Belajar Manajemen Keuangan Untuk Trading

mohon tehnik ini dicoba dalam demo akun dulu untuk belajar, sebelum siap mencoba real akunnya.
Dan semoga sedikit ilmu kecil ini berguna dan barokah untuk semuanya, amieeen.

Untuk masta momod dan masta mimin, kalau pun tread ini sudah pernah dishare atau sekiranya tidak berbobot, mohon dihapus aja, dan saya ucapkan terima kasih dan mohon maaf yang sebesar-besarnya, sedikitpun saya tidak berniat untuk membuat junk post. saya hanya ingin trader newbie indo MT5 bisa konsisten dalam trading.

LANGSUNG SAJA SAYA MULAI:
"Misalkan Anda memiliki dana $100, saya sarankan untuk membuka acc micro agar pengaturan Money Managementnya lebih teratur dikarenakan modal anda yang kecil.

Tapi anggaplah kita trading di MT4 micro cent. Dengan modal $100 di MT4 anda akan terlihat seperti memiliki uang $10.000.

Ok, sekarang per tradingnya kita hanya meresikokan 2%, artinya dengan modal seperti di atas berarti kita hanya mespekulasikan $10.000 x 2% = $200 /trading.

Kemudian tentukan batas SL Anda berapa pips sehingga kita bisa menentukan Lot yang akan di buka nantinya. Saya contohkan SL kita menurut sistem trading mesti 30 pips.

Maka rumus perhitungan lot nya sebagai berikut:

Lot = (Balance x Risk)/SL/10

Seperti contoh di atas diketahui:
Balance = $10.000
Risk = 2%
SL = 30

maka Lot = (10.000 x 2%)/30/10 = 200/30/10 = 0.66 lot

artinya dengan membuka 0.66 lot dan kena SL 30 pips, loss anda cuma $200 atau 2% dari Balance.

Nah tinggal pilih saja mau yang mana, profit yang luar biasa tanpa MM yang ketat, namun dalam satu malam account anda drop bersamaan dengan psikologi anda atau menggunakan MM yang baik di mana sistem anda bisa bertahan sampai kapanpun juga dan anda bisa tetap dalam koridor sistem anda untuk tidak berganti-ganti sistem terus, lebih fokus kepada compunding sehingga dalam 3 tahun anda bisa meraih profit yang luar biasa nantinya.

Katakanlah profit anda bisa stabil 20% sebulan, dengan modal $100 dalam satu tahun kalau di compound bisa menghasilkan $743, memang kelihatan kecil, itu karena anda cuma bermodal $100 saja, tapi gimana kalo gak ditarik2 dan dibiarkan sampai 3 tahun, ya anggap aja nabung, maka uang anda yang tadinya cuma $100, sekarang menjadi $50.000."

NB : Mohon maaf dengan sangat, sumbernya saya lupa, tapi saya dapat ilmu ini waktu belajar forex juga. dan mencarinya di mbah google (dan sejujurnya dalam hati saya tidak ingin memplagiat).

Pengertian Margin Call

Di marketiva, leverage nya 1:100, yang artinya : 100 quantity, anda perlu margin $1. dan, setiap satu poin, akan terjadi perubahan sebesar 1% dari margin anda, atau sebesar 1%x$1 = 0.01 dolar.


misalnya : anda punya 10 dolar, dan anda beli 100 quantity, artinya,uang anda akan ditahan 1 dolar sebagai used margin. sisanya yaitu 9 dolar sebagai available margin.

saat anda buka posisi, misalnya langsung ada minus 3, maka posisi anda adalah -0.03 dolar (karena 1 point nilainya 0.01 untuk 100 quantity).

Nah, pada saat anda minus 10, posisinya -0,1 dolar
pada saat minus 100, posisinya -1.0 dolar
pada saat minus 200, posisinya -2.0 dolar
pada saat minus 500, posisinya -5.0 dolar
pada saat minus 800, posisinya -8.0 dolar
pada saat minus 900, posisinya -9.0 dolar. ====> Margin Call

Pada saat anda minus 900, akan terjadi margin call. Hal ini karena dana anda (available margin) mencapai nol. (ingat sisa margin anda adalah 9, karena 1 dolar sisanya digunakan untuk membeli 100 quantity).

Jadi Margin Call artinya suatu keadaan yang terjadi ketika dana anda tidak sanggup lagi menahan kerugian akibat penurunan nilai ketika anda membeli.

Pada saat terjadi margin call, posisi anda akan ditutup. Jika ada banyak posisi yang rugi, posisi yang pertama kali ditutup adalah posisi yang ruginya paling besar. (ini aturan di marketiva)




Untuk kasus anda yang diatas, yang anda tanyakan,

uang anda 100 dolar.

anda buka posisi 5000 quantity, maka margin yang digunakan adalah sebesar 50 dolar. (ingat contoh di atas, 1 dolar 100 quantity, 10 dolar adalah 1000 quantity, maka 50 dolar adalah 5000 quantity)

ketika uang anda 100 dolar, maka used margin adalah $50, dan available margin adalah $50 ( available margin = modal anda - used margin).

pergerakan 1 poin untuk 5000 quantity adalah 1% dari nilai uang ($50). Jadi untuk 5000 quantity, per point nya adalah $50 x 1% = 0.5 dolar.

jika pergerakan nya turun 1 poin, anda minus 0.5 dolar
jika pergerakannya turun 10 point, anda minus 5 dolar
jika pergerakannya turun 100 point, anda minus 50 dolar. =====> Margin Call

Pada saat pergerakan turun 100 point, available margin anda tinggal Nol. maka terjadi margin call.

nah, baca kembali kalimat yang anda tanyakan. mudah2an jadi jelas.

"Anda membuka posisi beli sampai 5000 unit (used margin $50 atau 50% dari total margin $100). Ternyata harga malah berbalik turun. bila harga turun sampain 100 pips, maka kerugian anda SUDAH $50, sehingga anda akan terkena margin call. Bandingkan dengan anda menggunakan $5 (500 unit) dengan total margin $100, anda akan baru terkena margin call bila sudah turun mencapai 1900 poin"

Trading tanpa system yang jelas = bunuh diri

Ini mungkin bisa dibaca gan untuk mengatasi kegalauan dalam kondisi Down.

I. DISIPLIN DIRI

Disiplin dalam trading itu mutlak hukumnya.
Setiap bisnis selalu ada plan atau rencana dalam operasinalnya sehari-hari. Demikian juga dengan trading, anda pasti punya plan yang harus anda jalankan. sebagai contoh :
1. Saya hanya menggunaan periode M30 saja,
2. Setiap posisi yang saya ambil saya pasang TP 10,
3. Setiap open posisi selalu ada Stop Loss (SL) 50 pips,
4. Indocator yang digunakan adalah Parabolic SAR,
5. Hanya mengambil posisi pada SAR pertama,
6. Hanya menggunaan margin 10% saja.

Itulah contoh plan . Nah sekarang anda juga harus membuat plan. Lalu anda harus mengikuti plan anda dengan disiplin. Banyak sekali trader merasakan kehancurannya karena tidak disipilin. Mereka mengakuinya. Misalnya mereka tau kalau tidak boleh ambil posisi pada SAR kedua, tapi itu mereka lakukan juga karena menurutnya saat itu harga masih bagus.

Anda sulit untuk sukses dalam trading kalau anda tidak mengikuti plan anda dengan sisiplin. Suatu ketika anda akan kebingungan sendiri ketika terjadi hal-hal yang tidak anda inginkan akibat ketidak disipinan anda. Contoh nyata dan banyak dialami oleh para trader adalah memakai margin melebihi 10%. Ketika terjadi floating maka saat itu juga muncul dilema. Pertama, floating membuat modal berkurang drastis karena margin yang digunakan besar. Kedua, floating besar sangat menakutkan kalauharus di cut loss (dibuang). Oleh karena itu untuk contoh diatas, patuhlah pada semua aturan yang anda buat.

Dilema di atas tidak akan terjadi jika saja anda tidak melanggar plan nomor 3 dan nomor 6.

Intinya apapun strategi anda, apapun indicator yang anda gunakan, disiplinlah dan konsisten dengan strategi anda itu. Ketika ternyata strategi anda berjalan dengan baik, maka jangan anda ubah strategi anda itu. Jangan mudah mengubah strategi karena --mungkin-- banyaknya opini dan tawaran strategi pada chatroom Marketiva.. Selamat berdagang...!

II. EMOSI TRADER

How To Control Fear And Greed In Trading
Ada satu pepatah yang menyebutkan bahwa pasar dikendalikan oleh katakutan dan keserakahan. Siapa saja yang melakukan trading lebih dari 2 posisi umumnya pasti pernah merasakan 2 macam emosi tersebut.

Semua trader berpengalaman dalam masalah emosi. Perbedaan antara trader yang sukses dengan yang gagal adalah dari bagaimana cara mereka menghadapi emosi tersebut. Mari kita lihat bagaimana emosi ini mempengaruhi seorang trader yang sukses dan trader yang gagal dalam berbagai skenario:

Skenario1: Tiga transaksi sebelumnya mengalami kegagalan.

Trader yang gagal akan menyadari ini sebelum ia ambil posisi di market dan senantiasa dalam ketakutan kalau-kalau transaksinya kali ini akan gagal lagi. Hal ini hanya akan membuang waktu hanya untuk memastikan bahwa dia dalam posisi yang benar. Sehingga pada akhirnya ia akan ketinggalan entry level yang bagus tersebut. Mereka mungkin pada akhirnya akan mencari-cari factor lain, yang kira-kira belum dipikirkan, sehingga mendapatkan alasan untuk tidak masuk market. Kesimpulannya dia akan selalu dihantui oleh rasa takut akan mengalami kegagalan lagi.

Trader yang sukses akan mencoba strategi mereka dan bisa memaklumi akan adanya kemungkinan loss yang beruntun dari penggunaan strategi mereka. Mereka akan selalu mengukur tingkat kesuksesan dengan menggunakan sistem tersebut baik ketika sedang menang maupun sedang kalah.

Skenario2: Sesaat setelah masuk ke market, ternyata market price bergerak melawan prediksi.

Trader gagal akan segera merasa takut kalau dia telah melakukan sebuah kesalahan. Mereka akan menunggu dan berharap bahwa market akan segera berbalik arah menuju yang mereka inginkan. Rasa ‘takut akan melakukan tindakan yang salah lagi’ telah berhasil mengendalikan pikiran mereka dan kebijaksanaan trading mereka, mereka bahkan mungkin akan menggeser posisi Stop Loss mereka menjauhi Open Position dengan tujuan supaya Stop Loss tersebut tidak disentuh oleh market price. Mereka mungkin juga akan mengabaikan trading itu begitu saja dan berharap market price akan segera berbalik arah, paling tidak ke posisi breakeven – seorang yang awalnya adalah daytrader kini bisa berubah posisi menjadi trader ‘penggeser posisi’ dan beberapa hari kemudian mungkin beralih status lagi menjadi trader jangka panjang yang menerapkan strategi buy dan menahan posisi.

Trader yang sukses, tentu saja, akan tahu berdasarkan beberapa percobaan yang telah ia lakukan terhadap sistemnya, bahwa setiap masuk ke market pasti ada peluang tradingnya akan berhasil dan ada peluang juga akan menyentuh stop loss-nya. Stop Loss yang sudah dipasang akan berada pada tempatnya dan tetap berada pada tempatnya. Stop yang digunakan memberi petunjuk di mana ia akan keluar dari market, bukan petunjuk seberapa takut dia akan gagalnya trading.

3. Skenario3: Saat masuk ke market, tiba-tiba market bergerak dengan sangat cepat menuju arah yang diinginkan (arah profit).

Trader yang gagal akan segera membayangkan sebuah villa di bawah terik matahari dan sebuah mobil sport terbaru terbayang-bayang di dalam kepalanya. Lalu dia kemudian akan memindahkan price targetnya menjauh dan memutuskan untuk membiarkan market terus bergerak berharap akan mengenai target yg telah digeser menjauh tersebut. Keserakahan telah membutakan dirinya dan ‘rencana’ sebelumnya (jika memang ada). Tentu saja, market jarang bergerak ke satu arah untuk waktu yang lama dan saar market berbalik arah keserakahan itu akan segera berubah menjadi ketakutan hingga impian-impian yang tadi akan sirna seketika dan trader gagal ini akan menunggu hingga market price kembali ke tempat asalnya waktu ia masuk ke market. Daytrade kini berubah menjadi position trade.

Sedangkan Trader yang sukses telah menset target sebelumnya, harga yg spesifik atau waktu yg spesifik dan akan disiplin dengan prinsipnya itu. Jika satu trading berhasil membawa profit hanya dalam waktu 5 menit, maka sudah! Itu bagus! Banyak trading-trading lain yg tidak bisa secepat itu.

Ketakutan dan keserakahan adalah emosi manusiawi. Kita tidak bisa merubah 2 emosi tersebut. Namun berikut ini ada beberapa tips:

1. Kenali sistem Anda.
Jika Anda telah cukup percaya diri dengan sistem yang Anda gunakan, maka perasaan itu akan bisa menguasai rasa ketakutan dan keserakahan tadi. Kepercayaan diri terhadap system hanya akan dapat terjadi dari desain sistem yang bagus dan percobaan-percobaan yang dilakukan.

2. Otomatisasikan sistem Anda.
Komputer tidak akan pernah merasakan ketakutan maupun keserakahan, mereka tidak akan berdoa untuk keajaiban dan berteriak histeris saat membuat keputusan yang salah. Mereka hanya akan stop, jika mereka memang diperintahkan untuk itu.

3. Manajemen keuangan.
Cukup sederhana, tidak perduli seberapa bagus sistem Anda, Anda harus sensitive terhadap jumlah dana yang Anda miliki dan kalkulasikan seberapa besar Anda bisa menerima kekalahan.

III. MENTAL TRADER

Pernah dengar mental trader? Mungkin sudah ya? Mental trader itu diuji ketika terjadi floating pada poisi yang ia ambil. Juga bisa terjadi ketika harga bergerak cepat berlawanan dengan arah posisi dia saat itu.

Untuk kasus harga yang bergerak cepat ke satu arah, anda bisa menggunkan indicator Ichimoku Kenko Hyo untuk mengetahui apakah harga benar-benar akan menjadi tren ke arah tersebut?

Saat menghadapi kejadian seperti itu, perhatikanlah grafik garis "merah" dan garis "biru" pada ichimoku. Kalau garis merah tidak berubah, maka anda harus tenang saja karena gerakan itu tidak akan berlanjut. Disinilah mental anda akan diuji. Adakalanya pergerakan itu cukup jauh yang membuat kebanyakan trader gugup dan buru-buru melakukan cut loss atau melakukan tindakan lain yang jauh lebih jelek yaitu hedging.

Mental trader harus dipunyai oleh seorang trader. Ada lagi hal lain yang bisa membuat trader ciut misalnya terjadi loss berturut-turut sampai 4 kali. Bila anda perhatikan chart pada waktu-waktu yang lalu anda akan menemukan bahwa adanya signal --misalnya SAR-- akan tetapi harga tidak berubah dari pagi sampai sore, bahkan berlanjut sampai besok sore. Kalau anda menemukan pasar yang seperti itu, maka kemungkinan besar anda akan loss beruntun padahal anda sudah mengikti signal dengan benar. Pasar seperti ini namanya "sideway". Ancaman terbesar bagi kita adalah sideway ini.

Bila anda tau pasar sedang sideway maka indicator saat itu tidak berlaku, kalau anda tetap mau trading saat itu.. itu namanya swing.. jadi anda harus perhatikan gelombang harga yang bolak-balik dari suatu ketinggian tertentu sampai pada level rendah tertentu lalu balik lagi ke atas (kelihatan jelas pada periode M15). Tetap mau trading? Baik, lakukanlah buy pada dasar gelombang dan TP 10 poin saja.. dan lakukan sell pada puncak gelombang TP 10 poin saja. Maka anda sudah melakukan "Swing Trade" namanya atau ada juga yang menyebutnya copi-copi atau coping-coping.

So.. tumbuhkan mental trader dalam diri anda, bukan mental judi lo ya?


IV. TAHAN NAFSU ANDA

Nafsu juga bisa menghancurkan lho..
Bagaimana tidak karena sudah sangat banyak contohnya. Greedy! Semua penasehat trader di seluruh dunia akan menganjurkan jangan "greedy" jangan "serakah". Serakah itu nafsu.

Keserakahan akan tampak pada jumlah margin yang anda gunakan dalam trading. Penggunaan margin 10% itu adalah normal. Maka ketika anda menggunakan margin mulai melebihi 10% maka anda harus hati-hati karena boleh jadi keserakahan sudah mulai merasuk di hati anda :-) Anda boleh saja menghitung ah 20% masih aman kok, atau 30% masih aman kok.. tapi itu greedy, serakah. Karena penggunaan margin yang besar akan menghasilkan output yang besar pula baik plus maupun minus.

Kebisaan seperti itu mudah mati oleh pergerakan pasar yang tidak satupun bisa mengendalikannya. Anggap saja margin digunakan 20% dengan kemampuan menahan float 500 poin. Tapi ketika mencapai 50 poin saja minus trader sudah gugup dan cut loss (untuk modal $1000 itu berarti cut loss $100), ambil posisi baru 20% lagi dan floating 200 poin misalnya... itu berarti sudah $400, sisa margin tinggal $500.. sudah kelihatan mau rugi, cutloss kebesaran, hedging takut balik lagi.. nah mending dari awal-awal sekali janganlah serakah

Pakai saja 10% margin anda. Toh jika modal anda $1000 dengan 10% margin itu, bila anda dapat rata-rata 20 poin saja satu hari, itu berarti satu bulan anda memperoleh 20 x 20 hari kerja = 400 poin alias $400 itu sudah 40% sebulan. Yakinlah bahwa 40% itu adalah suatu hasil yang luar biasa!

Jangan serakah, jangan greedy, tahan nafsu anda untuk ingin cepat kaya

V. JAGA MARGIN ANDA

Penggunaan margin.. berhubungan dengan nafsu dan managemen modal. Bila anda disiplin dengan memasang Stop Loss (SL) misalnya 50 poin (lakukan study berapakah SL yang ideal?) maka anda tidak akan pernah floating melebihi 50 poin. Tapi bila anda serakah dan takut kehilangan 50 poin maka anda memiliki potensi untuk floating besar.

Disaat floating itu (10% margin) berarti anda sudah tidak bisa ambil posisi baru sampai posisi yang floating close! Tapi mungkin anda tidak mau kehilangan kesempatan ketika ada signal bagus, maka anda open lagi 10% margin. Total sudah 20% margin. Bagaimana kalau posisi kedua ini floating lagi? Kalau sama-sama BUY maka floating akan semakin besar. Kalau satu BUY satu lagi SELL maka total floating tidak akan berubah..., akan tetapi untuk bisa profit anda harus ambil posisi lagi... masihkah cukup margin untuk ambil posisi baru? Ini dari awal harus anda perhitungkan. Kalau terjadi hal begini, maka anda akan ambil tindakan ini dst dst.

Jadi ada rangkaian plan yang harus anda patuhi semua, lihat contoh di bagian "Disiplin Tinggi", satu dilanggar maka masalah beruntun akan anda hadapi.

Market Calls

The Market Calls placed here may or may not be Live and REAL Time each one will be Identified;
You will may find these on Facebook, Twitter, Google+ and Linkedin.  Although that is for Generally short term Daily market expectations.  If you wish to see Long Term Market Calls you will need to come back to this page often.
List:
1. 2013 Are you Prepared?
2. August 2011 Unfavourable Planetary Alignments.
2.1 August 2011 could be a tough Month for the Stock Market.  Date posted 25thJuly 2011.  NON Live indication of what might be a tough month.

3. Favourable & Unfavourable Planet Alignments in 2012.  NON live indications of Favourable & Unfavourable  planetary Alignments as discribed below.

3.1  Favourable Alignment in October 2012. Date Posted 27/12/2011

3.2 Unfavourable Planet Alignment April 2012. Date Posted 27/12/2011

3.3 Unfavourable Planet Alignment August 2012. Date Posted 27/12/2011

4.0 XJO Double Top & Pennant Formation REAL TIME Posted 15/01/2012

5.0 Further Explanation on Are you Prepared for 2013 Posted 15/01/2012.

6.0 S&P 500 Sqaures Out on the 26th January 2012 at NYSE LIVE Posted 26 Jan 2012 @ 10:14 New York Time
7.0 AUD/USD Targets Date Posted AET 8AM 04/02/2012 REAL TIME.
8.0 TOP in the DOW, S&P 500 & NASDAQ – VIDEO DATE Posted 23/02/2012

Charts & Videos Below

8.0 TOP in the DOW, S&P 500 & Nasdaq – Video Date Posted 23/02/2012


7.0 Target for the AU/USD is $1.19886 and with Extension to $123.795

6.0 S&P 500 Squares Out on the 26th January 2012 at NYSE LIVE Posted 26 Jan 2012 @ 10:14 AM
The S&P 500 Squared out at 1333.47 on the 26th January 2012 @ 10:10.  This was double its Low of 666.79, It made on the 06/03/2009.  Gann said he discovered Securities must Square out.  He did not site a reason but I believe it is because God said “he would bring all things to be know whether Good or Bad”.  In other words all things are squared out.
Points (1) Looking at the Synodic Planet Alignments, as an angle against the backdrop of the stars, they travel a certain number of degrees.
Mars – Earth 120 Degrees -  Moved 4 star signs
Venus – Earth 300 Degrees Moved 10 Star Signs
Mercury-  Earth 360 Degrees – Moved Back to the same spot reative to the Stars.
Ceres – Earth 91 Degrees – Square
Jupiter – Saturn 60 Degrees – Moved two star signs
Jupiter – Neptune 90 Degrees – Square
Jupiter – Pluto 90 Degrees – Square
Ceres – Saturn 90 Degrees – Square
Earth – Saturn 90 Degrees – Square
Vensu – Saturn 90 Degrees – Square
Mercury – Saturn 90 Degrees – Square
Note: that when a cycle goes more than 360 degress I.e. goes round more than once the 360 is dropped off.,  for example 420 degrees becomes 60 degrees (420-360 = 60 degrees).
Point (2) The Square of 52.
Gann used the Square of 52, because the year had 52 weeks in it.  The squaring out took 1056 calendar days or 20*52 (1056).
It also took 728 days Trading Days or 14*52
Point 3 Earth – Ceres Chart below showing 1054 days Calendar Days

Gann box is displayed below to illustrate Gann’s Angles and how the S&P 500 respected the Time and Price Points (angles)

Other points of Anaylsis could be shown to support the above.  Like the Sqaure of 144, the Number 666, the Number 7 and  The Pentagram.  However enough has been shown if you wish to see more on this please email Barry Gumm at barry.gumm@eminance.com.au

5.0 Further Explanation on Are you Prepared for 2013 date posted 15/01/2012.

Within this 17 year Stock Market Correction Cycle, there are other cycles are work notably the 5, 8 and 13 year cycles. (Fibonacci Numbers). The 13 year cycle is due in 2013.  Eminance will reveal the actual cycle due date closer to the time it falls due.  It is enough to know that this 13 year cycle is usually brutal. There is going to be a lot of money made for those who short the market in fact fortunes made for those are not in cash and long the market fortunes lost.  You have been warned.

4.0 XJO Double Top & Pennant Formation REAL TIME Posted 15/01/2012

Eminance has had this chart going for months now since the end of April 2011 (8 M0nths) based on the assumption that the two April highs was a possible Double top.  Only updating it with the black lines when the Market drew a pennant.  April 201o and April 2011 was only 3-4 days short of one calendar year, However it is one Gann’s 360 Degrees formations that he said to watch for.  With this possible double top and the announcement of the Downgrades of European Countries after Market close on the 13/01/2012 USA NYSE time then it is highly likely that this pennant formation will break down over the new few days and over the course of the next month the XJO head down to the targeted 3319 level.  Also note that on the 27/11/2011 Eminance Posted that February 2012 may be tough for the market also there may be a lead up to 2012, its seems we are now receiving the lead up to the unfavourable mathematical formation in February 2012.

3.3 August has 9 unfavourable Planet Alignments.

August 2012 is looking like a tough month.  The chart below is from the 15th August 2012.  Also from a Heliocentric point of view (viewed from the Sun) the Helioalignments seem to hover around the number 153.  153 is a important number it is a perfect 5 month cycle.

3.2  April 2012 has a lot of unfavourable planet alignments below is 27th April 2012.

April is looking like a tough month.  However you should be aware as in August 2011.  Although August was a tough month for the markets the markets were alreadly falling well before August 2011.  Therefore it could be that before April comes along the market may be falling a few months before hand.

3.1

Do not know why but October 2012 has a favourable indication, particularly the 29th October 2012 with 9 favourable alignments.  Maybe this is becuase it is close to the US elections, we will find out as the time draws near.

2. & 2.1

Below are two charts of the Planetary alignments for the 22nd August 2011, Gann used these a lot to accuratley predict future events.  This one is from a man named L. J Jensen Economic Trend Analyst.  He died in 1981 of old age.  In his book titled Astro-Cycles & Speculative Markets he named favouable and unfavouable planetary alignments.  As the planet cycles are a massive elliptical musical clock if you will, (goto www.revampyourmind.com if you wish to read more on this subject) it is wise to make note of these alignments.
The problem with the approach is sometimes, it’s like / sort off telling the markets what to do and therefore subjective.  Mr. Jensen studied the Astro-Cycles in relation to speculative Markets for 40 years.  In January 2011, I went through the whole year for both his Favourable andUnfavourable alignments.  August came up by far the most unfavourable, at the time I did not know why, yet it is only in the last couple of months that the Debt ceiling in the USA has become an issue along with Italy and the European debt problem again..  In other words how is it that a planet cycle can warn of trouble months and years into the future, before man (or politians) realises it themselves?…… goto www.revampyourmind.com then investing Gods wya to find out why…!
Below is a chart of August the 22nd 2011, showing 13 alignment or shapes, triangles for example.  I am not saying it is it going to crash, but the mathematicial clock and Mr Jensen studies suggust it may be a tough month.  The 22ndAugust is the worse day of the month but the whole of August had significantly higher unfavourable alignments than the other 11 mnths of the year.  Natal Chart.
Emphesis Chart 22nd August 2011.
Well As it turned out August was a terrible month for the Markets,  its good to know in advance what may happen, If one is better prepared the returns are so much greater.

Fibonacci Analysis and Elliott Wave Theory

Elliott Wave Theory (EWT)

Ralph Nelson Elliott referred to three important aspects of price movement in his theory: pattern, ratio and time. Pattern refers to the wave patterns or formations, while ratio (the relationship between numbers, particularly the Fibonacci series) is useful for measuring waves. To use the theory in everyday trading, the trader determines the main wave, or supercycle, goes long and then sells or shorts the position as the pattern runs out of steam and a reversal is imminent.

• The Five-Wave Pattern In its most basic form the Elliott Wave Theory states that all market action follow a repetitive rhythm of a five waves in the directions of the main trend followed by three corrective waves (a "5-3" move).
  The advance waves are denoted 1-2-3-4-5 and the retreat waves are denoted a-b-c. In the advance waves' phase, waves 1, 3, and 5 are "impulse waves" and move in the direction of the trend, while waves 2 and 4 are called "corrective waves". After the five-wave advance is completed, a three-wave correction begins denoted a-b-c. In the correction waves' phase, waves 'a' and 'c' move in the direction of the retreat, while wave 'b' heads in the opposite direction.
  
  Note: In the chart shown here an uptrend is described and therefore the advance waves are moving upwards. In a downtrend the descending waves will be referred to in the form 1-2-3-4-5, with the ascending waves addressed as a-b-c.
  
• Wave cycles When a three-wave retreat is complete, another five-wave advance begins and so on, until a reversal is prompted. It is possible to see then, that each five-wave advance can be identified as a single advance wave. Similarly, when viewed from a larger perspective, and vice versa, each wave can be broken down into smaller waves.
  The Elliott Wave Theory classifies waves according to cycle length, ranging from a Grand Supercycle, spanning for decades; to a subminuette degree, covering no more than a few hours. However, the eight-wave cycle remains constant.
  
  Note: The largest two waves, 1 and 2 here, can be subdivided into eight lesser waves that in turn can be subdivided into 34 even lesser waves. The two largest waves, 1 and 2, are only the first two waves in a larger five-wave advance. Wave 3 of that next higher degree is about to begin. The 34 waves that constitute a cycle can be broken down further to the next smallest degree which would result in 144 waves.
  

Fibonacci Analysis

Fibonacci numbers provide the mathematical foundation for the Elliott Wave Theory. While the Fibonacci ratios have been adapted to various technical indicators, their utmost use in technical analysis remains the measurement of correction waves.

• Fibonacci Series Characteristics The Fibonacci number sequence is made by simply starting at 1 and adding the previous number to arrive at the new number:
  0+1=1, 1+1=2, 2+1=3, 3+2=5, 5+3=8, 8+5=13, 13+8=21, 21+13=34, 34+21=55, 55+34=89,…
  This series has very numerous interesting properties:
  + The ratio of any number to the next number in the series approaches 0.618 or 61.8% (the golden ratio) after the first 4 numbers. For example: 34/55 = 0.618
  + The ratio of any number to the number that is found two places to the right approaches 0.382 or 38.2%. For example: 34/89 = 0.382
  + The ratio of any number to the number that is found three places to the right approaches 0.236 or 23.6%. For example: 21/89 = 0.236
  These relationships between every number in the series are the foundation of the common ratios used to determine price retracements and price extensions during a trend.
  
• Fibonacci Price Retracements A retracement is a move in price that "retraces" a portion of the previous move. Usually a stock will retrace at one of 3 common Fibonacci levels - 38.2%, 50%, and 61.8%. Fibonacci price retracements are determined from a prior low-to high swing to identify possible support levels as the market pulls back from a high.
  Retracements are also run from a prior high-to-low swing using the same ratios, looking for possible resistance levels as the market bounces from a low.
  
• Fibonacci Price Extensions Fibonacci price extensions are used by traders to determine areas where they will wish to take profits in the next leg of an up-or downtrend. Percentage extension levels are plotted as horizontal lines above/below the previous trend move. The most popular extension levels are 61.8%, 100.0%, 138.2% and 161.8%.
  
• Advice In reality it is not always so easy to spot the correct Elliott wave pattern, nor do prices always behave exactly according to this pattern. Therefore it is advisable for a trader not to rely solely on Fibonacci ratios, but rather to use them in conjunction with other technical tools.
  

Mathematical Trading Indicators

The mathematical trading methods provide an objective view of price activity. It helps you to build up a view on price direction and timing, reduce fear and avoid overtrading. Furthermore, these methods tend to provide signals of price movements prior to their occurring in the market.
The tools used by the mathematical trading methods are moving averages and oscillators. (Oscillators are trading tools that offer indications of when a currency is overbought or oversold). Though there are countless mathematical indicators, here we will cover only the most important ones.

1. Simple and Exponential Moving Average (SMA - EMA)
2. Moving Average Convergence-Divergence (MACD)
3. Bollinger Bands
4. The Parabolic System, Stop-and-Reverse (SAR)
5. RSI (Relative Strength Index)

Moving Average

A moving average is an average of a shifting body of prices calculated over a given number of days. A moving average makes it easier to visualize market trends as it removes – or at least minimizes - daily statistical noise. It is a common tool in technical analysis and is used either by itself or as an oscillator.
There are several types of moving averages, but we will deal with only two of them: the simple moving average (SMA) and the exponential moving average (EMA).

1. Simple moving average (SMA)
   • Definition The simple moving average is an arithmetic mean of price data. It is calculated by summing up each interval's price and dividing the sum by the number of intervals covered by the moving average. For instance, adding the closing prices of an instrument for the most recent 25 days and then dividing it by 25 will get you the 25 day moving average.
     Though the daily closing price is the most common price used to calculate simple moving averages, the average may also be based on the midrange level or on a daily average of the high, low, and closing prices.
     
   • Advantages Moving average is a smoothing tool that shows the basic trend of the market.
     It is one of the best ways to gauge the strength a long-term trend and the likelihood that it will reverse. When a moving average is heading upward and the price is above it, the security is in an uptrend. Conversely, a downward sloping moving average with the price below can be used to signal a downtrend.
     
   • Drawbacks It is a follower rather than a leader. Its signals occur after the new movement, event, or trend has started, not before. Therefore it could lead you to enter trade some late.
     It is criticized for giving equal weight to each interval. Some analysts believe that a heavier weight should be given to the more recent price action.
     
   • Example You can see from the chart below examples of two simple moving averages - 5 days (Red), 20 days (blue).
     
     
2. Exponential Moving Average (EMA) The exponential moving average (EMA) is a weighted average of a price data which put a higher weight on recent data point.
   
   • Characteristics The weighting applied to the most recent price depends on the specified period of the moving average. The shorter the EMA period, the more weight will be applied to the most recent price.
     An EMA can be specified in two ways: as a percentage-based EMA, where the analyst determines the percentage weight of the latest period's price, or a period-based EMA, where the analyst specifies the duration of the EMA, and the weight of each period is calculated by formula. The latter is the more commonly used.
     
   • Main Advantages compared to SMA Because it gives the most weight to the most recent observations, EMA enables technical traders to react faster to recent price change.
     As opposed to Simple Moving Average, every previous price in the data set is used in the calculation of EMA. While the impact of older data points diminishes over time, it never fully disappears. This is true regardless of the EMA's specified period. The effects of older data diminish rapidly for shorter EMAs than for longer ones but, again, they never completely disappear.
     
   • Example You can see from the chart below the difference between SMA (in blue) and EMA (in green) calculated over a 20-day period.
     
     

MACD (Moving Average Convergence-Divergence)

The moving average convergence-divergence indicator (MACD) is used to determine trends in momentum.

• Calculation It is calculated by subtracting a longer exponential moving average (EMA) from a shorter exponential moving average. The most common values used to calculate MACD are 12-day and 26-day exponential moving average.
  Based on this differential, a moving average of 9 periods is calculated, which is named the "signal line".
  MACD = [12-day moving average – 26-day moving average] > Exponential Weighted Indicator
  Signal Line = Moving Average (MACD) > Average Weighted Indicator
  
• Interpretation Due to exponential smoothing, the MACD Indicator will be quicker to track recent price changes than the signal line. Therefore,
  When the MACD crossed the SIGNAL LINE: the faster moving average (12-day) is higher than the rate of change for the slower moving average (26-day). It is typically a bullish signal, suggesting the price is likely to experience upward momentum.
  Conversely, when the MACD is below the SIGNAL LINE: it is a bearish signal, possibly forecasting a pending reversal.
  
• Example of a MACD You can see from the chart below example of a MACD. The MACD Indicator is represented in green and the Signal Line in Blue.
  
  

Bollinger Bands

Bollinger Bands were developed by John Bollinger in the early 1980s. They are used to identify extreme highs or lows in price. Bollinger recognized a need for dynamic adaptive trading bands, whose spacing varies based on the volatility of the prices. During period of high volatility, Bollinger bands widen to become more forgiving. During periods of low volatility, they narrow to contain prices.

• Calculation Bollinger Bands consist of a set of three curves drawn in relation to prices:
  The middle band reflects an intermediate-term trend. The 20 day - simple moving average (SMA) usually serves this purpose.
  The upper band is the same as the middle band, but it is shifted up by two standard deviations, a formula that measures volatility, showing how the price can vary from its true value
  The lower band is the same as the middle band, but it is shifted down by two standard deviations to adjust for market volatility.
  Bollinger Bands establish a Bandwidth, a relative measure of the width of the bands, and a measure of where the last price is in relation to the bands.
  
  Lower Bollinger Band = SMA - 2 standard deviations
  Upper Bollinger Band = SMA + 2 standard deviations.
  Middle Bollinger Band = 20 day - simple moving average (SMA).
  
• Interpretation The probability of a sharp breakout in prices increases when the bandwidth narrows.
  When prices continually touch the upper Bollinger band, the prices are thought to be overbought; triggering a sell signal.
  Conversely, when they continually touch the lower band, prices are thought to be oversold, triggering a buy signal.
  
• Example of Bollinger Bands You can see from the chart below the Bollinger Bands of the S&P 500 Index, represented in green.
  
  

The Parabolic System, Stop-and-Reverse (SAR)

The parabolic SAR system is an effective investor's tool that was originally devised by J. Welles Wilder to compensate for the failings of other trend-following systems.

• Description The Parabolic SAR is a trading system that calculates trailing "stop-losses" in a trending market. The chart of these points follows the price movements in the form of a dotted line, which tends to follow a parabolic path.
  
• Interpretation When the parabola follows along below the price, it is providing buy signals.
  When the parabola appears above the price, it suggests selling or going short.
  The “stop-losses” dots are setting the levels for the trailing stop-loss that is recommended for the position. In a bullish trend, a long position should be established with a trailing stop that will move up every day until activated by the price falling to the stop level. In a bearish trend, a short position can be established with a trailing stop that will move down every day until activated by the price rising to the stop level.
  The parabolic system is considered to work best during trending periods. It helps traders catch new trends relatively early. If the new trend fails, the parabola quickly switches from one side of the price to the other, thus generating the stop and reverse signal, indicating when the trader should close his position or open an opposing position when this switch occurs.
  
• Example of an SAR parabolic study You can see from the chart below in green the Parabolic System applied to the USDJPY pair.
  
  

Relative Strength Index (RSI)

The RSI was developed by J. Welles Wilder as a system for giving actual buy and sell signals in a changing market.

• Definition RSI is based on the difference between the average of the closing price on up days vs. the average closing price on the down days, observed over a 14-day period. That information is then converted into a value ranging from 0 to 100.
  When the average gain is greater than the average loss, the RSI rises, and when the average loss is greater than the average gain, the RSI declines.
  
• Interpretation The RSI is usually used to confirm an existing trend. An uptrend is confirmed when RSI is above 50 and a downtrend when it's below 50.
  It also indicates situations where the market is overbought or oversold by monitoring the specific levels (usually “30” and “70”) that warn of coming reversals.
  An overbought condition (RSI above 70) means that there are almost no buyers left in the market, and therefore prices are more likely to decline as those who previously bought will now take their profit by selling.
  An oversold condition (RSI below 30) is the exact opposite.
  
• Example of RSI You can see in red from the chart below the Relative Strength Index of the GBPUSD pair.
  

Support and Resistance

Support and Resistance are lines that illustrate the ongoing battle between the buyers (the bulls) and the sellers (the bears).

• Support levels indicate the price where the majority of investors believe that prices will move higher. As the price declines towards support and the price become cheaper, buyers become more inclined to buy and sellers become less inclined to sell.
• Resistance levels indicate the price at which a majority of investors believe that prices will move lower. As the price moves towards resistance and the price becomes higher, sellers become more inclined to buy and buyers become less inclined to sell.

See below a graph representing the support and resistance of the EUR/JPY.

As long as the price of a security moves between the support and resistance level, the trend is likely to continue. A break beyond a level of support or resistance can be the sign of:

• An acceleration of a trend
• A reversal of a trend

When a resistance level is broken, its role is reversed and it becomes a support level. Similarly, when a support level is broken, that level becomes a resistance level.
You will see below a graph representing a trend acceleration of the AUD/JPY where a resistance becomes a support level.

Support and resistance analysis is used by technical traders to make trading decisions and identify when a trend is accelerating or reversing. Being aware of these important levels should affect the way you trade and help you significantly improve your performance.

Charts

A price chart is a sequence of prices plotted over a specific time frame. On the chart, the vertical axis represents the price scale while the horizontal axis represents time.

Chart properties

When looking at a chart, there are several factors that you should be aware of as they affect the information that is provided. They include the time frame and the price scale used.

• Time frame Each bar, candlestick or dot in a chart contains information regarding a defined time interval. The length of this interval is the chart interval.
  Deciding on which chart interval to use depends on your trading style and investment horizon. Day traders may use chart intervals as short as 1 minute, while swingers (traders that hold trades between several days to a couple of weeks) usually use intervals varying from several hours to a day.
  
• Price Scale There are two methods for displaying the price scale along the y-axis: arithmetic and logarithmic.
  On an arithmetic price scale, each price point is separated by the same vertical distance no matter what the price level. Each unit of measure is the same throughout the entire scale. If a stock advances from 10 to 100 over a 6-month period, the move from 10 to 20 (+100% variation) will appear to be the same distance as the move from 90 to 100 (+11% variation). Even though this move is the same in absolute terms, it is not the same in percentage terms.
  On a logarithmic scale, each price point is separated by a vertical distance that is equal in percentage terms. An advance from 10 to 20 would represent an increase of 100%. An advance from 20 to 40 would also be 100%, as would an advance from 40 to 80. All three of these advances would appear as the same vertical distance on a logarithmic scale.
  

Type of Charts

There are three main types of charts that are used by traders depending on the information that they are seeking and their individual skill levels. The chart types are: the line chart, the bar chart and the candlestick chart.

• Line Chart INTERPRETATION: The line chart is the most basic type of chart. The line shown in the chart connects single prices over a selected period of time. The most popular line chart is the daily chart. Although any point in the day could be plotted, most traders focus on the closing price, which they consider the most important. However this presents an immediate problem; using a daily line chart, one cannot see the price activity that occurred during the rest of the day.
  BENEFIT: A line chart gives the trader a fairly good idea of where the price of an asset has traveled over a given time frame.
  
• Bar Chart
  
  INTERPRETATION: Each vertical bar represents one period of price activity from the chosen periodicity, which could be as short as 1 minute for intraday charts, or as long as several years for historical charts. On a daily chart, the vertical bar represents one day's trading whereby:
  + the top of the bar represents the market's high price
  + the bottom of the bar represents the low
  + the left hash mark on the bar indicates the opening price
  + the right hash mark on the bar indicates the closing price
  BENEFIT: By including open, high, low and close information, bar charts allow more detailed analysis than standard line charts.
  
• Candlestick Chart
  
  INTERPRETATION: The candlestick chart is closely related to the bar chart, as it also represents the four major prices: high, low, open, and close. Each candle represents a timescale of your choice. The following timescales are offered by different chart software: 1 min, 15 min, 30 min, 1 hour, 2 hour, 4 hour, 8 hour, daily, weekly and monthly.
  For a daily chart, each candlestick represents one day's trading range and is displayed as "open" or "closed":
  + An open candlestick represents a higher close than open and is shown in blue.
  + A closed candlestick represents a lower close than open and is shown in red.
  Each candlestick consists of two components, the real body and the shadows:
  + The real body is the thick part of the candlestick that represents the open and the close
  + The thin lines above and below the real body are the shadows that represent the session's price extremes. The upper shadow (above the real body) measures the high of the session and the lower shadow (below the real body) measures the low of the session.
  BENEFIT: The candlestick chart is the most common chart used for technical analysis. Many trading strategies are based upon patterns in candlestick charting.
  

Technical Indicators

Trend is the most important concept in technical analysis. A trend designates the general direction of a market movement. It is important to identify trends so that you can trade with them rather than against them.

Types of Trend

A trend may be:

• Upward – this is called a Rally ; the market trends the way up
• Downward – this is called a Downtrend ; the market trends the way down
• Sideways / Horizontal – this is called "flat market" or "trendless" ; the market trends nowhere

Trend Lengths

A trend of any direction can be classified according to its length

• Short-term Trend ; it usually lasts no more than three weeks
• Intermediate Trend ; it usually lasts somewhere between 3 weeks to several months
• Long-Term or Major Trend ; it is considered to last for a year or more. It is composed of several intermediate trends, which often move against the direction of the Major Trend

Trendlines

A trendline is a simple charting technique that consists of connecting the significant highs (peaks) or the significant lows (troughs) to represent the trend in the market. These lines are used to clearly show the trend and also help in the identification of trend reversals.
A trendline may be classified as:

• Rising trendline
• Declining trendline
• Sideways trendline

Example:

On the chart below, you can see a representation of a long-term upward trend in the EURUSD, along with a rising trendline.

 

Channels

A price channel is the addition of two parallel trendlines that act as strong areas of support and resistance. One trendline connects a series of price highs while the other connects a series of lows. A channel can slope upward, downward or sideways. Traders expect a given security or currency to trade between the two levels of support and resistance until it breaks beyond one of the levels. They used channel lines to point out where to place "take profit order" and "Stop Loss Order".
You can see below a chart of an upward channel in the S&P 500 Index.

http://www.markets.com/education/technical-analysis/technical-indicators.html

What is Technical Analysis?

Technical analysis is a technique used to forecast the future direction of prices through the study of historical market data, primarily price, volume and open interest.
Technical traders use trading information (such as previous prices and trading volume) along with mathematical indicators to make their trading decisions. This information is usually displayed on a graphical chart updated in real time that is interpreted in order to determine when to buy and when to sell a specific instrument.

Dow Theory

The ideas of Charles Dow, the first editor of the Wall Street Journal, form the basis of modern technical analysis. They are based upon three main premises:

1. The price is a comprehensive reflection of all market forces. At any given time, all market information and forces are reflected in the prices.
2. Prices move in trends that can be identified and turned into profit opportunities.
3. Price movements are historically repetitive.

• Advantages of Technical Analysis It requires much less data than fundamental analysis. From price and volume, a technical trader can obtain all the information he needed.
  As it is focused on identifying trend reversal, the question of timing to enter a trade is easier to address with technical analysis.
  
• Drawbacks of Technical Analysis Technical analysis can become a self fulfilling prophecy. When many investors, using similar tools and following the same concepts, shift together the supply and demand, this can lead to the prices moving in the predicted direction.
  

Technical and/or Fundamental Analysis

Technical Analysis is one of the most significant tools available for forecasting financial market behaviour. It has been proven to be an effective tool for investors and is constantly becoming more accepted by market participants. When used in conjunction with fundamental analysis, technical analysis can offer a more complete valuation, which can make the difference in executing profitable trades.

http://www.markets.com/education/technical-analysis/what-is-technical-analysis.html

Main Macroeconomic Indicators

Macroeconomic indicators are statistics that indicate the current status of the economy of a state depending on a particular area of the economy (industry, labor market, trade, etc.). They are published regularly at a certain time by governmental agencies and the private sector.
Markets.com provides an Economic Calendar for the dates of critical fundamental announcements and events. When properly used, these indicators can be an invaluable resource for any Forex trader.
In truth, these statistics help Forex traders monitor the economy's pulse; thus it is not surprising that these are religiously followed by almost everyone in the financial markets. After publication of these indicators we can observe volatility of the market. The degree of volatility is determined depending on the importance of an indicator. That is why it is important to understand which indicator is important and what it represents.

• Interest Rates Announcement

  Interest rates play the most important role in moving the prices of currencies in the foreign exchange market. As the institutions that set interest rates, central banks are therefore the most influential actors. Interest rates dictate flows of investment. Since currencies are the representations of a country’s economy, differences in interest rates affect the relative worth of currencies in relation to one another. When central banks change interest rates they cause the forex market to experience movement and volatility. In the realm of Forex trading, accurate speculation of central banks’ actions can enhance the trader's chances for a successful trade.
  

• Gross Domestic Product (GDP)

  The GDP is the broadest measure of a country's economy, and it represents the total market value of all goods and services produced in a country during a given year. Since the GDP figure itself is often considered a lagging indicator, most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility.

• Consumer Price Index

  The Consumer Price Index (CPI) is probably the most crucial indicator of inflation. It represents changes in the level of retail prices for the basic consumer basket. Inflation is tied directly to the purchasing power of a currency within its borders and affects its standing on the international markets. If the economy develops in normal conditions, the increase in CPI can lead to an increase in basic interest rates. This, in turn, leads to an increase in the attractiveness of a currency.

• Employment Indicators

  Employment indicators reflect the overall health of an economy or business cycle. In order to understand how an economy is functioning, it is important to know how many jobs are being created or destructed, what percentage of the work force is actively working, and how many new people are claiming unemployment. For inflation measurement, it is also important to monitor the speed at which wages are growing.

• Retail Sales

  The retail sales indicator is released on a monthly basis and is important to the foreign exchange trader because it shows the overall strength of consumer spending and the success of retail stores. The report is particularly useful because it is a timely indicator of broad consumer spending patterns that is adjusted for seasonal variables. It can be used to predict the performance of more important lagging indicators, and to assess the immediate direction of an economy.

• Balance of Payments

  The Balance of Payments represents the ratio between the amount of payments received from abroad and the amount of payments going abroad. In other words, it shows the total foreign trade operations, trade balance, and balance between export and import, transfer payments. If coming payment exceeds payments to other countries and international organizations the balance of payments is positive. The surplus is a favorable factor for growth of the national currency.

• Government Fiscal and Monetary policy

  Stabilization of the economy (e.g., full employment, control of inflation, and an equitable balance of payments) is one of the goals that governments attempt to achieve through manipulation of fiscal and monetary policies. Fiscal policy relates to taxes and expenditures, monetary policy to financial markets and the supply of credit, money, and other financial assets.

Conclusion: There are many economic indicators, and even more private reports that can be used to evaluate the fundamentals of forex. It's important to take the time to not only look at the numbers, but also understand what they mean and how they affect a nation's economy.

Source: http://www.markets.com/education/fundamental-analysis/main-economic-indicators.html

What is Fundamental Analysis?

Fundamental analysis is a method that attempts to predict the intrinsic value of an investment. It is based on the theory that the market price of an asset tends to move towards its 'real value' or 'intrinsic value'.
Fundamental analysis in Forex entails predicting the price valuation of a currency and its market trends by analyzing current economic conditions, government policy and societal factors within a business cycle framework. Forex Traders gauge a country's economic state by examining macroeconomic indicators covering:

• Interest Rates Announcement
• Gross Domestic Product (GDP)
• Consumer Price Index (Inflation) and Spending Indicators
• Employment Indicators
• Retail Trade and Consumer Confidence
• Balance of Trade Surplus or Deficit
• Government Fiscal and Monetary Policy

Visit our economic indicators page and learn more about the different indicators and their impacts on the markets.

Fundamental Analysis Benefits

Determining the intrinsic value of an investment

Identifying long-term investment opportunities

Fundamental Analysis Drawbacks

Too many macroeconomic indicators and indicator can confuse novice investors

Source: http://www.markets.com/education/fundamental-analysis/what-is-fundamental-analysis.html

Trading Orders

Forex and CFD Trading Orders

There are various types of orders which a trader can use to trade Forex and CFDs. Below we outline the different order types: Market Order, Stop-Loss / Limit Orders, Entry Orders, Trailing Stop-Loss Orders and One-Cancels-the-Other Orders.


Market Order
A market order is an order to buy or sell at the current ask or bid price quoted on the market. The buy order may be to initiate a new position or liquidate a previous sell position. The sell order may be to initiate a new position or liquidate a previous buy position.

Here is an example of a market order. The current market price – in this case, for buying US Dollars (Ask price) - is 1.0555 and for selling US Dollars (Bid price) is 1.0551.

 Stop-Loss / Limit Orders

Stop-Loss and Limit orders are protective orders that close an open position or future position under certain conditions, namely price.

Stop-Loss Orders are used to limit trader's losses if the market moves against their position. The trader sets the maximum amount (in terms of pips) that he is willing to lose on a certain trade. When that specified price is reached, the trade is executed.

Conversely, Limit Orders are used to lock in the trader's profit if the market moves favorably. The trader sets in advance the price at which he wants to close his position.

In the example below, a trade was opened at the market price of 1.0561(buying order). According to the stop-loss order, the position will be closed if and when the price falls to 1.0553. According to the take-profit order, the position will be closed if and when the price hits 1.0565.

 Entry Orders

These types of orders open a new position only if the market reaches a price specified by the trader.

Entry orders are divided into two varieties: Entry Limit Orders and Entry Stop Orders.


Entry Limit Orders – Entry limit orders are orders that are placed by traders to enter the market at a more favorable price than the current price. When Buying a currency pair or a CFD, a Entry Limit order will be placed below the current market price. When Selling, a limit entry order will be placed above the current market price.
When placing Entry Limit Orders, the trader expects that the market price will bounce back after reaching the level at which the entry limit order was placed.

For example:

The USD/CAD trades at 1.0547 / 1.0551. Here, you expect the pair to trend higher, but prefer going long at a better price – you expect the price to go down to 1.0525 before it continues going up. You then place an entry limit buy order of 1 lot (5,000 USD/CAD) at 1.0525. When the rate reaches 1.0525, the limit order will be executed and 1 lot of USD/CAD will be bought at 1.0525.

Entry Stop Orders – Entry stop orders are orders that are being placed by traders to enter the market at a less favorable price than the current price. A BUY Entry Stop order will be placed above the current market price. When A SELL Entry Stop order will be placed below the current market price.
When placing Entry Stop Orders, the trader expects that once the market's momentum breaks through the specified price, the trend's movement is confirmed and will continue in that direction.

For example:

 One-Cancels-the-Other Orders (OCO)

OCO orders are combined orders with both a stop price and a limit price. When one of the orders is executed, the other is automatically cancelled. OCO orders can be applied to open positions, or they can be used to open a new position.

Say for example a trader believes that the USD/CAD, currently traded at 1.0548/1.0552, will continue trending higher; you believe that should the pair break above 1.0560, it will rise to at least 50 pips. Nevertheless, you expect that prior to this major incline, the pair will retrace to 1.0544. You can place an entry limit at 1.0544, but in case the pair does not hit 1.0544 before climbing higher, you would miss the trade. You then place an OCO order to buy the USD/CAD if it reaches 1.0544 or 1.0560. Of the two, the first bid price to exist in the market will trigger the order:

 Stop and limit orders entered on an existing position are also types of OCO orders. When either the stop or the limit is executed, the other is automatically canceled.

Trading Terms

FX & CFD Trading Terminology

Forex and CFD investing is just like any endeavor, where preparation is a valuable instrument. Understanding and familiarizing yourself with terminology is valuable asset for any trader.
Quote An indicative market price, when used in Forex, refers to the prevailing exchange rate of the quoted currency at that moment. A quote will always be for a currency pair; for example EUR/USD, AUD/JPY or USD/JPY. The first currency in the pair is the quoted currency, while the second currency is referred to as the counterpart.
A currency pair is usually quoted to a 1/10,000 degree of precision (i.e. until the 4th digit right of the decimal point); except for Japanese yen pairs, where quotes are usually made to 1/100 degree of precision (i.e. to the second digit right of the decimal point).
A quote will always be provided in a form of two figures. The first figure is always the Bid or selling price, while the second is the Ask or buying price.
For example:

FX & CFD Trading Terminology

Forex and CFD investing is just like any endeavor, where preparation is a valuable instrument. Understanding and familiarizing yourself with terminology is valuable asset for any trader.

• Bid/Ask The Bid or the selling price is the exchange rate at which a currency is offered for sale. The Ask or buying price is the exchange rate at which a currency can be bought.
  In the example above the EUR/USD pair (Euro vs. US dollar) is quoted at 1.5034/1.5037. In other words, the quote for the EUR/USD pair is 1.5034/1.5037, where 1.5034 is the Bid price and 1.5037 is the Ask price. Meaning if you wish to sell the quoted currency – in this case the Euro – then you would receive 1.5034 US Dollars per 1 Euro. On the other hand, if you were buying the quoted currency, then the quote tells you that to buy Euros for US dollars, you would need to pay 1.5037 dollars per 1 euro.
  
• Lot A lot is the standard unit size of a transaction. It represents the minimum quantity which can be traded in any given instrument.
  For Forex Trading, Markets.com standard lot size is 1,000 units of the quoted currency.
  For CFD Trading, the standard lot size varies from 1 to 500 units of the quoted CFD.
  
• Pip This is the smallest value in a currency quote and can be different for different currencies. For most currency pairs a pip is the 1/10,000 (0.0001) fraction of the quoted currency. However, in Japanese yen pairs, a pip refers to a 1/100 (0.01) fraction of the quoted currency.
  Profits on a trade can be expressed in pips, for example: Suppose you bought the EUR/USD at an exchange rate of 1.5016 and sold it at an exchange rate of 1.5037. 37-16=21. You made a 21 pip profit.
  
• Pip Value The pip value can be either variable or fixed, depending on the currency pair it refers to and the base currency (i.e. measuring currency) of your account. The pip value is also a function of the amount traded.
  The simplest way to calculate the pip value is to divide 1 pip by the exchange rate and multiply it by the lot size. This gives you the pip value in terms of the quoted currency. If the base currency of your account is other than the quoted currency, then simply multiply this by the applicable exchange rate.
  For example: What is the pip value of a trade in GBP/JPY with a price of 128.92? The pip value of 1 standard lot (5,000) of GBP/JPY which is traded at 128.92 is:
  0.01/128.92 = 0.00007756 GBP
  0.00007756 x 5,000=0.387 GBP
  The base currency of your account is USD. If the exchange rate for GBP/USD is 2.0612, then the pip value for 1 standard lot in terms of the account's base currency is: 0.387x 2.0612 = $0.80.
  
• Spread This is the difference between the bid price and the ask price. For example: If the quote for the EUR/USD pair is 1.5034/1.5037 (in other words the bid price is 1.5034 and the ask price is 1.5037), then the spread for the EUR/USD in this case is 3 pips. Low spreads ensure that traders can get in and out of their trades at very low slippage.
  
• Margin The amount of funds required to open or maintain a position. It is usually expressed as a percentage of the open position. You may have a margin requirement of 0.5%, which would mean that in order to hold a position of 100,000 EUR/USD, an equity level of 500 euros or more must be maintained.
  
• Leverage This is the use of borrowed capital to increase potential return. Trading on leveraged capital means that you can trade amounts significantly higher than the balance of your funds, which only serves as the margin. High leverage can significantly increase the potential return, but it can also significantly increase potential losses. The leverage is specified as a ratio, such as 200:1. This means that the trader can trade amounts 200 times higher than the sum in his or her margin account. If the trader has $1,000 in his account, it means that he can now open trades worth $200,000.
  
• Interest In a sense, interest is the price of money. It is the amount paid on loans and received on deposits.
  
• Long A trader going long expects the price to go up when buying a currency pair or a CFD.
  
• Short A trader going short expects the price to go down when selling a currency pair or a CFD.
  
• Value date The date on which counterparts to a financial transaction agree to settle their respective obligations, i.e., exchanging payments.
  
• Rollover Process where the settlement of a deal is rolled forward to another value date and a charge is levied based on the difference in rates of interest of the two currencies. Every day, at 21:00GMT, open positions are rolled over to the next day and the positions gain or lose interest based on the interest differential between the bought and sold currencies.
  If you buy overnight a currency pair where the base currency has a higher interest rate than the terms currency, then you’ll receive interest and vice versa.
  

CFD Trading Examples

ompiled below are several CFD trading examples. Please note that these are just examples; be aware that trading Forex and Contracts for Difference (CFDs) – like online futures trading – is speculative and involves significant risk.

Assumptions

You funded your Markets.com Trading Account with a $2,000 initial deposit.
You are considering investing in the US Equity Market and below are the trading conditions of some US Equity CFD Indices:

Instrument Name	Contract Size	Leverage (Approximately)
S&P 500	1	100:1
DJ 30	1	100:1

USD interest rate is charged at 4.0%.
CFD Positions left open overnight incur a financing charge against the whole amount of the position at a rate of +/ -1.5%.

DAY 1 - Friday, July 3.

The US Non-Farm Payroll numbers come out worse than expected – unemployment rate is rising. This causes US stock markets to fall 2%.
You believe that stock market losses are overdone and that upcoming corporate earnings numbers will be better than expected, and decide now is a good time to go long on the US stock market. You decide that the S&P 500 CFD is your best choice since it encompasses a wide group of market leading companies, and buy 100 lots at $874.25.
Since you have bought 100 lots, an increase of 1 point in the S&P 500 index from 874.25 to 875.25 will earn a profit of $100, while a drop of 1 point from 874.25 to 873.25 will incur a loss of $100.
+ Opened Position: Buy 100 S&P Lots at 874.25 (Total purchase amount = $87,425)
+ Client Account Report

Balance (USD)	Equity (USD)	Lots Open #	Used Margin (USD)	Usable Margin (USD>
$2,000	$2,000	100	$874.25	$1,125.75

1. Balance = Deposit ($2,000) + Sum of Realized Profit & Loss ($0) = $2,000
2. Equity = Balance ($2,000) + Sum of Unrealized Profit & Loss ($0) = $2,000
3. # Lots open = # lots S&P 500 CFD purchased = 100 lots
4. Used Margin = # Lots open (100) x Value of one lot ($874.25) x Margin (1%) = $874.25
5. Usable Margin = Equity ($2,000) – Used Margin ($874.25) = $1,125.75

DAY 4 - Monday, July 6.

Your Assumptions are correct and corporate profits are better than expected as US companies were able to boost their earnings by cutting their expenses. On the next trading day, the S&P rallies over 3% to $901.50 where you close your position by selling your CFDs.
+ Closed Position: Sell 100 S&P Lots at 901.50 (Total sale amount = $90,150)
+ P&L Report:

Open Long Position	$87,425	= 100 S&P lots bought at 874.25 (Total purchase amount = $87,425) on Friday, July 3
Starting Value	$87,425
Overnight Financing	$26	1 lot of S%P 500 is $874.25 Financing Charge: 4.0% + 1.5% = 5.5% Daily interest charge: [874.25 x (4.0% + 1.5%)]/360 = $0.13, i.e 13 cents per lot each day Total interest charge:$0.13 x 100 lots x 2 days = $26
Sales Proceeds	$90,150	= 100 S&P lots sold at 901.5 on Monday, July 6.
Net Cost	$26	= Interest paid to maintain the CFD long position that was opened
Profit on Trade	$2,699	= Sale proceeds - Starting Value - Overnight financing = $90,150 - $87,425 - $26 = $2699

DAY 6 - Wednesday, July 8.

Two days later, more poor economic data is published in the US and market sentiment turns negative. To capitalize on the downward correction in stocks, you decide to sell (go short) the Dow Jones (DJ 30) with the aim of buying it back cheaper in the short-term. On July 8, you sell 5 Lots of DJ 30 at a price of $8,180.00.
Since you have sold 5 Lots, every drop of one point in the DJ 30 will earn you $5, and every increase of one point will cost you $5.
+ Opened Position: Sell 5 Lots of DJ 30 at $8,180.00 (Total sale amount = $40,900)

DAY 7 - Thursday, July 9.

Again, your strategy succeeds. Overnight the market drops lower and the next day, July 9, you buy back the 5 Lots of DJ 30 at $8,150, making a gross profit of $150 (5 lots x $30).
+ Closed Position: Buy 5 Lots of DJ 30 at $8,150 (Total purchase amount = $40,750)
+ P&L Report:

Open Sell Position	$40,900	= 5 DJ 30 lots sold at $8,180 (Total sale amount = $40,900) on Wednesday, July 8.
Starting Value	$40,900
Overnight Financing	$2.85	1 lot of DJ 30 is $8,180 Financing Charge: 4.0% - 1.5% = 2.5% Daily interest received: [$8,180 x (4.0% - 1.5%)]/360 = $0.57, i.e 57 cents per lot each day. Total interest received: $0.57 x 5 lots x 1 day = $2.85
Purchase Amount	$40,750	= 5 DJ lots bought at $8,150 on Wednesady, July 9.
Profit on Trade	$152.85	= Starting Value - Purchase Amount + Overnight Financing = $40,900 - $40,750 + $2.85 = $152.85

PLEASE NOTE: the exact amount of interest to debit/ credit may vary each day depending on changes in any of the following factors: the underlying instrument price, central bank rates, margin rates and the individual CFD portfolio.

Source: http://www.markets.com/education/cfd-education/cfd-trading-examples.html

CFD Terms

What is a CFD?

A CFD is a Contract agreed between you and your broker to exchange, at the closing of the contract, the Difference in price between the opening and closing price of the underlying instrument.
This means that in CFD dealing, you do not physically buy or hold the underlying asset; you trade a contract whose value captures every change of the price of the underlying asset.

How does a CFD work?

• Margin
  CFDs are dealt on a margin basis and you secure the transaction by paying a deposit. This means that when you open a position, you do not have to pay for its full value. Instead, you put up a deposit from 1% to 2% (depending on the contract’s margin requirement), which enables you to trade up to 100 times your initial capital (leverage of up to 100:1).
  You are required to keep funds in your account to cover the transaction amount of each CFD and any associated costs if the price moves unfavorably. The margin requirement must be maintained to keep your position open. Should the equity value of the account drop below the minimum margin requirement, additional funds must be added.
  
• Trading and Pricing CFDs are traded in units that vary depending on the CFD itself. For example:
  
  • Oil is traded in barrels (bbl)
  • Wheat is traded in bushels (bu)
  • Coffee is traded in pounds (lb)
  All units are set to a standardized quantity known as a “lot”. A lot represents the minimum quantity, which can be traded in any given instrument.
  CFDs are quoted as seen in the underlying market. So for example, stock indices and commodities are quoted and traded in their base currency. The FTSE100 CFD is quoted in Pounds and the S&P500 in Dollars.
  
• Overnight Interest adjustments When you leave a CFD position opened overnight, you pay or receive daily interest adjustments depending on whether you have a long or a short position. These adjustments represent the financing fees for Markets.com to maintain your position opened.
  The Markets.com Financing Charge is 1.5% and overnight interest adjustments are calculated in accordance with the following formula:
  Overnight rollover = (Interest Rate Differential – Financing Charge)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.
  
• Expiration of underlying instrument (Roll Overs) Unless otherwise specified, the underlying instrument of a CFD has an expiration date. However, you should be aware that CFDs are not traded up until the exact expiration date of the underlying instrument. Instead, CFDs are rolled over to the next underlying Future Price during the last weekend (before the official expiration day). This is known as the expiration rollover.
  If there would be any substantial price difference between the two Futures, an adjustment will be Credited or Debited from the balance of your account subject to the open position amount of the expiring CFD. This Adjustment will show up in your account under Rollover Charge and will not affect the real value of your Equity.
  However, you should be aware that the switch between the two Future prices of the underlying CFD could involve a substantial price difference. Therefore, Entry Orders might be filled on Market rates rather then on the predefined rates.
  If you do not want to incur the price adjustment or any implication of the underlying CFD rollover, you can close your position(s) and/or cancel Orders before the rollover date and open a new position afterwards. Markets.com, at its best effort, will inform customers about any projected expiration of instruments by Popup, email, or through the site.
  Example:
  A Markets.com Client's Account is long 10 Dax 30 Futures CFDs at 5,700.
  The price of the current Dax 30 Futures CFD (Expiry Dec 09) is EUR 5,710, making the client a profit of EUR 100 (10 lots x EUR 10).
  The price of the next contract (Expiry Mars 10) is EUR 5,720, i.e. + EUR 10 over current month.
  When Markets.com roll over to the next month's contract:
  The price feed is changed to new contract; the client's open position will now show a profit of EUR 200 (10 lots x [5,720-5,700]).
  But the Client's Account will be debited EUR 100 to compensate for changes in P/L due to the roll.
  The net financial effect of the roll-over is zero.
  
  Source: http://www.markets.com/education/cfd-education/cfd-terms.html