BANK TRADER REVEALS BREAKOUT STRATEGY - forex currency trading basics

BANK TRADER REVEALS BREAKOUT STRATEGY ~ forex currency trading basics

Hello traders,

Today I would like to show you a technique that is valid for all currency pairs and all time frames (my group in the bank tend to use it mostly on the Daily and Weekly charts to avoid market choppy noise). The name of this strategy is the Breakout, Congestion and Continuation pattern, and it’s a high probability setup given the right circumstances. If you master this technique, you could achieve a 75% to 80% win/loss ratio!

The key concepts are the universal pattern of any currency pair : continuation pattern after a strong momentum breakouts of key Support / Resistance levels, using candlestick formation made by 3 consecutive candles.

Search for the pattern only upon the breakout of a significant horizontal level of support / resistance 

The pattern : You must see a solid breakout candle breaking through the Support / Resistance level

Dont trade if you get "shaky" breakout candles

Trade only when you see one small candle beyond the support / resistance level, then place your stop orders as shown below

Close 50% of the trade at the close of the first continuation candle, then move stoploss to break even.

Finally, close remaining 50% of the trade at the close of the second continuation candle.

There is 75%-80% winning ratio if you follow this strategy. Good luck !

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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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DUMP THAT LOSER - forex day trading books

DUMP THAT LOSER ~ forex day trading books

One of the biggest mistakes that traders make is holding on to losers too long. The reason we do this is because we cant stand to lose that money. We cant stand to see our bottom line shrink. We cant take the fact that we were wrong in the trade set up. We dont want to mess up a good winning streak. We got stopped out too many times, only to soon see price reverse in our favor. We got angry because we got tricked and now refuse to budge, but keeping the loss only hurts us, while another trader is getting our money. We got tricked it happens, it is time to cut our losses and move on to another better trade set-up.

Whatever the reason, holding on to losing trades IS A BAD IDEA, that only cripples you.

There are other ways you lose besides losing your money??????

By refusing to take a legitimate loss, (not when price moves against you a few pips in a well established trend, but holding for days, weeks and months), you rob yourself of many more profits. When you lock yourself in a losing trade, you cant take any profitable trades in that pair. Say you are short on the USD/JPY and the pair moves against you, now you have practiced good money management so you can afford to hold on to it until in comes back in your favor, it has now been 6 months. With FIFO (first in, first out) that is 6 months that you could not make money on that pair because you were nursing a loss. If you traded on the pair twice a day that is 318 trades(taking out Saturday) that you have cheated yourself out of over six month, and even if you got just 5 pips per trader, that is 1590 pips that you have missed, but say that you couldnt get every trade, you only got half that is 795 pips that you have missed...........ok, but even that is a struggle, so lets say a third, that is 265 pips, that you have cheated yourself out of, and if you are really a great trader, you know that you have missed so much more, say you were able to average ten pips per trade over the 6 months, then that is 3,180 pips that you have kept yourself from. Lets translate pips into dollars that is $265.00, enough for a nice Christmas present. $790.00, enough for that nice gadget that will impress your Friends. $1590.00 enough for that great TV you want. $3,180.00 enough for a great down payment on your teenagers first car.

You could have traded that multiple times both long and short, instead you threw it all away because you refused to take that loss.

Then the loss gets too big and you feel like you cant take it, because you cant afford to take it now. If you cut the legs off of that monster while it is manageable, it wont grow up to eat you.

Not cutting a loss, increased your stress level, making you harder to live with. Makes you feel sorry for yourself, because GOD will help everybody else but you. You are too worried to sleep, so you stay up and watch the market. You also limit the amount of money you can trade with, because a portion of it is locked in that losing trade, resulting in smaller profits.

You are going bald, your blood pressure is up and you are stressed to hell. Just cut the loss while it is manageable. I know you dont want to give the market your money, but that is part of the price of playing the game. Dont trap yourself into a corner that you cant make money in, it is sooooooooooo much worst than giving the market a few dollars, because you are still able to trade and make more money. What if it takes a whole week to recover, it is still better than that panicky feeling that comes from watching the market go against you day after day after day and feeling helpless to do anything about it.

The right way is to ride the winners and DUMP THE LOSERS, because they cripple you, they pull you down emotionally, they steal your trading confidence and lastly they drain your account as they get greedier and greedier the larger they become.

IS IT WORTH IT??????????!!!!!!!!

DONT LET YOUR LOSERS RUN WILD, Because many times they will run until they drain you dry.


YOU CAN DO THIS (^_^)



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RUNNING PRICE - best forex trading books pdf

RUNNING PRICE ~ best forex trading books pdf

Many times when price is running like a mad train on steroids, it is very unsettling because all of your emotions are screaming for you to jump aboard. The problem with that is many time that same train that seduced you aboard will often abandon you at the station leaving you wondering what happened??????

One of the most difficult temptation to resist in trading is the urge and beckoning to follow running price. Running price will often leave you stuck at the top or abandoned at the bottom. When your eyes see price running, all of your emotions are screaming for you to jump aboard. DONT DO IT! Many times it is a trap that will leave you licking your wounds. When you get off of the ground all scraped up, you still arent sure what happened because you were in harmony with your trend. Many times price will speed up just before the critical end of that run.



Now if you are aboard a trend and price starts on super steroids x 20 then you might want to begin looking for the nearest exit point. It doesnt always happen like that, but I have seen it often enough that I never jump into running price, even though my emotions are still screaming for me to.

While I am looking at price accelerate, I am thinking "look at all of that money you missed, and you knew it was going to keep going" or thoughts like "crap you should have gotten in, you missed your chance." My Friend the market will give you another chance!

I would rather miss out on an iffy trade for a sure one any day. When things settle and I can see a clear advantage then I can enter the market with logic instead of emotions....

Study Your charts and learn the price rhythm of your currency pair or pairs

YOU CAN DO THIS (^_^)

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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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DEMO ACCOUNT - best forex trading books 2015

DEMO ACCOUNT ~ best forex trading books 2015

I am always telling new traders to practice on their demo account until they become consistently profitable.

WHY?????

Because I have found that it is a way to program a success pattern in your mind. Your mind doesnt distinguish between a live and a demo account, however we do. Sometimes we allow emotions to interfere with the successful program that our mind is running once we get a live account.

We want trading to be so ingrained in us that it is almost instinct. Your demo gives you the opportunity to train your mind toward automatic success.

Your brain begins to recognize patterns of success as you practice on your live or demo account, it doesnt matter which one?.

As a trader, every time you enter the market, you take a risk.

YOU CAN NOT BE BE AFRAID OF RISK!

But you must make SMART, CALCULATED RISK in the market. Risk no more than 2% of your capital in a trade. 2% on the right side of the trade is more than enough to provide your with a very comfortable life style. 2% on the wrong side of the trade can also take you out. That is why smart calculated risk give you the biggest advantage in the market. When you dont over trade your account it gives you more control over your exit as opposed to being forced out of the trade by the market.

ENTER THE MARKET WHEN YOU CAN SEE A CLEAR ADVANTAGE!

Use your demo up, blow it up several times if that is what is necessary for you to gain an understanding of what is going on in the market.

Take your demo seriously. Practice your successes and it will help your mind begin to eliminate those habits that are counter productive to good trading. Practicing success in your demo translates into success in your live account.

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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HOW TO PREDICT PRICE SWINGS IN ADVANCE - forex trading basics instaforex.com

HOW TO PREDICT PRICE SWINGS IN ADVANCE ~ forex trading basics instaforex.com

Have you ever wished you had an indicator that would predict a price swings in advance? Well chances are you already do, its just that you have yet to discover how to harness its power. 

Confused? Dont worry it will become clear! 

Im not a big advocate of indicators, I do use some common indicators in my trading but all indicators have a major flaw when it comes to trade entries. Indicators follow historic price and consequently are always lagging behind price. However there is a technique to use selected indicators in relation to price structure, which can give you an accurate leading indication of when price will turn! 

I am of course talking about Divergence. I know divergence is no big secret, but when used properly it is extremely powerful in predicting price swings. If you have never used divergence then you are in for a real treat. If you already use it then hopefully some of these tips and tricks will help increase your accuracy. Over the next 2-3 posts I will share with you what I have learnt from the many years of trading divergence setups. I have a tested a multitude of different indicators, entry techniques and time frames. I have discovered through backtesting plus trial and error what works and what does not. 

First things first, lets get the basics out of the way, once you have a grasp of the basics we will discuss some cool tips and tricks I use which will help you spot these powerful setups plus get in at the right time.

For standard divergence, we are watching the highs and lows of price in relation to the highs and lows of the indicator. In an up trending market we are watching the higher highs and waiting for the indicator to begin showing lower highs. In a down trending market we are watching the lower lows and waiting for the indicator to begin showing higher lows. 

Please see my crude sketches below for reference. :-)

 

The red doted price line indicates the expect direction of price due to the divergence setup.

What indicator should you use? 

Many oscillators will work fine for spotting divergence. Here are a few that I have used with great success.

- MACD (trigger lines or histogram) 

- Stochastic 

- RSI 

People tend to have their own favourites so have a play around and see what suits you. 

A high percentage of the time strong divergence can be a good indication that the current trend is over at least temporarily. So not only can you take advantage of the divergence swing you can also use it to manage trend trading methods. 

This stuff will work on any time frame but in my experience it is easier to spot on 4H and Daily charts so you may want to start there. 

In the next post I will show you another type of divergence which is extremely accurate and my personal favourite. I will also discuss some little tricks I use to help increase the accuracy of these setups even further. 

Your mission - should you choose to accept it, is to head over to your charts, go back over the history and start looking for divergence. Have a play with a few indicators and see which you prefer. 

Before I go I will leave you with one quick example of how powerful divergence can be when used properly. The chart below is a 4H chart of the EURUSD just before the huge trend reversal. 

Keep a close look out for part 2 (high probability divergence setups) of this series. Have fun & good trading! 

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