Do you know what candlesticks tell you?

 Candlestick charting is a popular technical analysis tool used in finance to represent the price movement of an asset, such as stocks or currency, over a certain period of time. There are several types of candlesticks that can indicate the balance of power between buyers and sellers in the market.

✔️ Candlesticks with buyers in total control: This type of candlestick shows that buyers have completely dominated the market and pushed prices up. The candlestick is typically green or white and its body is long.
✔️ Candlesticks with buyers in control: This type of candlestick shows that buyers have the upper hand, but not as strongly as in the first type. The body of the candlestick is shorter and there may be some upper shadow.
✔️ Candlesticks with active sellers but stronger buyers: This type of candlestick shows that while sellers are trying to push prices down, buyers are able to keep prices up. The candlestick has a long upper shadow and a short lower shadow.
 ✔️ Candlesticks with buyers winning but showing weakness: This type of candlestick shows that buyers were able to push prices up, but only slightly and with difficulty. The body of the candlestick is short and there may be a long upper shadow.
✔️ Candlesticks with sellers in total control: This type of candlestick shows that sellers have completely dominated the market and pushed prices down. The candlestick is typically red or black and its body is long.
✔️ Candlesticks with sellers in control: This type of candlestick shows that sellers have the upper hand, but not as strongly as in the fifth type. The body of the candlestick is shorter and there may be some lower shadow.
✔️Candlesticks with active buyers but stronger sellers: This type of candlestick shows that while buyers are trying to push prices up, sellers are able to keep prices down. The candlestick has a long lower shadow and a short upper shadow.
✔️ Candlesticks with sellers winning but showing weakness: This type of candlestick shows that sellers were able to push prices down, but only slightly and with difficulty. The body of the candlestick is short and there may be a long lower shadow.

It is important to note that interpreting candlestick charts is not an exact science and should be used in combination with other technical analysis tools and market indicators.

Learn more about candlestick patterns here 

 

8 Rules Successful Traders follows!

 🔥 Every trader follows some rules that help him achieve goals and targets. Here's our list, share your in the comments:

⚠️ Your capital is the only thing keeping you in trading. Set yourself a threshold of capital loss when you stop trading real money and start practicing on demo to prevent liquidation.

🛑 Did you lose 5%-15% of your capital in one day? Stop trading and think about the mistakes made. The market isn’t going anywhere, and you will always find a situation to trade.

💵  Trading is fun, entertaining, and enjoyable. However, it’s not a game, and you are not a gamer. Trading is a serious job that may make you financially free. Treat it like a business, where profit depends only on you.  

🧑‍🎓 The financial world is a dynamic and ever-changing place where you will be constantly finding new things and learning on mistakes. Don’t stop learning.

❌ Stop Losses are critical for almost all traders to succeed. Although Take Profits help you take your portion of the market, Stop Loss limits your casualties, thus, decreasing your chances of losing everything.

🌐 Found a great technical indicator? Test it! Managed to create or set up a trading robot? Great job! Technology is amazing for traders, use them in your favor.

📍 Can you call yourself a trader if you don’t have a trading plan? This set of rules explains everything in your trading: from entry and exit points to risk-reward ratio and other vital components. Never forget your trading plan.

😌 Always be ready to lose what you’re putting in the trade. Acceptance of this fact will make you more emotionally stable.

How to Scalp in Forex Market : A Simple Definitive Guide

In this overview, we will discuss what is scalping and whether this strategy suits everyone. Scalping is a popular method of short-term trading in Forex with the use of leverage and low spread.

What is scalping?

The definition of "Scalping" means a short-term intraday trading strategy with a short period of time.  Scalping make a lot of intraday trades – short and with modest goals. The technique consists of quickly “cutting” small profits off the price movement of certain instruments.

The option of availability of Leverage  has made scalping quite a popular strategy. A small fluctuation by a couple of points can bring the trader a serious profit thanks to large leverage. Scalping is perfect for traders with a small deposit that does not allow for long-term positional trading. For scalping, we use small timeframes: M1, M5, M15.

Unlike many other strategies, scalping requires much time and effort. You have to keep a close eye on the market the whole day, find entry points, and make trades. Potentially, scalping can bring large profits, but in practice, it requires a well-tried trading strategy and psychic and emotion stability.

Who is scalping suitable for?

Scalping does not suit everyone. The profitability of each trade is usually low, and a significant profit is reached by aggregating the small profits from multiple trades. A scalper must be patient to wait for their effort to bring fruit. To become a successful forex scalper, one needs self-control, attention, and discipline.

Scalping requires much more time and accuracy than any other strategy, such as swinging or trading the trend. A typical scalper opens and closes dozens of positions during a typical trading day. For some people, such a task might turn out overwhelming.

 Advantages and drawbacks of scalping

Let us have a look at the positive and negative sides of scalping in Forex.

The advantages of scalping

• The strategy is potentially profitable both in the short and long run;
• You do not need to wait for a trend to form in the market. You can scalp any time: by trading the trend or trading counter trend, or in a flat market condition;
• Market analysis becomes simpler. You use technical analysis and indicators to estimate short-term trends; fundamental factors are accounted for selectively;
• It is suitable for trading on small deposits. Thanks to leverage, you can open significant positions and make profits even on a moderate deposit.
  

 The main disadvantages of scalping

• Choosing a decent broker is difficult. You need advantageous trading conditions for scalping: minimal spreads and commission fees, no critical slippages. Not every broker can provide all this;
• An increased risk connected to large leverage: even a small market move against the trader can result in serious losses,  this is why you need to use the rules of risk management;
• You spend a lot of time and involve deeply in your trading. You have to keep an eye on the market constantly because you open dozens of positions. Scalping take up much of your energy and might end in a professional burn up.
  
• A limited number of available trading instruments. Not any instrument suits scalping. To decrease expenses from a large number of trades, choose assets with minimal spreads.
  

How to succeed in scalping?

To increase your chances for success, you will need the following.

1. A tried and reliable trading strategy

It is the main instrument of a scalper that helps to make a stable profit. You can make a random profit several times, but without a proven strategy, a trader is destined for misfortune in the long run. Hence, start with testing your strategy on a small deposit demo account.

2. A trustworthy broker with suitable trading conditions.

The trading conditions provided by the broker influence the results of scalping tangibly. Apart from being reliable and having a license, your broker should be loyal to scalpers and provide high-quality services. A high speed of order execution, low spreads and commission fees, acceptable slippages are the criteria that a scalper should check.

3. Suitable instruments

Not all instruments suit scalpers. The most popular ones in Forex and majors, because they boast minimal spreads and commission fees. You can also use certain cross-rates, as for exotic currency pairs, their spreads are too large.

4. Right time for trading

The timing to trade a trade is also important. Analyze your strategy and decide at what time of the day it works the best. Or, it may yield the best results during a certain session: Asian, Pacific, European, or American. If so, try to trade at this time.

5. Analyze your trading statistics

Investors say that you previous success does not guarantee success in the future. Hence, you need to analyze your trading regularly, shooting troubles. A useful instrument is a trader's diary. It can increase your discipline, find mistakes, and master your trading style.

Trading strategies for scalping

Nowadays, you can find plenty of scalping strategies on the net. Still, approach every strategy individually: one trader prefers an empty price chart, another one enjoys indicators, the third one sticks to automatic trading.

Choose your strategy based on your preferences and test it well on a demo account before trading for real. Now let us discuss three strategies meant for scalping.

 2 Moving Averages Scalping Strategy

This is a scalping strategy using 2 simple moving averages of 20 period and 50 period, a signal bar indicator (to observe trend strength) and in subwindow StepAbsoluteQQE indicator for filter entry and exit signal. It can use on 1m and 5m chart.

Example of the strategy setup :

Bottom line

Scalping is a popular way of trading in Forex. It helps to make a good profit even on small deposits but requires much effort and durability from the trader. You need all the conditions to be met (the strategy, broker, etc.) and to control risks to succeed.

 

 

 

 

 

 

 

 

 

Currency pairs volatility

 Following US FOMC rates announcement, here are some chart showing the big move after the news.

It is possible to trade the news to capture 20pips or more but expect bad slippage and re-quote from broker.

A brief Introduction About Regression Channel

 A regression channel is a technical analysis indicator that attempts to forecast where a stock might go next. Watch this video to learn how this indicator might help you determine potential entry signals and price targets, and what price to consider when setting a stop order. 

Watch the video :

Something Interesting to Read : Mastering the Market Cycle By Howard Marks

 

A Note to Readers from Howard Marks, author of Mastering the Market Cycle

Investors clearly could do much better if they knew what lies ahead. But they can’t. Few people can accurately predict what the future holds in store for the economy and markets, and fewer still know enough about these things to out-think and thus out-invest the general consensus of investors whose views are incorporated into – 'discounted by' – the market prices of securities. But we know economies and markets follow an up-and-down pattern called a cycle and, importantly, knowing where we currently stand with regard to the economic cycle and the market cycle can give us a better idea of what lies ahead. This is a process through which investors can get the odds on their side.

When the economy is just beginning to recover from a slowdown and the markets are picking themselves up off the floor after a bust, it’s highly likely that security prices haven’t been lifted to precarious levels by large doses of investor optimism.

Pleasant surprises are more likely to lie ahead than disappointments; investors will probably come to be persuaded of these things over time and thus become buyers; and their buying should cause security prices to rise. At such a point – when economies and markets are low in their cycles – good things are more likely to lie ahead than bad things.

Since security prices aren’t inflated, buying at that point is likely to make for significant appreciation and entail little risk.

And on the contrary, when the recovery and bull market have been rolling for a while, investors are likely to be feeling good, and their optimism is likely to be incorporated in security prices.

Thus prices may be at risky highs; disappointments are more likely to lie ahead than good news; and thus risk may be high and appreciation hard to come by. All these things mean that when we’re high in the cycle, the odds are against you. When others feel good and drive prices to highs, it’s time to cut risk and take some of your money off the table.

In all these things, the operative words are 'likely' and probable.' So while we can’t know what the future holds, we can have a better idea whether the wind is at our back or in our face. The best investors have a sense for where we stand in the cycle and thus whether it’s time to build more aggressiveness or more defensiveness into their portfolios. This book will teach you what cycles are, what causes their rise and fall, and thus how to tell what investment moves are most likely to succeed. 

 

Buy The Book Here 

Forex Trading Strategy : MACD + ADX Trading Strategy

 

This simple trading strategy can be applied to any instrument on any time frame. This strategy using two ocillator, ADX with 16 period setting and MACD setting of 3, 9, 16. Some say that a trend indicator alongside an oscillator is the most efficient combo.

Any of these three pair suits the strategy: EUR/USD, GBP/USD, AUD/USD. Experienced traders/investors stick to these ones because majors have more predictable behavior, and tech analysis works much better on them. Recommended time frame should be on shorter period.

To open a position, start by analyzing the activity of ADX with period 16. Make sure you choose correct settings when adding the indicator to the trading terminal.

Signals in the strategy do not differ from "classic" ADX signals. As you know, the author claims that a crossing of +Di and -Di as it is already gives a market entry signal. For example, if +Di crosses -Di from below, this is a signal to buy, and if -Di crosses +Di from above, this signals to sell.

+Di and -Di show the difference between today's and yesterday's high and low. So in the first case, when +Di goes up, the trend must be ascending because today's highs are higher than yesterday's. Hence, buying is the best option in such circumstances. Meanwhile, when -Di values go down, we can conclude there is a bearish impulse and get prepared for selling.

Read more MACD + ADX Strategy