Simple Forex

[Paul]

Thereason breakout trading is an important strategy is because breakouts often represent the start of increased market volatility. By waiting for a break in a price level, we can use volatility to our advantage by joining a new trend as it begins.

Some forex pros advise diving in the moment a support or resistance level is breached. Others suggest waiting just long enough to ensure that the breakout does in fact signal a true up or down trend.

Other trading techniques use two moving averages: one longer and one shorter. When the shorter-term MA crosses above the longer-term MA, it's a buy signal, as it indicates that the trend is shifting up. This is known as a "golden cross."

Carry trade is a type of forex trading whereby traders look to profit by taking advantage of interest rate differentials between countries. It is important to note that while popular, it can, however, be risky.

Fundamental analysis can be complex, involving the many elements of a country's economic data that can indicate future trade and investment trends. It can be simplified by concentrating on a few major indicators.

The technique involves identifying an upward or downward trend in a currency price movement and then choosing trade entry and exit points. These points are based on the positioning of the currency's price within the trend, as well as the trend's relative strength.

A Skrill wallet lets you keep all your trading funds in one place and move the money between trading platforms when it suits you. Transact with only your Skrill credentials and make every trade quick, convenient and secure.

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Unlike the spot, forwards, and futures markets, the options market doesn't involve an obligation to purchase the currency. Options contracts give you the right to buy or sell the currency, but it's a choice.

Remember that the trading limit for each lot includes margin money used for leverage. This means the broker can provide you with capital at a predetermined ratio. For example, they may put up $50 for every $1 you put up for trading, meaning you will only need to use $10 from your funds to trade $500 in currency.

You can start trading forex with as little as $1,000 funded in a micro account, but will need significantly more capital for a standard account. Leverage from brokers can allow you to trade much larger amounts than your account balance. Brokers may provide capital at a predetermined ratio, for example, such as putting up $50 for every $1 you put up for trading. This means you may only need to use $10 from your own funds to trade $500 in currency.

Forex markets are among the most liquid markets in the world. So, they can be less volatile than other markets, such as stocks. The volatility of a particular currency is a function of multiple factors, such as the politics and economics of its country. Therefore, events like economic instability in the form of a payment default or imbalance in trading relationships with another currency can result in significant volatility.

Forex trade regulation depends on the jurisdiction. Countries like the United States have sophisticated infrastructure and markets for forex trades. Forex trades are tightly regulated in the U.S. by the National Futures Association and the CFTC. However, due to the heavy use of leverage in forex trades, developing countries like India and China have restrictions on the firms and capital to be used in forex trading. Europe is the largest market for forex trades. The Financial Conduct Authority monitors and regulates forex trades in the United Kingdom.

Currencies with high liquidity have a ready market and exhibit smooth and predictable price action in response to external events. The U.S. dollar is the most traded currency in the world. It is paired up in nine of the world's 10 most traded currency pairs. Currencies with low liquidity, however, cannot be traded in large lot sizes without significant market movement being associated with the price.

Hi I am new to this forum in fact I rarely write post in forums. Being a succerssfull forex trader for many years coming from and still trading commodities for a living. I have usually not bothered to post in forums as they usually have too many rules. However I am sick of all the fake BS systems being sold to the many struggling rookie traders. I am going to freely give you one of my very successful and simple systems. I am doing so in the hope that any rookie traders reading this post will realise that ANY system that is sold is a fake, if these so called foolproof systems really worked then the people that wrote them would not need to sell them as they would make millions using their system themselves.

I do not use indicators at all I trade Price Action only. No cluttered chart just a simple candlestick chart. in the MT4 Platform. On the H1 chart I insert the daily seperators and I use a plugin called daily open.

I wait till a new week begins and I draw a line on the weekly open. This becomes a major support and resistance line for me. I note the trend direction if for-instance the trend is up then I place a buy order on the first bullish candle above the weekly open line with a SL on the weekly line, sometimes this is stopped out a couple times however I keep doing so till it rallies. Some time during the week the market will return to this line, if it bounces off then I again place a buy order with again a SL on the weekly open line. If the market breakes thru the weekly open line then place a sell order on the first candle that closes below the weekly line with a SL again on the line.

If the market rallies and does not return to the weekly open line then take note of the next daily open line

run a Fib from the weekly line to this daily line and wait till the market retraces to the 50% line then place a buy order with a SL on the 50% line.

In a downward market do the opposite to the upward market.

There a simple system that any careful trader can make money from.:23:

Here is a Chart of my System. Like all systems it has Flaws, What they are well it is too complicated to do so in this forum. Here is the System Check it out and experiment. You should find the Flaws yourself and learn to recognize them and how to compensate. Further to ad to the confusion here, even though I use MT4 Charts for Demo here In reality I Hand Draw my Hourly Eur/Usd Chart. Cheers Woodydj

I too would like to know how we should exit/take profits? It seems that we establish what direction the market will move at the beginning of the week. The example chart I posted, however, showed that the market spent that whole week criss-crossing the weekly line. I feel this will eat into profitable trades as you will have alot of stop outs. Perhaps if we used the weekly line as a starting point for establishing the major support/resistance for the week, and IF it requires it, adjust it on the first day (Monday) if the market trades both above and below the line. For example, take the chart I posted and transform it to this:

Hi DonaldQ

Sorry about the chart If you send me your email address I will send you a jpeg.

About this chart! There are several problems trading this chart. Firstly it is the GBP/USD I never trade this baby TOOO volitile. Secondly you have a contrarian clash between time zones. Very GBP/USD! The Daily is in a down trend and the hourly is jumping all over the place. Thirdly the market is clustering around the weekly open line. The first signal is bearish you would sell. However in the middle of the next day you get Bullish signals. There is no clear run from the weekly open line. The Market keeps Clustering around it. The GBP/USD is a scalpers market I leave it alone. You could trade. Buying on the first candle above the weekly line or the daily line. And selling on the first candle below the lines.

Another problem with MT4 platforms is that every platform has different Prices. I use for my hand drawn charts Bloomberg charts. They are expensive however they are correct. My weekly open for the GBP/USD Tuesday 7th August 2012 is 1.55898. which actually is more bullish than yours.

Cheers woodydj

Firstly I would like to add that no system especially mine is flawless. There are many facets to my system that I have not discussed in this forum. I read on this forum and on the internet claims of success rates of 70%,80% even 90%. I am sorry my system does not even come close to those figures (BS) I get around about 55 to 62% success rate. With good money management I believe I am very successful. That being said my system is simple if the trend is defined, however if not then it can become quite ambiguous.Look at the trend from higher time frames and also look to the weekly open line from the previous week. The last two weeks of the EUR/USD are typical of my system at work.

On my chart the weekly open on the 6/8/2012 was 1.2392 and the first candle was Bearish. giving me a selling week. The week traded down to 1.2239. The weekly open for the 13/08/2012 was 1.2291 the first candle on my chart was a DOJI signalling a caution, I waited a few hours until I had a definite trend, drawing a fibo retracement from the 1.2392 weekly open of 06/08/2012 to the weekly open of 13/08/2012 has seen this weeks market bouncing between the two open lines. ERGO I traded this bullish from the weekly line of 13/08/2012. Drawing a fibo retracement from the weekly line of 06/08/2012

to the weekly open line of 13/08/2012. I traded between the two lines quite successfully. i.e Bullish from the 13/08/2012 line to the .618 fib line then selling from there till the 13/08/2012 line again.

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