PowerZone Trading Blog

Should You Trade Forex or Stocks?

Jean Folger - Saturday, May 21, 2011
Today's investors and active traders have access to a growing number of trading instruments, from tried-and-true blue chips and industrials, to the fast-paced futures and forex markets. Deciding which of these markets to trade can be complicated, and many factors need to be considered in order to make the best choice.

The most important element may be the trader's or investor's risk tolerance and trading style. For example, buy-and-hold investors are often more suited to participating in the stock market, while short-term traders, including swing, day and scalp traders, may prefer markets where price volatility is more pronounced. In this article, we'll compare investing in the forex market to buying into blue chips stocks, indexes and industrials. more

Introduction to Technical Analysis Price Patterns

Jean Folger - Wednesday, May 04, 2011
Transitions between rising and falling trends are often signaled by price patterns. By definition, a price pattern is  a recognizable configuration of price movement that is identified using a series of trendlines and/or curves. When a price pattern signals a change in trend direction, it is known as a reversal pattern; a continuation pattern occurs when the trend continues in its existing direction following a brief pause. Technical analysts have long used price patterns to examine current movements and forecast future market movements.

Trendlines
Since price patterns are identified using a series of lines and/or curves, it is helpful to understand trendlines and know how to draw them. Trendlines help technical analysts spot areas of support and resistance on a price chart. Trendlines are straight lines drawn on a chart by connecting a series of descending peaks (highs) or ascending troughs (lows). A trendline that is angled up, known as an up trendline, occurs where prices are experiencing higher highs and higher lows. The up trendline is drawn by connecting the ascending lows. Conversely, a trendline that is angled down, called a down trendline, occurs where prices are experiencing lower highs and lower lows. more

Investing in the Metals Market

Jean Folger - Tuesday, April 19, 2011
The periodic table represents the earth's known chemical elements, including 94 naturally occurring elements and 24 synthetic elements artificially produced in extreme conditions such as in particle accelerators. The periodic table is divided into nine families of elements with similar properties: alkali metals, alkaline metals, transition metals, other metals, metalloids, non-metals, halogens, noble gases and rare-earth metals. These rare-earth metals, along with a selection of elements known as base and precious metals, provide today's investors and active traders with a variety of trading opportunities. more

5 Tips for Selecting a Forex Broker

Jean Folger - Wednesday, March 30, 2011
The foreign exchange market accounts for more than $4 trillion in average traded value every day, making it the world's largest financial market. Since there is no central marketplace for the forex market, traders must select a forex broker to help them conduct their trading activity. There are a large and growing number of forex brokers, and choosing the right one requires cautiously sifting through an overwhelming number of magazine and internet advertisements. In this article, we'll look at five considerations when choosing a forex broker in today's competitive forex marketplace. more

PowerZone Trading's Lee Leibfarth Winner of TradeStation 9.0 Developer Challenge

Jean Folger - Monday, March 14, 2011

PowerZone Trading's Lee Leibfarth has been selected as a winner of the TradeStation 9.0 Developer Challenge for his work on the new Activator indicator. This user-customizable indicator provides a highly visual, real-time display of the bid/ask ratio, as well as a histogram for past bid/ask ratios during the trading session.

Press Release from TradeStation:
"Plantation, Florida. March 10, 2011 - TradeStation, the award-winning broker-dealer and futures commission merchant, today announced the winners of the TradeStation 9.0 Developer Challenge, a competition designed to recognize third-party software analysis tools that highlight the power and flexibility of EasyLanguage in TradeStation 9.0.  Submissions were judged on the use of innovative analysis techniques to create added value for TradeStation clients, overall ease of use, and clear documentation."

Going Green with Exchange Traded Funds

Jean Folger - Thursday, February 24, 2011
Exchange traded funds, or ETFs as they are commonly known, are investment funds that are traded on a stock exchange. Investors have a wide variety of ETFs from which to choose, from those that track a major market Index to ETFs that track a basket of foreign currencies. Another type of exchange traded funds are green ETFs, or those that focus on companies that support or are directly involved with environmentally responsible technologies, such as the development of alternative energy or the manufacturing of green technology equipment and devices. Today's investors have access to a growing number of green ETFs, allowing them to incorporate environmentally friendly strategies in their investment decisions. more

Using Technical Indicators to Develop Trading Strategies

Jean Folger - Tuesday, January 18, 2011
Indicators, such as moving averages and Bollinger Bands, are mathematically-based technical analysis tools that traders and investors use to analyze the past and predict future price trends and patterns. Where fundamentalists may track economic reports and annual reports, technical traders rely on indicators to help interpret the market. The goal in using indicators is to identify trading opportunities. For example, a moving average crossover often predicts a trend change. In this instance, applying the moving average indicator to a price chart allows traders to identify areas where the trend may change. Figure 1 shows an example of a price chart with a 20-period moving average. more

Is Your Portfolio Light on Stocks? It may be Time for a Switch

Jean Folger - Wednesday, January 12, 2011
Many investors have either significantly lightened up their stock positions or entirely eliminated these investments from their portfolios in response to the economic downturn of the late 2000s. Much like falling off the proverbial horse and finding the gumption to hop back on, investors, still gun-shy from demoralizing losses, are having to dig deep to find the courage to get back in the stock market. more

Introduction to E-Micro Forex Futures

Jean Folger - Thursday, January 06, 2011

While there is no central marketplace for the foreign exchange (forex) market, foreign exchange futures are one way to trade forex through exchange-traded contracts. Forex futures are similar to other futures contracts in that the currency pairs’ exchange rates act as the underlying commodity in the exchange. In 2009, the Chicago Mercantile Exchange (CME) introduced a smaller version of currency futures contracts – the E-micro forex futures suite. These six currency pairs trade at one-10th the size of the corresponding forex futures contracts and make forex futures trading more accessible to a wider variety of traders and investors, including active individual traders, small commodity trading advisors (CTAs) and small and medium enterprises (SMEs). Here we'll take a look at these forex futures and show you how you can incorporate them into your trading. more

Adaptive Price Zone Technical Indicator Explained

Jean Folger - Monday, December 13, 2010

The adaptive price zone (APZ) is a technical indicator developed by Lee Leibfarth that was first described in the Technical Analysis of Stocks & Commodities (September, 2006 "Identify the Turning Point: Trading with an Adaptive Price Zone"). The APZ is a volatility based indicator that appears as a set of bands placed over a price chart. Especially useful in non-trending, choppy markets, the APZ was created to help traders find potential turning points in the markets. This article will examine the calculations behind the APZ as well as some of the possible trading applications. more