Posts Tagged ‘Foreign Exchange Market’

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How Is the Price of a Currency Determined

John has been reading newspaper and notices that the price of the US Dollars has changed from Rs.50 to Rs.60 in over a month. This has puzzled him. He knows that the currency prices are not fixed by Indian or US government. However the price of the currency is closely tied to demand and supply. When the demand increases for goods, services and goods that are paid in US Dollars, the price of the dollar goes up. […]

Lesson 27 — Moving Average Strategy

This is part 27 of the series. If you are a Forex trader you may have found out that you too often enter and exit markets, but it turns out to be a mistake. So you try out something else but its still not successful. Let me show you, this happens to most traders in the beginning and the secret is you need a trading strategy. The simple […]

Lesson 26 — Oscillator MACD

This is part 26 of the series. The MACD is an oscillator that is based on Exponential Moving averages. The MACD is an oscillator based on Exponential Moving averages. This indicator was introduced in1979 by Gerald Appel and is one of the oldest instruments for the Forex markets. This indicator can be applied in many ways. It is mainly used to show trends or trend reversals, especially when there are strong market […]

Lesson 25 — Oscillator RSI

This is lesson 25 of the series. The RSI indicator or Relative strength index as it is called in its abbreviated form is a technical indicator that can help you with your technical analysis of overbought or oversold markets. The calculation of the RSI is based on the rate of average positive and negative prices. If a market is overbought it is likely to reverse and it is seen as a signal to sell and when market is […]

Lesson 24 — Oscillator Stochastic

This is lesson 24 of the series. The Stochastic Oscillator is a great indicator for an overbought or oversold market. Its based on support and resistance levels. Calculates the highest and lowest price levels in a certain time range and sets the current closing price in relation to that. Very often the price has tendency to come to the extreme prices before it reverses. There are two lines in this indicator, %K and %D, which is the moving average […]

Lesson 23 — ADX Indicator

This is lesson 23 of the series. The ADX indicator or Average Directional Movement index was developed by Welles Wilder. It is a great tool for analying trend and how strong a trend is. You have 3 lines in this indicator. One solid line and 2 dotted lines. If the solid blue line is below 20 the trend is regarded as weak. If it is above 40 or 50, the trend […]

Lesson 22 — Bollinger Waves Indicator

This is lesson 22 of the series. The Bollinger bands indicator can be of great help in your Forex trading with regard to indicating trends, trend changes and the volatiility of the market. However it is not always reliable to use a stand alone tool and it is good to combine it with another technical indicator like Elliot waves for example. Because the Bollinger bands can filter them out and together they […]

Lesson 21 — Bollinger Bands Indicator

This is lesson 21 of the series. The Bollinger bands indicator got its name from its inventor John Bollinger. It is used as a trend indicator and also as a trend change indicator. It is also used to indicate the volatility of the Currency markets. In the middle we have a line, which is a Moving average with 20 periods. And the other two lines are the bands, the upper band and the lower band. They are […]

Lesson 20 — Moving Average Indicator

This is lesson 20 of the series. The Moving average indicator is a simple but powerful tool for Forex traders to analyze the market trends. As the price is moving, the moving average is moving along with it and updated. In the MetaTrader platform you can add the Moving average indicator and specify the period, shift, type and method. The various methods of Moving average include Simple moving average, Exponential MA, Smoothed MA and linear […]

Lesson 19 — Fibonacci lines

This is lesson 19 of the series. The Forex market usually not move upwards or downwards but pullback very often and continue in the direction of the trend. This is known as Fibonacci retracement. Mr. Fibonacci, an Italiam Mathematician from the 13th century discovered these numbers. This video shows you how to use the Fibonacci tool in the MetaTrader platform in the 4 hour chart and identify retracement levels. There are different types of Fibonacci […]