Article by Michael Bors

Chart Patterns are the heart and soul of Technical Analysis. Appearing from the 1900s, they are the only proven mechanism to provide leading trading signals in FOREX and trading in general. In this article we will describe 5 Golden Rules for Trading Chart Patterns.

Golden Rule #1: Use Tight Stop LossChart Patterns allow you to identify precise place for stop loss, in order to make in tighter as possible. After a trade is confirmed, quickly set Stop Loss above or below the local support and resistance, to keep you risk low and maximize your Risk:Reward ratio. This is a method that is only applicable when trading Chart Patterns, because trades are taken on Support and Resistance levels.

Golden Rule #2: Use Candlesticks as EntryWhen a pattern is identified and a trading signal is taking place – in the form of a touch at Support\Resistance or a Breakout, use candlesticks to define your entry point. Candlesticks are the most objective and precise mechanism to signal and confirm entries to trades. Do not be tempted to use indicators for entry, as most of them lag and will result in late entries and larger stops. Instead, keep your stop loss close and enter early, to catch bigger moves.

Golden Rule #3: Trend Or RangeWhen trading chart patterns, trader must differentiate and separate periods of Trend and Range. This is important because the phase of the market affects your trading style: In periods of trend, trend-following trades work better so one will try to trade breakouts and retracements. On the contrary, in periods of range, one should take trades on Support and Resistance levels, also called as aggressive trades. One can separate between periods of Trend and Range by using the Bollinger Band’s direction. Flat middle band indicate period of range, while trendy indicates trend period.

Golden Rule #4: Use Pattern TargetsKnow to calculate the targets for your trades. For most chart patterns, an exact method of calculating the projected target is available. Use this target as your take profit and do not deviate from it (neither lower nor higher). Sticking to solid rules will make your trading more consistent and profitable, though it requires higher discipline.

Golden Rule #5: Beware of Support and Resistance BlocksWhen trading a pattern, pay attention to price action in higher timeframes. Higher timeframes have more power over price, and sometimes a block on higher timeframes can stop a perfect chart pattern in a lower one. Look for possible blocks that may prevent price from going in your direction, and eliminate positions when in doubt.

Please note that this video is for training purposes and any dates are therefore not applicable or current

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Article by JackJ Reynolds

CFDs provide flexible two good advantages comparing to other forms of commercial setups such as futures and warrants.

Future business has no particular expiry time and therefore there is no scope for damage comparing to warrants.

The second is that you are able to deal in much smaller sizes than futures.

The main drawback in dealing with CFDs is that it is a type of leverage product which means there is higher possibility of lopsided ratio between profit and loss after making initial investment.

There are many businessmen and investors who don’t know about CFD functionalities very clearly and a small backup from experienced faculties does a huge matter in this regard.

Contracts for Difference and effective CFD Strategies

With effective usage of suitable CFD strategies and trading systems, we can minimize risk factors while taking advantage of better returns.

You must keep in mind that there is no particular good or bad trading system which is available save and except good or bad trader in society.

Actually, CFD trading field is big where numerous traders join and communicate with one another to create a marketable tool/asset to assist the further growth of the CFD business.

Investors get lot of business opportunities and you can surf the online portals to choose different sorts of business facilities.

However, you must keep one thing in mind that it doesn’t mean that every internet based business is genuine as it is published by webmasters for public viewing.

Having a Trading Plan

For a trading plan to be successful, it needs to have certain established criteria.

You should search for a trading method which will help you to set a price range for trading and it will also help you decide at what price you will feel comfy to sell products.

This marketing strategy will help you to take decision about proper trading size for doing business and opt for stop loss level to cap the downtime if the market goes against you.

You should make plans how to determine entry and exits to this CFD trading so that you can control your emotions to a certain point of time.

The trade strategy should suit your style of trading and trading methodology so if you are looking to enter and exit a market several times in a day (i.e. day trade), you should not seek a system that is based on, say, 200-day moving averages.

Trading system can be less intricate but it must take care of your needs.

For instance a trading strategy that is based on pairs trading and moving averages might be actually work out better than a trading system that uses 200+ technical indicators.

This trading system has variations but it can’t support the fact that it over excels others; instead, it supports the fact that it will be more risky if that system doesn’t work up to the mark.

So start with a simple system and then see how it reacts to changing market conditions and only tweak it if fails to meet your trading objectives.

Lastly, don’t feel like you need to trade every day.

CFD trading system is vast and it is far better than that of regular trading to sell and buy shares randomly.

Article by Jeff C Daniels

There is no doubt that we are all currently being faced with tough economic times. Most of us have found ourselves out of a job. Those that do have jobs are still finding it difficult to make ends meat with the rise of expenses in the global economy. For this reason many people are trying to find possible ways by which they can make some extra money on the side. There is no doubt that the internet is full off various options that claim to help making you money in these tough times. The unfortunate truth however is that most of these opportunities are carefully planned scams and it makes you wonder, if the programs offered are so good at doing what they do, how come everyone does not use them. This is where futures trading comes in to play. Futures trading is a recently launched trading platform that allows you trade on various unique commodities.

The reason futures trading has not been so widely used amongst the public as it is a recent release that has made to possible for every and any person to use. Previously futures trading was only available to those that use to work in investment banks on high street firms. This had limited the amount of market volatility and wealth distribution up to a considerable factor. Seeing that now any one can simply make use of this trading platform from the comfort of their home has allowed many to see a drastic change in their standards of living. Do not get me wrong, this form of trading is no get rich scheme that will happen over night. You will be required to put in the effort to make sure you have every chance of you seeing some form of profit.

Futures trading unlike stocks and shares investment offer a wider choice of markets to choose from. These would include some commodities such as wood, wheat, currency, gold, steel etc. Now at first glance you might find yourself saying “is this for real” as it may sound pretty stupid to believe that one can make money by investing in the beef that we all eat. If you take a closer look at the financial market and how it runs, you will be able to see that every commodity in this world has a market that one can invest in. This is the same principal that futures trading offers.

Futures trading is very different in comparison to other investment opportunities in the sense that they offer a higher profit margin. This is the main reason why futures trading has become so popular in recent months.

If you are planning to make use of futures trading, then there are many ways that you can go about it. The best place to start looking for details on futures trading is online. The key to being successful in this form of trading is taking things as slowly as possible.

If you’re interested in learning more about how to trade futures or how to find a good http://www.yourbrokerguide.com/28/futures-brokers-best-futures-broker-comparisons/“>futures broker, visit the website at http://www.yourbrokerguide.com

Article by Matthew Brown

Candlesticks have become one of the most popular methods for reading stock prices. When evaluating stock, commodity, option, or market values, the Japanese Candlestick not only provides all price data, but it also gives you a visual identification of buyer and seller demand.

This document is a beginners explanation to reading Japanese Candlesticks.

For any trader/investor who wishes to evaluate and make decisions using charts, the Candlestick will become your closest ally.

History

Needless to say, Japanese Candlesticks originate from Japan. Somewhere around the 1600′s in Fuedal Japan, Rice Traders began plotting the price of rice. At the time, rice was the predominant method of currency, and a Rice Exchange actually formed.

As one can imagine, without the help of computers, plotting prices was quite painstakingly difficult, and so the method of Candlesticks were developed.

To put this into perspective, while the Candlestick was being used to plot the changing prices of rise in Japan, Europe was in the midst of Tulipmania, which subsequently resulted in an economic crash. Whilst both the Japanese and the Dutch were using a crude form of Futures contracts to purchase rice and tulip bulbs respectively, only the Japanese were using a visual aid to analyze and plot the price changes.

Up until the early 1990′s, however, Candlesticks were still not predominant in the western world. Renowned author Steve Nison translated much of the material available in Japan on the subject, producing one of the most widely read books today: Japanese Candlestick Charting.

Westerners had been using a cruder technique of price plotting called Bar Charts. They depict the same information, however, the Candlestick offers far greater benefits as a visual aid. This is due to the depth of its body (see further sections for explanation).

Today, Japanese Candlesticks are one of the most predominant methods for evaluating price, with nearly all software packages providing this technique. For the trader/investor who is able to proficiently read candlesticks, a great insight is provided into the balance between buyers and sellers.

Price

The daily movement of a stock price consists of 5 pieces of data:

* Open price* Close price* High price* Low price* Volume

Candlesticks represent all of this information except Volume (Equivolume candlesticks are not discussed in this paper). Therefore, by using the candlestick as our price evaluation technique, we are able to visualize whether the day was dominated by buyers or sellers, whether there was weakness in buyers or sellers, and the relationship of the days’ movements compared to previous days.

Other methods to evaluate price movement include:

* Line Chart – only one price is represented (typically the closing price), but is a simple method to view price activity.* Bar Chart – similar to a Candlestick, but does not have a body.* Point and Figure Charting – one of the first methods of analyzing price movement, they evaluate price movement by marking an X for an upward movement, and an O for a downward movement.

Analysis of price is the base to where most traders/investors begin. To put it simply, by analyzing the price, we are attempting to determine whether or not that price is “over-valued” or “under-valued”. Other factors will also apply in this determination, but analysis of the price is the starting point in an effort to follow the golden rule: Buy Low… Sell High

Make-up of a Candlestick

There are two sections to a candlestick:

*The body*The shadow

Candlestick Body

The body represents where the open and closing prices are.

For a candle that has an open body, the opening price is at the bottom of the body and the closing price is at the top of the body

For a candle that is solid, the opening price is at the top of the body and the closing price is at the bottom.

To read the full article, please go to: http://www.fmranalysts.com/education/Candlesticks.pdf

Matthew Brownwww.fmranalysts.cominfo@fmranalysts.com

More Nison Candlesticks Articles

Please note that this video is for training purposes and any dates are therefore not applicable or current

For more information on ADVFN.com get in touch on support@advfn.com or give us a call on 0207 0700 961 in the UK or 888 992 3836 in the US. A stock chart is a graphical representation of stock price data. It allows the investor to analyse the information in a variety of ways to make or aid trading decisions. Stock charts come in many different types. Some of the most common are line, bar and candlestick charts. Candlestick charts show the open, high, low and close prices as a candle with “wicks” at both ends. The ends of the wicks show the high and low values with the body of the candle showing the open and close for the day, black for a down day and white for an up day.