Forex : Technical Analysis : Draw Uptrend or downtrend

Forex can view in OHLC bar, Candle stick & line.

OHLC :

Candle Stick:

Line:

I normally using OHLC, this type give more data & useful in my analysis.

Trendline:

The first to understand in chart is to know how to identify a currency is at up trend or down trend. Remember one of the secret is do not trade against trend. So, a correct must establish.

• up trend: by connect the lower troughs, identify at least 3 touches.

• down trend : Connect the upper peaks. Identify at least 3 touches.

Always remember never never trade against the TREND..

When a chart do not show any trend, it means buyer & seller are equal..DO NOT TRADE at such trend!!

Forex : Trading Secret

 :Secret 1:
Always know where is your support & resistance. Simple tools to use is using Pivot lines.

Secret 2 : 
You cannot scalp the Forex like what usual people do in stocks. It's very important to have a exit strategy in Forex

Secret 3:
Always trade follow the trend, don't against it. When it is uptrend, don't short, or vice versa.

Secret 4:
Trade when there is support & resistance in place, and know what's the entry point.

Secret 5:
Don't trade all the pair currencies. Remember, focus on what's is most interested you. Pay 100% study & understand the co-relation..Focus, then you'll success.

Secret 6:
Start small to create small success, this will slowly build you confidence. Target 20pips per trade at a start!
Create trading plan, keep a journal of each trade, written down why you long/short, what's the outcome. Important, learn from mistake if lose trade..Don't give up!!

Secret 7:
Technical indicator most of the time is confirmation, but not a signal to tell you entry or exit. Price pattern & action is the key.

Secret 8:
Practice using Demo account..commit to yourself decipline trade at least 20 times per day using demo account. Until you build up your confident, then using your REAL MONEY!

Forex: Who & What Drive the Market

Main Players in Forex:

1. Banks & Central banks - There are the main player. Their trader trade currency through bank's proprietary accounts. Banks actively trade is to moderate the strength or weakness of the country's currency.
2. Investment funds & Hedge funds - Hedge fund also speculating currencies. The most famous hedge fund is Quantum fund who famous in speculating currencies.
3. Companies - some companies may need to buy foreign currency for international trade.
4. Retail Trader - There is small retail trader, who make some money from Forex Trading. People can access to online trading easily.

There are lots of factors to make a move in Forex Market, there are:

1. Balance of Payments
2. State of economy
3. Implications drawn from chart analysis
4. Political Factors
5. Psychological Factors
6. Purchasing Power
7. Fundamental factors such as inflation & interest rates
8. Activities by professional currency managers

News always bring significant impact to the pair currency, example:

1. Interest Rate- interest rate up, currency up
2. Employment - Employment down, currency down
3. Trade balance - The larger the deficit, the weaker currency
4. GDP - High economic strength, currency up
5. Retail Sales - Sales up, Strengthen Currency

Use the ForexFactory : http://www.forexfactory.com/ to understand the date of news release.

Focus on the primary importance indicators first..

More on Forex Market drivers : Forex : More on Forex Market Moving Driver

Forex : Price, Pips & Spread

In Forex, we always focus on pips.

Pip is the last decimals of the quoted currency.
example 1EUR = 1.3714USD, the last two digits is pips. For USD/JPY, there are only 2 decimal, eg USD/JPY 92.25


In Forex, we are looking at making 20pips of profit, so for the above EUR/USD example, we are looking close trade at 1.3734.


In Forex, there are no commision charges & brokerage fees like in stocks, they charge base on spread. Normally EUR/USD is at 2 points, GBP/USD is at 3 points.


In order to break even, the currency must move 3-5 pips in your direction, the profit earn after that.

Forex: Currency Pairs & Movements

Example of currencies pair:

EUR/USD.
is EUR/USD is trading at 1.3170.
That's mean 1 Euro is worth 1.3170 USD.
EUR is base currency, USD is terms currency.

In Forex, there are Major Pairs like EUR/USD, GBP/USD, USD/JPY & USD/CHF. The stronger currency always the base. As beginner, let's start become an expert for one or two currency pairs.

When the exhangce rate rises, the base currency is stronger, eg:

The USD/CHF is at uptrend, the  dollar is strengthen against the Swiss.

Forex: What's good about him?

When do a comparison about Forex with Stocks, you can see the big different:

1. Liquidity - Forex is the most liquid in the market.
2. Stops - Easily put a stop loss to cut your loss..
3. Strong trends - Trends well established and technical analysis is quite accurate
4. 24 Hours - Trading can make up 24hours, but not include weekend.
5. Visibility - Every single news can influence the movement..Forex is like trading the economies, not companies.

Forex: What's that?

It is the largest financial market in the world, with a volume of over $3 Trillion a day.
it's liquid and very liquid. Compare with NYSE which trades around $28 billion a day, what a big different.

Forex do not have central market place, the trade is between interbank, this is call interbank market.

The banks trade directly among themselves through a network of dealing stations. Banks will conduct their buying and selling by placing their buy orders and sell orders in the electronic broking system.

The buying & selling of currency continues 24 hours a day from Monday to Friday.

In a week, starting from Monday, the market will open with Australia, move to Asia, start from Tokyo, Hong Kong, and Malaysia. When Europe comes in, and New York will join in also, and when New York officially closes at 5pm, it is the end of a day in foreign exchange. This cycle will continuous till Friday evening New York time at 5pm.

If we want to convert it to Malaysia, that will be start at 6am Monday till 6am of Saturday Morning.
When there is daylight saving in Europe & USA(starts March & end of October), it will start at 5am.

Forex : Re-cap Study

I started my forex study last year..but I didn't make it work because I didn't follow through..Right now, I going to re-cap what I read again.

Why I need to re-cap again? If I follow through well, I maybe already at a very advance level, learn new thing but to re-cap again.

I heard one say "Repetition is the mother of skill". I throughly believe that and that's why I repeat the study again..