The Forex Community

What is Moving Average in forex? Here's all you need to know about it.

noreply@blogger.com (Raihan Mistry) — Thu, 7 Jul 2022 23:12:00 +0530

What is Moving Average?

Moving Averages are an important tool when analyzing financial markets. They help us understand what is going on in the market at any given time. Moving averages are calculated using past prices and then averaged together to create a single number. The MA is often represented as a line graph, showing the price over time. MAs can also be displayed as bars or candles, depending on the type of charting software you use.

How do you calculate a Moving Average?

A simple moving average calculates an average value for a series of numbers by adding together all the previous results, dividing the sum by the number of items added, then repeating the same process for the next item in the list. This gives us an idea of what the average price might be in the future for the next few weeks.

Why we use Moving Average?

Moving averages help determine when prices will either go up or down in the future. On charts, you'll see a line that looks like an arrow going across the chart. This line represents a moving average. Traders use them as points of reference to tell if prices are likely to rise or fall. If the price rises above the line, then it is considered higher than average and could indicate strength. Conversely, if the price falls below the line, it indicates weakness.

What is EMA and SMA?

Exponential moving averages(EMA) are a type of simple moving average, or SMA, that takes prices into account when calculating the average. Exponential moving averages are useful for smoothing out volatility, and keeping your portfolio balanced. When you purchase stocks, you should consider using exponential moving averages to help determine whether a stock will go up or down. You could also use them to determine if a certain security is undervalued or overvalued.

Which Moving Averages are best?

There are three most useful MA in forex market

20 MA : Very popular and extremely fast-moving MA indicator. It's mainly use to identify the area of value in your chart to buy or sell.
50 MA : Medium-term and the most accurate moving average. this is used by most of traders in the entire world.
200Ma : this is mainly used for justify the market structure. To know where the market is an up trend or down trend.

Here's some Example :

200 MA

20 MA

Always remember that there are nothing is best in the entire market. if a strategy works well in your system and you gain something with that. then it's for you. These is the truth of the entire financial market that's no body tells you.

Best forex price action strategy ever - The MAEE formula.

noreply@blogger.com (Raihan Mistry) — Wed, 6 Jul 2022 00:30:00 +0530

What is The MAEE formula?

First, let me introduce you to the MAEE formula (which is about trading price reversals). MAEE stands for market structure, area of value, entry trigger, and exits. And if you haven’t realized it yet, these are the individual components we covered earlier (if you haven’t read about these, please stop and go back to page one). Here’s how it works:

Market Structure: the first thing you want to do is identify the current market structure, so you’ll know what to do. Ask yourself, “Is this in an accumulation, advancing, distribution, or declining stage?” Now, there are times when it’s impossible to classify the market structure, and if that’s the case, move on to something else; don’t force your analysis on the charts.

Area of Value: next, you want to identify the area of value so you know where to enter a trade. This can be things like support and resistance, trend lines, channels, etc. For example, if you’re looking for buying opportunities, you’ll want to ask yourself, “Where might potential buying pressure step in?”

Entry Trigger: then, you’ll want to have an entry trigger so you’ll know when to enter a trade. We covered an entire section on candlestick patterns because they’re useful for identifying entry triggers. So if you’re looking for buying opportunities, you can look for candlestick patterns like the hammer, the bullish engulfing pattern, and so on. Now, don’t limit yourself only to candlestick patterns because there are other types of entry triggers. These can be chart patterns, indicators crossing a certain value, etc. (The point is, keep an open mind and always keep learning.)

Exits: finally, you have exits so you know when to exit a trade. There are two parts to this:

Exit when the price moves against you (otherwise known as a stop loss);
Exit when the price moves in your favor (you can do this using target profit or trailing stop loss).

Now let me walk you through a few examples:

Example 1: GBPUSD daily:

GBPUSD is in a declining stage (market structure) with a series of lower highs and lows. The price did a pullback towards resistance at 1.2750 (area of value) and formed a bearish engulfing pattern (entry trigger). You could set your stop loss 1 ATR above the highs of resistance (exit when you’re wrong) and have a target profit at the nearest swing low, which is around 1.2550 area (exit when you’re right).

Example 2: Copper 8-hour:

Copper is in a potential accumulation stage (market structure). The price collapsed to support at 2.600 (area of value) and formed a hammer (entry trigger). You could have your stop loss 1 ATR below the lows of the hammer (exit when you’re wrong) and have a target profit at the nearest swing high, which is around the 2.720 area (exit when you’re right).

Best strategies to exit your position with a heavy profit in forex.

noreply@blogger.com (Raihan Mistry) — Tue, 5 Jul 2022 00:18:00 +0530

Why do we exit our position in forex?

“Exiting a trade” means closing your position. You can close out a losing position or take a gain when exiting a winning position.

Here's some secret strategies to follow whenever we will exit our position:

TRADE EXITS: HOW TO CAPTURE A SWING

A swing refers to “one move” in the markets. The idea of capturing a swing (also known as swing trading) is to exit your winners before opposing pressure comes in. Here’s an example:

The advantage of capturing a swing is that you endure “less pain” because you exit your trade before the market reverses against you. This improves your consistency and your winning rate. But the downside is that you’ll miss big moves in the market as you exit your trades too early.

So if this approach is for you, then the key thing is to exit your trades before opposing pressure steps in. This means if you’re long, you’ll want to exit your trade before selling pressure comes in. And where would that be? Possibly at swing lows, support, the lower channel, etc.

Here’s an example:

TRADE EXITS: HOW TO RIDE A TREND

The only way you’ll ever ride a trend is to use a trailing stop loss. This means you progressively shift your stop loss higher as the market moves in your favor. Here’s what I mean:

The beauty of riding a trend is that you can reap massive profits doing little to no work. You can expect your average gains to be two-to-three times larger than your losses. But, there’s always a but, right? The downside is that you’ll only win 30%-45% of the time, you could give back 30%-50% of your open profits, and it’s common to have your winners turn to losers.

Psychologically, riding a trend is one of the most difficult things for traders to do. But if this approach is for you, the key is to embrace your losses and adopt a proper trailing stop-loss technique. So how do you trail your stop loss? There are many ways to do this, like moving average, average true range, market structure, etc.

TRADE EXITS: MOVING AVARAGE

Let me give you an example using moving average. If you want to ride a long-term uptrend, you can trail your stop loss with the 200-day moving average. This means you’ll only exit the trade if the price closes below the 200-day moving average; otherwise, you hold onto it (and it’s just the opposite for a downtrend). Here’s an example:

In addition, you can tweak the moving average to accommodate the type of trend you want to capture. If you want to ride a medium-term trend, you can trail your stop loss with the 100-day moving average. Or, if you want to ride a longer term trend, you can use the 300-day moving average.

TRADE EXITS: MARKET STRUCTURE

Another way to trail your stop loss is by using market structure. As you know, an uptrend consists of higher highs and lows. So what you do is trail your stop loss using the previous swing low. This means if the price closes below the previous swing low (by more than one 1 ATR), you’ll exit the trade (and vice versa for a downtrend). Here’s what I mean:

Unlike moving average, market structure is subjective because it requires discretion when you’re identifying the swing highs/lows. So if you prefer something more objective, use moving average to trail your stop loss.

TRADE EXITS: HYBRID APPROACH

Finally, you can combine both approaches to capture a swing and ride a trend. Here’s how it works. Let’s say you’re in a long position and the market has come into an area of resistance. You’re not sure if the price could break out higher or not. So what now? Do you take all your profits and just capture a swing? And what if the price breaks out higher and you miss a good chunk of the move?

Well, what you can do is sell some of your position at resistance and hold the remaining portion to see if the price breaks out higher. If it does, you’ll have the potential to ride the trend higher. If the price doesn’t break out higher but reverses instead, then you’ll get stopped out on the remaining position. But at least your earlier position closed at a profit (and this will subsidize some of your losses).

Now, if you want to adopt this approach, my suggestion is to exit no more than 50% of your position for the first target because if you exit with anything more than that, the remaining position won’t make much of a difference to your bottom line.

For example, if you exit 90% of your position at resistance and hold onto the remaining 10%, even if your remaining position gives you a 1:10 risk-to-reward ratio, the net profit is only a gain of 1R (since it’s 10% of your original position size).

What about the downsides? Well, there are two: 1. If the market trends well, you’ll never have your full position size on because a portion of it was exited earlier. 2. If the price hits your first target and reverses, you might end up at breakeven or experience a small loss. But had you chosen a swing trading approach, that trade would have been a winner.

By now you should realize that there’s no best method, strategy, technique, or whatever in trading. There are always pros and cons with any action you choose. So the key isn’t finding the holy grail but finding a method you can embrace and execute consistently.

How to calculate position size in forex? Here's the best strategy to do this.

noreply@blogger.com (Raihan Mistry) — Sun, 3 Jul 2022 20:57:00 +0530

The secret to risk management lies in this diagram below:

As you can see, if you lose 10% of your trading capital, you’ll need to earn 11.11% to get back to breakeven. If you lose 50% of your capital, you’ll need a 100% return to get back to breakeven. And if you hit a drawdown of 90%, you’ll need a return of 900% before you break even (good luck with that).

The secret to risk management is to lose small when you’re wrong so you never hit a level of drawdown that’s impossible to recover from. That’s why you want to risk a fraction of your capital on every trade (my suggestion is not more than 1%). This means if you have 20 losing trades in a row, your drawdown will be about 20%. This won’t be the end of the world, and you can still live to fight another day.

Now the question is, how many units do you trade if you only want to risk 1% of your trading account? Here’s the formula for forex trading:

Position size = Amount you’re risking / (stop loss * value per pip).

Let me give you an example:

You have a trading account that’s worth $10,000 USD and you risk 1% on each trade (which is $100).
You want to short GBP/USD at 1.2700 because it’s a resistance area.
You have a stop loss of 200 pips.
Value per pip for 1 standard lot = $10 USD/pip.

Plug the numbers into the formula and you get: Position size = 100 / (200*10) = 0.05 lot (or five micro lots) This means you can trade five micro-lots on GBP/ USD with a stop loss of 200 pips. And if it hits your stop loss, the loss on this trade is $100 (which is 1% of your trading account), excluding slippage.

Here's an example:

For download Forex position sizing calculator for free click here.

How to place a proper stop-loss like a pro trader? Here's all you need to know about it.

noreply@blogger.com (Raihan Mistry) — Sat, 2 Jul 2022 13:22:00 +0530

How to place a proper stop-loss? Here's all you need to know about it.

What is the purpose of stop-loss in forex?

A stop loss is an important tool for traders. It helps you avoid losing money when the market moves against your position. Stop losses are usually set at a specific distance from the entry point. For example, if you buy EUR/USD at 1.3100, then your stop loss will be placed at 1.2900. If the pair trades below 1.2900, you will lose all your investment.

Can stop-losses fail?

Stop losses are an important tool for traders. They allow you to limit your risk while still making money. However, there are times when a stop loss will trigger a trade even though the market did not move enough to meet the stop loss. This is called a failed stop loss. If you're using a broker that doesn't provide a free trial account, you'll need to pay to test out your strategy before trading real money.

Do professional traders do stop-losses?

Because they are using mental stops, professional traders don't need to give away where their stop loss is by placing them in the market. Instead, they place their stop loss at the point where they think the price will go if they were wrong about their trade.

How to place a proper stop-loss?

When you set your stop loss, you want to have a “barrier” working in your favor to prevent the price from moving against you. These “barriers” can be things like support and resistance, swing highs and lows, trend lines, etc.

This means that when you set a stop loss, you want to lean against an area of value because the market will face difficulty breaking through. Make sense? Great. Here’s how to do it.

First, identify the area of value. Then add a “buffer” to it so you don’t get stopped out just because the price spiked through the lows of support.

For an example, let’s say your area of value is at support, so what you’ll do is identify the lows of support and subtract 1 ATR from the lows (for short trades, you add 1 ATR to the highs of resistance).

Here’s what I mean:

Also, when you set a stop loss, it should be at a level that invalidates your trading setup. For example, if you’re buying the breakout of a bull flag, your stop loss should be below the lows of the bull flag because anywhere above it, the bull flag pattern is still intact. But below its lows, the bull flag is “destroyed,” and your trading setup is invalidated.

Summary

Your stop loss should lean against an area of value which acts as a “barrier” to prevent the price from moving against you.
The wider your stop loss, the smaller your position size will be (if you want to risk the same percentage of your account on each trade).
If you want to capture a swing, then look to exit your trade before the opposing pressure steps in.
If you want to ride a trend, you need to trail your stop loss as the price moves in your favor.

Best 5 Bearish reversal Candlestick Patterns ever - Every traders should know.

noreply@blogger.com (Raihan Mistry) — Fri, 1 Jul 2022 00:52:00 +0530

Best 5 Bearish reversal Candlestick Patterns ever - Every traders should know.

What is Bearish Reversal Candlestick Pattern?

Bearish reversal candlestick patterns signify that sellers are momentarily in control. However, this doesn’t mean you should sell immediately when you spot such a pattern because you must take the market conditions into consideration.

How do you confirm Bearish reversal Candlestick patterns?

A bearish reversal pattern should form at the end if an uptrend. If it does not form, then it acts just like a continuation pattern and you should wait until it forms before confirming it with other indicators. Volume and resistance are two important factors when looking for confirmation of a bearish reversal signal.

The best 5 Bearish reversal Candlestick Patterns are

Shooting star
Bearish engulfing pattern
Dark cloud cover
Tweezer top
Evening star

These are the five bearish reversal candlestick patterns that we’ll be discussing:

Shooting Star

A shooting star is a (one-candle) bearish reversal pattern that forms after an advance in price.

Here’s how to recognize it:

There is little or no lower shadow.
The price closes at the bottom quarter of the range.
The upper shadow is about two or three times the length of the body.

And this is what a shooting star means:

When the market opened, the buyers took control and pushed the price higher.
At the buying climax, huge selling pressure stepped in and pushed the price lower.
The selling pressure was so strong that it closed below the opening price.

In short, a shooting star is a bearish reversal candlestick pattern that shows rejection of higher prices.

Bearish Engulfing Pattern

A bearish engulfing pattern is a (two-candle) bearish reversal pattern that forms after an advance in price.

Here’s how to recognize it:

The first candle has a bullish close.
The body of the second candle completely “covers” the body first candle (without taking into consideration the shadow).
The second candle closes bearish.

And this is what a bearish engulfing pattern means:

On the first candle, the buyers were in control since they closed higher for the period.
On the second candle, strong selling pressure stepped in and the price closed below the previous candle’s low, which tells you that the sellers have won the battle for now.

In essence, a bearish engulfing pattern tells you the sellers have overwhelmed the buyers and are now in control.

Dark Cloud Cover

A dark cloud cover is a (two-candle) reversal pattern that forms after an advance in price. Unlike the bearish engulfing pattern that closes below the previous open, the dark cloud cover closes within the body of the previous candle. Thus, in terms of strength, dark cloud cover isn’t as strong as the bearish engulfing pattern.

Here’s how to recognize it:

The first candle has a bullish close.
The body of the second candle closes beyond the halfway mark of the first candle.
The second candle closes bearish.

And this is what a dark cloud cover means:

On the first candle, the buyers are in control because they closed higher for the period.
On the second candle, selling pressure stepped in and the price closed bearishly (more than 50% of the previous body), which tells you there is some selling pressure.

Tweezer Top

A tweezer top is a (two-candle) reversal pattern that occurs after an advance in price.

Here’s how to recognize it:

The first candle shows rejection of higher prices.
The second candle re-tests the high of the previous candle and closes lower.

And this is what a tweezer top means:

On the first candle, the buyers pushed the price higher and were met with some selling pressure.
On the second candle, the buyers again tried to push the price higher but failed and were finally overwhelmed by strong selling pressure.

In short, a tweezer top tells you the market has difficulty trading higher (after two attempts) and it’s likely to head lower.

Evening Star

An evening star is a (three-candle) bearish reversal pattern that forms after an advance in price.

Here’s how to recognize it:

The first candle has a bullish close.
The second candle has a small range.
The third candle closes aggressively lower (more than 50% of the first candle).

And this is what an evening star means:

The first candle shows the buyers are in control as the price closes higher.
On the second candle, there is indecision in the markets because both the selling and buying pressure are in equilibrium (that’s why the range of the candle is small).
On the third candle, the sellers won the battle and the price closed lower.

In short, an evening star tells you the buyers are exhausted, and the sellers are momentarily in control.

Best 5 Bullish Reversal Candlestick Patterns ever - Every Traders should know.

noreply@blogger.com (Raihan Mistry) — Thu, 30 Jun 2022 13:29:00 +0530

Best 5 Bullish Reversal Candlestick Patterns ever - Every Traders should know.

What is Bullish Reversal Candlestick patterns?

Bullish reversal candlestick patterns signify that buyers are momentarily in control. However, this doesn’t mean that you should buy immediately when you spot such a pattern because you must take the market conditions into consideration.

The 5 best bullish reversal candlestick patterns are

These are five bullish reversal candlestick patterns we’ll be discussing:

Hammer.
Bullish engulfing pattern.
Piercing pattern.
Tweezer bottom.
Morning star.

Now, there are many more bullish reversal candlestick patterns out there. But you don’t need to know them all since the key focus here is just to Note: For a bullish candle, the open is always below the close. And for a bearish candle, the open is always above the close.

Hammer Candle

A hammer is a (one-candle) bullish reversal pattern that forms after a decline in price.

Here’s how to recognize it:

Little or no upper shadow.
The price closes at the top ¼ of the range.
goog_192447218The lower shadow is about two or three times the length of the body.

And this is what a hammer means:

When the market opened, the sellers took control and pushed the price lower.
At the selling climax, huge buying pressure stepped in which pushed the price higher.
goog_192447220The buying pressure was so strong that it closed above the opening price.

In short a hammer is a bullish reversal candlestick pattern that shows rejection of lower prices.

Bullish Engulfing Pattern

A bullish engulfing pattern is a (two-candle) bullish reversal pattern that forms after a decline in price.

Here’s how to recognize it:

The first candle has a bearish close.
The body of the second candle completely “covers” the body of the first candle (without taking into consideration the shadow).
goog_192447222The second candle closes bullish.

And this is what a bullish engulfing pattern means:

On the first candle, the sellers are in control because they closed lower for the period.
On the second candle, strong buying pressure stepped in and the close was above the previous candle’s high, which tells you that buyers have won the battle for now.

In short a bullish engulfing pattern tells you that the buyers have overwhelmed the sellers and they’re now in control.

Piercing Pattern

A piercing pattern is a (two-candle) reversal pattern that forms after a decline in price. Unlike the bullish engulfing pattern which closes above the previous open, the piercing pattern closes within the body of the previous candle. Thus, in terms of strength, the piercing pattern isn’t as strong as the bullish engulfing pattern.

Here’s how to recognize it:

The first candle has a bearish close.
The body of the second candle closes beyond the halfway mark of the first candle.
The second candle closes bullish.

And this is what a piercing pattern means:

On the first candle, the sellers are in control because they closed lower for the period.
On the second candle, buying pressure has stepped in. and the close was bullish (more than 50% of the previous body), which tells you there is buying pressure present.

Tweezer Bottom

When I say tweezer, I don’t mean the tool you use to pick your nose hairs (although it sure looks like one). Instead, a tweezer bottom is a (two-candle) reversal pattern that occurs after a decline in price.

Here’s how to recognize it:

The first candle shows rejection of lower prices.
The second candle re-tests the low of the previous candle and closes higher.

This is what a tweezer bottom means:

On the first candle, the sellers pushed the price lower and were met with some buying pressure.
On the second candle, the sellers again tried to push the price lower but failed and were finally overwhelmed by strong buying pressure.

In short a tweezer bottom tells you the market has difficulty trading lower (after two attempts) and the price is likely to head higher.

Morning Star

A morning star is a (three-candle) bullish reversal pattern that forms after a decline in price.

Here’s how to recognize it:

The first candle has a bearish close.
The second candle has a small range.
The third candle closes aggressively higher (at more than 50% of the first candle).

And this is what a morning star means:

On the first candle, the sellers are in control since the price closes lower.
On the second candle, there is indecision in the markets because both selling and buying pressure are in equilibrium (that’s why the range of the candle is small).
On the third candle, the buyers have won the battle and the price closes higher.

In short, a morning star tells you that the sellers are exhausted and the buyers are momentarily in control.

All you need to know about Candlestick Patterns.

noreply@blogger.com (Raihan Mistry) — Thu, 30 Jun 2022 10:53:00 +0530

All you need to know about Candlestick Patterns.

What are Candlestick Patterns in Forex?

Candlesticks are a type of charting system used by forex traders. They are based on historical price data, and help traders identify potential trading opportunities. Candlesticks are often used to analyze market movements.

How to read Candlestick Patterns?

Let’s begin by understanding that every candlestick pattern has four data points:

Open: the opening price.
High: the highest price over a specific time period.
Low: the lowest price over a specific time period.
Close: the closing price.

Here's an example:

Note: For a bullish candle, the open is always below the close. And for a bearish candle, the open is always above the close

Now that you understand the basics of candlestick patterns.

What’s the purpose to know about candlestick patterns?

Well, candlestick patterns are useful as entry triggers to help you time your entry. Recall that market structure tells you what to do. Support and resistance (or the area of value) tells you where to trade. And candlestick patterns tell you when to enter.

Do candlestick patterns work in forex?

Candlesticks are an effective tool for analyzing market trends. They provide a lot of information about the current state of the market. They show the opening, closing, high and low prices of each bar. This gives traders an idea of what happened during the time period covered by the chart.

Are candlestick patterns useful?

Candlestick patterns are important indicators of price movement. They help us understand what is happening in the markets. We can see whether there is an uptrend or downtrend, and if we can identify when prices will turn around. These patterns can also be used to determine when a trend might reverse.

How do you Master in Candlestick Patterns trading?

You can master the candlesticks just getting knowledge of the reversal candles, chart patterns, and knowing the secret behavior in the market. if you understand the main thing that how the candlestick patterns are work then you should able to justify the market by predicting candles.

SUMMARY

Candlestick patterns give you an idea of who’s currently in control of the markets.
There are three types of candlestick patterns: reversal, indecision, and continuation.
If you want to know who’s currently in control of the markets, ask yourself, “Where did the price close relative to the range?”
If you want to know if there’s strength behind a move, ask yourself, “What’s the size of the candlestick pattern relative to the earlier ones?”
Candlestick patterns are useful as entry triggers to time your entries.
goog_192447226Don’t trade candlestick patterns in isolation. You must take into account the context of the markets (and aspects like market structure and area of value).

What is Support and Resistance in Forex Market? Here’s All You Need To Know About It

noreply@blogger.com (Raihan Mistry) — Tue, 28 Jun 2022 23:11:00 +0530

What is Support and Resistance in Forex Market?

Support: the horizontal area on your charts where potential buying pressure could come in and push the price higher.

Resistance: the horizontal area on your charts where selling pressure could come in and push the price lower.

In short, you can treat support and resistance as areas of value on your charts to help you buy low and sell high.

Here’s an example of support:

Here's an example of Resistance:

How to draw support and resistance perfectly?

So here are some guidelines to draw support and resistance perfectly:

Zoom your charts out so they show at least 300 candles.
Draw the most obvious levels (if you need to second guess yourself, it probably isn’t worth drawing).
Adjust the levels to get as many “touches” as possible.

Here's an example to draw Support and Resistance:

Why is support and resistance important?

Support and Resistance are two ways to analyze market trends. Support is when prices stop falling and start rising again. Resistance is when prices stop rising and start falling again. These levels are important because they indicate whether the current trend will continue or change direction. Traders use these levels to determine if there is an opportunity to buy or sell at a particular point in time. That's why Support and Resistance are important.

Does support and resistance really work?

Yes, Support and Resistance are really work in live market. When prices are falling rapidly, there is often a strong reaction from traders who are trying to buy low and sell high. These traders may try to get out of positions before the price falls further, but if they are not careful, they will end up buying at lower prices and selling at higher ones. If they are lucky, they might even get out of the market entirely. But if they are unlucky, they could lose money. When prices are rising rapidly, there is also a strong reaction from traders trying to get in on the action. Prices rise until they reach a resistance level, then stop. Traders who were waiting for the price to go back down may start to panic and sell all their shares. If they are lucky enough to get out of the market before the price rises again, they will have made a profit. However, if they are unlucky, their losses will be greater than those incurred during the previous decline.

What is the main difference between Support and Resistance?

Support is a horizontal area where potential buying pressure could come in and push the price higher and Resistance is a horizontal area where selling pressure could come in and push the price lower - this is the main difference between support and resistance.

What happens when a support is tested multiple times?

When the price re-tests support, some of these orders get filled. So the more the price re-tests support, the more orders get filled. And when all the orders get filled, who’s left to buy? No one, and that’s when the market breaks down.

Here’s what I mean:

What happens if the price breaks Support?

When the price breaks below support, that horizontal area could become future resistance. And when the price breaks above resistance, that horizontal area could become future Support.

Here’s what it looks like:

How to tell when Support and Resistance will break?

There’s no way to tell for sure whether support or resistance will break. But here are a few things you’ll want to pay attention to:

Resistance tends to break in an uptrend — As you know, an uptrend consists of higher highs and lows

And for it to continue, the price must break out of resistance (or swing high).

Support tends to break in a downtrend — Likewise, a downtrend consists of lower highs and lows. And for a downtrend to continue, the price must break out of support (or swing low).

Higher lows into resistance are a sign of strength — This looks something like an ascending triangle. It’s a sign of strength because it tells you buyers are willing to buy at higher prices (despite the price being near resistance).

Here’s an example:

Lower highs into support are a sign of weakness — This looks like a descending triangle. It’s a sign of weakness because it tells you sellers are willing to sell at lower prices (despite the price being near support).

Here’s what I mean:

Summary

Support is a horizontal area on your chart where potential buying pressure could come in and push the price higher.
Resistance is a horizontal area on your charts where selling pressure could come in and push the price lower.
The more times support or resistance is tested within a short period of time, the greater the likelihood it will break.
Observing support and resistance is one way to identify an area of value on your charts. Others include looking at the moving average, trend line, channel, etc.
Support tends to break in a downtrend or when there are lower highs into support.
goog_192447224Resistance tends to break in an uptrend or when there are higher lows into resistance.

Here's all about Support and Resistance. Thank You

What is Phases in forex market? How does it work actually

noreply@blogger.com (Raihan Mistry) — Tue, 28 Jun 2022 09:46:00 +0530

What is phases in forex market?

The market doesn’t go up and down in a straight line. There’s an ebb and flow to it. If you pay close attention, you’ll realize the market moves in stages. This means if you know what stage the market is at, you’ll never have to second guess whether you should be buying or selling. Everything becomes clear to you.

How many types of stages or phases in a Forex Market?

There are four stages or phases in a forex market.

Accumulation Stage
Advancing Stage
Distribution Stage
Declining Stage

Accumulation Stage

An accumulation stage occurs after a decline in price, and it looks like a range market within a downtrend. The logic behind this is the market can only go so low before the buyers step in and push the price higher. When that happens, you’ve got traders selling in the downtrend and traders buying at “cheap” prices. When these two forces collide, the market goes into an equilibrium, otherwise known as an accumulation stage.

Here are the characteristics of an accumulation stage:

It occurs after the price has fallen over the last five months or more (on the daily timeframe).
It looks like a range market with obvious areas of support and resistance within a downtrend.
The 200-day moving average starts to flatten out.
The price swings back and forth around the 200- day moving average.

Advancing Stage

The advancing stage occurs when the price breaks out of resistance (from the accumulation stage), which is otherwise known as an uptrend. This happens because the market can’t remain in a range forever. Eventually, one side of the market will dominate and that’s the start of a new uptrend (or the resumption of the downtrend). So for an advancing stage to occur, the buying pressure must overcome the selling pressure, which leads to the start of a new uptrend.

Here are the characteristics of an advancing stage:

It occurs after the price breaks out of resistance in an accumulation stage. 34 Market Structure: Decoding the Secret Behavior of the Markets
You’ll see a series of higher highs and lows.
The price is above the 200-day moving average.
The 200-day moving average is starting to point higher.

Distribution Stage

A distribution stage occurs after an advance in price, and it looks like a range market within an uptrend. The logic behind this is that the market can only go so high before the sellers come and short the markets. When this happens, you’ve got traders buying in an uptrend and traders shorting at “high” prices. When these two forces collide, the market goes into an equilibrium, otherwise known as the distribution stage.

Here are the characteristics of a distribution stage: 35 Market Structure: Decoding the Secret Behavior of the Markets

It occurs after the price has risen for the last five months or more (on the daily timeframe).
It looks like a range market with obvious support and resistance areas in an uptrend.
The 200-day moving average starts to flatten out.
The price whips back and forth around the 200- day moving average.

Declining Stage

The declining stage occurs when the price breaks down of support (from the distribution stage), otherwise known as a downtrend. This is because the market can’t remain in a range forever. Eventually, one side of the market will dominate, and that’s either the start of a new downtrend (or the resumption of the uptrend). So for a declining stage to occur, the selling pressure must overcome the buying pressure, which leads to the start of a new downtrend.

Here are the characteristics of a declining stage:
It occurs after the price breaks out of support in a distribution stage.
You’ll see a series of lower highs and lows.
The price is below the 200-day moving average.
The 200-day moving average is starting to point lower.

How does Phases work actually in live market?

Phases are actually works very well in live market. that's why we’ll realize the market moves if you know what stage the market is at, you’ll never have to second guess whether you should be buying or selling. Everything becomes clear to you.

Summary

An accumulation stage occurs after a decline in price, and it looks like a range market within a downtrend.
The advancing stage occurs when the price breaks out of resistance (from the accumulation stage), otherwise known as an uptrend.
A distribution stage occurs after an advance in price, and it looks like a range market within an uptrend.
The declining stage occurs when the price breaks down of support (from the distribution stage), otherwise known as a downtrend.

What is Price Action Trading? Here’s All You Need To Know About It

noreply@blogger.com (Raihan Mistry) — Sun, 26 Jun 2022 10:40:00 +0530

What is Price Action Trading?

price action trading is about: Understanding the imbalance between buying and selling pressure so you can better time your entries and exits—and improve your trading results.

So what are the benefits of price action trading?

• You can ignore fundamental news because price is all you need.
• Unlike trading indicators, the price is the price.
• You can better time your entries and exits.
• You have a framework to trade in different market conditions.

Which is better price action or indicators?

trading indicators work by applying mathematical formulas to the price. So they’re slower to react, and that’s how you get the saying “indicators lag behind the market.” This means when you use price action to time your entries and exits, you’ll be faster than someone who relies on indicators. But remember, just because indicators lag, doesn’t mean they’re useless because they’re a great tool to filter your trading setups, trade management, etc.

Is price action the best strategy?

Price action trading is not a strategy but a framework for trading in different market conditions. Price action trading is about understanding the imbalance between buying and selling pressure so that you can identify trading opportunities and make a profit.

Does price action trading really work?

Well, the price is the price – and what you see is what you get. No formulas, no “adjustment,” and less manipulation. (I say less manipulation because in less liquid markets, the price can still be manipulated by those with deeper pockets). We use price action trading strategy for a better entry in the market.

Why do price action traders fail?

Price action traders need to be patient. This is because they must wait for confirmation at support and resistance. Confirmation can come in a pin bar or engulfing pattern. By waiting for confirmation, traders often miss trading opportunities when price just touches and goes.

How do you master in price action trading?

Price action trading is a very popular method of trading. It is also called trend following because you follow trends. You buy when prices go up and sell when prices go down. Price action traders tend to focus on identifying key support and resistance levels, which are areas where price tends to stop moving. These levels are often referred to as “support” and “resistance” levels. If prices break through them, then there is usually a strong chance that prices will continue to move in that direction. If prices fail to break through these levels, then there is less likely to be a continuation of the current trend.

What Is Forex Trading? Here's All You Need To Know About It

noreply@blogger.com (Raihan Mistry) — Sat, 25 Jun 2022 11:17:00 +0530

What is Forex?

Forex is a generic term for foreign exchange. It’s a global market where people buy and sell currencies by trading on the interbank market or on derivatives exchanges. Traders can hedge against increases in the price of a specific currency by going long on the market or short on the interbank market, but they can earn a positive return by correctly timing the market. There are two types of forex trading: spot trading and forwards trading. Spot trading refers to trading a single currency in the spot market. In the future market, a trader has the flexibility to buy or sell an underlying asset in a single currency at a specified price. Forwards trading is a form of interest rate trading where the investor agrees to buy or sell a fixed amount of a currency at a specified exchange rate at a future date.

How to trade in Forex?

Forex trading can be done through online brokerage accounts and online brokerages that offer trading forex as a commission-free alternative to investing in stocks and shares. There are a number of online brokers offering trading forex, which may be confusing especially for beginners. You can get started by searching for forex brokers in your country. Before opening an account with a forex broker, be sure to read the broker’s terms and conditions carefully and make sure you agree with them. Once you have signed up, you will be asked to create an account with your bank. After this, your broker will transfer your funds to your trading account. You can then trade forex in a number of different ways, depending on your preference and the condition of the market.

Important terms in forex trading

Trading margin - This is the amount you need to put in your trading account to execute a trade. This will be the difference between the value of the trade and the funds you trade with. An account with a higher trading margin is more risky as it means you are risking more of your funds on each trade. Meaning of the terms - FX, EUR/USD, GBP/USD, AUD/USD, JPY/USD, USD/CHF, etc.

Top 3 most commonly traded currencies in the Forex market

- USD/JPY: The USD/JPY currency pair is one of the most commonly traded currency pairs in the world. The USD/JPY currency pair is very liquid and has a high trading frequency. More than $5 trillion worth of USD/JPY currency trade hands in the forex market every year. - EUR/USD: The EUR/USD is the second most commonly traded currency in the world and the most liquid Forex pair. More than $1 trillion worth of EUR/USD currency trades hands in the forex market every year. - AUD/USD: The AUD/USD pair is the third most commonly traded currency in the world and the most liquid Forex pair. The AUD/USD pair is also one of the most actively traded Forex pairs.

Popular exchange platforms for Forex trading

- XM: A top online broker for forex trading, XM offers interest rates to traders who open an account with them. XM has a number of trading platforms that enable traders to access a wide range of assets. - IG: IG is a top forex broker in Europe. The IG platform is simple to use and offers a number of analytical tools to help traders make better investment decisions. IG is also one of the world’s most liquid forex exchanges. - TD Ameritrade: One of the world’s largest online brokers, TD Ameritrade has gained a strong foothold in the forex market. The TD Ameritrade platform is easy to use and offers comprehensive trading tools.

Conclusion

Forex is a global market where people buy and sell currencies. Traders can hedge against increases in the price of a specific currency by going long on the market or short on the interbank market, but they can earn a positive return by correctly timing the market. The USD/JPY, EUR/USD, and AUD/USD are three of the most commonly traded currencies in the Forex market. Forex trading can be done through online brokerage accounts and online brokers that offer trading forex as a commission-free alternative to investing in stocks and shares.