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MACD and Stochastics are two Oscillators which can help the trader time their trades, and to see if their potential support or resistance area will hold. MACD gives a sense as to what the market as a whole is doing. If the market as a whole is making higher highs and higher lows, we will generally see a downward sloping MACD. Stochastics helps verify what current price is doing in the current moment.
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Profitable trading is work. Executing a trade is the last step in a series of events which gives you the right to "pull the trigger". The work that needs to be done prior to the actual trade moment is known as trade planning.
As the saying goes, you either "fail to plan or plan to fail". Nothing could be more true in the fast paced world of Forex. Each and every trade plan you make is a business decision. By giving each trade a carefully calculated thought out routine BEFORE execution makes behavior after the trade mechanical. There are no worries or questions as "What do I do now that the trade is 10 pips against me?" or "Should I take profit here at 12 pips?"
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News trading as a whole is largely reflected in the market well ahead of time. For example; if traders are expecting a given number for a Non Farm Payrolls event on Friday, that expected number will be traded in the charts on Tuesday or Wednesday.
Having said that there are scalp opportunities to trade the news after the announcement has been made. There are good reasons to wait. First there can be total whipsaw where spreads will widen, or price may rocket up 30 pips and down 30 pips in the blink of an eye giving the novice an opportunity to do nothing but lose money. Also, as trader we like to see proven direction, and "go with the flow".
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A 1,2,3 pattern in one which establishes a reversal is occurring. In order for one to take place there must be a trend or pattern established regardless of time frame. These patterns can be used to both initiate tra...