Monday, November 27, 2006
Forex Day Trading System - Importance of candlesticks
Forex Day Trading System - How much is the importance of candlesticks
Candlestick patterns are important and very important..When you look at a daily chart, the candlestick formations are very reliable..They point to hammer, hanging man, morning star, evening star and other formations very accurately..
However, when the timeframe of a chart drops, so does the reliability of the candlestick patterns..For e.g. candlestick formation on a daily chart is far more reliable than candlestick on an 1 hr chart..Which in turn is more accurate than the formation on a 5 min. chart
Same is true for other technical indicators such as MACD, RSI and others..Infact thats why I said in one of my previous posts on forex day trading system that don't rely on many technical indicators when doing this form of trading.
However, the candlesticks are very accurate to inform you of any strong support or resistance levels for that timeframe..So thats why, even on 1 min chart, pay close attention to the support levels and resistance levels from which the candlesticks bounce consistently.
Very soon, I'll start a series on Candlestick and important patterns..So keep visiting to learn forex trading online
thats all in this session of forex day trading system.
Tuesday, November 21, 2006
Forex Day Trading System - Another System for 1 min. chart
Forex Day Trading System - Another System for 1 min. chart
As always I have said that for 1 min chart, the technical indicators are not very reliable.. However this system is more cool than others and the indicators this sytem uses is more reliable than others..
Lets go through the system -
As I have mentioned earlier that use this system for a profit targets of 5-7 pips after subtracting the pip spread.
This system uses EMA (Exponential Moving Average) 25, 50 and 100. Also, this forex day trading system works best when you are trading during US trading session or london trading session.
Entry -
When the actual price crosses all three indicators, you enter your trade, long or short. If the price crosses down through the 100 EMA, enter short, if the price crosses up through the 100 EMA go long. Again to emphasize, make sure that you book a 5-7 pip profit. Don't hold the trade for long since price can whipshaw and you may loose money. Learn this in forex trading online.
Exit
Simple - either when price crosses the 100 EMA or when you acheive the 5-7 pip profit..Feel free to repeat this trade multiple times in a day.
Thats all in this post..Next time lets go through another strategy in forex day trading system
As always I have said that for 1 min chart, the technical indicators are not very reliable.. However this system is more cool than others and the indicators this sytem uses is more reliable than others..
Lets go through the system -
As I have mentioned earlier that use this system for a profit targets of 5-7 pips after subtracting the pip spread.
This system uses EMA (Exponential Moving Average) 25, 50 and 100. Also, this forex day trading system works best when you are trading during US trading session or london trading session.
Entry -
When the actual price crosses all three indicators, you enter your trade, long or short. If the price crosses down through the 100 EMA, enter short, if the price crosses up through the 100 EMA go long. Again to emphasize, make sure that you book a 5-7 pip profit. Don't hold the trade for long since price can whipshaw and you may loose money. Learn this in forex trading online.
Exit
Simple - either when price crosses the 100 EMA or when you acheive the 5-7 pip profit..Feel free to repeat this trade multiple times in a day.
Thats all in this post..Next time lets go through another strategy in forex day trading system
Saturday, November 18, 2006
Forex Day trading System - More rules to follow
Forex Day trading System - More rules to follow
Lets continue going through some more rules -
1. Don't use too many technical indicators - Since day trading happens using 5 min, 15 min or 30 min charts, most of the technical indicators keep conflictng with each other and you may keep missing the trade..So, use only 1 or 2 indicators at the most such as EMA (Exponential moving Average, support resitance levels etc..
2. Keep the money managemant principles in mind - Never risk more than 20-30 pips in a singe trade..Because thats what your profit range is..
3. If trade starts going against you and indicators suggest that the market trend has changed, minimize your loss and be courageous to close your trade in the loss.
4. If too many trades are getting into loss, close your trading station and trade the nex day..Don't start the next trade with the aim to make up for your losses in previous trade.
5. Be ready to except what market has offerred you. if the market is just offerring 10 pips, don't hold onto the trade to make atleast 25 pips.
These are some discipline points that you should learn to forex trading online...Without discipline a trader cannot survive in long run..
Thats all in todays session on forex day trading system
Lets continue going through some more rules -
1. Don't use too many technical indicators - Since day trading happens using 5 min, 15 min or 30 min charts, most of the technical indicators keep conflictng with each other and you may keep missing the trade..So, use only 1 or 2 indicators at the most such as EMA (Exponential moving Average, support resitance levels etc..
2. Keep the money managemant principles in mind - Never risk more than 20-30 pips in a singe trade..Because thats what your profit range is..
3. If trade starts going against you and indicators suggest that the market trend has changed, minimize your loss and be courageous to close your trade in the loss.
4. If too many trades are getting into loss, close your trading station and trade the nex day..Don't start the next trade with the aim to make up for your losses in previous trade.
5. Be ready to except what market has offerred you. if the market is just offerring 10 pips, don't hold onto the trade to make atleast 25 pips.
These are some discipline points that you should learn to forex trading online...Without discipline a trader cannot survive in long run..
Thats all in todays session on forex day trading system
Forex Day Trading System - Rules to follow
Forex Day Trading System - Important Rules to keep in mind
Before we start going through another system, I think its important to learn the rules of the game. Thanks Charlie for asking this question
Lets go through these points to keep in mind while day trading -
1. Use the broker that offers you tightest of all spreads. On the majors (EUR/USD, USD/CHF, GBP/USD etc.) the spread offered by most of the brokers is 3-5 pips..
2. Keep the profit expectations real - If someone tells you that you can make 100-200 pips in forex day trading system using 1 single trade, its not correct..In a day trade keep your profit levels as 20-25 pips generally..
3. Trade only those currencies that have the tight spreads..Since your profit is going to be 25 pips per trade per contract, don't trade the currency pair that ask for more than 5 pips as spread..since that eating 20% or more on your profit.
4. Trade with the trend - Never swim against the river flow since making a profit in that case is very remote..Important point to learn in forex trading online.
5. Trading during fundamental announcements (NFP or Non-Farm Payroll etc..) can be very risky since these news are very volatile and can hit your bank very hard..If you have to trade during news time, I would suggest you to avoid at least the NFP..
Thats all in this session to learn..We'll continue to understand some more rules in next post on forex day trading system
Before we start going through another system, I think its important to learn the rules of the game. Thanks Charlie for asking this question
Lets go through these points to keep in mind while day trading -
1. Use the broker that offers you tightest of all spreads. On the majors (EUR/USD, USD/CHF, GBP/USD etc.) the spread offered by most of the brokers is 3-5 pips..
2. Keep the profit expectations real - If someone tells you that you can make 100-200 pips in forex day trading system using 1 single trade, its not correct..In a day trade keep your profit levels as 20-25 pips generally..
3. Trade only those currencies that have the tight spreads..Since your profit is going to be 25 pips per trade per contract, don't trade the currency pair that ask for more than 5 pips as spread..since that eating 20% or more on your profit.
4. Trade with the trend - Never swim against the river flow since making a profit in that case is very remote..Important point to learn in forex trading online.
5. Trading during fundamental announcements (NFP or Non-Farm Payroll etc..) can be very risky since these news are very volatile and can hit your bank very hard..If you have to trade during news time, I would suggest you to avoid at least the NFP..
Thats all in this session to learn..We'll continue to understand some more rules in next post on forex day trading system
Thursday, November 16, 2006
Forex day Trading System - Details on Parabolic Sar
Forex day Trading System - Details on Parabolic Sar
Yesterday we looked at a system which uses Parabolic SAR..Another useful technical indicator...
Generally the indicator is used to place stop..Your charts will calculate the parabolic SAR for you automatically..You need to place the stop on the other side of the parabolic SAR..Once the currency pair starts trending, calculate the parabolic sar. Place a long trade when the parabolic sar is below the price and currency is trending up. The other way around when currency pair is trending down..Easy to learn and use in any forex day trading system.
As you can see we did the same in last system that we went through..Again it is said that Parabolic Sar is more useful in trending market..the stronger the trend the more reliable this indicator is..
Thats all in this session..Visit again to learn more in day trading online..This was kind of shorter session this time..
In the next post, we cover another forex day trading system
Yesterday we looked at a system which uses Parabolic SAR..Another useful technical indicator...
Generally the indicator is used to place stop..Your charts will calculate the parabolic SAR for you automatically..You need to place the stop on the other side of the parabolic SAR..Once the currency pair starts trending, calculate the parabolic sar. Place a long trade when the parabolic sar is below the price and currency is trending up. The other way around when currency pair is trending down..Easy to learn and use in any forex day trading system.
As you can see we did the same in last system that we went through..Again it is said that Parabolic Sar is more useful in trending market..the stronger the trend the more reliable this indicator is..
Thats all in this session..Visit again to learn more in day trading online..This was kind of shorter session this time..
In the next post, we cover another forex day trading system
Wednesday, November 15, 2006
Forex day Trading System - Do you need more strategies?
Forex day Trading System - Lets go through another strategy
Lets go through another system which is as expected simple and as expected very effective.. This system is based on parabolic SAR and exponential moving averages (EMA)..
It can be applied on a 15 min. chart or it can work on a 1 hr. chart...However, let me tell you if you are tading 15 min. chart, don't trade this during news or fundamental announcement time (such as Non Farm payroll or NFP announcements)..
Lets go through the system..Oh but before that do you know what is parabolic SAR? Its another technical indicator is popular..We'll go through it in tomorrow's session..
But 1st the system and its details -
Learn chart setup for this forex trade online -
1. Set up Exponential moving average (EMA) for 10 , 25 and 50 points..
2. Set parabolic sar with the reading 0.02 and 0.2 values..We'll go through details of this technical indicator in next session..
Thats all is required in the chart set up..Once done, next is to wait for a setup to enter the trade.
When to enter -
When the 10 EMA crosses 25 and 50 EMA from below and the parabolic SAR is below, that means its time to enter the trade..When you enter, your stop loss should be about 15-20 pips away from 50 EMA..
Reverse is applicable for short or a sell trade..Simple isn't it?? This is a very popular forex day trading system.
One caution..If you are trading 1 hr chart, your 15 min. parabolic SAR should be lined up with 1 hr SAR..it should not be against.
When to exit -
When the price crosses the 50 EMA or when you find a major resistance (for buy trade) on a daily chart or a major support level (for a short trade).
Try this out..I would suggest you to learn and try this forex trade online on major currency pairs such as EUR/USD, GBP/USD or USD/CHF.
Thats all in today's session..We;ll cover parabolic sar next time in forex day trading system..
Lets go through another system which is as expected simple and as expected very effective.. This system is based on parabolic SAR and exponential moving averages (EMA)..
It can be applied on a 15 min. chart or it can work on a 1 hr. chart...However, let me tell you if you are tading 15 min. chart, don't trade this during news or fundamental announcement time (such as Non Farm payroll or NFP announcements)..
Lets go through the system..Oh but before that do you know what is parabolic SAR? Its another technical indicator is popular..We'll go through it in tomorrow's session..
But 1st the system and its details -
Learn chart setup for this forex trade online -
1. Set up Exponential moving average (EMA) for 10 , 25 and 50 points..
2. Set parabolic sar with the reading 0.02 and 0.2 values..We'll go through details of this technical indicator in next session..
Thats all is required in the chart set up..Once done, next is to wait for a setup to enter the trade.
When to enter -
When the 10 EMA crosses 25 and 50 EMA from below and the parabolic SAR is below, that means its time to enter the trade..When you enter, your stop loss should be about 15-20 pips away from 50 EMA..
Reverse is applicable for short or a sell trade..Simple isn't it?? This is a very popular forex day trading system.
One caution..If you are trading 1 hr chart, your 15 min. parabolic SAR should be lined up with 1 hr SAR..it should not be against.
When to exit -
When the price crosses the 50 EMA or when you find a major resistance (for buy trade) on a daily chart or a major support level (for a short trade).
Try this out..I would suggest you to learn and try this forex trade online on major currency pairs such as EUR/USD, GBP/USD or USD/CHF.
Thats all in today's session..We;ll cover parabolic sar next time in forex day trading system..
Tuesday, November 14, 2006
Forex day Trading System - Continuing trading using 1 min chart
Forex day Trading System - Continuing trading using 1 min chart
Lets continue day trading using the 1 min chart..After the setup was made as mentioned in last post, lets go the entry and exit strategy
Entry -
You are going to enter the trade as soon as -
3 EMA (Exponential Moving Average) crosses through the 18 Bollinger Bands Middle line.
This will need to be confirmed by lining up of Relative Strength Index (RSI) and MACD Histogram - Above 0 (MACD) and above 50 (RSI) for BUY signal. Below 0 (MACD) and below 50 (RSI) for SELL signal.
Once you enter the trade, your stop will be 10 pips away from the entry point..
Exit -
For this forex day trading system, you Exit point is very simple - A profit in range of 7-10 pips. Once realized, close the trade..
Remember the risk to reward ratio here is 1.5 to 1..This means higher risk and lower reward..learn this in forex trading online.
However, this strategy has more winners..so, this risk and reward is still acceptable. Personally, I do not trade anything lower than 5 min. chart..However I have heard that quite a few traders have good profit with this system..
Thats all in this session to learn forex trading online...Visit again to understand more forex day trading system
Lets continue day trading using the 1 min chart..After the setup was made as mentioned in last post, lets go the entry and exit strategy
Entry -
You are going to enter the trade as soon as -
3 EMA (Exponential Moving Average) crosses through the 18 Bollinger Bands Middle line.
This will need to be confirmed by lining up of Relative Strength Index (RSI) and MACD Histogram - Above 0 (MACD) and above 50 (RSI) for BUY signal. Below 0 (MACD) and below 50 (RSI) for SELL signal.
Once you enter the trade, your stop will be 10 pips away from the entry point..
Exit -
For this forex day trading system, you Exit point is very simple - A profit in range of 7-10 pips. Once realized, close the trade..
Remember the risk to reward ratio here is 1.5 to 1..This means higher risk and lower reward..learn this in forex trading online.
However, this strategy has more winners..so, this risk and reward is still acceptable. Personally, I do not trade anything lower than 5 min. chart..However I have heard that quite a few traders have good profit with this system..
Thats all in this session to learn forex trading online...Visit again to understand more forex day trading system
Monday, November 13, 2006
Forex Day Trading System - Trade the 1 min. chart
Forex day Trading System - Trading the 1 min chart..
No, its not a fundamental announcement trading such as NFP or trade deficit etc..Its using technical indicators such as EMA (Exponential Moving Average), Bollinger bands and MACD..
You can replace MACD with RSI if you need..
Mind you trading with 1 min chart is scalping and you can't capture very high moves..Also, its not very popular for day trading, never the less there is still a system in place..So, you can learn this in forex trading online..
The average pips gained by this strategy is 5-10 pips...Also, the loss can be in similar range..
Tomorrow, I'll post the details on the trade setup and how to enter and exit this trade..
By the way, just to tell you, very soon I am going to start a series on using candlesticks more efficiently and how you can place better trades using it..So learn this to forex trade online.
Thats all in today's session.. visit again to understand more on this forex day trading system.
No, its not a fundamental announcement trading such as NFP or trade deficit etc..Its using technical indicators such as EMA (Exponential Moving Average), Bollinger bands and MACD..
You can replace MACD with RSI if you need..
Mind you trading with 1 min chart is scalping and you can't capture very high moves..Also, its not very popular for day trading, never the less there is still a system in place..So, you can learn this in forex trading online..
The average pips gained by this strategy is 5-10 pips...Also, the loss can be in similar range..
Tomorrow, I'll post the details on the trade setup and how to enter and exit this trade..
By the way, just to tell you, very soon I am going to start a series on using candlesticks more efficiently and how you can place better trades using it..So learn this to forex trade online.
Thats all in today's session.. visit again to understand more on this forex day trading system.
Sunday, November 12, 2006
Forex Day Trading System - What is moving average?
Forex Day trading System - Learn what is a moving average
To help understand moving averages, in a given series, a sample of consecutive candlesticks may be referred as a “time window.” If the candlesticks (e.g., closing prices) in a given chart (1 hr or 15 min. or any chart) were added together, and the sum divided by the number of candlesticks in the sample, an “average” gets calculated. So, lets say if on 1 hr chart, you take 10 consecutive candlesticks and calculate its average, you have got average of 10 candlesticks.
However its not a moving average yet..Once you calculate the average of 2nd to 11th candlestick, you have got the next 10 candlestick average..Do it with 3rd to 12th candlestick and its the next average..Repeat it on your chart and now you have got a moving average..
Same process can be repeated with 50 candlesticks and you'll calculate the 50 period moving average..Understand this to learn forex trading online.
You must have noticed that equal weightage is given to all candlesticks in a sample..Thats why its called simple moving average..If you gave more weightage to recent candles, its called exponential moving average..Your charts will calculate that automatically for you..The only thing you have to do is specify the time period..
Generally, Exponential Moving Average (EMA) is more common now a days in all the common forex day trading system..
How to use the moving averages?? Generally the moving averages indicate the momentam..If a fast moving average crosses above the slow moving average, the market is considered to be bullish..For. E.g. if 10 EMA crosses above the 50 EMA , it can be considered that the market has turned bullish..
Thats all in today's session in series on Forex Day Trading System
To help understand moving averages, in a given series, a sample of consecutive candlesticks may be referred as a “time window.” If the candlesticks (e.g., closing prices) in a given chart (1 hr or 15 min. or any chart) were added together, and the sum divided by the number of candlesticks in the sample, an “average” gets calculated. So, lets say if on 1 hr chart, you take 10 consecutive candlesticks and calculate its average, you have got average of 10 candlesticks.
However its not a moving average yet..Once you calculate the average of 2nd to 11th candlestick, you have got the next 10 candlestick average..Do it with 3rd to 12th candlestick and its the next average..Repeat it on your chart and now you have got a moving average..
Same process can be repeated with 50 candlesticks and you'll calculate the 50 period moving average..Understand this to learn forex trading online.
You must have noticed that equal weightage is given to all candlesticks in a sample..Thats why its called simple moving average..If you gave more weightage to recent candles, its called exponential moving average..Your charts will calculate that automatically for you..The only thing you have to do is specify the time period..
Generally, Exponential Moving Average (EMA) is more common now a days in all the common forex day trading system..
How to use the moving averages?? Generally the moving averages indicate the momentam..If a fast moving average crosses above the slow moving average, the market is considered to be bullish..For. E.g. if 10 EMA crosses above the 50 EMA , it can be considered that the market has turned bullish..
Thats all in today's session in series on Forex Day Trading System
Forex day Trading System - Continuation to this day trading strategy
Forex Day Trading System - Lets continue our discussion
In our last session we discussed on Pivot points and how they are important...We also went through R1, R2 and R3 (Resistance levels) and also on S1, S2 and S3 (support levels)..Also we looked at how to calculate these..However you don't have to this manually..On the net there are lots of pivot calculators that are available to calculate it automatically...However, you have to supply the open, close and high values..
Now, lets continue going through this day trading system -
This system is primarily used on EUR/USD or USD/CHF currency pairs..What you need is -
1. 5-minute and 1-hour charts for the forex currency pair that you have selected. The 1-hour chart helps define the intraday trend and the five-minute is used for entry and exit.
2. Indicators: The 9 and 18 Exponential Moving Averages on both the 5-minute and 1- hour charts. The MACD on both the 5-minute and 1-hour charts.
Oh..Don't you know EMA (Exponential Moving Average)? Don't worry, we'll go through that in next session...Currently lets go through this forex day trading system.
3. Calculate the Pivot points for the day..S1, S2, S3, P, R1, R2, R3..Once these are calulated, place the lines on these points on your chart.
Now, lets go through the system and learn how to do online forex trading -
When price penetrates a pivot number, it often tries to retrace back to the pivot point it just broke. If it was resistance that was broken, and it does not move back down, but continues to hover just above it, then there are very high chances that there is about to be a jump in the overall price. At the point that it retraces after breaking the resistance, enter a buy order. The stoploss can be just few pips below (On a 1 hr chart, I would suggest the stop to be atleast 20 pips below the resistance line) resistance line. Your limit can be the next resistance level or the point where the 9 EMA crosses below the 18 EMA..
Reverse is true for the trade when the support was broken..Test this strategy and let me know your experience..
Thanks all in today's session..Visit tomorrow to learn a very popular indicator used by forex traders..
So keep visiting to learn forex trading online and forex day trading system.
In our last session we discussed on Pivot points and how they are important...We also went through R1, R2 and R3 (Resistance levels) and also on S1, S2 and S3 (support levels)..Also we looked at how to calculate these..However you don't have to this manually..On the net there are lots of pivot calculators that are available to calculate it automatically...However, you have to supply the open, close and high values..
Now, lets continue going through this day trading system -
This system is primarily used on EUR/USD or USD/CHF currency pairs..What you need is -
1. 5-minute and 1-hour charts for the forex currency pair that you have selected. The 1-hour chart helps define the intraday trend and the five-minute is used for entry and exit.
2. Indicators: The 9 and 18 Exponential Moving Averages on both the 5-minute and 1- hour charts. The MACD on both the 5-minute and 1-hour charts.
Oh..Don't you know EMA (Exponential Moving Average)? Don't worry, we'll go through that in next session...Currently lets go through this forex day trading system.
3. Calculate the Pivot points for the day..S1, S2, S3, P, R1, R2, R3..Once these are calulated, place the lines on these points on your chart.
Now, lets go through the system and learn how to do online forex trading -
When price penetrates a pivot number, it often tries to retrace back to the pivot point it just broke. If it was resistance that was broken, and it does not move back down, but continues to hover just above it, then there are very high chances that there is about to be a jump in the overall price. At the point that it retraces after breaking the resistance, enter a buy order. The stoploss can be just few pips below (On a 1 hr chart, I would suggest the stop to be atleast 20 pips below the resistance line) resistance line. Your limit can be the next resistance level or the point where the 9 EMA crosses below the 18 EMA..
Reverse is true for the trade when the support was broken..Test this strategy and let me know your experience..
Thanks all in today's session..Visit tomorrow to learn a very popular indicator used by forex traders..
So keep visiting to learn forex trading online and forex day trading system.
Thursday, November 09, 2006
Forex Day Trading System - Another popular trading system
Forex Day Trading System - Trade using pivot points
Before the trading is done, it is important that you know about pivot points. A pivot point is a point of support or resistance. Its a kind of mutually agreed point between traders.
In a forex day trading system, the pivot point is calculated using the previous day's high, low and closing value. Generally traders use the pivots in association with important support and resistance levels of a daily chart. As always the longer the timeframe of a chart, the more reliable it is which means the pivots calculated from 1 1 hr chart is more reliable than ones calculated from 15 min. chart
Formulas for calculating Pivot Point (P) - (High + Low + Close)/3
Important Supports and Resistances:
First Resistance (Res1) = (2*P) - Low
First Support (Sup1) = (2*P) - High
Second Resistance (Res2) = P + (Res1-Sup1)
Second Support (Sup2) = P - (Res1- Sup1)
Pivots are very important to learn forex trading online.
Along with these people also calculate a third support and resistance..However, I don't use those.
How to use these points in forex day trading system? That, I'll cover tomorrow..Visit again to learn forex trading online.
Before the trading is done, it is important that you know about pivot points. A pivot point is a point of support or resistance. Its a kind of mutually agreed point between traders.
In a forex day trading system, the pivot point is calculated using the previous day's high, low and closing value. Generally traders use the pivots in association with important support and resistance levels of a daily chart. As always the longer the timeframe of a chart, the more reliable it is which means the pivots calculated from 1 1 hr chart is more reliable than ones calculated from 15 min. chart
Formulas for calculating Pivot Point (P) - (High + Low + Close)/3
Important Supports and Resistances:
First Resistance (Res1) = (2*P) - Low
First Support (Sup1) = (2*P) - High
Second Resistance (Res2) = P + (Res1-Sup1)
Second Support (Sup2) = P - (Res1- Sup1)
Pivots are very important to learn forex trading online.
Along with these people also calculate a third support and resistance..However, I don't use those.
How to use these points in forex day trading system? That, I'll cover tomorrow..Visit again to learn forex trading online.
Wednesday, November 08, 2006
Forex Day Trading System - Answering a question
Forex Day Trading System - How much does a pip corresponds to!!??
One of a visitor has asked me what is a pip and how much money does it mean. So Lets focus on that to learn forex trading online
A pip is the last decimal place of a forex quote. The pip, is how a profit or loss is measured. For example if EUR/USD = 1.2506, it means that 1 EUR = 1.2506$.
As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In major/minor currency pairs (which involve USD), a sample calculation
of a pip would be -
Example - EUR/USD is 1.2506 or 1 USD = 0.7996
The lowst value is 0.0001
So, 1 pip = 0.0001/0.7996
which when multiplied by contract size will give the value of 1 pip movement as $1 for a mini account and $10 for a standard account..When using a forex day trading system, averge profit is of 20-25 pips per trade.
Knowing value of 1 pip movement is important when making trade since for some currency pairs 1 pip = 8.9$ on standard account (e.g. USD/CAD)
Thats all in today's session on forex day trading system..keep visiting to learn forex trading online
One of a visitor has asked me what is a pip and how much money does it mean. So Lets focus on that to learn forex trading online
A pip is the last decimal place of a forex quote. The pip, is how a profit or loss is measured. For example if EUR/USD = 1.2506, it means that 1 EUR = 1.2506$.
As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In major/minor currency pairs (which involve USD), a sample calculation
of a pip would be -
Example - EUR/USD is 1.2506 or 1 USD = 0.7996
The lowst value is 0.0001
So, 1 pip = 0.0001/0.7996
which when multiplied by contract size will give the value of 1 pip movement as $1 for a mini account and $10 for a standard account..When using a forex day trading system, averge profit is of 20-25 pips per trade.
Knowing value of 1 pip movement is important when making trade since for some currency pairs 1 pip = 8.9$ on standard account (e.g. USD/CAD)
Thats all in today's session on forex day trading system..keep visiting to learn forex trading online
Forex Day Trading System - Important points to be kept in mind when trading
Forex day Trading System - Focus on these points and learn forex trading online
Forex day trading rules often revolve around techniques, technical indicators, and equity management. All these are of course important.
As it is said that without proper equity management new traders take a lot of risk as compared to they can afford.
Generally it is recommended that one should not risk more than 2% of the overall bank account..However, if your mini account is of $500, then that means your stop should not be more than 10 pips away including the spread..Some say 1% or even less. So, in many cases its not practical..I would suggest the forex day trader to stake about 20-25 pips tops and no mopre than that.
In this way you can have a string of losing trades and still be able to survive to see another day.Of equal importance however is adequate emotional management. Day trading can be an exhausting business as when multiple trades are placed, one has to focus on the screen all the time so that one can get in and out of the trade very quickly..
So, do focus on the soft skills of self decipline and mental management to learn forex trading online ..Ofcourse, add to that a strong forex day trading system
Forex day trading rules often revolve around techniques, technical indicators, and equity management. All these are of course important.
As it is said that without proper equity management new traders take a lot of risk as compared to they can afford.
Generally it is recommended that one should not risk more than 2% of the overall bank account..However, if your mini account is of $500, then that means your stop should not be more than 10 pips away including the spread..Some say 1% or even less. So, in many cases its not practical..I would suggest the forex day trader to stake about 20-25 pips tops and no mopre than that.
In this way you can have a string of losing trades and still be able to survive to see another day.Of equal importance however is adequate emotional management. Day trading can be an exhausting business as when multiple trades are placed, one has to focus on the screen all the time so that one can get in and out of the trade very quickly..
So, do focus on the soft skills of self decipline and mental management to learn forex trading online ..Ofcourse, add to that a strong forex day trading system
Monday, November 06, 2006
Forex Day Trading System - Do you trade NFP (Non Farm Payroll)
Forex Day Trading System - Do you trade NFP (Non Farm Payroll)
Quite a few traders trade Non Farm Payroll which is a very volatile fundamental announcement. As you know this news moves the forex market at least 100-150 pips in just a minute on most of the USD based currency pairs (Except AUD/USD and NZD/USD).
So, most of the trades place the trades on both the sides of the overall forex currency pair range over last 1 hour on 1 minute chart. So, lets say on the 1 minute chart in past hour if EUR/USD has high of 1.2700 and low of 1.2675 with the current price of 1.2690, they will place a short trade to be invoked when currency pair reaches 1.2675 if currency starts going down after NFP is announced and they will place a buy at 1.2700 when the Non Farm Payroll announcement starts moving the currency pair up..So thats a powerful forex day trading system if..
And only if..your broker promises you that they will accept the order the moment you place it and closes also whenever the closing order is placed..
You see, since the volatility is very high when fundamental announcements are made, the volatility is very high and brokers don't execute the order immediately...So your order may get executed when the currency pair has already moved significantly..when you trade fundamental announcement, this is key point in to learn forex trading online .
Thats all in today's session on forex day trading system...visit more to learn forex trading online.
Quite a few traders trade Non Farm Payroll which is a very volatile fundamental announcement. As you know this news moves the forex market at least 100-150 pips in just a minute on most of the USD based currency pairs (Except AUD/USD and NZD/USD).
So, most of the trades place the trades on both the sides of the overall forex currency pair range over last 1 hour on 1 minute chart. So, lets say on the 1 minute chart in past hour if EUR/USD has high of 1.2700 and low of 1.2675 with the current price of 1.2690, they will place a short trade to be invoked when currency pair reaches 1.2675 if currency starts going down after NFP is announced and they will place a buy at 1.2700 when the Non Farm Payroll announcement starts moving the currency pair up..So thats a powerful forex day trading system if..
And only if..your broker promises you that they will accept the order the moment you place it and closes also whenever the closing order is placed..
You see, since the volatility is very high when fundamental announcements are made, the volatility is very high and brokers don't execute the order immediately...So your order may get executed when the currency pair has already moved significantly..when you trade fundamental announcement, this is key point in to learn forex trading online .
Thats all in today's session on forex day trading system...visit more to learn forex trading online.
