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Saturday, August 8, 2009
OREX ; The Importance of Fibonacci levels in Trading
If there is one thing in the whole technical analysis panoply of tools, we would choose the Fibonacci retracement percentages ladder. It is not the place to enter into the theory behind these numbers but it is always amazing how well their use will help the trader-investor in his efforts to understand the markets gyrations. There are many applications in which we can apply one variant or another of the Fibonacci numbers and their relationships, but our preferred one is this power of theirs to predict levels of retracements in a corrective phase. In the classic technical analysis methodology, a correction should be between a third and two third of the previous move. Less than that, it would be viewed as a part of the trending move and not a correction. More than that would be considered a "deep correction" with a tendency to treat it as the first sign of weakness in the prevailing trend. The Fibonacci counterpart of one third is the 38.2% area and the one for two third is the 61.8% area. Furthermore, the 50% retracement is considered the most common in the financial world of assets. Half is a nice point of reference and it seems at times that it is a prophecy that is fulfilling itself. So many traders look for this area for a re-action in the price, that many of them will come and buy or sell in this exact point. By doing so, they are creating the effect that they are waiting for. Our visual aid is the weekly chart of the USDJPY with a daily chart insert. Look how many price moves have been retraced by EXACTLY 50% (back, blue, light green) and EXACTLY 61.8% (violet, orange). You can also find many more in the daily and intraday time frames.
How can we use this feature effectively? First, the trader should understand that the price and only the price is giving signals to go long or short. Any other indicator or tool is only helping. Some a bit more than others and we consider this one a great help. So, the thing to do is "to be ready" when the price arrives near the Fibonacci percentages.
If the correction suddenly stops and reverse, it is a good sign that the old trend is returning and to enter a position in its direction. Such a position should be protected by a very tight stop-loss over or under the Fibonacci level that was the limit of the reversal. For example: in the black correction (end of 2002) the trader would be prepared from 124-5. When the price did break the ascending channel, the trader should have taken a short with a SL at 125.75. What about now?
The daily insert shows that the current correction up did not yet reach the 50% Fibonacci retracement. In view of the history in this pair, it is safe to say that there is a way to go to the upside for the USDJPY. We should be ready near 115-116 and then near 118 for the end of this move. If the JPY will go further, we should consider that a change in the main trend is in the cards.
Forex Descending trend - Whenever the current rate of exchange depreciates, it is a descending trend. It is simply, when the rates value becomes lower. Trend lines are drawn by connecting the highest peaks of local maximums for ascending rates and the local minimums for descending rates.
Example of a descending trend
When the trend lines form a straight, or more even line, it confirms that particular trend. One of the criteria for determining trend force is examination of breaks in the support or resistance levels. Any trend that receives a lot of resistance will be weaker. And, without support, the trend will eventually change in the future. There are several general rules that are followed in defining trend force: 1) The longer a trend lasts, the stronger it becomes however there is still a limit. 2) When a trend begins abruptly and ascends or descends quickly, it's a strong trend. 3) If a trend line reflects a long, level line, it's very likely the trend will continue. 4) While an abrupt trend usually indicates a strong trend, they can also change abruptly. 5) No matter what the trend is, it will eventually slacken. High trends will eventually become lower and low trends will eventually rise.
FOREX Ascending Anytime that the demand for currency exceeds the currency offered, the exchange rate on Forex grows. On the other hand, if the volume of currency for sell is less than the volume that participants are seeking to buy, the market rate falls. When the demand lasts for a long time, it causes a rate in growth and will lead to the market being saturated. From the time that offers exceed demand; the sales are decreased in rate. Trend corrections are the movements that are directed against the direction in which the previous trend was headed. This movement doesn't surpass the previous trend. A trend is considered a phenomenon that will return prices to a correct channel and does not allow the movements in the market to deviate from the fundamental factors. If participants will open long positions and when satisfied by the increase of an exchange rate sell with a purpose of profiting quickly, it is called an ascending trend. But, if the principal factors that have resulted in an increase in the demand for currency have not changed, it renews the buying of currency and increases the rate. Then that particular movement takes a direction. There are two kinds of trend: ascending and descending trend. Ascending trend - An ascending trend is any period in which exchange rates reach a higher value when compared to the previous rate. It's an upward gain in rates from the rate before it. The bottom points of waves (local minima) join a direct line - trend line:
FOREX Trend Following – 3 simple steps to catching big profits
If you want to catch the big profits in forex trading you need to trend follow forex trends which are longer term. Here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every major forex trend and lead you to long term currency trading success.
Most novice traders don't bother trying to trend following forex longer term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profits however as most short term moves are random, this leads to equity wipe out.
The other choices are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long term trends that last for months or years. These moves can and do yield big profits - here we will outline a simple method to catch them.
By far the best way of catching the big moves is to use a forex trading strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.
It's a fact that most major moves start from new highs or lows.
While it might appear that you are not buying or selling at the best level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The reason for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.
Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.
The only point to keep in mind is a support or resistance which is broken, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the wider the spacing between the tests the more valid the level is.
Of course not every breakout continues and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your trading signal.
These indicators give you an idea of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the best are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop levels are easy with breakouts - Simply behind the breakout point.
If you have a big trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a big move, trailing stops should be held a long way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.
It's ok to give a big back, as that's the nature of trading forex. Keep in mind if you got 50% of every major trend you would be very rich. When you are long term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
The above is a simple way to trend follow forex and catch the high odds moves that yield the big profits. If you are learning forex trading and want a simple method that is robust and will help you catch every major move, then you should base your Trading on the above method
Nisfu dlm bahasa arab beerti setengah. Nisfu Syaaban beerti setengah bulan Syaaban. Malam Nisfu Syaaban adalah malam lima-belas Syaaban iaitu siangnya empat-belas haribulan Syaaban.
Malam Nisfu Syaaban merupakan malam yang penuh berkat dan rahmat selepas malam Lailatul qadr. Saiyidatina Aisyah r.a. meriwayatkan bahawa Nabi saw tidak tidur pada malam itu sebagaimana yg tersebut dalam sebuah hadis yg diriwayatkan oleh Iman Al-Baihaqi r.a:
Rasulullah saw telah bangun pada malam (Nisfu Syaaban) dan bersembahyang dah sungguh lama sujudnya sehingga aku fikir beliau telah wafat. Apabila aku melihat demikian aku mencuit ibu jari kaki Baginda saw dan bergerak. Kemudian aku kembali dan aku dengar Baginda saw berkata dlm sujudnya, "Ya Allah aku pohonkan kemaafanMu daripada apa yg akan diturunkan dan aku pohonkan keredhaanMu daripada kemurkaanMu dan aku berlindung kpdMu daripadaMu. Aku tidak dpt menghitung pujian terhadapMu seperti kamu memuji diriMu sendiri." Setelah Baginda saw selesai sembahyang, Baginda berkata kpd Saiyidatina Aisyah r.a. "Malam ini adalan malam Nisfu syaaban. Sesunguhnya Allah Azzawajjal telah dtg kpd hambanya pada malam Nisfu syaaban dan memberi keampunan kpd mereka yg beristighfar, memberi rahmat ke atas mereka yg memberi rahmat dan melambatkan rahmat dan keampunan terhadap org2 yg dengki."
Hari nisfu sya'aban adalah hari dimana buku catatan amalan kita selama setahun diangkat ke langit dan diganti dengan buku catatan yang baru. Catatan pertama yang akan dicatatkan dibuku yang baru akan bermula sebaik sahaja masuk waktu maghrib, (15 Sya'aban bermula pada 14 hb sya'aban sebaik sahaja masuk maghrib)
Berikut adalah antara amal ibadah di hari Nisfu Sya'aban:
1.Solat sunat nisfu sya'aban - terdapat dua cara mengerjakan solat sunat ini
Sembahyang 100 rakaat dengan memberi salaam selepas setiap 2 rakaat. Surah Al-Ikhlas dibaca sebanyak 11 kali setelah setiap rakaat setelah membaca surah al-Fatihah
Sembahyang 10 rakaat dengan memberi salaam selepas setiap 2 rakaat. Surah Al-Ikhlas dibaca sebanyak 100 kali setelah setiap rakaat setelah membaca surah al-Fatihah
2. Membaca Yasin 3x selepas solat Maghribnya
i) Yasin pertama : mohon dipanjangkan umur untuk beribadat kepada Allah
ii) Yasin kedua : mohon rezeki yang halal untuk beribadat kepada Allah
iii) Yasin ketiga : mohon ditetapkan iman dan Islam & mati di dalam iman a 3. Berpuasa pada siangnya (mulai pagi esoknya-15 Syaaban)
Kegagalan hari ini bererti pendorong, namun kejayaan semalam bukan bererti kemegahan. Oleh itu gantungkanlah cita citamu setinggi tinggi bintang dilangit dan rendahkanlah dirimu serendah rendah rumput dibumi...