Inside Trade | Basic Candlestick Patterns

The main concept of technical analysis is that the movement of the market repeats every now and then.

After being introduced to the types of charts, especially to the Japanese candlestick, a trader should already know that since the market repeat its movement, certain patterns may appear from time to time.

There are 12 major candlestick patterns: Doji, Gravestone and Dragonfly Doji,Long-legged Doji, Bullish Engulfing Pattern, Bearish Engulfing Pattern, Dark Cloud Cover, Piercing Pattern, Hammer and Hanging-man, Morning Star, and Evening Star.

Doji – displayed as a candle without a body, Doji denotes the indecisiveness of the investors. It means that it may mark an impending reversal if in case it appears on a long trend. Traders must preparer for a major trading decision.

Gravestone Doji and Dragonfly Doji – Both patterns are common before a trend reversal. The Dragonfly usually shows a “T” like candle who has a long lower shadow but has no body and upper shadow. Meanwhile, Gravestone is like an upside down “T” which looks like the reverse of the Dragonfly. It has no lower shadow and body but has a long upper shadow which made it look like an erected Japanese gravestone.

Long-legged Doji – this Doji may be compared to the common type but it only has a longer shadow. It indicates that even if the price movement shows a lot of trading activity, the next direction must still be confirmed.

Bullish Engulfing Pattern – this type of pattern is formed at the end of a bear trend. This chart pattern shows a small black candlestick followed by a large white candlestick, “engulfing” the smaller candle. This indicates that the bull had assumed control on the trend and overcoming the the selling pressure.

Bearish Engulfing Pattern – this is an opposite of the Bullish Engulfing Pattern and are formed at the end of a bull trend. It is displayed as a small white candlestick being overwhelmed by a large black candlestick and is showing that the bear had taken over.

Dark Cloud Cover – A pattern which involves a white candlestick being followed black candlestick. It may be a sign of a future bearish trend.

Piercing Pattern - it is a pattern which involves two candlesticks. The candlestick for the first day is black then followed by a white one on the next day. The opening of the white candlestick is way below the range of the candlestick for the previous day. It will then go up and will close above the half of the black candlestick. It signal the end of a small to moderate downtrend and also the time for traders to open a buy position or close their sell position.

Hammer and Hanging-man – the name of the candlestick depends on its color but has similar formation, a small body with a long lower shadow. A hanging man is a bearish candlestick formed at the end of a bull trend. Meanwhile, hammer is found at the end of a downtrend and indicates that although the bullish investors doesn't have the full control, the influence of the bull is getting stronger.

Morning Star – a bullish candlestick pattern consisting of three candle. The first candle is big black candle located on a downtrend. Meanwhile, next to it is a small white candlestick followed by another big white candle. This pattern denotes that the bearish trend will reverse.

Evening Star - the opposite of the Morning Star.

Venturing on InstaForex | Best Analyst Wins 45 Gran

The year long wait to announce this year's best analyst is finally over. Last November 30,2012, the Analyst of the Year award was concluded and three winners are proclaimed and awarded with the titles and prizes.

The one who claimed the first place this year is Yuriy Zaytsev from Russia. Meanwhile, Gerardo Narciso Palomino from Peru assumed the second place; and Stanislav Polyanskiy from Ukraine holds the third place. Each of them won a managed account worth $45,000.

Though the awarding is still new, it already garnered attention among Forex traders. Not only that, it also lifted the quality of analysis by allowing traders to compare the works of one another. The works which in time will forge the best. Like a tempered steel heated and beaten and hardened with cold water.

Inside Trade | Dissecting a Trader's mind – Dr. Alexander Elder

A great deal of different personalities are attracted in the world of finance. Some are really inclined from the very beginning, but there are those who are just sucked in but still manages to stand out despite unfamiliarity of the field.

Among those who stood tall was Dr. Alexander Elder. The famous financial figure was born in USSR but emigrated to the United States when he was still 23. He graduated from a medical school in his mother country but settled in the US to teach at Columbia University. At first glance, stock trading is really a far fetched career from medicine. Queer as some would say, and an extremely different path which seems to be outlandish when compared with one another. Despite the alienation from his original career path, it's hybrid composition bore to new heights. A combination which allowed him to penetrate the wits of his colleagues and use it to his advantage.

Dr. Elder, being a psychiatrist by profession, was bestowed with the ability to understand how the mind goes. He was immersed on the world of traders which gave him a first hand account and thus permitted him to really understand what's going on inside a trader's mind. His contribution to the industry was delivered through a distinction of traders according to their understanding of the behaviors on the market.

According to Dr. Elder, the three classification of traders are:

1. Traders who understands the concepts and details of Technical analysis but cannot decipher the traders' motives behind it.
   
   
2. Traders who realizes that the technical analysis will not suffice to ensure success.
   
   
3. Traders who understands that in order to be successful, control and money management are the key to victory rather than the statistics from the market.

Inside Trade | Trading on Christmas

As the birth of Christ is fast approaching and people are now too busy shopping for all the things that they needed in preparation for the much awaited event, Some questions might pop up to the fickle minds of newbie traders. If this will be your first Christmas as a trader, you may be wondering if the markets are open during this time of the year.

The answer is yes. But if in case you have plans to trade during the yuletide season, there are some point that you must take note of.

Brokers

Although most brokers allow trading during this time of the year, there may still be some who would stop its operation to enjoy and celebrate Christmas. No one can blame them since it's just normal for humans to stop working once in a while and enjoy life. Spending sometime with their children and relatives or escaping the cold breeze by taking a vacation in a warm island somewhere in the Asian region. If in case your broker's like that, maybe you should too. It won't hurt if you leave trading for a while and just come back tomorrow.

Movement

After successfully entering the market, your instincts may tell you that something isn't right. Something's unusual about the market. Guess what? You're right! During this season wherein most are not working, the economic activity slows down. If there isn't much economic activity, expect that the market movement would be limited.

Spread

Since the movement are limited and only a few are trading, you may get the idea that spread will increase. Why will it increase and how much? Due to the limited number of traders who are working, only a few may agree upon the value that they want to sell or buy the currency of the other party. Often because of this, the spread size becomes triple than the normal, making it really difficult for traders to catch a profit which is aside from the limited market movement.

So in the end, I am advising you to just spend your time with your love ones because even though you have the money that the world can offer, it cannot buy the time you traded with currency trading. Merry Xmas!

Inside Trade | I got 'ya partner! - Choosing the Right Broker

Nowadays, it's really hard to know who are trustworthy and who are not. Most especially that many are now living in a virtual world wherein you could become whoever you want to be. Claim to be a rich man even though your poor or pretend to be normal joe even if you're a millionaire in real life. My point is, it is quite hard to figure out which is which. What more if there are money at stake?

But that doesn't mean that you cannot hand out a little trust. You could still entrust your money to someone but just be sure that you're in good hands. Dishonest brokers are abundant in the net, wolves among sheep as they say. I cannot deny the existence of those ill intended brokers that are just pretending to be catering wonderful service but in reality only intends to steal your money. Good thing that there are some indications which gives a clue to separate the good ones from the rotten ones. Here are some of those clues to help you.

Communication

Honest brokers are always open for communication. They make themselves visible and reachable either on their support service or through their online and offline representatives. Forums usually have a section for traders to talk with the representative whenever they encounter a problem or have some complains regarding the services of that particular broker. If in case you can't see signs of their representatives, then better think twice before opening an account with them.

Representative Offices

Representative offices gives assurance to investors that this broker will most likely not run away with their money. It is also a sign of boldness from the broker that it is not afraid to show itself to the public. Aside from that, it also mean that their clients may at anytime go to their office and complain face to face.

Transparency

If you've got nothing to hide, why be afraid to show to your client what they needed to see. If a broker discloses a suspicious information then it may be a signal that something's not going right.

Right credentials

Credentials aren't only used as an ornament. It also gives security that other people recognizes the capability of the broker. If there is someone who could vouch for them, then it is a good sign that their are words are not weigh with air. like they, "words are still words until it is proven."

Venturing on InstaForex | Another Lotus

Last May, the Lotus Evora was bestowed to the winner of the Fast Ride from the Best Broker campaign. Traders were awed as the sports car was handed down to its new Malaysian owner. I bet some were dismayed and some are still hopeful for the sports car. Worry no more because if you missed the chance to grab one of those mouthwatering give away sports car then just try again your luck this year's Sports Lotus Is Your Trade Bonus campaign.

The campaign which raffles the elite sports cars from the British car producer – Lotus, and is now open to traders who has a live account with InstaForex. Traders must only deposit an amount of not less than $1000 to his/her account and register for the campaign. Meanwhile, InstaForex Club member is only required $500 deposit. The duration will be from June 25, 2012 up to June 25, 2014. So there's still plenty of time to join and participate in this wonderful campaign.

The winner of the campaign will be drawn using the same procedure used in the previous campaign. For the benefit of those who are still new to the campaign, a number is given to every participant of the campaign. The number is called Lotus Number which serves as their raffle ID. At the end of the campaign, a random number will be generated and will declare the winner of the brand new sports car.  

Inside Trade | Economic Calendar

Ever heard of the term “economic calendar”? If in case you haven't, allow me to inflict the idea. Economic calendar refers to a list of scheduled economic events and the time which it is expected to happen. It is a calendar of various economic activities which specifies the nature of the event and it's scheduled release or commencement.

For the benefit of everyone, most macroeconomic indicators has it's own release schedule which allow traders to predict it's effect on the market. The GDP, CPI, PPI, Inflation rate, etc. are just some of the macroeconomic factors that are released on a regular basis.

However, it's not only the economic indicator that you may include in your calendar. Huge issues, like Fiscal cliff or Euro crisis events, may also be included on your calendar. Though theses events may not be expected at the start of the year, some of it still have a definite schedule and may play a significant role to your analysis. Poll results which has a scheduled released may also be mentioned in here.

Venturing on Forex | InstaForex Great Race 2013

Start your engines because the race is about to begin! InstaForex company is glad to welcome you in the opening of another high speed trading season of the InstaForex Great Race 2013. Another thrilling season of fastest trader is already at hand and all are summoned to participate in this famous chase.

The thrilling race has already been made as a tradition as years are being added to the string. Attracting thousand of traders every year to compete and show what they're really made of and if they have what it takes to be the fastest among the rest.

The contest is open to any client of InstaForex who has a demo account regardless of their trading experience. Each has it's own equal to scramble against the odds and claim a piece of the $55,000 dollar prize pool. The first leg has already begun last December 10 2012 and will last until February 1,2013.  

Inside Trade | It's Time! - Entering the market

Recently, I managed to succeed in catching a few profitable trades which somehow boosted my ego. Highly acclaiming myself for such small victories, I recklessly opened trades thinking that I would be able to wield the market at my whim. I was wrong.

My haughtiness tolled me losses more than those of my little achievement, up to the point wherein my capital was threatened. It's a wake up call, a slap back to reality in which reminded me that almost everything must be accounted for, including the right moment.

Yes, almost every second is an opportunity waiting to be converted to profit. But there are moments that are far more profitable and far less dangerous than others.

Against the many

If you're familiar with the concept of demand and supply, you may observe that it is also applicable in Forex. The supply and demand affects the price in a way that it may denote if there is an impending reversal lurking around the corner.

How to successfully ride it?

Simple, go against what most are doing but do it in the right moment. In traders term, wait for a reversal or retracement before opening a trade. That way, you could earn more without worrying that the trend might change soon. Just imagine you're on a hill with a bike. You won't have to worry about your speed if you're on top, right? You could smoothly go down if everything is set and ready. Just braced yourself from the impact and be sure that you won't fall on a cliff.

How would you know that it's time?

There are tons of indicators out there, but I would recommend oscillators to do the job. If the indicator is already near the safe line, 70 and 30 value for RSI, then ready yourself up because it's almost time. Once you're in, set a TP and SL on a balance so that you could ride it smoothly and safely.

Inside Trade | Time Management

“Time is gold.” We've heard it most probably a gazillion times already, but then again it teaches us to cherish one of the most important things in life. Time.

Time is really important. It's something that we can't bought even if we have all of the money in the world. It's something that if wasted, it cannot be returned to us no matter what. It's not something that we could save for later because it would continuously push through regardless of anything that might happen. But you know what? It's what we do with the time that makes it very important.

Since time is a very valuable asset and wasting it would most probably the last thing that we wanna do. Not to mention that it may also be the one of the most unreasonable crime for ourselves. Better allocate it in the things that we deem important. Use it wisely every moment, like it was the last penny in our possession. Here are some tips that may help us effectively manage this valuable resource.

Make a schedule and stick with it

Although being spontaneous makes our lives a bit exciting, it wouldn't hurt if an activity schedule is already laid for the day. Some of our colleagues, most especially those with short and super short positions, tend to spend the whole day trying to earn from every pip. Occupied from dawn till dusk or dusk till dawn. They seldom take a break to inhale a deep breath of fresh air or stroll around the corner to appreciate your surroundings.

But in case your gonna devise your schedule, just be sure that your schedule has a little room for unexpected commotions. Make it not too tight but not too loose.

Know what's important

Traders sometimes forget that there are far better things in life than earning profit in the market. I'm not saying that we refrain from trading, I'm only pointing out that we should plan everything out so that we won't be glued in front of our computer the whole day, watching the market instead of watching our kids grow. Time is really flying very fast and one day that you may be surprised that you had spent almost all of your life monitoring the changes in the market rather than the changes of people around you.

Inside Trade | Scalping

The very first strategy that most traders will most probably learn is to ride a very short momentum. It means that they would close the deal once a profit shows itself. Since they are still testing the waters, cautious ones would immediately closed their deals. Greedy ones would most probably see their trades through until it reaches a loss, hoping up to the last minute that their luck would suddenly turn the situation around.

From the above mentioned concept, scalping was formed. Scalping or sometimes pipsing is a strategy meant to open very short deals intended to catch only small profit from fluctuations. It is expected to only last a couple of minutes and though the profit might be insignificantly small at first glance, it will be compensated by the number of deals. The profit is accounted at the end of the day, balancing the number of deals which resulted as a loss over those that gained profit.

The Pros and Cons

Scalping is a strategy that even those who had just started trading can employ. It won't need any deep understanding of forex, thought it would be of great help, in order to carry things out. It also won't need any indicator to aid you if whether it's time to open trades or that a reversal will soon take place. A simple yet dangerous strategy.

Seldom brokers allow this strategy and traders caught engaging on this activity usually suffer losses due to a sudden termination of deals. Not only that it was reprimanded, the risk is also high because of the number of trades which usually accumulates to hundreds per day. The emotional factors also comes in because often traders only trade with their instincts which may make them prone to close their deals to soon.

Venturing on Forex | Intraday Options

Options by definition is a type of arbitrage transaction which has specific terms and conditions that a trader may fulfill in order to gain profit. It's like making an agreement with a person and if in case you managed to honor what you had agreed upon, you would be given a reward.

InstaForex offers this kind of transaction in a more comfortable and easier way. It is called Binary Intraday Options service.

Binary Intraday Options service is an option service which is only offered by InstaForex. Intraday offers short and long positions on 11 instruments with a minimum option value of 1 USD and a maximum value of 1000 USD. If in case the trader fulfills terms and conditions of the contract, the opening price is lower or higher than the closing price, he/she will gain profit.

Intraday Option to Increase

This kind of option is conducted by predicting that an increase will happen on the currency rate between two time periods within a day. For example, you predicted that an increases will take place between 1200 and 1700 and you waged for a 100 bucks. If the closing rate is higher than the opening rate, value increases, then you will gain a profit

Intraday Option to Decrease

This kind of option is conducted by predicting that a decrease will occur on the currency rate between two time periods within a day. For example, you predicted that there will be a decrease between 1400 and 1600 and you waged for a 500 bucks. If the closing rate is lower than the opening rate, value decreases, then you will gain a profit

Profit

How to calculate profit? Simple. Just multiply the amount that you waged in to the price-to-earnings ratio, which is 1.8, then subtract it to you wager.

Profit = Amount * 1.8

Profit = 100 USD * 1.8 – 100

Profit = 180 – 100

Net profit = 80 USD

Forexpress | The One Million Mark

“InstaForex Company is happy to announce that the number of company's clients reached a landmark figure! Now more than 1,000,000 clients prefer InstaForex to other companies!”

The continuously growing InstaForex community has now reached a new height, imprinting their place on history, and soaring to a new level. As of today, InstaForex has now an outstanding one million customers who putted their trust on to the hands of the best broker in Asia.

As relayed by the company, this new mileage of success wouldn't be achieved without the participation of its dear partners and the trust given by its dedicated clients. In the same statement, they wanted to extend and express their gratitude by continuing its effort to hone the comfortable and fruitful client-company relationship. “We do everything to make your cooperation with InstaForex comfortable and fruitful.”

The trust and confidence of clients, caressed throughout the years, are regarded by the company with great importance. It was and always will be a treasure of the company which it will carry as it travels to a much greater height in the future.

Inside Trade | Back to Basics – Demand and Supply

The extensive involvement of economics in the Fundamental analysis makes it a very essential topic for one's understanding of Forex. Moreover, its concepts are exemplary vital for forecasting the price of a currency. But before jumping in to the macroeconomic indicators of Fundamental analysis like GDP and inflation rate, better embrace the more basic concepts first – Supply and Demand.

Supply and Demand are basic concepts of microeconomics taught in college. But what we were taking for granted back then, especially if you're not business major, may very well be needed if you want to engage into trading.

Supply

Is a measurement of the quantity of a particular item available on the market within a particular time. It mainly depicts the availability of a good in a market. The larger the supply of a particular good is, the lower its demand thus lowering its value. Meanwhile, the lower the supply of a particular good is, the higher will its demand be thus increasing its value.

Demand

It is a measurement of how much quantity of a particular item that people are willing and able to buy. The scarcity of a particular item leads to an increase of value mainly because many are willing to buy but only few are available. On the other hand, the fewer the people willing to buy that particular good the higher will be the supply available on the market which would lead to a decline in its value.

Let us make an example. Imagine we are on a wet market and you want to cook a special dish for your love ones and its main ingredient would be prawns. Due to a storm, the supply of prawns are quite limited. Since the supply is limited and not everyone can buy it, some would be willing to buy it in a higher price than the usual just to acquire it. It will then make a chain reaction which will lift its standard price. Meanwhile, due to a high demand of prawns the fishermen were encouraged to look for prawns to gain a huge profit. But since most fishermen has the same idea, the supply of prawns continuously increased and resulted to a surplus. It then resulted to the decline of the price.

How will we relate this concept to Forex trading?

Let us substitute the prawns, given in the previous example, with a currency. Imagine you are an investor and you're planning to establish a business on a very promising country. Since there are many investors who have plans similar to yours, the demand for that currency increases leading to a limitation in its supply. As previously stated, the preconceived effect will be an increase in the currency's value, thus providing a significant pull in the price's tug-of-war.

Since this scenario, though essential to traders, is quite difficult to know. Certain signals and tools have been derived to assist traders in determining this factors. The support levels determines the demand of a particular currency while the resistance levels denotes the availability of supply. Furthermore, Oscillators signals if the pair is already overbought or oversold which means that there is either a scarcity or surplus of supply.

Inside Trade | The Cons of News Trading

Almost every beginner trader regards the news, especially those big ones, to be a great opportunity to profit. Yes, we cannot deny the sudden movement of a currency whenever a big news has been released. But have you ever considered its effect in case it didn't turn out the way you wanted it to?

Let's give a comparison. For example, you're strolling around under the scorching sun and enjoying the scenery of beach. While you were walking, you had observed that there were some individuals who are still learning how to surf and had just dipped in to test the waters. What would happen if those novice surfers encountered a really huge wave? The main tendency for those surfers to ride the huge wave successfully would be very slim, right?

It's almost the same with the novice traders. The news is like the huge wave. It's a great opportunity to surf but inexperienced surfers, who still doesn't have the capacity to handle the huge wave, might be tolled dearly. Big news requires a deal of knowledge in economics and latest in order to be ridden successfully.

The interpretation of its effect on the value of a currency may differ depending on the knowledge and experience of the trader. Often, newbies only look to its immediate effect and only focuses on a particular currency. They usually fail to perceive its chain reaction and ended up in a jumble.

What advice should I give to the newbies? Be the observer first. It wouldn't hurt if you'll read and observe first. Learn how things would go and never jump in without the necessary knowledge.

Don't risk losing your capital even though you may be sure the effect of an incoming news. Try to forecast its effect but restrain yourself from trading. Observe if it would turn out the way that you had foreseen it and do this procedures a couple or more of times to prove that it wasn't just sheer luck. In case your predictions were correct, you may now proceed to devising your game plan and hope for the best. Good luck.

Inside Trade | Fibo Exapansion

After discussing how Fibonacci retracements helps in determining the support and resistance level, we will now tackle our ideal level wherein we could at last hoard our much awaited profit.

Fibonacci expansion's main job is to specify up to what value would the movement would last. How do we do it? It's actually simple but you must first know the concept of Fibonacci retracement. If you could remember, the main concept of fibonacci retracement is that before a trend move in its main direction, retracements could be formed in between. In simpler terms, support and resistance are always present in trends.

Fibonacci expansion may also be used to predict areas of support and resistance. But it goes beyond the 100% that Fibonacci retracement offers. It is an extension of the retracement which may give the trader an idea on where would it be best to take your profit.

How to apply it?

First and foremost, analyze the latest movement of the market and seek for signs of retracements. If in case the current movement doesn't display a retracement or it is still not yet complete, wait first for a complete retracement to materialize. After that, you can now apply the expansion by mimicking the recently completed retracement.

The FE levels 61.8, 100.00 , and 161.8 will then appear and will serves as your guide for your TPs.