Wednesday, August 29, 2007

Forex day trading - Range of any currency

Forex day trading - Range of any currency pair.


After a currency pair has been in a trend for while, it stops for a while and starts range trading. This is applicable for all time frames be it daily, weekly, 15 min or 1 hr or even 5min. Once the currency pair has caught the breath, it starts trending again. The trend can be any direction, however the forex pair mostly goes as per the elliott wave.

The kick of a trend generally is caused by fundametal announcement/news such as NFP (Non farm payroll), FOMC, interest rate revisions etc etc.

However, the target of any rally or trend can be decided by the technical indicators such as the fibonacci leels or cros of MACD or can be even EMA.

Its very crucial to identify the entry and exit points when taking advantage of the trade. A good entry point can generate healthy profit of may be 100 pips hile a poorly timed entry can see your stop loss hit.

Thats why its always important to use a sound trading system for tradingin forex maket in any time frame. Thats why its always good to understand a proven trading strategy.

Some of you have aked me which fore trading system is good. In my previous posts, I have recomended the systems of Avi Frister and and by Adam Burgoyne.

Here is my suggestion -

1. If you are looking for a system that is purely mechanical in nature, which means that you can automate entry and exit, then go for Avi Frister's "Forex trading Machine" ebook. It is fantastic and is very concise and is very easy to understand and apply to the market.

2. If you are looking to understand a technical system by which you can decide on entry and exit points and can also understand how to read market, then use Adam Burgoyne's "5 EMAs forex trading system" ebook. Its very easy to understand and comes with a trading strategy which is simple to use and is excellent. Currently Adam is running some kind of promotion on this forex trading system. Feel free to check it out

Best of all, both of these courses ome with a mony back gaurantee..So, you are at no risk at all.

Please remember that just like entry, the exit points are also very important in the trade. You should not close your trade prematurely and also should keep your trade open under greed just to see that the profit you earned got reduced because the market turned in other direction.

Thats all in this message. Keep visiting to learn more.

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Saturday, August 25, 2007

Forex day trading - How do you decide the stop loss?

Forex day trading - How do you decide the stop loss?

The importance of a stop loss when placing a trade, is very evident. One will not want the entire account balance to come to zero which can happen if stop loss is not in place.

But how do you decide a stop loss? Should it be anything?? Are there any factors that decide the stop loss?

There absolutely are the factors -

1. Foremost is how much can you risk? That amount should not only drive your stop loss, but it should also decide the time frame you should forex trade on.

2. The indicators you use. Ideally the stop loss should be the below the indicators you use to decide entry point. For example if you use 5 ema, then your stop loss can be few pips below that ema (exponential moving average)

3. The time frame you place your forex trades at. If you use 15 min chart, the stop loss should be at least 20 pips. If 1 hr chart, then atleast 40-45 pips.

4. Fundamental news or announcements. Always make sure that there are no fundamental announcements such as NFP (Non Farm Payroll) or FOMC etc are coming out. Since they can hit your stop loss in seconds if the news are against your direction of trade.

Thats all in this message...Keep visiting to learn more on online forex trading.

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Friday, August 17, 2007

Forex Day Trading - Pounding by USD

Forex Day Trading - Pounding by USD on all the currency pairs

Did you notice what happenned to forex market in last 4-5 days? Yes..The big USD has hit back on all the currencies..No exceptions (There is one - JPY).

EUR/USD dropped by 350 pints, GBP/USD dropped by 450 and so on and so forth. This was an excellent opportunity to make some great forex pips. I placed trade on EUR/USD and made 155 pips. The market was really great trend wise.

The technical indicators were all holding up - there was a massive MACD divergance on daily chart, the EMA, the stochastic and RSI, all were confirming USD bullishness.

The only thing left to be done was to follow a strong trading system and make good profit using good entry and exit points.

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Friday, August 03, 2007

NFP today impacted the EUR/USD

NFP today impacted the EUR/USD

Today Non Farm Payroll were announced. As always it caused some ripples in the market and that set the market in motion. EUR/USD especially broke out of the range which it was in for last 2 days.

If you llok at today's NFP announcement, it led to a partial bullish candle on 1 hr chart. After the candle closed at 9 AM EST, the next candle closed outside the highest of the 8 AM candle. That was a huge bullish signal to trade.

Also this forex signal can be considered to be even more stronger considering that the currency pair broker the 200 EMA.

Thats the point when I entered the trade with a very conservative target of 30 pips which is because this is Friday and market will close very soon.

With in next candle my limit order was reached and I ended with 30 pips profit.

Though not very popularly followed, the candlestick analysis is very important and useful.

Thanks all in this session.. Visit again to learn more on forex trading.

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