Tips on trading on line successfully

Online trading has become a trend today. You simply need to have a trading account and you will be able to operate in a stock market. The best thing is that you are not required to run to a stock exchange. Instead, you trade comfortably from home. Besides comfort, online trading provides a lot of other benefits. Selling and buying shares becomes absolutely easy and you are also able to receive directly deposited money from bonus and dividends to your account. Any kind of transaction statement or contract notes can be received online and you will not have to run around. Most importantly, Internet provides various kinds of tools to make investments, and any kind of online transaction becomes a lot easier.
Trading online is uncomplicated and interesting. However, you must learn trading and know the tricks to emerge as a winner. With a click of the mouse you can either become a winner or a loser. Hence, it is important to know when and where to click. In other words, be careful while trading online because one little mistake can cost you a lump sum. There are few things which you have to do in order to be a gainer. Moreover, you must also know things that you need to avoid while trading online.
It is wise enough to think and plan ahead of making any kind of transaction. Prices change in a jiffy in stock markets and you must not hurry with your decision. Transactions do not always take place in real time and moreover the speed of your internet connection may be slow. Take all these into note and examine stock while making decisions. The stock market is a volatile one thus making it even more important for you to keep track of the changes while placing order. Or else you may end up losing money.
Have a transparent relation with your broker and ask him to send you the details like contract notes and e-mail statements each time you make a transaction. Limit order is a method in which you can trade online. This is especially good if you do not have much time at hand to keep track of the swiftly changing stock prices. This will save you from loses. For new investors it is wise to set a stop loss level to be on the safe side. A prudent investor updates himself on the various commissions and fees charged by a broker including reports, mobile services and others. Your brokerage might be extremely efficient, but it is recommended that you keep track of money being debited or credited from your bank account and share transfer to and from your DMAT account. In this way, you can avoid any discrepancies.
Finally, always abide by the rules regarding the protection of personal information and passwords. Therefore, learn trading and follow these tips to trade safely.
Online trading has become a trend today. You simply need to have a trading account and you will be able to operate in a stock market. The best thing is that you are not required to run to a stock exchange. Instead, you trade comfortably from home. Besides comfort, online trading provides a lot of other benefits. Selling and buying shares becomes absolutely easy and you are also able to receive directly deposited money from bonus and dividends to your account. Any kind of transaction statement or contract notes can be received online and you will not have to run around. Most importantly, Internet provides various kinds of tools to make investments, and any kind of online transaction becomes a lot easier.
Trading online is uncomplicated and interesting. However, you must learn trading and know the tricks to emerge as a winner. With a click of the mouse you can either become a winner or a loser. Hence, it is important to know when and where to click. In other words, be careful while trading online because one little mistake can cost you a lump sum. There are few things which you have to do in order to be a gainer. Moreover, you must also know things that you need to avoid while trading online.
It is wise enough to think and plan ahead of making any kind of transaction. Prices change in a jiffy in stock markets and you must not hurry with your decision. Transactions do not always take place in real time and moreover the speed of your internet connection may be slow. Take all these into note and examine stock while making decisions. The stock market is a volatile one thus making it even more important for you to keep track of the changes while placing order. Or else you may end up losing money.
Have a transparent relation with your broker and ask him to send you the details like contract notes and e-mail statements each time you make a transaction. Limit order is a method in which you can trade online. This is especially good if you do not have much time at hand to keep track of the swiftly changing stock prices. This will save you from loses. For new investors it is wise to set a stop loss level to be on the safe side. A prudent investor updates himself on the various commissions and fees charged by a broker including reports, mobile services and others. Your brokerage might be extremely efficient, but it is recommended that you keep track of money being debited or credited from your bank account and share transfer to and from your DMAT account. In this way, you can avoid any discrepancies.
Finally, always abide by the rules regarding the protection of personal information and passwords. Therefore, learn trading and follow these tips to trade safely.

Parabolic Sar Indicator Explain

The parabolic SAR is a tool that is developed by the same person creating the RSI, Welles Wilder. It is a very simple indicator that is mainly used to indicate the end of a trend or the setting of stop loss by some traders.

The SAR behind the word Parabolic refers to Stop And Reversal which can help traders to identify entry and exit position of their trading position. This indicator makes use of dots as a visual tool to help traders clearly identify the direction of the price movement. When the trend is up, the dots will be under the candlesticks and when the trend reverses to down, the dots will flip side to be formed above the candlesticks.

How To use Parabolic SAR

Basically, the parabolic SAR is a simple to use tool that can help to give forex buy sell signals to traders. When the dots are formed below the candles, it is a BUY signals and when the dots are formed above the candles, it indicates a SELL signals.

However, it is best to use this tool together with the help of trend. To be able to trade successfully with parabolic SAR, you should first identify the long and short term trend of the market and then place your trade in the direction of the trend according to the signals given by the SAR.

In addition, the parabolic SAR should always be used with other forex indicators such as MACD, RSI, Stochastic or Bollinger Bands for better results.

Advantage of Parabolic SAR Indicator

- It is a very simple to use indicator as you just have to look at the position of the dot to understand what it is conveying to you.

- You do not have to make any calculation as it is all automatically calculated by the program of your trading platform.

Disadvantage of Parabolic SAR Indicator

- It creates too many signals within a period of time as the price moves up and down.

As a whole, the PSAR is a good tool to use if it is combined properly with other indicators.

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Kelvin is basically a full time forex trader. Before getting into the field of forex trading, he used to work as a process engineer in a multinational company. he was introduced to this field by one of his friend who had also quit from day job to be a full time trader today.

Forex Fibonacci Indicator Explained

As most of you know that the forex market basically moves in waves and there will be time where the market extends and there will also be time where the market retraces.

One of the best tools that you can use to time this retracement and extension is the forex Fibonacci levels.

So What Exactly Is Fibonacci?

It is a number sequences that is named after Leonardo of Pisa and the Fibonacci number sequences goes like this

0, 1, 1, 2, 3, 5, 8, 13 and so on. (Add the first 2 numbers to get the next)

However in trading, we are not interested in the sequences, we are actually interested in the Fibonacci ratio that the sequences create.

These are the ratio that we use as a forex trader.

Below are the retracement ratios

- 0.236
- 0.382
- 0.500
- 0.618
- 0.764

Below are the extension ratios

- 1.272
- 1.382
- 1.500
- 1.618

So How Can You Use These Ratios In Trading?

The Fibonacci ratio is in fact used as a level of support and resistance. These are areas where you will SELL or BUY depending on what you see and where you are.

Although there are quite a number of ratios given above, the important ones are the 0.382, 0.500, and 0.618 as they are usually area of strong support when the price retraces down and area of strong resistance when the price retraces up.

Here Is How You Should Plot Your Fibonacci Levels In An Uptrend

Step 1: Using the tool provided by your platform, Pick a high point and a low point

Step 2: Select the levels that you want to display. (We will select 0.382, 0.500, 0.618, 1.272, 1.382, 1.500 and 1.618)

If you are in a downtrend, all you have to do is to switch the step 1 points.

Uptrend Fibonacci

Downtrend Fibonacci

In the case where you are in an uptrend, you will find that the retracement of your price will usually land on the 0.382, 0.500 or the 0.618 level as these are area of strong support and the price will then extend up to continue in its uptrend movement.

If you ever find the price moving below the 0.382 level, there is a high chance that the trend is reversing.

In the case where you are in a downtrend, the market will retrace upward and it will also find its resistance at 0.382, 0.500 and the 0.618 levels. Similar to the uptrend, if the market retraces above the 0.382 level, there is a high chance that the market is reversing.

Fibonacci Support and Resistance

In my next blog post, I will show you how to trade using Fibonacci Strategy and how you can make use of the 1.272, 1.382 and the 1.618 levels. In the meantime, you should try to plot the Fibonacci levels on your chart to see the power of it.

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Kelvin is basically a full time forex trader. Before getting into the field of forex trading, he used to work as a process engineer in a multinational company. he was introduced to this field by one of his friend who had also quit from day job to be a full time trader today.

My Forex Breakout Indicator Revealed

In today's post, I will be sharing with you several indicators that I use to trade breakout and I call them the forex breakout indicator.

Forex breakout is one of the most profitable trading strategies that even new traders are able to do. It is very simple to execute and the movement is usually very large which also translate to more profit. In order to trade breakouts more effectively, you should make use of some indicators which are sometime known as breakout indicators.

Here are a few indicators that you should use when trading this strategy:

1) MACD indicator: This is one of my favourite indicators as it provides me with reliable entry and exit signal. When you are trading breakout, the most annoying thing that can happen is to see yourself entering a trade when you see the price breaking through a trend channel or trend line but later find it reversing and stopped you out. This occurrence is known as fake out and it can be minimise by using the forex macd indicator.

2) Oscillators: These are indicators that are able to show you whether the market is currently oversold or overbought. Examples of such oscillators are relative strength index and stochastic. By using the oscillator, you will be able to further enhance your entry as you are able to tell whether the price is going to continue in its range or breakout of the trend.

Let say that you are in a trend channel and the price is moving within the range. You will not know when it will break above or below the range or whether it is going to be repelled by the range resistance and support.

This is when the oscillator comes into use as it will be able to help you in this area. If you see the price moving toward a resistance level, you should take a look at the oscillator to see if it is overbought. If it is indeed overbought, there is a high chance that the price will be repelled by the resistance level. If you want to double confirm that it will be repelled, you can check your MACD to see if a bearish crossover is going to occur and this is exactly how I check for breakout and repulsion.

3) Bollinger Bands: This is an indicator that plots a upper band and a lower band that envelopes the price. Forex breakout usually occurs best when the market is in a period of consolidation. The longer the consolidation, the stronger is the breakout.

If the Bollinger bands are very narrow, you are likely to be in a period of consolidation and you should be looking for the price to make a sudden burst of movement.

Once you see the price breakout, you will definitely find the Bollinger bands to widen and this is the best time for you to enter a trade.

The above are 3 forex breakout indicators that I use to trade breakouts and I hope that this information is useful for your trading as well.

—

Kelvin is basically a full time forex trader. Before getting into the field of forex trading, he used to work as a process engineer in a multinational company. he was introduced to this field by one of his friend who had also quit from day job to be a full time trader today.

Regards

Puneet Bohra

Different type of moving average cross

Virtually every trader has dabbled with or experimented with some sort of moving average. What I want to introduce you to in this lesson is a different sort of moving average cross method, which I have found to be very good at identifying short term trend changes. As we know a moving average is normally plotted using the close of a bar e.g. if you were plotting a 3 period moving average, then you would add the last three closes and divide the total by three to get a simple moving average. This is where I want you to think a little differently. I have always been an advocate of taking traditional thinking and changing it around. What if you used the open instead of the close? What if you used the close of one period of a moving average and the open of another? First, most charting packages will allow you to use the open, high, low or close to plot a moving average. In the example below of the daily Dow Jones, I have used a 5 period exponential moving average of the close and a 6 period exponential moving average of the open. As you can see it catches the short term trend changes really nicely. In the next example of the 1 hour EUR/USD, you can see that the close/open combination worked really well. Of course you will go through periods of consolidation with any market and any moving average method you use will be whipsawed. To get around this you need some sort of filter or approach that helps you keep out of the low probability trades. You could use ADX, Stochastic or MACD to help filter the noise but I also like to add a time frame. In the next example of the 4 hour GBP/USD you can see that on the 24th September 04 at 4:00 there was a cross of the 5 period exponential moving average of the close above the 6 period exponential moving average of the open. This signal has remained in place until today as I write on the 27th September. Although there was a signal on the 4 hour, to help identify even better entry points you can drop down a few time frames to the 30 minute chart. As you can see from the 30 minute chart there have been quite a few crosses of the 5 period exponential moving of the close above or below the 6 period exponential moving average of the open. There are lots of ways to trade this but a neat little trick is to wait for the signal on a higher time frame and then drop down a few time frames and wait for a pullback. The first signal after the pullback on the lower time frame is normally a pretty good entry point e.g. If there were a cross up on the large time frame then drop down to a lower time frame and wait for the market to retrace and then give another buy signal (cross up). The opposite is true for short signals. Once you get the signal on the shorter time frame depending on where support is you can usually place your first stop loss under the nearest support area (valley).   If the market begins to make progress you can move your stop so that it trails the market by moving your stop to just under the most recent support area. In this lesson I have use an exponential moving average but experiment with different types of average such as weighted, smoothed or simple. You can also experiment with different lengths of moving average. Good Trading Best Regards Puneet Bohra

An Introduction to Japanese Candlestick Charting

Introduction - New Way to Look at Prices Would you like to learn about a type of commodity futures price chart that is more effective than the type you are probably using now? If so, keep reading. If you are brand new to the art/science of chart reading, don't worry, this stuff is really quite simple to learn. Technical Analysis - A Brief Background Technical analysis is simply the study of prices as reflected on price charts. Technical analysis assumes that current prices should represent all known information about the markets.

Prices not only reflect intrinsic facts, they also represent human emotion and the pervasive mass psychology and mood of the moment. Prices are, in the end, a function of supply and demand. However, on a moment to moment basis, human emotions.fear, greed, panic, hysteria, elation, etc. also dramatically effect prices. Markets may move based upon people's expectations, not necessarily facts. A market "technician" attempts to disregard the emotional component of trading by making his decisions based upon chart formations, assuming that prices reflect both facts and emotion.

Standard bar charts are commonly used to convey price activity into an easily readable chart. Usually four elements make up a bar chart, the Open, High, Low, and Close for the trading session/time period. A price bar can represent any time frame the user wishes, from 1 minute to 1 month. The total vertical length/height of the bar represents the entire trading range for the period. The top of the bar represents the highest price of the period, and the bottom of the bar represents the lowest price of the period. The Open is represented by a small dash to the left of the bar, and the Close for the session is a small dash to the right of the bar. Below is a standard bar chart example.

Candlestick Charts Explained

You may be asking yourself, "If I can already use bar charts to view prices, then why do I need another type of chart?"

The answer to this question may not seem obvious, but after going through the following candlestick chart explanations and examples, you will surely see value in the different perspective candlesticks bring to the table. In my opinion, they are much more visually appealing, and convey the price information in a quicker, easier manner.

What is the History of Candlestick Charts?

Candlestick charts are on record as being the oldest type of charts used for price prediction. They date back to the 1700's, when they were used for predicting rice prices. In fact, during this era in Japan, Munehisa Homma become a legendary rice trader and gained a huge fortune using candlestick analysis. He is said to have executed over 100 consecutive winning trades!

The candlesticks themselves and the formations they shape were give colorful names by the Japanese traders. Due in part to the military environment of the Japanese feudal system during this era, candlestick formations developed names such as "counter attack lines" and the "advancing three soldiers". Just as skill, strategy, and psychology are important in battle, so too are they important elements when in the midst of trading battle.

What do Candlesticks Look Like?

Candlestick charts are much more visually appealing than a standard two-dimensional bar chart. As in a standard bar chart, there are four elements necessary to construct a candlestick chart, the OPEN, HIGH, LOW and CLOSING price for a given time period. Below are examples of candlesticks and a definition for each candlestick component:

• The body of the candlestick is called the real body, and represents the range between the open and closing prices.

• A black or filled-in body represents that the close during that time period was lower than the open, (normally considered bearish) and when the body is open or white, that means the close was higher than the open (normally bullish).

• The thin vertical line above and/or below the real body is called the upper/lowershadow, representing the high/low price extremes for the period.

Bar Compared to Candlestick Charts

Below is an example of the same price data conveyed in a standard bar chart and a candlestick chart. Notice how the candlestick chart appears 3-dimensional, as price data almost jumps out at you.

( 3a )

( 3b )

The long, dark, filled-in real bodies represent a weak (bearish) close ( 3a ), while a long open, light-colored real body represents a strong (bullish) close ( 3b ). It is important to note that Japanese candlestick analysts traditionally view the open and closing prices as the most critical of the day. At a glance, notice how much easier it is with candlesticks to determine if the closing price was higher or lower than the opening price.

Common Candlestick Terminology

The following is a list of some individual candlestick terms. It is important to realize that many formations occur within the context of prior candlesticks. What follows is merely a definition of terms, not formations.

• The Black Candlestick -- when the close is lower than the open.

• The White Candlestick -- when the close is higher than the open.

• The Shaven Head -- a candlestick with no upper shadow.

• The Shaven Bottom -- a candlestick with no lower shadow.

• Spinning Tops -- candlesticks with small real bodies, and when appearing within a sideways choppy market, they represent equilibrium between the bulls and the bears. They can be either white or black.

• Doji Lines -- have no real body, but instead have a horizontal line. This represents when the Open and Close are the same or very close. The length of the shadow can vary.

Candlestick Reversal Patterns

Just as many traders look to bar charts for double tops and bottoms, head-and-shoulders, and technical indicators for reversal signals, so too can candlestick formations be looked upon for the same purpose. A reversal does not always mean that the current uptrend/downtrend will reverse direction, but merely that the current direction may end. The market may then decide to drift sideways. Candlestick reversal patterns must be viewed within the context of prior activity to be effective. In fact, identical candlesticks may have different meanings depending on where they occur within the context of prior trends and formations.

• Hammer -- a candlestick with a long lower shadow and small real body. The shadowshould be at least twice the length of the real body, and there should be no or very littleupper shadow. The body may be either black or white, but the key is that this candlestick must occur within the context of a downtrend to be considered a hammer. The market may be "hammering" out a bottom.

• Hanging Man -- identical in appearance to the hammer, but appears within the context of an uptrend.

• Engulfing Patterns -- Bullish -- when a white, real body totally covers, "engulfs" the prior day's real body. The market should be in a definable trend, not chopping around sideways. The shadows of the prior candlestick do not need to be engulfed.

• Bearish -- when a black, real body totally covers, "engulfs" the prior day's real body. The market should be in a definable trend, not chopping around sideways. The shadows of the prior candlestick do not need to be engulfed.

• Dark-Cloud Cover(bearish) -- a top reversal formation where the first day of the pattern consists of a strong white, real body. The second day's price opens above the top of the upper shadow of the prior candlestick, but the close is at or near the low of the day, and well into the prior white, real body.

• Piercing Pattern (bullish) -- opposite of the dark-cloud cover. Occurs within a downtrend. The first candlestick having a black, real body, and the second has a long, white, real body. The white day opens sharply lower, under the low of the prior black day. Then, prices close above the 50% point of the prior day's black real body.

Stars

These candlestick formations consist of a small real body that gaps away from the real body preceding it. The real body of the star should not overlap the prior real body. The color of the star is not too important, and they can occur at either tops or bottoms. Stars are the equivalent of gaps on standard bar charts.

Stars make up part of four separate reversal patterns:

Morning Star

Evening Star

Doji Star

Shooting Star (Inverted Hammer)

• Morning Star -- this is a bullish bottom reversal pattern. The formation is comprised of 3 candlesticks. The first candlestick is a tall black real body followed by the second, a small real body, which gaps (opens), lower (a star pattern). The third candlestick is a white real body that moves well into the first period's black real body. This is similar to an island pattern on standard bar charts.

• Evening Star -- a bearish top reversal pattern and counterpart to the Morning Star. Three candlesticks compose the evening star, the first being long and white. The second forms a star, followed by the third, which has a black real body that moves sharply into the first white candlestick.

• Doji Stars -- When a doji gaps above a real body in an uptrend, or gaps under a real body in a falling market, that particular doji is called a doji star. Two popular doji stars are the evening star and the morning star.

• Evening Doji Star -- a doji star in an uptrend followed by a long, black real body that closed well into the prior white real body. If the candlestick after the doji star is white and gapped higher, the bearishness of the doji is invalidated.
  

• Morning Doji Star -- a doji star in a downtrend followed by a long, white real body that closes well into the prior black real body. If the candlestick after the doji star is black and gapped lower, the bullishness of the doji is invalidated.
  

• Shooting Star -- a small real body near the lower end of the trading range, with a long upper shadow. The color of the body is not critical. Not usually considered a major reversal sign, only a warning.

Inverted Hammer-- not really a star, but does look like a shooting star. When occurring within a downtrend, may be a turning signal. Body color is not critical.

Regards,

Puneet Bohra