1. Trade from an intra-day chart. The goal of capturing 10 pips of profit per trade is suitable for a short term day-trading strategy. As such, you should use an intra-day chart to plan entries and exits for your trade. Some examples of charts to use are a 15-minute, 5-minute or even a 1-minute chart.
2. Decrease your drawdown as much as possible. Drawdown is a term describing the amount of paper losses you incur before a position turns profitable. While some drawdown is acceptable for medium- and long-term trades, you must aggressively cut your losses and eliminate drawdown when making intraday trades.Effectively, this means that you need to precisely time entries and exits on your trades. Some popular methods traders use to accomplish this goal include support and resistance levels, candlestick charting and trend lines. Many traders also incorporate indicators such as the MACD, Stochastics and RSI. No matter which strategies you use, you need to time your trades as precisely as possible and cut losses immediately when a trade moves against you.
3. Use a trailing stop loss. The trailing stop loss is an essential tool to use when making intraday trades because it automatically cuts losses and locks in profits as a trade moves in your favor. Whenever you enter a trade, enter a trailing stop loss close to your entry level. This will prevent you from ever taking a big loss in the market.
4. Exit the market when you reach your goal. In this scenario your goal is 10 pips, but you may have to make a little over 10 pips to compensate for the spread. For example, if your Forex broker offers a 2 pip spread on the EUR/USD (euro/dollar), you need to make 12 pips on a trade to achieve a 10 pip net profit. One technique for exiting trades is to move your stop loss up to lock in your profit goal rather than exiting the trade. This protects you from giving back some of your profits while allowing you to book additional profits if the market continues to move in your favor.
Friday, February 27, 2015
Sunday, February 22, 2015
How to Become a Forex Broker (4 Steps)
1. Understand the Foreign Exchange Market. Read every web article and book you can to make sure you fully comprehend the workings, mechanisms and the players in the Forex market. Obtain a strong command of the various sub-disciplines that play a role in currency trading, such as macro-economics and technical analysis. Be fully checked out in modern Forex nomenclature and jargon, pricing and order conventions and all the basics of what you can expect to encounter when helping traders decide on and broker their transactions.
2. Get a feel for what a Forex broker does in today's trading environment. Find practicing or retired Forex brokers to talk to about the requirements of the job and the day-to-day routines. If you don't know or can't find any in the real world, online Forex discussion groups are often an excellent venue for either locating them or finding people who can help you locate them. Be aware that with the advance of technology, the job of today's Forex broker is considerably more preoccupied with information technology than it was even 10 years ago. Many retail traders trade Forex almost entirely online, without the input of a broker. In this case, brokers are often relegated to ensuring the client's software platforms are operating soundly, their orders are being processed expeditiously and the firm's own pricing algorithms are maintaining an appropriate bid/ask spread, upon which the company depends for revenue.
3. Get your professional certification. Forex brokers are grouped in with futures and commodity brokers and are typically required to pass the National Association of Securities Dealers Series 3 test. You can find and order comprehensive preparatory material for this test online but to take the actual test you'll have to be sponsored by a licensed futures brokerage firm. There are no explicit educational requirements for being a Forex broker, but a college degree in business or economics would enhance your chances of getting hired.
4. Pursue a job. Decide on whether you would like to try to get hired by a large financial institution, in which case you'll probably have more stability but will have to start out lower on the employment ladder, or if you'd like to join a smaller retail brokerage firm in which you might have more responsibility to start off with, but don't have the presumed stability of a large institution. Be aware that some Forex brokerages have merged with futures brokerages and that to become a broker for one of these hybrid firms you'd probably have to accumulate additional licenses or certifications specific to the futures industry, under the purview of the Commodity Futures Trading Commission. Also, be sure to stay away from shady bucket-shop style Forex firms that are not transparent about their ownership or the nature of their operations and promise their clients unrealistically high returns or non-existent safety guarantees.
2. Get a feel for what a Forex broker does in today's trading environment. Find practicing or retired Forex brokers to talk to about the requirements of the job and the day-to-day routines. If you don't know or can't find any in the real world, online Forex discussion groups are often an excellent venue for either locating them or finding people who can help you locate them. Be aware that with the advance of technology, the job of today's Forex broker is considerably more preoccupied with information technology than it was even 10 years ago. Many retail traders trade Forex almost entirely online, without the input of a broker. In this case, brokers are often relegated to ensuring the client's software platforms are operating soundly, their orders are being processed expeditiously and the firm's own pricing algorithms are maintaining an appropriate bid/ask spread, upon which the company depends for revenue.
3. Get your professional certification. Forex brokers are grouped in with futures and commodity brokers and are typically required to pass the National Association of Securities Dealers Series 3 test. You can find and order comprehensive preparatory material for this test online but to take the actual test you'll have to be sponsored by a licensed futures brokerage firm. There are no explicit educational requirements for being a Forex broker, but a college degree in business or economics would enhance your chances of getting hired.
4. Pursue a job. Decide on whether you would like to try to get hired by a large financial institution, in which case you'll probably have more stability but will have to start out lower on the employment ladder, or if you'd like to join a smaller retail brokerage firm in which you might have more responsibility to start off with, but don't have the presumed stability of a large institution. Be aware that some Forex brokerages have merged with futures brokerages and that to become a broker for one of these hybrid firms you'd probably have to accumulate additional licenses or certifications specific to the futures industry, under the purview of the Commodity Futures Trading Commission. Also, be sure to stay away from shady bucket-shop style Forex firms that are not transparent about their ownership or the nature of their operations and promise their clients unrealistically high returns or non-existent safety guarantees.
How to Trade FOREX Channels (5 Steps)
1. Understand channels and their variations. Channels are constructed by drawing straight lines at an angle connecting the highs and lows on a particular chart, forming a band between which prices often trade. Other forms of channels are mathematically calculated from price and volatility data, and form an envelope around the price of a particular pair, with the high end denoting an overbought extreme, and the low end denoting an oversold extreme. Such channels are called linear regression lines, Bollinger Bands, and Keltner Channels.
2. Settle on a trading timeframe. Most Forex participants trade on an intraday basis, using 5-minute, 15-minute, or 60-miunte charts. Each chart obviously looks different. If you trade channels on a 5-minute chart, the range and depth of price movement is considerably more constricted than if you trade on a 60-minute chart or longer. The timeframe you elect to trade will both affect the primary technical picture you see, as well as how you will need to adjust your profit expectations and stop loss safeguards.
3. Trade bounces off of channel highs or lows. Many traders combine this strategy with indicators called 'oscillators' as part of a short-tem countertrend strategy. A particular advantage of countertrend strategies is that most of the time Forex prices tend to churn in a relatively narrow range, bouncing off lower and upper channels. This creates many short-term, high probability trades. The disadvantage is that when prices do eventually breakout to the upside or downside, they move very strongly, and getting caught on the opposite side can lead to large losses.
4. Trade channel breakouts. As soon as a price bar closes above the upper channel line, buy immediately at the open of the next price bar. This strategy will be unsuccessful far more often than a countertrend strategy, but when it's right and you catch a big move, the profits from one successful trade can more than pay for three or four losing trades. Channel breakouts tend to be most successful if you buy into them after a prolonged stretch of particularly narrow range trading. When buying a channel breakout, you might also wait for a retest of the upper channel before buying to get a better price.
5. Observe other technical factors that compliment channel analysis. The most important are trend, support and resistance, and range. Typically, when Forex prices compress and coil into a particularly narrow range channel, there will soon be a large breakout move, either up or down. Conversely, after a big range move, prices tend to bounce around in a new narrow range before either continuing or reversing the previous trend. Be aware of the broader conditions affecting the Forex pair you are trading, and use channels to augment your overall analysis.
2. Settle on a trading timeframe. Most Forex participants trade on an intraday basis, using 5-minute, 15-minute, or 60-miunte charts. Each chart obviously looks different. If you trade channels on a 5-minute chart, the range and depth of price movement is considerably more constricted than if you trade on a 60-minute chart or longer. The timeframe you elect to trade will both affect the primary technical picture you see, as well as how you will need to adjust your profit expectations and stop loss safeguards.
3. Trade bounces off of channel highs or lows. Many traders combine this strategy with indicators called 'oscillators' as part of a short-tem countertrend strategy. A particular advantage of countertrend strategies is that most of the time Forex prices tend to churn in a relatively narrow range, bouncing off lower and upper channels. This creates many short-term, high probability trades. The disadvantage is that when prices do eventually breakout to the upside or downside, they move very strongly, and getting caught on the opposite side can lead to large losses.
4. Trade channel breakouts. As soon as a price bar closes above the upper channel line, buy immediately at the open of the next price bar. This strategy will be unsuccessful far more often than a countertrend strategy, but when it's right and you catch a big move, the profits from one successful trade can more than pay for three or four losing trades. Channel breakouts tend to be most successful if you buy into them after a prolonged stretch of particularly narrow range trading. When buying a channel breakout, you might also wait for a retest of the upper channel before buying to get a better price.
5. Observe other technical factors that compliment channel analysis. The most important are trend, support and resistance, and range. Typically, when Forex prices compress and coil into a particularly narrow range channel, there will soon be a large breakout move, either up or down. Conversely, after a big range move, prices tend to bounce around in a new narrow range before either continuing or reversing the previous trend. Be aware of the broader conditions affecting the Forex pair you are trading, and use channels to augment your overall analysis.
Tuesday, February 17, 2015
How to Use Live Forex Bar Charts (5 Steps)
1. Use a live Forex chart online service to plot your currencies before trading. These charts are generally free and they provide live currency quotes to the minute. Choose your currency name and the pricing frequency desired. For example for minute by minute prices on the dollar and euro pairing; use USDEURO and choose the minute frequency. You can also choose one currency only. The bar chart will be plotted with a vertical axis (for frequency) and a horizontal axis (for prices).
2.
Find the currency 'Support' level on the live Forex chart. To do this, find the lowest price on the bar graph that the currency has dropped to over several times. This price is generally a buy signal for traders. This is interpreted as the currency support level; in technical analysis the currency is not expected to fall below this price for the near term. This is also a signal that there are more buyers than sellers in the market for the currency.
3. Look for the currency or the currency pair 'Resistance' level on the live bar chart. Look for the highest price the currency has traded over several time. This point in technical analysis is a sell signal because it is assumed that there are more sellers than buyers.
4.
Learn to recognize currency trading patterns on the bar charts. Use various historical Forex charts to study and spot price patterns. Historical prices can be obtained for any day in the past. Compare a few of these bar charts and identify uniformity in the currency support and resistance levels. The more you practice this, the easier patterns recognition becomes.
5. Remember that currency prices are not always predictable, expect breakaway points. These are the points when the currency breaks from the previous support or resistance levels to form new patterns. When the currency leaves an old price bottom or top and moves to a new point not returning to the old price, it is likely setting a new trading level.
2.
Find the currency 'Support' level on the live Forex chart. To do this, find the lowest price on the bar graph that the currency has dropped to over several times. This price is generally a buy signal for traders. This is interpreted as the currency support level; in technical analysis the currency is not expected to fall below this price for the near term. This is also a signal that there are more buyers than sellers in the market for the currency.
3. Look for the currency or the currency pair 'Resistance' level on the live bar chart. Look for the highest price the currency has traded over several time. This point in technical analysis is a sell signal because it is assumed that there are more sellers than buyers.
4.
Learn to recognize currency trading patterns on the bar charts. Use various historical Forex charts to study and spot price patterns. Historical prices can be obtained for any day in the past. Compare a few of these bar charts and identify uniformity in the currency support and resistance levels. The more you practice this, the easier patterns recognition becomes.
5. Remember that currency prices are not always predictable, expect breakaway points. These are the points when the currency breaks from the previous support or resistance levels to form new patterns. When the currency leaves an old price bottom or top and moves to a new point not returning to the old price, it is likely setting a new trading level.
How to Calculate FOREX Margin (4 Steps)
1. Determine the total transaction (notional) value. Let's say you wish to trade one 'lot.' A lot is 100,000 units in any currency. For instance, the quote 100,000 EUR (euro) / USD (U.S. dollar) is equivalent to 100,000 euros.
2. Determine the margin requirement. This is the amount of money you are required to put up in order to make a trade, and is referred to as 'margin requirement' by the forex broker. Let's say your broker requires 1 percent of the transaction amount before you can trade.
3. Determine the Forex margin. Multiply the margin requirement by the transaction value. The calculation is 100,000 x 0.01 = $1,000.
4. Calculate margin-based leverage. Divide total value of the transaction (notional) by the forex margin. The calculation is: 100,000 / 1,000 = 100:1 or 100 to 1.
2. Determine the margin requirement. This is the amount of money you are required to put up in order to make a trade, and is referred to as 'margin requirement' by the forex broker. Let's say your broker requires 1 percent of the transaction amount before you can trade.
3. Determine the Forex margin. Multiply the margin requirement by the transaction value. The calculation is 100,000 x 0.01 = $1,000.
4. Calculate margin-based leverage. Divide total value of the transaction (notional) by the forex margin. The calculation is: 100,000 / 1,000 = 100:1 or 100 to 1.
Monday, February 16, 2015
How to Join FOREX
1. Identify a Forex broker you wish to consider. There are hundreds of Forex brokers available, and all the reputable ones offer free demo accounts to prospective clients. This is an important part of the process of joining the Forex market. If a broker does not provide a demo, skip it and look at another.
2. Open a demo account with the broker of your choice. While many brokers provide this service, it is recommended that you open only one demo account at a time. Most demo accounts are fully funded with fake capital and provide access for two to four weeks.
3. Download and install the Forex trading software for the broker you will demo. Open the program after installation and begin trading at any time. The market is open 24 hours a day, so you will see prices fluctuate immediately.
4. Trade currency in the Forex demo account. This serves two important purposes. It offers you an opportunity to develop trading skills before committing real money. This is essential for traders who are new to Forex. Secondly, you can asses the broker's trading platform and features to see if they meet your needs. All Forex platforms are proprietary, and each broker offers different software. As you try different platforms, you will quickly see which interface is easiest for you to use.
5. Open demo accounts with other Forex brokers as needed after your simulation account expires. You can realistically continue to try different Forex brokers for many months before opening a real account. This may be necessary for new traders who need experience simulating before deciding if the Forex market is right for them.
6. Identify a broker that offers the kind of leverage your require once you are ready to open a real account. A standard brokerage account requires that all trades include a minimum of 100,000 units of the traded currency. This requires considerable capital. A 'mini' Forex account reduces this amount to 10,000 units, while a 'micro' Forex account requires only 1 percent the trade size and startup capital. Micro Forex accounts are relatively safe and can be opened for only $25 in some cases. You may choose the broker you most enjoy from your simulation experience or one that meets your minimum risk requirements before opening a real account under your name.
7. Sign up for an account using the broker's online application. This process takes only minutes.
8. Fund the account once the application is approved and account is opened.
9. Download and install that broker's trading software if you do not already have it on your system. You have now joined the Forex market and are ready to participate in currency trading using real money.
2. Open a demo account with the broker of your choice. While many brokers provide this service, it is recommended that you open only one demo account at a time. Most demo accounts are fully funded with fake capital and provide access for two to four weeks.
3. Download and install the Forex trading software for the broker you will demo. Open the program after installation and begin trading at any time. The market is open 24 hours a day, so you will see prices fluctuate immediately.
4. Trade currency in the Forex demo account. This serves two important purposes. It offers you an opportunity to develop trading skills before committing real money. This is essential for traders who are new to Forex. Secondly, you can asses the broker's trading platform and features to see if they meet your needs. All Forex platforms are proprietary, and each broker offers different software. As you try different platforms, you will quickly see which interface is easiest for you to use.
5. Open demo accounts with other Forex brokers as needed after your simulation account expires. You can realistically continue to try different Forex brokers for many months before opening a real account. This may be necessary for new traders who need experience simulating before deciding if the Forex market is right for them.
6. Identify a broker that offers the kind of leverage your require once you are ready to open a real account. A standard brokerage account requires that all trades include a minimum of 100,000 units of the traded currency. This requires considerable capital. A 'mini' Forex account reduces this amount to 10,000 units, while a 'micro' Forex account requires only 1 percent the trade size and startup capital. Micro Forex accounts are relatively safe and can be opened for only $25 in some cases. You may choose the broker you most enjoy from your simulation experience or one that meets your minimum risk requirements before opening a real account under your name.
7. Sign up for an account using the broker's online application. This process takes only minutes.
8. Fund the account once the application is approved and account is opened.
9. Download and install that broker's trading software if you do not already have it on your system. You have now joined the Forex market and are ready to participate in currency trading using real money.
Sunday, February 15, 2015
How to Start Trading Forex Online (4 Steps)
1. Open a Forex Trading AccountOpen a forex trading account online at a reputable company. Forex trading companies are usually different from stock brokerage companies. You cannot trade currency on a stock trading account.You will need a minimum amount of cash to open a forex trading account. The minimum is normally about $500, but each company has their own policy.Do not start live trading until you have completed a training course and practiced trading for at least three months.
2. Take Free Online Training CoursesTake a free training course online that will take you step by step through trading currencies online. There are many websites that can help you learn how to trade forex even for beginners.You will need to understand how to buy and sell currency and how to read the indicators and charts.
3. Practice TradingPractice trading in a practice account. Make sure that you are in your practice account and not trading actual funds. One indicator is that you normally have about $50,000 to practice trading with in a practice account. Your normal account will only have the funds that you have placed inside it.Knowing how to start trading forex online will help you to bring in extra funds during this weak economy.
4. Find a MentorFind a mentor online that you can go to each day for a daily update of their forex predictions. They will let you know what currencies they are buying and selling that day and where you should place your stops or buy and sell orders.You can sell currencies short and buy to cover just like you would with stocks. Currency trading accounts will automatically sell your currencies if your account is about to go into a negative balance. Never trade more than you can afford to lose. Only put an amount into your account that you can afford to lose, once it is in your account it may bet used up if your currency goes in the wrong direction. Trade with caution.
2. Take Free Online Training CoursesTake a free training course online that will take you step by step through trading currencies online. There are many websites that can help you learn how to trade forex even for beginners.You will need to understand how to buy and sell currency and how to read the indicators and charts.
3. Practice TradingPractice trading in a practice account. Make sure that you are in your practice account and not trading actual funds. One indicator is that you normally have about $50,000 to practice trading with in a practice account. Your normal account will only have the funds that you have placed inside it.Knowing how to start trading forex online will help you to bring in extra funds during this weak economy.
4. Find a MentorFind a mentor online that you can go to each day for a daily update of their forex predictions. They will let you know what currencies they are buying and selling that day and where you should place your stops or buy and sell orders.You can sell currencies short and buy to cover just like you would with stocks. Currency trading accounts will automatically sell your currencies if your account is about to go into a negative balance. Never trade more than you can afford to lose. Only put an amount into your account that you can afford to lose, once it is in your account it may bet used up if your currency goes in the wrong direction. Trade with caution.
Tuesday, February 10, 2015
How to Trade in Forex for Dummies (4 Steps)
1. Review the definition of a currency pair. Currencies are traded in pairs, that is, two different currencies. The first currency is the transaction currency and the second is the payment currency. The quotation tells us how many units of the payment currency are needed in order to buy one unit of the transaction currency.
2. Understand how currency prices move. Let's say you want to trade EUR/USD. If the current quote for EUR/USD is 1.2400, it means that one EUR is exchanged for 1.24 US dollars. If the quote moves to 1.2410, it means the euro is getting stronger against the dollar. However, if the quote moves to 1.2390, it means the euro is getting weaker against the dollar.
3. Choose a broker with low spreads, a strong reputation and extensive tools. There are as many Forex brokers are there are different types of currency. Look for low spreads, which is the difference between the price the currency can be sold and bought at (also known as bid or ask price). Forex brokers don't charge commission and this difference is how they make money. Look for a quality institution. Your broker should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Commission (CFTC). Finally, look for an extensive tool-set offering. Download a few versions of Forex trading software from different brokers before funding your account. Play around with the tools and request a virtual trading account to test the trades.
4. Sign up for a Forex account. You can fund your account using a credit card, money order or wire. Signing up is the same as getting an equity account, however you will need to sign a margin agreement. The spreads are so small on Forex that it takes a great deal of capital in order to trade profitably. It is not unusual for Forex accounts to be leveraged 50 times (this is the same as borrowing money). Once you register, be mindful of how much your account is margined. If your trade suffers a loss that takes your position into negative territory, it will be automatically closed. Start off with no leverage and work your way up to 20 times. This will make it easier to understand the effect it has on your trades.
2. Understand how currency prices move. Let's say you want to trade EUR/USD. If the current quote for EUR/USD is 1.2400, it means that one EUR is exchanged for 1.24 US dollars. If the quote moves to 1.2410, it means the euro is getting stronger against the dollar. However, if the quote moves to 1.2390, it means the euro is getting weaker against the dollar.
3. Choose a broker with low spreads, a strong reputation and extensive tools. There are as many Forex brokers are there are different types of currency. Look for low spreads, which is the difference between the price the currency can be sold and bought at (also known as bid or ask price). Forex brokers don't charge commission and this difference is how they make money. Look for a quality institution. Your broker should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Commission (CFTC). Finally, look for an extensive tool-set offering. Download a few versions of Forex trading software from different brokers before funding your account. Play around with the tools and request a virtual trading account to test the trades.
4. Sign up for a Forex account. You can fund your account using a credit card, money order or wire. Signing up is the same as getting an equity account, however you will need to sign a margin agreement. The spreads are so small on Forex that it takes a great deal of capital in order to trade profitably. It is not unusual for Forex accounts to be leveraged 50 times (this is the same as borrowing money). Once you register, be mindful of how much your account is margined. If your trade suffers a loss that takes your position into negative territory, it will be automatically closed. Start off with no leverage and work your way up to 20 times. This will make it easier to understand the effect it has on your trades.
Monday, February 9, 2015
How to Use RSI 9 on FOREX (5 Steps)
1. Calculate the nine-day decay factor (DF) for an exponential moving average (EMA). An EMA uses a series of values in a manner such that newer values have an exponentially greater impact on the average. The nine-day DF, which specifies how fast impact falls away, is equal to 2/(N+1) = 2(9+1) = 0.2, where N is the number of days.
2. Compute the exponential moving average (EMA) for the previous nine 'up' periods (opening prices below closing prices). Each period's closing price is designated by Yt, where t is equal to one through nine. The nine-day EMA (S) is equal to DF
Yt + (1 – DF)
(the previous period’s S), or 0.2
Yt + 0.8
(previous S). You start with two days and reiterate the formula until you get the nine-day solution.
3. Perform the same calculation using the nine previous 'down' periods (opening prices above closing prices). You now have two EMA values representing the strength of uptrends and downtrends, respectively.
4. Calculate the relative strength (RS) by dividing the up EMA by the down EMA. If the down EMA happens to equal zero, assign the RS a value of 100.
5. Calculate the RSI. It is equal to 100 – (100 / (1 + RS)). You can use this number to predict either a trend continuation or a trend reversal, depending upon your trading strategy. In either strategy, an extreme RSI value—below 10 or above 90—signals that a momentum reversal may be imminent.
2. Compute the exponential moving average (EMA) for the previous nine 'up' periods (opening prices below closing prices). Each period's closing price is designated by Yt, where t is equal to one through nine. The nine-day EMA (S) is equal to DF
Yt + (1 – DF)
(the previous period’s S), or 0.2
Yt + 0.8
(previous S). You start with two days and reiterate the formula until you get the nine-day solution.
3. Perform the same calculation using the nine previous 'down' periods (opening prices above closing prices). You now have two EMA values representing the strength of uptrends and downtrends, respectively.
4. Calculate the relative strength (RS) by dividing the up EMA by the down EMA. If the down EMA happens to equal zero, assign the RS a value of 100.
5. Calculate the RSI. It is equal to 100 – (100 / (1 + RS)). You can use this number to predict either a trend continuation or a trend reversal, depending upon your trading strategy. In either strategy, an extreme RSI value—below 10 or above 90—signals that a momentum reversal may be imminent.
Friday, February 6, 2015
How to Use Fibonacci in Forex
1. Open your trading platform and plot a Forex price chart.
2. Locate recent high and low points on the price chart. Fibonacci patterns are used to determine the fluctuation that may occur between these points. Any two points will do, but the most obvious high and low points in the recent price action of any time frame are more likely to be watched by traders worldwide. On a daily chart, for example, the lowest and highest prices of the year could be used.
3. Click on the Fibonacci 'retracement' tool in your trading platform. Most trading software offers many technical analysis tools, including Fibonacci analysis.
4. Drag the mouse between the two points you selected, starting with the price level that occurred first. Most Fibonacci software tools require that you click and hold down the mouse as you drag over the price chart to establish the price range you wish to analyze.
5. Lift up on the mouse. The trading software will create several horizontal lines on the chart between the two price points you selected. These lines are potential reversal points as price fluctuates between these two extremes. As prices move near these areas, be on the lookout for changes in trend when trading Forex.
Manual Fibonacci Calculation
1. Select two price extremes on a Forex chart.
2. Subtract the lowest extreme from the highest extreme. This is the trading range.
3. Multiply the trading range by 0.382, 0.500 and 0.618 to create three results.
4. Add each of these results to the lower price extreme of the trading range. You now have three potential reversal levels that could influence Forex trading between these two extremes.
2. Locate recent high and low points on the price chart. Fibonacci patterns are used to determine the fluctuation that may occur between these points. Any two points will do, but the most obvious high and low points in the recent price action of any time frame are more likely to be watched by traders worldwide. On a daily chart, for example, the lowest and highest prices of the year could be used.
3. Click on the Fibonacci 'retracement' tool in your trading platform. Most trading software offers many technical analysis tools, including Fibonacci analysis.
4. Drag the mouse between the two points you selected, starting with the price level that occurred first. Most Fibonacci software tools require that you click and hold down the mouse as you drag over the price chart to establish the price range you wish to analyze.
5. Lift up on the mouse. The trading software will create several horizontal lines on the chart between the two price points you selected. These lines are potential reversal points as price fluctuates between these two extremes. As prices move near these areas, be on the lookout for changes in trend when trading Forex.
Manual Fibonacci Calculation
1. Select two price extremes on a Forex chart.
2. Subtract the lowest extreme from the highest extreme. This is the trading range.
3. Multiply the trading range by 0.382, 0.500 and 0.618 to create three results.
4. Add each of these results to the lower price extreme of the trading range. You now have three potential reversal levels that could influence Forex trading between these two extremes.
Thursday, February 5, 2015
How to Become a Forex Account Manager
1. Obtain at least a Bachelor’s degree if not an MBA, ideally in the field of statistics, international finance, economics, math or accounting. Gain an internship during your junior or senior year at a reputable financial institution and get hired upon graduation.
2. Pass the examination offered by your brokerage firm based on the training you received within the company. If you pass this weed-out course, ask for sponsorship from your employer. Use this sponsorship to sit for the Series 3 exam offered by the Financial Industry Regulatory Authority. Pass the two-and-a-half-hour, 120-question test to gain licensing and permission to buy and sell commodities including foreign currency. To gain consideration for promotion as an account manager, earn the credentials of a Certified Financial Planner. Ensure you meet all of the requirements to obtain CFP designation, which include possessing a college degree, passing another test and working three years in the financial planning field.
3. Excel in the tasks issued to you during the first couple of years in your firm. Solicit new clients over the phone by placing cold calls and forge relationships with other businesses and potential new clients. Do well within your team as an analyst, where the firm will likely have you specialize in a certain financial instrument or region first. Or perform well on the trading floor as a way to gain recognition from the management team. After earning enough money on the trading floor and building an extensive customer base, appeal to the higher-ups for the promotion of an account manager. Expect this process to take several years, depending on your formative success and overall likability.
2. Pass the examination offered by your brokerage firm based on the training you received within the company. If you pass this weed-out course, ask for sponsorship from your employer. Use this sponsorship to sit for the Series 3 exam offered by the Financial Industry Regulatory Authority. Pass the two-and-a-half-hour, 120-question test to gain licensing and permission to buy and sell commodities including foreign currency. To gain consideration for promotion as an account manager, earn the credentials of a Certified Financial Planner. Ensure you meet all of the requirements to obtain CFP designation, which include possessing a college degree, passing another test and working three years in the financial planning field.
3. Excel in the tasks issued to you during the first couple of years in your firm. Solicit new clients over the phone by placing cold calls and forge relationships with other businesses and potential new clients. Do well within your team as an analyst, where the firm will likely have you specialize in a certain financial instrument or region first. Or perform well on the trading floor as a way to gain recognition from the management team. After earning enough money on the trading floor and building an extensive customer base, appeal to the higher-ups for the promotion of an account manager. Expect this process to take several years, depending on your formative success and overall likability.
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