Solid ECN | %40 Deposit Bonus
- Thread starter SOLIDECN
- Start date
- Watchers 13
Forex, short for foreign exchange, refers to the trading of one currency for another. It is also known as FX.
> Forex markets are the largest in terms of daily trading volume in the world and therefore offer the most liquidity. This makes it easy to enter and exit a position in any of the major currencies within a fraction of a second for a small spread in most market conditions.
> The forex market is traded 24 hours a day, five and a half days a week—starting each day in Australia and ending in New York. The broad time horizon and coverage offer traders several opportunities to make profits or cover losses. The major forex market centers are Frankfurt, Hong Kong, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich.
> The extensive use of leverage in forex trading means that you can start with little capital and multiply your profits.
> Automation of forex markets lends itself well to rapid execution of trading strategies.
> Forex trading generally follows the same rules as regular trading and requires much less initial capital; therefore, it is easier to start trading forex compared to stocks.
> The forex market is more decentralized than traditional stock or bond markets. There is no centralized exchange that dominates currency trade operations, and the potential for manipulation—through insider information about a company or stock—is lower.
Solid ECN brings vital advantages for forex traders in the US, EU, and beyond.
solidecn.com
instagram | facebook | twitter | linkedin
The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer.
In FX trading, the Ask represents the price at which a trader can buy the base currency, shown to the left in a currency pair. For example, in the quote USD CHF 1.4527/32, the base currency is USD, and the Ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.
In CFD trading, the Ask also represents the price at which a trader can buy the product. For example, in the quote for UK OIL 111.13/111.16, the product quoted is UK OIL and the Ask price is £111.16 for one unit of the underlying market.
Solid ECN brings vital advantages for forex traders in the US, EU, and beyond.
solidecn.com
solidecn.com
ETH USD - Murray analysis
The ETHUSD pair continues to trade within a wide descending channel and last week fell to its lower border in the area of the lowest values since December 2020 at 880.
Currently, the price is making an attempt to grow, but for a serious recovery it needs to break above the level of 1562.5 (the middle line of the Bollinger Bands, Fibo retracement of 23.6%, Murray [1/8]). In this case, the movement will continue to the levels of 1875 (Fibo retracement of 38.2%, Murray [2/8]) and 2187.5 (Fibo retracement of 38.2%, Murray [3/8], the upper line of the Bollinger Bands). The key for the "bears" remains the level of 937.50 (Murray [-1/8]), at the breakdown of which the downward dynamics will continue to the area of 625.00 (Murray [-1/8]), 500. The current downward trend persists: the Bollinger Bands have reversed downwards, while the Stochastic is directed upwards, and the MACD histogram is decreasing in the negative zone, which creates the probability of a corrective growth, but is unlikely to lead to a reversal of the current trend.
Resistance levels: 1562.5, 1875, 2187.5 | Support levels: 937.5, 625, 500
Solid ECN brings vital advantages for forex traders in the US, EU, and beyond.
solidecn.com
solidecn.com
The most basic forms of forex trades are a long trade and a short trade. In a long trade, the trader is betting that the currency price will increase in the future and they can profit from it. A short trade consists of a bet that the currency pair’s price will decrease in the future. Traders can also use trading strategies based on technical analysis, such as breakout and moving average, to fine-tune their approach to trading.
Depending on the duration and numbers for trading, trading strategies can be categorized into four further types:
A scalp trade consists of positions held for seconds or minutes at most, and the profit amounts are restricted in terms of the number of pips. Such trades are supposed to be cumulative, meaning that small profits made in each individual trade add up to a tidy amount at the end of a day or time period. They rely on the predictability of price swings and cannot handle much volatility. Therefore, traders tend to restrict such trades to the most liquid pairs and at the busiest times of trading during the day.
Day trades are short-term trades in which positions are held and liquidated in the same day. The duration of a day trade can be hours or minutes. Day traders require technical analysis skills and knowledge of important technical indicators to maximize their profit gains. Just like scalp trades, day trades rely on incremental gains throughout the day for trading.
In a swing trade, the trader holds the position for a period longer than a day; i.e., they may hold the position for days or weeks. Swing trades can be useful during major announcements by governments or times of economic tumult. Since they have a longer time line, swing trades do not require constant monitoring of the markets throughout the day. In addition to technical analysis, swing traders should be able to gauge economic and political developments and their impact on currency movement.
In a position trade, the trader holds the currency for a long period of time, lasting for as long as months or even years. This type of trade requires more fundamental analysis skills because it provides a reasoned basis for the trade.
Solid ECN brings vital advantages for forex traders in the US, EU, and beyond.
solidecn.com
instagram | facebook | twitter | linkedin
Where is Forex Traded?
Forex is traded primarily via three venues: spot markets, forwards markets, and futures markets. The spot market is the largest of all three markets because it is the “underlying” asset on which forwards and futures markets are based.
Why Do People Trade Currencies?
Companies and traders use forex for two main reasons: speculation and hedging. The former is used by traders to make money off the rise and fall of currency prices, while the latter is used to lock in prices for manufacturing and sales in overseas markets.
Are Forex Markets Volatile?
Forex markets are among the most liquid markets in the world. Hence, they tend to be less volatile than other markets, such as real estate. The volatility of a particular currency is a function of multiple factors, such as the politics and economics of its country. Therefore, events like economic instability in the form of a payment default or imbalance in trading relationships with another currency can result in significant volatility.
Solid ECN brings vital advantages for forex traders in the US, EU, and beyond.
solidecn.com
solidecn.com
Which Currencies Can I Trade In?
Currencies with high liquidity have a ready market and therefore exhibit smooth and predictable price action in response to external events. The U.S. dollar is the most traded currency in the world. It features in six of the seven currency pairs with the most liquidity in the markets. Currencies with low liquidity, however, cannot be traded in large lot sizes without significant market movement being associated with the price. Such currencies generally belong to developing countries. When they are paired with the currency of a developed country, an exotic pair is formed. For example, a pairing of the U.S. dollar with India’s rupee (USD/INR) is considered an exotic pair.
How Do I Get Started With Forex Trading?
The first step to forex trading is to educate yourself about the market’s operations and terminology. Next, you need to develop a trading strategy based on your finances and risk tolerance. Finally, you should open a brokerage account. Today, it is easier than ever to open and fund a forex account online and begin trading currencies.
The Bottom Line
For traders—especially those with limited funds—day trading or swing trading in small amounts is easier in the forex market than in other markets. For those with longer-term horizons and larger funds, long-term fundamentals-based trading or a carry trade can be profitable. A focus on understanding the macroeconomic fundamentals that drive currency values, as well as experience with technical analysis, may help new forex traders to become more profitable.
Solid ECN brings vital advantages for forex traders in the US, EU, and beyond.
solidecn.com
solidecn.com
What Is a Spot Trade?
A spot trade, also known as a spot transaction, refers to the purchase or sale of a foreign currency, financial instrument, or commodity for instant delivery on a specified spot date. Most spot contracts include the physical delivery of the currency, commodity, or instrument; the difference in the price of a future or forward contract versus a spot contract takes into account the time value of the payment, based on interest rates and the time to maturity. In a foreign exchange spot trade, the exchange rate on which the transaction is based is referred to as the spot exchange rate.
- Spot trades involve securities traded for immediate delivery in the market on a specified date.
- Spot trades include the buying or selling of foreign currency, a financial instrument, or commodity
- Many assets quote a “spot price” and a “futures or forward price.”
- Most spot market transactions have a T+2 settlement date.
- Spot market transactions can take place on an exchange or over-the-counter.
Understanding a Spot Trade
Foreign exchange spot contracts are the most common type and are usually specified for delivery in two business days, while most other financial instruments settle the next business day. The spot foreign exchange (forex) market trades electronically around the world. It is the world's largest market, with over $5 trillion traded daily; its size dwarfs both the interest rate and commodity markets.
The current price of a financial instrument is called the spot price. It is the price at which an instrument can be sold or bought immediately. Buyers and sellers create the spot price by posting their buy and sell orders. In liquid markets, the spot price may change by the second, as outstanding orders get filled and new ones enter the marketplace.
The current price of a financial instrument is called the spot price. It is the price at which an instrument can be sold or bought immediately. Buyers and sellers create the spot price by posting their buy and sell orders. In liquid markets, the spot price may change by the second, as outstanding orders get filled and new ones enter the marketplace.
Charts Used in Forex Trading
Three types of charts are used in forex trading. They are:
Line Charts
Line charts are used to identify big-picture trends for a currency. They are the most basic and common type of chart used by forex traders. They display the closing trading price for the currency for the time periods specified by the user. The trend lines identified in a line chart can be used to devise trading strategies. For example, you can use the information contained in a trend line to identify breakouts or a change in trend for rising or declining prices.
While it can be useful, a line chart is generally used as a starting point for further trading analysis.
While it can be useful, a line chart is generally used as a starting point for further trading analysis.
Bar Charts
Much like other instances in which they are used, bar charts are used to represent specific time periods for trading. They provide more price information than line charts. Each bar chart represents one day of trading and contains the opening price, highest price, lowest price, and closing price (OHLC) for a trade. A dash on the left is the day’s opening price, and a similar dash on the right represents the closing price. Colors are sometimes used to indicate price movement, with green or white used for periods of rising prices and red or black for a period during which prices declined.
Bar charts for currency trading help traders identify whether it is a buyer’s market or a seller’s market.
Bar charts for currency trading help traders identify whether it is a buyer’s market or a seller’s market.
Candlestick Charts
Candlestick charts were first used by Japanese rice traders in the 18th century. They are visually more appealing and easier to read than the chart types described above. The upper portion of a candle is used for the opening price and highest price point used by a currency, and the lower portion of a candle is used to indicate the closing price and lowest price point. A down candle represents a period of declining prices and is shaded red or black, while an up candle is a period of increasing prices and is shaded green or white.
The formations and shapes in candlestick charts are used to identify market direction and movement. Some of the more common formations for candlestick charts are hanging man and shooting star.
The formations and shapes in candlestick charts are used to identify market direction and movement. Some of the more common formations for candlestick charts are hanging man and shooting star.
Difference Between Spot Rate and Futures Rate
The currency spot rate is the current quoted rate that a currency, in exchange for another currency, can be bought or sold at. The two currencies involved are called a "pair." If an investor or hedger conducts a trade at the currency spot rate, the exchange of currencies takes place at the point at which the trade took place or shortly after the trade. Since currency forward rates are based on the currency spot rate, currency futures tend to change as the spot rates changes.
If the spot rate of a currency pair increases, the futures prices of the currency pair have a high probability of increasing. On the other hand, if the spot rate of a currency pair decreases, the futures prices have a high probability of decreasing. This isn't always the case, though. Sometimes the spot rate may move, but futures that expire at distant dates may not. This is because the spot rate move may be viewed as temporary or short-term, and thus is unlikely to affect long-term prices.
If the spot rate of a currency pair increases, the futures prices of the currency pair have a high probability of increasing. On the other hand, if the spot rate of a currency pair decreases, the futures prices have a high probability of decreasing. This isn't always the case, though. Sometimes the spot rate may move, but futures that expire at distant dates may not. This is because the spot rate move may be viewed as temporary or short-term, and thus is unlikely to affect long-term prices.
Trading with Elliott Wave (Part 2/2)
Decoding Elliott Wave Corrective Pattern
Corrective waves, also known as diagonal waves, are composed of three sub-waves or a combination of three sub-waves that result in a net movement that is perpendicular to the trend of the next-largest degree.
Its objective, like with all motive waves, is to move the market in the trend’s direction.
There are five sub-waves in the corrective wave. The diagonal is different because it might seem like a wedge that is either extending or contracting.
Depending on the sort of diagonal being observed, the sub-waves of the diagonal may not have a count of five. Every sub-wave of the diagonal, like the motive wave, never exactly repeats the previous sub-wave, and wave number three of the diagonal may not be the shortest wave.
Elliott Wave with Fibonacci
Corrective wave application emphasizes the potential for cross-studying Fibonacci retracements. Fibonacci levels were not directly used by Elliott, although traders have done so to make the conventional theory more complex.
Which Fibonacci retracement levels might be applied at different stages in the trend are highlighted by the previously stated principles. The 23.6 percent -50 percent levels would be of special interest to a trader searching for a fourth wave given rule three, who would also be looking for it to be reasonably shallow.
Additionally, we can look for the correct A, B, and C move to represent a retracement of 50% to 61.8% of the overall 1-5 impulse move.
Bottom-line
For many people all across the world, Elliott Wave theory continues to provide markets a sense of structure. The capacity to constantly adjust the theory whenever a rule is breached can make it difficult to employ the theory as a trading tool.
But it also significantly improves trend recognition’s level of clarity. Elliott’s original principles can be made as complex as a trader wants, but it is unquestionably an approach that many traders choose to prioritize in their market tactics.
We hope you found this blog informative and use it to its maximum potential in the practical world. Also, show some love by sharing this blog with your family and friends and helping us in our mission of spreading financial literacy.
How to trade with High-Wave Candlestick Pattern?
Indecision candlesticks that resemble long-legged Dojis are known as High-wave candlestick patterns. Their lower shadows are lengthy, and their top wicks are long. They also have a larger physical body. They’re common near support and resistance levels, as well as during periods of consolidation. Bullish or bearish high wave candles are possible.
What is High-Wave Candlestick Pattern?
A high wave candlestick pattern is an indecisive pattern that indicates neither bullish nor bearish market conditions. It generally happens at the levels of support and resistance. This is where bears and bulls compete to drive the price in a specific direction. Long lower shadows and long higher wicks are used to show the design of candlesticks. They, too, have little bodies. Long wicks indicate a lot of price movement throughout the period. However, the price eventually settled near the opening level.
In most situations, buyers attempt to raise prices but are met with fierce opposition. Similarly, sellers attempt to cut prices but find fierce opposition. Both fail to drive price in a specific direction, resulting in the candlestick closing near to where it began.
Formation
The high wave candlestick is a unique type of spinning top basic candlestick with one or two lengthy shadows. The prices at the open and closing are not the same. They differ slightly from one another. The color of the body has no bearing here. The pattern looks like a long-legged Doji.
The High wave pattern indicates that market changes are rapid, just as most candles have long shadows. This could put the current trend in jeopardy. The significance of the candle, like in so many other examples, is highly dependent on the market setting.
How to interpret this pattern?
A high wave candlestick pattern can appear anywhere on the price chart of a stock or currency pair. This High-wave candlestick pattern could be regarded as part of a continuation pattern if it appeared in the middle of a move, either an upward trend or downwards trend. For example, if a stock is heading up and the high wave candlestick pattern appears, a consolidation could occur. After a few swings, the price of a range’s highs and lows may break out of the range and continue to rise.
If the high wave candlesticks appear in a stock that is going lower, a range may emerge, resulting in a sideways activity. When the consolidation period ends, the price may break out and continue to fall in line with the long-term decline.
Similar threads
