That was the first step to technical analysis, which we all know with indicators and oscillators. Technical analysis studies price on share, index, commodity and currency based on movements and fluctuations in the past. It uses action and trading history to predict or adopt the price fluctuations in the future.

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Technical analysis consists charting analysis based on indicators and oscillators.

Charting analysis shows Support and Resistance, Chart Patterns, Trend Lines, Fibonacci Retracement and Extension Levels, Candlesticks (support patterns Bullish Engulfing, Bullish Harami, Doji, Hammer Long White candlestick, Morning Star; resistance patterns: Bearish Engulfing and Harami, Dark Cloud Cover, Evening Star, Shooting Star) and other.

Most useful indicators and oscillators are: RSI (Relative Strength Index), CCI (Commodity Channel Index), MACD (Moving Average Convergence/Divergence), ATR (Average True Range), Bollinger Bands, SMA (Simple Moving Averages), EMA (Exponential Moving Averages), ROC (Rate of Change), Williams%R, Momentum and many more…continue

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The medium term trader has the least amount of capital to begin with, and the fewest opportunities to execute trades, which mean his forex strategy will rely on how well he interprets the technical information and the decision reached. This sounds like a lot of work for not a lot of pay off, but the trick is finding those times when the majority of the forex indicators point in the same direction. A patient trader will move until the signs lead him to profits.

Choosing Forex Trading Software – Now that you comprehend where you begin in terms of choosing a forex trading strategy that will work for you, it’s time to select trading software. There are many trading programs from which you can choose, but until you feel comfortable with the technical ins and outs for forex, select forex trading software that grants a free demo statement so you can practice the forex strategy that’s right for you. Before you choose, there are a few basic gotta-haves of any forex trading software:

1. Ability to display (at least) three distinct time frames at the same time. 2. Ability to plot common technical trading indicators.

Set up Forex Indicators – Once you have selected forex trading software, it is time to begin setting up the indicators. The forex indicators you select should help you implement the forex strategy you wish to employ, medium term if you have tiny capital, and short or long term if you have the capital to risk. Forex trading indicators show you, in graph form, the price at a particular point in time. In order for you to decide how to act, you will set up several different indicators and move for all of them to point in the same direction. This sounds like an simple strategy, and with patience and skill it can be.

Keep in mind that the more forex indicators you set up in your forex trading software, the more reliable your forex strategy will be. Conversely, the more indicators you have set up, the fewer opportunities to trade will arise. The key when setting up your forex indicators is deciding if you want a reliable trading strategy that works but provides fewer opportunities, or one that is less reliable but creates more trading opportunities. Medium term traders will focus on reliable but infrequent trades to make a profit.

When you devise your forex strategy, make it for the capital you have now, not the capital you plan on having in the future. You can always change your forex trading strategy when you need to.

In Nihon and Korea, there are millions of housewives who are trading foreign exchange currency online portion time and making pitiful regular profits to acquire additional income. In fact, there are an estimated a good amount as opposed to 40 million educated forex traders are trading forex online for living. Forex Korea

In a recession time like now, less money prefabricated from the Husband caused less money given to the Housewife as well. When many companies are retrenching and pay cutting, the income of the Husband, who is the only one who make money, would be definitely affected. Therefore, the Husband might also wage less and less monthly allowances to the housewife for food and other regular necessities. With all the cleaning and nursery jobs for the beloved kids, it is not simple to get a part time job and acquire extra income for the family. Forex Korea

What else can a desperate housewife do? Eventually, full time housewives could trade forex online part time and make extra income like USD50 to USD100 per day for food, groceries and other necessities. What does a housewife need? All they need is just a personal with world wide web access at home. Then, they need to learn a proven and tested forex trading strategies and begin trading. Forex Korea

Somehow, some housewives might have other concerns, like they have no time to look at the forex market! The Forex market is running 24 hours from Monday to Friday only. Forex Traders can always enjoy lifestyle and calibre time with their families during weekends. A part time forex trader will only need 1 to 2 hours per day to make money from the lucrative online forex market. Forex Korea

A currency pair like USD/JPY moves up or down within 200 to 300 pips in a day. To acquire USD100, a good fx trader will only will need to profit 10 pips within a very short period of time. Housewives just have to scarify 1 hour of their afternoon kip time or 1 hour of watching television time to make extra money daily. There is another advantage of a housewife trading forex. In general, women are more discipline compared to men. Forex Korea

The secret of each successful forex trader is using proven and tested forex strategies coupled with conservative money or risk management and very tight discipline (follow the winning forex strategy all the time). Many male currency traders tend to imply their own theory using existing forex strategies and sometimes enter to a trade even though it is not a confirmed trade! Stop what you are doing RIGHT NOW and get your Life Changing Forex Korea Program. It’ll change your Life Forever!

The reasons why each trader (not just currency traders) should look at Dow Theory, and comprehend it, is the basis of this article. Comprehend Dow Theory correctly, and incorporate it in your trading strategy – then watch your profits soar.

Predictive Theory V Odds Theory

Many traders look for theories that predict – as they think making money is easy. Of course if they stopped to think about it, they would realize that if predictive theories worked, we would all know the market price in advance – and there would be no market!

Losing traders love theories, such as Elliot Wave, and Gann – which are supposed to scientifically predict market movements in advance – which of course they can’t.

So, forget about joining the far out investment crowd, and traders looking for simple money. Lets look at currency technical analysis with Dow theory – and acquire a greater insight into market movement, that can lead to large profits.

In 1901, when writing in the Wall Street Journal, Charles H. Dow compared the stock market, to the tides of the ocean, – and the quote below neatly sums up the theory:

“A mortal watching the tide coming in and who wishes to know the exact spot which marks the high tide, sets a stick in the sand at the points reached by the incoming waves until the stick reaches a position where the waves do not come up to it, and finally recede enough to show that the tide has turned. This method holds good in watching and determining the flood tide of the stock market.”

Probability is the Key to Currency Trading Success

Like the waves of the ocean, we all know that tides diminution and flow (come in and go out) – but we don’t know the exact spot, or the exact timing – we move for confirmation.

Dow Theory is a theory of currency technical analysis that doesn’t predict – but gives us a chance to place the odds in our favor.

Just as waves don’t move to an exact scientific theory, neither do markets – but they do move in recognizable patterns – and with currency trading technical analysis, this is what we need to do – spot the patterns with the ideal chance of success, and trade them for profit.

The basis of currency trading technical analysis lies in getting the odds in our favor – not scientific prediction.

The Development of Dow’s Thoughts

Dow theory has been around for nearly 100 years, and even in today’s markets, the basic components of Dow theory remain valid. Dow theory not only addresses technical analysis, and price action – but also market philosophy.

Dow theory as set down by Dow himself, was later developed by two important analysts – Rhea and Hamilton, who take enormous credit for developing Dow theory, and bringing it to a wider audience.

Why is Dow Theory So Significant?

In today’s world of trading, many traders think that trading is simple – vendors, who peddle predictive theories, and simple ways to make money, perpetrate this hype.

However, even with the large advances in computers, and the data crunching acquirable today, there is no way of predicting the market – and their never will be.

Dow theory though, gives any sensible trader, a great form of currency technical analysis, which can get the odds in their favor.

We will cover the basics of this important currency technical analysis theory in part 2 of this article – where we show you how you can use the theory to enhance your profit potential.

In part one of this article, I noticed some advantages of technical analysis and emphasized that technical analysis is superior to fundamental analysis. At the end of this article, I’ve place the link to part one.

The goal of this article is to explain that you can increase your returns and gains with some knowledge about Fundamental Analysis.

Why Fundamental Analysis is needed?

One of defects in Technical Analysis is that it’s a tiny slow.

It means that the increasing trend of a stock started before, but after some tardiness (maybe after some days) signals of purchase appear in Technical Analysis method. Or for example on the ground of news that company publishes, you could distinguish decreasing trend of stock is starting (with Fundamental Analysis) but decreasing trend’s signals appear with some tardiness in Technical Analysis.

In Technical Analysis, with notice to the past of stock you could forecast its future.

Suppose that a new company who enter in the stock market, There is no past to help us to forecast its future, so you should get helps from Fundamental Analysis.

Sometimes, you find a stock in the stock market that it’s good to purchase with Technical Factors but when you examine it with Fundamental Factors you find that the price of this stock is too far from its real value and its price is increased like a bubble and maybe there are some manipulations in the stock.

Conclusion

Combination of these two methods could give you too much advantage and you could increase the return in the stock market. In fact, it’s superior to know both methods and then select one of theme as a principal method and use other method as a help.

But you should notice that examine of a stock with Fundamental method takes too much time. Remember that you use this method to complete Technical Analysis, so continue your researches in Fundamental Analysis until your researches in Technical Analysis complete. In other words: Find a stock technically and then be sure that there is no problem fundamentally.

Read part 1: Why Technical Analysis is Better to Fundamental Analysis

Here we are going to show you the logic and how you can use technical analysis to get you a trading edge to acquire consistent profits.

The most common query in regard to technical analysis is:

How can it possibly help you trade when the fundamental supply and demand equation is not known?

The answer is it takes into statement all the supply and demand fundamentals.

How?

Technical analysis works on the basis that the fundamentals are instantly discounted in the price ( and if you think about it this is perfectly logical in today’s world of instant communications ) and all fundamentals immediately show up in price action.

But technical analysis does something more:

The price of anything ( including currencies ) is not just a reflection of the supply and demand fundamentals, it is a reflection of how people view them.

Human psychology finally determines the price of anything.

So, the equation for the determination of price is:

Supply and demand + human psychology = Price

Recurring price patterns

Human nature is constant and this is reflected in recurring price patterns in the market that can be traded for profit.

By studying charts and a whole host of technical indicators traders can determine the odds of where prices will go next.

In essence technical analysis in directly studies the fundamentals and human psychology.

Most short term price spikes are caused by emotion – Not the supply and demand fundamentals and these are simple to spot using technical analysis.

Technical analysis is an art not a science.

You need to practice your art, however if used correctly, it can help you place the odds in your favor and help you spot trading opportunities.

Currency markets are saint for technical analysis as they exhibit long term trends either up or down in price.

By locking into these trends you can trade them for profit and as the major trends can last for months these profits can be huge.

In part 2 of this article we will go through how to use technical analysis correctly to profit from these long term trends.