So you think you would like to participate in foreign currency trading?  More and more people are investing in the market by themselves and forex trading is becoming more popular by the day.  Listed below are a few facts that you should be familiar with. In this article I will be using fx trading and foreign currencies interchangeably since they are basically the same thing.

1)    There is less regulation in dealing with foreign currencies. Foreign exchange trading does not have the same strict country regulations as other types of markets. 
2)    There are no fees in when dealing with foreign currencies. In fact, it is the only market containing no exchange fees or commissions.
3)    This market is run all over the world and therefore is not centralized.  Because there is no way to corner the market, fraud options rarely exist in forex markets.
4)    The forex investor will also find that this type of trading is very convenient. You have the ability to trade 24-hours a day from the comfort of your own home.
5)    The currency exchange also offers high liquidity. What this means is that you can invest a very small amount of large amount of money depending on what you are comfortable with.
6)    Through trading foreign currencies you can also increase your earnings by up to 100 times more than with regular trading. You do this with margin and leveraged investments that will give you larger profits.

When learning to trade foreign currencies, there are quite a few terms that you will also need to know and understand. These terms will be explained throughout this article. First of all, you must know what a “pip” is. A “pip” refers to the least amount a cross price quote can alter on the forex exchange. Another term, called the “spread” refers to the price difference between the selling and buying price of a particular currency.

There are also different trading trend types when reading foreign currency charts. There are two that I would like to address in today’s article.

1)    Uptrend – This occurs when the currency trading price is on an upward rise. In order to successfully detect an uptrend, forex traders, typically use hourly and daily charts. The forex trading strategy required to take advantage of an uptrend includes the ability to detect the best time to place an entry order. This happens after the trend was previously in a long downtrend.
2)    Downtrend – It is important to understand this pattern. The novice investor may not understand that there are often small rises in foreign currencies during a downtrend pattern. This can confuse some investors who are looking for definite signs of a trend pattern change not realizing that there are often small rises during a downtrend that may take place.

Understanding the different trend patterns and chart types is crucial to successfully trading currency. When leaning to trade foreign currencies it is important to study all methods available and to select the one that makes the most sense to you. There are line charts, bar charts, and candlestick charts for an investor to use when trading forex. Research each of them before you begin trading foreign currencies.

A hard selloff from that point brought the Dow back down to a perceived support level. The pennant formation in the Dow is now dissipated but a trading channel can be observed. Today's Doji illustrated the lack of bearish conviction coming back down to a potential support level. Does this mean we know definitely which direction the market is going to go from here? Definitely not, but it provides additional analytical tools for projecting what could happen based upon the appearance of candlestick signals. If bullish trading will witness tomorrow in the markets after today's doji in the Dow, that would make the trading channel analysis without much more viable.

DOW

Does a sideways trading channel provide any benefit for anticipating whether to be long or short? Not really, but knowing that a sideways trading channel is in progress, it allows for the planning of what type of investment program should be anticipated for the next week or two. Obviously, long-term positions would not be considered. Short-term buying, with the expectation that the top of the trading channel might be reached in a matter of days, would come into play. Candlestick analysis may not necessarily project what the markets are doing a longer-term basis but they do reveal what the markets are doing now.

This information permits an investor to invest accordingly. If you can be observed that a trading channel is in progress, logic dictates that the Bulls or the Bears do not have major control of the market trend.

Commodity Corner - World Cup Advisors account August 1, 2007 to March 3, 2008 - Positive 112.1% gross. Live cattle and feeder cattle are breaking down all the perceived channels after candlestick sell signals. The utilization of a channel analysis provides profitable information when used correctly. What is expected at the top or bottom of a channel? A reversal back into the channel area. A breakthrough of either one of those levels means a new dynamic has come into the trading. We shorted live cattle based upon that information.

Live Cattle

For Candlestick Forum newsletter members -- The sign up special has been keeping the staff of the World Cup Advisors extremely busy for the past week or two. They have not been able to respond to everybody that has indicated they were interested. We have negotiated for the special to continue until March 10 for the members of our newsletter. If you have any questions about the commodity trading program, please feel free to e-mail Steve to steve@candlestickforum.com.

Online training session - the next training session is scheduled for April 19 and 20th. This two-day training will include Steve Bigalow showing all the nuances of the 12 major signals and price patterns and how to use them correctly for profitable investing. Rick Sadler will also demonstrate how to use additional technical indicators to improve the profitability of trading with candlesticks. Details can be found on the website.

Chat session tonight at 8 p.m. ET - Rick will be described in more of his technical indicators for affective day-trading or quick fling trade profit.

Good investing,

The Candlestick Forum Team

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