Used by Japanese traders for centuries, the Western world has only recently (since around 1991) become aware of their value due to the work of Steve Nison.

Candlestick charts are now the preferred medium for probably the majority of traders due to their visual impact. Like bar charts, candlestick charts are based on four main pieces of information relating to the timeframe of the chart (15 minute, 1 hour, 4 hour, daily, etc.) – the open and close prices for the timeframe, plus the high and low points during that period.

However, by representing this information graphically, in the shape of a candle, the trader is able to absorb a glut of information about a single trading period with just a glance.

So learn to read candles well – your forex strategy will be more solid as a result.

What you can read from a single candlestick?

Certainly not enough to base a trade upon. However, a distinctive single candlestick in conjunction with other indicators can be very significant.

When reading candlesticks it helps to think of the battle constantly going on in the market place between the bulls and the bears. A candlestick will tell you how the battle went during any given period.

Take for example a candlestick on the hourly chart which has a long solid body and very small shadows if any. If the color of the candle is green, or whatever color your charting package uses when a candle closes higher than when it opened, it means either the bulls are in firm control or there was little or no interest from sellers.

If the candle is red, or whatever color your charting package uses when a candle closes lower than when it opened, it means either the bears are in firm control, or there is little or no interest from buyers.

If the solid body of the candle is small but there is a long upper shadow and a long lower shadow, it means during that 1 hour period, the bears took the trade to the lowest point, the bulls took the price to the highest point, but neither could maintain the position so the end of the period is close to where it was at the beginning.

Get a series of those candles and the market is obviously in an indecisive state, or reconciled to trading within a range for the foreseeable future, until a further stimulus comes along, such as a fundamental announcement, to cause price to break out of the channel.

Candles come in all shapes and sizes with very distinctive names such as spinning tops, doji, hammers, etc.

Learning to read candles in conjunction with understanding other technicals such as pivot points and support/resistance lines, Fibonacci retracements and trendlines can add real power to your forex strategy.

Remember, when browsing your charts, every candle tells a story. It`s up to you to decipher and interpret the significance.

How do you react to rules? Do you find them to be a burden, a drudgery to observe and obey? Do you look at them as something negative, a restriction to your freedom perhaps?

Or, do you instead see rules as beneficial, as a protection from possible harm? Do you find that rules are necessary in your trading?

While growing up, we were constantly confronted with rules of one type or another. We received rules in proper hygiene, how to address other people, how to respond to various signs on the road, etc. Wouldn’t you agree, that by following these rules it helps us stay healthy, have good association with others, and avoid serious injury or death? Absolutely. It is without a doubt that when we reflect on the role that rules play in our lives, it becomes clear that they were provided for our benefit and well being.

Of course, there are times when bad rules are made, or when following a rule it does not protect us from what it originally was intended for. But this is the exception rather than, excuse the expression, the rule.

The thing about rules is that they will not do us any good if we do not have the discipline to follow them. Ask yourself, do you have the discipline to follow rules, or do you find yourself conveniently forgetting them? How you answer this question will help determine whether you may be exposing yourself to unnecessary risks.

I’m sure that anyone who has been trading for any period of time realizes the dangers inherent with the occupation. Since our system of barter is still the use of money, and it is money that helps us support our families, losing it can be quite hazardous. That is one reason why we need to understand the first rule of trading, ONLY TRADE WITH MONEY YOU CAN AFFORD TO LOSE. Failing to follow this rule spells disaster from the very beginning. You will have the tendency to trade scared, make rash judgments, and most likely make your financial situation worse.

Do you have the discipline to follow this rule?

When driving on the road, we find that there are many rules we must obey. If we obey them all, this does not guarantee that we will make it to our destination safely, but it does provide us with the best odds of successfully doing so. Yet, all it takes is for us to break just one rule, such as not stopping at one red light, and the result can be fatal.

In trading it is no different. There are many rules that are the result of past trading experiences. Experienced traders have been victim to many accidents in trading over their careers and have come up with specific or general rules to help others avoid or minimize the impact of such accidents. But just like rules of the road, we need to follow ALL the rules pertaining to the type of trading we’ve chosen. To do so will require our exercising discipline.

We need discipline, for example, to follow rule number two which is to ONLY TRADE IN THE DIRECTION OF THE TREND. This is one rule that not only requires the ability to discern what that trend is, but the discipline to obey it. Most traders find that they lack the necessary discipline to do this. A particular market may be moving down in trend, yet a bottom seems to have appeared and the temptation for picking the very bottom to go long becomes great. This temptation then causes a trader to reason that this is it, and if he were to follow the rule to trade only with the trend, he would miss the big one. Discipline is then thrown right out the window, the trade is made, and many times the increased exposure to risk causes a disaster to the traders account. It is usually then that he may reflect on the error of his way.

Do you have the discipline to follow this rule?

Now if a trader does have the discipline to follow the first two rules, this is a good start. However, another rule needs just as much discipline to obey and is just as hard to do so. Rule number three is that a trader should ONLY RISK A SMALL PERCENTAGE OF HIS TRADING CAPITAL ON ANY TRADE. This percentage will vary depending on whom you may ask and the amount of trading capital that is available, but the common rule of thumb is that for accounts of $10,000 or less, no more than 10% should ever be put to risk at any time. This percentage should drop off considerably for accounts much larger. Proper risk management is important to increase your chance for success.

Do you have the discipline to follow this rule?

Now, all rules are good, but they won’t help you be successful in trading unless you follow our final rule, BE CONSISTENT IN HOW YOU TRADE. This rule is somewhat blanketing in that it refers to all aspects of ones trading. A trader must be consistent in his approach to the markets, whether he be using a mechanical system, or one that requires continual decision making by the trader. The rule also applies to following all the other rules consistently. If we follow them sometimes, but break them at other times, we are certainly not being consistent and will leave ourselves open for trouble.

Do you have the discipline to follow this rule?

These are just a few simply stated rules, yet very hard for most traders to adhere to. They lack the necessary discipline to stick to them on a consistant basis. It is human nature to feel that we can do better than the rules would allow us to do on certain situations, yet to only use them sometimes and not others makes them ineffective for the purpose they were created for, to protect us and allow a chance to succeed.

So then, where do you currently stand when it comes to having the discipline to follow trading rules? If we recognize that we are indeed weak in this regard, it would do us good to go over the points brought out in this message again as well as consider some books on the subject, both of which can help us strengthen our awareness to have discipline in following rules if we are to succeed.

Do you have the discipline to follow this suggestion?

Rick J. Ratchford has been trading since 1989 and since 1996 is an Analyst for ProfitMax Trading Inc., a membership for traders specializing in the advance forecasting of market tops and bottoms.

If you are like the rest of the world working the daily grind from Monday to Friday, you may be familiar with only one source of income. The currency exchange market allows you to begin leveraging yourself while building multiple streams of income. The question then becomes what exactly is leverage? When speaking of finances, the term leverage means to enhance your financial wealth potential given a small amount of money. Lets face it self made millionaires do not turn into millionaires overnight. These types of people leveraged themselves to make their millions, whether it?d be starting a business, the stock market or becoming an investor. If you’re not willing to take a risk and leverage yourself, than your chances of earning millions are better off playing the lottery.

Earning an extra income with e-currency trading is like starting an investment. At first everyone is a bit nervous with their new investment, but once confidence is gained they ad more money. I personally started out with $400 in e-currency trading. After a month of the currency exchange program, I saw that it worked. This gave me the confidence I needed to invest another $1000. Now as of February 2006 I have made nearly $81,000 after being involved in the e-currency exchange program for one year.

How does e-currency trading work? There are two types of ways to make money in the e currency exchange program. The first way is through a portfolio. The portfolio is your investment portion of the trading. You can choose to buy trading shares throughout the world. These shares increase slightly overtime as the shares become more valuable in different countries. Once your portfolio has reached a level of $5000, you can apply for what is called a console. When you have a console, you then act as a merchant processing in-exchanges and out-exchanges for people wishing to exchange one online currency for another. By processing these transactions, you will collect a 6% fee for each one you process. Your profits can easily be moved to your personal bank account or back to your trading account to reinvest into your portfolio.

There are many online courses available that will show anyone how to start trading e-currencies. The courses vary in price, but the money is well spent on the professional training and resources.

And what characteristic is that? Discipline. Why? Discipline will keep your feelings under control. As in everything, when you’re in charge of your feelings, you’ll be in a position to make sound choices since you are in the right psychological state. You’ll have the power to concentrate on what you do. It will permit you to gauge when to put the stops.

It’ll teach you how to adhere to a plan and achieve success in it. In forex trading, the most significant thing is to make certain the system or the method that you’ll be using will function well and, naturally, all the fine details of it should be like the middle of your hand. You should make your own set of rules and criteria to be in a position to establish which would or would not work. Of course, you need to think about the forex signals that you can openly find anywhere, may it be online, the local paper, or a trustworthy chum who is also doing forex trading.

Humans can also let their emotions get in the way of making smart choices, like the gambler who loses everything as he just can’t tear himself away from the table. An automated trading program has none of those issues. With the software doing it for you, it’s as if you were always watching every market, noticing each trend, right away researching all available info, and making the smartest decisions. Forex is profitable because countrywide currencies vary from day to day primarily based on prophecies of the state’s GDP and other things. As with the stock market, the concept with the foreign exchange is to buy low and sell high : Buy a large amount of a particular currency when it is weak, then sell it should it become stronger.

There is a cost for this, naturally. Most brokers that offer it need a minimum investment of many thousand bucks or more, and they may charge money on top of that. Some brokers include foreign exchange alerts as a part of their service, whilst others charge for them. Some are a part of a wider alert program that also handles your stocks and bonds. You can tailor the sort of alerts you get based primarily on if you are a conservative or aggressive trader, and how actively you plan to trade. But the advantages of automated Foreign exchange trading can be great. While manual trading needs a backer to observe the market intensely before jumping in to it, automated trading needs no training at all.

Learn the basics of how the market works so you can tell what your automatic system is doing for you, and that is it. Relax and let it make your money work for you. Automated trading is also helpful for companies and other establishments that need to diversify their assets but do not have the time or resources to devote to Foreign exchange trading.If a program can do it for you, there’s no real need to have one of your workers handle it, right? That is, the algorithms inspect past market performance and general trends and base their trading choices on that, not on external factors such as politics and green issues, that may affect a nation’s currency.

However , automated trading has proved to be very effective and correct for many investors, liberating their schedules to target other stuff.

By using Forex VPS, or a virtual private server, as they are known, many of the problems associated with a shared hosting account are eliminated. When many people are using one server sometimes the account is very slow. VPS is a server being used by only one person. The main server will be divided into several servers and distributed on a shared basis, and forex hosting is usually limited to 15 or 20 virtual servers on a single main server.

VPS is a crossbreed between full – fledged dedicated hosting and shared hosting. It is full- fledged because it is just like an individual server. You can install applications, reboot the server and access the server root without worrying about affecting other users. There is also shared hosting because you will have to share hardware with other users. When it comes to forex trading there are traders who don’t want to run MetaTrader platforms on their computers. By accessing the services of Forex VPS you can have your own server.

A forex VPS is like a dedicated server in a number of ways – you can install applications, reboot the server and access the server root without worrying about affecting other users. There is also a shared element to the forex hosting because you will have to share hardware with other account holders. When it comes to forex trading there are traders who don’t want to run MetaTrader platforms on their computers.

For those traders who run their expert advisers without interruptions, forex VPS is the ideal service for you. It is always on-line, and does not reboot when trading. Power outages do not affect it and the best part is that the computer can be off. With all its benefits, you can also use this kind of server to test WebPages right before you make them available to the public. It lets you test applications and different software’s without having to reboot the whole server.

You need the automatic restart feature incase the server is rebooted and you need to automatically restart. The 24/7 access feature is needed because you should be able to access your forex VPS anytime and trade.

In terms of selecting your forex hosting company, there are a large number of providers who are in the market, and this number is growing daily. Some of the leading forex VPS providers are; EzforexHost, MetaTrader Hosting and Forex Hoster.

All in all, the forex VPS hosting companies have broadly the same product offering, with similar specs within their hosting accounts. The features that you should look out for especially are a pre-installed MetaTrader MT4. Also check that the hosting service is compatible with all forex brokers, or at least with the broker you trade with, as there are some brokers which only use certain operating systems. This will allow you to download and install trading platforms from brokers to your forex VPS. Finally, double check that the EA you plan to trade with is compatible with the VPS host. Most forex hosting providers can support all EAs, but some are still limited in this capacity.

While moving forward with the larger numbers in the sequence, the division of the two closer consecutive numbers results in the golden ratio. And this golden ratio’s where used by trading stocks , they produce primary and secondary results. Onward direction refers in the primary result and opposite direction refers the secondary result.

In primary trend,the most common Fibonacci retracement levels are 38.2%,50%,61.8%.These standard levels are used by most basic stock charting applications.These Fibonacci retracement levels act almost as magnets once the countertrend rally takes place.Apart from above three there are few other levels that can provide resistance.These are 75%, 78.6%, 87.5%, and 88.7% retracement levels.

The thumb rule states that the retracement levels makes about 50%, and the earlier mentioned levels attracts the price by behaving like magnets. The price must be analyzed by the persons who are familiar on those levels. Always the prices do not move in constant. Stocks, futures, forex,all instruments which are liquid,will often oscilate in Fibonacci proportions.

Fibonacci ratios may be applied to the Price scale,and also to the time scale of charts.Many traders use Fibonacci ratios with a few simple indicators that can help them to determine probable price turning points,optimum entry,exit and stop-loss levels.

After identifying the primary trend, use price reversal pattern recognition to coincide with a fibonacci retracement level to confirm that the countertrend move has ceased.Then look for the stock to test the recent lows and double bottom or break through that level.

The trader must have the clear idea and knowledge of the international markets because of the “risk arbitrage” in the existing market situations mainly in “forex trading”. For help “forex signal trading” can be used by the trader. While performing “forex rading” the transaction of currency between nations take place, so the trader must be aware of that.

This application of Fibonacci to trading can be very complex for a new beginner and does take time and experience to perfect it.Many floor traders use these Fibonacci retracement levels. These levels are used by many advanced traders as well,it allows them to become a self-fulfilling prophecy.