Monday, October 1, 2007

Proper Analysis Of The Forex Chart

In all media references, you may have heard about Foreign Exchange. Still, a lot of people have little idea when it comes to forex trading, especially reading the forex chart. People seldom realize its importance because they probably have not participated in it.

But it is actually quite easy to understand the forex chart, as long as you know what to look for. There are essentially two basic approaches for buying and selling currencies and this is where the understanding of a forex chart comes in.

First off is the Fundamental Analysis approach. This approach doesn? depend on forex charts at all. Instead, it uses economic and political factors to establish trades. Charts are essentially used just for reference regarding exiting and entering trades. The other approach is the Technical Analysis approach. This approach, meanwhile, tries to forecast the direction of prices by studying historical price movement on a particular chart. Technical analysts observe the relation between price and time.

To know how currencies are related to one another is very important. A forex chart always shows to your RIGHT, the value of the currency so one can buy a unit of the currency found to the LEFT. Recorded horizontally, time will be found somewhere at the chart? bottom alongside the price scale to the right. Price scale always stands for the currency to the east in the forward slash.

The most popular way of observing price or time movement on a forex chart is by means of the Japanese candle sticks. In order to watch price movement, one must pay attention to Japanese candle sticks. In case you don? know, a lot of traders depend on these sticks in making decisions in trading. A Japanese candle stick provides a way to examine price movement for a currency pair over a given timeframe. How much "time" each candle represents depends on the timeframe of the chart. If the chart below were a one-hour chart, each red and blue candle on it would represent the price activity for the currency pair over the course of one hour. If the chart were a daily chart, each candle would represent price activity for one day. It does not really matter what the timeframe is. You just have to remember that a candle represents price activity for the timeframe of whatever chart you are viewing.

The following are the basic parts and whatnot of a typical forex chart. The fat red section is the body of that candlestick. The lines protruding from the top and bottom are the upper and lower wicks. The bodies of the candles can be of varying sizes in a forex chart. There may also be times when there are no bodies in the chart at all. This is not something out of the ordinary. The same goes for the wicks. The wicks can be of varying sizes, or there just might not be any wicks at all. The length of the body and the wick is determined by the price range for that candle. Longer candles had more price movement during the time they were open. The very top of a candle? wick is the highest price for the currency pair, while the wick? bottom represents. When a candle is considered "bullish", this means there were more buyers than sellers during the time the candle was open.

Reading a forex chart actually becomes simple once you completely understand its symbols and figures.

Francisco Segura owns and operates

Forex Brokers

Weekly Markets Thoughts - July 29, 2007

This is what I call a rock-and-roll week! Anybody scared? You should not! After a good advance of the broader markets these pull-backs are more than normal. The week before, I suggested to take some profits and to forget about the markets until the end of the summer. If you did miss this suggestion, do not get nervous as nothing major is expected soon. As I already have said, the markets are entering a period of a sideways move which could last for a couple of months. The recent decreases are a bit too deep for such a short period and we are probably going to witness some sort of a bounce back action next week. Do not get very excited about this either as it will go nowhere! It would only be a normal adjustment after the fall down.

On the currencies side, we saw a record low for the $US on July 24th and a bounce back right after. It is not easy to break a historical support. The dollar is due for some rest and is not going to fall sharply as many analysts suggest. All the currencies had a good run recently and we can expect that the profit taking action will stop them for sometime before the race continues. This in turn will help the US dollar for now (but not for long!).

The recent decline of the long term interest rates is giving some relief for the bonds as well. However, we should not forget that the major trend is on the up side and this is only a temporary benefit for the bonds.

The stock markets are under pressure after reaching new highs for some of them. Dow still has a room to go down to its good support of 12750 but is unlikely to cross the 12850 mark. The S&P 500, NASDAQ, the TSX Composite and the FTSE 100 indexes are already at their supports and a rebound action is very possible. These respective supports are 1450, 2525, 13710 and 6170.

Crude oil is continuing to outperform its pears from the resources sector. It is now approaching its all time high of $80.64 and has enough steam to reach it and achieve a new record. However, I think this is not going to happen now but rather later this summer or early in the fall. The precious metals are coming back from their recent runs and are still in a process of confirming the beginning of the long awaited new intermediate wave up. Gold and silver should not go bellow $655 and $12.60 respectively. The up side will be confirmed by breaching $685 for Gold and $13.30 for Silver.

We are approaching exciting moments but for the next month or so the markets will give us the opportunity to take advantage of our summer. Keep your energy for the fall action!

Good investing and best regards,

Stefan Penkov

Disclaimer: Stefan Penkov is not a registered investment advisor.The opinions and statements made in the above publication are the result of extensive research and are believed to be accurate and from reliable sources. The contents are my current opinion only, further more conditions may cause my opinions to change without notice. The insights herein published are made solely for international and educational purposes. The contents in this publication are not to be construed as solicitation or recommendation to be used for formulation of investment decisions in any type of market whatsoever. WARNING share market investment or speculation is a high risk activity. Investors enter such activity at their own risk and must conduct their own due diligence to research and verify all aspects of any investment decision, if necessary seeking competent professional assistance.

The Benefits of Online Stock Trading

There are many online stocks available, including penny stocks or high-end ones which can be a couple of hundred dollars each. Most of the stocks online are also available in the real world market but at a higher cost. Buying online stocks means you can start trading without paying high brokerage fees. You have total control over your stocks too.

If you want to trade online, it does mean you have to know certain terms. Here are some of the most common ones:

Penny Stocks not all penny stocks cost one penny but they are all cheap. Some people have made money this way because when the price goes up, you can sell what you have and make a profit. New companies offering stock at cheaper prices to get them moving might choose to deal in penny stocks and many penny stocks are traded online.

Blue Chips these are premium stocks. Blue chip companies are big corporations, the names of whom everyone knows. Big airlines and companies producing a certain percentage of the countrys steel or timber or cars will probably be blue chip companies. Blue chip stocks tend to be expensive because people have faith in them. Blue chips can grow slowly over time or maintain their price. They also tend to climb back quickly after a fall or recover fast.

Bonds and Futures bonds, which include municipal offers, can be issued by the companies. Futures are normally farming crops so if the lettuce crop is having a good year, the lettuce futures will do well too. Futures include livestock, wheat and various other farming produce.

You can buy pretty much any type of stock online if you look for it. You just need a willing seller. Stock availability depends on the website and what stocks they have access to at the moment. Just because dealing online is easy, that of course does not mean you can be careless or not research the stocks before purchasing.

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Currency Trading - What Is It?

Currency trading is the worlds largest market made up of nearly $2,000,000,000,000 in daily volume. Yes, thats $2 trillion with 12 zeros. And as more and more investors continue to catch on, the market will continue to grow at a very rapid pace.

Currency trading is done electronically by telephone, computer, or Reuters -- also known as a financial market data and news service provider. However, currency trading is not suitable for everyone, which holds true for most home base business opportunities. Its the perfect financial market and the "basis" for the buy or the sell on the currency conversion rate.

Currency trading is taking advantage of shifting foreign exchange rates and is the most profitable and attractive online investing opportunity mainly due to the fact that it can be done from the home office or the work office, wherever that may be, from anywhere in the world.


Trading circulates between major banking centers all around the world which permits traders to earn healthy profits during rising and falling markets. For example, trading between two non-US Dollar currencies will usually occur by first trading one non-US Dollar against the US Dollar and then trading the US Dollar against the second non-US Dollar currency.

Trades can be made 24 hours a day simply because the trading markets are located all over the world and because of the diversity in time-zones. And, thanks to modern technology interfaces like those used by large currency trading brokerage firms with deep pockets, trading opportunities in the currency trading market are now readily available to individuals like you and me. Trading currencies affords investors both large and small alike to make money quickly and efficiently, with low risk.


Currency trading uses the acquisition and release of substantial quantities of currency to leverage the shifts in relative value into profit which occurs when one country's currency is traded for another country's currency at the prevailing exchange rate.

Currency trading may be one of the most liquid forms of trading, but it is also a volatile market that requires strategy if you wish to make money, which leads into the very next section.


Strategies that utilize cross currency pairs allow for profit potential in flat or neutral markets. But, making a profit is only half the equation. The other half of the equation requires that you devise strategies to sustain those profits long term. In other words, you need to learn proven strategies and make money consistently.

New investment strategies and instant electronic trading now ensures high returns for the investors. But an offer is nothing more than an offer and the opportunity will pay off only for those who approach currency trading equipped with the proper trading strategies.

In doing so, you must keep in mind that currency trading is really nothing more than a zero sum game. And, a few great reasons why it is such a great way of entering the capital markets are: (1) its easily accessible thanks to the widespread use of the Internet, and (2) currency trading is all commission-free with relatively low transaction costs.


This exciting and rapidly growing financial market provides a home based business the opportunity to generate profits in one of the hottest financial activities today, and leverage gives the currency trader the ability to make extraordinary profits while at the same time maintaining risk capital to a minimum.

Trading currency allows traders to earn profits during rising and falling markets. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. On the flip side of the coin, if the outlook is pessimistic, we have a bull market in which a trader profits by selling the currency against other currencies.

You need to devise strategies to make profits in the market on a sustained basis. Unlike most managed programs or mutual funds the primary form of compensation for currency trading is a percentage of profits.


Not too long ago, the barriers to entry for currency traders were very high, so much so that only large banking and institutional firms had access to the tools and the systems necessary to play in the currency trading game. Modern monetary systems are far superior to the barter system people used back in the old days.

There are many simple systems that work well. Understanding both forecasting systems and how they can predict the market trends will help currency traders be successful with their trading. Learning currency trading is easy when you use the best mentors and systems available.

So, as you can see, currency trading is a platform where individuals speculate on the exchange rate between two currencies. Its open and available every day of the year due to its global nature, and it is the gateway to the biggest pile of money on planet earth. What better way to start and grow a home based business!

Dramatically increase the returns on your money by learning the ultimate in online based businesses I reveal all the details in this free report that explains everything. Go to right now to read it for yourself. When you do, I guarantee you will want to add this to your business idea list

Shoebox FOREX - The Iraqi Dinar and Vietnam Dong

The FOREX market, otherwise known as the foreign exchange market, lies in the intangible world of ones and zeros that flow over the internet between thousands of computers 24 hours a day, 5 days a week. There is no brick and mortar location for this market like the New York Stock Exchange. There is no regulation. This is the international market of currency exchange where changes in one-hundredth of penny can equate to thousands of dollars for some investors. It is the wild west of investing.

Until this past decade this market has remained in the hands of central banks, international firms, large commercial banks & corporations, hedge funds, and the wealthiest of individuals. Only recently has the internet allowed it be accessible to the average person and with it, the ability to double or wipe out your account in a matter of minutes. How is this possible? Leverage. Unlike a traditional margin account, with a stock broker for instance, where one will get 2:1 leverage, FOREX brokers have accounts available with 100:1, 200:1, even 400:1 leverage. This makes a change in one-hundredth of a penny that much more powerful.

But some people aren't using leverage in their desire to make big gains in the FOREX market. In fact they aren't even using the internet or a computer. A simple shoebox under the bed will suffice and the cash in their bank accounts. These unique individuals are buying up hundreds-of-thousands, even millions in currency weak against the dollar and simply sitting on it.

One of the more popular is the Iraqi dinar. The War on Terror has put the spotlight on the country. Hundreds of online dealers and over a thousand auctions on eBay peddle Iraq's new currency (issued 10/2003) citing the currency could behave like the Kuwaiti dinar after the Gulf War appreciating over 3000%. With the current exchange rate of 1235:1 people don't need money leverage to get a return on this currency. It's up 18% since November of 2006 and over 125% since it's release into circulation despite the turmoil in the war torn country.

The action in Iraq has started to bring light to the potential opportunity in the Vietnamese dong. The dong is the weakest currency in circulation hovering near 16,000:1. Over a decade of depreciation has brought the dong to its current level. Yet Vietnam is the second fastest growing economy following China. Unlike the uncertainty which surrounds Iraq, Vietnam is seeing increased foreign direct investment, good business growth and excellent economic news on a consistent basis. Quite possibly the only thing keeping the currency's valuation at its current levels is Vietnams desire to keep the price on exports low.

Some businesses like the Massachusetts based Web Ownership Group offer both currencies. The founder believes they are both potentially good long-term investments. Only time will tell in this interesting twist in currency investing.

Nolan Robidoux is a business owner and technical FOREX trader who was recently exposed to the dinar and dong. He provides both currencies at his sites: and