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The Carry Trade

The Carry Trade technique is one of the best known and employed in the financial world. Most institutions and management businesses implement it, and it is a simple way to earn money. This strategy works as follows: You borrow from a low interest rate currency and buy a currency with a higher interest rate. The goal is to make profits from the spread or difference between both interest rates.…





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Added by Caroline Carlin on November 24, 2010 at 1:30pm — No Comments

Oil, forecasts and the Forex Market

What can be said about forecasts? Use actual and future market trends with available data and facts to forecast. Analysts trust technical and fundamental statistics to predict the direction of the economy, the stock market and individual stocks.

Why should you worry about oil prices if you are not buying or selling oil? If you trade currencies, there is a good reason to take this price into account. The…

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Added by Caroline Carlin on November 23, 2010 at 9:00pm — No Comments

Gold and the Forex Market

Gold Trading has its origins in the past, when this metal was a symbol of wealth and social status, as it was primarily used as a reference to establish the currency exchange rates. “Gold pattern” is a monetary system where the value of the currency is defined by a specific weight in gold. Under this standard paper money is guaranteed up to that amount of gold by those who print the currencies. It was used in the past to trade commodities and exchange with other currencies. Those… Continue

Added by Caroline Carlin on November 23, 2010 at 11:00am — No Comments

The Cycles in Economy

Economic cycles are successive periods during which the economic activity is more or less good. The evolution of economic activity is called economic situation. The growth of the economy is not continuous. There are 4 phases in an economic cycle:



- Rally : It is a reversal point between recession and growth phases.…

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Added by Caroline Carlin on November 23, 2010 at 12:14am — No Comments

Trader’s Psychology: Attributes for Success

Successful trading depends, in my opinion, 80% on psychology and 20% on methodology. This is why self-knowledge and studying one’s own behavioral patterns represent the key to success.We all well know that the Forex market is highly volatile and that generally decisions have to be made in very short spans of time. Uncertainty dwells above all things, and though nowadays we can count on many tools and techniques, nobody knows for sure what will happen to the market prices. In… Continue

Added by Caroline Carlin on November 18, 2010 at 12:04pm — No Comments

What are Divergences and how to use them to increase Forex profits

Divergences occur when the price of a currency pair and an oscillator-type indicator move in opposing directions. In technical analysis, you can make decisions by identifying situations where the divergence (for example the price of a currency pair moves in a contrarian direction from another indicator as for example the Moving Average Convergence/Divergence – MACD).



There will be a divergence… Continue

Added by Caroline Carlin on November 17, 2010 at 1:30am — No Comments

How much is it safe to risk in Forex?

It seems almost unbelievable, but sometimes the simpler things can be the harder to accept and understand for some people. When one keeps on advancing in this exciting world of trading one encounters a lot of people that do not have a clue about how to manage an account, be it a demo or much worse, a real trading account. I hope this article helps them to grasp a few essential points and keep them present in mind at any time.…



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Added by Caroline Carlin on November 4, 2010 at 3:00pm — No Comments

EURJPY Staircase on Weekly Charts

This week’s candle for the Euro-Yen has pierced the steeper down-trend line and is trading above the 25% retracement where it encounters a strong resistance area which had been repeatedly holding as support from October 2008 to February 2009, finally pierced in last May and subsequently broken to the downside.

According to the Trendline Staircase Strategy, we could expect the currency pair to push forward…

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Added by Caroline Carlin on November 4, 2010 at 12:00pm — No Comments

Psychological Control: The Key to Forex Success

The following comments were made by real traders, some professional and other well advanced in their learning curve, who at some point have shared with me their own experiences. Can you recognize yourself in any of the statements below?



Trader A: “I have been trading for the last two years and started with demo accounts, things were going quite well and then I opened my real account. At the beginning…

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Added by Caroline Carlin on November 2, 2010 at 12:30pm — No Comments

Trendline Staircase Strategy

The Trendline Staircase Strategy is a very simple system based on diagonal supports or resistances, and a sequential series of previous trend lines. It can be employed whenever there has been at least one steep deviation from the average angle of the main trend causing the formation of a new trendline.



On the example shown with the GBPJPY Daily chart below, we can appreciate a sequence of three successively steeper trend… Continue

Added by Caroline Carlin on November 2, 2010 at 10:30am — No Comments

Beliefs, anticipation and failure





What you think you know about the markets can become the worst enemy of your trading. One of the biggest obstacles a trader has to fight against is the series of strong beliefs that are deeply ingrained in our minds throughout our common education in real life. Especially those that relate to the need of being right, the almighty power of knowledge and the social stigma of experiencing losses.…



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Added by Caroline Carlin on October 27, 2010 at 5:36pm — No Comments

6 essential steps for a successful trading plan

Having a detailed and written trading plan with defined rules is fundamental if you are serious about trading Forex as a professional. Among all the steps you will have to include, depending on your particular system or strategy, there are five elements which I consider are essential to your success as a Forex trader.

Step 1: Before you Trade…

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Added by Caroline Carlin on October 26, 2010 at 4:53am — No Comments

5 proven rules for trend trading

Rule Number 1: Build your trading plan in the first place



A sound trading plan with technical and money management rules that you will be following with discipline is the first and foremost element to be taken into account, independently of your own trading style.



You need to have a plan for entries and know what to expect and how to proceed when the price will…

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Added by Caroline Carlin on October 23, 2010 at 7:52am — No Comments

This Week's Exotic: USD/SGD on the rise

The greenback seems to be very close to a recovery in regard to Singaporean Dollar, at least on a short-term approach. On 1 hour charts, it appears to be bottoming out and forming an inverse head and shoulders pattern just about to break its neckline, which lies at 1.3024, and which represents a 38.2 Fibonacci retracement from the recent down swing.



The projection of the head would bring us to 1.3105, well above the 61.8% retracement at 1.3077; this level can however be considered as a… Continue

Added by Caroline Carlin on October 22, 2010 at 4:36am — No Comments

The 3 Basic Types of Support and Resistance

Support and Resistance are determined by the balance between supply and demand of the market at a certain level, and imply the exhaustion of the previous selling or buying activity which then gives way to a temporary reversal (usually called pullbacks or retracements) of the trend, or a definite change in the market sentiment and the beginning of a new trend in the opposite direction.



Price will “stick” to certain levels, and also tends to come back much later on to the… Continue

Added by Caroline Carlin on October 21, 2010 at 6:21pm — No Comments

USDCHF - Monthly long-term Overview

The Swissie broke down through March 2008 all-time lows and is now hovering around the break area testing if the level will hold as a resistance. The lower downtrend line has been confirmed on weekly charts and I would expect a pullback to the 50% Fibonacci retracement at 1.0590, but there are other steps to be attained and breached at 0.9900, 1.0130, 1.0330 and 1.0400. Weekly time frame looks like a bottom, however there is plenty of room on monthly charts for a further fall towards… Continue

Added by Caroline Carlin on October 21, 2010 at 10:34am — No Comments

EURGBP - Monthly long-term Overview

The Euro-Pound has kept consolidating for the last two weeks after a long and steady ascension on the daily charts. Getting near the upper down-trend line on weekly time frame, it seems like it is making its mind up before a bounce back down and has been trying this week to revisit last highs, attained after a break of the previous week confirmed pinbar and tweezer top. Having just touched the 161.8 Fibonacci extension from last swing high on daily charts, it seems poised for a continuation to… Continue

Added by Caroline Carlin on October 20, 2010 at 11:10am — No Comments

GBPCHF - Monthly long-term Overview

Given the overall weakness of swiss franc related pairs, we can expect here too from GBPCHF to follow the bearish path until its ultimate consequences, here the pair has some more room than EURCHF on monthly charts and we have several levels to watch closely, each lying at previous channel lines in confluence with Fibonacci retracements. First would be 1.4350/60, a 138.2 extension from last highs of mid-2009 to support area at 1.7600 on weekly charts; then we do not have any obstacles in the… Continue

Added by Caroline Carlin on October 19, 2010 at 6:12am — No Comments

EURCHF - Monthly long-term Overview

Monthly charts show us a steady fall going steeper and steeper, with lows very near of the lower downtrend line, and an impulsive correction almost reaching a 61.8% Fibonacci retracement. October has seen it trading in a very tight range by now, but the narrower trend level hasn’t been breached yet. On weekly time frame, we can appreciate it weaving a series of bearish flags around the line resistance, which if broken would lead us to next level near 1.4350 which is the previous upper line of… Continue

Added by Caroline Carlin on October 19, 2010 at 5:16am — No Comments

GBPUSD - Monthly long-term Overview

The British Pound vs. Dollar is presently trading inside a rising wedge on weekly charts, which itself inscribes inside a falling wedge and bearish flag pattern on monthly time frame. On a long-term appreciation, a 138.2 Fibonacci extension from the up-swing that started in the middle of May could be the target, inside a resistance area of 1.7040, and matching the highs of November 2009 at 1.6875. However in Daily charts we seem to have reached a double top with a strong rejection from… Continue

Added by Caroline Carlin on October 18, 2010 at 2:26am — No Comments

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