Introducing Japanese Candlesticks

Candlestick charts were first developed in the 18th Century by successful Japanese rice trader Munehisa Homma. It took a long while for candlestick charts to gain popularity in the Western world. It wasn’t until Steve Nison’s 1991 book Japanese Candlestick Charting Techniques that the charting style gained any real traction with western traders. Throughout the 90’s candlestick charting grew in popularity and is now used by the majority of currency traders.Forex Candlesti...
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The Trade Weighted US Dollar Index

What Is the Trade Weighted US Dollar Index?The Trade Weighted US Dollar Index, like the standard US Dollar Index measures the value of the US Dollar relative to a basket of world currencies. The Trade Weighted Index was introduced by the Federal Reserve back in 1998 for two main reasons. Firstly in anticipation of the Euro, which lead to the elimination of several currencies used in calculating the standard US Dollar Index. Secondly, it was felt that the standard US Dollar Index w...
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Interest Rates and Forex

forex_generic2Interest rates are one of the key fundamentals that many Forex traders pay close attention to. The Foreign exchange markets are particularly influenced by any change interest rates made by the world’s largest central banks. Any change made by the central banks when setting interest rates is an indirect response to other econo...
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Introducing Fibonacci Retracements

Who was Fibonacci? Leonardo Pisano Bigollo better known as Leonardo Fibonacci was an Italian mathematician. Fibonacci is often considered to have been the most talented mathematician of the middle ages and is best known for a number sequence named after him.  The number sequence is begins with 0 followed by 1 and then continues by adding 0+1 to derive; 1 the third number in the sequence.   The sequence then continues by adding the second and third number together getting 2. The sequen...
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What Is Fundamental Analysis?

Fundamental analysis involves analyzing certain types of fundamental data in order to get a better understanding of the factors that affect supply and demand for a particular asset class. Just like other assets, Forex prices are largely driven by the global supply and demand for a particular currency. For instance if there is little demand and numerous sellers, then prices are very likely to fall. By looking at economic, social and political data those using fundamental analysis hope to get an i...
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What is Technical Analysis?

Technical analysis is the idea that traders can look at historical price movements and us this data to work out current market conditions and potentially predict future price movements. Many proponents of technical analysis claim that all current market information is reflected in the current price and historical prices. If all market information is contained within current and historical price action, then traders would have all the information they need readily available to them.Technical ...
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Introducing the Average Directional Index (ADX)

The Average Directional Index (ADX), as well as the related Minus (-DI) and Positive (+DI) Directional Indicator are a set of directional movement indicators that are part of a trading system designed by Welles Wilder. The Average Directional Index was designed by Wilder with commodities and currencies in mind. But the indicator can be applied to a range of other financial instruments. The ADX measures trend strength, but not does not measure trend direction. The other two indicators mention...
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Introducing Parabolic SAR

The parabolic SAR, was first developed by Welles Wilder is price-and-time based trading system. Wilder originally called the system he developed the 'Parabolic Time/Price System'. The SAR in the name stands for 'Stop and Reserve', which is the indicator used in system. The indicator falls below price action when prices are rising and rises above price action when prices are falling. This is where the 'SAR' comes in, the indicator stops and reserves when price trends reserve and break through...
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Introducing the Commodity Channel Index (CCI)

The Commodity Channel Index, is a technical indicator which was developed by Donald Lambert and first featured in Commodities magazine during 1980. The Commodity Channel Index or CCI for short, is a very versatile indicator that can be used to both identify a new trend or warn a trader of extreme trading conditions. The CCI was originally developed in order to identify cyclical turns in commodities, but it was soon realized that the indicator could be applied to a far broader range of securi...
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Introducing Simple and Exponential Moving Averages

Moving averages are used to smooth price data in order to create a trend following technical indicator. Moving averages are not used to predict price movement, but are instead used to help confirm the current trend direction. Moving averages lag due to the fact the indicator is based on past prices. In despite of this lag moving averages are deemed useful as they both help smooth price action and filter  out market noise. Moving averages also play an important role in the construction of a n...
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