EURUDS 16/11/11

We talked about the EURUSD last week. To look for resistance at the horizontal level of 1.3800. We saw a little pinbar there, and guess what, it payed off, the price lost ground over 2 days now, and is now again in a move back up. Just like before we will look for price action signals at the horizontal level, and dynamic resistance of 1.3650. After this level is reached and the price is going down again we could see a support at 1.3200 if the level of 1.3500 is broken.

EURUSD 16/11/11

Also the oil price reached an 5 month high today. We can expect to see the price of gas rise in Suriname in the coming days. The reason the oil price is rising is probably because the turmoil in the middle east, particularly Iran, who is accused by the U.N. nuclear watch dog about developing nuclear weapons. 

Crude oil 16/11/11

How to identify a trend

One of the most important things to know in forex trading is the trend. For this you have to know what a trend is and how to identify it. It is very simple, a trend is going up or down ( up trend or down trend). we can look at the chart ( I prefer the daily chart) and just see were the price is going, up, sideways(consolidating) or down. If the chart is consolidating, there is NO trend and we stay out of the trades. It is also handy to use the moving averages, this is a indicator and it can be found in the indicator browser of you platform. just set up 2 of them,

1. 8 period Exponential moving average (EMA)
2. 21 period Exponential moving average

( 8 and 21 day EMA's) in the daily chart.

You will notice that the 8 day ema responds faster to the chart than the 21 day. When they cross it usually means a change of the trend, BUT not always. The other method I'm going to teach you how to determine a trend, is to look for diverging EMA's ( as time goes on the distance between them becomes wider). If the 8 day ema is above the 21 day ema, and they are diverging, we may have a up trend, and if the 8 day ema is beneath the 21 day ema and they are diverging, we may have a down trend.

Diverging moving average (up trend)

Up trend

 

Down trend

Consolidation (between the 2 green lines)

The easiest tradingn method !

This is the most simple technique to learn and  to use. I will show you how to do it in simple steps.

1. Use the daily chart of any pair you want to trade (ex. EURUSD)
2. Mark all the horizontal levels ( support and resistance)
3. Set up 2 moving averages the  8 and 21 day EMA.
4. Look for the overall trend ( diverging moving averages )
5. Look for moves AGAINST the overall trend. They tend to test horizontal levels and dynamic resistance,and bounce back.
6. Look for price action signals at these Horizontal levels. 
7. If you spot a signal, execute the order, and don't forget to set SL and TP
8. Take your money !!!!!!

If you don't know what EMA's, and diverging moving average are, please go to the article " how to identify a trend"

You can also go to my website here.

Europe today

Today the euro went back up after the Yield bonds of Italy got off their highs from yesterday. But this crisis is far from over. we will watch the news if there are new developments in Europe.  We can watch for possible price action signals near the resistance level of 1.3650 of the EURUSD.

EURUSD 11/9/11

The Euro lost ground today, after consolidating for the last few days. Italian bond yields hit a record high. This raises worries for how bad the crisis in Europe really is. Also Italian debt exposure is much larger than Greek debt exposure. after all this turmoil in Europe, The Euro broke trough the support of 1.3650, and is now somewere around 1.3520. By now it lost 300 pips already today. By the looks of this it will probably continue to go down after a retrace to 1.650 resistance. We can watch for possible price action signals around that level and go short. The next support level is somewhere at 1.3200.

 

Journey to Alpha: FOREX update: All roads lead to Rome

Journey to Alpha: FOREX update: All roads lead to Rome

Make money online with forex!

Have you ever thought about making money online. Some of you most certainly already tried it, but you ended up wasting your money.

There are thousands of people just like you who became millionaire using the internet. The internet is like a "goldmine". Just type on Google "make money online"   and you will find thousands of of sites promising to make you a millionaire in 5 min. but these ones are mostly fake and you will end up wasting your money. The thing I'm going to show you is not some kind of  "automates money system", no it is the Forex market. It is the largest market in the world. It has a daily turnover of $3 trillion. yeah!! that's 3 TRILLION U.S. DOLLARS.

Traders earn from $1000 a week, up to $100 million a year. That's a lot of money. If you want to make money in this business it will be necessary to get yourself educated, because if you don't you will not make it. I will post articles about forex trading methods in other articles.

Price action

This is for people who know something about forex, if you don't, i suggest you  go to the post "Learn Forex Trading" on this blog.

When i search the internet, i never find something about price action trading. just automated system robots. Well.... i don't use these robots. I don't even use those fancy indicators, just plain candlestick charts. The only indicator i sometimes use is the  exponential moving average, and only with the daily charts.

when i use price action, i like to trade the daily charts, 4 hour charts, and sometimes the hourly chart, (but i like the higher ones better) but i don't even think about going in a lower time frame. When we go to the lower time frame, the overall trend is sometimes hard to see, and as we know, we like to stay with the trend, so just trade the daily time frame especially if your an amateur.

Price Action 
If we use price action as our method of trading, we do not need any fancy indicators, just the plain candlestick chart. 
the first thing that we do. is mark the horizontal levels on our chart. These act as support and resistance levels our chart. 

Once we marked the horizontal levels, we look for the overall trend. Is the market going up(bull market) or down(bear market) r it could also be consolidating (going sideways). If the market is consolidating, we don't need to trade, because it has no trend. If it is a bull market, we will buy on weakness, and if it is an bear market we will sell on strength. This means if there is a down trend, we wait for a retracement back up to an horizontal level there we look for price action signals.

Learn Forex trading

When we are going to trade the forex market, we will analyze charts. Because of this it is important to know what a chart is. If you don't know what that is... well than i think forex trading is not for you. A forex chart consists of 2 axes: the horizontal axes(time) and the vertical axis(price). As time goes on, the price of a currency pair will change. With this change we can make a profit.

There are 3 kinds of charts. 

- line carts

- bar charts

- candlestick charts

EURUSD Candlestick Chart.

 Above we can see a candle stick cart. As you can see, there are white and black candles. the white ones mean that the price went up for that time interval. And the black ones mean the price went down for that time interval.

by analyzing this chart we can predict where the price is going next, and execute an order to buy or sell this position.  


There are many resources on the internet to learn forex. One of them is "baby pips". just Google it. This website has an online school, from preschool to graduate, an best of all, It's FREE!!!!, so go their and check it out

here is the link:
http://www.babypips.com/

so from now on i will post just my strategies, and no more learning. Please go to the website i provided above to learn what you have to know. I like to trade whit price action, so i will show you guy's what price action is in the next posts.

Understanding Forex

With the forex market we can make a profit just like in the stock market, but instead of buying shares, we buy currencies. yes we buy money. let me explain how it works. EURUSD
eurusd: this is a currency pair. let say the price is now 1.3400. this means for every EUR(euro) i buy, i have to pay $1.34. lets say i buy 100 euro's. 100 x $1.34 =$134
the next day the price is 1.3500. if i sell the euro's now, i wil get 100 x $1.35 = $135
that is $1 profit. it seems like nothing, but trust me, in the forex market we don't buy 100 euro's, we buy much more than that. the best thing is IT IS FREE. yes!! you don't have to pay the broker anything, they make their profit with the spread, that is the difference between the buy and sell price. you can start with just $100 and make some money. Unlike the stock market, the forex market does not react on news of companie's, they react on political news, and speculation by the big traders. If there is some news comming out, every body will know it at the same time, unlike the stock market. This is why huge profits can be made, BUT we have to learn "the rules of the game".
Just like in any other profession, you have to get educated first and train youself to be successful. The same goes for forex trading. you have to educate yourself first, and then train yourself to be profitable and consistant every month to make money.
Just like the stock market, risk is involved in the forex market. You can never tell 100% which way the price will go, up or down. To increase the ods, we analyze the charts and watch out for financial news. example: If the price of gold rises, the value of the USD drops, so the EUR will go up against the USD.