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Currency Foreign Exchange

The currency foreign exchange market also referred to as the FX exchange, and the foreign currency exchange, is where the buying and selling of different currencies takes place. In order to buy goods or services from other countries, or to invest in other countries, you must first buy the foreign currency of the country that you wish to do business. There is no central headquarters for this market and it actually functions as a network of traders connected only by computers and telephones. The majority of the transactions that take place on the forex market occur in the United States, Japan, and the United Kingdom.

The currency foreign exchange is open 24 hours per day, is extremely fast-paced, volatile, and is the largest market in the world. Billions of dollars are traded daily and forex trading takes place in London, New York, Hong Kong, France, Australia, Singapore, Switzerland, Germany, among other places.

There are four main types of FX trading participants and these include banks, central banks, brokers and customers.

Banks are the major participants since about two thirds of all forex transactions take involve banks dealing directly with each other. They earn their profits buy trading currencies (buying and selling) with each other.

Central Banks act on behalf of their governments and these transactions account for most of the remaining transactions in the forex market. The market first becomes active in London followed by New York, then San Francisco, followed by Singapore and Hong Kong.

Forex brokers are the intermediaries between these banks that trade on the currency foreign exchange. They make their profits through charging commissions on any transactions they handle and the dealers can actually call them directly to find out where they can get the best price for their forex currency. His also offers anonymity to buyers and sellers.

Customers, who consist of mainly large companies, are also market participants, and they are companies that require foreign currency in order to do business and make large investments. These forex traders often have their own trading desks or they consist of individuals who make purchases in foreign countries or who travel abroad.

There is a lot more to forex currency trading and to the forex markets. Continue to study not only the general information, but the forex trading strategies available to investors to see if forex trading is a good fit for you.


Market Direction: Why are candlestick signals so effective? You may have seen this question asked on this site quite often. There is very distinct reasons why candlestick analysis is extremely accurate. It is the identification of reoccurring signals or patterns created by investor sentiment. Although this may sound very simplistic, the signals and patterns are recognized today because they have been observed to work successfully throughout the centuries. What is the biggest factor for eliminating emotions out of investment decisions? Knowing what should occur after price signals and patterns! Having insights into what specific results should occur after the appearance of a signal or pattern allows an investor to have great control over their trades strategy.

Today's results of candlestick signals has one very powerful aspect of confirmation. The signals/patterns work because of the actual observation and utilization by Japanese rice traders. This has much more compelling results than a computer simulated trading program. The information built into candlestick signals are actual tested results from actual trading. Hundreds of years of observations have provided today's investors with a series of signals and patterns that demonstrate a high degree of accuracy.

Each signal can be described with recognized visual elements. Patterns can be further described as to the type of formations involved in the pattern. Most importantly, each signal/pattern can be explained as to how it was formed, the investor sentiment that created the pattern. This knowledge alone provides an investor with insights into trading that most seasoned investors do not gain experience until many decades of actual trading. Fortunately, learning how to interpret the signals is relatively easy. Is merely common sense investment practices put into a graphic depiction.

Let the market tell you what the market is doing! The Japanese rice traders boil it down to this simplistic statement. You do not have to have years of economic background to analyze market trends. The signals and patterns convey what is occurring in the market trends. This allows the candlestick investor to be prepared for establishing correct trading strategy in current market conditions.

What are today's market conditions? It appears as if another Dumpling Top is in progress. A Dumpling Top consists of a rounding top formation. How early can this pattern be recognized? It may take a few weeks to visually recognize how the top is starting to roll over. However, there are other elements of a Dumpling Top that can confirm the pattern set up. The trading becomes very indecisive. As we have experienced over the past few weeks, the Dow would trade up for a few days, then down for a few days, up for a few days and back down. This makes it very difficult to establish any lasting positions.

Dow

The indecisive trading is an aspect of the Dumpling Top. It usually can be observed as well as felt. When it becomes frustrating to be in a market because of its inconsistent direction, this would be the sign that a Fry Pan bottom was forming at the bottom or a Dumpling Top was forming at the top. How do you use this information to your advantage? Your trading strategy has to be altered to accommodate the market conditions. Knowing that the trend may only last a day or two in any one direction produces the correct trade scenario. Either move your money to cash and be prepared to make big profits at the end of the pattern or know that your trades may be short as a day trade until the pattern is over.

Dow This summer

Knowing what to expect at the end of a dumpling top provides trade setups that can produce huge profits .

GENZ

The Candlestick Forum will be starting and education program on how to use options effectively with candlestick signals and patterns. To use options effectively, you have to have a very clear understanding of the direction of the underlying entity. Without that knowledge,  there is no sense in learning how to use options. If you have not yet become completely familiar with the candlestick signals and patterns, please take the time to study those training videos. There are many advantages to trading options. But there are no advantages to trading options if you don't know how to analyze the underlying entity. Take advantage of the Candlestick Forum pricing special this week to gain knowledge most investors will not have the opportunity to learn.

Chat session tonight at 8 PM ET -- Everybody is welcome.  Learn how to use the Dumpling Top for effective trading strategies. Click here for instructions.

Good investing,

The Candlestick Forum Team


 

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