Trading Without Indicators - Tips to Currency Trading

                                 Trading without indicators is also known as Trading Naked or trading with only price action. Most professional traders actually trade naked depending on only price action. Technical analysis is the art of predicting the future price action in the short term based on the past price action. What is on the left of the chart is history and what is on the right of the chart is a mystery.

Many pro traders only use price action to solve the mystery that lies ahead on the right of the chart. Most indicators that are used in technical analysis are lagging in nature. Lagging means that the trading signals generated with these indicators will be a little late, price action would have already moved ahead.

So many pro traders simply avoid the indicators in trading and solely depend on using price action in making their trading decisions. For example, some would use candlestick patterns to predict the price action as well as other chart patterns.

There are other traders who are the masters of using fibonacci levels in their trading while there are some traders who solely trade depending on the pivot points. Now, it is always a good idea to confirm a trading signals using a second method before you make a trading decision based on that signal. Here comes the use of indicators. For these fibonacci levels, pivot points and chart patters on their own are not considered to be sufficient.

There are a lot of subjective things in trading. If you ask two traders to make a trendline on the same chart, both of them will come up with two different trendlines. Given the same trade setup, two traders will decide to make two different entries into the market. You need to keep these facts in mind. Trading is an art plus a science.

You cannot never be 100% sure in trading. This is why you will keep on hearing over and over again, markets are always unpredictable. So what you need to master is how to read the charts correctly. There are a number of high probability chart patterns that tell about the possible reversal in the market. You should master a few of them and then only trade them.

Apply the K.I.S.S principle in trading. Keep your trading as simple as that. The simplest trading systems have a higher chances of success as compared to complicated systems. Don't waste your money in expensive trading software. Learn to trade naked using only price action and you will succeed!

Mr. Ahmad Hassam has done Masters from Harvard University. Download this Fibonacci Trading FREE eBook by the Elliott Wave International.

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Why New Business Models For US Banks?

                           Reportedly, second and third quarter was an impressive period of significant improvements for the US banks, but still we get to hear some news about the stocks of large banks that declined by more than 20 percent. This is happening since the beginning of the third quarter and four out of every five people are trading below the book value. Do you know why?

Here's a sneak-peak....

While some commentators blame the fear of double dip recession or may be Europe's sovereign debt crisis, McKinsey Quarterly has tried to draw attention to three additional factors. The undermining issues brought to light by this business journal include the new bank capital requirements initiated under Basel III international-banking regulations, impact of new US banking regulations retorting to financial crisis, Dodd-Frank Act, and continuous deleveraging of customers.

As per the estimates, if these banks continue following the current business model, their average ROE (Return on Equity) is expected to fall from 11% to 7% by the year 2015. Moreover, the investors are also willing to see bank management teams to put forward trustworthy and far-reaching plans to fill this gap. This is the current scenario, but what next? Let's find out.

What does the current status implies???

Out of these three factors, Basel III requirement is the most significant, since without justifying actions, they could reduce ROE of some banks by 5%. And that is why, it is being estimated that US banking system will require almost $500 billion in retained earning or may be an absolutely new equity to meet new standards. The second threat is also stepping forward slowly, as an amendment caps fees on payments and there is also a requirement to move many Over-The-Counter (OTC) businesses to clearing houses. This will probably lead to more expensive and complex day-to-day operations.

Then the next threat is all about unwinding of consumer debt and according to the analysis, when excessive borrowing becomes the principal cause of recession, businesses tend to spend next eight years to restructure their balance sheets. So, there is a very little prospect for the companies to return from those borrowing levels and some may never even return.

Therefore, banks must constrict the most out of all the capital cash especially that they have been neglecting from more than a decade. In fact, linking to risk adjusted capital usage would prove even more helpful in such a scenario.

Article Source: http://ezinearticles.com/?Why-New-Business-Models-For-US-Banks?&id=6819535

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