WHEN TRENDS TURN - free forex trading books pdf

WHEN TRENDS TURN ~ free forex trading books pdf

As you have probably already read, I love trends; but what happens when a trend turns. No matter what time period you trade your trend will eventually turn. It is essential to the well being of your successful long term trading life that you can recognize the beginning of a trend turn.

The first sign of a trend turn usually come in the form of a candlestick reversal formation. Then you will eventually get a trendline break. That is why it is essential that you learn to read candlesticks like a master musician learns to read sheet music.

Things you want to look for in a valid trend turn are:

1. Price that has really been in a trend for a while, and a valid candlestick reversal signal). (Except on a smaller time frame, those trends can change rapidly)

2. A treadline break is usually a good sign. On the trendline break, be sure to wait for the candle to close. If it closes outside of the line you may want to confirm the validity of the breakout with an indicator such as a MA. I am not a huge fan of indicators because they are lagging data, but in this case, it would be wise to use one, which ever one best suits you. In a valid trend break your MA will usually be broken too.

3. I think the most important piece in a valid reversal is if price surpassed the previous relevant high/low.

Many times a good buy signal comes when a candlestick closes above the trendline, in a downtrend, though not always. A good sell signal could come from the close of a candle below the trendline , in an uptrend. This is where either patience, indicators or a combination of both come in handy.

If the trendline break is not valid (meaning it broke trend only temporarily), then you can redraw your trendline, or add another one to include the new high/low.

Very important if you trade against a long term established trend, expect it to be a short term ride. Get in and get out. The shorter the time frame the faster youd better get out after you see that you have lost your advantage  No matter what time frame you made your counter trend trade, just know that it will eventually turn to continue to follow the major trend. A counter trend trade is like a river temporarily diverted, the trend will eventually resume its course. There are always trends within trends or hiccups/retracement, price never move straight up or straight down. It is essential that you know your major trend direction.

A breakout from trend can also be a valid exit signal to close out your profits.

Trend reversals are important because most traders want to buy near the bottom when price begins to move up and sell near the top when price begins to decline, and that means waiting for a proper confirmation before jumping in and getting your butt handed to you.

A reversal signal can be good for 0pips- 1100pips depending on your chart time frame and your patience level. For example the 5 min chart will give you many trading opportunities, but they are less reliable; whereas the monthly chart is much more likely to provide more accurate signals, so far this year it has provided 4 really good bounces for the USD/YEN pair. Longer term traders were able to capitalize on those opportunities, but they are a whole league unto themselves.

Remember, though trends tend to continue, nothing goes on forever and if you are going to be a successful trader, you are going to have to remind yourself that neither price nor trend heads in the same direction perpetually. In order to trade successfully you have got to be flexible. If you, like me, have been bearish all of 2009, you have got to know when to become bullish when theres a bounce in the market. Know when to hold em know when to fold em, know when to walk away and know when to grab your profits and run.
As it stands; I dont plan to do a blog on candlestick formations, but you are welcome to go to my youtube channel where I have downloaded videos that I think are very helpful to new or a fresher for the more experienced traders. Please copy and paste the link:

http://www.youtube.com/user/TRADERSFRIEND.For a more in-dept look at candles read any of Steve Nisons Japanese Candle Trading books available on-line or at your local library. If you are going to purchase it, ebay is usually an excellent source for on-line trading materials.

Remember a consistently profitable trader spends more time waiting for valid entry signal than actually trading and that is a whole discipline unto itself(BIG SMILE)

HAPPY TRADING!!!!

Get 10 Trading Lessons FREE Click HereThis blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.


More info for WHEN TRENDS TURN ~ free forex trading books pdf:

Read more

Trend lines - forex trading secrets book pdf

Trend lines ~ forex trading secrets book pdf

Now we are about to embark on what is almost sacred territory for me, trendlines. Ahhhh..... What a most glorious word. Trendlines are one of my favor trading tools. If there is a pot of gold at the end of the rainbow in trading for me, I would have say that it is trendlines.

Why?????? Because using trend lines properly will put you on the right side of the trade most of the time. I personally use trendlines in all of my trading. Now for those of you who have used trendlines and it hasnt worked out for you. Please remember that the shorter the time frame you trade, the more your trend is likely to change. My advice is to find the prevailing trend and trade in harmony with it. Example, if the trend is bullish (going up) on the 30min charts and you trade the five minute chart. If the trend is bearish (going down) on the five minute chart, dont take that trade. It is much more likely that the trend will reverse on you than if you wait for a trade that is in harmony with the bullish trend.

Please allow me to elaborate. If you are trading that five minute chart and price has dropped 30pips, you need to wait for a good candlestick reversal confirmation and a trendline break, before going long. Candlesticks are very often the first sign of a trend reversal. The break of the trendline is just further confirmation. If you trade the five minute chart, you want to get in and get out fast!!! Remember on the five minute the direction of the trend is going to change frequently. The shorter your time frame the less reliable your trend, or your candlestick confirmation. On the smaller time frames, snatch your money and go!!!!!!!!!

Ok........What is a trend? A trend is the tendency for price to move (overall) in one direction for a period of time. I say overall, because you get price retracements and corrections. That is when price temporary takes a pause or temporarily reverses from the major trend.

It is essential that if you chose to use trendlines as part of your trading strategy that you determine the direction of price on a larger time frame, so that you know how to best trade your strategy and for how long.

For example if you are in the mist of a bullish price trend on the daily chart and it is bearish on the monthly chart, then you need to be aware that price will reverse in the direction of the major trend at some point, sometimes in as little as 2days. However if you are bullish on the both the daily and the monthly chart, you stand a much greater chance at a longer more successful bullish run.

The reason to determine your trend before you begin trading is because when you sit in front of the monitor all day with price pullbacks and spikes, it is hard to determine the primary trend.

When I first started to trade, I would sit up and watch price move for about 15-30 mins and some times longer, because I wanted to make sure that I was on the right side of the trade before I committed my hard earned money. I would wait just long enough until the end of a rally or dip and Id find myself on the wrong side of the trade and couldnt figure out why. It was almost as if the broker was just waiting for me to put in my order before price went the other way against me. My early trading life was extremely frustrating and eventually I went broke. I was staying up most of the 24 hours trading and traded all three markets; studying my butt of in between. I stretched my brains with all of the complex theories, and learned all of the indicators, and was still getting killed in the market. After all of that, I had to find what worked for me. Price action.........that is it and I use trendlines and candlestick formations to help me maximize my trading strategies.

Your trendline is diagonal support or resistance, it is that barrier that price is least likely to break. The longer the time frame the more reliable your trendlines. Though trends eventually break.

Traders Whiteboard #1 Traders White Board #1

Drawing trendlines.

To determine if you are in a bearish or bullish trend you will need to draw trendlines...........

For a bearish trend ( a trend in which price is making a series of lower highs) you want to draw your trendline connecting two relevant/major highs, then your trendline should project itself from there.
This is a picture of a downtrend with a bullish break at the end.

Video Lesson: Trading a Downward Trending Market Click Here

For a bullish trend ( a trend in which price is making higher lows) you want to draw your trendline below price, connecting relevant lows, then your line will project itself from there.

This is an uptrend with a 20period moving average.

How to find the Trend and How to TRADE the Trend Video Lesson Click Here

Lastly I want to touch on a trend channel. A trend channel can be bullish or bearish; but in a trend channel you want to connect both the relevant highs and the relevant lows to form a price channel that forms diagonal support/resistance.

An example of a bearish channel. This is a longer term channel, but I included enough of it so that you can see how price bounced off of support and resistance clearly defining buy/sell zones.

I do want to warn you that price will not always fit perfectly in your trend projections, it can be quite naughty sometimes, but we will discuss that in a later blog "When trends turn"

Until we meet again my Friend.

Happy Trading!

For any questions you may contact me at TradersFriend@yahoo.com

MarketClub BONUS, 2 FREE MONTHS! Click Here

This blog is not in anyway an enticement or solicitation to trade in the Forex Market. These tips are for informational purposes only and are not to be substituted for legal advice or council. I have written this blog in hopes that it will help you to avoid some of the terrifying pitfalls I had in the Forex Market before I learned better.


More info for Trend lines ~ forex trading secrets book pdf:

Read more

Ivy bot discount 120 only 5 copies - forex trading basics tutorial

Ivy bot discount 120 only 5 copies ~ forex trading basics tutorial

Only 5 copies remains, grab it here ... Ivybot Instant Free Download, top EA

Why does IvyBot succeed while all others fail?

The reasons are endless, but one prime cause stands out.

Back tests ALONE are worthless...
Period, end of story.

We dont ONLY rely on back test results !

Here is why... As you know, the markets constantly change.
IvyBot is intuitive enough to recognize not only major shifts in market patterns, but minor ones too!

Simply put... a Forex trading robot that made money in a back
test a few months ago probably will not work today.

Let us be clear, IvyBot back tests are amazing.

However, the best results are found in real day to day trading.

More info for Ivy bot discount 120 only 5 copies ~ forex trading basics tutorial:

Read more

Confirm your main trend with LMT Forex Formula - trading forex for beginners - the basics

Confirm your main trend with LMT Forex Formula ~ trading forex for beginners - the basics

L.M.T Stands for Low Maintenance Trading. The L.M.T Forex Formula is a trend following system that requires little time to manage and trade.
The L.M.T Forex Formula was originally designed for trading the Daily charts but can also be used very profitably on the 4 hour charts.
If you currently have a demanding day job but still wish to trade Forex then you will want to focus on the daily charts. This allows you to only check your charts for 10-15 minutes a day (at the close of the daily candle). Trading the daily charts will also provide you with very profitable trades sometimes netting anything between 100 and 2000 pips profit. Trading 10-12 pairs on the daily charts you can expect around 8-10 trades a month which is 2-3 trades a week on average.
If you have more time to spare you may wish to drop down to the 4 hour charts
giving you plenty of opportunities to trade, however this will also require a lot
more time managing the trades as they progress.
Yesterday , I noticed a perfect WolfWave pattern , so I sold 3 lot E/U and made nice profit, the decisions were confirmed by LMT forex Formula. 

Needless to say much about this hot forex system, it help you detect and confirm the main trend so you will always feel at ease when open new positions, we always go with the trend, Get LMT Formula.
More info for Confirm your main trend with LMT Forex Formula ~ trading forex for beginners - the basics:

Read more

TREND EXHAUSTION COLLAPSE STRATEGY - forex trading basics for beginners

TREND EXHAUSTION COLLAPSE STRATEGY ~ forex trading basics for beginners

Trend Collapse Forex Strategy

Today I want to share with you a powerful Forex strategy that works on any time frame and any currency pair because its principles are virtually universal. This strategy seeks to exploit the sharp reversal moves we occasionally see in our charts once an established trend shows weakness. When this happens, traders who had been riding that trend are very quick to protect their hardearned pips by closing out at once all their trend-based trades, and therefore the market bias suddenly changes. 

When a trend starts collapsing

Everyone says that the safest way to trade Forex is by trading only in the direction of the trend. But what about when the trend comes to an end? Should you stop searching for trading opportunities altogether? Not at all!

In fact, when a trend begins to lose its momentum, the market goes through a period of sudden “mass panic” as every trader closes his formerly-profitable trend-riding positions before the trend goes belly up. So… what happens when a large portion of the market jumps out of the market at the same time? well, basically the market -and the former trend- collapse!

And right THEN and THERE is exactly when you want to be ready to profit from that sudden market collapse.!

I hope you enjoy and use this strategy… trust me, it’s powerful stuff!

The outer trend line

In order to define the breakout point, meaning the point upon which the market will deem the trend as weak or as jeopardized, we must draw the trend’s outer trend line. This trend line is to be set from the trend’s original focal point. It’s impossible to determine an exactly number of bars or candles we are to scroll back in our chart in order to define the trend’s starting point, so that’s something that you, as a trader, will have to gauge from a visual point of view. Please mind that we’ll only be interested in the very outer trend line, so please do not draw any inner trend line at all. The outer trend line is the last line of defense for a trend, so once the outer trend line give way, there’s nothing beyond to hold the price fall. 

The Pullback

Upon the breakout of the outer trend line, we’re not to trade the initial breakout thrust. Initial breakout thrusts are risky because we might be caught up in a fake breakout. In order to protect ourselves from these fake breakouts, we will wait for that initial breakout thrust to die out and then we will wait for the first swing pullback.
That first swing pullback usually comes back to rest either breakout levels or the outer trend line from the other side. That’s precisely where we’ll be hiding behind the bushes, ready to enter the price as price eventually pulls back to either of the mentioned levels.

Trade strategy set up

As already mentioned, we will enter the trade exactly at the moment when, after the pullback, price begins to turn again in the direction of the original breakout. Needless to say, we will be trading only in the direction of the original breakout, or what’s the same, in the opposite direction of the trend that has just broken.
Basically, the idea is to wait for the pullback to be completed so, once price begins to curl around once again in the direction of the original breakout thrust, we can jump onboard as tightly as possible from the bounce point.
There is no particular formula or price pattern to trigger the trade. We will simply try to be as nimble as possible in order to trigger the entry just as the bounce begins to take place. It’s important to enter into the trade as close as possible to the bounce point, but without actually getting ahead of it: firstly we wait for the pullback to die out, then we wait for the bounce, and then we simply trigger the trade as nimbly as possible.
The stop loss will be placed immediately beyond the bounce point.
We will use a three-point exit policy, exiting a 33% of our lot size at each consecutive level:
• Target #2 will be around the end of the initial breakout thrust.
• Target #1 will be mid-way through between our entry level and our target #2 level.
• Finally, target #3 will be located at the projection of the full breakout swing measured
from the bounce point.
We will trail our stop loss to break-even when price hits our Target #2.

Here is a live examples of the Trend Collapse strategy applied to actual real Forex charts.
Please mind that this strategy works on…
• Any currency pair.
• Any time frame (best used on H1 chart and above though).
• Any market direction (both after a down trend or after an up trend, the market dynamics and the way to trade this technique are exactly the same). 

Your Questions and Comments Are Always Welcome !

More info for TREND EXHAUSTION COLLAPSE STRATEGY ~ forex trading basics for beginners:

Read more

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! 

More info for HOW TO PREDICT PRICE SWINGS IN ADVANCE ~ forex trading basics instaforex.com:

Read more