Elliot waves were formulated by Ralph Nelson Elliot in the 1920s. Elliot discovered that the stock market does not behave randomly at all, as first believed.
Instead Elliot waves were able to show that the stock market is specifically dependent on outside factors, such as the attitude of masses.
If the stock market is dependent on something, then it cannot be random. Elliot waves were also used to show that stock market form repetitive patterns that can be likened to waves, thus the name of the tool.
Predicting the market based on Elliot waves - Elliot waves are used to gauge the investors’ (that may be Forex investors or stock investors) psychology, providing clues to questions like how many people will be willing to invest with this type of economy?
What makes Elliot waves more complicated to interpret is that they show that the market does not react to outside factors in the same way every time.
Because the effects on the market move in waves, the reaction can be different the next time around.
With Elliot waves to mark the zigzagging reactions, however, investors can have a better picture of what will happen next.
Are Elliot waves accurate? Elliot waves can still be regarded as both accurate and inconsistent. The waves create the inconsistency.
However, Elliot waves are just probability tools. The results are in “most likely” or “less likely” and not an absolute guarantee.
Thursday, December 31, 2009
Monday, December 28, 2009
Forex: Forward Outright Order
A forward outright order is a type of foreign exchange (Forex) transaction in which two parties enter into agreement to trade a currency pair at a future date.
To make this more clear, let's make use of a forward outright order transaction on the EUR/USD currency pair.
Say the current price of EUR/USD is at 1.44 and you enter into a forward outright order with another party.
The two parties will settle on a future date, perhaps weeks or months in the future, to make a forward outright order.
When that date arrives, the forward outright order is carried out and the two parties complete the transaction based on the EUR/USD market price on that date.
In other words, the two parties enter into a forward outright order contract to trade currencies in the future, no matter what the prices may be.
When you trade using forward outright order transactions, it is important to be wary of market volatility. If you aren't careful, a forward outright order can lead to large losses.
When successful, however, forward outright order transactions can reap large profits. Basically, your future outright order gains or losses will be determined by the change in value of the currencies over the time of the contract.
To make this more clear, let's make use of a forward outright order transaction on the EUR/USD currency pair.
Say the current price of EUR/USD is at 1.44 and you enter into a forward outright order with another party.
The two parties will settle on a future date, perhaps weeks or months in the future, to make a forward outright order.
When that date arrives, the forward outright order is carried out and the two parties complete the transaction based on the EUR/USD market price on that date.
In other words, the two parties enter into a forward outright order contract to trade currencies in the future, no matter what the prices may be.
When you trade using forward outright order transactions, it is important to be wary of market volatility. If you aren't careful, a forward outright order can lead to large losses.
When successful, however, forward outright order transactions can reap large profits. Basically, your future outright order gains or losses will be determined by the change in value of the currencies over the time of the contract.
Tuesday, December 1, 2009
Forex Trading Hours or Sessions
Forex trading is one of the most risky activities in the market. In just a span of a short time, you can win or lose everything.
This is why when you are planning to engage in forex trading, you have to know a lot of important things about it. One of the most important things you have to be knowledgeable about is the forex trading hours. Forex trading hours refer to the time when forex trading is active.
Forex trading hours - When is forex trading active? Currencies are traded 24 hours a day, five or more days a week. This goes without saying that forex trading doesn't stop the whole year round. Yes, there are closing time in many countries, but because time is different from one part of the globe to another, forex trading hours overlap.
Best forex trading hours - As forex trading hours never stop, does it mean you can trade currencies anytime you want? Of course yes. But you have to keep in mind that there are forex trading hours when the exchange is as its peak.
The peak forex trading hours are usually those times when the forex trading hours of many countries overlap. If you trade during the forex trading hours when currency exchange is in its peak, you will get better chances of obtaining greater profits.
This is why when you are planning to engage in forex trading, you have to know a lot of important things about it. One of the most important things you have to be knowledgeable about is the forex trading hours. Forex trading hours refer to the time when forex trading is active.
Forex trading hours - When is forex trading active? Currencies are traded 24 hours a day, five or more days a week. This goes without saying that forex trading doesn't stop the whole year round. Yes, there are closing time in many countries, but because time is different from one part of the globe to another, forex trading hours overlap.
Best forex trading hours - As forex trading hours never stop, does it mean you can trade currencies anytime you want? Of course yes. But you have to keep in mind that there are forex trading hours when the exchange is as its peak.
The peak forex trading hours are usually those times when the forex trading hours of many countries overlap. If you trade during the forex trading hours when currency exchange is in its peak, you will get better chances of obtaining greater profits.
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