Interesting!

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The Fed and "Plunge Protection Team": Are They Manipulating Stocks?
Rumors are, the U.S. government "is propping up the stock market."
October 29, 2010

By Elliott Wave International

Out of thousands of questions recently submitted to us at Elliott Wave International, the most frequent one received is: "Can the Fed manipulate the stock market?" Read our expert's answer on this and other misleading “investment wisdom.” Read more.

You will find many intriguing Q&As at EWI's Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute's experts. We strive to answer every Message Board reader, and publicly post the best Q&As.
By far, the most frequent question we've been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

We have several active Message Board posts that touch on "market manipulation." But here is an eye-opening chart that will help shed more light on this issue.

EWI President Robert Prechter published this chart in his October 2008 Elliott Wave Theorist. Review this chart carefully. For too many investors, the crash of 2007-2009 is becoming a hazy memory. And almost no one in the mainstream financial media talks about the utter panic in the markets in September-October 2008, the worst part of the crash.

If you think back to that time, you may remember that the Federal Reserve and U.S. government took many aggressive steps to help stop the collapse. Every time they would announce a new intervention, the market would cheer. Result? Prechter's chart gives an unequivocal answer:

As you can see, announcements of bailouts, unlimited credit, bans on short sales, etc., were powerless against the biggest stock market collapse in 76 years. The DJIA kept sliding. It didn't stop until March 6, 2009 -- after it had slipped below 6,500.

So: Is the Fed and the "Plunge Protection Team" engaged in market manipulation? You can browse EWI's Message Board for some answers, but one thing is clear: When stocks were crashing two years ago, few dared to suggest that the Fed was in the saddle. Bob Prechter puts it best:

"When markets go up, the Fed seems to be in control; when they go down, it seems out of control. But the control aspect is an illusion."

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Learn why you should think independently rather than relying on misleading investment commentary and advice that passes as common wisdom. Just like the myth that government intervention can stop a stock market crash, Market Myths Exposed uncovers other important myths about diversifying your portfolio, the safety of your bank deposits, earnings reports, inflation and deflation, and more! Protect your financial future and change the way you view your investments forever! Learn more, and get your free eBook here.

ITS SIMPLE.

Sorry for the less updated blog. I dont feel that I have anything else to put in. The answer is all in here. This was more like a log to me. I put in everything that I learned in forex.

To make things easier, I will summarize it.

What is Forex?
Forex stands for Foreign Exchange Market. Where you buy 1 currency over the other (exchange). Its a business, no matter what people say. It involve buying and selling like any other business only difference is the medium is currency.

How to trade Forex?
The idea behind forex trading is to make profit from the difference in prices. Simply put, buy when the price is low and sell it when the price is high. Its just like the item you buy in stores, the store keeper is selling it at a higher price to make profit except in Forex you can sell first at high price and buy back later when the price is low.

When to buy and when to sell?
Logically you will sell when the price is going down and you will buy when the price is going up. It is simple but in practice this is what killing most traders. Something so simple can be so complicated.

How to know when the price is going down/up?
The price is going down when it no longer making new high. The price is going up when it no longer making new low.

Final advice
Forex is a human activity. It involve buying and selling. Because it is a human activity, it is not predictable. You cannot predict when is the time you need to go to toilet or when you are going to cut your hair. It is all based on situation. Prediction is an over statement of intelligence in Forex. You dont need it.

Fortunately not everything is unpredictable. By nature human tends to follow what other people are doing. In Forex there is something called the Trend. It happen when lots of people are doing the same thing at the same time (follow??). when more and more people are buying, you buy. When more and more people are selling you sell.

Dont get greedy. Put a reasonable target for each trade and get out once you get your target. There will always be another trade tomorrow and you dont have to trade everyday to make profit. Btw, last week I only trade once.

Good luck to all you traders. For the new blood, take your time. Give it 2 years before you can understand it and go for the kill.

October Curse vs. Objective Analysis: The Choice Is Yours

October Curse vs. Objective Analysis: The Choice Is Yours

October 12, 2010

By Elliott Wave International

Over the weekend, I went shopping for Halloween decorations. In the store, one of the clerks was wearing a white T-shirt with a puff-paint rendering of the Dow Jones Industrial Average. The line representing prices was the color of blood red, dripping and splashed across the front. When I asked him what it was, he said "the October Curse."

'Tis the season of stock market adages; those age-old Wall Street platitudes that claim stock prices perform a certain way during certain months of the year. The problem is, such correlations are hardly a guarantee.

Take October, for example. Yes, this month has marked some of the darkest periods in stock market history: 1929, 1987 and on. Historically, however, it's not the worst performing month. For example, the supposed "Halloween Jinx" failed to bring a deathly pallor to stocks in 2008, as the final days of that year's October saw the biggest weekly gain since 1974.

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Remove Dangerous Mainstream Assumptions from Your Investment Process. Elliott Wave International's FREE 118-page Independent Investor eBook shows you exactly what moves markets and what doesn't. It will change the way you invest forever. Click here to learn more and download your free, 118-page ebook.

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Then there are these familiar saws of seasonal wisdom:

"As Goes The First Week of January, So Goes The Month"-- In the first week of January 2010, the stock market enjoyed a powerful winning streak. Yet, by the end of the month, prices were back in the red, circling the drain of a two-month low.

"Sell In May And Go Away" -- And don't come back 'till St. Leger's Day (September). If investors heeded this wisdom this year, they would have missed one of the strongest uptrends in stocks of the entire year from July to September.

"September Curse" -- If you think October is supposed to be bad, September is widely assumed to take the financial killing cake. Yet this year, U.S. stocks enjoyed their strongest September in 71 years!

Bottom line: Don't "buy" your trading strategy before the trend actually arrives. The choice comes down to old adages, or objective analysis. Pick the latter.

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Remove Dangerous Mainstream Assumptions from Your Investment Process. Elliott Wave International's FREE 118-page Independent Investor eBook shows you exactly what moves markets and what doesn't. It will change the way you invest forever. Click here to learn more and download your free, 118-page ebook.

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Happy Trading!!

ForexJourney

Video (Part 3): Prechter - Investing in Extreme Markets

Video (Part 3): Prechter - Investing in Extreme Markets

(Note: This interview was originally recorded on September 20, 2010)

In the video below, Robert Prechter talks to Yahoo! Finance Tech Ticker host Aaron Task and Henry Blodget about a technical pattern he sees forming in the Dow.

Get Up to Speed on Robert Prechter's Latest Perspective — Download this Special FREE Report Now.

Video (Part 2): Prechter: Ominous Pattern in the DJIA

Video (Part 2): Prechter: Ominous Pattern in the DJIA

(Note: This interview was originally recorded on September 20, 2010)

In the video below, Robert Prechter talks to Yahoo! Finance Tech Ticker host Aaron Task and Henry Blodget about a technical pattern he sees forming in the Dow.

Get Up to Speed on Robert Prechter's Latest Perspective — Download this Special FREE Report Now.

Introduction to Forex Trading

Are you new in the Forex market? This market may sound really complicated and frightening to tackle but it’s not. Just like in any kinds of trade, you make money when you buy low and sell high. Forex trading is simply trading currencies in the Forex market.

Forex is the most extensive financial market in the world. It generates trillions of dollars by exchanging currencies everyday and it operates 24 hours a day and seven days a week therefore, also making it the most liquid market in the world.

In the world of Forex, trading in this very liquid market is very unique compared to other financial market like stocks. Since the Forex market operates 24 hours a day worldwide, starting at Sydney and ending in New York, trading is not centralized in one location. You can trade in Forex whenever you want regardless of the local time.

In the past, Forex trading was only offered to large financial institutions, like banks. And, it was also only offered to large companies, multi-national corporations and large currency dealers. This is due to the large and extremely strict financial requirements imposed by the Forex market. This means that individual traders and small businesses are not able to participate in this liquid market.

However, in the late 90s, Forex was made available to individual traders and small businesses. This is owing to the developments in the communications technology. High speed internet made it possible for people to enter the Forex market and have become one of the best make money at home businesses.

Forex trading is getting more and more popular each day. Moreover, who wouldn’t want to trade in the largest and the most liquid financial market in the world? Trading in Forex will definitively give you the opportunity to earn a lot of money. However, trading in this ever liquid market also has its risk. It is a fact that many people who traded in Forex lost a substantial amount of money and some of these people are seasoned traders.

This is why it is very important for you, as a beginner trader in the Forex market, to have the adequate knowledge and education on how to trade in the Forex market. Firstly, there are hundreds or even thousands of available websites in the internet offering Forex education. Some of these websites offer dummy Forex trading where you can practice trading in the Forex market using dummy money or demo accounts.

These programs will really take you closer to actually trading in Forex. Many experts say that you’ll never fully understand how Forex really works until you traded in the market. So, in order to learn how to trade Forex, you may want to sign up for a dummy account that numerous Forex trading websites offer.

With a dummy account, you can trade Forex without the need to use real money at all. With this program you can practice your knowledge and skills in trading in the Forex market and not waste money.

To prepared for trading in this market, all you need is a computer with a high speed internet connection, a funded Forex account, and a trading system. These three simple things are enough to get you started in the Forex trading.

In order for you to minimize the risk of losing money, you need to get some basic knowledge in charting before you start trading. In most Forex trading systems, Forex charts are there to assist you with your trades. Forex charts are a visual representation of the exchange rates of currencies. This is where you will mostly base your decisions to buy and sell currencies. You need to learn how to read the different Forex charts in order for you to successfully operate in the Forex market.

Each Forex chart is different even though they represent the same variations. For example, in the daily Forex chart, you can evaluate market trends in the past 24 hours to help you make decisions on the next 24 hours of trading. You can use the hourly chart to spot trends within the day. And, in the 15 minute chart, where it can help you recent currency fluctuations in a 15 minute interval to help you decide on which currency to buy and sell. Sometimes, there are 5 minute chart available to better help you get closer to the action.

These are the basics on how to trade in the Forex market. You should never forget that aside from the promising earning potential that you can have in the Forex market, there are also underlying risks that you have to consider. It is therefore wise to trade in this market with a proper investment plan and strategy. If you are just starting out to trade in Forex, consider opening a dummy account to help you practice trading Forex without risking money.