CFD Trading Strategy - Ascending Wedges Downside Breakout

By Jeff Cartridge

Traditional thinking suggests that the ascending wedge is most profitable when traded short. In reality this conclusion is not supported by the evidence. An ascending wedge is formed when the price action is contained within two lines. Both the bottom line and the top line slope up, but the bottom line has a steeper slope meeting the top line.

Ascending Wedges, Marginally Profitable

The ascending wedge breaks up more than it breaks down with downside breaks only occurring in 32% of the patterns. A downside breakout is profitable 42% of the time delivering an average profit of just 0.02% in 8 days, it is barely profitable. As with other patterns it can be improved with the addition of filters.

Improve Your Trades

Surprisingly short breakouts work well in rising markets so the market, as well as the stock, should be rising or consolidating. The best results are achieved trading ascending wedges when the sector is falling or consolidating. So if the trend of the sector turns down, this sets up the best short trades.

A breakout from an ascending wedge can occur anywhere on the way to the point of the pattern; it is not important exactly where the breakout occurs. The best trades occur with patterns that are between 5 and 30 days long.

Ensure that the volume is supportive of the breakout, i.e. volume as the stock falls is greater than volume as the stock rises. Avoid patterns that have two closes the same prior to the breakout as this is often a sign of an illiquid stock. Lower highs or lower lows prior to the breakout produce better results.

Ascending Wedges Profitable Sometimes

Following a series of rules to determine which ascending wedge to trade can improve results dramatically. To do this however it is necessary to throw away over 1200 trades reducing the number of trades from 1275 down to just 74. By applying these filters ascending wedges are profitable on 48% of the trades and return an average of 1.46% per trade in 10 days. This is a profitable pattern to trade, if the conditions are right.

Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23229

About the Author:

Jeff Cartridge has been trading CFDs since 2002 and created the website LearnCFDs.com Discover Patterns of Success

Plan Your Currency and Commodity Trading Strategy, Tips for Commodity Traders

By William Davies

An analysis of currency and commodity trading refers the keen trader to the currencies of countries whose economic output and subsequent exports are chiefly commodities, such as raw materials like aluminium, oil and gold and agricultural products like sugar, soybean or livestock.

Clearly the currencies of a number of countries around the world could be called commodity currencies on this very broad definition. For the purposes of currency and commodity trading, the term relates to three major country currencies where a significant contribution to exports comes from commodities.

Movements in global commodity prices affect the Australian, New Zealand and Canadian dollar currencies, with the Australian dollar reflecting gold price movements strongly, while the crude oil price seems to have a close relationship with movements in the Canadian dollar (CAD). Though it is not linked to any particular commodity like the other two currencies, the New Zealand dollar (NZD) or "Kiwi" shows a general correlation with price changes in the Commodity Research Bureau (CRB) Index.

So what happens when the gold price strengthens? We will see a similar rise in the Australian dollar in the AUD/USD pair (the Aussie), as all currencies trade in pairs. This means the Australian dollar is rising against the dollar, conversely the US dollar is weakening in that pair. When investors see economic uncertainties such as rising inflation or a recession, they may move into gold for its perceived safe haven status. Currency and commodity traders also look to the yellow metals link to the Aussie, possibly trading this pair as a proxy for gold.

Commodities contribute a significant proportion of Australias GDP and over 50% of its exports, with gold and other precious metals making a significant contribution. Trading charts show the very positive correlation of gold with the Aussie, which means a trader can either go for trading gold in the futures market or as an ETF, or follow the AUD/USD pair in the spot forex market.

Followers of currency and commodity trading will know that Canada is a major commodities producing nation and specifically one of the worlds largest crude oil producers. Accordingly, there is a fairly strong negative correlation between movements in the USD/CAD (the Loonie) pair and the price of crude oil.

Canada is a major oil supplier to its neighbour the USA, which in turn consumes more oil than any other economy. A low crude oil price would be bad news for the Canadian dollar, though positive for both the US economy and US dollar. Any trader bearish about the outlook for crude oil prices could as a proxy go short the Canadian dollar in the forex market, instead of going short Nymex crude or buying inverse ETF's in oil.

When you consider these three currency pairs it's clear why currency and commodity trading followers sense a real opportunity in spot forex trading to capture commodity market movements, whether in gold, crude oil or across the broader commodities universe. With currency trading always providing a bull market, it just comes down to deciding which currency in the pair you are long or short. - 23229

About the Author:

The author, William Davies, is a keen observer of commodities and writes for an informational online resource on trading commodities. Learn more about how you could benefit from currency and commodity trading in the global markets.

Here's How Everyday People Are Making Good Money Trading Forex

By Steve Halladay

For many people, making money with a small business has become much easier due to the advent of the Internet. There are quite a lot of things you can do to make money from home, and it doesn't take a lot of time or effort to set it up. Sell items on eBay, or set up your own online store. In some cases, though, you don't even have set up a store to get started. One of the best ways to make money online for many people is something called Forex trading, also known as "foreign exchange trading."

Forex trading means that you engage in buying and selling currency pairs so as to make a profit. If you want to make money doing so, you'll need to be able to predict how one particular currency in a currency pair is going to do against the other. This isn't easy to do if you're new to it, but it can be quite easy to learn.

One of the ways you can learn about Forex trading is to read about it. This can take a lot of time, but you should do this as efficiently as you can so that you don't waste much time. Let's talk about two reasons why currencies might fluctuate in value to each other.

The first example is that interest rates might go up or down in a particular country and therefore affect that country's currency value. For example, if the US raises interest rates, US bonds become more popular with global investors. This means that US dollars become more in demand, which means the dollar itself goes up in value.

Another example of a reason for a currency's change in value is that a country's key exports can rise or fall in value. One example of that is Canada. Canada is a major oil exporter. When oil prices go up, the Canadian dollar rises in value because of Canada's oil exporting capabilities. This was true recently as oil prices rose markedly. Now, oil prices are going down, so that the Canadian dollar, too, is also going down in value when compared to some other currencies.

These are just two examples as to why currencies can change in value. This is a topic that can be quite complex.

Thankfully, you don't actually need to know all the intracacies of the market before you can make money at it. There are forex trading software programs that have been developed by professional traders that will spot out trends and signals in order to find profitable trades for you. You just need to install the software on your computer (with an internet connection) and the program will use realtime market data in order to generate trades.

These programs are perfect for beginners because it allows them to make money while they also learn more about currency trading. As you become more knowledgable, you will begin to make trades based both on what the software spots and as well your own intuition.

Shopping for one of these programs is quite easy, but there are some cautions to keep in mind. You don't need a program that costs literally thousands of dollars. In fact, you can get quality software for about $100; the software is reliable and proven, and it can definitely make you money.

The company that sells the software should also offer a moneyback guarantee. If the program is a good one and it really works, they'll be happy to back it up with a moneyback guarantee. This also helps give you peace of mind and some additional security that the program you're getting is a good one.

Even if you haven't considered forex trading in the past, it's a worthwhile business to look into. It's easy to start and you can quickly start generating good money with it. And at the risk of sounding like a geek - I also think it's a lot of fun! All the best! - 23229

About the Author:

Click Here to discover how real everyday people who are earning cash trading forex online. You can also see reviews on the most successful Forex Trading Robots.

Are You A Futures Trader? (Part II)

By Ahmad Hassam

Apart from professional traders and speculators, futures trading is done by most of the people like you and me who are interested in making money in the markets. Like stocks, Buy low and sell high, is the basic premise in futures trading as well.

You will like to know what is different in futures trading from stock trading. The fact that you can trade futures with leverage on either long or the short positions introduces an additional element of risk not present in the stock market. Leverage is a risky.

Another major difference with stock trading is that there is no uptick rule in futures trading. Thus, it is as easy to sell short as it is to buy long. This means that you can easily enter into a position to capture a downward move in prices with no restriction.

Even when you are not particularly good at it, how do you manage to survive at futures trading? The answer is simple. You should have the money first to open a margin account. Then you should have the ability to develop a trading plan that enables you to keep making money in the market long enough to capitalize your next big move. How do you become good at futures trading? By learning technical analysis!

In simple words, it means if you dont have enough money, you wont be able to trade futures. And if you dont have a good trading plan, you wont last long in the market. Your money will quickly disappear.

You must know this thing that 95% of the people trading futures lose money consistently. In order to start trading futures, you need to have at least $25,000 in your account. Off course, $5,000 is the minimum with which you can start trading futures.

When you start trading futures make sure that you understand the risks involved and that you go into trading futures contracts with realistic expectations. You can take advantage of the managed futures accounts if you are not sure how to handle the risk involved in futures trading.

So in order to trade futures, you need money, patience, knowledge and technology to be successful. Without money you cant open a position and without knowledge you wont know when to enter and when to exit. Trading futures contracts is truly a hybrid that uses both fundamental and technical analysis. Only proceed ahead if you have these skills in abundance.

You need to know the futures contract specifications. There are seasonal tendencies in the markets that you need to be aware of. The fundamental side of futures trading involves getting to know the industry in which you are making trades. You should also know the important reports that usually affect the industry in which you are planning to trade futures contracts. You need to keep an eye on the release of those reports.

You should determine your trading style. Are you are scalper? Are you a day trader? Are you a swing trader or are you a position trader? You will need to develop your own trading style whether it is momentum trading, scalping, day trading or swing trading. Your personality will determine your trading style. Now, the technical side of futures trading tells you what the market will do in response to the fundamentals.

As I have said before: Learn technical analysis. Understanding candlestick charts and candlestick patterns can be a good tool in your technical analysis arsenal. Dont try to conquer every type of analysis at once. Instead, go step by step and focus on mastering one item at a time"maybe concentrating only on chart patterns such as the candlestick patterns for instance. Establish a trading plan for getting there, once you know your trading goals. - 23229

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading futures and currencies. Trade Dow Futures and S&P Futures!

Are You Aware Of Some Common Alternatives To Bankruptcy?

By Emma Elvie

What are some alternatives to bankruptcy? This is what may be on your mind if you are experiencing financial difficulty. The truth is that most people never think about learning how to handle their finances until it is too late.

One of the main reasons that we wrote this article is because we wanted to share with you that you do have some alternatives to bankruptcy. While filing bankruptcy will allow you to get a fresh start to life the truth is that you should do everything that you can to avoid it.

We have taken the time to list some alternatives to bankruptcy that may enable you to get out from underneath your debt. First of all before you even consider any of these alternatives to bankruptcy; you have to be honest with yourself and find out if they will work for you.

1. Professional Assistance: Even though you may think that there is nothing that you can do financially; the truth is that there are places that you can turn to for professional assistance that may help you avoid filing bankruptcy. Thousands of people who are living paycheck to paycheck tend to believe there is nothing that they can do. However as long as you continue to ignore your financial situation then you can expect it to get worse.

The truth is that unless you are willing to confront your issues then you may realize that your problems will never go away. You should begin confronting your issues by speaking with a professional who can help you decide what your next step should be.

2. Have A Budget In Place: If you are like most people then you hate to set up a budget because you feel restricted to the amount of money that you can spend on a daily or monthly basis. However people who do not have budgets in place tend to find themselves overspending on items that they should tell themselves "No" they can not have it.

3. Necessities: We all know that there are ways to cut back on certain finances in today's society. There are certain items that you may be spending money on that you really do not need or can downgrade on such as telephone, cable and other things that you may be spending money on.

For more alternatives to bankruptcy that have helped thousands of people be sure to stop by our site below and get all the information about filing bankruptcy that you can use. - 23229

About the Author:

Bankruptcy Alternatives Do You Know About This? Declaring Bankruptcy