When you start on the market, you are always watching for news. I do not blame you, I also did the same few years ago but you have to understand that you are a retail investor and probably you are the last one to know what is happening in the world. Professionals have access to information sources that you can‘t even dream. So, what can you do?
You may know that professionals are always trying to hide their trading positions, but they can’t avoid the market volume. Professional traders can hide pending positions through black pools but when they buy or sell they start to create volume on the market and that’s your advantage.
Most traders think that they can predict the future analyzing only price patterns. And that’s true but not easy!
More than 100 years ago Dow Jones wrote about price and trends in the wall street journal. He discovered that price moves in trends. He talked about 3 levels of trends (main, medium and short) and also said that when an uptrend finishes it is because a down trend is starting.
Nowadays, a lot of traders still follow this old theory. But…
Can we still believe in trend lines?
Yes, we can. But we need to look for some currency where trend lines are working fine. Today, I’ll show you a daily chart of EUR/AUD. I trade it only with trend lines and trailing stops and it works fine for me.
When we talk about price action and chart patterns we usually see examples that have happened years or months ago. In Brokinator we like to see real examples, so here we go!
A triangle is a particular case of triple top. If we only draw the upper line we have a triple top, but we can notice that drawing an uptrend line in the lows make sense.
This kind of pattern in the middle of a trend is usually a great signal of trend continuation so today is a good day to buy with tight stops.
If you are reading this article, you should have read the previous one. I encourage you to read it before you continue with this one. Well, if you are done with the first part of the article then let’s continue!!
By now, you have a basic money management strategy to beat the market. As said before, the best way to learn is trading every day, but you still have some important questions to be answered.
How much can I earn?
Needless to say how much you earn depends only on you. You can win whether the stock market goes up or down. When someone sells, someone buys, so for each winner we have a loser. No one can predict the future, there is nothing written. However, I can give you a couple of clues.
First of all, if you are new to Forex you will not win a cent for the first 4 months. Some transactions will be profitable but overall you will not win. Remember that you are learning, so use low capital accounts and save money for the future, where you can do a serious trading account.
Every day market is giving us opportunities to earn money; we only need to be aware and ready. Today we can make profits by doing a breakout trading strategy based on price action theory.
Today AUD/NZD shows this chart. As you can see the pair has done a very strong downtrend but now we have a very interesting price action pattern. First of all we can see a double bottom, this is a great signal for bullish traders, but it is even more important if the volume decreases in the second low. As you can see, we have less volume in the second low, ¡GREAT! One more point for bullish purposes. The low volume means no one was trying to sell hard to beat the previous low, so everyone was agree that this minimum is important enough to wait and see what happens.
I want to show you 3 ways to know how to detect (or not) the end of a trend.
As you can see we have the 1hour EUR/USD chart below. First, we see an uptrend and later we see a similar downtrend. Let’s see how to predict what is going to happen in the 3 orange areas.
3 ways to detect the end of a trend
If you have not traded forex but you are looking forward to do it, then this article is for you.
You love the market, you want to be a good trader, but you don’t know where to start. Probably you have some questions like: How can I buy currencies? How much money do I need? How much can I earn?
Maybe stock market is better? If yes, how can I trade it? What else should I consider?
Before we begin, I want to remark that you should ask yourself different questions like: What am I trying to achieve? How much am I willing to lose?
However, the best way to learn something is by doing it! Even if you have no idea about market rules. Remember that all brokers have free Demo accounts, and this is a great way to start learning. So, today I will start answering your questions, not the right ones.
Choosing the best broker for you is the key for your trading success. You can save lot of money and problems if you choose a good broker for you. How to choose the best forex broker:
What should I take in consideration to choose the best forex broker?
The foreign exchange market, forex or FX is an unregulated global market in which trading does not occur on an exchange or a physical address. The network of market participants is not centralized; therefore, the price of a currency can be different from one broker to another in the same moment.
The most important market players are the largest banks in the world and they form a group where most trading activities take place. The name of this group is Interbank market. Retail traders as you are not able to trade the interbank market, but you can trade forex through two types of brokers, Market makers or ECN brokers. Now we are going to see the differences between these brokers: Market Maker or ECN broker.
How Market makers work
The market makers make both prices, ask and bid. They show you both prices, separated by spread and you can decide if you want to buy or sell. If you decide to buy the market maker have to sell to you, so he becomes your counterparty. To cover or hedge their positions they will try to pass your trade to someone else who wants to be your counterpart. Sometimes this is not possible and they act against you in the market.
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