Get started

Forex-trading

CADJPY - One of Three Yen Trend TradesCADJPY is one of three Japanese yen pairs that I held through the weekend. the other two pairs are EURJPY and SGDJPY as they share very similar price action patterns. The selloff in December 2023 seemed short-lived to me so I found an opportunity to enter long earlier this month. My best guess for the selloff is the collective premature anticipation of interest rate cuts in 2024. From a price action standpoint, I quickly developed another sentiment. High level summary below: After a retracement, price failed to push to a new lower low. The relative low forms a new range boundary. Price breaks above the upper range boundary and holds, which signals further upside momentum. I'm not the biggest fan of how this pair, along with EURJPY and SGDJPY, closed last week. Seeing two down days certainly poses a risk that this uptrend may not continue for the week ahead.
Long
by FinancialGamblR
WHAT IS A SWAP IN FOREX MARKET?All participants in forex trading sooner or later leave an open position overnight. Most often, beginners do not have access to impressive sums of money as initial capital, so they actively use leverage. Although it carries a lot of risk, it gives an opportunity to earn good money trading currency pairs in a relatively short period of time. Around midnight, changes occur in the client's account: a certain amount is debited or credited, which is called "swap." What is it, and is it worth being afraid of? What is a Swap? Traders whose position has not been closed overnight are sure to ask the question: What is swapping on Forex? Some believe that it is a guarantee of loss; others see it as an opportunity to earn. Each currency, whether it is the American dollar, Japanese yen, or euro, has its own central bank, which sets the interest rate. This rate is the determining value for granting loans to other financial institutions. For example, Japan's central bank sets the interest rate on the yen at which other banks in the country are lent. When trading begins in the market, a position is opened for a currency pair, one of the components of which is Japanese money. At the same time, the interest rate of the Bank of Japan will be valid for the yen on the exchange. The second currency in the pair, let's say the dollar, also has its own rate. The difference between these values will be called a forex swap. Since each country sets its own interest rate for loans, the value between them in a currency pair can be either positive or negative. For example, the Japanese yen is lending at 1% and the dollar at 0.5%. Then an open JPY/USD position can bring 0.5% profit from the deposit amount if it is held for a long time. If you swap the components of the currency pair, you will get the same value but with a negative sign. Swap accrual occurs at night, i.e., after the end of the trading session. This means that those who are engaged in scalping or intraday trading do not face this concept at all. Other traders see its impact on the account every day. What is a forex swap, in simple words? It is the difference in a currency pair between the interest rates that banks set. Traders often use it in trading and can sometimes make a significant amount of money in a short period of time. An important point: the use of leverage is a guarantee that a certain amount of money will be charged or debited to the account. Otherwise, trading is done without the use of loans and deposits, which, although it reduces risks, does not eliminate them altogether. Why Do Overnight Swaps Occur? An open position in the forex market is typically held for a few minutes, hours, or, in some cases, days. When a trader holds an open position beyond the end of the trading day, they need to roll it over to the next day. This process is called an overnight swap. The purpose of overnight swaps is to ensure that open positions are settled at the end of each trading day, allowing traders to continue holding their positions and making adjustments based on their trading strategies. How Does An Overnight Swap Work? Perhaps one of the main features of swaps is their occurrence when trading with leverage. That is, there is no such concept for ordinary investment accounts. As soon as leverage is used, swaps appear. Brokers increase their income not only from account commissions but also from the negative difference. Therefore, no one will warn a beginner about the need to close a position overnight so as not to make a loss. Islamic Account Without Swap At the same time, traders have the opportunity to trade with leverage without swap. The so-called Islamic account is used, which can be opened by anyone. According to religious canons, Muslims can not use interest in any activity. A special account was created for them, and not only those who use Islam can apply for it. It is important to realize that brokers do not work for free. If a trading account has a swap, it means that the commission or spread has been increased. Information about this should be found before opening to avoid unpleasant surprises over time. Time Of Swap Setting Traders are often interested in what time the swap is set on Forex. The difference is accrued or written off at night. The exact time of the swap is 0:05. Every night, the servers go to reboot at 24:59. After that, they start working again at 0:05, and at the same time, the swap is calculated. If a trader manages to close a position before midnight, her/his account will remain unchanged with a 100% guarantee. Triple Swap Financial market participants face one more peculiarity of the swap: its triple size. On the night from Wednesday to Thursday, the value multiplied by three is charged or withdrawn from the account. Why does it happen? Conversion on the Forex market takes place in three days. So, the swap value is available for calculation three days after opening a position. On weekends, the difference is calculated, but the forex exchange does not work on weekends. So, it turns out that for Friday, Saturday, and Sunday, i.e., three days, the commission should be set on Monday. And since the real commission is paid only after 3 days, the formal calculations fall on the night from Wednesday to Thursday. On different markets, the increased swap can be debited in different ways, but on Forex, the triple size is only on Wednesdays. It is important to take into account the time zone. For some traders, the triple commission is charged on Thursdays due to the time difference. In conclusion, overnight swaps are a critical component of the forex market, enabling traders to hold positions beyond a trading session. Understanding how overnight swaps work and the factors that influence swap rates can help traders make informed decisions when trading currency pairs. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
7
TRADER'S CREDOThe world of trading is filled with risks, challenges, and opportunities. As traders navigate the ups and downs of the markets, it's essential to have a strong set of principles and beliefs to guide their actions. The Trader's Credo serves as a useful reminder of these core values, helping traders stay focused, disciplined, and committed to continuous growth. The Trader's Credo 1. I am responsible for my actions : As a trader, I understand that my success or failure depends on my decisions and discipline. I will take full responsibility for my actions and their outcomes. 2. I respect the markets: The markets are my ultimate teacher. I will respect their wisdom, learn from my mistakes, and constantly improve my trading skills. 3. I am committed to continuous learning: The world of trading is ever-changing. I will stay up-to-date with the latest market trends, trading strategies, and technologies to enhance my knowledge and success. 4. I practice discipline and patience: Trading success requires discipline and patience. I will follow my trading plan, manage my emotions, and avoid impulsive decisions. 5. I prioritize risk management: The preservation of capital is paramount. I will never risk more than I can afford to lose and adhere to strict risk management protocols. 6. I embrace accountability: I will be accountable for my decisions and accept the consequences. I will learn from my mistakes and use them as valuable lessons for future success. 7. I focus on the process, not the outcome: Trading success is a journey, not a destination. I will focus on the process, enjoy the learning experience, and trust that my hard work will eventually lead to success. 8. I respect others' opinions: The trading community is filled with diverse perspectives. I will respect others' opinions, engage in constructive discussions, and learn from their insights. 9. I strive for continuous improvement: I will never be satisfied with my current level of knowledge and success. I will always aim to improve and grow as a trader. 10. I am committed to ethical trading: As a trader, I will act with integrity and honesty. I will never manipulate the markets or engage in unethical practices. Conclusion The Trader's Credo is a powerful tool for traders looking to develop a strong foundation of principles and values. By adhering to these guiding beliefs, traders can improve their skills, manage risk, and ultimately achieve long-term success in the trading aren
Education
by DeGRAM
4
EURUSD BUY | Day Trading AnalysisHello Traders, here is the full analysis. Watch strong action at the current levels for BUY. GOOD LUCK! Great BUY opportunity EURUSD I still did my best and this is the most likely count for me at the moment. Support the idea with like and follow my profile TO SEE MORE. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 🤝 Patience is the If You Have Any Question, Feel Free To Ask 🤗 Just follow chart with idea and analysis and when you are ready come in THE GROVE | VIP GROUP, earn more and safe, wait for the signal at the right moment and make money with us💰
Long
by TheGrove
1
VOLATILITY IN THE FOREX MARKETHello Forex traders. Today we are going to talk about the concept of Volatility in the Forex market. We will talk about what it is, what volatility depends on, and most importantly how we can use this data to build and improve our own trading strategies and, as a result, get more profit from trading. What Is Volatility? Volatility is the range of price changes from high to low during a trading day, week, or month. The higher the volatility, the higher the range during the trading time period. This is considered to be a higher risk for your positions, but it gives you more opportunities to earn money. Volatility can be measured over different time periods. If we open a daily chart and measure the distance from high to low, we will get the volatility of the day: It turns out that on the chart above, it was 121 pips. We can also measure on another timeframe, for example, weekly chart. The distance from the high point to the low point was 162 pips. The total volatility during the week was 162 points. Volatility can be measured within a trading session or within a trading hour. This allows us to conclude that it is a fractal value. As a rule, the average volatility for the last candles is taken into account. If we take daily charts, the average volatility is usually considered for the last 10 days. Roughly speaking, the last 10 candles are summarized and divided by 10. What Does Volatility Depend On? It depends on the number of trades in the market, players, trading sessions, the general state of the economy of a currency, and, of course, on speculation. It depends on how speculative the market is about a given currency. Note that volatility can be measured both in points and in percent. But it should be noted that most often, the volatility of stocks is measured in percent. In forex, it is more usual to measure in pips. If you are told that the average price change of EURUSD is 0.7%, you can easily convert it into pips. And vice versa, you can calculate percentages from points if you need them for any research. Now let's move on to the most important question. How To Apply Volatility Data For Profit? It's actually quite simple. As they say, everyone knows about it, but no one applies it. This is especially true for intraday trading. Nobody wants to apply the simplest rule. Suppose you know that the average volatility of GBPUSD is 120 pips. Question: if the price has moved up 100 pips from the beginning of the day, should you open a buy position? The answer is obvious, we should not. Because the probability that the price will go up another number of pips is too low. Therefore, we should not open a buy position and on the contrary, we should focus on bearish positions. But for some reason people forget about this simple technique and follow their system. I believe that it is absolutely necessary to include volatility, at least on intraday strategies, in your checklist for market entry. The same can be done with higher timeframes. Let's imagine that we know that GBPUSD has an average weekly volatility of 200 pips. If the pair has moved 50 pips since Monday, we can expect that if the price continues to move down, there is a potential of about 150 pips. Of course, there are days when some movements become bigger or smaller, but we try to rely on statistics. With its help we can calculate the sizes of stops and take-outs. If we decided to be guided by the volatility data and open a sale on the pound, then we would try not to put a large (relative to the weekly timeframe) take profit. Because our expectation within the week is 150 pips. If the average volatility of a pair is 200 pips, it is silly to expect 1000 pips move. At least within a week. Thus, volatility can also be used for risk calculations. If you have opened many positions on different pairs, you can calculate what will happen if all stop-losses are triggered. Of course, the market is not obliged to obey your calculations, but it gives some support for your convenience and trading. Volatility-based Indicator The first indicator is ATR Average True Range indicator invented in 1972. It shows the average volatility and it is used most often to set targets and stop losses. The value of the indicator is multiplied by a multiplier and thus calculate the stop loss or and/or take profit. The calculations will automatically change depending on the current volatility. Volatility is higher, take profit becomes higher. Volatility is smaller and take profit becomes smaller. The next indicator is the CCI It is based on average price and moving average data. It is used as an oscillator, that is, when it is in the oversold zone, it is recommended to buy. And when it is in the overbought zone, it is recommended to sell. Another indicator, which is known to everyone, is Bollinger Bands They consist of a standard moving average and a moving average plus and minus standard deviation, which is calculated based on price. These bands are used most often to determine the limits of movement from the standard average. We can draw conclusions based on this indicator about the end of the movement, correction, etc. Conclusion In this article I have tried to give you an understanding of what volatility is in the forex market and most importantly how we can apply it in our trading. I hope that it will help you in developing and adjusting your own trading systems. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
11
INTUITION IN TRADINGWhy is it that when you feel that you should buy and you buy, the price goes down, and when you feel that you should sell, but do not open an order, the price immediately and sharply goes down? Murphy's Law? What should I do with my inner voice? Should I tell it to shut up or listen to it? In various sources, one can often find completely opposite opinions about the role of intuition in trading. Some say that only a systematic approach can bring success, while others, on the contrary, claim that it is impossible to achieve significant results without a "sixth sense". Who is right? Many people are interested in this question and we can make the most adequate conclusion: "Intuition is worth using, but only after you have gained experience of more or less successful trading within a year or two". Let's think for a second. How can a person who has no experience as a construction worker take a look at a house and immediately realize that there is "something wrong" with it? You can't. The person simply does not have enough experience, he is too poorly informed about the subject to make any judgments. There is a wonderful book by Malcolm Gladwell called Blink: The Power of Thinking Without Thinking. It deals in great detail with the "Thin-slicing Theory", what we call Intuition. I suggest you read it. So how to apply intuition in trading? The answer is simple. At first, gain experience by trading according to a mechanical system, without using any judgments like "I feel it, we are about to fall" or something like that. And only then, when you have an insight, be sure to check it with the help of technical analysis. Having found confirmation of your intuitive guess, you can already take some actions. In fact, there is even a book written on this topic, it is called "Trading from Your Gut". It is written by one of the "Turtles", Curtis Faiths. There is not so much information in this book specifically on the use of intuition, but there are a couple of useful thoughts. The less fear, the better intuition works. Perhaps this is the reason why it is so easy to make thousands of dollars on a demo account and so difficult on a real one. When trading on a demo, we release the full potential of our brain, because nothing limits our freedom, because the money is virtual and there is no fear of losing it.
Education
by DeGRAM
1
EURCHF: Buy opportunity at the bottom of the 1 year Channel DownEURCHF has turned bearish on the 1D time-frame (RSI = 31.608, MACD = -0.007, ADX = 35.082) but reached the bottom of the 1 year Channel Down pattern. Considering that the 1D RSI got oversold last week and rebounded above 30.000 this week, this constitutes a technical buy opportunity. We are aiming for the 1D MA50 (TP = 0.94500). See how our prior idea has worked: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
Long
by InvestingScope
1
💡December Bank of England Survey Reveals Divergent Views The most recent survey from the Bank of England Decision Maker Panel (DMP) in December is likely to maintain a division within the committee regarding the outlook on interest rates. Those leaning towards a more cautious approach will highlight the ongoing decline in inflation expectations. The 1-3 year ahead expectations, calculated on a three-month average basis, dropped by 4.3% and 3.1%, compared to the previous figures of 4.6% and 3.2%, respectively. On the contrary, proponents of a firmer monetary stance will emphasize the persistent lack of advancement in wage growth. Year-ahead expectations for wage growth increased by 0.1 percentage points to reach 5.2%. Additionally, Catherine Mann, a dissenting member with a hawkish stance who advocated for a 25 basis points hike in the December meeting, had previously highlighted concerns about price pressures originating from firms' expectations. This aspect was a crucial factor in her decision to vote in favor of higher interest rates.
Short
by Stone_Haven
AUDUSD: Market analysis strategy on I chart todayThe Australian Dollar (AUD) tries to end a losing streak on Friday. The AUD/USD pair is facing bearish pressure, even as the US Dollar (USD) lacks clear direction and China's Caixin Services PMI improved in December. Market Sentiment Weakness and widespread commodity price declines have both played a role in the Australian Dollar's weakness. Australia's Judo Bank's latest Purchasing Managers' Index (PMI) data shows a decline in business activity across both the services and manufacturing sectors, further highlighting vulnerabilities of the Australian Dollar. The Services PMI specifically showed the fastest contraction in the services sector since the third quarter of 2021. However, Matthew De Pasquale, Economist at Judo Bank, suggested that a slowdown in the economy Australia has not yet gained momentum. The US Dollar Index (DXY) holds a steady trend, showing a slight tilt towards positive sentiment and potential profits. However, a pullback of recent advances in United States (US) Treasury yields could put some pressure on the Greenback. Furthermore, upbeat jobs data released on Thursday could strengthen support for the US Dollar.
Long
by NicoTradingMaster
2