|
On more days than not, the market is being held
hostage by crude oil prices. These days you have to look at oil as a
leading indicator, as every gyration affects stocks. If you go back
six months, the weekly release of the Energy Information
Administration's crude oil inventory report was no big deal. Now,
however, it's a potential market mover. This is a normal (and quite
frequent) occurrence in the markets, as cycles and perceptions are in
a constant state of flux. For this reason, traders must stay abreast
of these dynamic trends in perception. If they don't, they will
encounter bigger challenges than are already present in the daily
routine of a day trader.
The continuing meltdown of the financial sector was further
exacerbated on Tuesday. Goldman Sachs (one of the most respected firms
on the street) captured the spotlight, and essentially was the
catalyst for the day. First, they were ascribed with sending the
market higher in early trading by reporting better-than-expected
earnings (this rally overshadowed bad inflation numbers). Then, they
followed that by being credited with sending the market lower when
their bank analyst downgraded, as well as lowered his forecast, for a
whole host of bank stocks. Incidentally, for those of you looking for
a bottom in these stocks, the bottom will be found when everyone stops
looking for it.
I've been alluding to these problems for the last two months now, and
despite these negatives, I've been generally positive on the market
since the middle of March. Why is this? Well, the primary reason is
because the market has been trending higher; hence being long has been
the path of least resistance. The only way to have maintained a long
position - amid all the seemingly bad economic data - is by looking at
the market through an OBJECTIVE eye. In other words, only trade on
what the market is telling you, not what you think it SHOULD do.
Objectivity also prevents traders from overstaying in profitable
trades. If the market is signaling the move's over, then it's time to
take profits. An aphorism I like to use that speaks to this issue is
"now that you own it, it owns you". Whenever I get into a slump, I
always ask myself if am I losing my objectivity. If the answer is yes,
I have to work to regain it since my trading survival depends on it.
This goal of these e-books is to introduce beginning traders to all
the
essential aspects of foreign exchange in a practical manner and to be
a source of
best answers on the typical questions as why are currencies being
traded, who are
the traders, what currencies do they trade, what makes rates move,
what
instruments are used for the trade, how a currency behavior can be
forecasted and
where the pertinent information may be obtained from. Mastering the
content of
an appropriate section the user will be able to make his/her own
decisions, test
them, and ultimately use recommended tools and approaches for his/her
own
benefit. Forex System Click Here!
You see, many traders rely mostly on technical indicators to trade...
and maybe that's how you trade too...
But technical indicators only tell you what's roughly happening in the
market : For example -- whether the market is overbought or oversold,
or whether the market is on a general uptrend or downtrend...
These technical indicators can be helpful... but the problem is that
they can't pinpoint exactly when to enter a trade. They're also
terribly poor at telling you when to exit your trades...how many times
have you seen an 'in-the-money' trade suddenly turn against you
without any warning at all?
The reason why technical indicators often fail to help traders make
accurate trading decisions is because they all lag behind market
prices.
The only true indicator of how the market is moving 'right now' is
through candlestick studies - it's the most up-to-date information
you'll ever get on the Forex market.
 Forex Candle Charting! |
