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Trading Tips: Part Six |
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1. Patience is a virtue when it comes to trading. A trader needs patience in order to wait for the right trades and to stay with those trades that are working.
2. If you are superstitious, don't trade if something bothers you.
3. Technical analysis requires the study of market action through the use of charts, for the purpose of forecasting future price trends.
4. Charting the price action of a market identifies trends in the early stages of development for the sole purpose of trading in the direction of those trends.
5. Fundamentalist investors study the cause of market movement, while the technician investors study the effect.
6. Falling commodity prices typically signal that the economy is slowing along with inflation.
7. Rising commodity prices generally suggest a stronger economy and rising inflationary pressure.
8. The longer the period of time that priced trade in a support or resistance area, the more significant that area becomes.
9. When a market is rising, go long.
10. When the market is falling, go short.
11. When the market is moving sideways, do nothing.
12. When a breakout occurs from an existing price channel, prices typically travel a distance equal to the width of the channel. All the trader has to do is measure the width of the channel and then project that amount from the point at which either trend line is broken.
13. The larger (the height and width) the Price Pattern, the greater the potential. The height measures the volatility of the pattern, while the width is the amount of time required to build and complete the pattern. The wider the price swings within the pattern and the longer it takes to build, the more important the pattern becomes and the greater the potential for the ensuing price move.
14. The first indication of an impending trend reversal is the breaking of an important trend line. Remember: The violation of a major trend line does not necessarily signal a trend reversal, but possibly the beginning of a sideways price pattern, which later would be identified as either the reversal or consolidation type. Sometimes the breaking of the major trend line coincides with the completion of the price pattern.
15. A triangle requires, at minimum, four reversal points. Remember: it always takes two points to draw a trend line.
16. The moving average never anticipates; it only reacts. It is never a leader, always a follower.
17. Shorter term averages are more sensitive to the price action, while longer range averages are less sensitive.
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| Symbol |
Rate |
| GBP:CHF |
1.747703 |
| GBP:JPY |
155.484239 |
| GBP:USD |
1.638403 |
| NZD:USD |
0.627050 |
| EUR:CAD |
1.545998 |
| EUR:CHF |
1.516857 |
| EUR:GBP |
0.867915 |
| EUR:JPY |
134.947096 |
| EUR:USD |
1.421994 |
| AUD:JPY |
76.394373 |
| AUD:USD |
0.805000 |
| USD:CAD |
1.087204 |
| USD:CHF |
1.066711 |
| USD:JPY |
94.899879 |
| USD:SEK |
7.613010 |
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Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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© ForexCenter.com, 2005, All Rights Reserved
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