Technical analysis with the Forex trade

The technical analysis is one of the most important aid for a successful Forex trade. She gives important explanations about how exchange rates develop in future. Before all private investor these turn the technical analysis preferentially and also for short-term commercial strategies can be used. Thus can profit in particular Daytrader with a rather short-term investment horizon from it. Courses often move with the help of similar patterns which can be identified with a technical analysis. Afterwards from it profitable and gainful Trades can be developed.

Acceptances of the technical analysis:

With the help of the technical analysis can be determined whether the market is in a downward trend, an upward trend or in a Seitwärtsbewegung. Besides, the technical analysis rests mainly on the following acceptances:

• All basic data of the market are reflected in the prize data again.
• The reasons for course movements are clearly less relevant in the technical analysis.
• The Forex market moves in certain cycles what always returning patterns can be derived from. These patterns are also called trends and serve as signals for the development of an investment strategy. Aim in the technical analysis is to be predicted future trends by the investigation of the past trends.
• Price fluctuations never come about by chance, because the acceptance insists that prices on the Forex market move in predictable manner. After the education of a trend this movement will continue for a certain period what becomes evident by the technical analysis.

By the use of technical indicators traders with the right broker are able like ActivTrades to determine the suitable ones an one and climbing out time. Around the technical indicators become to indicate, primarily, volume charts, in course charts as well as gliding averages used. Besides, every indicator serves a certain purpose. Thus trends reveal themselves or the strength and continuity of a trend investigate. An advantage is present that the emotional aspect remains in the technical analysis completely outside before. To investment decisions are met exclusively with the help of the technical charts.

Linienchart

Line charts easier get themselves and are relatively easy to read. Because this representation form is used often also in other areas, it is familiar to most people, besides, already. With the Linienchart all closing prices successive within a certain time span are shown as points and afterwards are connected with a line. With the Forex trade line charts are provided for different periods of one week, one day, one hour or even one minute.

Balkenchart

Beam charts are more specific around something and to read a little more complicated. They consist of a vertical beam and two waagrechten lines. In this manner the opening rate, the closing price as well as the deepest and highest traded exchange rate is shown. Besides, under point shows Most deeply and the upper point the highest level within the respective period. At the same time the left waagrechte line shows the opening rate and the right waagrechte line the closing price. Therefore points of the Balkenchart the complete trade profit margin of a currency pair for a certain period.

Beam charts are called very often also "OHLC" charts. Besides, "Open" stands for the opening rate, "High" for the Höchstkurs, "Low" for the Tiefstkurs and "Close" for the closing price.

Beam charts are generated in practice for periods of one minute up to one month. Besides, investors speak of "Timeframes" which are measured during minutes, hours, days or months.

Candlestick charts (candle charts)

Candle charts differ with regard to her explanatory power not from beam charts. There are differences merely what the graphic form concerns and candle charts are felt mostly as optically more successful. In addition they offer the advantage that trend changes can be shown substantially more unambiguously.

Instead of the vertical beam with two waagrechten steps candle charts own a vertical "body" and two waagrechte "shadows". Of it one is about and one under the body. With the help of the body the span reveals itself between opening rate and closing price. The Shadows stand for Highly and the Tiefstkurs.

Different colours of the Forex charts

To be able to read become the charts better this on modern Tradingplattformen in different colours shown. The colour is directed afterwards whether at them with a higher state close or reverse. With black beams gainful periods are shown loss-bringing and with white beams. In some main entrances the colours are used instead of black and white also red and green.

A black or red candle registers that the closing price lay under the opening rate. With a white or green candle this has turned back. Should the left beam line lie under the right one and be red the whole beam black or the opening rate is higher than the closing price.

BASIC ANALYSIS VERSUS TECHNICAL ANALYSIS 

For many brokers it is a religious question. While only one trust in the present datum, place other exclusively on the explanatory power of the charts. We take both analysis methods under the magnifying glass and look in part 1 first at the advantages and disadvantages of the technical analysis.

Only it was the US dollar, then DAX, and now still gold. Quite several times impressive course movements were begun this year, after a value had crossed or fell short of an important charttechnische brand. With the help of the technical analysis these outbreak brands which cause a stronger course movement with achievement with high likelyhood can be defined. The currency pair hears US dollar / Japanese yen to the best examples this year. Between February and August of this year the US dollar tended in a narrow rank between 101 and 104 yens sidelong, although already in this phase the basic basic conditions of both currencies had clearly changed. Only an outbreak from this Seitwärtsbewegung in August rang in a massive revaluation of the US dollar which could increase afterwards within less weeks on about 115 yens.

Advantages of the technical analysis

Job of the technical analysis is to define favorable entrance and climbing out signals. Besides, she fades out economic figures or economical data completely and tries to estimate on the basis of historical course patterns and on the basis of indicators the future chart development. Technical analysts look with it solely at the respective course movements and not possibly
on the reasons which lead to these changes. This approach brings a huge saving of time with itself, technically oriented traders must thin out, nevertheless, no enterprise balances or interpret enterprise news. In addition, the technical analysis compared with the basic analysis needs by far less data, already mostly only very hard and incompletely to
are received. All required information for the technical analysis can be read from the price and volume. The necessary knowledge, suitable tools like commercial software as well as a computer presumed, offers the technical analysis good conditions to be able to operate successfully in the market.

Borders of the technical analysis

Technical analyses not always run successfully, historical course patterns can be transferred in the future. The return of certain course courses is booked till this day academically. The technical analysis bumps in particular into view of a longer period to her borders, rises here, nevertheless, the danger of the external influence which demonstrates the preceding analysis worthless. The use of information which is exclusively past-oriented is the most frequent point of criticism of the opponents of the technical analysis.

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Gap Strategy

Gap strategy:

Near GAP it concerns a course jump which arises from the closing price from Friday evening and the opening rate from Monday morning. The reasons lie in one reacting of the banks on news and important data about the week-end. GAP strategy is based on the acceptance that GAP originates on the basis of speculations and an excessive Volatilität. One assumes from the fact that the course develops during the next hours and days again in the other direction to GAP.

Advantages of the strategy:

• Strategy can be used in regular trade
• clearly defined rules
• at a normal market very good profit possibilities

Disadvantages of the strategy:

• Positions must be opened at the weekly beginning and be closed again to the week-end

Use GAP strategy

1. For this strategy currency pairs with a high Volatilität as for example GBP/JPY are recommended. In addition are also suited all the other currency pairs basing on JPY. In addition this strategy can be applied to all main currency pairs at the same time.
2. Hold for the weekly start look out to Gap which amount to the at least 5-fold of the Spread calculated for the currency pair. Only so GAP can be also interpreted as a real signal.
3. If GAP lies on Monday under the closing price of Friday traders speak of negative GAP. In this case Long Position should be opened.
4. Vice versa one speaks of positive GAP if the opening rate lies under the closing price. Near positive GAP a Short position is advised.
5. With this strategy orders are put neither Stop-Loss nor take profit.
6. At the end of the commercial week about 5 minutes before commercial end the position is closed.

Choice of the value writings for a successful strategy

The right process of the choice of the value writings for a successful strategy for active port folio management

In the modern economy different strategies exist for active port folio management. Besides, with a choice of the value writings the right process plays for a successful strategy an important role. Within the port folio theory acceptances about the behaviour are met by investors: Statements about the investment behaviour can be thereby met. High investment success can be achieved exceptionally by active port folio management. Besides, within an investment segment a higher performance should originate from it. If a high short growth is forecast for a market segment, it is invested in this area.

The right process of the choice of the value writings

Securities, called also value writings, are an important component of the economic business, as for example within a security pension business. Interest papers are distinguished in the kind of the interest, after firm, variable or economic interest. Value writings are distinguished according to the following criteria:

• after the yield
• after the economic function
• after the juridical transference

Within the active port folio management port folios are constructed. Single securities are bundled up, for example, and receive a certain weighting. Besides, the following securities are weighted in a certain manner:

• Shares
• securities fixed-interest
• Money market papers
• Raw materials
• Precious metals
• Real estate and more.

With the investment strategies it is distinguished between active and passive port folio management. With the active port folio management a port folio manager invests invested in certain securities, she shops for a low price and sells them for higher price. A Überrendite should arise from it compared with the market. The selection of securities and the steady forecast of future security courses are of essential importance with this process. Moreover, an identification of undervalued titles must occur. This process plays with the passive port folio management only one minor part, future forecasts and the selection of the securities are not here from primary meaning. The passive port folio management serves with priority the simulation of capital market clue, the representation of the port folio and the Index-Tracking. The choice and the weighting of the securities orientate themselves by the construction of the underlying index. The advantage of both strategies, the active one and the passive port folio management lies in the cost comparison and in the scientific knowledge from the theory of efficient markets. Besides, the port folio diversification reduces the risk.

Unit trust with wide dispersion

According to the so-called "Markowitz diversification" it is distinguished between systematic and unsystematic risk from arrangements. Unsystematic risk referring on single security, is diversifiable. Systematic risk is not diversifiable by contrast and concerns the whole arrangement. As a consequence it is renounced, for example, floor Picking. Therefore, investment in unit trust with wide dispersion about branches, countries and different investment classes are very recommendable. The port folio diversification by arrangements with counter-rotating yield development pays the port folio diversification in a high degree to itself, because by a counter-rotating yield development losses and profits can compensate themselves, for example, precious metals and real estate concerning. Often an uncoupling of shares and loan markets takes place. The risk of a loss is reduced by a wide-scattered arrangement in different investment categories. Besides, the investment categories should not be tied together too firmly with each other.

Besides, the globalisation process on the financial markets progresses on and on. The coenterprises, the enterprise structure, the finance management and, for example, branch standards which can promote positive criteria of an enterprise are for trade, besides, from bigger and bigger meaning. Just nowadays the market participants within the financial market must take over more and more responsibility. Within the port folio management responsibility for the decisions and the right process of the choice of the value writings must be taken over steadily. Moreover, the reading of articles and scientific, analytic books which form as a basis for the right process for a successful, active port folio management belongs to strategy processes. Besides, the progressing globalisation opens numerous, new investment possibilities, offers a broader dispersion of the finance arrangements and contributes to the lowering of the investment risk. Besides, it is important that the market participants co-operate with each other and profit of each other, not only financially, but also economic knowledge concerning. The globalisation on financial markets has led, as everybody knows, to a narrower connection of the development of capital markets in industrial states and thereby to a stronger synchronisation of yield developments. The advantages of the port folio diversification are lower. Difficulties exist concerning the increasing transmission of crises as a result of the globalisation process:

• stronger transference of financial crises up to now not unambiguously confirms
• Stability of the financial system
• Hedge fund debate
• Real estate crisis with central bank intervention

Moreover, has turned out that crises have numerous effects on the capital markets in developed states in developing countries. Moreover, in addition effects come like environmental editions or tax duties. Numerous economic researchers and professional port folio managers try to master these worldwide difficulties and by an active investment strategy in the market to exist more and more co-operating than competing. A passive beginning means the replication of an index of which wide-scattered port folio forms the basis. If one compares active to a passive investment strategy, explanations above the costs arise first.

With the active investment strategy the issue impacts which amount up to 3% of the investment are raised by the purchase by unit trust. A passive port folio management has less costs than an active port folio management. Nevertheless, therefore, an active investment strategy delivers no higher yield than the market and the cost disadvantage is not overcompensated. Capital markets are already efficient markets and systematically accurate course forecasts, therefore, are not possible basically. The topical course delivers at the market daily all relevant and available information. With systematically accurate forecasts about future course of securities the success of active investment strategies stands and falls.

Successful port folio management

The port folio manager of an enterprise provides and administers a port folio within an active port folio management. The conditions of this bundle in investments are agreed with the investor by contract, with regard to the investment criteria. Besides, special attention to purchases and sales is laid concerning the expected market developments. Within the theory of the top Down beginningthe aims in which the strategy is derived then are looked. At every time the strategy arises from the analysis and the decision. As soon as a Taktig has arisen or has developed, this is checked by the performance analysis. Another procedure is known than Bottom Up beginning. This port folio management process contains the port folio planning, port folio realisation and the port folio control. Within the port folio management process investor's analyses, finance analyses, checks, the so-called monitoring and many other factors are included like the performance measurement in the education of an optimum strategy. Also within the active port folio management it is difficult to weigh the future yield and the risks: This presents itself over and over again as a problem. Investors are interested as a rule in the investment medium, the investment politics, the risk classes and the dispersion. The port folio structure and the port folio style are fixed by thestrategical port folio management. With an active yield divergence a divergence of the yield of the comparative index takes place. Moreover, this divergence can occur through instruments beyond the comparative index. Also the passive investment style plays an important role for the choice of the value writings: For example, yield divergences compared with the index can be held by special technologies like the picture of the index value writings low. The active one and the passive port folio management can be connected directly with each other. With the so-called "semi passive" port folio management becomes, for example, a Tracking Error of 2%, besides, serves as the greatest possible percentage and unit for a semi passive investment style. The basis for every tactics and strategy forms the analysis which serves to make decisions which were weighed out before thoroughly. The analysis of the value writings forms the basis for the port folio management. Basic analyses enable to find out an adequate price of securities, and are based on economic data and the so-called basic data. Also methods of the balance analysis are applied, for example and the relation of course and profit are analysed. Thereby one receives, for example, as a result a course aim. This aim delivers tips to undervalued and overrated shares or enterprises. Then the knowledge which is won from the analysis of the tip can promote a certain action strategy in the stock market which is called "Value Investing". Moreover, short-term and medium-term to long-term aims are distinguished: The differentiation of the criteria "short" and "long" plays a very important role with regard to the floor Pickings. Besides, it is possible to the investor to determine certain rules for the tactics, the possible risks should prevent. Therefore, in the area of the short-term aims, in the short area, the port folio management often occurs with technical support through computer programs. Besides, the costs can be thereby reduced.

With the help of the performance analysis the success of a port folio is examined. With this kind of analysis the yield and the risk are balanced with each other and the result is split in different components. By the right port folio management can be found out which securities and which number of these securities can be taken up in an optimum port folio. The futures contract allows the observance of the Tracking Errors with Benchmarks and is an important instrument in the port folio management because he steers bonds-port folios. Investments can be thereby administered optimally. Moreover, it is thereby possible to anticipate future market developments. Then according to the analysis of a port folio and the decisions the market strategy which must adapt itself to the steadily changing market arises. Accordingly of the port folio aims is fixed which value writings are kept in the port folio. This can be, for example, shares, pensions or derivatives. Here a coarse subdivision of the structural components, for example , 60% of shares and 40% of pensions occurs. The dispersion qualitatively occurs (perhaps, also quantitatively) after regions, branches and between standard and Nebenwerten.

The performance analysis serves the inquiry of the success of a port folio and can be explained in different way:

By the comparison with a Benchmark, the comparison of yield and risk, for example, by the Sharpe-Ratio or the Attributionsanalyse. Within the Attributionsanalyse the result is disassembled in different components. Besides, market-conditioned, tactically or structurally can influence conditioned components the results. There are numerous analysis methods of the port folio analysis to put together the security bundles and to reach an optimum payment of interest of the invested capital. With the help of the port folio analysis the different market segments are looked in isolation. Besides, the port folio analysis allows a graphic representation of the commercial processes of an enterprise. By this analysis it is put outside whether the shops of an enterprise behave consistently. The port folio manager of an enterprise puts investment possibilities and bundles up with it other possible financial transactions to lower risks by a dispersion. Within the modern port folio theories it is distinguished between active and passive investment strategies. For example, the interest structures are analysed by active strategies to improve the business systematically. Passive strategies serve to make certain yields of interest variations independent. Verzinsliche securities serve the long-term investment.

A pension business is a short-term loan which is with a security besichert and was granted to the pension giver by the pension taker. Within a real security pension business the pension taker is obliged to sell the securities once more. Besides, the pension giver has a repurchase obligation. In a pension system after the capital cover procedure the pension contributions with interest and compound interest are accumulated. Then at the age the pension is tipped out. Asset managers look, for example, worldwide for the best investment possibilities to offer individual investment solutions and to guarantee investment possibilities. In any case, the competent behaviour within the economic forecasts decisively determines the decision with a choice of the value writings. In the investment process the important decisions which rescue different advantages and risks, profits and losses are made within the port folio management. Therefore, must be also respected by a decision for an active port folio management furthermore to the steadily developing economic processes and with a choice of the value writings must become perfectly gone forward. Also the advantages and disadvantages of the active and passive port folio management must be compared steadily with each other. Every decision must follow a thorough analysis, because exclusively in this manner new chances can develop and risks more often be avoided. Besides, in the areas of the port folio management the cooperation is a more and more important subject, so that active and passive port folio management strategies can be connected with each other and be realised better: And this best of all in a lasting way for all involved market participants. If the right choice is made at the right time the effected investments can be increased with the help of the active port folio management by leaps and bounds upward. Therefore, the strategies of the active port folio management must provide dependable future expectations.

Because the financial markets are unpredictable on the one hand though solidly, on the other hand, nevertheless, management strategies serve, in any case, rather the short-term planning. If, nevertheless, all risks were included, there are, in any case, the opportunities of evasion on which the port folio management can fall back then strategically and systematically. The right investments can be sense-donating: Therefore, reliable forecasts form the basis for the choice of the value writings. The investments should pay off in the long term on the financial market and can be used differently. Basically, for example, the trend goes with the investments in the direction of education and health service. In addition, the ethical added value also receives at many enterprises more and more in meaning. The profits which result from the investments can be used in many different kinds: Future thinking is asked for a successful active port folio management – the analysis, the decision: Then the strategy can occur. Moreover, by decisions the respective law situation must be considered. Also laws and other existing regulations determine the trend of a port folio strategy.

Which strategy for small investors?

To buy shares and resell is an awkward matter. Basically it must be considered a lot to be able to take the fear of the action above all from small investors. It should be concentrated to use a special strategy to be able to make sure that no money gets lost with the action with shares and is risked, moreover, not too much. Small investors should never act with money which they need. This could entail because that they misjudge and invest money which yields no profit with itself. Putting on of money should be considered thoroughly and, in addition, a Kleinangeleger strategy is important to be able to use more security with the action.

Experiences collect and slowly start

First it is important that a property construction with richly consideration is begun. To begin an investment, among the rest, the advice of an expert is important. It can be tested with pleasure in the closer sphere whether already experience with shares were gained and whether richly sensible tips can be used. Basically there are with shares different possibilities to put on money without having to take a risk. The long-term property construction is very important and should be kept an eye permanently. The demands for shares must be held up accordingly, so that no shares are bought which promise only short-term results. That's why small investors should always pay attention to the fact that the following points are followed, before is begun with the purchase of a share:

• Strategies consider and fix
• To specialist books help in the entrance in the share world
• Long-term arrangements need basic sign
• Course variations can be avoided with blue chips partially
• Share depots should be controlled only in long-term distances

Strategy do not change

To protect an investment strategy and to use this for himself, is to be paid attention to the fact that short-term and medium-term course variations should bring no strategy change with themselves. The investor who has bought a share or would still like to shop should pursue a clear strategy and can be dissuaded by this by no means. The uncertainty with the action is the biggest enemy and could lead without further ado to the bankruptcy. That's why it is recommendable to find the first strategies help of specialist books. With pleasure a long-term investment possibility which can be used absolutely sensibly can be found on this way. If own share depot is tested in short distances and is controlled, can lead absolutely to the fact that a big insecurity will receive. It is best if with the distance of several months own depot is looked to make no premature decisions.

The best investment security create

Small investors are equipped best of all with strategies which are based on blue chips. On this occasion, it concerns the shares which can be received with the biggest turnover. These come from listed companies who can shake off a sure profit. The small investor receives through this a high commercial volume and at the same time a higher engagement of enterprise investors exists. The shares which come from large-scale enterprise and which have already put down a good course are suited best of all for the purchase. Enterprises with a stable sales situation are to be selected here. Though Nebenwerte and shares which come from threshold countries are also attractive, however, these are connected with higher risks what is to be avoided best of all. Therefore it must be paid attention to the fact that shares with low course variations are used. These can offer the best possibilities for small investors.

The trend is your friend

Over and over again can read the small investors who explore themselves on the Internet or also in the professional reading about the successful commercial strategies that the trend should be obeyed. Over and over again it is pointed out to the fact that the trend is the friend and therefore the trend should be considered and is obeyed. Indeed, the idea is also to be handled behind the wisdom „falling knives“, the same idea. It is important that the past are followed by shares. The users can analyse therefore as the shares have behaved in the past. The trend will recur because with the highest likelyhood. With the Momentum strategy small investors have good chances, because here a relatively good yield is to be received. With the strategy is to be paid attention to the fact that the suitable moment is got. Indeed, new strategies and points of departure must be created moreover over and over again to analyse the market. It is tried to use an impetus to be able to make sure that a market change develops to own advantage. By a suitable beginning can be reached that the Momentum strategy absolutely yields an actual profit. Results could be already published which have brought up to 15 percent of yields with themselves, after this kind of the strategy was used. Particularly if low interest is received, there are 15 percent of yield a very good value. Also in Germany researchers could prove this success. Nevertheless, the height of the yield has differed concerning the period and the stock market a little. Of course the loss phases must be included in the plan also which is normal in addition fnühren, that even a deficit from up to 30 percent in the month. Small investors must pay attention very much, so that they are not drawn in a wave of the loss. On account of the commercial costs the yield is often reduced, so that must be weighed out whether an investment is worthwhile in a certain share generally really.

Long-term profit is decisive

Course variations are the best clue for the fact that shares should be bought. A mistake which many investors make at the beginning is the not sufficient caretakers of share increases. The profits do not let go them because enough and with losses they wait too long. Therefore is valid:

If the share price rises, should not be sold too early – Sinking the course, shares must be sold early

Of course a high and a low-pressure area cannot be analysed with shares by beginners early enough, because it is difficult for small investors to pursue a trend and too discover. That's why it is important that only enterprises should be searched which understand her commercial model and which offer a regular course course. Moreover, the following questions should be put themselves, before in the share purchase becomes got:

• Does the enterprise make profit?
• How does the enterprise lie in comparison to other companies?
• How good are the views for the branch?
• How was the course of the shares in the last time of the company?

It will get to the fact that only money should be put on that at least five years can be done without. Course variations should be absolutely accepted to be able to make sure that no loss leads to a long-term plight. This is valid of course for small investor just as for great investors. The problems in a share analysis are always that cannot be also protected by an extensive analysis that a course is interpreted really in the right direction. Finally, shares can suddenly break out or break (stop / Loss place!), so that also extensive analyses cannot lead to a clear statement.

Time horizon, course aim or stop

Would like to be invested with pleasure for a long-term time, should be always considered that with the time-horizontal strategy at least one investment time of from three to five years is valid. On this occasion, it concerns rather conservative and medium-term investment optics. A stable yield of 7 to 8 percent is mostly achieved. This yield can be maintained by the application of different investment securities with certainty. The market insecurity can be lost basically by a sure share. Still should be never invested in one single share, because it can be, otherwise, the case that by a case the complete depot goes to ruin. The time-horizontal arrangement brings the advantage with itself that diminished variations are received, an active supervision is allowed and at the same time optimised yields can be used.

Course aim maintain

An old stock market wisdom says that profits run leave and losses must be limited. On this occasion, it concerns a basis regulation which is important for the 3:1 rule. Investors must keep an eye above all on the long-term profit payment and protect therefore that the first step is taken in the right direction. The smooth places of own position with the course aim rule are important. It is to be noted that losses are hard to be accepted. Nevertheless, that's why it is important to consider the stop Loss courses and to work on this. Best of all the trader delivers an order and the share is for sale automatically if this has reached the pain border which was put. Therefore the loss can be limited to the minimum border. By no means an other stop Loss function should be adapted after next below. If the course aim is achieved, should be sold best of all directly to be able to use the profits. Or it could make sense at the same time if the goal is set further upwards to win afterwards the course increase for itself. The prospects of success with the course aim strategy are to be valued as a rule positively and introduce good yield chances.