How to Determine the Length of Market Cycle

When determining the length of a cycle, it suffices for us to measure the time from one crest of the wave to the next, or from one bottom of the wave to the next.

A perfect model would feature a uniform distance between high points and between low points. In the currency market, however, it is extremely rare to find such a regular pattern, even though the lengths of cycles are very similar. Hence, we actually use the average distance to determine the length of a market cycle.

The length of a cycle can be simply calculated as follows:

• We first spot out a few evident bottom points with comparable time periods on the chart and measure their length.
• Secondly, we work out the average time of the periods.
• Finally, to determine whether we have obtained a valid average number, we check to make sure that the maximum difference between the average period and the shortest and longest period is 15% or below. If it is confirmed as a valid average number, we can use it to forecast when the subsequent bottom period of the market cycle will occur.
The same process can be repeated to calculate the high points of a market cycle.

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Buying and Selling Simultaneously

The biggest mental hurdle facing newcomers to currencies,

especially traders familiar with other markets, is getting their head around the idea that each currency trade consists of a simultaneous purchase and sale. In the stock market, for instance, if you buy 100 shares of Google, you own 100 shares and hope to see the price go up. When you want to exit that position, you simply sell what you bought earlier. Easy, right? But in currencies, the purchase of one currency involves the simultaneous sale of another currency. This is the exchange in foreign exchange. To put it another way, if you’re looking for the dollar to go higher, the question is “Higher against what?” The answer is another currency. In relative terms, if the dollar goes up against another currency, that other currency also has gone down against the dollar.

To think of it in stockmarket terms, when you buy a stock, you’re selling cash, and when you sell a stock, you’re buying cash.

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1. Lowest spreads in the market with 0-1 pip spread in 10 pairs, no commissions, no swaps and instant account Activation.
2. Scandinavian quality with Swiss precision, funds secured and local agents in 18+ countries.
3. ForexGen offers Forex trading in the major currency pairs and crosses.
4. Low capital start, with $250 as a minimum account size.
5. Liquidity and 24/5 availability are the characteristic factors of the Forex market compared with other financial markets.
6. [ForexGen] offers a free trial Forex [demo account] that allows you to test your skills and practice without risking real money.

The Mechanics of Currency Trading

The currency market has its own set of market trading conventions and related lingo, just like any financial market. If you’re new to currency trading, the mechanics and terminology may take some getting used to. But at the end of the day, most currency trade conventions are pretty straightforward

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How to Get Started?

People are introduced to the exciting world of foreign exchange in many ways: friends, current events, newspapers, television, and many others. For those of you who are new to forex, the following guidelines cover the basics of currency trading.

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