Candlestick Charts For Currency Traders

By Tom OReilly

The single most useful and popular type of technical analysis available to forex traders is probably candlestick charts. The charts were originally developed during the 18th. century by a prominent commodity trader in Japan to chart the fluctuations in the price of rice. They are often known as Japanese candlestick charts, and many of the patterns that they form have Japanese names, for this reason.

Traders were in need of something more than the simple line graphs plotting the price of a commodity at regular intervals in time, that had been used for centuries. They wanted something that could plot more variables within a two dimensional graph. Candlestick charts were even better than the bar chart showing the opening, high, low and closing prices of a commodity that were used to help traders predict future price movements and were reliable but not as good as the candlestick charts.

Charles Dow introduced them to the American stock market at the beginning of the 20th. century and from there to the worldwide financial markets. Co-founder of the Dow Jones company, Dow was the founder of the Wall Street Journal.

Candlestick Formation

The chart is made up of a series of 'candlesticks' which typically include different points measuring the differential in prices over a certain period of time, which might be 5 minutes, 15 minutes, or longer. The 'candlesticks' have a chunky body with vertical lines stretching up from the top (the upper shadow or wick) and bottom (the lower shadow or wick).

The top of the wick is the highest point reached during the time period and the lowest point of the lower wick is the low. The top and bottom of the body are the opening and closing prices. If price rose during the period the body will be white (or green or blue if colored). The bottom of the body marks the opening price and its top marks the close. If the price fell during the period the prices are the other way around and to show this at a glance the body will be black (or red if colored).

Using Candlesticks in Charts In Currency Trading

A forex trader can base a system for determining when a trend is developing on the many patterns that develop on the charts showing 5 or 15 minute candles over a period of several hours. For example, when the candle body is green or white and higher than the preceding candles, it indicates that buyers are very bullish. When it is red or black and lower than the preceding candles, it indicates that buyers are very bearish.

Being able to see these implications at a glance is vital in the fast moving forex markets where trading decisions often need to be made in a split second. So candlestick charts are one of the most useful visual aids for any forex trader. - 23223

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How Can Gold Make Your Small Business Rich? Benefits To Buy, Sell And Trade Gold.

By Kirk Richardson

Small business investment can be a tricky situation. You need to ensure that your investment portfolio can take of weight of your companys ups and downs which is why more and more small business investors are diversifying their portfolios by branching away from the stock exchange. More and more investors are opting to buy gold in addition to other investments in order to ensure the security of their business. When you buy gold, even a small amount, you are giving your business another option to thrive and lessening the risk of playing the stock exchange.

So why is it so smart to buy, sell and trade gold as part of your overall small business investment portfolio? Here are four good reasons why:

One of the best examples of this is right after World War II when inflation was at an all time high. During that time, gold also peaked at a 130% return. This is only one of the many examples.

- Gold will also always have a value. After all, gold is money. In the worst case scenario, you can always sell gold investment for monetary value and get out of the red.

Gold can also be predicted through the oil prices. The past trends have demonstrated that, in general, when the price of oil is up, so is the price of gold. Knowing this will help small business investors buy, sell and trade gold at the right time.

The fact that gold is a lot less riskier and a lot easier to predict than stock commodities are only two of the reasons why many small business investors are opting to add gold to their investment portfolio.

Gold and inflation works this way. In history when inflation was up, such as after WWII, then so was the price of gold. In fact, after WWII the price of gold was at a 130% return.

Knowing how gold works and when to buy gold, and knowing that, like real estate, gold will continue to rise in price over the upcoming years, is a great advantage to small business investment. Buy gold now and invest in a profitable future for your company. You wont regret making this move. - 23223

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As a small business investor choosing to buy gold, or trade gold is choosing to secure your business and financial situation for long years to come.

Two Great Reasons To Invest In Silver Eagle Monster Boxes

By Christina Goldman

When you purchase American Eagle Silver coins, your price is based on the current market spot price. The dealer then adds a premium per silver bullion coin. The main advantage for buying Silver Eagle Monster Boxes is the cost savings. The greater the quantity purchased, the cheaper the price! Plus, most bullion dealers offer free shipping for large orders.

Another valid reason for purchasing Silver Eagle Monster Boxes is the shortage situation in silver bullion. Because of the selloff in the stock market, the financial turmoil in the credit markets and increase in bank failures, investors are turning to hard assets for protection and diversification. Unprecedented demand for silver bullion because of extreme investor demand has forced the the U.S. Mint to stop production of 2008 edition of the Silver Eagle.

The US Mint has rationed American Silver Eagles since early spring and is supplying the silver bullion coins to dealers on an allocation basis only.

Most dealers are shipping American Silver Eagle orders as they receive them from the U.S. Mint. In many cases, orders are experiencing significant delays and wait times of up to several months! Investors wishing to invest in Silver Eagles should purchase as many coins as they can afford now. There is a real risk that anyone wishing to purchase these silver bullion coins in the future will have to pay a huge premium to do so.

The American Silver Eagle coin is the most popular silver bullion coin. The Silver Eagle is not only beautiful but its silver content is guaranteed by the U.S. government. Each beautiful silver eagle coin contains 1 troy ounce of silver and is 99.9% pure. The American Silver Eagle is considered legal tender and can be converted to cash at any given time. - 23223

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Want To Become Day Trader? Here's The Key To Making Money

By Sam Lockwood

Day trading can be an excellent method for making a profit, if you have the stuff to do it. However, no matter how others may pitch it, it's not a smooth ride. You have to put a lot of work into it to succeed.

Day trading in commodities or stocks is, at base, a job. While it can be a highly lucrative job, it's also one that means you need some basic traits to succeed. You also need some specific habits, and they have to be so ingrained they're automatic.

The first thing you need is a great sense of time. Anyone who has trouble getting up first thing in the morning or needs to jumpstart with that first cup of coffee will only be miserable day trading. That's because the best time to figure out what you'll be doing on the market on a particular day is right before the opening bell. That happens at nine am in New York City - six am in California and five am in Hawaii and Alaska. You can't just be an early riser, though. You also have to have an excellent internal scheduling system and clock.

Habit number two is maintaining a good set of quantitative thinking skills. You can make or lose money if you're just running off your basic hunches, but to really do well, you have to make informed choices. That means reading, understanding, and dealing with numbers without thinking about them consciously. You'll need to be numerate and be able to manipulate numbers in your head with enough skill to tell if you're looking at a blip or a trend, then act accordingly.

I should point out that you don't have to be a mathematician to do this. You can learn how to analyze the numbers correctly, even if you're not fond of math. There are quite a few numerical skills that can turn into second nature, as long as you get well into the game.

Habit number three is maintaining good observational skills, being incredibly patient, and learning to forget. This can be pretty hard, since you have to keep yourself from feeling let down when you don't catch a stock at its top, or when you lose money on a short sale that never turns up. Don't get caught up in either your wins or your losses, or you'll lose focus and money.

Dedicated research is also a must. Day trading doesn't require you to devour accounting statements like long term investing usually does, but you do need to constantly be able to deal with the flow of data and make analyses. You also have to be proactive about shares that you're buying or selling, and make snap judgments that you act on fast. The only way you'll know these judgments are the right ones are through the right research. However, don't let this desire for good research paralyze you.

Remember that a lot of the research and analysis won't need to be done by you directly. The best traders always have a number of tools at their disposal, as well as many different data services and research sources ready to access.

If day trading appeals to you as a new career, you'll have to build up a support network. You'll need to find some investors willing to help you apply leverage, as well as a good broker.

If you believe you've got what's needed to be a day trader, it could be a great way to make a significant income. This is a job you can seriously call fun, if you have what it takes, and it could be pretty enriching, too. - 23223

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Specialize In Trading USD (Part I)

By Ahmad Hassam

If you are a currency trader and focus on the four major currency pairs EUR/USD, GBP/USD, USD/CHF and USD/JPY, then you should consider yourself a specialist in USD. Yes, its true! You are a specialist in trading the greenback.

Each currency pair actually comprises two currencies. So if you are long in GBP/USD then you are in fact buying the GBP and selling the USD. In each of the major currency pairs, USD is part of the equation.

This means that if you study and understand the fundamentals of US Dollar, the US economy and the workings of the Federal Reserve System, then you have done your homework needed to trade any one of the four major currency pairs.

These four major currency pairs are the most liquid pairs in the forex markets. They involve the vast majority of the currency trading. You should think like this. Majors are the most heavily traded pairs and US Dollar is half of each major pair. So if you can understand what drives the USD, it will have a huge impact on your trading plans.

The only thing you need to determine is your bias for USD. What do you think; USD will weaken or strengthen in the near and medium term. Then apply that bias to the major currency pairs.

Just to remind you, suppose you buy a currency pair. You are buying the first currency and selling the second currency in the pair! Suppose your form a bias that USD is going to strengthen. With this bias, you can go long on USD/CHF and USD/JPY. Similarly, you can go short on GBP/USD and EUR/USD.

With one bias, you have the possibility of four trades. However, each currency pair will react differently to USD. Suppose Euro is also strengthening. The currency pair EUR/USD will move less with USD also strengthening. USD/JPY will move more if JPY is weakening.

Lets say you can only afford to trade one standard lot. You have a bearish bias for USD. You can consider going long on either GBP/USD or EUR/USD. What pair you should trade? Which one!

Take a look at both GBP and the Euro. Try to find which of the two currencies is stronger right now. Trade the stronger currency. Take a look at the cross EUR/GBP. If it is down, it means EUR is weakening and GBP is strengthening. Trade GBP/USD!

You should always evaluate the currency correlations for the major currency pairs in every trading plan that you create. Correlation is determined by what is known as the correlation coefficient. Correlation coefficient always ranges between +1 and -1. The correlations between the currency pairs are dynamic and can change any time. So you need to calculate the correlations at least on weekly basis to give you a fair idea of how the correlations are changing. - 23223

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Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Discover A Revolutionary New Forex Robot. Develop your own Forex Trading System.