How To Incorporate Price Action In Forex Trading System - forex trading chart reading

How To Incorporate Price Action In Forex Trading System ~ forex trading chart reading

There is no unified or centrally cleared market for the majority of Forex trades. 

There are rather a number of interconnected market places, where different currencies instruments are traded. 

This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. 

Trading the Forex market has become very popular in the last few years.

But how difficult is it to achieve success in the Forex trading arena? 

Or let me rephrase this question, how many traders achieve consistent profitable results trading the Forex market? 

Unfortunately very few, only 5% of traders achieve this goal. 

One of the main reasons of this is because Forex traders focus in the wrong information to make their trading decisions and totally forget about the most important factor, the price behavior.

In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. 

Fluctuations in exchange rates are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in gross domestic product (GDP) growth, inflation (purchasing power parity theory), interest rates (interest rate parity, Domestic Fisher effect, International Fisher effect), budget and trade deficits or surpluses, large cross-border MA deals and other macroeconomic conditions. 

Most Forex trading systems are made of technical indicators (a moving average (MA) crossover, overbought/oversold conditions in an oscillator, etc.) 

But what are technical indicators? They are just a series of data points plotted in a chart. 

These points are derived from a mathematical formula applied to the price of any given currency pair. 

In other words, it is a chart of price plotted in a different way that helps us see other aspects of price.

Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. 

There is an important implication on this definition of technical indicators. 

The fact that the readings obtained from them are based on price action. 

Take for instance a long MA crossover signal, the price has gone up enough to make the short period MA 

crossover, the long period MA generating a long signal. 

Most traders see it as "the MA crossover made the price go up," but it happened the other way around, the MA crossover signal occurred because the price went up. 

Where Im trying to get here is that at the end, price behavior dictates how an indicator will act, and this should be taken into consideration on any trading decision made.

Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. 

For example, again a long signal generated by a MA crossover as the market approaches an important resistance level. 

If the price suddenly starts to bounce back off that important level there is no point on taking this signal, price action is telling us the market doesnt want to go up. 

Most of the time, under this circumstances, the market will continue to fall down, disregarding the MA crossover.

Dont get us wrong here, technical indicators are a very important aspect of trading. 

They help us see certain conditions that are otherwise difficult to see by watching pure price action. 

But when it comes to pull the trigger, price action incorporation into our Forex trading system will definitely put the odds in our favor, it will generate higher probability trades.

So, how to create a perfect Forex trading system?

First of all, you need to make sure your trading system fits your trading personality; otherwise you will find it hard to follow it. 

Every trader has different needs and goals, thus there is no system that perfectly fits all traders. 

You need to make your own research on various trading styles and technical indicators until you find a concept that perfectly works for you. 

Make sure you know the nature of whatever technical indicator used.

Secondly, incorporate price action into your system. 

So you only take long signals if the price behavior tells you the market wants to go up, and short signals if the market gives you indication that it will go down.

Third, and most importantly, you need to have the discipline to follow your Forex trading system rigorously. 

Try it first on a demo account, then move on to a small account and finally when feeling comfortably and being consistent profitable apply your system in a regular account.

The description above is the hard way to achieve goals as a forex trader.

There is an easy way also. Try a new, revolutionary software,which can make your life eaiser and can guarantee your profit.

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The Price Yo Yo - free forex trading ebooks download

The Price Yo Yo ~ free forex trading ebooks download

What is the Price Yo-Yo???????

It is the price dance that keeps traders confused and keeps them off guard. Every hour, every day, every week and every month you have a natural price movement like the flow of musical notes. It flows up and it flows down sometimes like smooth rolling hills and sometimes like sharp cliffs and canyons.

The Price Yo-Yo is one of the hardest things for traders to get use to, as is seems so random and without any logic. When you are sitting at your computer all day watching price move up, down and sideways it is easy to get confused about the true direction of the market. That is why it is always best to get a view of the bigger picture before you begin trading in smaller time frames.

By looking at the bigger picture you can plan a strategy that will help you to keep sight of your trading objective and give you an advantage that you would not have if you just jumped in on a smaller time frame and started to trade without that bigger time frame reference.



If you see that your market is mostly bullish on a four hour chart, then it may be wise for you to take trades in the bullish direction on the 15min time frame. If you have a predictable range bound market, then you want to look for opportunities to sell near resistance and buy near support on your 15 min time frame. Remember you only want to buy/sell at these point with proper candlestick reversal pattern at/near an established support/resistance. Waiting for proper entry/exit signals will put you on the right side of the trade most of the time (^_^)

Keeping an eye on the bigger time frame picture, will give you an advantage and help keep you from getting confused and losing your way while trading in smaller time frames. If you have been trading any time, you know that you can use every advantage you can get (^_^).

YOU CAN DO THIS (^_^)

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6 Advantages Of Trading Forex - forex trading 5 minute charts

6 Advantages Of Trading Forex ~ forex trading 5 minute charts

Forex is the popular term for foreign exchange markets. The banks and brokerage firms are linked via electronic network to do business in the stock markets. The network allows them to convert currencies worldwide.

It became the chief and largest liquefied financial market around the globe. Take for instance, the volume of dollar currencies can rapidly increase in trillions of dollars within a day in currency markets. It even goes beyond the total volume of the total equities in the U.S. as well as future markets.

Forex trading is dominated often by commercial banks, investment banks, and government central banks. This is the main reason why many private investors are dealing on currency exchanges. They find it easier to access the market through technological innovations such as the internet.

It also provides the needed information in the stocks market regarding trading forex. The currencies which are widely traded include British Pound, US Dollar, Japanese Yen, Swiss Franc, Australian Dollar, and Canadian Dollar. Forex trading is done 5 days within a week and the traders can have constant access to various dealers all around the world. The trading does not mainly focus on any exchange or physical location and the transaction happens between two persons via electronic network or a phone line.

Forex trading has grown rapidly on the global market. The restrictions on the flow of capital have even been put off in various countries. This factor leads to market independence settling the forex rates on its perceived values. There are different reasons why forex trading is very popular. It include utmost liquidity, available leverage, lower trading costs.

There are different advantages of forex trading in the stock markets. Traders are making bigger sums of money by selling and buying foreign currencies. However, some people might ask of its advantages on the stock market.

1. Liquidity. Forex market can handle transactions even if it reaches 1.5 trillion dollars every day. Take note, this is a very large volume. It only denotes that sellers and buyers are always available regardless of the currency types. So, if the trader wanted to buy, there is always an available seller, and if the trader wanted to sell, there is always an available buyer.

2. There is no insider in the trading systems. Remember, constant value fluctuations of several currencies are caused by economic change. Some traders may obtain the information before others get it. So, they can sell or buy it within the stock markets. However, the nation’s economy is accessible to every trader so nobody can take an inside advantage to anyone.

3. It has accessibility. It is operational for five days within a week and accessible for twenty four hours. Trading can be made during this period.

4. It has more predictability. It always follow the market trends even the trends that are well established.

5. It can allow smaller investments. The potential traders can open mini accounts even for a few bucks of dollars. Forex trading has high leverage which is around 100:1. It only signifies that your assets can be controlled 100 times over your invested money.

6. It has no commissions. The forex trading brokers can earn money through setting their spreads where they weigh the process between selling and buying currencies.

Forex trading can be one of the best systems in day trading. Since it deals with currency trades, it can have the largest volumes of trading. Although it can be labeled as high risks trading systems, it can bring the traders higher returns within minutes.

However traders should be aware that forex trading needs a thorough research before starting it. Never confine yourself with only one source. Always make it a part of your plan to research first before engaging yourself in the real forex trading. It is not enough to know its advantages. As a trader, you need to clearly understand the systems involved in forex trading. It is helpful if you read the latest forums posted in the community boards.

It is also important to find the best forex trading systems. In this manner, you can incorporate a course, software, or method developed by forex trading experts. Take note, there are various system types that are available. It is important to find the right system that will fit in your goals in the industry of trading forex to achieve success.

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Forex Market Hours Can You Trade Currency 24 7 - trading forex using chart patterns

Forex Market Hours Can You Trade Currency 24 7 ~ trading forex using chart patterns

The forex market hours stretch from Monday morning in Sydney, Australia to Friday afternoon in New York. During that time the market is open somewhere around the globe at all hours of the day or night. 

However it is not a 24/7 market because it does shut down on weekends. 24/5 would be more accurate.

If you need to know the exact times that the markets open and close, you have to take time zones into consideration. It is very simple when expressed in UTC. This is Universal Coordinated Time, formerly known as Greenwich Mean Time. This is the standard (winter) time in Greenwich, London which is the point of zero longitude on the globe. 

So, the normal forex market hours are 22.00 Sunday UTC to 22.00 Friday UTC. This is 10 pm in the UK in winter time. 

New York is 5 hours behind the UK so the global forex market opens and closes at 5 pm Sunday/Friday in New York, 2 pm on the US west coast, 11 pm in Germany, 8 am Monday/Saturday in Sydney.

Things get a little complicated when you start to try to take summer time daylight saving into account. This makes one hour difference in countries that observe it. But daylight saving operates in a different way in the southern hemisphere countries such as Australia which have summer time from September to March instead of March to September. 

The hours of the different major national markets are as follows:

Sydney: 10 pm to 7 am UTC

Tokyo: 12 midnight to 9 am UTC

London: 8 am to 5 pm UTC 

New York: 1 pm to 10 pm UTC

Or we can express that in EST (Eastern US time):

Sydney: 5 pm to 2 am EST

Tokyo: 7 pm to 4 am EST

London: 3 am to 12 noon EST

New York: 8 am to 5 pm EST

You can see that these correspond to 24 hour cover.

However, this does not necessarily mean that trading will be good at all of these times. Just after a major market opens, the prices can be very volatile and unpredictable. Many traders will stay out of the forex market for up to an hour four times a day when the financial markets are waking up in these major cities. 

The US dollar is the most traded currency by a long way, involved in 2.5 times as many trades as its nearest rival the euro. This means that events in the USA have a greater impact on the financial markets than events in other countries. The New York market tends to slow down around 3 pm local time (8 pm UTC) and if you are involved in a US dollar pair, this can be a good time to stop trading for the day.

So theoretically you can trade 24 hours a day from Sunday night to Friday night. Automated software in the form of a forex robot can even make this physically possible. However, a cautious trader will choose his times and will not be active during all of the forex market hours.

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PRICE ACTION AND FRIENDS - forex trading books in urdu pdf free download

PRICE ACTION AND FRIENDS ~ forex trading books in urdu pdf free download

Why do so many traders go broke???????
The house advantage!!!!
What is the house advantage???????

The house has all of the money and knows and makes the rules. The thing about the rules is that they seem random as if they are being made up as we are going along. That is why the proper interpretation of the language of the charts is so essential to your trading success. Your indicators and oscillators are only following where the price lead. How much better is it to be able to interpret what is going on in the market long before your indicator does? It can be done and is done skillfully everyday by people who understand and know the language the charts speak. What is this secret, strange, mysterious, language that the charts speak???

PRICE ACTION!!!!!!!! What price is doing and has done, along with the natural rhythm of the market.

By the time your indicators tell you what your price is doing, you are already behind those who interpreted price action long before your indicator/oscillator clued you in. Have you ever waited for your indicator/oscillator to tell you to get in only to discover that you have missed a great deal of the move already. Becoming fluent in the language of price will help you to avoid much of that.

THERE IS NO PERFECT FOREX SYSTEM, it doesnt exist, but studying and learning the language of your charts will put the odds in your favor, and help you to glean a sweet little profit in the process.



There are no short cuts here. You can learn the language and get an advantage, or you can rely on the news, support/resistance, trend lines or other indicators/oscillators. I am a huge fan of support/resistance and trend lines, but gaining an understanding of price action will give you a clear advantage.

I am not bashing indicators, but you need to understand what they are. They are merely assistants and interns to the PRESIDENT OF PRICE ACTION.

Is PRICE ACTION ENOUGH??????

NO!!!!!!!

Like the president, your Price action needs a cabinet that can support it. That is where your indicators and oscillators come on. They are your support staff. Once you master PRICE ACTION, the other things become natural assistants.

Price action will not tell you everything, it will not tell you how far price is headed, and how long the destination might be. That is where support/resistance, and long term trend line comes in.

At the end of the month, always see where your price is headed, then plan your strategy accordingly, knowing that most of the time you will have a bounce on your weekly candle. DO NOT SHORT OFF OF THE LOW OF THAT LAST MONTHLY CANDLE, BECAUSE MOST OF THE TIME, YOU WILL END UP ON THE WRONG SIDE OF THE TRADE.

THAT IS WHY LEARNING YOUR MARKET RHYTHM IS SO IMPORTANT!!!

PRICE ACTION ALONG WITH FRIENDS CAN TAKE YOU WHERE YOU WANT TO BE.

You may use any indicator/oscillator that your are comfortable with. Just remember that they are the cabinet to the PRESIDENT OF PRICE ACTION!!!!!!!!!!!

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YOU CAN DO THIS (^_^)




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