Dear reader,

One of the biggest challenges any trader faces is figuring out which direction the markets are heading. And this is never more so than for traders who get a thrill out of making money on the forex market.

Half the time, they wind up playing against the trend… No wonder they get so frustrated.

Today, I’ve asked trading expert and currency buff, Sean Hyman to offer up a “cure” for that ailment. It’s really quite simple.

You see, in today’s issue Sean will unveil three techniques that revolve entirely around price action.

********************************

Getting your timing right is as easy as 1, 2, 3…

Most people think it’s impossible to time the market. For good reason… Few traders (outside of the JSE’s elite) possess the right technology to do so.

But over the course of my trading career, I’ve come across three incredibly helpful techniques that have helped me up my trading success from dismal to a win rate of 75%. And today, I’m going to share my secrets with you. 

The first technique “averages” the currency exchange rates over time and smoothes out the crazy gyrations so that you can tell where the price is actually heading. The second technique can tip you off to a major breakout point – up or down. And the last strategy shows you how to tap into the trades of a currency genius.

So what are you waiting for… let’s get into it.

Tip #1: When the Moving Average clearly points south, start shorting!

One of the best ways to follow a medium-term trend direction is to place a 50-period simple moving average on a currency pair’s daily chart.

Check out an example of this below.

Don’t know where the pair is headed? Let the SMA guide you

If the moving average line is distinctly pointing down, then it’s telling you that the odds favour short-sellers, not buyers. In other words, bet on this pair falling further.

Had the moving average pointed higher, then the best probability trade would be to buy this currency pair.

By using this simple tool you can gain a significant edge.

Tip #2: Let the price prove to you which way it’s going

There’s another way to determine which way to trade. You simply draw support and resistance lines on the chart. The best way to do this is to look back a long ways. The more days of data that you can see, the more likely you are to draw these lines right.

When you connect the major low points on the chart, you’re drawing the support line. When you connect the major highs on the chart, you’re drawing the resistance line. Check out an example below.

Support & resistance lines give you a clear direction

As in the example above, once you see which way the price breaks out, then you have your trading direction. (In this case, it’s very clear: Go short, since the breakout was to the downside through the support line).

By using these two trading tools… The 50-period moving averages and support and resistance lines, you can trade WITH the trend instead of against it.

Tip #3: Now for that secret weapon – Follow the advice of a currency expert

The first two tips will put you far ahead of the investing crowd. You’d be surprised how many folks ignore these fundamentals!

But there’s an even simpler – more lucrative secret…

You see, from the splashy headlines on the front page… To the most boring, arcane economic data buried in the middle… Your daily newspaper dishes out enough information to give you a few great chances each and every month for hefty double-digit winners.

Yet the only ones who really know the value of this info are professional traders. And that’s why Tip #3 is to tap into the genius of a professional currency trader.

 
Here’s to your financial freedom,

Karin Iten and Sean Hyman
For Money Morning

****************************
Know of a colleague or friend who will benefit from today's Money Morning?
Forward this email onto them so that they too can start taking advantage our brilliant investing commentary. And if they want to subscribe all they need to do is click here!

*******************************
If you really like our service, why not tell us about it? We'd really appreciate
you leaving a testimonial! Just click here.

*******************************
PRIVACY POLICY: “We HATE spam, possibly more than you do. That’s why we will never, EVER pass your details on to any third party companies. That’s a promise.”

****************************
Since Money Morning is completely free email, we necessarily fund our operation with occasional – and carefully selected- advertising and offers. All of these opportunities are ones we believe you will find interesting.  However we will keep our promise and NEVER give your email address to any other companies.

*************
Copyright (c) 2010 Fleet Street Publications Pty (Ltd)

You are receiving this email because you have given us permission to contact you.

Unsubscribe from this e-letter? If you do not wish to receive further such emails, please click on the link

Do you have a query? Please do not reply to this email. Messages to the sending address will not be seen by customer services. All email correspondence should be sent to: queries@fsp.co.za Customer Services 0861 114 365.

Syndication

If you'd like to put Money Morning articles on your website, for free, please email - syndication@fsp.co.za.

IMPORTANT: We do require that: 1. You ask permission first, 2. That you do not use our articles until we have confirmed that you can, and 3. That you clearly attribute any article you use to us, and paste a link back to www.fsp.co.za.

Disclaimer: There is no magic formula to getting rich in the stock market. Like all forms of investment, success in selecting stocks with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis of publicly available company and industry filings and news releases. The opinions in this advertisement are just that, opinions of the author.

Warning: Stock/option trading involves high risks and you can lose a lot of money-you may even lose all the money you invested. So please, do not invest with money you cannot afford to lose. Past Results are not necessarily indicative of Future Results

The information in this email is confidential and may be legally privileged. It is intended solely for the addressee. Access to this email by anyone else is unauthorised. If you are not the intended recipient, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it, is prohibited and may be unlawful. If you are not the intended recipient please return the message to the sender and delete it from your records. Alternatively, please contact Fleet Street Publications Pty Ltd on Customer Services 0861 114 365.