Handling a Liquidating Market

A liquidating market is defined as a market that is experiencing a pattern of broad selling in the face of declining prices. It can take place in all kinds of market and is not just limited to the financial markets. Nevertheless, the issue of liquidating market is important for an online trader as it will affect his trading strategy. Lately, it is even more critically important as the recent financial meltdown that happened in the sub-prime mortgage market in the U.S. has caused the liquidating market to dominate the scene longer than usual.

Thus, in the face of this kind of volatile market that you might be facing, you need to be on your toes and be aware of exactly what kind of markets that you are trading in and adjust your trading strategy accordingly. A market which is consolidating, Ranging or trending all requires different types of trading strategies to deal with them. Liquidating markets are especially difficult to deal with for day traders because the fluctuation of prices tends to move in ‘bursts’. One will see a sharp drop in prices when a large liquidating order comes into the market with limited follow through after that. Because a sharp drop in prices can trigger stops or break through an important technical level, these can and is likely to spark off another round of liquidation. When the above vicious cycle occurs, we often find false bottoms or tops.

Usually, the span of a liquidating market position is relatively short and stops will also get exhausted. The next phase of the market reaction after a liquidating run has flatten out is either to continue the trend as the next cycle or reverse the trend. On the other hand, the current market situation is far from ordinary. Since the beginning of 2008 and driven by a heighten level of risk aversion, the global financial market has been facing extreme volatility.

Just as when we thought the market is due for a correction and trend reversal, the liquidating market continues its vicious cycle. The unending waves of selling orders will put a strain for those traders who are used to trading in a typical market by looking for paltering bottoms or tops. The end result will cause everybody to be running for cover. Nevertheless, avoiding the temptation to go bottom fishing for profitable situations is not easy in a liquidating market. The illusion of the market bottoming out can really pull one into loss making spiral. This is where iron clad discipline in trading will pay off.

he herd like mentality that we all possess needs to be restrained. Financial experts have suggested the liquidating markets are driven by factors other than fundamental economic theories or technical analysis. Hence, relying on technical analysis for reliable forex signals can be extremely difficult for a liquidating market. Regardless, the best way to avoid getting sucked into a liquidating market is to have proper money management and discipline in controlling oneself from running after false bottoms or tops.

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3 Power Strategies in Forex Trading

3 Rules to Make serious earnings

If you want to catch the serious profit in forex dealing you need to trend watch forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior forex trend and lead you to long-term term currency dealing success.

Most beginner traders don't bother trying to trend following forex lengthier term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.

The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.

Breakouts

By far the best way of catching the serious moves is to use a forex dealing strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.

It's a fact that most leading moves start from new highs or lows.

While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.

Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.

The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.

Confirmation

Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.

These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI

Stops and Targets

Stop points are easy with breakouts - Simply behind the breakout point.

If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.

You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.

It's ok to give a serious back, as that's the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.

The above is a simple way to trend watch forex and catch the high odds moves that yield the serious profit. If you are learning forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.

Source : Forex Article Collection

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E-Currency [[ electronic currency ]]

Undoubtedly, a distinctive feature of electronic currency is its virtuality, as it cannot be touched, put in pocket or paid with in a store. Speaking about material component, it does not exist. However, we should not doubt of its materiality. You can buy anything in the Internet with it: apartment, car or home appliances. Electronic currency can also be converted into any currency you need. Virtual purses are usually funded through prepaid cards such as WebMoney, Yandex.Money or bank wire. You can withdraw money from electronic payments system by using ATM or bank withdrawal. Moreover, you can get a credit in electronic currency. All this is available in the global network Internet. As a rule, all operations with electronic currency take no longer than several minutes.
Electronic currency has many peculiarities which paper money does not have:
1. It cannot be faked.
2. With electronic purse on your computer and a special anti-spy protection, third parties will have no chance to hack it. Confidentiality is guaranteed. And you do not need to obtain any permission documents. You may open as many electronic purses as you want.
3. You are absolutely independent. Only you can determine the deposit amount.
4. You will be always aware of who and where you transfer money to and where it comes from.
5. Absolute safety of all operations. Using electronic money you are able to make a riskless transaction, i.e. pay for goods only after you receive them.
6. All transactions take a few seconds.
7. You can buy a lot of goods and services which are available for sale for electronic money only.
8. You can take out a loan using electronic money. Besides, you can both obtain and grant loans.
9. Opportunity of using numerous banks, multicurrency.
We can state that electronic currency is the same money, but expressed in digital format.
Due to dynamic development of the Internet and technologies, people take another view of payment opportunities. All aforesaid advantages of electronic currency prove its great use.
Electronic currency is a new phenomenon widening opportunities. The only problem you can face is a fear of something new.

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Automated Trading

Today the high popularity of Forex is mainly caused by the fact that you can trade having a computer and Internet access, you do not need to invest large sums in order to start trading on the market, and also trader can use the advisors for automated trading.
People, who have just started their work at Forex, very often do not have the required experience and knowledge in order to begin trading themselves. That is why about 70% of traders use the automated trading – advisors. The usage of the automatic trading system helps to avoid the influence of the human emotions, panic, excitement, etc. on the trade process. The advisors are developed on the basis of long experience of the successful traders and professional analysts. However, even the programs of automated trading can not guarantee 100% profit; nevertheless, due to them you start trading at Forex market, having minimum of knowledge and experience in this area.
What is the Automated Trading, as known as the trading with the help of expert advisors?
Advisors are the special programs, including different modules, which are used when the charts, indices, received from the broker to trader, are processed and analyzed.
The programs of the Automated Trading were developed and are used by traders in trading for a long time, and every year the number of such programs grows, a lot of them are updated and become more perfect in the work. The trading with modern expert advisors allows to receive profit as well as to get familiar with Forex market and acquire skills and knowledge, which are needed in order to trade successfully.
The major part of advisors, provided by different companies for the automated trading, as a rule, does not require special skills to start work with them. You just need to download them and install, that is all, you can start trading, which very often gives a result immediately.
Most often the automated trading systems are provided for free, with the detailed description of program’s functions, but sometimes this description does not correspond to its real possibilities. That is why despite all advantages of advisors, you should not rely on them completely. Traders, who have enough experience and know much about trading strategies, start trading independently, guessing the movements of exchange rates on short time intervals.

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