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Forex Trading PsychologyOn 12 March 2009, the Swiss National Bank announced a 25bps cut in the official three-month franc LIBOR rate to a range of 0–0.75%, the lowest level since 2003. At the same time, the SNB initiated quantitative easing through the purchase of corporate bonds and worked to weaken the franc through direct intervention in the [...]
Prior to the close of trading on Friday, 20 February, several major currencies appreciated strongly against the U.S. dollar for no apparent reason. Many forex traders, including some of the “big money,” were caught napping when the landslide began and before they could reposition their stops to ride out what seemed to be a short-term [...]
At the turn of the year, AUD/CAD entered a bullish linear regression channel and has remained there to this date; however, there are indications this trend may consolidate at its current level or reverse.
This channel is best seen on daily charts, as illustrated below:
Although a case can be made for an earlier entry, the channel [...]
The forex trading week began on a risk-aversion downslope, with an old-fashioned run on U.S. mortgage bank IndyMac and fears for mortgage financiers Fannie Mae and Freddie Mac. However, when the U.S. financial system survived and 2Q2008 earnings for the industry sector were not as gory as expected, the price of crude oil slumped over [...]
The accelerator oscillator, introduced by trader Bill M. Williams in his book Trading Chaos (Marketplace Books by John Wiley & Sons, 1995) measures the acceleration or deceleration of momentum—the rate of change in the “current driving force”—in the price action of a currency pair. For the mathematically inclined, the equation in two parts is:
AO = [...]
Why do some forex traders empty their accounts within a few months while others earn honest or even significant profits? What character traits comprise the effective forex trader? More importantly, what can the currently ineffective trader do to change that status?
The ability to shrug off a financial loss, possibly a substantial one, without allowing the [...]
