8857-1.8837), Take Profit @1.8796, StopLoss @1.8897

4. Automatic Range & Pivot Calculator

5. Easy to use :)

6. REVERSAL PREDICTION BASED ON WS SYSTEM (NEW)

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5. Free Data Feed (MT4 Data feed)

6. Registered at WSS International Community

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Welcome new visitors!!

2007-04-08T04:10:00.000+08:00

Hi everybody.. today is saturday and sunday.. holiday for traders!! Hope everybody get a very profitable trade for whole last week..

As this blog has just launch about 2 weeks, there are about 300 visitors already and they are from Asia, America, Europe, some from Australia and Africa, i just want to wish u WELCOME and thank you ur visit. I hope i will get some feedback from all of you on what do u want me to put in my blog so this will be the best place for u to surf for searching information relate to forex trading.

See u in monday!!

2007-04-05T23:10:00.000+08:00

As we achieved our target in EU market, ive decided to short at 1.3435 becoz of oversold in RSI.
Just target for 30pips as the EU market is not as volatile as GU.

Happy trading for everybody..

short at 1.3435
take profit 1.3400
stop lost at 1.3450

will close when hit my TP or SL or RSI (14) reach 30%.

This week in FOREX

2007-04-04T12:33:00.000+08:00

As my calculation in GU and GJ market, ive predicted that the market will going north as they created an Elliot Wave pattern. As i want the market to go down or short, i have no guts to place long order as for me, the market are oversold already. Anyway, i dont want to gamble to place short, and i will wait when the market has finish the wave 5 in elliot wave and i will decide to short either GU or GJ when there is a right time.

All the best in your trading!

Review for todays market..

2007-04-02T10:43:00.000+08:00

Market at the moment looks unclear for me.. so i decide to wait for better signal when the UK sessions open. Will update later when i decide to trade.

Good luck in your trading!

Fundamental Analysis

2007-03-28T03:34:00.000+08:00

Traders should be aware of few factors that may effect price of a currency

1. Unmployment Rate
2. Interest Rates
3. Industrial Production
4. Geopolitical Events

Can Forex Trader be a billionaires?

2007-03-26T07:23:00.000+08:00

The World's Billionaires
#80 George Soros

Age: 76

Fortune: self made
Source: hedge funds
Net Worth: $8.5 bil
Country Of Citizenship: United States
Residence: Westchester, New York , United States, North America
Industry: Finance
Marital Status: divorced, 5 children
Education: London School of Economics, Bachelor of Arts / Science

Born in Hungary; family evaded capture by the Nazis 1940s. Studied at London School of Economics; founded Quantum Fund. Accused of "breaking" the British pound in 1992 with protégé Stanley Druckenmiller; short position netted him $1 billion. Lost several hundred million investing in Russian telecom firm Svyazinvest. Closed Quantum 2000, now manages Quantum Endowment. Committed philanthropist has given away $5 billion since 1991 via Open Society Institute and other foundations. Spent $27 million trying to unseat Bush in 2004. Author of The Alchemy of Finance (1987) published most recent tome, The Age of Fallibility, last September: explores the consequences of the war on terror

Welcome to my blog

2006-11-23T01:46:00.000+08:00

i want to welcome every forex trader out there to share their knowledge and skills in trading forex. hope we can gain benefit from this blog..

i will try my best to update from time to time about current analysis, news outbreak and trading system. feel free to post your comments and HAPPY TRADING!! :D