Forex Technical Analysis

Deciding to venture into trading the Forex is a big decision, and it requires you to make some very important decisions about what kind of trader you are and what your goals are for trading the Forex. That’s because trading the Forex is unlike trading any other market. The main difference in Forex vs. all other markets is that the Forex market is never closed, except on weekends. It trades 24 hours a day, 5 days a week. If you like fast-moving action, the Forex is definitely the market for you.

One of the first things you must decide as a Forex trader is what time-frame you are going to trade. All this really means is are you going to trade tick charts, 1-minute, 5-minute, 15-minute, 1-hour, daily, weekly, monthly, or yearly charts? The type of chart you trade will have a huge impact on what kind of trading you will do. The kind of trading you SHOULD do is whatever is suited to your personality. This is something you may not have thought about before, but you should definitely give it some thought before you get too far into your Forex career.

The two main types of trading are day-trading and position-trading. The definition of “day” varies in Forex trading as opposed to other markets, because the Forex trader’s day could happen anytime during the 24-hour period. This is great news for traders in countries not located in the US or Europe, since they no longer have to keep opposite hours from the rest of their family just to be able to trade – since many of the World’s major markets are located in the US or Europe. The Forex gives them the unique opportunity to unleash themselves from the restrictions of someone else’s time zone.

A day trader typically starts each day with no trades left open from the day before. He will start the day by looking at the day’s news and announcements and then examine his charts for whatever activity has been going on overnight and how that activity may have affected what how he was trading the day before. A day-trader will usually trade with shorter time frames, such as 1, 5, or 15 minute charts, since he’s only trying to capture whatever moves happen during the day so he can exit all of his positions by the time his day is over. An hourly chart is probably about as large of a span as a day trader will need to pay attention to. However, most traders will probably keep tabs on the weekly and daily charts in order to know what the major underlying trends currently are.

A position trader, on the other hand, doesn’t worry as much about the short time frame charts because he is looking at the longer time frames such as daily, weekly, monthly, or yearly charts. The position trader might pay attention to the hourly charts in order to find the best entry and exit points, but will not usually trade based on the hourly charts’ movements.

The position trader will almost always be carrying his positions overnight from one day to the next, often for weeks at a time as he waits for the longer-term trends to move him along. The only caveat is that you need to have large stops and fairly deep pockets to keep from getting stopped out due to daily price swings. . If you can absorb the up and down swings that occur on a daily basis, then this is probably the best way of profiting from the Forex, since the Forex tends to trend so well over long time frames. As long as your stops are set fairly far away from the daily price action you will be most likely be able to profit quite handsomely from this type of trading.

So basically, it sums up like this: The day trader can trade with a smaller account because he uses tighter stops and watches the market almost constantly during the day. This can be hectic and stressful, but many traders thrive on the adrenaline rush that this type of trading provides. If your personality is right for this type of trading, then you will probably not be satisfied with slower pace of the position trader.

Position trading is best suited for those who either don’t care for the stress that accompanies day trading, or for those who have deep trading pockets, or both. The position trader also must be able to feel comfortable about whatever positions he has left overnight, since he know the market will be doing things while he is off work or sleeping. For some, especially for day traders, the stress of leaving positions unwatched and unprotected overnight is more stressful than the stress of watching the markets during the day.

Knowing your personality type will help you decide what time frame you will be best suited for trading. If you aren’t sure, then try each one until you decide what suits you best. Just be sure you don’t burn out on the wrong style before you decide, because it would be a shame to miss out on the profitable opportunities of trading the Forex.

Good trading,

By: Seun Oluwaseun

I start with these concepts because they need to be understood in order to use the day trading levels that I post each day. The following topics involve looking a chart of price history of a given financial instrument.

Support Levels are price points at which prices have had a hard time pushing down through in the past. In other words, a support level is a level where price stopped falling. Often a support can be found at slightly different levels, for example yesterday prices moved down to $90 in the morning, later in the day they went down to 89.90 before moving higher, then near the end of the day price touches 89.95 and then moves back up to close at 91.

In this example three support levels were created, but together they can be used to describe a support area. Support areas have more significance than a single level because it shows the market has tried several times to breakthrough a certain level, but could not sustain it. In this case the support area would be 89.90-90.00.

Resistance Levels on the other hand are price point in which prices have had a hard time pushing up through in the past. In other words, a resistance level is where prices stopped rising. Just as the example under the support levels section, resistance can also form resistance areas.

Resistance and support levels are dynamic, meaning prices may just edge past the old support resistance level only to revert course. This new price is a new resistance or support level, but should be coupled with old support and resistance levels in the same are to create a support or resistance area.

Breakouts are price movements in which a support or resistance level is moved through. For instance, if the SPY has moved up to $100, but can not break above that price, $100 is a resistance level. When the price finally does move above $100 it would be considered a breakout. When price move up to resistance or support levels, but do not breakthrough, it is called a test (or a level was tested).

If prices quickly move back the other way through the support and resistance zone it just broke out of, then it is called a false breakout. In the example from above, if the SPY moved above $100, this would be a breakout, but if it fell back below $100 and could not get back up to $100, then this would be a false breakout.

By using support and resistance areas (when available), instead of just a single level, we have a better chance of picking levels to watch that have more significance. The more times a price has been tested, but not moved through significantly, the more important that price area is. If a breakout occurs above the top of a resistance area, or the bottom of a support area, it is more likely a significant breakout could occur. But as mentioned, these areas are dynamic and may expand.

Support and resistance occur on all time frames. These levels can be seen on a one minute chart which may only show one day of activity or a weekly chart which could show many years worth of data. If multiple time frames show resistance at a certain level, that level is likely very significant, for all traders. Even a day trader can benefit if a breakout occurs on a weekly chart. They may not be aware of that level because generally they are only watching the last few days or a week of price action. A longer term trader may not be aware of why a major move occurred intra-day, but it could be because of technical factors in a shorter time frame when they were only watching their long term charts.

Not all time frames need to be analyzed, but it is a good idea for all traders to look at time frames longer than the one they currently trade on to be aware of larger forces that may be at work. If longer term traders are looking to enter or exit and they want a good price it may be worth looking at shorter time frame charts.

By: Cory A. Mitchell

Is the newly released GPS Forex Robot really one of the top Forex trading robot as what its owners are claiming it to be? Although there are hundreds of automated Forex trading tools available today, it is certain that less than 10% of these robots are able to make a consistent profit over the long term.

1. How Can You Tell Whether GPS Forex Robot Really Works or Not?

From my experience, the most important factor that determines the success of any currency trading robot is its capability to perform in a live trading market environment. Created by the professional expert trader Mark Larsen, it is the first Russian Forex software that really works in a live market environment. On average, the live accounts are making $300+ per day trading some of the most liquid and volatile currency pairs.

2. What Can You Expect to Receive as a Member of GPS Forex Robot?

The customer support of this program is provided by Ronald and Antony, both of whom were involved in the programming of this software. On top of being programmers, they are also profitable Forex traders themselves, allowing them to understand customer queries quickly and give proper advice to clients. PDF guides and video tutorials provide the instructions that users will need to fully install the robot and be up and running within 15 minutes.

Currently, this robot trades the USD/CHF, EUR/USD and EUR/GBP currency pairs regardless of the timeframe that you choose to use. By programming this software to mimic himself, Mark has made his robot capable of calculating parameters exactly the same way that he would. It takes in information from the live markets, carries out technical analysis and then, based on the fundamental data that has been programmed in, it makes a decision on its own about whether to open a trade with the discovered trend.

By: William Barnes

The method is my own that I use on my live account and have substantially grown my initial modest investment. I never thought it would be possible to make such a good income from an initial deposit of $500, but the years of hard work certainly paid off. My account is now at a level I had only fantasised about and continues to compound everyday by 2%.

In the beginning, a 2% increase on my account was not much profit but it was better than nothing. As my account slowly grew, 2% of the account suddenly become a substantial amount. After this great success I decided that I wanted to help fellow traders who were not making progress so I put together an ebook that describes the method I use. Now anyone can use my method and enjoy the same great success from it. One of the great things about the method is that it is not complicated. Novice and experienced traders can understand it and apply it to their day trading.

What the method does is tell you exactly when you should enter a trade and at what point you should exit some or all of your position.

The great thing about manual methods are that they can perform just as good in backtests as they do on live accounts. What you see is what you get. My method helps you to read the market and understand what is happening. It gives you the confidence that you know what the market will do next. It is also a method that is not dependant on market conditions. Wherever in the world you may be you can trade the method at anytime. I trade during the London session but I do use the method during the afternoon and evening if I have free time. The beauty of the method is it is so accurate that you will find you have a lot of free time.

As I mentioned before I have been trading this way for a while now and have increased my account substantially. Therefore it is safe to say that this is a long-term trading methodology that has been proven to last the test of time. When I was in the initial stages of testing I backtested the method on over 10 years of data and the results amazed me. That’s why I wasted no time using the method on my live account. I am so glad I did.

I don’t like to lose money and my method prevents big losses from occurring. It ensures that profit is realised as soon as possible and the stop loss is very tight, yet rarely hit.

There are many advantages of the 2% daily method and here I will give a brief list:

Profitable, Longterm, Accurate, Easy to learn, Requires minimal investment, Not time consuming, Leaves you with plenty of free time, Not broker dependant, minimal risks, hardly any drawdown, work from anywhere you want, no boss!

Take a calculator and multiply your initial investment by 1.02 (2%). Each time you press equals is another day making 2%. Watch how quickly that figure grows!

This method leaves no guessing work. The rules are clear. If you follow them you will make 2% on your account every day trading the pound/dollar on the 15 minute chart. I am sharing this method because I am aware of the difficulties those getting their feet wet in Forex go through and want to stop them from making the same mistakes I did. I am essentially offering a short cut to the rewards the Forex market can offer. With all the trash robots and methods out there I believe there is room for one honest guy trying to help his fellow traders out!

By: Sami Cat

Many people who start to trade the Forex market, do so without really knowing what everything means. You need to know all the facts before doing anything, get to know the system, memorize symbols and terms for later use. Here is a list of some of the terms that a successful trader will need to know.

Arbitrage – Profiting from the differences in the price of a currency pair that is trade against another pair.

Ask/Ask Price – Price at which a currency pair is offered for sale; the quoted price at which a trader can buy a currency pair.

Bear Market – An long period of general price decline in an individual currency, asset or market.

Bid – The price at which a trader can place an order to buy a currency pair.

Broker – An agent who ‘executes’ orders to buy and sell currencies for a commission or on a spread.

Bull Market – A market with a consistent upward trend.

Central Bank – A bank administered by a national government, which regulates the behavior of financial institutions within its borders.

Commission – The fee that a broker may charge traders for dealing on their behalf.

Currency Pair – The two currencies in a foreign exchange transaction. The”EUR/USD” for example.

Day Trading – A type of trading style where trades are opened and closed during the same day.

Federal Reserve (FED) – The Central Bank of the United States.

Hedge – A Transaction that reduces the risk on an existing investment position.

Long Position – In the forex market, when a currency pair is bought, the primary currency is the “long” pair and the second is the “short”.

Margin Call – A call for additional funds in an account because the amount of money in an account has fallen below a required minimum.

Open Position – Any position, long or short, that is subject to market movements and has not been closed out.

Pip – The smallest amount of change in a foreign currency price, up or down.

Rate – Price at which a currency can be bought or sold against another currency.

Slippage – Its the experience of not getting filled at your expected price when you place a market order or stop loss. This can happen because either

Spot Market – A market where people buy and sell actual financial currencies.

Spread – The pip difference between the bid and ask price of a currency pair.

Stop Loss – Order to buy or sell when a given price is reached.

Tick – The smallest possible change in price, up or down.

By: Luis Aguirre