Monday, September 3, 2007

5 Kick-Arse Tactics To Seize Favorable Probabilities at Forex

As you ponder how to balance your forex portfolio, it is important to map out sure-fire strategies beforehand.

With your plan, you optimize your reward with respect to the expected risk, and tweak probabilities to your favor. Forex strategies must be disciplined and limit risk; simultaneously, it positions you at the most favorable advantage in the market.

A beginners strategy is the fundamental Moving Away Average, which is draws predictions from technical study over 12 periods, with each period 15 minutes in length. Trading decisions based on the MAA technique considers historical data to arrive at relatively safe predictions.

We use a simple algorithm for MAA. When currency price crosses above the twelfth period, simply move away it is a signal to stop and reverse. In this way a long position will be liquidated and a short position will be established, both using market orders. This system keeps trades constantly active in the market, with either a short position or a long position after the first signal. Risk is minimized.

Intermediate level strategy calls for analysis of support and resistance levels. The market likes to trade above support levels and trade below resistance levels. If either a support or a resistance level is broken, then the market follows through in the direction given. These breakpoints can be determined by analysis of the chart and assessment of where the chart has encountered unbroken support or resistance in times past. Identify these critical points and you can ascertain periods when you plan to open or close a position.

An advanced tactic that many consider exotic is the balloon strategy. The Balloon is an option that balloons, or increases in size when triggers are breached. Take the case of an investor who predicts that the dollar will gain strength against the Euro in the near future and is currently trading at one hundred, the investor will see one hundred ten as having strong resistance, but he also believes it will be broken.

Now, rather than buying straight US dollars at one hundred for the next six months the investor will purchase at at the money balloon call with a One Hundred Ten trigger and multiple of two. The investor then acquires a One Hundred Ten call in USD110mm. However if the dollar and Euro ever trade at or above one hundred ten, the 110 call will double to USD 20mm.

A day trader at heart? The Double Bottom is definitely for you. Significant to the short term trader, the double bottoms indicate a possible major change in currency sentiment and indicates a shifting trend. The pattern is used on all times frames, and many compelling intraday and long term bull markets are identified from this setup.

Analysts recognize that double bottoms quickly reflect strong support levels. When prices fail to break support in the down trending markets on more than one occasion we see powerful changes of trend. These reversal signals are revealing. The most common portal where a trader will open on a double bottom trade is upon a maneuver through the high of the two troughs. This high embodies secondary resistance, and when penetrated confirms a price reversal. From this vantage point, stops are placed around the lows of the patterns because a move below lows negates the pattern premise. Easy isnt it?

To round of your arsenal of forex implements, arm yourself with the ichimoku chart. These charts consist of following indicators, which identify support and resistance levels and create trading beacons in a manner that is akin to moving averages. A contrast however between both is that the Ichimoku chart lines swing forward in time, creating vast swathes of support and resistance zones while decreasing the risk of trading false breakouts. They are arrived at with data on trend existence, direction, support and resistance.

The four primary lines include:
Turning Line = (Highest High + Lowest Low) / 2, for the past nine days
Standard Line = (Highest High + Lowest Low) / 2, for the past twenty-six days
Leading Span 1 = (Standard Line + Turning Line) / 2, plotted twenty-six days ahead of today
Leading Span 2 = (Highest High + Lowest Low) / 2, for the past fifty days, plotted twenty-six days ahead of todays date.

Commit these tactics to memory and bring home Your Gold..

An enthusiast of forex and radionics, Joseph R. Plazo, Ph.D offers leadership executive coaching and helps people find great jobs in the Philippines.

Forex Trading - Getting In On Long Term Trends a Live Example

When a trend has started how do you get in? There are always plenty of opportunities as trends can last for months or years.

Here we will outline a simple method on a live example.

Lets look at it

If you read our recent article you will know that we wanted to get into US Dollar and Canadian Dollar and this set up has just come to fruition.

Here it is:

You can see it on any many chart services but the one we are using here is and were writing this on 06 03 PM CET.

Pull up the weekly chart and you will see the long term trend in US Dollar is down and you want to be in on the longer term trend

Now pull up the daily chart.

You will see the US Dollar is having a counter trend rally.

Last week we said that resistance and nearby highs would probably hold.

Check out the strong resistance and the top of the Bollinger band.

This is the line the US Dollar had to cross and it hasnt and is faltering just below this level.

Get Confirmation

Rather than just jump in and trade, we look for a test and a fall off in near term price momentum.

If you want to time trade entries the stochastic momentum indicator is simply one of the best timing tools you will find.

It measures short term velocity of price and is a great timing tool and confirms weakening momentum.

The key here is to watch resistance and then wait for prices momentum to the upside to stall.

All you do is simply watch for the stochastic lines to cross and point downwards with bearish divergence which has just occurred.

It really is that simple.

Identify strong resistance look for a strong rally into it and WAIT for confirmation of weakening of momentum. Dont jump too soon

The real key is to get confirmation of weakening momentum in the counter trend rally and thats where the stochastic is so useful.

Many traders simply jump in near resistance and expect it to hold but this means you reduce the odds of being successful and support and resistance levels are broken all the time.

Right or wrong

This is a trade with low risk and good rewards and you can run it or simply wait for a quick blast to the middle of the Bollinger band.

Look it up on the net or read our other articles, its an under rated yet very useful tool


On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at

Flipping Properties Works In Any Market

For years, hot-shot speculators made huge profits flipping condos in Florida and Vegas before they were even constructed. All the while, the naysayers in the ivory towers of Wall Street and academia warned of a "housing bubble" that was sure to burst as all bubbles do.

When Fed chairman Alan Greenspan said that national real estate market was "frothy," the writing was really on the wall, and anyone with half a brain could see that we were in for a cooling of the housing market, at best. And yet still, speculators continued to profit, and the real estate bull market marched on.

But the bulls aren't marching now. Greenspan handed his matador's cape to the new Fed chairman, Ben Bernanke, who continued the policy of interest rate hikes designed to deflate housing. No longer accelerating at a break-neck pace, home prices have flattened like a pancake in many markets, and new the condo speculators who got in late are in for a world of hurt. Clearly, the housing boom is over in many parts of the Country. But contrary to the media hype, this is great news for flippers!

It should be made clear that there is a difference between flipping and speculating. While speculators may be a sub-set of flippers, they are, at best, the amateurs of the real estate investing family. Flippers who have consistent success are more conservative and have a fundamental approach to real estate investing. While it may not be as exciting as speculating, the rewards of more conservative flipping are nearly as generous, and they are paired with far less risk.

The biggest difference between flipping and speculating is that flipping works in any market, whereas speculating only works in certain places at certain times. Las Vegas from 2002 to 2004 was a great time and place to be a speculator, but if you were still in the market in 2006, chances are you got burned by more than the hot desert sun.

Basically, speculating often works on the greater fool thesis - that you can always find a greater fool than yourself to take a property off your hands in the expectation that he will be able to find yet a greater fool. Eventually, someone is left holding the bag and that's when the party is over.

Flipping, by contrast, relies on fundamentals. The idea is not to catch a shooting star in a rapidly appreciating market. Rather, the plan is to find undervalued properties, rehab them, present them in an attractive manner, and sell them for a reasonable profit.

Not only is a rising market not a requirement of flipping success, it may even be a mild detriment! After all, it is a bit harder to find bargain properties in booming areas. Sure, it can still be done, but the point is that even falling markets are prime for flipping since the holding period is often too short for the value of the property to decline beyond the deep discount at which it is purchased. Assuming that you add value through rehabbing, you almost can't lose!

While speculators often rely on the "greater fool" strategy, flippers tend to have one of two exit plans:

1) Quickly flip the title to another investor, or
2) Rehab and sell the property at the retail level. While the lion's share of the profits go to the retailer, a quick wholesale deal can free up your cash (and energy) for the next deal. But what if neither strategy works? What if the market really crashes and the buyers disappear? Is all lost? Of course not!

For complex economic reasons, the rental property market does not always correlate with the housing market. In fact, they are often countercyclical. Although most flippers aren't terribly interested in being landlords, generating rental income from a botched deal is a solid backup plan. Better yet, you can usually refinance the property after rehabbing it to get all of your money out.

From that point forward, the bulk of your rental income will be pure profit, and when the market improves, you can make the sale. Even better, you can offer your tenants a lease with an option to buy, which is attractive to many young families looking for their first home.

The media portrays real estate flippers as the investment world's answer to Wild West gunslingers, but in reality, nothing could be further from the truth. Compare the worst case rental income scenario of real estate flipping with the worst case Enron scenario of stock market investing. There really is no comparison!

If you take a fundamental approach to real estate rehabbing and flipping, your risk is limited and your profits are virtually limitless. It really is the best of all worlds.

Richard Reichmann is internationally known as a millionaire maker. He's a leading consultant in real estate and internet marketing strategies that are profit proven.

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