FOREX and Technical Analysis

[jc08]

Hey NT,

Recently I have been researching and studying the FOREX markets and learning about technical analysis as well. Long story short, I feel that FOREX is more"pure" and liquid than the equity market and that technical analysis can be more heavily relied upon. To the knowledgeable NT'ers who have ordon't have experience, what are your thoughts about point and figure charting vs. candlestick charting vs. western charting. Also what are some good booksand/or websites about technical analysis that one should read to really learn the material. Finally, what trading platforms do you guys use? I think ECN is theway to go although market makers offer more tools and programs from what I researched/heard. I have been using hotspotfx.com demo platform and so far it ispretty good. I look forward to everyones responses. Shout out to Lazy B, Wawawewa, Rexglorium, Ricardo Malta, and many others that have been droppingeconomic/financial information and analysis, keep it up!

 

[jc08]

Bump

 

[ortega03]

Yo fam, its friday, finals week is over. *Cue Grandpa Simpsons walking in and out*

 

[jc08]

^I'm just interested in the subject that is all.

 

[dey know yayo]

candlestick always works best.

google "chart patterns" that will be more than enough technical analysis info to play with. learn underlying economic fundamentals... asset pricecorrections = deleveragin = USD strength. after stock market has one more down leg, look for the USD to start selling off big.

 

[we get money]

More liquid than the equity market? How do you figure?

In my opinion currency speculation is a fool's errand. It's inherently unpredictable, the most sophisticated models have as much of a chance of successas an amateur trader playing a hunch. Right now there are some stocks trading way below their value, go find one of those or buy an ETF if you really want toinvest your money.

 

[deenyce]

 

[jc08]

Hey thanks Dey Know Yayo. Are there any books you suggest that can provide further insight in using the patterns for analysis? Are the books on candlestickcharting by Steve Nison specifically useful enough to spend $60 on? Also what is your opinion on the point and figure method and the western charting method. Ihave heard that the western charting method is better than the candlestick method because it forces a trader to look deeper into the meaning of the signalsbecause it is not as clear. Finally what indicators do you primarily use or think that is the most important? Sorry for all the questions but this subject isreally piquing my interest because I want to learn as much as I can. Thanks again.

 

[nicefro]

Currency trading is too volatile for my liking.

 

[dey know yayo]

currencies are easily more liquid than equity markets without a doubt. forex is the most liquid market in the world.

currency speculation is not a fool's game if you know what you are doing. i can attest to that through personal experience.

i wouldn't look into candlestick analysis really, i just like candlestick charts because they give all the info you need rifht there. only indicators i useare 50 and 200 day moving averages, popular institutional buy/sell points. other than that, look to underlying economic fundamentals and chart patterns.

made a lot of money with the recent gbp/chf... gbp is goign to eventually be devalued in my opinion and my favorite spread to play it against is the swissfranc... britains debt economy is going to get defaulted on... gbp/chf could get down all the way to below 1.000.

 

[dey know yayo]

and we get money, please tell me some of these "undervalued" stocks because i sure don't see any. we are going to go a lot lower than currentlevels in the market in the next couple years, and rallies and bounces in between will be just that--- countertrend bounces.

 

[ltms206]

Originally Posted by WE GET MONEY

More liquid than the equity market? How do you figure?

In my opinion currency speculation is a fool's errand. It's inherently unpredictable, the most sophisticated models have as much of a chance of success as an amateur trader playing a hunch. Right now there are some stocks trading way below their value, go find one of those or buy an ETF if you really want to invest your money.

He is correct the Forex market is the most liquid, by far. One month of currency trading is worth more than a year on the NYSE. The markets are opened 5 days aweek, through the whole day. It's easy to learn, but make sure you understand what you're getting yourself into. I recommend a practice account from anonline brokerage, fxcm.com froex.com ... Also, you should save up to 25K - 50K, that's a good amount to open an account with. At the moment, I am tradingwith an executive account (Not my personal money, losses, or gains), I made 250K this week

I am saving up at the moment to open my personal account andtrade from home, lets just say I need well over six figures to start.
Edit: I forget to mention, Forex is influenced as much by fundamental analysis as it is technical. The Fed dropped the interest rates near 0% this week, do themath

 

[r33p04s]

very difficult market to wrangle...I'm involved (out right now) in it and it is a royal $+$%%...I use very few analysis' because they all are only truefor that instant and then changes the next because of the unpredictability and volatility of the market...back test, find patterns and FOLLOW THE NEWS anddevelop your own system...

 

[jc08]

There are also rumours and articles floating around that the Chinese yuan might be devalued to make Chinese exports more competitive. What do you make of thissituation? Also why isn't the Chinese Yuan or the Indian Rupee not a major trading currency? Is it because it so tightly controlled?

 

[dey know yayo]

CNY is way too undervalued, if anything exchange rates will have to be raised.

GBP EUR and USD all end up default in my opinion, within next 5-6 years. GBP is worst off. Play them against CHF or JPY.

 

[jc08]

Is currency trading your primary source of income or is it a side thing which might be difficult considering the hours of the US market? Also what is youracademic background and/or do you work for a financial institution?

 

[dey know yayo]

the stock market is how i make most of my money. i trade equities on the long and short side, etf's, indices, and all of their options. i trade currenciesas well, but usually just wait for big moves to develop (such as recent gbp/chf sell off from beautiful descending triangle).

i'm a sophomore at the univ of michigan, no finacial background. google and wikipedia all you need.

 

[jc08]

Do you mind me asking what your major is? Michigan's got a great business school

 

[dey know yayo]

econ/math double major.

 

[ltms206]

Originally Posted by JC08

Is currency trading your primary source of income or is it a side thing which might be difficult considering the hours of the US market? Also what is your academic background and/or do you work for a financial institution?

Not sure if you're asking me, but i'll answer just in case. I am currently in college, and I was at Lehman Bros. with their market makers on the NYSEfloor. I wasn't getting a salary, however, I was there because I have a family member who works there, so i decided to stick round just to learn. Now thatLehman is gone, I was at Barclays for a while, that's when i learned about currency and the Foreign Exchange Market. I can't say much more about that,but lets just say I am 18 and controlling an account worth a lot more than me

At the moment, I am programming my own trading strategy (like a Black Box), it's a form of arbitrage, if you want to know anything else feel free to PM me

 

[ltms206]

Originally Posted by Dey Know Yayo

the stock market is how i make most of my money. i trade equities on the long and short side, etf's, indices, and all of their options. i trade currencies as well, but usually just wait for big moves to develop (such as recent gbp/chf sell off from beautiful descending triangle).

i'm a sophomore at the univ of michigan, no finacial background. google and wikipedia all you need.

Which ETFs do you trade? Personally the Qs are the most liquid, with a great spread. Do you scalp, or do you just trade?

 

[dey know yayo]

SPY QQQQ SKF SRS FAZ BGZ USO are the regulars... I trade big short term moves based on long term patterns and analysis, but I'm a tradeaholic so I'malways making little trades here and there.

QQQQ break of its symmetrical triangle on 5 year made me a ton of money as market crashed, that's the type of play I trade.

 

[ltms206]

It must be expensive for you, which brokerage do you use and how much is the transaction fee?

 

[dey know yayo]

interactive brokers, commissions and fee schedules really arent bad at all actually

 

[reigndrop]

Originally Posted by JC08

Hey NT,

Recently I have been researching and studying the FOREX markets and learning about technical analysis as well. Long story short, I feel that FOREX is more "pure" and liquid than the equity market and that technical analysis can be more heavily relied upon. To the knowledgeable NT'ers who have or don't have experience, what are your thoughts about point and figure charting vs. candlestick charting vs. western charting. Also what are some good books and/or websites about technical analysis that one should read to really learn the material. Finally, what trading platforms do you guys use? I think ECN is the way to go although market makers offer more tools and programs from what I researched/heard. I have been using hotspotfx.com demo platform and so far it is pretty good. I look forward to everyones responses. Shout out to Lazy B, Wawawewa, Rexglorium, Ricardo Malta, and many others that have been dropping economic/financial information and analysis, keep it up!

Read Technical Analysis of the Finanical Markets by John Murphy. It's a bit pricey at$50 but you'll never look back after reading it. I'm just having a hard time finding a good charting program. I thought about Metastock but $2,000 a year doesn't seem worth it to me /