Forex Technical Analysis

Trading forex Fibonacci strategy can be a very profitable method of trading if you know your stuff well. Basically the Fibonacci strategy makes use of the various fib levels as support and resistance whereby you can enter your trade and exit your trade.

There are several levels in the fib sequence and the more significant ones are the 0.382, 0.5 and the 0.618. The Fibonacci is made up of retracement and extension as currency pair movement is usually in the form of waves. It is very common for the currency to move to certain point and then retrace back to the Fibonacci 0.382, 0.5 or the 0.618.

Here is how you can trade currency with the Fibonacci strategy

If the price retraces back to the 0.382 and then move up, it will most probably extend its movement to the 1.272 level and this can be your target profit.

If the price retraces back to the 0.5 and then move up, there is a high chance that it will later extend to the 1.382 and then to the 1.618 level.

If the price retraces back to the 0.618 and then move up subsequently, it will be more likely to move straight to the 1.618 level.

Based on this information, you can then use these levels as a target profit. However it is not advisable to trade based on the Fibonacci alone, the Fibonacci strategy usually includes indicators like stochastic and MACD to help you plan your entry and exit more precisely.

By: Kelvin Dee

If there is one question that many forex beginners ask before they start trading it would have to be “how much do people make on the forex market”?? This is obviously not the easiest question to answer.? Quite frankly, most traders don’t make money in the forex market.? The harsh truth is that only 5% of traders out there are making any money.

I really don’t want you to be depressed by that, though.? The simple reason why so many fail, is that they don’t take it seriously.? They actually don’t want to LEARN how to trade.? They just want to be rich.? I have nothing against wanting to be rich, but you can’t have one without the other.

Your main goal should to understand trading is to understand technical analysis.? A HUGE part of technical analysis is price action. If you don’t know what price action, it means to trade naked (no indicators). You’ll be amazed at what you can see once all your indicators are out of the way.? You can find key support and resistance just by spotting price patterns.

If you’ve done any history on trading, I’m sure you’ll know that many trading legends like Jesse Livermore used the concept of price action to make millions on the floor of the stock market, at the turn of the 20th century.? Believe it or not, the concepts haven’t changed. Traders just have to get a “back to the basics” crash course in trading.? If they did, there would be a lot more than just 5% of the trading public making money.

By: John Templeton

Free Forex trading strategies abound on the internet these days, so how do you know which ones are valid and worth pursuing and which ones should be placed into the “scam” category? Well, there really is no easy answer to this question, but there are some characteristics that all effective and time-tested free Forex strategies have in common. This article will discuss some of these characteristics and will hopefully give you a better idea of what to look for in your search for the best free Forex strategy.

A good indication that the free Forex trading strategy you are considering making use of is valid and effective is whether or not it is based on classic technical analysis skills. Classic technical analysis consists of simple core trading strategies like price patterns, support and resistance, retracements, trend lines, breakouts, and other similar free Forex trading strategies. These core price chart reading skills have been used for literally hundreds of years, and there is a reason why; they work. Gaining the skills to read a raw price chart without a bunch of fancy indicators all over it is the first thing any technical trader must do if they are serious about gaining a deep understanding of price movement, and any free Forex strategy worth pursuing will be based on such skills.

That is not to say that there aren’t some free Forex trading strategies worth checking out that incorporate indicators into their approach. However, if lagging indicators are the only part of the strategy, it is best to keep looking, because you absolutely must learn how to interpret raw price dynamics on some level if you are to find success as a Forex trader. The problem is that many traders commit themselves to free Forex strategies that consist entirely of lagging indicators or computerized “robot” trading methods, such methods only work to confuse the trader and complicate the process of interpreting a price chart. This idea that technical Forex trading needs to be complicated or expensive is absolutely not true, learn Forex trading strategies that are free and based on core technical analysis principals, and you will see how cheap and simple it can be to learn to trade Forex.

Another important factor to consider in any free trading strategy is who it is taught by. If you are trying to learn a trading strategy from someone who isn’t qualified, or who you aren’t sure is qualified, your progress is likely to be quite limited and slow at best. It is very important that you qualify any person teaching you free Forex trading strategies because there are many people on the internet trying to develop a following who are not actual successful traders. When you land on most web pages for indicator based or robot based strategies you usually have no idea who is behind them. This is because these types of strategies simply don’t work and are designed to sell to people for profit. There is nothing wrong with selling a Forex strategy for money if it is actually effective, however, typically anyone selling such a Forex strategy will also offer free Forex strategies as well.

By: Max F

Many novice traders try and make money by FOREX Technical analysis and most fail as they don’t understand its advantages or its limitations.

FOREX Technical analysis trading can be very lucrative if you follow some simple basic rules so here are some simple rules that could make you a lot of money.

Basic rules for technical analysis trading FOREX are:

1. Use a simple system

This means support and resistance and a few filters – We like stochastics and Relative strength Index (RSI) to time trade entry and Bollinger bands to project targets and isolate areas of value.

Don’t: Buy a system from a vendor – you can’t buy success.

In most cases if the vendor made money he would shut up and trade his own money.

Develop your own methodology, if everyone could buy success for a few hundred dollars then there would be a huge amount of winners in FOREX trading and there aren’t!

Only you can give yourself success you’re on your own and that’s the only place to be – All top FOREX traders rely on themselves.

Don’t: Assume the more rules you put in your system the better.

It’s a fact that most of the top systems are simple.

There is no correlation between complicated systems and success.

A simple system will be more robust and have fewer elements to break

2. Run profits and cut losses this way

It’s a fact you need to run your profits to cover your losses.

Your system can make money only 30% of the time and still make huge profits if losses are a lot smaller than profits.

The best way to achieve this is to trade significant breakouts (i.e strong support and resistance that is seen as critical by the market) stops are tight and profits from significant breakouts are normally huge.

Fact:

Most major currency trends develop from new market highs – so if you want to catch these trends, look up and research breakout methodology.

It’s simple to understand, works and will continue to work.

Don’t: Day trade FOREX! It will simply lose you your money quickly.

Volatility is random in daily periods, so technical analysis trading is a complete waste of time.

You will keep losses small and have plenty of them.

Of course, profits from winning trades (that’s if you get lucky) will never be enough to cover the losses you have taken!

Don’t: Trade to frequently.

Be patient and ONLY Trade low risk high reward set ups.

You don’t get more money for trading more frequently – you get your payout for being right.

3. Take Open Equity Losses to get long term currency profits

Currency trading is risky but most novice traders try and restrict risk so much they create it.

Here are some pointers

Stop levels if trading against support and resistance are obvious place them and forget about them.

The major error most traders make is moving them to quickly and getting stopped out by normal market volatility.

Leave the market room to breathe and don’t trail stops too quickly.

Its painful seeing dips in open equity in FX trading, but it’s a great way to make big money from the big trends.

Don’t: Forget to place stop on entry be disciplined! Never trade with a mental stop

Don’t: Trail stop to quickly have a profit target and then tighten stops – Until then leave them way back.

4. Look Then Confirm Then Enter

No FOREX trading method will work if you hope levels of support and resistance will hold.

Confirm that support or resistance will hold and don’t predict. That’s why you have other indicators to gauge price momentum.

Don’t: Simply buy or sell into support or resistance and hope, it’s the ultimate mugs way to trade.

The above 4 points are critical to currency trading success by technical analysis trading – so use them.

By: Sacha Tarkovsky

Fibonacci retracement is a tool to measure possible correction target of price after a market performing certain trend, that can be bullish trend or bearish trend but not sideways trend. A lot of traders in foreign exchange market implement this tool for their market analysis and trading purpose and surely they experience the benefits of using Fibonacci retracement. Not only traders are able to assess a price correction target but they also can utilize the retracement as a part of their trading strategy, even some traders, including me, only use it the main consideration factor of their trading strategy.

To implement Fibonacci retracement in forex properly, a trader should be able to locate the beginning and the end of a trend. For instance, when you see EUR/USD on your 1-hour chart, the currency pair starts its trend from 1.3500 then price goes upwards to 1.3600 which from there market gives some reversal signals and on the chart price also starts to decline. What you should do is draw your Fibonacci retracement from 1.3500 to 1.3600.

What if in between those levels you have another swing down of price? It should be a simple answer if you are able to measure the strength of a trend. I usually ignore small swings and keep the focus on main trend. After certain of time exercising it you will be easier figuring out what is the difference of major swing and minor swing.

So from the example above, the goal is to identify possible major retracement target which predominantly significant and will be a major support or resistance of a trend. The consequence of any failure when drawing proper Fibonacci retracement is you will have worse trade. Perhaps following will give you better explanation on it. If you suspect a certain level is 38.2% but it actually should be 50% perhaps you will enter the market too premature resulting in you need to cut your position or at least you will gain lesser profit or could be only get break event point. Do you get what I mean here?

As I said before, there is no other way than learning, observing and practicing how to properly implement Fibonacci retracement in forex. If I may suggest you: study on Elliott Wave Principle. To my knowledge this theory is the first market analysis technique which implemented Fibonacci retracement. Go get some free study resources on the internet about Fibonacci and Elliot Wave Principle.

By: Alberto Pau