In simple terms, technical analysis means that one looks at price movements. Price movements that occurred in the period then become the basis of analysis of price movements in future periods.
The main objective is to observe the price chart:
1. can quickly find the price trend
2. can predict the likelihood of time and distance trend
3. can take advantage, when to enter and exit the market.
In the development of modern investment, investment decisions seem to rely more on technical analysis than fundamental analysis, especially for short-term investment decisions such as forex. According to Meyers, this is because, the price movement of securities, including currency-is no longer random, but repeatedly and form a certain pattern that can be identified.
Prior to use in trading, it's good to understand the basic principles of this technical analysis. Among experts there is no mutual agreement on a number of principles that must be met. However, there are at least three principles that can be used as a basis for understanding the technical analysis, namely:
1. Market discounts everything
The first is that technical analysis market is a reflection of everything. Changes that occur in the market price is the result of the action (purchase or sale) are taken by actors with diverse backgrounds, information, knowledge and emotions are different.
Through the observation of price changes that occur in the market is enough for an analyst to predict subsequent price movements, technical analysis.
2. Prices move in a trend
Technical analysis prices tend to move in the same direction during several periods. Movement can be raised, lowered or moved in a certain area (sideway) form patterns whose effects can be recognized. Technical analysis does not believe that prices move randomly, so it can be estimated. If the price of an asset moves up at the end of this week, then next week is likely to continue the movement, to mark the end of the increase in technical analysis emerges clearly.
3. History repeats Itself
The patterns of specific technical analysis which was formed by the movement of prices that occurred in the past will happen again and cause a similar effect in the future. Technical analysts believe that the behavior of human transaction that is driven by information, desire and emotion en masse tend to be repetitive, such as technical analysis of mass crowd who do the queue due to the scarcity of kerosene at this time will return to repeat the behavior in the future when faced with similar situations.
Source : Google
Monday 28 February 2011
Sunday 27 February 2011
Forex Market
Forex (Foreign Exchange market) is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating ones. Transactions among forex market agents involving exchange of specified sums of money in a currency unit of any given nation for currency of another nation at an agreed rate as of any specified date. During exchange, the exchange rate of one currency to another currency is determined simply: by supply and demand – exchange to which both parties agree. The foreign exchange market determines the relative values of different currencies.
The primary purpose of the foreign exchange in forex market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import Japan goods and pay Yen Japan, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade. A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate.
The scope of transactions in the global currency market is constantly growing, which is due to development of international trade and abolition of currency restrictions in many nations. in 2007 was recorded daily trading volume in the forex market to reach US $ 3.900.000.000.000. With high trading volumes and the highest rates of information technology development in the last two decades, the market itself changed beyond recognition. Forex transactions that used to be the privilege of the biggest monopolist banks not so long ago are now publicly accessible thanks to e-commerce systems.
Typical attractive the forex market:
Liquidity: the market operates the enormous money supply and gives absolute freedom in opening or closing a position in the current market quotation. High liquidity is a powerful magnet for any investor, because it gives him or her the freedom to open or to close a position of any size whatever.
Promptness: with a 24-hour work schedule, participants in the FOREX market need not wait to respond to any given event, as is the case in many markets.
Availability: a possibility to trade round-the-clock; a market participant need not wait to respond to any given event;
Flexible regulation of the trade arrangement system: a position may be opened for a pre-determined period of time in the FOREX market, at the investor’s discretion, which enables to plan the timing of one’s future activity in advance;
Value: the Forex market has traditionally incurred no service charges, except for the natural bid/ask market spread between the supply and the demand price;
One-valued Quotations: with high market liquidity, most sales may be carried out at the uniform market price, thus enabling to avoid the instability problem existing with futures and other forex investments where limited quantities of currency only can be sold concurrently and at a specified price;
Market Trend: currency moves in a quite specific direction that can be tracked for rather a long period of time. Each particular currency demonstrates its own typical temporary changes, which presents investment managers with the opportunities to manipulate in the forex market;
Margin: the credit “leverage” (margin) in the forex market is only determined by an agreement between a customer and the bank or the brokerage house that pushes it to the market and is normally equal to 1:100. That means that, upon making a $1,000 pledge, a customer can enter into transactions for an amount equivalent to $100,000. It is such extensive credit “leverages”, in conjunction with highly variable currency quotations, which makes this market highly profitable but also highly risky.
Source : wikipedia and fxmarket
The primary purpose of the foreign exchange in forex market is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import Japan goods and pay Yen Japan, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade. A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate.
The scope of transactions in the global currency market is constantly growing, which is due to development of international trade and abolition of currency restrictions in many nations. in 2007 was recorded daily trading volume in the forex market to reach US $ 3.900.000.000.000. With high trading volumes and the highest rates of information technology development in the last two decades, the market itself changed beyond recognition. Forex transactions that used to be the privilege of the biggest monopolist banks not so long ago are now publicly accessible thanks to e-commerce systems.
Typical attractive the forex market:
Liquidity: the market operates the enormous money supply and gives absolute freedom in opening or closing a position in the current market quotation. High liquidity is a powerful magnet for any investor, because it gives him or her the freedom to open or to close a position of any size whatever.
Promptness: with a 24-hour work schedule, participants in the FOREX market need not wait to respond to any given event, as is the case in many markets.
Availability: a possibility to trade round-the-clock; a market participant need not wait to respond to any given event;
Flexible regulation of the trade arrangement system: a position may be opened for a pre-determined period of time in the FOREX market, at the investor’s discretion, which enables to plan the timing of one’s future activity in advance;
Value: the Forex market has traditionally incurred no service charges, except for the natural bid/ask market spread between the supply and the demand price;
One-valued Quotations: with high market liquidity, most sales may be carried out at the uniform market price, thus enabling to avoid the instability problem existing with futures and other forex investments where limited quantities of currency only can be sold concurrently and at a specified price;
Market Trend: currency moves in a quite specific direction that can be tracked for rather a long period of time. Each particular currency demonstrates its own typical temporary changes, which presents investment managers with the opportunities to manipulate in the forex market;
Margin: the credit “leverage” (margin) in the forex market is only determined by an agreement between a customer and the bank or the brokerage house that pushes it to the market and is normally equal to 1:100. That means that, upon making a $1,000 pledge, a customer can enter into transactions for an amount equivalent to $100,000. It is such extensive credit “leverages”, in conjunction with highly variable currency quotations, which makes this market highly profitable but also highly risky.
Source : wikipedia and fxmarket
Friday 25 February 2011
Definitions Forex Trading
Forex (Foreign Exchange) or the buying and selling foreign exchange (forex) is the buying or selling foreign currency in the form of a contract system in which to exploit fluctuations in price rises and price drops that we can make a profit.
Excluding foreign exchange market the market, as is usually because the foreign exchange market is not available place where buyers and sellers meet to conduct the transaction as well as commodities markets. Buyers and sellers have sex only through a sophisticated telecommunications network.
Foreign currencies are often traded is USD (U.S. dollar) against the British Pundsterling (GBP), Japanese Yen (JPY), Euro Currency (EUR) and Swiss Franc (CHF).
Global trade takes place between the world's financial centers by involving major banks duni as the main executor of this transaction.
With the time difference between the market makers (the world's foreign exchange banks, non bank financial institutions, insurance, investment management, investors, individuals) worldwide, making this market is active 24 hours from Monday to Friday
Excluding foreign exchange market the market, as is usually because the foreign exchange market is not available place where buyers and sellers meet to conduct the transaction as well as commodities markets. Buyers and sellers have sex only through a sophisticated telecommunications network.
Foreign currencies are often traded is USD (U.S. dollar) against the British Pundsterling (GBP), Japanese Yen (JPY), Euro Currency (EUR) and Swiss Franc (CHF).
Global trade takes place between the world's financial centers by involving major banks duni as the main executor of this transaction.
With the time difference between the market makers (the world's foreign exchange banks, non bank financial institutions, insurance, investment management, investors, individuals) worldwide, making this market is active 24 hours from Monday to Friday
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