How to Trade Trends Within or Against the Trend
Most Forex traders start out by trying to catch that dream trend that will produce 500 pips with just 10 pips of stop loss! So that they can prove themselves to be exceptional technical analyst in front of their peers. However, most profitable traders in the world understand that while it is possible to find a trade like that, it is simply not worth their time to hit the home run every time. Profitable Forex traders make their bread and butter by trading small trends, within a bigger trend, and often against the prevailing trend.
Housing Starts – Forex Trading Indicator
When you choose to look at real estate as forex trading indicator, you need to focus on New Residential Construction Report.
This report is issued monthly by the Department of Housing in USA alongside with the Census Bureau. Within the report there is data from surveys regarding home building.
Rate Of Change (ROC) in Forex Technical Analysis
ROC, the rate of change, is used by traders to create bullish or bearish signals. ROC shows the border between the current price and the earlier price of the selected time frame.
ROC goes up when the prices trend up
ROC goes down when the prices trend down
Forex Trading – Monetary Approach to Determine Exchange Rates
One of the ways to determine exchange rates in forex trading is known as the Monetary Approach. It has two transmission mechanisms:
1. the price
2. the interest rates
Misaligned Exchange Rates in Forex Trading
Exchange rates that do not reflect the Purchasing Power Parity (PPP) value are called “misaligned”. It is also presumed that they have to revert towards PPP.