Saturday 29 October 2016

How To Generate Forex Signals Using Fibonacci Retracement,Trendline & 30EMA Moving Average

The Fibonacci retracement tools plays a vital role in technical analysis of the forex market because it particularly helps to gauge the extent of a retracement or correction  and extension of a trend during resumption.While there could be diverse methods of drawing the tools, the conventional method will be discussed here.
So, the Fibonacci retracement tools is usually drawn from swing low to swing high in a downtrend with the 0%  level on the swing low and 100% on the swing high. In a downtrend, a rise in price is considered a minor trend or retracement of the major trend.

The chart above shows a bullish retracement or a minor uptrend in a major downtrend and it also indicates  that Fibo  0% is placed on the recent swing low and Fibo 100% is placed on the recent swing high. The chart shows that price retraced level 23.6, 38.2, 50.0 and broke above level 61.8.
The conservative traders do take the levels 38.2 and 61.8 as the most important retracement levels. However, observations from price actions have bountifully shown that level Fibo 50% tends to be more formidable in recent times.

The drawing is reversed during an uptrend.That, we have in an uptrend that the Fibonacci retracement tools is usually drawn from swing high to swing low such that the  Fibo 0%  is fixed on the swing high and Fibo 100% on the swing low. In an uptrend a fall in price is considered a minor downtrend or bearish retracement of the major uptrend  or bullish.



The  level 0.0 is placed on the recent swing high and level 100.0 is placed on the recent swing low on the chart above.The chart shows that price retraced down to level 50.0 and slightly below it without reaching level 61.8 then pulled back up from there.The two charts above show how fibonacci retracement are drawn both in an uptrend as well as during downtrend in the forex market.

Similarly, trendline connects two consecutive swing lows or two  consecutive swing highs.If the trendline rises from left to right then we have an uptrend



 and if it falls from left to right then we have a down trend.



Example 1 [EURUSD Signal for  (Nov.1 to Nov. 5 2016) ]
Base onthe current scenario in the market, I have updated the signal today the 2nd of November 2016.
 From the current EURUSD daily chart, it is obvious that price has broken the fibonacci resistance levels 23.6% (1.0972) , 38.6%  (1.1013) and 50% (1.1064). It is now approaching fibo 61.8% which is at 1.1114.Now all these previous resistance levels have become current support levels.Therefore a break below them should indicate a signal to sell the pair and target the next support because both trendlines and 30EMA moving average on daily are indicating downtrend.We have so far considered the retracement of the medium fall of  1.1278 to 1.0850. However, if 1.1278 is broken  then the whole analysis crashes and we start all over again.

 
Example 2 [EURUSD Signal for  (Nov.1 to Nov. 5 2016) ]
Now we want to use this method to generate signal for next trading week.


From the EURUSD daily chart above, we can see that price is moving well below the black 30EMA. This suggests a downtrend. The falling blue trendline also confirms the that the prevailing trend is bearish.Therefore we will consider any rise as a counter-trend move ( retracement of the fall). This means buyers should tread with greater caution under the current market scenario.Sellers have the resultant force in a bearish trend. Hence we are going to remain selling the pair next week until the market changes phase.
The signal is to sell when price pulls back to level 23.6 which is1.0950.
Therefore, we will sell the pair next week if price returns to 1.0950 with take profit 1 at 1.0850. Our stop loss will be 50 pips. I always recommend a risk of 1% or at most 2%. Happy trading!




How To Generate Forex Signals Using Rectangles

Today, I want to teach you how to use rectangles to generate trading signals in forex.And I also going to apply this method to analyse what is currently going on in the market. I am also going to use the analysis to forecast the most likely direction of the market for this week.That means we are going to use this method to generate entry, and exit signals  today against next week trading.

Rectangles can occur in any time frame and any market you are following. As with many chart patterns the pattern is in the eye of the beholder. I have found that some traders are better than others at identifying chart patterns. It may take some time before you can spot the most common patterns.
The rectangle contains price movement between two points in a rectangular shape to which we add lines to signify the upper boundary and lower boundary. These lines should be horizontal. Slanted rectangle will most probably fall into the realm of ''Flags'', which we will discus in another lesson.

The top line should connect at least two bars and the bottom line should connect at least two bars. As most markets are in congestion most of the time rectangles are fairly common.
It is not necessary to draw the top and lower lines at the extreme of the congestion points but rather make sure the lines contain at least 95% of the congestion area. The longer the rectangle continues the more important the breakout.
To help identify a valid breakout there should be an increase in volume on the day (or time period) of the breakout. The breakout can occur in either direction but if you are in a defined up trend then an upside breakout is favored and vise versa for a down trend. If I am in a defined trend then I tend to view this pattern as a continuation patter unless it starts to break the other way.



There are a number of ways to trade the rectangle. You can buy or sell the breakout as it happens or you can wait to see if there is a pullback to the neckline (see charts). Once you have defined the rectangle you can also buy and sell at the boundaries of the rectangle. I prefer to buy at the lower boundary if in an up trend and sell at the upper boundary if in a down trend. This can be a very effective trade as the risk is small. If you sell at the upper boundary then your stop loss can be close to the boundary and vise versa for the long trade at the lower boundary.


If you sell the breakout place your protective stop inside the rectangle and do the same for buying the upside breakout. You can also measure the distance between the upper and lower boundaries and project the distance forward to get an indication of the size of the next move.

GBPSUSD Signal for  (Nov.1 to Nov. 5 2016)

Now we want to use this method to generate signal for next trading week.




We are going to use the GBPUSD chart above to buttress the teaching. The pair has been trapped within the prize zone of 1.2375 and 1.2088 for over ten days now.This is about 290 pips range. 287 Pips to be precise. Now we have a rectangular formation.What do we do with this?

This kind of formation usually leads to a strong breakout. It is a high momentum signal.In the next trading week, we expect that the pair would breakout of this long price range.Hence, our bias is as follow:

SHORT:
Entry price= 1.2078
Stop loss=1.2178
Take profit 1 = 1.1978
Take profit 2 = 1.1878
Risk = 1% of current equity

LONG:
Entry price = 1.2385
Stop loss = 1.2285
Take profit 1 = 1.2485
Take profit 2 = 1.2585
Risk = 1% of current equity


The Forex Broker You Can Trust


Friday 21 October 2016

How To Survive Drawdown In Forex Trading



Account draw-down is an intrinsic property of forex trading.Infact, many highly respected traders have always said that there will be no market if there is no retracement.This statement is as true as saying the market takes 5 steps forward and 3 steps backward. It is therefore highly essential for a serious minded and profit - oriented traders to integrate an excellent, draw-down tolerant features into his or her trading system.As a matter of fact, any trading system that cannot withstand account draw-down over an appreciable amount of time defiitely promises gallant failure in the long run.

Whenever I am placing a trade on my forex account, I anticipate fabulous profit and envisage possible draw-down.Yes, if I open a position I know surely one of the following is going to happen:
1. The price may move towards my profit objective and strike my take profit so that I make big profit. Hurray!

2.The price may move against my bias and strikes my stop loss so that I incur small loss.I normally risk 1% or maximum of 2% per trade. A risk of 5% or 10% per trade is a sky-high risk for me, and I don`t think I can go to bed with such a risk exposure.Simply put, I don`t take reckless risks.  

3. The price may not be able to hit my take profit but gives me little profit

In any event, I do my paper work before placing any order,and as such, I can estimate my possible profits or losses.By that, I avoid unnecessary emotional torture and unexpected financial losses.

Finally, all traders know that account draw-downs occur in forex trading but very few traders appreciate it. Majority of traders carry out their trading as though they have a trading system that is 100% successful. They think their trading system is the only one that guarantees profit in every trade. Let me give you a shocker; neither success, nor failure is guaranteed for any trading position.If you are thinking of holy grail system, please wake up. Holy Grail Trading System search is just another wild-goose chase.Therefore,don`t risk too much.Plan your trade and trade your plan. To success!


The Forex Broker You Can Trust


Thursday 20 October 2016

Best 10 Forex Blogs

The best 10 forex blogs are listed below. They will surely add great values to your trading career.

#1.Babypips.com
Learn How to Trade Forex. BabyPips.com Is The Beginner's Guide to Forex Trading.
Your Best Source for Forex Education on the Web.

Professional forex traders from around the world converge at Forex Factory. Launched in 2004, the website is designed exclusively to provide market intelligence to forex traders. To make great decisions, traders need information that's accurate, fast, reliable, insightful, and accessible – these five qualities are therefore at the heart of Forex Factory.
Every aspect of the Forex Factory website is the result of an uncompromising design approach that's focused on supporting forex traders. Countless features have been dedicated to quickening the collection of information, and a myriad of systems are employed to lend context to opinions and reduce noise. The site has been developed and refined for over twelve years, resulting in a trading environment with unmatched professionalism and productivity.

#3. Actionforex.com
Forex trading has never been so easily accessible than before. Forex used to be the private playfield of banks and large institutions. But everyone of us has noticed its evolution in recent years. You're seeing a growing number on online forex market-makers, forex portals, forex information providers, forex managed account providers, forex trading signals services, etc. every single day.
But again, like all other stuffs on the Internet, we're experiencing the transition from lacking information to information overflow. That's the reason we set up this forex portal - ActionForex.com.
ActionForex.com is set up with the aim to empower individual forex traders, providing insightful contents to individual forex traders.

#4. FXstreet.com
FXStreet is one of the leading currency trading portals. Through this site the readers will receive lots of information on many different areas related to currency trading such as real-time exchange rates, technical analysis/studies, market analysis/forecasts, and currency charts. It also provides trading newsletters and live webinars of famous currency market experts, creating professional growth for its collaborators such as the banks, brokers, analysts and educators as well as to its audience in all levels. Through the site’s latest market updates and broker reviews, forex traders will definitely learn more to improve their skills on trading.

EarnForex.com provides visitors with tools and information to become successful Forex traders. We can help you by:
  • Explaining the basics of Forex trading.
  • Giving you free e-books and articles that help to learn more about trading.
  • Providing online calculators, downloadable indicators, and free expert advisors.
  • Maintaining an honest broker rating system based on traders' reviews.
  • Using sophisticated algorithms to detect suspicious reviews.
  • Offering access to a community of traders where one can share experience and learn from others.
  • Uploading daily technical analysis videos, weekly chart analysis posts, and regular fundamental analysis updates.
  • Informing you on the latest Forex and commodities market news.

#6. Investing.com
Investing.com is a global financial portal and internet brand composed of 27 editions in 21 languages and mobile apps for Android and iOS that provide news, analysis, streaming quotes and charts, technical data and financial tools about the global financial markets. Each edition covers a broad variety of local and global financial vehicles including Stocks, Bonds, Commodities, Currencies, Interest Rates, Futures and Options. Founded in 2007, Investing.com has a growing readership worldwide and is now a leading global financial portal committed to constantly launching innovative features and sections to ensure an optimal one-stop source for its readers.


#7. Zerohedge.com
Zero Hedge contains blogs and reports on the financial sector, economics and Wall Street. If you are looking for a site that informs you with valuable market information,then this is it. Zero Hedge is a site from where traders at all levels  and investors will gain golden insights.

eToro is claims to be the  biggest social trading & investment network globally.Investors and traders can follow what financial trading activities other investors and traders have and copy such trades as well. Both professional and  beginner  investors and traders can participate in this investment network. Users are allowed to follow the trading activities of other users and can also learn from one another through sharing personal trading experiences. 

Nial Fuller, one of the finest forex trading mentors is the one managing this blog.As a professional and kind mentor, he furnishes this blog with vital information and highly technical analysis. He gives his views on the market on daily basis.Traders can utilise this site for maximum profits while learning along the way.

DailyFX gives  very useful forex trading information  and news as well as important forex  trading analysis. The primary goal  is on foreign exchange.It gives sufficient information on the day-to-day changes about  the currency markets. The users will
*learn about technical analysis concerning currency pair;
*get insights from trading recommendations;
*know how the technical, economic and political factors influence the financial markets; and
* become familiarize with the forex concepts, terms and techniques commonly applied in the forex market through this site.

My Recommendation:
 EA that earns astonishing 50% per month  with low draw 
Also compatible with with US brokers.

No deposit is required. Just register and get $500 bonus.


Top 5 Forex Blogs

Below is the golden list of top ten forex websites for all levels of traders.

#1.Babypips.com
Learn How to Trade Forex. BabyPips.com Is The Beginner's Guide to Forex Trading.
Your Best Source for Forex Education on the Web.

Professional forex traders from around the world converge at Forex Factory. Launched in 2004, the website is designed exclusively to provide market intelligence to forex traders. To make great decisions, traders need information that's accurate, fast, reliable, insightful, and accessible – these five qualities are therefore at the heart of Forex Factory.
Every aspect of the Forex Factory website is the result of an uncompromising design approach that's focused on supporting forex traders. Countless features have been dedicated to quickening the collection of information, and a myriad of systems are employed to lend context to opinions and reduce noise. The site has been developed and refined for over twelve years, resulting in a trading environment with unmatched professionalism and productivity.

#3. Actionforex.com
Forex trading has never been so easily accessible than before. Forex used to be the private playfield of banks and large institutions. But everyone of us has noticed its evolution in recent years. You're seeing a growing number on online forex market-makers, forex portals, forex information providers, forex managed account providers, forex trading signals services, etc. every single day.
But again, like all other stuffs on the Internet, we're experiencing the transition from lacking information to information overflow. That's the reason we set up this forex portal - ActionForex.com.
ActionForex.com is set up with the aim to empower individual forex traders, providing insightful contents to individual forex traders.

#4. FXstreet.com
FXStreet is one of the leading currency trading portals. Through this site the readers will receive lots of information on many different areas related to currency trading such as real-time exchange rates, technical analysis/studies, market analysis/forecasts, and currency charts. It also provides trading newsletters and live webinars of famous currency market experts, creating professional growth for its collaborators such as the banks, brokers, analysts and educators as well as to its audience in all levels. Through the site’s latest market updates and broker reviews, forex traders will definitely learn more to improve their skills on trading.

EarnForex.com provides visitors with tools and information to become successful Forex traders. We can help you by:
  • Explaining the basics of Forex trading.
  • Giving you free e-books and articles that help to learn more about trading.
  • Providing online calculators, downloadable indicators, and free expert advisors.
  • Maintaining an honest broker rating system based on traders' reviews.
  • Using sophisticated algorithms to detect suspicious reviews.
  • Offering access to a community of traders where one can share experience and learn from others.
  • Uploading daily technical analysis videos, weekly chart analysis posts, and regular fundamental analysis updates.
  • Informing you on the latest Forex and commodities market news.

My Recommendation:
 EA that earns astonishing 50% per month  with low draw 
Also compatible with with US brokers.


No deposit is required. Just register and get $500 bonus.