Learning To Use Moving Averages & Bollinger Bands

By Ahmad Hassam

Moving averages are a very popular tool among the traders because they are a lagging indicator of the price action. Short and long term trends are easier to identify using moving averages.

Most of the charting software freely provided by the broker can calculate the moving averages on the users specifications. MAs can be formatted to different style of trading and time frames. For example, in case you want to use a 120 time frame moving average, the prices of the last 120 times frames is added together and divided by 120.

A moving average can be calculated based on the opening, high, low or closing price within a time frame. Since the closing price is the most important price, most traders prefer to use the closing price. There are three types of moving averages. First one is the Simple Moving Average. Second is Weighted Moving Average and the third is the exponential moving average.

The simple moving average as the name suggests is simply calculated by dividing the price in each time frame by the number of time frames. A weighted moving average gives more weight to the current prices as compared to the prices in the last few time frames. In an exponentially smoothed moving average, the chart is calculated gradually with less emphasis on the prices in the latter time frames. Exponential moving averages are smoother as compared to the simple.

What are Bollinger Bands? Bollinger bands are plotted at a standard deviation above and below a moving average. The base of a band is moving average and the bands width is determined by volatility. Since standard deviation is a measure of volatility, the bands are self adjusting. Widening during volatile markets and contracting during calmer periods. The bands bracket almost 90% of the market action.

They are curves drawn in and around the price structure that provide relative definitions of high and low. Knowing when the prices are high and low, the trader can make rational investment decisions by comparing price action with the action of indicators.

Bollinger bands can be applied to currency trading, futures, indices, mutual funds and most other trading. Usually sharp price action tends to occur as the bands tighten and as volatility lessens. When the price moves outside the bands, a continuation of current trend is implied.

Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for the reversal of the trend. A move that originates at one band tends to go all the way to the other band.

When the bands are flat and narrow, this indicates that price volatility is lower as compared to previous time periods. The 10% price action that takes place outside the bands is most likely going to approximate areas where prices will return to within the bands.

When the bands begin to flare and widen, this indicates increased volatility and start of a new strong trend. Wide bands are usually taken as an indication of a very strong move. - 23212

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading and swing trading stocks and currencies. Trade Dow Futures. Learn Forex Trading.

Forex Ambush 2.0 - Trading by Robot: 3 months Profitable Trading Now

By Forex Phil

From the get go, I am going to advise you buy this expert advisor called Forex Ambush 2.0. I have tested nearly 100 similar products, and as an experienced trader I am harsh and tough in my opinions. I simply don't care what the vendors think about me and I never back away from my beliefs. Simply put, Forex Ambush 2.0 gets my vote for sure as an excellent tool. The good news starts with their website - they actually have a real website! Not just some stand alone sales page: they have a real website.

I think you know what I mean. Say you want to buy a software program that can do "whatever", and it costs about $150-$200. I EXPECT to visit their website and to interrogate that website for every detail I want to explore about the software. And I expect to be able to send them my questions and to make pre-sales contact with the vendor.

Getting into the heart of Forex Ambush 2.0, it uses an artificial intelligence engine, custom designed to process Forex data. It analyzes live and historical currency price information in order to predict the near term future of price movements. Think of it in terms of it monitoring multiple forex indicators to form a merged view of likely trends. Once all these indicators line up each confirming what the other indicators are implying, Forex Ambush 2.0 then alerts you to buy/sell that currency pair.

Think about it. Metatrader has many forex indicators. Each indicator plots an aspect or dimension of the market that has just occurred. The forex indicators may be measuring volumes of trade, or comparing pricing pressures in some way.

Many people don't trade with expert advisors. Rather, they do all their trading by relying on the indicators built into metatrader already. Different traders have their own systems of which indicators have helped them in the past. Each indicator gives a graphical measure of an aspect of the markets, and using several indicators give a more comprehensive picture.

But what happens when say 5 or 7 different indicators are tracked, all measuring and tracking a different perspective of the currency pair. And what if these indicators all line up and say the same thing - that a market is over-sold and a reversal or correction is imminent. THAT is what I expect from my robots!

Big business has always hated smaller players in their domain and has always sought to block entry to the most profitable markets. However, there is nothing they can now do to stop the hundreds of thousands of small traders becoming a very big part of the trading liquidity of forex markets. Metatrader and tools such as Forex Ambush 2.0 now put the power in our hands, whereas before it was only the province of big banks and trading houses.

Forex Ambush 2.0's ambition is to take the technology to the wider market and into the consumer's hands. Forex Ambush 2.0 claim it has been described as working so well, it feels like it uses insider information to pick trades. From my own experience, this expert advisor definitely is reporting to me the right times to buy/sell.

I have been very impressed by MegaDroid and Fap Turbo (with Fap Winner), but I must admit that even though they both have very high profitable trade percentages, Forex Ambush 2.0 deserves a very strong thumbs up. I can't speak for the fully automatic version, as I am not paying the $97 a month extra for it. But I am very impressed with the manual, trading alert version.

Perhaps Forex Ambush is just that bit more conservative, I really don't know. I have used it for 3 months now, and I have not lost one single cent yet. Like most expert advisors, don't expect a flurry of fast and furious action all day long. Forex robots of this caliber often go several days with no trades at all. As I said, I don't have to be 100% right all the time - but I hate to be wrong ever. I'd rather miss a trade than make a wrong trade. - 23212

About the Author:

ForexPhil is a professional forex trader with many years trading experience. Visit his website to get free reviews and updates on forex trading systems, software, forex robots and expert advisors and read about his one to one live forex training course

How Can I Make Money With Penny Stocks? It's Not That Hard!

By Grant Dougan

One of the most exciting investments are penny stocks. There's a lot of people that don't consider these types of shares because they assume they are full of risk. In reality, there's tremendous opportunity to make enormous cash with these shares once you know what you need to look for.

Any share under $2 is what I view as a penny share. When I choose a stock to purchase, I search for a company that is up and coming. There are many businesses whose stock is priced less than $2 because they have had troubles. Instead of investing in these companies, I look for newer companies that are growing. By zoning in on these organizations I can set myself for large profits in the future when they start earning profits..

So how can you pick the businesses to purchase? This, of course, is the most important question!

Examining the industry that the business is in is an important first stage. Think about if a new business into the industry can succeed based on the competition that exists. This involves a top-down view of the industry to ensure that the organization is involved in an area that allows them the potential to be successful.

And of course you want to analyze the business itself. I always like to see a business that differentiates themselves from the competition in some manner. Make an effort to locate companies that either offer a unique product or compete on some other factor such as price. It's definitely a wise choice to look for a company that provides something original and sticks out from the other competitors in some manner.

You should also take a look at the financial statements of the company, but don't worry if you notice that the business has negative income. Most growing companies don't generate positive earnings in the years at the start. Just make sure that there is money available to the company. Whether they have entree to loans or credit or cash sitting around, the organization need to have cash so the business can invest money in their business and develop in the future.

As a final note, it's always a good idea to be able to locate updates on the organization. By having the ability to read periodic updates from the organization, either on a website or some type of newsletter, you have the ability to understand exactly what is happening with the organization.

These shares can provide you with tremendous returns if the business starts to become profitable. There is incredible money to be made when you understand what to look for. - 23212

About the Author:

If you want to know how to trade forex, you can find lots of information on the internet. Click Here to get a free trial of the best forex trading programs which make people money right away in the forex market.

Candlestick Patterns Explained (Part I)

By Ahmad Hassam

Candlestick patterns can reveal a lot about the underlying market sentiments. Using one of these candlestick patterns without knowing about the previous trends wouldnt be very useful. Based only on the market activity of the previous few days, most candlestick patterns are valid. For instance, some of the candlestick patterns indicate a change in trend.

When you spot and identify a particular candlestick pattern you should take it as a signal that something is going to happen to the market in the near future. What you should do based on that candlestick pattern depends on the context. Usually the context in which you find the candlestick pattern tells you a great deal about them. Lets consider simple candlestick patterns first.

The Bullish White Marubozu: The longest white candle is the most bullish of the candlestick patterns. It represents the day when bulls control the market and push prices higher from the opening to the closing. With the long white candle closing near the high, chances are the bulls will be back for more buying the following day.

This means that buying has been taking place all the day. With the long white candle, the low price on the candlestick is a good support level. One common feature of the long white candle is an open near the low of the day and a close near the high of the day.

The Bullish Dragonfly Doji: For a Doji to be created, a day must begin and end with the same price. A Doji is formed when the opening and the closing prices are the same. So essentially there is no stick in the candlestick.

Doji patterns are usually associated with a market turn. A Doji may not look very exciting to you. But dont be fooled. Doji depicts a day where the battle between the bulls and the bears has been fairly equal. A market turn is highly likely the next trading day.

A Dragonfly Doji is unique in that three of the four candlestick patterns- the open, high and the close are all equal. The price action depicted by the Dragonfly Doji bodes very well for those hoping that prices go higher. The low of the Dragonfly Doji day is considered a near term support level. You can make smart trades based on the Dragonfly Dojis.

The Bearish Long Black Candle: A long black candle means that sellers take over at the beginning of the day. Continuous selling throughout the day pushes prices lower and lower until the end of the day. The long black candle is as bearish as it gets. The long black candle is the direct counterpart of the long white candle discussed earlier.

These sellers are selling just to get out of their trades. Price sensitivity is very low for these sellers. Seeing this type of enthusiastic selling must give you the confidence that the bears will be in control for a few more days after the appearance of the long black candle. You can capitalize on this fact. The long black candlestick pattern is a good bearish signal. - 23212

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Know The Candlestick Patterns. Learn Forex Trading!

Home Business Trading Forex: Forex Trading Robots Reviewed

By Phil Jarvie

I have 2 great passions: working from home and trading forex. Twenty years ago it was impossible to trade forex as it was exclusively the domain of large banks and brokers. But now and for the past few years there have been many changes to the way forex markets operate and so now small home traders can live and breathe the forex trading markets making very tidy profits along the way without leaving home. Software and the Internet allow us individual traders to place buy and sell orders with our broker or brokers. Some of this software is manually operated; some of it is fully automated forex trading software.

Forex trading involves leverage. Leverage is where for every $1 you commit, you are controlling perhaps $100 or $200 etc. The leverage on your account can be chosen by you and also the broker you chose to work with. What the software does is it makes your buying and selling decisions for you - so you don't need to be the expert. Automatic and automated forex software trading systems provide you with expertise of a trader without you being an expert. Now when it comes to these forex robot and software programs you have a lot of different choices ahead of you. Just to name a few:

Of all the forex software robots, there is one that has been around the longest and has clearly far more users than any other - it is called Fap Turbo. Well, there is the original called just Fap (still available and a bit cheaper) and now there is its big brother called Fap Turbo. Both of these robots use Fap Winner for after sales service, advice and support. So think of Fap Winner as the user group on how to get the best out of their expert advisor , and to buy Fap or Fap Turbo without Fap Winner would be a silly thing to do even for experienced traders.

Forex Maestro has been around in the market now for about 4 months. there has been much argument about who developed it and if any rules were broken by the vendor in terms of did he have permission to sell it, is it an exact copy of another forex robot, etc. Some forex forums canned Maestro on the grounds that it was released without consent, but interestingly the alleged programmer has never come forward nor ever complained his work was copied. Certainly Clickbank have been allowing it to sell on their network without drama. It is a strong performer, and you may want to consider it for your toolkit of forex software programs.

As you become more experienced with forex trading software and your own needs as a forex trader you will come to release that your needs will be different to other people. Some traders want to be more aggressive and to take bigger risks for bigger gains, others want to stay within the pack and only use the large names like Fap Turbo. For the bigger risk taker I recommend you have a look at Forex Funnel. It does require larger trading accounts of at least $5,000 but also can return some very significant returns too.

Finding the right review website is paramount to you making the right decisions about forex robots. There are literally hundreds of expert advisor forex software programs available. Not all of the work well. Not all of them are suited to new forex traders. Some are more dishonest than others in their claims. All seem to have hyped up sales pages filled with urgency trying to push you into a fast decision. The 3 forex robots discussed here are all good - in the right hands and with the right settings and trading account size. Find a good review site and you will save yourself a lot of time and hard earned money.

I know many people do want to just jump in and buy a robot and make money. It is important that you slow down a little and be realistic about it. As a new player to forex trading, it would be the fast way to lose money if you jump in too fast. Learn a little first to save yourself much pain later. You will reach your goal much faster. Find the review site that you can relate to, that you can trust. This is the most important first step to take. then plan which robots you will buy, and I do recommend that you buy 3 of them. And research which forex training course you will buy - I can recommend two of them as excellent value. - 23212

About the Author:

F0rexPhil has been Forex trading professionally and testing automatic forex trading systems and expert advisors for many years. His forex robots review website is known to be one of the best there is for honest opinion on how good they are.