Tag: Forex trader beginner

The London Breakout FOREX Trading Strategy

~ Vera J.

The London breakout FOREX trading strategy is used to trade the London trading session during the first few hours (1-3hrs) when the FOREX market opens in London.

You do not necessarily need any indicators for the London Breakout trading strategy, but you must be able to draw horizontal (support and resistance) lines on your FOREX chart. That is a very easy thing to do and you can learn all about it here.

Why Trade the London Session Breakout?

The London trading session is the biggest FOREX market mover as the most of the trading volume for currency trading is happening during this session.

What that means is that:

  • Whatever the trend direction during the first 1-2 hrs of London FOREX session is, determines what the trend would be for the remainder of the London session.
  • This trend might continue through to the New York trading session.

The volumes of trades and the amount of money that moves during the first few hours of the London FOREX market opening hours are HUGE, which creates some exciting trading opportunities.

So that explains the background of what and why of the London Breakout FOREX trading strategy. It’s all about catching the trendy moves to the upside or downside during the early hours of the London market opening.

Where and How to Place Your Breakout Orders?

The next thing you need to know is where to enter your trade order to trade the London Breakout.

Here is how to do that:

  • Identify the 3 previous candlesticks in the Asian session.
  • Find the high and the low of these 3 candlesticks because they form your breakout levels.
  • On the highest point of these three candlesticks draw a horizontal line. If price breaks above this line, it’s a buy signal.
  • On the lowest price point between these 3 candlesticks draw another horizontal line. If price breaks below this line, this is your sell signal.

See the image below as it makes it clear:

How To Close Your Trade

At the end of the London trading session you must close your trade, you don’t want to carry this position overnight. Even if it means you have a 10 pips profit or a 10 pips loss. Just do it. Never hang on your trade hoping for a few more pips in the New York trading session.

In FOREX trading Hope and Prayer have no place, you follow a system.
And also remember, there is always tomorrow.

Advantages of the London Breakout FOREX Trading Strategy

  • Very simple FOREX trading system.
  • No indicators needed and it’s a very simple price action trading system.
  • It’s a very easy trading strategy that even a stay-at-home mum or dad can do.
  • All you need to do is draw 2 horizontal lines based on the high and low of the previous 3 candlesticks in Asian trading session; they form your breakout levels on where you place your pending orders to catch a breakout.

Disadvantages of the London Breakout FOREX Trading Strategy

As usual, this is not a holy grail trading strategy. There will be times when the FOREX market may not move as expected and this can lead to trading losses.

Experience has shown that Mondays and Fridays are the worst days to trade FOREX, as the market usually is slow on Mondays and spiky on Fridays. You can either trade on these two days or avoid them, it’s up to you.

Happy trading!

Mindset – Every Worthy Goal Requires Self Discipline

~ Vera J.

Last time I posted on my blog was in March this year. Long time ago. Must admit, I feel guilty, hopefully you can forgive me. Of course, I could look for excuses like no time, too busy with trading FOREX, overwhelmed by this pandemic etc.

But it would not be the truth. The truth is the lack of self discipline. I didn’t stick to my plan. Guilty! Simple as that. Sounds familiar?

Then yesterday I saw this video and thought to myself: Yesss, Terri is right, this is what I need to do! Terri shares simple steps you can take that will help you to gain more self discipline!

 

The Art of “Feeling” the Forex Market

~ Vera J.

In Forex trading, one has to learn to gauge market sentiment, listen to what the charts are saying, and adjust accordingly.

More often than not, it’s also about getting the timing right. That’s why intuition plays a huge role. Not to be confused with taking impulsive trades based on gut feel. Forex trading demands a special type of intuition that many refer to as “feeling the market” or being “in the zone.”
Forex tradingIt’s that specific point in your Forex trading career. You have gained enough experience to label market behavior (trending, ranging, breaking out or consolidating). You know what trading setup you will take to tilt the odds slightly in your favor.

Examples:

You noticed that the market is trending, so you use moving averages.
You noticed that the market is retracing, so you use Fibonacci retracement levels.
You noticed that the market is ranging, so you mainly use support and resistance levels.
You noticed that the market is consolidating, so you wait for a breakout.

Did this just magically happen? Heck NO! Just like in any other art form, some are born with the natural talent while others acquire the skill. Either way, you arrived at this point because of constant refinement and deliberate practice.

Through these actions, you have learned to trust yourself and observe the Forex market in an analytical and “artful” way, and not merely by guessing.

You have found out that Forex trading is more of an art than an exact science. Also you have learned that there really is no clear “signal” or set of rules, that indicate that the market environment has changed.

Getting “in the zone” does not happen overnight. It takes time.

Just like in photography, where it takes tons of practice to get the perfect shot, Forex trading requires watching the charts every now and then, before you get to the point where you can instinctively “feel the market.”

This experience is necessary because it will help you understand why the market is behaving the way it is. It isn’t enough to go through the manual and learn all the technical aspects.

At some point, you need to put all this knowledge to work and try it out for yourself. By exposing yourself to the markets, you can gain the skills necessary to gauge market conditions and in the end, come up with your own conclusions.

By Dr. Pipslow

Source: BabyPips

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Forex Trading – Do You Qualify?

~ Vera J.

Global Trading Army is committed to assisting people from Developing countries to obtain Forex trading knowledge and learn how to trade money for money rather than time for money!

We fully understand affordability for everyone is a major barrier to consider. Therefor we decided to offer a substantial 50% discount on our package offerings to students and residents of Developing countries.
Forex tradingWe’re about connecting and freeing Nations from financial constraints!

We will inspire you to understand and tap into the most powerful financial market in the world and gain Freedom to do the things you love!

 

 

 

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Forex Trading – Japanese Candlestick Patterns Pt3

~ Vera J.

TRIPLE CANDLESTICK PATTERNS

I – Morning and Evening Stars

The morning star and the evening star are triple candlestick patterns that you can usually find at the end of a trend. They are reversal patterns that can be recognized through three characteristics.
ForexWe’ll use the Evening Star Pattern on the right as an example of what you may see:

#1 The first candlestick is a bullish candle, which is part of a recent uptrend.
#2 The second candle has a small body, indicating that there could be some indecision in the market. This candle can be either bullish or bearish.
#3 The third candlestick acts as a confirmation that a reversal is in place, as the candle closes beyond the midpoint of the first candle.

II – Three White Soldiers and Black Crows

The three white soldiers pattern is formed when three long bullish candles follow a DOWNTREND, signaling a reversal has occurred.
ForexThis triple candlestick pattern is considered as one of the most potent in-your-face bullish signals, especially when it occurs after an extended downtrend and a short period of consolidation.

The first of the three soldiers is called the reversal candle. It either ends the downtrend or implies that the period of consolidation that followed the downtrend is over.

For the pattern to be considered valid, the second candlestick should be bigger than the previous candle’s body. Also, the second candlestick should close near its high, leaving a small or non-existent upper wick. The last candlestick should be at least the same size as the second candle and have a small or no shadow.

The three black crows pattern is just the opposite of the three white soldiers. It is formed when three bearish candles follow a strong UPTREND, indicating that a reversal is in the works.

The second candle’s body should be bigger than the first candle and should close at or very near its low. The third candle should be the same size or larger than the second candle’s body with a very short or no lower shadow.

III – Three Inside Up and Down

The three inside up candlestick formation is a trend-reversal pattern that is found at the bottom of a DOWNTREND. This triple candlestick pattern indicates that the downtrend is possibly over and that a new uptrend has started.
ForexFor a valid three inside up candlestick formation, look for these properties:

#1 The first candle should be found at the bottom of a downtrend and is characterized by a long bearish candlestick.
#2 The second candle should at least make it up all the way up to the midpoint of the first candle.
#3 The third candlestick needs to close above the first candle’s high to confirm that buyers have overpowered the strength of the downtrend.

On the other side, the three inside down candlestick formation is found at the top of an UPTREND. It means that the uptrend is possibly over and that a new downtrend has started.

A three inside down candlestick formation needs to have the following characteristics:

#1 The first candle should be found at the top of an uptrend and is characterized by a long bullish candlestick.
#2 The second candle should make it up all the way down the midpoint of the first candle.
#3 The third candlestick needs to close below the first candle’s low to confirm that sellers have overpowered the strength of the uptrend.

Source: BabyPips

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Forex Trading – Forex Chart Patterns Cheat Sheet

~ Vera J.

Here’s a little cheat sheet to help you remember all those Forex chart patterns and what they are signaling.

You can see listed the basic Forex chart patterns, when they are formed, what type of signal they give, and what the next likely price move may be. Check it out!

ForexForex

You never know when you’re gonna need to cheat!

The triangle formations (symmetrical, ascending, and descending) are not included in this cheat sheet. That’s because these chart patterns can form either in an uptrend or downtrend, and can signal either a continuation or reversal. Confusing, but that’s where practice and experience comes in!

As we all know, it’s tough to tell where the Forex market will breakout or reverse.

So what’s important is that you prepare well and have your entry/exit orders ready so that you can be part of the action either way!

Happy Trading!

Source: BabyPips

 

 

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Forex Trading – Is it Worth it Concentrating on Chart Patterns?

~ Vera J.

Yes, you should be aware of them even if you don’t trade patterns as such. They demonstrate price action, support & resistance levels and simple chart dynamics like trends, and they are useful guides to market participants’ psychology and buying / selling preferences.

Forex

Chart patterns is the most interesting thing in the whole technical analysis. Actually, they are more useful than any other tools like indicators or candlestick patterns. They will help you to understand the situation and sometimes even to make relatively accurate assumptions on the upcoming price changes.

You can easily find detailed information on the most popular chart patterns. It would be interesting to save templates and then try to find them on charts. You can also create your own collection of chart patterns – this will give you better understanding of instruments you are trading.

Of course, indicators are important too, but in most of the cases they just provide additional confirmation for the signals provided by chart patterns, and the situation with candlestick patterns is nearly the same.

Another important point is that one can use the same chart patterns at any market, so this approach is very flexible. If you will find some books dedicated to chart patterns in commodities or stocks, you can use them too.

But don’t spend too much time on these things and the different names they have.

Know what a Doji, Shooting Star, or Hammer candle is. Know what a Head and Shoulders is. And otherwise, look for ‘M’ or ‘W’ structure to give signs of reversals and/or continuations. ‘M’ structure is obviously bearish – Highest High – higher low – lower high – lower low, and ‘W’ structure is bullish. Lowest low – Lower high – Higher Low, Higher high.

Forex Triangles

Know what a pennant is, a descending triangle, and an ascending triangle, and the way that price usually (although not always) breaks from these formations.

Source: BabyPips

 

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Stop Waiting For That Perfect Forex Trade Setup!

~ Vera J.

When you’re risking your own money, do you feel the need to find that secret information that nobody yet knows or to find the perfect Forex trade setup?

Forex Trading

Some traders are so obsessed with trying to find the “perfect trade” that they end up not trading enough to get experience and develop the trader mindset, which in turn decreases the odds of long-term profitability.

Forex trading is not the line of work you want to be in if you’re a perfectionist!!!

You can plan a trade systematically only to end up losing money because an unforeseen event invalidates the trade setup that you thought was sooo perfect, slapping you in the face and forcing you to question your trading skills. That’s just the way the cookie crumbles!

While you don’t want to become a careless and impulsive Forex trader, you don’t want to be an extreme perfectionist either. Remember that there’s no such a thing as a “perfect setup” or a guaranteed profit.

Rather than looking for the “perfect” setup, just find a setup with a good probability of success. Yes, you might make less profit per trade (or even lose that trade), but you’ll actually take the risk and give yourself a chance to develop your skills, learn, and make a profit.

You may find that you prefer a “less-than-perfect” trade since you’re more relaxed, which tends to be more supportive of high performance than being stressed (which a perfectionist mindset tends to bring).

Forex trading is just like dating because it’s all about probabilities. You must make many trades (or kiss many frogs) to get the law of averages to work in your favor or to eventually score that big win.

As long as the setups are legitimate and you’re using sound money management and risk control to max out profits and cut losses, you’ll make enough trades to come out ahead. You’ll be able to get the losing trades “off your back” and focus on winning trades.

If you’re an unyielding perfectionist, you’ll always be on edge and will hardly be able to execute any trades. This will be your downfall  because you won’t be able to pull the trigger on Forex trades that were “less than perfect” but had a good chance of profitability.

Dare to be average and see what happens. A student who makes straight “A’s” may be smarter but the “C” student sitting behind him may be richer.

Source: BabyPips

 

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Forex Trading – Japanese Candlestick Patterns Pt 1

~ Vera J.

On your journey to learn more about Forex trading, today you can read about basic Japanese candlesticks patterns.Forex TradingSpinning Tops
Japanese candlesticks with a long upper shadow, long lower shadow and small real bodies are called spinning tops.

The color of the real body is not very important. The pattern indicates the indecision between the buyers and sellers.
Forex TradingThe small real body (whether hollow or filled) shows little movement from open to close, and the shadows indicate that both buyers and sellers were fighting but nobody could gain the upper hand.

Even though the session opened and closed with little change, prices moved significantly higher and lower in the meantime.

– If a spinning top forms during an uptrend, this usually means there aren’t many buyers left and a possible reversal in direction could occur.
– If a spinning top forms during a downtrend, this usually means there aren’t many sellers left and a possible reversal in direction could occur.

Marubozu
Sounds like some kind of voodoo magic, huh? Fortunately, that’s not what it means. Marubozu means there are no shadows from the bodies.

Depending on whether the candlestick’s body is filled or hollow, the high and low are the same as its open or close. Check out the two types of Marubozus in the picture below.
Trading ForexA White Marubozu contains a long white body with no shadows. The open price equals the low price and the close price equals the high price.

This is a very bullish candle as it shows that buyers were in control the entire session. It usually becomes the first part of a bullish continuation or a bullish reversal pattern.

A Black Marubozu contains a long black body with no shadows. The open equals the high price and the close equals the low price.

This is a very bearish candle as it shows that sellers controlled the price action the entire session. It usually implies bearish continuation or bearish reversal.

Doji
Doji candlesticks have the same open and close price or at least their bodies are extremely short. A doji should have a very small body that appears as a thin line.

Doji candles suggest indecision or a struggle for turf positioning between buyers and sellers.

Prices move above and below the open price during the session, but close at or very near the open price.

There are FOUR special types of Doji candlesticks. The length of the upper and lower shadows can vary and the resulting Forex candlestick looks like a cross, inverted cross or plus sign.
Forex tradingWhen a Doji forms on your chart, pay special attention to the preceding candlesticks.

If a Doji forms after a series of candlesticks with long hollow bodies (like White Marubozus), the Doji signals that the buyers are becoming exhausted and weakening.

In order for price to continue rising, more buyers are needed but there aren’t anymore! Sellers are looking to come in and drive the price back down.
ForexIf a Doji forms after a series of candlesticks with long filled bodies (like Black Marubozus), the Doji signals that sellers are becoming exhausted and weak.

In order for price to continue falling, more sellers are needed but sellers are all tapped out! Buyers are foaming in the mouth for a chance to get in cheap.
ForexWhile the decline is sputtering due to lack of new sellers, further buying strength is required to confirm any reversal. Look for a white candlestick to close above the long black candlestick’s open.

Hopefully it will help you to know how to recognize different types of Japanese candlestick patterns and make sound trading decisions based on them.

Source: BabyPips

 

 

 

Don’t Let Regret Keep You From Forex Trading

~ Vera J.

No matter what, whether a five dollar roll of toilet paper or a new car, we always feel buyer’s regret when making a purchase.

Forex trading can be very similar. We put our money (real or demo) on the line in the pursuits of financial gain and happiness.

Our trades are placed plentiful when the potential for profit is there, and we scurry away with lightning speed when the crowd starts selling off in great numbers. “Hurry, everybody out!”

This fear (and greed for some) becomes a controlling emotion, dictating their currency trading decisions and behavior. Just as powerful an emotion as fear and greed, is regret too.

Regret is similarly controlling, it can keep us from placing a trade because we don’t want make a mistake. We want to feel good about our decisions and strategies.

In our attempt to do feel this way, we find it more painless to steer clear of making a trade all together, avoiding any risk of failure. Taking this mindset of avoidance, however, will definitely not lead us to the potential for profits that we seek.

Regret comes about after we make a decision and we then start picturing the things that could have gone differently.

When trading, regret is an easy feeling to have because it can occur both when making a move or when doing absolutely nothing.
Forex TradingFor instance, you open a trade with the best intentions, only to have it stop out for a loss of your entire account balance. You automatically feel regret for ever taking the position and now being poor.

On the other side, you don’t take a position because you’re allergic to risk. Your missed opportunity turns out to be the trade of the century, and it would have made you a gazillionaire! Arrrgghh! You seep into a state of utter regret.

For both examples, it’s easy to imagine the could-have-beens. We envision ourselves in those “winning” realities and how everything is so heavenly. But then we come back to Earth where things are definitely not paradise.

Sometimes regret can give us that extra kick in the ribs to get off the floor and back on our feet. It compels us to get right what we initially did wrong.

When the going gets tough and you lose yet another Forex trade, the right response to your mistake is too re-evaluate your strategy and the market. You do more testing and try your skills on another new trade. You want that losing trade back!

In the last example, we used the regret we felt for our errors to motivate and encourage ourselves to try again.

Taking this new perspective when things don’t go as planned will have a positive impact on your mental attitude and your trading as a whole. Don’t get hung up on the loss. Forget about it and move on!

Some Forex traders have an issue with feeling regret even before a trade is made. No action has been taken, but the worry starts to consume the mind. All they can think about is making a mistake. In this instance, the possibility of a regrettable outcome is stopping them from acting.

To help, we must remind ourselves that it isn’t the end of the world and that there’s still time to fix what’s not working. We can’t change our past trades but we can definitely make new ones to take those profits back.

Again, the key here is action; the point is to make the trade. Don’t let regret hold you back from progressing by means of action.

And remember, not all risk is bad. Taking risks that are minimal and calculated are integral to growing into a successful Forex trader.

Source: Baby Pips

 

Your Worst Trades Can Help You Become a Better Forex Trader

~ Vera J.

In life we usually develop repetitive behavior. We develop daily routines that help us get through the day. And as creatures of habit, we also go through patterns in forex trading. Over time, we form a routine in the way we process and react to information thrown at us.
Forex TradingTry looking at the worst trade you’ve ever had in your trade journal. It’s not easy, I know, but could be a good lesson.

Review the trade setup that you saw, think about what went wrong, and ask yourself, “Why the heck did I ever take that trade in the first place? What was I thinking?!”

More importantly, “Was I even thinking?!”

You probably just took that trade automatically based on a familiar setup. In this case, your decision was a result of your own way of thinking rather than what the market was telling you.

Your worst trade isn’t necessarily the one where you’ve incurred your largest loss.

It can be in the form of a missed opportunity, when you hesitated to long to take what could’ve been your trade of the year, or when you locked in profits too early instead of letting it ride. You might’ve wimped out because of your fear of losing, even when the markets gave every indication that this next trade would be a winner.

Another negative thought pattern is when you become absolutely indifferent to losing that you end up blindly taking one trade after another just to make up for your losses.

In this case, you keep insisting that you’re right and you believe that you will eventually beat the market. Revenge trading turns into a nasty habit and could result in large drawdowns if not corrected.

The usual response to bad trades is just shrugging them off. Much like the memory of getting rejected by crushes in high school. It’s easier to simply push the memory of a bad trade at the back of our heads, and falsely reassure yourself that you’ll prepare better next time, and then move on to the next trade.

But THAT’S NOT ENOUGH!

You have to REALLY dig in into the problem and review the nitty-gritty of your bad trades. Otherwise, you run the risk of repeating your mistakes. No matter how painful or discouraging the task is, you must force yourself to open your trade journal and ask yourself questions like:

“Why did I take the trade?”

“Did I follow valid signals when I closed my position?”

You get the idea?

In forcing yourself to identify the emotions you felt when you made bad trading decisions, you might be able to see a negative pattern in your behavior and take actions to correct it.

Unlearning bad habits and trading practices can be difficult, but they will certainly bring you one step closer to controlling your emotions and becoming a better trader.

Source: Baby Pips

 

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Forex Trading Abbreviations and Symbols

~ Vera J.

If you are a Forex trader beginner, than you need to know all the Forex trading abbreviations and Forex trading symbols, so you can fully understand what your fellow Forex traders are talking about. It might be a big help for you to make right decisions.

Forex Trading Abbreviations and Symbols
Forex trading
For example, today I was trading GA/ 

Happy Trading!

 

 

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Forex Trading Newbie Tip

~ Vera J.

When you met your goal for the day… stop and smell the roses.
trading ForexRelax, take in your win. Demo trade if you must. Remember: this is a mental game. The market takes advantage of the greedy and feeds the patient. Also don’t forget to celebrate your victory.

Source: Scharlette Donald

 

 

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