Alternative to Working - Part (4)

By John W Middelkoop

Currency trading:

Case study: In my opinion, today, August 12, 2008, we are ready to make a transaction in the market. First we have to establish what the trend is for the USD/JPY. If you look at any available weekly trading chart (available on the internet) we will see it had a low of 95.89 on march 16/08 and another low, of 103.84 on July 16/08. To establish the trend on the weekly chart connect these two points and continue the trend line. The direction of the line indicates the trend is "up" since the trend is your friend, and the trend is "up" we will buy. (Always buy at a dip.) Since the market has declined for 2 days during an uptrend and is close to the trend line we will buy (1) contract (10,000 units) at approximately 108.80, immediately with the purchase of the contract place a stop loss just below the trend line at about 108.30 for a possible 50 point loss protection when the market moves as expected after this 2 day decline, it should turn around and move in the direction of the trend which is "up" this case is a perfect opportunity to get into the market, for the following reasons

(1) The trend is up,
(2) The buy to go long is close to the trend line,
(3) You buy at a dip. And we know that we are protected with a stop loss in the unlikely event the market will decline trough the trend line.

In my experience, this case study is only one of the many similar opportunities that comes along a few times a month, if we are stopped out, we should again have the patience to wait and check for similar conditions. An investment with your financial institution of about $250.00 would be required to make this transaction. Situations like this provide the investor with tremendous profit possibilities. For those people that have never been involved in the art of currency trading I like to inform you that there are financial institutions that will be willing to open a practice account for you. This practice account is available to any one that is willing to learn without having to lose money.

One more thing I like to bring to your attention is the fact that the experiences are based on a market that is on an uptrend, as mentioned before in my previous articles it is possible to make a profit in a declining market. What we have to do is exactly the opposite. First establish a down trend, second wait for peaks sell to go short close to the down trend, trend line.

And don't forget to protect yourself with a stop loss in the unlikely event the market will advance through the trend line.

The date for my next currency trading article please visit: http://www.qualitystampsonly.com by: John Middelkoop