The Dow Theory With ForexGen

You will hear a lot about the Dow Theory as you travel through your trading career. Dow himself never actually used the phrase.
That came later as analysts began to use the term.
I should back up here slightly and mention that in 1884 Dow published his first stock market average of 11 stocks.
From the original 11 stocks, there were some changes and rearrangements of the average, until he settled on 30 stocks which are now know as the industrial average and that is where we get the term the ‘Dow Jones Industrial Average’.
The actual theory is fairly straightforward to explain and sensible if you take the time to think about it.
I shall simplify it slightly, as we have not covered some of the terms yet.

Become a Successful Day Trader With ForexGen

Day trading is the procedure of buying stocks, currencies or futures, and selling them on the same day. Out of the deal, a skilled day trader expects to earn a profit. Notice that the word skilled is important. Stock day trading is not for the lazy or unskilled trader.While many experience more losses than gains in day trading, there are still some more skilled stock day traders who swear by the system and continue to reap the benefits. Here are some advantages of day trading and how to become a stock day trader, as related by successful day traders. One major advantage of day trading is being able to work on your own. You are your own boss. You don’t need to consult with others before making a decision. Should you fail, you are the only one accountable for your trading losses.You do not need to know much about stock trading before you can try stock day trading. Anybody with a high speed Internet connection and a little risk capital can venture into day trading. However, if you want to trade at a profit and be successful, you need to study how trading systems work, find one that is suited to you, and work hard at mastering it. Most people who try out day trading without preparation and without a good day trading software program will lose money.In day trading you don’t want to speculate or make decisions based on your opinion of trends or your gut feelings. You should master a trading system and base your decisions upon the systems trading signals. If you use a proven system you should also be able to gain using the same system over and over again. That is if you have the discipline to follow it. The main reason so many day traders end up losing money is that they fail to follow their own trading system even when it is a very good one.

ForexGen | Dollar Bounces on Confidence

The greenback rallied across the board in the Tuesday, pushing the euro lower by over two big figures to 1.5554 – its highest level in a month and rising to 108.30 against the yen. A combination of a further retreat in oil prices and a better-than-expected reading in the Conference Board’s consumer confidence survey sparked the dollar’s gains and a rally in the US equity bourses. Traders shrugged off a disappointing Case-Schiller home price survey, which posted its steepest fall on record, down by 15.8% in May versus 15.3% a month earlier. Instead, markets lauded the better-than-forecast consumer confidence report, which bested estimates for a decline to 50 from 50.4, printing at 51.9 in July. The upbeat confidence survey marked its first increase since December and revealed a decline in 1-year consumer inflation expectations to 7.6% from the record high of 7.7% a month earlier.

ForexGen | The Nikkei 225 recovers 13,000, despite the decline in USD/JPY

Forex: The USD is weaker against most currencies as the WSJ notes that the greenback may be due for profit taking following the recent gains. Also the gains in commodities prices are weighing on the USD. The EUR is currently above $1.4700, USD/CHF is below 1.0950 and USD/JPY is below 110.50. Additionally the NZD and AUD are both higher against the USD, as AUD/USD moved above 87 cents. Although the yen is gaining against the USD and GBP, the Japanese currency is weaker against the NZD, AUD and EUR.

ForexGen | Trade Desk Thoughts: U.K. Rightmove House Prices

Release Explanation: This report gauges the costs of homes in the United Kingdom. The figure is based on surveyors' opinions on the state of the market. As an economic indicator, it measures sales of newly built and existing homes. A fall in house prices indicates a weak housing market, which generally reflects a weakening overall economy.

Trade Desk Thoughts: This report has been in decline since May and this month is no better with a reading of negative 2.3. Average asking prices for homes in the U.K. have fallen 4.8 percent from a year earlier and 2.3 percent from last month alone. Unsold homes are also hitting new highs, rising from last month’s 77 to 78 in August. This may be the lowest number of transactions since 1959. Mortgage approvals also fell to the lowest level since at least June of 1999.

Forex Technical Reaction: Although this is not a top tier release, the sterling is seeing weakness after this release while currently 10 pips above the neutral pivot point.

ForexGen | Dollar Consolidates Gains Into The Weekend

U.S. Dollar Trading (USD) made new 7 month highs according to the Dollar index on the back of surprisingly strong economic data. Empire State Manufacturing rebounded into positive territory in August at 2.8 vs. expectations of -2.8 and a -4.9 reading in July. July Industrial Production also beat expectations at 0.2% vs. forecasts of 0.0%. August Preliminary Consumer sentiment was also firm at 61.7 slightly less than the 62 forecast. In the U.S. share markets, the NASDAQ was down 1 point (0.05%) and the Dow Jones was up 43 points (0.38%). Crude Oil closed down $1.24 ending the New York session at $113.77 per barrel.

The Euro (EUR) tracked lower throughout the day although markets were thin as Europe had a bank holiday on Friday. US data added pressure denying any relief rally into the weekend. Overall the EUR/USD traded with a low of 1.4659 and a high of 1.4826 before closing the day at 1.4680 in the New York session. Looking ahead, Euro zone Trade Balance expected to be +0.5 Billion in June.

The Japanese Yen (JPY) was sold heavily against the USD breaking through resistance at 110.50 but was relatively unchanged against other currencies as continuing weakness in the majors offset. GBP/JPY was able to bounce of recent lows but EUR/JPY and AUD/JPY remained heavy. Overall the USDJPY traded with a low of 109.63 and a high of 110.67 before closing the day around 110.50 in the New York session.

The Sterling (GBP) bounce off support at 1.8520 trading up to 1.8680 as market was seen a little short after large waves of selling early in the week. Rightmove House Price Index down -2.3% in July. Overall the GDP/USD traded with a low of 1.8510 and a high of 1.8685 before closing the day at 1.8660 in the New York session. Looking ahead, Public holiday in UK.

The Australian Dollar (AUD) fell heavily once again after managing to recover from heavy sales and a low 0.8590 earlier in the week. Gold falling below $800 being the main catalyst. Support in the low 0.86 levels held for the time being as Oil bounced off lows and Gold stabilized. Overall the AUD/USD traded with a low of 0.8610 and a high of 0.8707 before closing the US session at 0.8660.

Gold (XAU) broke below $800 an ounce during the Asian session and was unable to recover as US data supported the Greenback. Overall trading with a low of USD$774.90 and high of USD$805.50 before ending the New York session at USD$787 an ounce.