Drawing Correct Trendlines

By Ahmad Hassam

Learning currency trading is like building a new car from scratch without an instruction manual for new traders. Many of them acquire quality parts like brakes, wheels, motors, seats, steering wheels etc to build the car.

You need right parts with right instructions to put them together in order to become a successful trader. After all, your car can come to a screeching halt due to a part such as a $2.00 gasket.

You should understand that forex trading is very different from trading stocks. Companies can file for bankruptcies like GM or Goldman Sachs or Enron. Companies can go completely out of business taking their share value to zero in the stock markets. However in case of currencies, there is no threat of a country going bankrupt or doing out of existence in a few weeks.

What can happen is that severe economic changes take place between countries. This can create dramatic changes between the currencies value of different countries. When that happens, it can create an incredible financial return for savvy, educated currency traders.

Before you enter the markets, you should learn how to find the current trend. For a skilled and educated trader, learning how to spot a trend is very important. A trend can last from a few hours, several days or several months. It can create an enormous financial return for the savvy.

Fighting a trend is like swimming against the current and getting drowned. You should always trade in the direction of the market. Traders make many mistakes. The biggest one is trading in the wrong direction.

If you are an active trader and you dont have the trading software that has the moving trend line indicator, you will need to learn the skill of drawing correct Trendlines. An incorrectly drawn trendline can mean the difference between making and losing money in a trade.

There are three types of trend lines that you need to learn how to draw. 1) An Inner Trendline. 2) An Outer Trendline. 3) A Long Term Trendline. These three trendlines form on all time frames and in both uptrends and downtrends and you will need them in your trading.

Correctly drawn trendlines can predict future levels of potential support in an uptrend as well as future levels of resistance in a downtrend. Draw a straight line connecting support levels without penetrating bodies or wicks of a candle in any uptrend.

Draw inner uptrendlines by finding the last two support levels and drawing the line from left to right. Likewise, draw the outer uptrendline by starting at the far left of the chart. Move to the right connecting the majority of the support levels with a straight line.

Go on a larger time frame like daily or weekly. Draw the longerterm trendline by connecting the support levels starting from the far left of the chart moving forward. Instead of a support level, use the resistance level to draw trendlines in a downtrend. That means all the rules are the same but in the opposite direction. The market reacts the same way in a downtrend as an uptrend but in an opposite direction. - 23218

About the Author:

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.

Credit Card Debt

By Don Burnham

Credit cards are no more a luxury, they are almost a necessity. You can't rent a car without one, you can't purchase goods over the Internet without one; you can't make airline reservations without one. Nearly everyone in modern societies have at least one credit card.

Now, however, the credit card industry and credit card holders are posed with a big problem called "Credit Card Debt." In order to understand what 'credit card debt' actually means, we need to understand the how credit cards actually work-- away from the point of sale.

People can use their credit cards to purchase things for which they do not need to make any payment at the point of purchase. The purchases are made by borrowing money against the account that is held by the credit card holder with the credit card issuing company. As people go on making such purchases it adds to this account, thereby creating credit card debt.

The total amount that is owed by a credit card holder to the credit card supplier adds up to be the total credit card debt, and needs to be paid back every month. Due to this the credit card suppliers issue monthly statements to the credit card holders and they are expected to pay back their dues within a particular date. Any delay in payment would result in the person having to pay extra money in terms of late fee and interest charges.

You have the option of making a partial (minimum) payment too, in which case you don't incur a late fee but interest charges are added which increase your credit card debt. So your credit card debt keeps on increasing because the interest rates on credit card debt are generally higher than the interest rates on other kinds of loans.

The credit card debt that is formed each month not only includes the outstanding amount that you need to pay, the interest that has been charged on it, but also includes the interest that is calculated on the previous month's interest paid. Thus with the more delay that you make in clearing your credit card debt, you only make matters worse by increasing your credit card debt.

You will soon find that the credit card debt has become a much larger amount than what it actually had been before. The amount may become so large that you may find it impossible to pay back. The only way you can help yourself is by curbing your spending so that you do not have a very large credit card debt. - 23218

About the Author:

Are you a credit card user and willing to know how exactly the credit card works? Then here is a website http://www.weknowthewayback.com from Don Burnham which explains you everything about Credit Cards.

If You Are Having a Difficult Time Getting Started on Forex...

By Alex Miller

If you're unfamiliar with trading on the Forex market, yet you would like to get started rather quickly there are a few things that you need to keep in mind. The first of these is that it is not as difficult as you might think to get started with trading right out of the starting gate. As a matter of fact, understanding just a few basic principles about the Forex market will help you to get started rather quickly.

The first thing that you need to understand about the Forex market is the fact that it is a zero-sum market. You're not going to find any trades that happened on the Forex market in which money is somehow generated, each trade is equally balanced. Since you are trading one currency for another, there is going to be somebody that comes out on the winning end and somebody that comes out on the losing end, it is as simple as that.

You are also going to need to go through a qualified broker if you're going to trade on the Forex market successfully. It is impossible for you to have direct access to the market, regardless of what you may have thought in the past. Many of these brokers are attached to an online platform which allows you real time trading and a number of other benefits.

There are a number of other benefits that you will receive by joining one of these online platforms. First of all, many of them have plenty of tutorials that will walk you through the process of trading from the beginning through the end. There are also a number of tools that are available on the inside which will not only help you automate many of the tasks of trading on Forex, they can also help you to gauge which direction the market is moving.

There are a number of different systems that are available for you to use which will enhance the online tools that are inside of the forex platform. The most popular of these systems analyzes different aspects of the Forex market in order to determine which direction it is going to be moving. Many traders use this regularly to help them make up their mind where they will place their trades. Other tools that are available include automated as well as semi automated instruments for trading Forex.

If you plan on using one of these automated systems, I would advise you to proceed with caution. I'm not saying that it is not a good idea to use the systems as many people use them with great success. What I am saying, however, is that you should always maintain control of your financial business, whether it is on the Forex market or in any other way. Never allow a program to run freely without some kind of input from you.

The Forex market is an excellent way for you to get your feet wet in trading or to rebuild a portfolio that may have taken a hit in recent years. Provided you understand the basics, you can really get started with a very small payment into a Forex platform. Take your time and grow from this point, it is possible to be successful if you do so. - 23218

About the Author:

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The Treasury Bond Market Revealed

By Peggy Aston

Serious attention is being paid the the U.S. Treasury bond market in recent trading. When T-bonds show action, the dollar does also. If there is a decline in long-term Treasury bond prices, the dollar also plummets. According to the March 2009 report of the Fed's Flow of Funds, there was $14.5 trillion outstanding in agency securities, mortgage-backed securities and Treasury securities.

Many countries invest heavily in our country's debt as an investment and China is the top holder of U.S. bonds. Several top economists believe that if the purchase of U.S. bonds by China were to stop, the U.S. interest rates would increase to make our debt more attractive.

With the consequence of huge deficits and out of control government spending, the real value of U.S. Treasury securities are the focus of increased attention. China wants their assets safe and if any question of U.S. credibility would ensue, the pressure to liquidate a portion of their U.S. assets in self-survival mode may seem a likely option.

If other nations do not buy U.S. debt, the only other option is for the U.S. Treasury to buy Treasury securities and, thus, increase the money supply dramatically. In order to attract investors, rates of interest would have to rise. As what happens when the Federal Government begins to habitually buy Treasury bills, inflation will soar. In the current climate, the Fed bought over 500 billion dollars in mortgage-back securities.

During normal economic times, higher interest rates are a result of the central bank trying to ward off inflation associated with an increased money supply. Yet, there is less of a demand for Treasuries and higher interest rates to entice buyer demand is the only other option. However, this would only accelerate a declining economy deeper into a hole. Higher interest rates only place a greater burden on the population which results in more defaults on mortgage loans and higher consumer debt.

Washington's record breaking Treasury offerings to fund the deficit and the Fed buying the debt through its spinning out of dollar bills is staggering. The floodgate opened by the U.S. Treasury is pushing bond yields higher. Bill Gross, of PIMCO told Bloomberg, "The market is beginning to wonder who is going to be buying these bonds."

A nation who spends in an out-of-control way can eventually destroy itself. A famous economist believed that inflation was a disease which could destroy a society if it wasn't stopped.

China is the top holder of U.S. debt. Famous economist, Milton Friedman, said that the fate of a nation was ''inseparable from the fate of its currency''. Soaring rates of interest and inflation put an already fragile economy on the alert. Thus, the bond yields are higher as the government's deficit shows no sign of slowing. - 23218

About the Author:

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Why Trading Price Action Is So Important

By John Templeton

If you find yourself having a really difficult time grasping the intricacies of the forex market, then you are definitely not alone. There are tons of new and struggling traders out there. I know that if you surf around the internet enough, you will find hundreds of thousands of articles on forex trading. Its enough to give you a headache. I can certainly empathize because I remember going through the same thing when I first started.

You never really get the information you need though, do you? All you ever seem to get is a guy will tell you to put a bunch of indicators on your charts, and as long as you follow them, you will be rich, right?

Well, let me be the first one to tell you that using these generic indicators like stochastics or moving averages as your only basis for buying and selling a currency pair, you will not last long in this business. If you want to take the forex market serious, it is critical that you understand price action. Once you understand that, you understand how the market works. Because the basis of technical analysis is comprehending price action patterns.

These are some of the advantages of price action:

You get to actually see the real support and resistance areas. I'm also not talking about those s/r areas that you get with one of those indicators. The real support and resistance on a price chart cannot be calculated by an indicator.

You can actually understand what the market is doing. You get to see the market's energy and you get to see the underlying reason as to why the market moves the up and down the way it does.

With price action, you are able to predict possible important turning points. This is so critical to a trader. Also, you can use any kind of time frame you wish to use. So, theoretically, it doesn't matter if you are either a long term trader or short term trader. This is proof that price action is for every kind of trader.

It also doesn't matter what kind of market you trade. You can trade stocks, forex, futures, derivatives, etc.... That's how universal it is. - 23218

About the Author:

If you want to learn forex price action, then you definitely check out winning in the forex market.