Today's Forex Prediction - August 11, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3173	1.3066
USD/JPY	87.66	86.02

See : How To Applying My Prediction

Yesterday Prediction Rate :
USD/JPY - ACCURATE (Average Error<50pips)
EUR/USD - FAILED (Average Error>50pips)

Today's Forex Prediction - August 10, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3362	1.3179
USD/JPY	86.29	85.08

See : How To Applying My Prediction

Yesterday Prediction Rate :
EUR/USD - ACCURATE (Average Error<50pips)
USD/JPY - FAILED (Average Error>50pips)

Today's Forex Prediction - August 09, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3345	1.3205
USD/JPY	85.50	84.40

See : How To Applying My Prediction

Yesterday Prediction Rate : NA

Today's Forex Prediction - August 02, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3081	1.2974
USD/JPY	87.69	86.34

See : How To Applying My Prediction

Yesterday Prediction Rate : ACCURATE (Average Error < 50pips)

Technical Indicators - Momentum

The Momentum indicator compares where the current price is in relation to where the price was in the past. How far in the past the comparison is made is up to the technical analysis trader. The calculation of Momentum is quite simple (n is the number of periods the technical trader selects):

• The current price minus the price n-periods ago

Hence, if the current price is higher than the price in the past, then the Momentum indicator is positive. In contrast, when the current price is lower than the price in the past, then the Momentum indicator is negative.

1. Momentum Buy and Sell Signals
2. Momentum Divergences

Technical Indicators - Momentum Divergences

Identifying divergences between price and technical indicators is important aspect of technical analysis trading. Bullish divergences can signal a trader to exit their short position; similarly, bearish divergences warn that prices could correct and it is advisable to exit any longs.
In the chart below of the S&P 500 exchange traded fund (SPY), Momentum divergences can be seen:

Technical Indicators - Momentum, Buy and Sell Signals

An example of the Momentum indicator is shown below in the chart of the E-mini Nasdaq 100 Future:

Potential buy or shortsell entries are shown above in the chart.

Today's Forex Prediction - July 30, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3120	1.2992

See : How To Applying My Prediction

Yesterday Prediction Rate : ACCURATE (Average Error < 50pips)

Technical Indicators - Relative Strength Index (RSI)

One of the most popular technical analysis indicators, the Relative Strength Index (RSI) is an oscillator that measures current price strength in relation to previous prices. The RSI is a versatile tool, it can be used to:

• Generate buy and sell signals
• Show overbought and oversold conditions
• Confirm price movement
• Warn of potential price reversals through divergences

1. RSI Buy ad Sell Signals
2. RSI Alternative Buy and Sell Signals and Divergences

Technical Indicators - RSI Alternative Buy and Sell Signals and Divergences

An alternative way that the Relative Strength Index (RSI) gives buy and sell signals is given below:

• Buy when price and the Relative Strength Index are both rising and the RSI crosses above the 50 Line.
• Sell when the price and the RSI are both falling and the RSI crosses below the 50 Line.

An example of this methodology for buying and selling based on 50 Line crosses is given below in the chart of Wal-Mart (WMT):

Technical Indicators - RSI Buy and Sell Signals

The chart below of eBay (EBAY) shows how the RSI can generate easy to follow buy and sell signals:

Today's Forex Prediction - July 29, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3090	1.2946

See : How To Applying My Prediction

Yesterday Prediction Rate : ACCURATE (Average Error < 50pips)

Technical Indicators - Pivot Points

Pivot Points are used to project potential support and resistance levels. The main time periods used are daily, weekly, and monthly pivots. The formula for the daily pivot point, support, and resistance is shown below:

• Pivot Point = [Yesterday's High + Yesterday's Low + Yesterday's Close] / 3 

A 15-minute chart of the mini-Dow futures contract and the corresponding floor trader pivots are shown below:

1. Pivot Points, Support, & Resistance
2. Pivot Point Trade Examples

Technical Indicators - Pivot Point Trade Examples

In addition to giving buy and sell signals, pivot points give traders a good time to get out of their trade. To illustrate, during a rally some traders will set their sell orders right below the next resistance line. Thus, pivot point resistance and support lines can generate ready made profit targets.
A 5-minute chart of the Nasdaq 100 ETF (QQQQ) is shown next:

Technical Indicators - Pivot Points, Support, and Resistance

Pivot Point = [Yesterday's High + Yesterday's Low + Yesterday's Close] / 3 A 15-minute chart of the mini-Dow futures contract and the corresponding floor trader pivots are shown below:

Today's Forex Prediction - July 28, 2010

PAIR	TODAY'S PREDICTION
	MAX	MIN
EUR/USD	1.3096	1.2949

See : How To Applying My Prediction

Yesterday Prediction Rate : ACCURATE (Average Error < 50pips)

Technical Indicators - Bollinger Bands

Bollinger Bands is a versatile tool combining moving averages and standard deviations and is one of the most popular technical analysis tools available for traders. There are three components to the Bollinger Band indicator:

1. Moving Average: By default, a 20-period simple moving average is used.
2. Upper Band: The upper band is usually 2 standard deviations (calculated from 20-periods of closing data) above the moving average.
3. Lower Band: The lower band is usually 2 standard deviations below the moving average.

Bollinger Bands (in blue) are shown below in the chart of the E-mini S&P 500 Futures contract:

There are three main methodologies for using Bollinger Bands, discussed in the following sections:

1. Playing the Bands
2. Bollinger Band Breakouts
3. Option Volatility Strategies

Technical Indicators - Option Volatility Strategies

There are two basic ways to trade volatility:

1. Buy options with low volatility in hopes that volatility will increase and then sell back those options at a higher price.
2. Sell options with high volatility in hopes that volatility will decrease and then buy back those same options at a cheaper price.

Since Bollinger Bands adapt to volatility, Bollinger Bands give options traders a good idea of when options are relatively expensive (high volatility) or when options are relatively cheap (low volatility). The chart below of Wal-Mart stock illustrates how Bollinger Bands can be used to trade volatility:

Technical Indicators - Bollinger Band Breakouts

Basically the opposite of "Playing the Bands" and betting on reversion to the mean is playing Bollinger Band breakouts. Breakouts occur after a period of consolidation, when price closes outside of the Bollinger Bands. Other indicators such as support and resistance lines can prove beneficial when deciding whether or not to buy or sell in the direction of the breakout.
The chart of Wal-Mart (WMT) below shows two such Bollinger Band breakouts:

Technical Indicators - Playing the Bands

Playing the bands is based on the premise that the vast majority of all closing prices should be between the Bollinger Bands. That stated, then a stock's price going outside the Bollinger Bands, which occurs very rarely, should not last and should "revert back to the mean", which generally means the 20-period simple moving average. A version of this strategy is discussed in the book Trade Like a Hedge Fund by James Altucher.