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Find Out All About Forex Trading
Relative strength index (RSI) is a popular oscillator that measures price momentum. It was first introduced by the legendary trader J. Welles Wilder in June of 1978 in Commodities magazine (now known as Futures), then spelled out in greater detail in his book, New Concepts in Technical Trading Systems. RSI is applicable for any charted [...]
This week, coordinated central bank auctions and currency injections poured liquidity into the markets and eased pressure on commercial banks. Despite more sub-prime mortgage disasters, this week saw the return of the carry trade as investors’ fears of global recession waned. The Australian dollar was the second best performance among the most actively traded currencies. [...]
Sometimes the charts of different currency pairs echo each other’s movements, and sometimes they seem to move as opposites. This phenomenon is known as positive or negative correlation within the forex trading market, and it can be a powerful tool for savvy traders. There are all sorts of reasons for correlation, for example, different monetary [...]
A coordinated plan announced Wednesday by multiple European, Australian, and North American central banks to provide international bank liquidity may ease the immediate crunch of the credit crisis and certainly reassured the forex trading market following the FOMC’s disappointing 25bp interest rate cut on Tuesday. Overall, risk aversion continued to dissipate and year-end volatility skewed [...]
A moving average envelope, coupled with RSI, offers a powerful trading strategy for a breakout market. A moving average is one of the most commonly employed technical indicators. It averages the price of a currency pair over a given period of time, with the calculated average “moving” as the earlier prices fall out of the [...]
With interest rate meetings across the globe this week and next, the forex trading market took a deep breath and currencies consolidated. Fears of a U.S. recession receded with the closing of the year; risk aversion declined with it and the carry trade returned. As expected, the RBA kept rates on hold as a balance [...]
One of the outstanding features of trading the forex market is its liquidity. According to the latest Bank of International Settlements (BIS) triennial report, covering the period 2004–2007, that liquidity has reached monumental proportions, growing 71% in the last three years and reaching U.S. $3.2 trillion in average daily turnover this past April. Forex market [...]
The clear signal from Chairman Bernanke of the Fed’s intention to combat recession through additional interest rate cuts rallied the U.S. dollar against most major currencies during the latter half of this forex trading week. It’s an odd logic that has lower interest rates strengthening the USD; however, emotions in the market remain volatile and [...]
