Why are support and resistance levels crucial when participating in the Forex day trading market?
Simply put, they represent key, strategic price points at which traders processed orders involving millions or even billions of dollars. No wonder price at times has a hard time getting past a previous high or low.
Those levels are being fiercely defended by traders who have large amounts of money at stake and who do not want to see price break those levels.
For this reason anyone who engages in Forex day trading should learn how to trade support and resistance.
The following checklist provides crucial guidelines:
1. Support and resistance levels are much more significant on the higher time frames. Pay particular attention to price highs and lows on the daily chart as this time frame is commonly used by big traders.
2. A price high or low has more significance when it has a number of candles either side of it which are lower (in the case of a price high) or higher (in the case of a price low).
3. Before you consider Forex day trading at a support or resistance level, see if there are more factors that would indicate this is a key price level.
For example, does a trendline intersect at the same point? Does the support or resistance line match up with a Fibonacci level, either a retracement or an extension? Does the support or resistance level coincide with a pivot point if you are in the practice (and it's a wise one) of calculating pivot levels when Forex day trading?
4. Has a key support resistance level been broken? Then look to see if price will come back to test that level. Remember, resistance once broken can become support in the future and support once broken can become resistance in the future.
These Forex day trading scenarios can present excellent trading opportunities as you put an entry order in at the key level and wait for price to come back and pull you in. Within a short time your dealing spread is covered and you are in profit.
5. The market spends most of its time in trading ranges or consolidation channels. You need to accept that this is a characteristic of Forex day trading and adjust your mindset accordingly. Identify the high and low of the trading channel and manage your trades accordingly.
6. After identifying a trading channel or range and you see a trading opportunity, set your entry level at the base of the channel if you are going long or at the top of the channel if you are going short.
Don't chase after price once it breaks out of the channel (although many who engage in Forex day trading do so). You will not get the optimal entry point. Waiting for price to take you in either at the top or bottom of the channel means you can have a smaller stop and your price target is closer.
7. Pay particular attention to the previous day's high and low. Price will often hesitate and retrace at these levels. If you are a Forex day trading scalper, you can often grab a nice pull back of 10 pips or more at these strategic levels.
Note: Although there are various ways to calculate the previous 24 hour period depending on where you live, using GMT as a standard is often beneficial. Midnight GMT is a time when the market is generally very quiet and unlikely to make new highs or lows.
Succeed Or Fail?
It is unlikely you will succeed at Forex day trading if you fail to understand or take into consideration support and resistance. This indicator is that crucial! Yes there may be fancy indicators out there with all the bells and whistles, but this simple indicator, marking where price reached a high or low during previous trading sessions, can be one of the most powerful and effective Forex day trading tools available.
Be sure you spend sufficient time studying it, examining your charts, marking off the key levels each time you begin a new Forex day trading session.
Friday, May 22, 2009
Thursday, May 14, 2009
10 Tips On Successful Forex Trading On The Mt4 Forex Platform Using An Expert Advisor
A Forex Expert Advisor (also know by other names such as Forex Trading Robot, EA, MT4 EA, Automated Forex Trading Software) is a mechanical trading system written in the MQL-4 programming language and designed to automate trading activities on the MetaTrader4 platform.
Hundreds of brokers and system developers are enticing new traders into trading the Forex market with claims of double digit or higher returns in a short space of time.
The reality is 95% of new traders lose their trading bank in the first couple of months. How can you ensure that you are part of the successful 5%?
Here are 10 tips that can help you achieve long-term success when first starting off as a Forex trader.
1) The Forex Market. You can’t hope to trade a market that you do not understand. Don’t listen to all the hype that “newbies” can buy an automatic system and be successful immediately. The Forex is a very exciting market but you need to read and learn about this market before trying to trade it.
2) Purchase a commercially available Expert Advisor or automatic trading system which offers a user support forum. There are systems that you can get for free, but if you are just starting out you should consider purchasing a system that offers good customer support and offers a users forum so you can read about the problems and the solutions that fellow traders are having.
3) Choose the system before you choose the broker. Different Expert Advisors will trade on different currency pairs and different brokers offer different spreads. Once you know what your system will be trading you can then shop around for the best broker.
4) Choose a reputable broker who offers the MetaTrader4 trading platform free. There a literally hundreds of brokers now offering MT4, but some are more reputable than others. Only choose a regulated broker.
5) Understand the difference between fixed and variable spreads: Some brokers offer fixed spreads and are usually market makers. Other types of brokers, like ECN brokers, offer variable spreads. Make sure you understand the difference.
6) Micro lots are a good way to experiment with a new system. Brokers offer different lot sizes, there are standard mini and micro lots. Make sure you know the difference before you trade and choose only a micro lot account if you have a small trading bank.
7) Open a demo account. Most if not all brokers will offer a demo account which you can practice with before risking real money. If you are trading a new system or are new to trading it is a good idea to experiment on a demo account first.
8) Learn how to use MetaTrader 4. Make an effort to fully familiarize yourself with the trading platform so that you can set your Expert Advisor up correctly and don’t make silly setting errors.
9) Start trading with small risk. Ensure you understand the value of each pip for the currency pair(s) you will trade for your new system. There are pip calculators available on the Internet that will provide this information quickly for you.
10) Never get greedy. Never raise your risk above the recommended levels for the system you are trading
For E-book on 40 TOP FOREX TRADING STRATEGIES. Email: omoluabii2@yahoo.com
Oluwaseun, 40 TOP FOREX TRADING STRATEGIES. I have an ebook on this. I can BOOST to you that, you will make more that 1000pips weekly if properly used. omoluabii2@yahoo.com
www.investment-arena.blogspot.com
Hundreds of brokers and system developers are enticing new traders into trading the Forex market with claims of double digit or higher returns in a short space of time.
The reality is 95% of new traders lose their trading bank in the first couple of months. How can you ensure that you are part of the successful 5%?
Here are 10 tips that can help you achieve long-term success when first starting off as a Forex trader.
1) The Forex Market. You can’t hope to trade a market that you do not understand. Don’t listen to all the hype that “newbies” can buy an automatic system and be successful immediately. The Forex is a very exciting market but you need to read and learn about this market before trying to trade it.
2) Purchase a commercially available Expert Advisor or automatic trading system which offers a user support forum. There are systems that you can get for free, but if you are just starting out you should consider purchasing a system that offers good customer support and offers a users forum so you can read about the problems and the solutions that fellow traders are having.
3) Choose the system before you choose the broker. Different Expert Advisors will trade on different currency pairs and different brokers offer different spreads. Once you know what your system will be trading you can then shop around for the best broker.
4) Choose a reputable broker who offers the MetaTrader4 trading platform free. There a literally hundreds of brokers now offering MT4, but some are more reputable than others. Only choose a regulated broker.
5) Understand the difference between fixed and variable spreads: Some brokers offer fixed spreads and are usually market makers. Other types of brokers, like ECN brokers, offer variable spreads. Make sure you understand the difference.
6) Micro lots are a good way to experiment with a new system. Brokers offer different lot sizes, there are standard mini and micro lots. Make sure you know the difference before you trade and choose only a micro lot account if you have a small trading bank.
7) Open a demo account. Most if not all brokers will offer a demo account which you can practice with before risking real money. If you are trading a new system or are new to trading it is a good idea to experiment on a demo account first.
8) Learn how to use MetaTrader 4. Make an effort to fully familiarize yourself with the trading platform so that you can set your Expert Advisor up correctly and don’t make silly setting errors.
9) Start trading with small risk. Ensure you understand the value of each pip for the currency pair(s) you will trade for your new system. There are pip calculators available on the Internet that will provide this information quickly for you.
10) Never get greedy. Never raise your risk above the recommended levels for the system you are trading
For E-book on 40 TOP FOREX TRADING STRATEGIES. Email: omoluabii2@yahoo.com
Oluwaseun, 40 TOP FOREX TRADING STRATEGIES. I have an ebook on this. I can BOOST to you that, you will make more that 1000pips weekly if properly used. omoluabii2@yahoo.com
www.investment-arena.blogspot.com
Saturday, May 2, 2009
FOREX - HOW TO WIN WITH 40 TOP FOREX TRADING STRATEGIES.
Getting to the correct way to winning at Forex Trading is to have great skills and strategies of battling the Forex war. Whenever you participate without enough knowledge, skills, strategies and background with reference to how to gain, you'll have losses for sure.
The most concrete challenge you'll find is getting the appropriate strategies and skill to the deal the war of the worldwide trading currency centers. In reality, your brawniest opposition is the hiding out inside you. This foe is so mighty that you will be astounded how rapidly it'll suppress all of your cautiously conceived decisions. Begin trading with actual money, and you'll be facing fear, greed, and hope, which will surely shape your trading harmfully.
Fear induces you to sell close the bottom and buy close the top. Greed forces you to get out of a trade much sooner than you should. Hope can cause you persist in the trade until you've exhausted all of your funds. Fear could prevent you from losing; however hope is able to entirely ruin you.
Wealth will never be reached when motivated by greed. It's imperative to trade without obstruction from your emotions, as difficult as this task is. Experiencing the emotional roller coaster and then appraise how these emotions influence the way you trade can be a key to successful trading in knowing the 40 Top Forex Trading Strategies
Examine your "bad" trades, since these could supply the most advantageous training on how to excel as a trader. Ripening as a trader might only take place after you've accepted some losses. From carefully dissecting these losses, you will be capable of plucking out all important lessons that will aid your future trading.
Traders never want to admit their mistakes. But the market is constantly in flux, and it requires a flexible mindset in making quick decisions. This means monitoring and constantly making corrections by altering your decisions and behaviors.
After you are able to control your emotions, concentrate on acquiring your own trading style. You should set out by borrowing several different methods and systems that accommodate your personality. Demo trade to prove your strategies until you find something that is suitable for you.
Each time your system proposes a trade, consider how the trade feels to you, as you are responsible for the final decision.
For E-book on 40 TOP FOREX TRADING STRATEGIES. Email: omoluabii2@yahoo.com
Oluwaseun, 40 TOP FOREX TRADING STRATEGIES. I have an ebook on this. I can BOOST to you that, you will make more that 1000pips weekly if properly used. omoluabii2@yahoo.com
www.investment-arena.blogspot.com
The most concrete challenge you'll find is getting the appropriate strategies and skill to the deal the war of the worldwide trading currency centers. In reality, your brawniest opposition is the hiding out inside you. This foe is so mighty that you will be astounded how rapidly it'll suppress all of your cautiously conceived decisions. Begin trading with actual money, and you'll be facing fear, greed, and hope, which will surely shape your trading harmfully.
Fear induces you to sell close the bottom and buy close the top. Greed forces you to get out of a trade much sooner than you should. Hope can cause you persist in the trade until you've exhausted all of your funds. Fear could prevent you from losing; however hope is able to entirely ruin you.
Wealth will never be reached when motivated by greed. It's imperative to trade without obstruction from your emotions, as difficult as this task is. Experiencing the emotional roller coaster and then appraise how these emotions influence the way you trade can be a key to successful trading in knowing the 40 Top Forex Trading Strategies
Examine your "bad" trades, since these could supply the most advantageous training on how to excel as a trader. Ripening as a trader might only take place after you've accepted some losses. From carefully dissecting these losses, you will be capable of plucking out all important lessons that will aid your future trading.
Traders never want to admit their mistakes. But the market is constantly in flux, and it requires a flexible mindset in making quick decisions. This means monitoring and constantly making corrections by altering your decisions and behaviors.
After you are able to control your emotions, concentrate on acquiring your own trading style. You should set out by borrowing several different methods and systems that accommodate your personality. Demo trade to prove your strategies until you find something that is suitable for you.
Each time your system proposes a trade, consider how the trade feels to you, as you are responsible for the final decision.
For E-book on 40 TOP FOREX TRADING STRATEGIES. Email: omoluabii2@yahoo.com
Oluwaseun, 40 TOP FOREX TRADING STRATEGIES. I have an ebook on this. I can BOOST to you that, you will make more that 1000pips weekly if properly used. omoluabii2@yahoo.com
www.investment-arena.blogspot.com
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