Posts Tagged ‘Forex strategy’

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How to Use the Relative Strength Index (RSI)

The RSI is a momentum indicator used to measure the momentum of an asset. It is s popular indicator used frequently in technical analysis. It can be compared to an oscillator and it fluctuates between two levels. It is used to measure the overbought and oversold readings for an asset. Prices above the 70 level is considered overbought. Prices below the 30 level is considered oversold. For example, you can enter a long position […]

How to Use Bull Flag Entries and Price Targets

A bull flag is a chart pattern, which is formed inside an uptrend, when the price of the asset enters into a brief period of consolidation. In this video, you will learn about how to trade using this pattern, set your stop-loss, and the take-profit level. This is a continuation pattern. Price enters into a range to trade between the support and resistance level. At some point, the market breaks the resistance to the upside, confirming the pattern. […]

Price Action Trading Using Supply and Demand Zones

This video teaches you a trading strategy by observing the highs and lows of the market to determine the current trend in a simple way. This example shows you the 15-min AUD/USD chart. Highs and lows are important as they illustrate you whenever there is an imbalance in the supply and demand happening in the market. When the market reaches the extreme point to the upside, then there is little supply, and the price stalls. When the market reaches the extreme point […]

Do RSI Overbought/Oversold Strategies Work?

In this video, you will learn about the other side of technical analysis, which shows you the more precise way of seeing the markets. A commonly used strategy involving the RSI indicator for observing overbought and oversold conditions. Above 70, the market is considered overbought. Below 30, the market is considered oversold. However, there exists a fundamental flaw with this approach. For example, look at this chart. You have the RSI […]

Does the Bollinger Bands Indicator Work?

In this video, you will learn about a strategy of analyzing the usage of Bollinger Bands indicator in relation to Andrew's pitchfork. In this example, you have the Bollinger Bands indicator added to the price chart. In some cases, the price touches the upper band as it has reached those extreme points, and then reversed. Now, you can see the problem with this indicator. There are situations when the price touches the upper band, […]

Do MACD Crossover Strategies Work?

In this video, you will learn about finding entries and exits using a better way, than using technical indicators like Bollinger Bands, MACD, etc. For example, look at this chart. The MACD indicators is shown below the price. When the price goes up, the histogram turns green. When the price goes down, the histogram turns red. You can use the green histogram bars for buy signal and the red histogram […]

How to Use MACD Indicator in Forex Trading

The MACD is a popular indicator in technical analysis. It stands for moving average convergence divergence and is used to find the momentum and the direction of the market. The MACD indicator can be used as an indicator for generating buy or sell signals using the crossover. It can also be a confirmation indicator, if you already have a technical setup. You can also use the histogram bars of the MACD indicator. The green bars indicate bullish momentum […]

What Is Divergence in Forex Trading

In technical analysis, divergence is seen as an early warning sign. It happens when your price says something, but the indicator says something else. For example, look at this little chart. The price is making new highs, but the indicator below is making lower highs. So, convergence will be in the same direction, and the divergence is in the opposite direction. You can use the RSI and the MACD indicator for observing divergence […]

Pennant Pattern — Continuation Pattern

The pennant is a continuation pattern. You have a prior uptrend in place. Then you have the price action in which price is entering into a brief period of consolidation. As you can see, the highs get lower and the lows get higher. The higher lows form the support trendline. The lower highs form the resistance trendline. At some point, the price converges, and then you have the breakout to the upside. You can enter a long position […]

Cup and Handle Pattern — Chart Pattern

The cup and handle pattern is a continuation pattern. It was defined by William O'Neil. He wrote a book with the title How to make money in stocks. This pattern is suitable in a swing trading strategy. You need a prior up move in the market. It is followed by a retracement forming the cup shaped pattern. The bottom dips about 30% from the peak. Then the price enters about a brief period of consolidation forming […]