About Tzerom forex services & Goals

Tzerom forex

is about the intersection of fundamentals, sentiment, and tech-
nical analysis in the currency markets. It was created to help  people who are
interested in gaining an edge in forex trading. In particular, for traders
who are beginning to test the waters in currency trading, it provides guid-
ance on how to integrate fundamental knowledge to better assess price
action.

For the more experienced trader who has focused mainly on tech-
nical analysis, our objective is to supplement technical analysis trading
with insights into which fundamental forces are impacting price move-
ments. Tzerom Forex aims to assist traders to develop and apply a fundamen-
tal and sentiment mind-set to trading currency markets.

Let us think back to just before the year 2000. That was the era of dedi-
cated phone lines and green screen monitors at brokerage firms. Markets
were slow. As a result, the prevailing strategy was “buy and hold.” In this
era, traders were at the mercy of their brokers. Information was in asym-
metrical pockets of knowledge. Then the rise of computers and the inter-
net destroyed the old order and changed the world of trading.

Today information is now everywhere and mostly free. But the data flow is often
unreliable and mixed with rumors and hyperbole. Yet trading execution
is lightning fast and as a result markets move equally fast in reaction.
In today’s fast-paced globalized world of information, integrating fun-
damental analysis with technical analysis is more important than ever
before.

The digital era has made trading at the same time easier, as data
acquisition and trading can be done anywhere, from the beaches of
Miami, to the streets of Mumbai. Smart devices enable instant trading.
Yet, trading is also more complicated because markets are more complex
than ever before, and more volatile as news acts as information shocks
and cascades quickly through cross market asset classes.

John Netto, a leading trader states:
Globalization has created a swath of financial news sources, social media
outlets, and inexpensive research available on the internet.

This information has created a new balance, changing global macro investing from a long-term strategy focused on large thematic bets to being woven in the
day-to-day price action of every asset class at every price level. The markets
eat, breathe, and run on global macro themes.

The interconnectivity of
the world has melded global macro investing philosophies into all other
investment philosophies to the point they are inseparable.1 In the age of the internet, trading experience presents many challenges to
traders and one is reminded of the ancient saying in the Book of
Ecclesiastes that “there is no wisdom without pain.”

Currency traders experience several pain points in their journey into
trading. The first is selecting the wrong pair to trade. A second pain point
is putting on a trade in the wrong direction. Having targets that are based
on belief rather than on evidence is a very important third pain point.
Finally, after achieving a profitable trade, many traders get out too early.
These pain points are very much the result of a false dichotomy that pos-
tulates there is a difference between fundamental and technical analysis,
or that all one needs is technical analysis to trade currency markets.


Tzerom Forex's  goal  is also to provide forex traders with what they need
to know to reduce the time it takes to become good enough at forex train-
ing to treat it as a profession. Malcom Gladwell famously referred to
10,000 hours as the amount of time necessary to become an expert. In
chess, Garry Kasparov has referenced 10,000 patterns or 50,000 positions.
For forex traders, Tzerom Forex trading fundamentals and sentiment patterns will hopefully build the skills for successful trading in far less time.

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What is hedging?

When a currency trader enters into a trade with the intention of protecting an existing 
or anticipated position from an unwanted move in the foreign currency exchange rates, 
they can be said to have entered into a forex hedge. 

By utilizing a forex hedge properly, 
a trade that is long (buy) in a foreign currency pair can protect themselves from down 
risk, while the trade that is short (sell) in a foreign currency pair can protect against 
upside risk. 

The primary methods of hedging currency trades for the retail forex trader are through spot contracts and foreign currency options. Spot contracts are the run of the mill trades 
made by retail forex traders and because spot contracts have a very short term delivery 
date (two days), they are not the most effective currency hedging vehicle. 

In fact, 
regular spot contracts are usually the reason why a hedge is needed.

Foreign currency options are one of the most popular methods of currency hedging as 
with many options on the other types of securities, foreign currency options give the 
purchaser the right, but not the obligation, to buy or sell the currency pair at a particular 
exchange rate at some time in the future. 

Regular options strategies can be employed, 
such as short straddles, long strangles and bull or bear spreads to limit the loss potential 
of a given trade.

We bought and sold USD/JPY at the same time, one might conclude it is a contradiction 
but it is not, this is part of hedging because the aim is to minimize the risk as we do not 
know the direction of the market, as soon as one of the trades starts making profit we 
are going to close the other one which is on a loss, then start engaging in long term 

trades in order to make more than what we lost.

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How to protect yourself against forex broker scams

1.Compare price feeds. 

Imagine a horse with blinders. This horse’s vision is limited to what’s in front of him. If
there is a hurdle in front, this horse has no other choice but to exert the additional
effort needed to jump over it.

This horse is a very sad horse. If you only use the price feed on your trading platform, you are basically trading like a horse with blinders on.

You have no idea what’s going on in the rest of the forex world because you have limited yourself to your broker’s price feed. If your broker chooses to widen spreads, manipulate rates, and run your stops, you have no way of knowing if the move
resembled the general market.
You do not want to be a sad horse. Because you are a mart trader, you want to have the most complete view of the market as possible.

The best way to do this is to subscribe to a second, third, or even fourth price feed. That
way, you get another view of the market, and you’d have a chance to confirm whether price really moved the way it did.

2. Record everything. 

Always keep detailed journals tracking all of your transactions! Always, always, always!
Like in a courtroom, you need evidence to make a case. You may feel cheated, but if you
have nothing to back it up, then that feeling will remain just a feeling.

The easiest way to keep records is to take a screenshot of each order you put, each trade you take, and other suspicious broker activity like odd price feeds. Not only is this good trade
journaling, but it will come in handy if have been victimized by an errant fill. By properly
tracking the trades you take, you can assure yourself that you will always have evidence
needed to support your case in the event that you file a dispute with your broker.

3. File legal action. 

If you cannot settle your conflict with your broker, then it is time for you to take legal
action. Most brokers give in when faced with the threat of legal action, but if they do not, you can approach either the Commodity Futures Trading Commission (CFTC) or the National Futures Associations (NFA) The CFTC has a Reparations program that provides an “inexpensive,expeditious, fair, and impartial forum to handle customer
complaints and resolve disputes between futures customers and commodity futures trading professionals.

Likewise, the NFA has an Arbitration/Mediation program that helps FCM’s and their clients resolve disputes.

4. Good trading habits. 

Like a disciplined nun who wears a habit, you too should develop good trading habits.
We know that joke does not make sense, but it sounded funny so we might as well put it
here. In any case, even with the proper weapons to protect yourself against evil brokers,
the most important thing is still to become a better trader. Know that no matter how
advanced your charting software is, no matter how much time you put into finding the
right broker, no matter how complicated your trading system is, without proper
discipline, you will end up losing.
It is very easy to put the blame on brokers, but at the end of the day, it is really your choices that get you to where you want to go.

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How to draw Trend lines

It takes at least two tops or 

bottoms to draw a valid trend 

line but it takes THREE to confirm a trend line. 

The STEEPER the trend line you draw,

 the less reliable 

it is going to be and the more

 likely it will break.

Like horizontal support and

 resistance levels, 

trend lines 

become stronger

 the more times they are tested. 

And most importantly, 

DO NOT EVER draw trend lines 

by forcing them to fit the market. 

If they do not fit right, 

then that trend line isn’t a valid one. 

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What you must know before trading in forex

What is laverage ??

Leverage is borrowing money from the forex broker so that

you can get an even bigger exposure to the markets. You don’t pay any interest on the loan.So a small amount deposited into your trading account can control a much larger contract value.

 With $100 you can handle currency that’s worth $1 000 For example, if you make 2% from the $1 000 that means that you have made $20 and your trading account is $120 now.

Technical analysis is based on chart interpretation. 

Technical traders are looking for the charts to show very clear setups. Once a setup appears, the trader is then able to precisely determine the entry, stop loss, and take profit prices.  This is the biggest practical difference between the two styles: fundamental trading is more free flowing; technical trading is more accurate and specific.

Fundamental analysis is based on economic data.

Traders who trade fundamentally wait for specific press releases and attempt to jump into big moves.This is very dangerous because the market is normally very volatile during a news release.If the trader takes the bait and jumps in on a false buy or sell signal and the market moves quickly in the opposite direction, it is very difficult for the trader to get out of the position without taking a hit. With that in mind, there are also huge benefits to trading the news. Large pip scores can be made very quickly, and this type of trading can prove to be very profitable to the seasoned trader.

Forex is Fight between the Bulls and the Bears 

The Bulls push the market up 

The Bears push the market down 

The Forex Market is a Free Market and is not centrally owned

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Support and Resistance Lines

The concepts of resistance and support are part of the foundations of technical analysis. Like trend lines, resistance and support convey assumptions about price patterns that are ambiguous. Just when is resistance or support broken? When is resistance and support simply being probed? Current technical analysis of resistance and support treat those concepts as firm and quantifiable. They are not. We can see the inherent ambiguity in finding resistance and support

Price patterns such as triangles and channels are patterns that exhibit similar degrees of vagueness and are imprecise when the trader attributes
powers to the patterns that they do not have to predict future price direction Keep in mind that the patterns, which are perceived by traders, are
subjective and at best ex-post facto. They are easy to see after they have formed.

True patterns in nature are mathematical and can be tested by scientific methods. More importantly, they are intersubjective, which means that other people can confirm them.

Price patterns are flawed because they are bestcase interpretations. However, patterns do provide
evidence of the status of emotions in the market.
Fibonacci levels are among the most popular tools for trading and do give insight into the nature of price action. Although the field of technical analysis ascribes nearly magical powers to Fibonacci levels, they are still not reflective of any inherent direction.

When prices seem to move in Fibonacci retracement ratios it is because that is the way energy moves everywhere (the famous Nautilus shell is a classic illustration of Fibonacci
patterns, and the proportions of the human face follow Fibonacci ratios), but this does not mean that they predict where the price is going. Furthermore, markets recognize where the Fibonacci points are and use them to create trading triggers. This creates a self-fulfilling process. Fib lines need to be seen as providing zones of possible resistance and support.

The most important weakness in applying Fibonacci analysis relates to the confusion of where to locate a bounce or break off a fib line. This kind of thinking creates a lot of room for error. Just when can a break of a Fibonacci line be considered a break? A break is a very subjective concept. Do we consider a break when the price reaches above or below a Fib line? Or do we have to wait for a candle to close more than once above such a line? The answer may vary among different traders
Chart wave analysis (Elliott Wave) is another popular form of technical/teleological analysis that offers traders the promise of finding and riding a direction more accurately.

The problem with wave analysis is that it is not falsifiable. Prices are defined as being in waves that are part of an impulse or a corrective sequence. Within each sequence there are mini waves as well. Those who follow wave analysis find comfort in this detailed set-up, until prices do not follow the wave prediction. Rather than accepting the fact of being wrong, wave analysts will say that the price is correcting and then will resume back in the right direction. Many traders have heard the statement: the price will go down and then go up.

This is nonsense. It is subjective and vague. It is misleading to the trader who wants to use a method that is reliable. When is a wave based trade wrong? Wave trading is a form of forecasting that has huge degrees of ambiguity. Riding the wave is easy when one is looking in the rear-view mirror.

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What is a Currency Pair Price?

A Fundamental View
An exclusive technical analysis view of markets, and in particular cur-
rency pairs, is highly flawed. The weaknesses and limits of technical anal-
ysis starts with a misunderstanding of what currency prices are all about.
The currency pair is, from a technical analysis view of market reality, a
point on the X–Y price axis. Charts visualize the price behavior. 

For example, if the EURUSD has moved 20 pips, from 1.1700 to 1.1720, a
line chart will show how this movement has occurred. Candlestick charts
show open, high, low, and close prices per unit of time (minute, hour, or
other time slices). The X axis represents time. Simple enough. But is that
what a price really is? The fact is that it is more than a measure on a X–Y
axis.

The fundamental viewpoint asserts that a currency price and its accompanying charts, are codes that are really enciphered signatures of expectations. A better understanding of how to unlock the codes within each currency pair will enable traders to profitably ride the expectation waves that move currency prices.

Flaws in Technical Analysis
The question arises: If technical analysis has these flaws, why is it so dominant? The answer is rather simple. The dominance of technical analysis as a tool for traders is not because technical analysis is totally effective, but because it is easy to sell systems and courses offering hyperbolic performance promises. It is natural that traders want to find the holy grail for predicting direction. As a result, responding to the desires and hopes of traders, there is extensive marketing of signals and systems, and courses that teach set-ups to respond to this demand.

Some systems and signals are profitable. None are profitable all of the time. The products of the trading industry are designed to be produced with minimal viability, because speed to the market is a more important priority than performance effectiveness. As a result, a total reliance on technical set-ups presents many flaws. Let us explore further some of the deep flaws in using technical analysis.The first deep flaw in exclusive reliance on technical analysis is psychological and philosophical. The very premise that one can predict that a price will reach a target is fraught with problems. The price target is in reality not technical in nature. It is a fabricated human construction. It is as subjective as searching for and finding a face in the clouds.

If you look for one you will find it, but it is delusional to believe that the face in the clouds really exists. Similarly, a profit target is a point of hope in the price arena. But in trading, “hopium” is not a useful drug.The very act of thinking that there is a target inherent in the currency pair price or pattern is also teleological (defined as inferring something has an intention).

Inferring intention is a common attribute of human behavior because it is more comforting to deal with an assumed intention then to deal with uncertainty. Consider the following statements: “The price wants to go to the next Fibonacci level”. “The price will bounce off resistance and then move to support”. “The price will break the outer trend line and then move to the inner trend line.” These types of comments are heard every day by traders and reflect the flaw that is inherent in teleological thinking in trading.

The fact is that a price does not know where it wants to go, because the price is really an instant in time of a balance between bullish and bearish expectations. A target also has the effect of suppressing profitability. Many traders who put on a trade that reaches a target price often take profit at that target, only to learn that the profits would have been higher.

Technical profit targets are best used as guides only.

A second powerful source of error and weakness in trading analysis is the use and analysis of trend lines. An uptrend is technically defined as when a price has a higher high and a higher low. A downtrend, conversely is defined as when a price has a lower high and a lower low. A popular saying is: “the trend is your friend.” Going with the trend seems like a good approach. But keep in mind that the trend is your friend until it is at an end. Trend analysis offers a great deal of ambiguity in detecting a shift in the trend.

When is it really over? Is it at a break of a line? How thick is the line? Is it 10 pips? This difficulty of defining a break in the trend applies to both intraday and longer durations.Central banks have a very hard time pinpointing just when a break in inflation trends is occurring. 

That is why they notoriously act too late and allow inflation to go too far, or too early, and put breaks on growth, stimulating a recession. Precision of projecting where prices are going is a common challenge to both traders and policy markets. Of course, lines do not exist and are just heuristic devices, which is a method to get a sense of the boundaries of price action. Lines are mathematical inventions to overlay on what we see. At best, a trend is a map of a path of prices. It leaves a great deal of room for error. It is a very low resolution map.

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