The foreign exchange markets are all about Forex trading systems. If you are interesting in expanding your investments and learning more about how you can make money in the foreign markets, Forex is what you should be looking to understand and learn more about. Just as there are all types of investment strategies in your own country, in products and companies that are sold near where you live and work, you can also get involved in the companies and products that are sold abroad. Foreign exchange markets are some of the hottest markets that you can find to make money in your investment portfolio.

The exchange rate from country to country can be just one step in where you are going to make money. For the dollar, changed to another currency can equal more opportunities to purchase additional stocks. The companies you are going to be investing in will be based in that other currency so you will need to exchange your money into that other currency before investing.

You can invest in Forex trades on your own or through a broker firm. If you are going to invest your money on your own, it is suggested that you learn about the company, about the other methods of trade, and you learn more about the currencies where you are going to invest your money. There are over one trillion dollars in trades made per day in the Forex markets. If you are careful and study where you are going to put your money, you can earn more by making the right choices. It takes at least two months worth of trading on the US market to equal the trades that are going on in the Forex markets. Foreign companies are open to investors, and will give great returns to those who ‘do’ their homework.

You will need to learn and study the charts of the companies you are going to consider investing with. Charting and following the growth and the downfalls of companies can be seen if you take your time before jumping in and investing. This is one thing that a Forex trading system is going to open you to. Forex trading systems are methods that are already proven for watching and detailing companies as they change and grow. Without some type of Forex trading system to follow you could be shooting in the dark to find that company that is just right for your needs while investing.

Forex trading systems are becoming so very popular because there are so many additional methods that can be used to get into the markets that are not available through the New York Stock exchange. If you want to reach a Forex trader you could be reaching on that works from their home, or in an office that is around the world. Following a particular Forex trading system is something you will become more comfortable with as you learn more about the individual markets, the companies, and about the value of foreign currencies. Open your mind to make money using the methods you can learn, and complete on your own time.

Are you planning a trip abroad? If you so, you might want to know the current currency exchange rates so you can plan ahead for your financing needs. Your money is usually not worth the same in different countries as it is in the country where you live. It’s a good idea to know the value of your dollar before you take your trip, as you will have to hand it over to be converted when you reach your destination. You don’t want to be shocked when you get there and realize the possibility of an enormous difference in monetary value, and that your money isn’t worth close to what is in your own country. Then again, it may end up that you are happily surprised upon discovering that your money is worth double or triple in the country you are going to be visiting than what it’s worth at home.

A really good source of information for currency exchange rates and other international financial services is www.currencysource.com. They offer information and services for business necessities like buying foreign currency, transferring funds to an overseas bank account, or paying an international seller’s invoice. On a personal level, you can send international wire transfers to family or friends abroad, pay overseas college tuitions or put a deposit down on a vacation rental in a foreign country. Another great feature they offer is a currency converter right on their home page. You can find out what your money’s worth in almost any country around world in just a few seconds!

Another reason for being aware of currency exchange rates is for purchasing over seas stocks. When you purchase stock in another country, but are based in your own country, as in online trading for instance, your dollar value is probably going to be different than what it is in the country where you are investing. You will want to be informed of the exact currency exchange rates so that you know precisely how much you are paying for that stock. It may seem like a good price, until you convert your dollars. You may end up paying much more than the stock is actually worth, defeating the whole purpose of investing.

If you have an online currency trading strategy, then you should incorporate the advice given in this article to make bigger profits - and maybe even change a losing system into a winning one.

The advice we’re giving here is contrary to almost everyone else on this subject - keep in mind however that 90% of traders lose! So, let’s stay away from the losers and make some profits.

Get Set for Bigger Profits

So, what’s this insider secret anyway? - It’s about looking at money management in a different light.

Money Management and your Odds of Success

Most traders are virtually guaranteed to lose - because they have money management strategies that ensure they are constantly going to get stopped out by normal market volatility.

For example, many traders risk say 2% of their equity on a trade. On small accounts, this amounts to just a few hundred dollars. They enter the trade, and market volatility ensures their stop is hit. The market then goes back in the direction they had anticipated - and piles up thousands of dollars! Our trader though, thinks he was just unlucky - and tries again, but he wasn’t unlucky, and volatility will take him out every time.

Money Management Guaranteed to Lose

A string of small losses soon adds up, and the trader runs out of money - and his online currency strategy is at an end.

The trader may have been right, on where markets were going - but got stopped out of the trade - and ended up losing instead of winning.

Does this sound familiar? - It happens all the time.

How to Protect Equity and make Bigger Profits

Here are seven tips to incorporate into your currency trading strategy, to protect equity and build huge profits.

1. Don’t listen to advisors or brokers. Advisors don’t care if you win or lose - and brokers certainly don’t mind, as they work on the assumption you will lose anyway. The more commission a broker makes the better - and tight stops ensure this.

2. You need to risk more per trade - so you need to be very selective in trades. Forget day trading, and concentrate on the big, longer-term trends.

3. Keep in mind this truism – “with risk goes reward”. Without risk, there cannot be big rewards. Currency trading offers big rewards - but you have to be prepared to take the risk.

4. Taking a risk with no thought, and taking a calculated risk, is entirely different. If you are taking a bigger risk, you are not necessarily going to lose - it depends on the logic behind the trade - and the profit potential. That’s why you should trade sparingly - and concentrate on the big trends.

5. Use up to 10%, or maybe even more, on the trades you are confident in - these are the big moves - and you don’t want to be stopped out!

6. Don’t move stops up too quickly to protect equity – big currency trends last months or years - so give the trade room to move. You don’t want to get into a big trade, and get stopped out on the first correction - if you think the trade is going to be big, then have the courage of your conviction.

7. Use options as a vehicle – they’re great if used correctly - to give you staying power. Use at the money, or in the money options - with plenty of time value, for greater staying power. Options are a great tool, but NEVER buy out of the money options - or options that are close to expiry.

An online currency strategy consists of a number of components - and the one that lets down the bulk of traders, is money management. They try so hard to avoid risk, but end up creating it - and lose. Don’t make this mistake in your currency trading strategy - you need to take risks, pure and simple - and as the famous, US general George Patton said:

“Take calculated risks - that is quite different from being rash”

The fact is, most traders don’t believe this – they end up creating risk by trying to avoid it - and that’s why their currency trading strategies fail every time – don’t make the same mistake!

If you’re going to trade, you need to understand support and resistance (S/R) also known as pivot points. Commercial traders recognize this. And, as you might already know, commercial traders dominate the Forex.

Why?

Because commercial traders have at their disposal the kind (i.e., “amount”) of money capable of moving this market. So, what’s important for you to know is they heavily rely on support and resistance levels.

S/R levels, as explained here, are called “pivot points” (which is an accurate name, because price tends to “pivot” – up or down, long or short – when it reaches them). They are typically calculated using a mathematical formula that relies on a currency pair’s previous day's high, low and close values (HLC).

Okay, besides the commercial traders using Pivot Points, why else should you want to include these in your trading arsenal?

Let's look at why

When an novice trader looks at a price chart, it appears that prices randomly go up and down. But, if that same trader plotted pivot points on the same price chart, he or she would immediately notice that price movement is NOT random – in fact, they’d see there’s a method to the madness, and here’s why:

If you understand trading is based on fear and greed (i.e., it’s emotional), you’ll see when price reaches a S/R level, traders tend to collectively enter or exit positions, which can catapult the market in the opposite direction or cause it to rest at that point for a period of time before it then makes it’s next move.

There’s been a lot of research on commercial pivot points. So, it’s no surprise there’s some disagreement on the subject, including the formulas used to calculate the pivot points. The same goes for the times used to calculate the open, high, low and close (because the Forex is open 24/7, traders use a variety of times in their calculations).

Based on this variance of formulas and times, non-commercial traders can generate pivot points that don’t mesh with the commercial traders. On the flipside, you can be pretty sure the commercial traders are all tuned-in to the same radio station – meaning they’re all using the same input values.

I use the pivot point values as provided on the Open FX Yahoo group. This is a great free chat group that has a collective group of highly successful Forex traders, http://finance.groups.yahoo.com/group/OpenFX. Sign up now and then click on the “Files” link and then the “Pivot Updates” to get access to these amazing Pivot Points that are updated on a weekly basis. This free resource alone is worth hundreds of dollars.

The largest financial market in the world is known to be the Foreign Exchange Market often referred to as the Forex or FX market. On a daily average they have a turnover of about one point nine trillion U.S. dollars. This forex trading market is thirty times larger than the combined volume of all the U.S. equity markets.

There are basically two types of investors involved in forex currency trading: About five percent of the overall daily turnover is from companies and governments that buy or sell products and services in a foreign country or on the other hand must convert profits made in foreign currencies into their domestic currency. The other ninety five percent are involved in financial speculation for profit which is the category most of us are in.

The best forex trading opportunities are with the most commonly traded currencies, which are called the majors. For speculators these offer the best forex currency trading opportunities. Right now the major forex market currencies are considered to be the:

US dollar
Japanese Yen
British pound
Swiss franc
Canadian dollar
Australian dollar

The forex trading market is a true twenty-four hour market. Forex trading begins each day in Sydney and works its way around the globe as the day goes by. It goes to Tokyo, London, and even over to New York. Investors can respond day or night to currency fluctuations which are caused by economic, social and political events. These are fundamental factors that effect forex trading but don’t let this scare you as most homebased investors use mechanical indicators and fundamental factors mostly for timing the placing of trades.

The forex market is considered to be an interbank market, due to the simple fact that transactions are conducted between two counterparts usually on the internet or through the telephone. It is a very simple system that can lead to much success for any investor who takes the time to learn the ropes. If you are looking for a good way to invest your money, then online forex currency trading may be just what the doctor ordered. With a good forex trading system and a reputable forex broker and trading platform, you could be on your way to creating extra income, a fulltime living or your family fortune.

There are some risks associated with online forex trading but this is true of most investor trading markets. The stock market and commodity markets are renowned for their peaks and valleys and high risks while on the other hand with a good forex trading system your risk for losses can be tightly controlled with a real probability of substantial gains.

You do not need to worry about learning about Forex currency trading on your own, it is easy to talk to a financial advisor about it. There are also many resources online that you can go through as well as many books at your local bookstore. You may want to learn a little through the process of studying forex online tutorials These are free and they can teach you everything that you ever wanted to know about how to deal with Forex in the future. Also there are many courses and systems which can be bought and downloaded instantly on the internet. The average cost of these courses are around $100.00. Some are excellent and some leave much to be desired but most come with a refund guaranty if you are not satisfied with the product. There is no limit to the amount of money that can be made with Forex currency trading so if you are in the market for some new investment opportunities, you certainly want to look into this lucrative investment vehicle.

In previous articles, we’ve looked at the history of Dow Theory, and why it's the best theory ever, for currency technical analysis.

The logic for spotting the big trends follows - and it’s these trends that we want to catch - as they yield the big profits!

Hamilton identified three specific phases, in both primary bull markets, and primary bear markets.

These stages are a reflection of the psychological state of the market - and their reflection in currency technical analysis.

A primary bull market was defined as: a sustained advance, marked by improving fundamentals, and investor confidence - a primary bear market is a mirror image – i.e. the exact opposite of a primary bull market.

In both primary bull markets, and primary bear markets, there will always be secondary movements, that run counter to the major trend. While Dow theory was developed for stocks, the format works perfectly, (if not better) in the currency markets.

Here we look at a bull market move, as defined by Dow Theory:

Primary Bull Market: Stage 1 – Accumulation

Hamilton concluded that the initial stages of a bull market were indistinguishable from the last reaction rally, of a bear market.

Pessimism, which was excessive at the end of the bear market, still remains at the start of a bull market.

It’s at this stage, that professional investors begin to accumulate positions - as the market is cheap, and now offers good value – This is true of any market.

In the first stage of a bull market, prices begin to find a bottom, and firm up, as these positions are established.

When the market starts to rise, there is skepticism that a bull market is emerging.

After the first leg peaks, and starts to head back down - this then confirms the bearish view of the majority.

It’s at this stage that careful analysis is needed, with Dow Theory - to determine if the decline is a secondary movement (a correction of the first leg up).

If it’s a secondary move, a low forms above the previous low, a period of low volatility will be present as the market firms - and the advance finally starts to get under way.

When the previous peak is surpassed, the beginning of the second leg forms - and the move is valid and confirmed.

Primary Bull Market: Stage 2 - Big Move

The second stage of a primary bull market is normally the longest - and represents an easily identifiable trend – clearly indicated with any form of currency technical analysis.

This period sees a sustained advance in prices - it’s a period marked by improving fundamentals, and increased confidence.

This is considered the easiest period to make money, as participation is broad and the trend followers are in - and investor confidence is high, with strong buying.

Primary Bull Market: Stage 3 – Excess

The third stage of a primary bull market is marked by excessive optimism, and excessive speculation.

During this third and final stage, the uninformed public are heavily involved. In reaction to this, prices are excessive, as confidence has soared - and greed takes over. Prices are being pushed by investor greed and we all know what happens next!

Primary Bear Market: Stage 1 – Distribution

Accumulation is the hallmark of the first stage of a primary bull market, and distribution marks the beginning of a bear market - as the "smart money" begins to realize, that prices are too far away from fair value.

Forex trading is the new way to make money through online currency trading. With a worldwide market and over 60 currencies for you to trade there has never been an easier way to make money online.

Forex trading until recently was reserved for banks and other large financial industries but thanks to the power of the internet and online currency trading, forex has now become feasible for everyday people. The forex market has become the largest trading market in the world and each day there is an estimated turnover of over $1.5 trillion dollars. Another added bonus is that forex trading is available 24 hours a day, 5 days a week unlike most other markets that operate on an 8 hour day. This means that people wishing to trade forex can do so at any given time.

Forex currency trading is done is pairs and these are known as crosses. These pairs are always against the US dollar and the main crosses you will find when trading forex are the USD/EUR and the USD/GDP. The most popular crosses are known as majors and these can make forex traders great profits. Currencies change on a regular basis and are based on the how the world financial markets see the value of the currencies. You can sell or buy these currencies and forex brokers do not charge commission fees.

There are two types of forex accounts; a mini forex account and a regular forex account. Mini forex trading is an excellent way for small investors to learn about and take part in forex trading and with the most forex brokers offering a leverage of 100:1, mini forex trading will allow you to control a $10,000 currency position with a deposit of only $100. Mini forex trading is a great way to get a feel for forex trading and learn the tricks and skills needed to succeed without having to go to great expense. Why not try mini forex trading now and see just how easy it is to profit with forex trading.

In recent years there has been a lot of hype around forex trading. Forex refers simply to the foreign currency markets. This is the largest market in the world with over a trillion dollars a day being moved around in trades. It is also the world’s most liquid and global market with trading taking place 24 hours a day, seven days a week, in hundreds of market places around the world. As a result, if offers a number of advantages to traders, particularly active traders who like to live and breath the markets.

One of the big advantages touted about the forex market is that there is zero commission. While it is true that the forex market does not charge commissions, there are what are known as spreads, which allow the market makers to profit. The spread is the difference between the bid and ask price of a particular currency. While the spread is very low, you will pay slightly more for a currency you wish to buy, than you will receive from a currency you wish to sell.

Another advantage of the forex market is that you deal directly with a market maker with the need to go through a broker. This is definitely an advantage given the broker’s fees that you can save. It does however mean that you will not receive any advice before you make a trade. However, given the nature of most online brokers these days, you are unlikely to receive any advice from these brokers either.

All of these lower transaction costs straight away mean that it should be relatively easy to profit as a trader on the forex market.

Another element of the forex market is the ease at which your investments can be leveraged. Generally, you can achieve up to 200:1 leverage. This gives traders with smaller sums at their disposal the same chance to receive high returns as can larger investors with huge portfolios.

The forex market also operates in real time which allows you to constantly manage your investments and your risks. With the high leverages that are possible, you will want to keep a very close eye on your risk as you stand to lose a lot very quickly if things don’t go your way.

Here we look at the best contracts to trade, for long-term trend followers - and how to blend these commodities and futures contracts, to obtain good diversification - and great profit potential. We also reveal the one commodity contract, which any trader should be looking to trade.

One of the great advantages of commodity futures trading is the wide variety of un-correlated groups that you can trade.

The main trading groups are:

. Currencies
. Interest Rates
. Stock Indices
. Grains
. Meats
. Energies
. Metals
. Food and Fibre

The big moves only come a few times a year - and of course, in futures and commodities, it’s the big moves that make the big profits.

Single Groups or Diversification?

In futures, and commodity trading, this depends on the risk / reward you want - and the amount of capital you have.

If you trade just one or two groups, then your commodity and futures trading risk / reward in will be higher

The Best Contracts to Trade

We have outlined the best futures and commodities contracts below - based upon the following criteria:

. Liquidity, and investor participation
. Long term trends, over the last 30 years.

Currencies

A great market for long-term trend followers - all currencies exhibit long-term trends - as they reflect the underlying health of the economy.

A good place to start is the Dollar Index, which can be less volatile than the individual currencies - and is suited to long term position traders.

Interest Rates

Another great group - interest rates - considered “boring”, by many commodity futures traders - but they’re not! They have great long-term trends - with the best contracts being the T Bond and T Notes.

Stock Indices

The S & P is the one, most commodity & futures traders look at - but there are plenty of others. Good markets to trade include the DAX, NASDAQ and Dow Jones.

Energies

Energies are the biggest physical commodity group in the world - in terms of volume. The energies group exhibits good, long-term trends all the time.

All traders should start with Crude Oil, but for traders who really want to taste some action, check out Natural Gas – when trends come here, they’re huge! A word of caution on this market - it’s only for futures commodity traders with deep pockets - and strong nerves.

Adding Diversity

The above commodity futures are all suitable for trading as individual groups - however with the contracts listed below, we’d only trade as part of a diversified portfolio - due to lower liquidity, and limit moves.

Metals

The main focus for speculators is on, Copper, Gold and Silver - however the White Metals of Platinum, and Palladium, have produced some of the best trends of recent years.

These rare metals are precious metals - but double up as industrial metals as well. Although trading volumes are thin, volatility and limit moves are frequent - for traders with deep pockets, these metals offer outstanding long-term trends.

Grains and Meats

Grains and Meats were big contracts for speculators in years gone by - but they have lost some of their shine. Speculators now trade more financials - however, Pork Bellies, Live Hogs, Feeder Cattle, and Live Cattle, still offer commodity futures traders great trends.

The grains are similar and the Soybean complex - Wheat, and Corn, are the markets to look at.

Food and Fibre

The markets to look at are Orange Juice, Coffee, Cocoa and Cotton. Cotton is probably the best market for long-term trend followers - but this is very much a personal choice.

Successfully Blending a Portfolio

Today, many traders simply focus on the financials (and currencies are the best group to trade) - however as you can see from the above, that commodity futures traders, have plenty of contracts from which to choose.

Foreign exchange forecasts see plenty of volatility, in the major currencies - but there are two currencies that look fantastic - as long-term position trades - and many currency traders are overlooking them.

In the foreign exchange forecast for the coming months, the Canadian and Australian dollar look set for significant strength - and a simple buy and hold strategy, could pile up massive profits.

Global Expansion

This foreign exchange forecast is rooted in the changes that are taking place in the global economy - and will underpin these currencies for many months - if not years to come.

When forecasting foreign currency exchange rates and looking at the longer-term outlook, changes in the global economy are telling us, why these currencies are set to soar in value:

They are big commodity exporters – the global economy is expanding - and it needs fuel!

The emergence of huge economic growth in China and India, is taking the headlines - but economic expansion is occurring worldwide, it’s broad based - and looks set to continue.

Both the Canadian and Australian economies will see huge buying of raw materials - causing strong buying, of both the Canadian and Australian currencies.

Did you Miss this?

When forecasting foreign exchange rates, you don’t see much in the news, about the bull market in the Canadian dollar.

The Canadian dollar has increased in value 30% since 2003! - Imagine trading this with just 10:1 leverage - that’s triple digit annual gains over 3 years.

This trade is not rocket science – it’s simple supply and demand.

The move is not over - and foreign exchange forecasts, see further strength in the currency.

The Australian dollar has been trading sideways, for a considerable period of time - but it’s only a question of when this will break to the upside.

A breakout above the weekly highs will see the currency enter a new bull phrase.

Long Term Growth

These foreign exchange forecasts are long term - and the trades are a simple buy and hold strategy - which could make anyone big profits.

The trades are simply taking advantage of the expansion of the global economy - which is an undeniable economic fact.

Trading the Move

These currencies can be quite volatile in the short term - so an excellent way to trade them is via options strategies.

Go for in the money, or at the money options, with plenty of time value - to reflect the long-term nature of this trade.

Entry to the Market

Use a breakout method, to get into the market - and dips to load up positions.

Diversification

Of course, the major currencies offer great profit potential too - as recent foreign exchange forecasts show – but the Canadian and Australian dollar give you a clear cut reason to buy and hold - and will help diversify your trading portfolio.

Check them out today

Look at the foreign exchange forecasts - and pay close attention to the Canadian and Australian dollar - we think these two currencies look great – but check them out for yourself, and see what you think!

We have demonstrated how well options function in unison with a
stock position. They enhance potential gains, provide profit
protection and limit the risk of the entire investment. They
enable us to manage risk in a single stock as well as an entire
portfolio. But, as good as options are in conjunction with
stocks, they can be even better when traded against each other.

Spreads are strategies that do not involve the use of any
security other than another option. Their positives are that
they are inexpensive, offer protection for both buyer and seller
and are in effect automatically hedged trades.

Spreads can provide large percentage returns with low risk and
can be entered into with small capital outlay. A spread involves
the purchase of one option in conjunction with the sale of
another option. There are many types of spreads. Some take
advantage of stock movements while others are set up to take
advantage of movements in implied volatility and even time
decay. There are calendar or time spreads, diagonal spreads,
ratio spreads and also vertical spreads, which we will discuss
in depth here.

Spreads are more advanced and sophisticated than the strategies
discussed in our beginner product “OPTIONS 101.” Where certain
spreads, like 1 to 1 vertical spreads, can be less risky than a
buy-write, there are more variables to consider and control
which makes trading the spread more complicated.

When you trade a spread you are dealing with three elements: the
spread as a whole (which you can buy or sell) and its component
parts – the option you buy and the option you sell.

Although the cost of most spreads is relatively inexpensive to
initiate, they can provide a large percentage return and there
is protection (limits) to both sides of the trade. Therefore,
even experienced investors can profit from learning about
spreads and their investment potential.

OTC – over the counter

• Exchange rate – the difference between currency values; for instance, a Canadian dollar is valued at .86 of a US dollar

• Hedge funds – large mutual funds companies that control vast amounts of money and are able to manipulate the value of a currency through speculation

• Central bank – the national bank of a nation, which usually exerts control over the value of that currency

Forex trading is the investment in the currency of one nation. Multinational Corporations doing business across national boundaries find value in keeping their cash reserves in a variety of countries, and holding their funds in a myriad of ways. For example, a UK corporation may hold a percentage of its working capital in UK pounds, but if it does quite a bit of business in USA it may also maintain a percentage of its money in dollars, in US banks. Individual investors over the decades have discovered that there is profit to be made in investment and speculation in the currency markets.

Take the case during the 70’s when the German DM swung rapidly in value. It was worth anywhere from 1.2 marks to the US dollar to 3.5 US marks to the dollar. When the mark was worth 2.5 it was beneficial to spend dollars buying marks, since the mark would buy more goods or services at that rate. As the mark bottomed out 1.7 to the dollar there was less incentive.

Surprisingly, the forex market itself is not unified. One can find many small forex markets specializing in trading various currencies. The most commonly traded currencies in forex speculation are the US dollar, the Australian dollar, the British pound sterling, the Japanese yen, and the European Euro. Currency values vary depending on the market in which an investor is speculating, so there is really no such thing as a single, unified dollar rate, but instead there are multiple dollar rates, which vary according to the market where the trade is occurring.

The major cities in which trades occur include New York, London, and Tokyo. It’s a 24 hour process. When Asian trading ends, European trading commences, and when European trading ends, then American trading opens. Naturally, when American trading ends, it is time for Asian trading to open house once more… and so on.

Currently, the most actively traded currency is the US dollar, involved in 90% of all trades. This is followed by the Euro involved in 36% of all trades, then by the yen in 20% and the pound in 17%.

Our fastest rising currency in trade is the Euro, however the US dollar is still the favored anchor point-- and the currency watched so as to judge how others will react. Differences in value of currencies come from the current events. GDP growth, inflation dips, interest rate swings, budget and trade deficits, surpluses and other economic conditions all shift currency values. Investors, for this reason, follow the news very closely. There are 24 hour cable news channels and many web sites devoted to news that aid currency speculators.

The forex market is highly susceptible to rumors. In fact the central banks of countries frequently manipulated local currency value by sowing rumors about interest rate hikes and other economic propaganda that impacts the value of the domestic currency. When this news is false it is called a dirty float- and it dismays the market.

A master of manifestation to his associates, Joseph R. Plazo offers intense executive coaching so people can find jobs and build careers. Joseph achieved financial independence at 22, authored five NLP books, mentored hundreds and indulges in his passion for radionics. Always to take the initiative, his battle cry is "Ducunt volentem fata, nolentem trahunt."

As you read forex charts, remember that the two fundamental approaches for online forex trading: fundamental analysis and technical analysis.

Fundamental analysis doesn’t rely on forex charts. It scrutinizes political and economic indicators to determine trades. Charts here are deployed as used as a secondary reference.

Technical analysis on the other hand, attempts to predict price swings by analysis of historical price activity. Those who use technical analysis study the relationship between price and time.

The most actively traded pair of currencies is the Euro and the US dollar, so we will use them in our example. The dollar is on the right hand side of the chart and the Euro is on the left hand side. The currencies are expressed in relationship to each other in pairing. Forex charges will always display how much of the currency on the right hand side is necessary to buy a unit of the currency on the left side. Looking at the typical EU-USD, chart you will notice the last price displayed per given date. This number is always emphasized. The time is tabbed horizontally across the bottom of a chart and the price scale is displayed vertically along the right hand edge of the chart. The time and the price are set in all caps to help the trader remember that technical analysis rests upon the relationship between time and price.

The trader observes the price and time movement on a chart. These include bars, lines, point and figure, and Japanese candle sticks-- the most favored method. With the candlestick method there is a large, red section that is the body of the candlestick. Lines protrude from the top and bottom and they are the upper and lower wicks. When you look at all the candles on a chart it is apparent that bodies come by difference sizes. Sometimes no body exists at all.

The same is true with wicks. Candle wicks come by many difference sizes; there may be no wick at all. The length of the body and the length of the wick are determined by the price range for the candle. Longer candles will have had more price movement during the time that they were open. The top of a candle wick is the highest price for that currency while the wick’s bottom is the lowest price. A currency is bullish when the close of the candle is higher than the open. In simple terms this means that there were more buyers than there were sales during the opening time period. Sometimes the candles will not have wicks. The price opened and it dropped off until it closed.

Forex charts don’t offer bullet proof trading hints, but they can help a trader. Past trends do have their place in forex trading as most traders will admit, and using the charts to track historical trends can assist a trader in making a snap decision.

The online investor typically joins a service that provides realtime charts that updates on currency activity. Charts can be checked on a minute to minute basis. For those who primarily do their trading based on historical accuracy this can ease the burden of prediction.

Most forex traders however use a combination of fundamental and technical analysis. They may chart historical trends, but they will also pay close attention to political, cultural and economic indicators within a region. They might use charts and other techniques to check correlation between political climate and currency fluctuations. But even the most sophisticated technical analysis software or tool has its limitations. A trader must be prepared to take risks… and invest money that is not needed for the immediate future