Posts Tagged ‘Forex trading’

This pattern is opposite to the morning start pattern. In terms of its definition Three candles (white, any, then black). Occurs at top of an uptrend. 1st is a white candle. 2nd is a small spinning top that opens and closes at or above a 1st white candle's close. 3rd is a black candle that opens at or below the 2nd candle's close and closes more than half way into 1srt candle's body. […]

In this video, we will discuss about Bollinger Bands. We will focus on how to trade them using trends and trend reversals. But firstly, in terms of their construction, this indicator is made up of 3 lines. The center line is a simple moving average, The distance between the center line and the outside lines are measured in terms of standard deviation. So, firstly, when we get into trends, we […]

The foreign exchange market is worth over 5 trillion dollars. Don't you want a slice of it. In a world where banks, dealers, and brokers buy, sell, and exchange currencies in a given period, discover the laws regulating fluctuations between currencies. You must keep track of an enormous amount of data, but what about the past. Once upon a time where banks were the kingdom of trading, but in 1996, everything changed. Forex […]

In order to make money in the forex market, you have to buy low and sell high. Let's have a look at the example. How much can you theoretically make in trading currencies? Assume you have $1,000 in your trading account. Lets' say the EUR/USD exchange rate is 1.25. You forecast that the euro will rise versus the dollar. Based on this forecast, you buy 800 euros for your $1,000. Your […]

Pivot points are technical indicators that help you determine potential support and resistance areas. But unlike Fibonacci, it uses set calculations of previous day's high, low, and closing prices to plot these levels. They are much more objective. This indicator is especially useful for day traders. One of the ways of using pivot points is to enter the market in the direction of the breakout. Take a look here. As the price […]

Leverage allows a trader to control a larger position than what they have as equity in their trading account. Leverage is most commonly used in real estate transactions through the use of mortgages to purchase a home. For instance, Sally wants to purchase a home worth $500,000. She only has $50,000 and has only the 10% capital required to purchase this home at this stage. She will need to go to the bank and borrow the remaining […]

Stochastics is actually a technical indicator used to measure overbought versus oversold. Now, there is another application that is really more for trend traders, that is momentum. But stochastics is actually a Greek word for random. When price go to a higher range or a lower range, get too far stretched, there is a reversion to the mean. Let's look at this chart. We have the stochastics indicator with […]

The Average True Range or ATR is a volatility indicator. It measures the range of the session in pips and then determine the average of that range over a certain number of sessions. For example, if using a daily chart with a default setting of 14, the ATR will measure the average daily range from high to low of previous 14 days. So, take a look here as the current ATR in the daily chart shows the reading of 0.0153. That means […]

The Average Directional Index or ADX is a directional movement indicator and is used to measure the strength and direction of a trend. It consists of 4 main components, the ADX line, the +DI line, the -DI line, and the level at 20. Let's take a look on how to use this in your trading. First of all, the ADX is great to determine if the pair is in a range or trending. The ADX line values below 20 suggests that the price is […]

Ichimoku is a momentum indicator that identifies trend direction, support and resistance, and provides trading signals. It consists of four main components, the tenkan-sen line, kijun-sen line, chikou span, and kumo cloud. As most of the similar indicators, you look for a line crossover, to find your entries. For a long entry, you are looking for the tenkan-sen line cross above the kijun-sen line. For short entry, you are looking for tenkan-sen line cross […]