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Trading Hacks - Deep AnalysisSorry for sound quality, better quality on yt ☝️Dear traders, no one here has superpowers, and I'm just a human after all. Please take everything with a grain of salt. I'm sharing my view and one of the possible scenarios of price action, but mostly - my direct experience. When I enter I try to predict as little as possible and actually follow what the market is doing, joining the market and not arguing with it or forcing my will. Have good trading, keep a constant flow of self-awareness, and do your best. 🙌
CAPITALCOM:US100Education
by Yelli_trades
2
15 Essential Topics to Transform into a Pro Trader 📈💹 Embarking on a journey to become a professional forex trader requires a solid understanding of various key topics. Whether you're a beginner or looking to enhance your trading skills, mastering these 15 forex topics will set you on the path to success. Let's dive into the essentials! 💪 1. Understanding Forex Basics 🌐 - Learn the basics of currency pairs, exchange rates, and market participants. 2. Fundamental Analysis 📰 - Explore economic indicators and events affecting currency values. 3. Technical Analysis 📊 - Study charts, patterns, and indicators to make informed trading decisions. 4. Risk Management Strategies 🛡 - Implement effective risk management to protect your capital. 5. Trading Psychology 🧠 - Master emotions and discipline for consistent trading success. 6. Different Trading Styles 🔄 - Explore day trading, swing trading, and position trading. 7. Leverage and Margin 📊 - Understand the risks and benefits of trading with leverage. 8. Market Order vs. Limit Order ⏩ - Differentiate between instant execution and pending orders. 9. Interest Rates and Carry Trade 📈 - Learn how interest rates impact currency values and the carry trade strategy. 10. Correlation in Forex Markets 🔄 - Understand how currency pairs move in relation to each other. 11. Economic Calendar Awareness 📆 - Stay updated on economic events and their potential impact. 12. Backtesting and Demo Trading 📊 - Test strategies in a risk-free environment before trading live. 13. Diversification Strategies 🌐 - Spread risk by trading various currency pairs and assets. 14. Market Sentiment Analysis 📈📉 - Gauge the mood of the market to anticipate price movements. 15. Continuous Learning and Adaptation 📚 - Stay updated on market trends, technologies, and regulations. Becoming a pro trader involves continuous learning and a commitment to mastering these essential forex topics. With dedication and practice, you can navigate the complexities of the forex market and trade with confidence. Happy trading! 🚀💰 Let me know, traders, what do you want to learn in the next educational post?
OANDA:XAUUSDEducation
by TopTradingSignals
3
Understanding Euro Zone Economic NewsEuro Zone Economic News Explained: Purchasing Managers Index Manufacturing: The Purchasing Managers Manufacturing report is a survey of manufacturing providers in the Eurozone (EZ) and focuses in on issues such as costs and demand. Essentially, a strong PMI, in which costs are low and demand is improving is bullish for the Euro, whereas a survey that results in increasing costs and decreasing demand implicates speculation against the Euro. Manufacturing is a significant component of the EZ economy, and thus a survey that indicates optimism or pessimism about the sector can really get the markets moving, the Euro in particular. A reading of 50 is a critical measure in the PMI index with a number below 50 indicating contraction and a number above 50 indicating expansionary conditions. Taking a strong position based solely on the PMI Manufacturing Survey though could prove to be regretful. Purchasing Managers Index Services: The Purchasing Managers Services report is a survey of service providers in the EZ and focuses in on issues such as costs and demand. Essentially, a strong PMI, in which costs are low and demand is improving is bullish for the Euro, whereas a survey that results in increasing costs and decreasing demand implicates speculation against the Euro. A reading of 50 is critical measure in the PMI index with a number below 50 indicating contraction and a number above 50 indicating expansionary conditions. The services sector is very important to the EZ and any significant gains or shortcomings could set the Euro climbing or falling. Retail Trade: Retail Trade is the measure of retail sales, and thus the willingness of the consumer to spend. An upswing in this figure could result in Euro buying whereas a shortfall could cause Euro selling. This number is very important to the trader because it correlates to consumer conditions and outlook within the EZ region. If the Retail Trade figure comes in strong it means that consumers are spending money and thus are probably well off, hinting that EZ consumer confidence and the CPI may also be strong. However, if Retail Trade figures are low, it could suggest that interest rates are too high, consumer confidence is sinking, or businesses are suffering. Clearly, a worse than expected Retail Trade figure offers more information (though ambiguity hand-in-hand) than does a strong figure because a strong figure seeks reinforcement from other indicators (such as the CPI and Consumer Confidence survey) and thus lags, whereas a less-than-expected figure immediately suggests that the EZ economy is most likely turning sour in one respect. Traders will often react immediately to this release, but much caution is exercised due to the wide array of implications this number carries with it. It is inadvisable to trade solely on this figure. German Retail Sales: German Retail Sales are very similar to the Retail Trade figure but differ in that they report an aggregate number of sales at retail outlets to provide for a better estimate of German private consumption. Like in Retail Trade, traders will often look to long the Euro should the figure be impressive, and short the European currency should it fall below expectations. Much like Retail Trade, traders will use the Retail Sales figure to better understand the direction of the economy in terms of other key economic releases. One of the few advantages the German Retail Sales has over Retail Trade is the time of release. Because the German figure is reported before the EZ number, traders can “jump the gun” should they wish, though acting in such a manner is not usually advisable in the Forex market. Eurozone Gross Domestic Product: The general rule of thumb when using GDP as a fundamental signal to trade is that an improved number means Euro positive whereas a lesser or unchanged figure translates into Euro stagnancy or bearishness. The Eurozone Gross Domestic Product is a measure of the progress of the Eurozone economy as a whole. The figure is very important to traders because it gauges the level of performance with which the Europeans are proceeding as well as harbingers and undermines the set of economic data that is expected to be reported from the region during a certain time period. Generally, the disclosure of a number that’s either expected or ahead of forecasts sets off bullish signals for the Euro; a number that falls below predictions invokes the Euro bears. GDP data for Germany, France, Italy, and the collective Eurozone region tend to be most closely followed. Current Account: The Current Account Deficit is probably the most comprehensive measure of international transactions for Europe as it is the measure of net exports, (total exports minus total imports). If the figure falls below expectations, slight movements against the Euro should be expected. But it is also important to keep in mind that a number that outperforms or either falls short of expectations is not necessarily going to get the traders to act hastily. The release of this number is monthly and tends to be in accord with the Trade Balance numbers that are generally reported a day or two in advance of the Current Account figure. The Current Account Deficit is usually interpreted in one way; a large negative number is damaging to the European currency. This is because the Current Account is a reflection of the net exports, and if it is negative, it shows that the Eurozone is importing more than it is exporting; a bad sign for industries at home and means that more Euros are going out of than coming into the region. However, the negativity of the number is not what traders pay attention to, but rather the change in it; the marginal change in the Current Account. The logic is very similar to that behind the GDP in that if a number comes in below expectations, it could hurt the Euro, whereas if it out performs forecasts, it could prove bullish for the European currency (despite its negativity). However, this number cannot be solely “judged by its cover” because the number says a lot more than meets the eye. For instance, a more negative figure does indeed signal a decrease in net exports, but at the same time could also serve to patron other economic releases, such as consumer spending. If the Europeans are spending a lot of money, and that money is leading them to buy things from abroad as their fiscal conditions are allowing them to do so, then a decrease in net exports doesn’t seem so “damaging” to the Eurozone economy; it could simply mean people are buying things exotic to them because they are better off. Generally though, the trend in industrialized western nations (Eurozone included) has been that a more negative Current Account is damaging to industries at home. So if the figure falls below expectations, at least slight movements against the Euro should be expected. Unemployment Data: Unemployment is a very significant indicator for Eurozone performance. It is reported in the beginning of every month and measures the percentage of the workforce that is currently out of a job but is actively seeking to be employed. Generally, traders understand slight improvements in the unemployment figure (as monthly figures generally vacillate by tenths of percentages) to be positive for the Eurozone economy and will buy Euros, whereas a no-change or increase in the unemployment numbers could lead to Euro stagnancy or dumping across the board. The figure is important because it signals how hard the Eurozone is actually working and helps to foreshadow consumer spending. High unemployment generally leads to lower consumer spending which can be bearish for the Eurozone economy as well as the Euro. The flip scenario is also true, weak Eurozone employment is bearish for the economy as well as the Euro. Generally speaking, unemployment raises concerns about the performance of firms, questioning whether businesses are either not hiring because they do not need more help, or are not hiring because they cannot afford to do so. If the latter is the case, then it could prove even more bearish for the Euro as it could be forecasting sour economic data regarding the productivity of businesses. German Unemployment: The German Unemployment figure is expressed in thousands and measures the change in unemployment in Germany; a positive figure says that more people are unemployed, thus leading to Euro selling, whereas a negative figure is indicative of decreasing unemployment and thus leads to Euro buying. Germany is important because it is the Eurozone’s largest economy. Any big or unexpected movements in this country have significant consequences for the Euro. This figure usually coincides with the Unemployment rate, but offers “greater detail” as it reports actual numbers, so that traders may have substance to trade off of if the rate itself remains unchanged. Consumer Price Index: The Consumer Price Index measures the change in price for a fixed basket of goods and services purchased by consumers. The higher the CPI, the more positive it is for the Euro, whereas the opposite is also true. The ECB has a 2% inflation target, so whenever consumer prices grow by more than 2%, the ECB becomes concerned and contemplates the need for rate hikes. If consumer prices grow by much less than 2%, the central bank has more flexibility to adjust monetary policy and interest rates. If the CPI has substantial gains, then the ECB would have the incentive to raise interest rates to keep inflation in check, thereby benefiting the Euro. However, if the CPI remains idle, or prices decrease, then even a rate cut is possible. CPI itself though consists of a few major components: one that includes energy prices, and one that includes food prices. These two constituents are very volatile and thus tend to sometimes “exaggerate” the CPI. Though they are undoubtedly considered when considering inflationary concerns, many times traders will also focus in on the “core CPI” to see how the change in prices in other sectors measured up to the changes in these two key areas. Either way, a sharp increase would generally prompt Euro buying, and a decrease would call for Euro dumping. German ZEW Survey: The German ZEW economic survey reflects the difference between the number of economic analysts that are optimistic and the number of economic analysts who are pessimistic about the German economy for the subsequent six months. Obviously, a positive figure bodes well for the Euro, while a negative number foreshadows Euro selling. The ZEW survey is important because firstly, it gauges the economic productivity of Germany, the Euro-Zone’s largest economy. Secondly, it forecasts the string of economic releases concerned with the different sectors of the economy. For instance, something like Factory Orders, Industrial Production, or even Retail Sales could be implicated (or at least their negative or positive changes) in the ZEW survey. Therefore, the survey is one of the key economic indicators that move the Euro during its time of release; the sentiment that results usually fuels the Euro strongly in one direction (at least in the short-term intra-day period). German IFO Survey: The Germany IFO economic survey is much like the ZEW economic survey in that it measures the sentiment, the confidence, in the German economy, but differs in that it includes the market-moving words of business executives. Usually, an improvement in the figure leads to Euro bullishness whereas a decrease or an unchanged number leads to either Euro stalemating or dumping. The IFO survey usually follows the ZEW and reflects sentiment along the same lines. However, should there exist a discrepancy between the ZEW and the IFO, traders tend to give the ZEW a bit more favoritism because it lacks the bias of business executives. Trading on either the ZEW or IFO survey isn’t usually very lucrative, unless both of these numbers are in line with each other and reinforce other key fundamental indicators as well. Industrial Production: The Industrial Production figure is a measure of the total industrial output of them Euro-Zone either on a monthly or yearly basis. The number is very significant as an improvement in the figure could lead the Euro to make significant gains whereas a decline or stagnant number could lead to weakness in the European currency. The reason Industrial Production is important is because it is a confirmation of its type of preceding economic releases (PPI, CPI, Retail Sales, etc.); the only key data following the IP figure being the Eurozone CPI estimate. This is why many times, by the time the Industrial Production data is due for release, traders will argue that the market has already “priced in” industrial productivity in the previous economic releases. Therefore, though large gains or losses in this figure could spark some immediate movement in the market, the market has more or less, factored in the expected Industrial Production data. German Industrial Production: German Industrial Production is a composite index of German Industrial Output that accounts for about 40% of GDP. This figure is very important because it measures the level of German Industrial Production; an improvement usually signals a “buy” in the Euro, whereas a decline in the figure constitutes a “sell” to many traders. The reason this particular IP report is more important is because not only does it measure the industrial output of Germany, the EZ’s largest economy, but also because of the fact that though it comes out late in the month, it is one of the first IP reports, and thus serves as a harbinger to the EZ IP report; if Germany saw decline, then the EZ IP report probably won’t be too bright, at least from the perspective of the trader. In a sense, the EZ IP continues to get priced in before its release. The German release has four significant components: manufacturing, which constitutes 82% of the figure, construction, which accounts for 9.5%, energy that has a 5.9% share, and mining which has the smallest share at 2.7%. Though all four components are important for Germany, movement in its largest constituent, manufacturing, usually carries the weight of the figure and has the attention of traders. German Factory Orders: German Factory Orders is an index of the volume of orders for manufactured products in Germany. This is a key figure for many traders, as an improvement in the number signals buying of the Euro, while a shortcoming signals a sell-off. The reason this reading is important is because Factory Orders not only reflect the strength of businesses but also help forecast other key economic releases such as retail sales. If orders are high, then businesses need more inventory, meaning that consumers are probably purchasing more. Traders key in on this figure, especially its components, before reacting towards the Euro. The four major constituents of German Factory Orders include intermediate goods (45.6%), capital goods (35.1%), consumer durables (11.8%), and consumer non-durables (7.4%). All four are very significant, but for different reasons. Traders will take the first two figures, the intermediate goods and capital goods, as an understanding of the strength of businesses within Germany. If there is an increase in these categories, then subsequent economic releases such as the PMI could also look very bright. The second two say much about consumer confidence and retail sales; if these two sectors are outperforming expectations, then the Euro could see significant gains. However, traders are usually wary when interpreting the German factory orders, because given some economic scenarios, gains in some sectors may very well offset losses in others whereas during certain time periods a different emphasis may be given to the different components. Therefore prudent traders will usually first consider the weight of each component before the release comes out and then act accordingly. Eurozone Labor Costs: The Eurozone Labor Costs (inclusive of both direct and indirect) figure reports the expenditures endured by employers in the EZ region in order to employ workers. Traders will generally understand higher costs to be negative for the EZ and consequently short the Euro, whereas decreasing costs may result in buying the Euro. However, it is advisable to understand the complexities involved in labor costs. On one hand, labor costs could be interpreted as a negative for businesses, but on the other hand they could be viewed as a positive stimulus for the economy. This is because firms may simply be hiring more qualified and thus more “expensive” individuals to increase specialization. If this is the case, then individuals within the economy may be better off, signaling that optimism is rising in the EZ; the Euro may see more gains. Also, there exists the possibility that while costs are rising, revenue is also rising, thus keeping total profit for businesses constant, and at the same time increasing payouts to workers, a signal that the EZ is expanding. In this case, the Euro may also be bought. However, understanding this complexity is again subject to the current economic scenario surrounding the EZ; if it is in a situation where expansionism is fertile or businesses have excess capital, then only can the increasing costs in labor justify a long position in the Euro. If that is not the case then increasing labor costs will result in Euro shorting.
Education
by Mihai_Iacob
9
Fundamental Analysis in Forex In forex trading, fundamental analysis looks at the outlook of a whole economy to determine the actual value of a currency. The value is then compared with the value of other currencies to assess whether it will strengthen or weaken relative to those currencies. This post will further discuss how fundamental analysis is used in forex, what to look out for, and how you can incorporate it into your trading. What is Fundamental Analysis? Fundamental analysis is a way of looking at the forex market by analysing economic, social, and political forces that may affect currency prices. The idea behind this type of analysis is that if a country’s current or future economic outlook is good, its currency should strengthen due to an increase in demand for that specific currency. The better shape a country’s economy is in, the more attractive it is, which will lead to foreign businesses and investors investing in that country. This results in the need to purchase that country’s currency to obtain those assets. There are a multitude of factors that determine the intrinsic value of a country’s currency. Factors covering a whole range of economic data, social trends, and political developments come together to generate a broad view of the outlook for the country. This will subsequently drive the outlook for the currency. Due to this, forex fundamental analysis allows traders and speculators to take a longer-term view of whether the current value of a currency will likely increase or decrease towards its actual worth. Fundamental Analysis Information So, what information is used in the fundamental analysis of forex markets? There are several fundamental factors and components that analysts use to value a currency. From an economic perspective, the most important data are interest rates, inflation, economic growth, homes, and employment. Central banks and governments will use all of this information to formulate their monetary policy and fiscal policy, respectively. Changes to interest rates will impact the outlook that fundamental analysts have on a currency. As such, central bank policy decisions and governments' fiscal policy decisions are critical factors in the valuation of a currency. (More on this later.) Key Fundamental Data Let’s go into further detail on some of the most important fundamental data and how they impact the valuation of a currency: Interest rates Interest rates are a tool that central banks use to control an economy. Depending on how a country's economy is performing, central banks will adjust the general interest rate level to bring the economy back towards its respective targeted levels. When the level of one country’s interest rates is compared to another, this is a driver of the relative attractions of the currencies. A higher interest rate level will generate a better return for the holder of assets in that currency since higher interest rates draw capital from around the world as money seeks a higher rate of return, thereby increasing the demand for the currency as foreigners convert their domestic currency into the investment. Thus, the currency will strengthen relative to the other currency. Additionally, government bond yields are an indicator of the market’s outlook for central bank interest rates. Bonds pay a fixed income, so fluctuations in a bond’s price will determine its yield. If a central bank raises the interest rate, traders can get a better return on their money at the bank; therefore, the fixed-income government bond will likely be sold. So, if yields reflect the expectation of interest rate moves, fundamental analysts can compare the government bond yields of various countries to assess the relative valuation of the currencies. That is why fundamental analysts will look at interest rate differentials in their valuation to determine whether a currency is mispriced. Inflation Inflation is caused by an excess supply of money in a country's economy. This then leads to more spending, which then leads to an increase in prices. If the inflation rate is higher in one country than in another, then the relative value of its currency will decline. It is possible for inflation to get completely out of control, and in fact, there are some countries that print so much money that their currency becomes almost worthless as money. Because money has such an important function in all societies, people will often find substitutes when the domestic currency becomes worthless—even using the currency of another country, in what is also known as 'dollarization.' Inflation is a crucial driver of central bank interest rates. High levels of inflation eat away at the underlying value of an individual's assets or even savings. Furthermore, if inflation is too low or negative (deflation), it will lead people not to currently spend, and this can cause a downward economic spiral. Why would people buy something today if they think it will be cheaper tomorrow? Every month, inflation measures such as the Consumer Price Index (CPI) and Purchasing Price Index (PPI) are assessed by traders and speculators to judge a country's inflation outlook. Central banks use inflation targeting as they set interest rates. Higher inflation levels require higher interest rates to prevent continued price rises. Therefore, if one country has a higher level of inflation, it is likely that the interest rate will also need to be higher, which will also impact the currency’s value. Gross Domestic Product Economic growth is measured almost universally by changes in Gross Domestic Product (GDP). Gross domestic product is a measure of the size and health of a country’s economy over a period of time (usually measured quarterly or yearly). It is also used to compare the size of different economies at different points in time. GDP is the most commonly used measure for the size of an economy. The GDP is the total of all value added created in an economy. Value added means the value of goods and services that have been produced minus the value of the goods and services needed to produce them. The biggest drivers for GDP calculation are: Consumer spending: Also known as personal consumption expenditures, this is the measure of spending on goods and services by consumers. Government spending: It’s everything that is spent from a government’s budget within a public sector on items such as education, healthcare, defence, and more, depending on the country. Business investment: Any spending by private businesses and nonprofit companies on assets to produce goods and services is considered business investment. Balance of trade: The difference in value between a country’s imports and exports is what constitutes the balance of trade. If exports exceed imports, the country is in a trade surplus. On the contrary, if imports exceed exports, it’s a trade deficit. Homes The data on homes is very important due to the sole reason that one of the main aims for most people in life is to own a home. Additionally, a home is most likely the most expensive item a person will ever buy. So most people will work hard for a large part of their lives to own one. Because of this, housing forms an important part of the worldwide GDP calculation, so if a country's housing data is strong, this tends to also show in the country's economic performance. The biggest drivers in housing data are: Pending home sales: This number shows the number of home sales where a contract between the seller and the buyer has been signed. Existing home sales: This number measures the number and value of transactions of existing homes that were sold in a given month. New home sales: This number measures the new homes that were sold in a given month. In a strong economy, the number of new home sales tends to keep rising. Employment A country's employment rate is very important in gauging a country's economic strength. The reason is that employment is very important to a country's economic output. If people have jobs, they will spend money and contribute to economic growth. If employment is low, companies will have a shortage of workers. This will lead to lower productivity and then lower company revenues, which will then lead to companies not being able to pay back loans and even fewer jobs being available because companies can no longer sustain themselves. Also, consumer spending will decrease, and the never-ending cycle continues. The US Nonfarm Payroll employment figure is one of the most important figures that comes out on the first Friday of every month. The figure is an estimate of the number of payroll jobs at all nonfarm businesses and government agencies, the average number of hours worked per week, and the average hourly and weekly earnings. Because labour is an important economic factor of production, the unemployment rate is a good indicator of how closely economic output is to potential output, which measures economic efficiency. A falling unemployment rate is a good indicator of economic growth, while an increasing unemployment rate indicates economic decline. Fiscal and Monetary Policy Monetary policy is very important in fundamental analysis. Central banks vary in philosophy and economic stance; some central banks are 'hawkish, meaning that they prefer higher interest rates to encourage saving and investing, whereas others are 'dovish, meaning that they prefer lower interest rates to encourage consumer spending and borrowing. Economic data can help a central bank formulate its monetary policy, but there is another aspect to consider. Fiscal policy (government spending and taxation) is also relevant to the fundamental economic outlook of a country. While governments and central banks tend to be independent, they are not mutually exclusive. The fiscal actions of a government can have implications for the central bank (for example, the response of the Bank of England to the unfunded spending cuts of the UK Government in September 2022). Therefore, politics are also important. The type of government ruling a country can affect its economic outlook and, more importantly, its perception of future prospects for the country’s economy. A government that favours high spending might be seen as fiscally irresponsible. However, if the view is that this will generate more growth and a larger economy, it might be viewed positively. How fundamental analysis is used in forex trading Fundamental analysis is widely used to generate potential bull and bear markets in forex trading. Technical analysts will discuss trends; however, the medium- and longer-term fundamental outlook mostly, if not all of the time, generates the source of those trends. Fundamental traders will generally position themselves according to where they see a big trend. There might be some near-term fluctuations within the trend that can be taken advantage of using technical analysis. However, broadly speaking, a currency will move in a particular direction due to an economy’s longer-term prospects and interest rates. How traders perceive fundamental economic data is very important. On a longer-term basis, it is all about what the data means for the future outlook of the country's economy. Is a central bank on a path of raising or tightening interest rates? Does a country's government have to raise or cut taxes? Is consumer borrowing and spending too high? For short-term trading, it is all about expectations. Day traders usually look at the economic data for their signals. How did the data perform relative to market expectations? Did it beat the consensus forecast? Fundamental traders will examine how data announcements compare to the market’s estimates. Better-than-expected data should drive a stronger currency; if the data is less than expected, it tends to lower its value. Dangers when trading using fundamental analysis Though fundamental analysis can be useful in predicting the direction of currency prices, there are dangers that you need to be aware of. First, important figures like the nonfarm payroll and interest rate announcements are extremely volatile and can wipe your account instantly if you end up on the wrong side of the market. Additionally, there are times when markets are 'priced in', meaning that the move has already happened in anticipation before the fundamental data or announcement; therefore, the market is already priced in, and the market tends to go the opposite way. For example, if traders have been strongly anticipating that a country's central bank will cut interest rates, they will short the markets all the way prior to the central bank actually confirming the interest rate cut, so now the market is priced in and the market will tend to go the other way due to those traders exiting their early short positions. Forex fundamental analysis can sometimes be very complex and time-consuming. However, a general understanding of its principles will not only help you in your journey to finding consistency in the markets but will also improve your economic knowledge and awareness. BluetonaFX   
Education
by BluetonaFX
2
Types of RetestsHere you can see few examples of a Retests 📊 ⚫️ First example is a regular support and resistance retest. It occurs after price breaks this zones. Price then goes back to test previous support or resistance and this is usually good place to enter a trade. ⚫️ Second example is a supply and demand retest. ⚫️ Third example uses help of volume profile indicator. Areas of a high volume profile represent zones where potential retest can occur. ⚫️ Fourth example is a simple trendline retest. Very useful when you look for a reversal entries.
OANDA:XAUUSDEducation
by SanShone
3
Understanding Price Gaps and Their Significance 💱🌉📉 In the dynamic world of forex trading, price gaps, often referred to simply as "gaps," are a phenomenon that can significantly impact market analysis and trading decisions. Understanding what gaps are, how they occur, and their implications is crucial for any forex trader. In this comprehensive article, we'll explore the concept of gaps in forex, provide real-world examples, and shed light on their relevance in your trading journey. Unveiling Price Gaps A gap in forex refers to a sudden, substantial difference between the closing price of one candlestick and the opening price of the next. These gaps typically occur in the forex market during times when trading is closed for the weekend, such as between Friday's closing and Sunday's opening, or due to significant economic events, news releases, or geopolitical developments. Types of Price Gaps 1. Common Gap (Area Gap): This type of gap is characterized by a moderate price difference and often gets filled relatively quickly. Common gaps are generally considered less significant for trading analysis. 2. Breakaway Gap: Breakaway gaps signal a shift in market sentiment and often occur at the start of a new trend. They tend to have larger price differences and are of particular interest to technical analysts. 3. Exhaustion Gap: Exhaustion gaps occur near the end of a trend and indicate waning momentum. They are often followed by a reversal in price direction. The Significance of Gaps 1. Support and Resistance: Gaps can act as support or resistance levels. Traders often observe whether a gap gets filled (prices return to the pre-gap level) or remains open, as it can provide insights into future price movements. 2. Market Sentiment: Different types of gaps reflect varying levels of market sentiment. Breakaway gaps signal strong conviction, while exhaustion gaps suggest potential reversals. 3. Trading Strategy: Traders may incorporate gap analysis into their strategies, such as trading breakouts or reversals based on gap patterns. Gaps in forex trading are intriguing phenomena that provide valuable insights into market sentiment and potential price movements. By understanding the types of gaps and their implications, traders can make more informed decisions and better navigate the complexities of the forex market. Whether you're a seasoned trader or just starting, bridging the knowledge gap about gaps can be a game-changer in your trading journey. 📊🌄🚀 What do you want to learn in the next post?
COINBASE:BTCUSDEducation
by UnitedSignals
6
Common Pitfalls Newbie Traders Should Avoid 🌿🌐💰 Embarking on a forex trading journey is both thrilling and daunting. The potential for profit lures many, but the path to success is riddled with pitfalls, especially for new traders. In this article, we'll explore some of the biggest mistakes newcomers often make in forex trading, offering insights and real-world examples to help you steer clear of these treacherous waters. The Pitfalls and How to Avoid Them 1. Overleveraging: One of the most common blunders is overleveraging. New traders may be tempted to use high leverage to amplify their gains, but this also escalates the risk of substantial losses. Remember, leverage is a double-edged sword; while it can magnify profits, it can do the same for losses. 2. Lack of Risk Management: Neglecting risk management is another grave error. Some new traders jump into trades without setting stop-loss orders or defining acceptable risk levels. This exposes them to significant losses if the market moves against their positions. 3. Ignoring Education: Forex trading is not a gamble; it's a skill that requires continuous learning. Newbie traders often underestimate the importance of education and dive into the market ill-prepared. Lack of knowledge can lead to costly mistakes. Forex trading offers immense potential, but it's not a shortcut to riches. Newbie traders often fall into common traps like overleveraging, neglecting risk management, and lacking proper education. To succeed in the forex jungle, approach trading with caution, prioritize education, and develop disciplined risk management strategies. Remember, avoiding these pitfalls can make the difference between a costly lesson and a thriving trading career. 🌟📊🚀 Please, like this post and subscribe to our tradingview page!👍
COINBASE:BTCUSDEducation
by EliteTradingSignals
8
Learn What is Impulse & Retracement Legs | Price Action Basics Hey traders, As you asked me, in this educational post we will discuss some price action basics. No matter whether you are a fundamental trader or a technical trader you should be able to execute trend analysis. You should always know where the market is going, if it is bullish or bearish. One of the simplest ways to execute trend analysis is to perceive a price chart as a sequence of impulses and retracements. ➖ The impulse leg is a trend-following move. It is characterized by heightened movement dynamics and speed. Usually the completion point of the impulse: sets a new lower low in a bearish trend, sets a new higher high in a bullish trend. ➖ A retracement leg is a correctional movement within the trend. Its’ initial point is the completion point of the impulse or retracement leg and its completion point might be an intitial point of a new retracement leg or of a new impulse leg. In the picture above, USDJPY is trading in a bullish trend. Bullish moves are called the impulses and bearish moves are called the retracements because bearish movements complete within the ranges of the bullish impulses. In the example above, AUDCHF is trading in a bearish trend. Bearish moves are called the impulses and bullish ones are called the retracements. Usually, a retracement leg is characterized by a slow zig-zag movement. Usually the completion point of the impulse leg: sets a lower high in a bearish trend, sets a higher low in a bullish trend. Perceiving the price chart as the set of impulses, one can easily and objectively identify a global, mid-term and short-term market trend, price action trend-following, reversal and correctional patterns. Hey traders, let me know what subject do you want to dive in in the next post?
COINBASE:BTCUSDEducation
by VasilyTrader
4
Key Preparations for Successful FX Trading Launch 🚀 🛠📊💰 Embarking on your forex trading journey is an exciting endeavor, but success requires diligent preparation. Before you jump into trading on a real account, there are crucial steps you must take to set the stage for profitability and risk management. In this article, we'll guide you through essential actions to undertake before you start trading real money in the forex market. Building a Strong Foundation 1. Educate Yourself : Forex trading involves a complex mix of factors. Before diving in, equip yourself with a solid understanding of forex basics, technical and fundamental analysis, risk management, and trading strategies. Resources like online courses, books, and educational websites can be immensely helpful. 2. Demo Trading: Open a demo trading account to practice your strategies in a risk-free environment. Use this phase to refine your skills, test various approaches, and build your confidence. Aim to consistently achieve positive results before transitioning to a real account. Examples 1. Technical Analysis Proficiency: 2. Risk Management Implementation: Crucial Steps Before Real FX Trading 1. Create a Trading Plan: Define your trading goals, preferred trading style, risk tolerance, and preferred currency pairs. A clear plan will guide your decisions and prevent impulsive trading. 2. Select a Reputable Broker: Research and choose a reliable forex broker that offers competitive spreads, efficient trade execution, and strong customer support. 3. Set Up a Risk Management Strategy: Determine the maximum percentage of your trading capital you're willing to risk on a single trade. This strategy minimizes losses and helps you stay in the game long-term. 4. Start Small: Begin with a small trading account to reduce psychological pressure and manage risk. As you gain experience and confidence, you can gradually increase your position size. The journey to becoming a successful forex trader begins with meticulous preparation. By educating yourself, practicing on a demo account, mastering technical analysis, implementing risk management, and creating a solid trading plan, you position yourself for success in the competitive forex market. Remember, the more effort you invest in your preparations, the better equipped you'll be to navigate the challenges and seize the opportunities that forex trading offers. 🚀📈🛠 Please, like this post and subscribe to our tradingview page!👍
COINBASE:BTCUSDEducation
by EliteTradingSignals
8
Convergence & DivergenceOne of the important concepts that traders should understand is the difference between divergence and convergence, two terms that are often used interchangeably but have distinct meanings and implications for trading. Convergence refers to a situation where both the price of an asset and a technical indicator are moving in the same direction. For example, in a situation in which both the price of an asset and an indicator show an uptrend, there is a high probability that the trend will continue. So, here, the price and indicator CONVERGE (follow the same direction), and the trader may hesitate to trade in the opposite direction, as this is often seen as confirmation that the price movement is strong and likely to continue. Divergence refers to a situation where the price of an asset is moving in one direction while a technical indicator is moving in the opposite direction. For example, if we again consider the situation when the price of an asset shows an uptrend and, this time, the trend of a technical indicator is falling, there is a high probability of a trend reversal. So, here, the price and indicator DIVERGE (go in opposite directions). This is often seen as a warning sign that the price movement may not be sustainable and could soon reverse. To further understand the difference between convergence and divergence, let's look at some of the most commonly used technical indicators in trading: Relative Strength Index (RSI) RSI measures the strength of an asset by comparing the average gains and losses over a specified period of time. When the RSI value is above 70, it is considered overbought and is seen as likely to reverse soon. When the RSI value is below 30, it is considered oversold and is seen as likely to rebound. RSI Convergence RSI Divergence Moving Average Convergence Divergence (MACD) MACD measures the difference between two moving averages of an asset's price movements. Traders use the MACD to identify when bullish or bearish momentum is high. There is usually one short-term moving average and one long-term moving average. When the short-term moving average crosses above the long-term moving average, it is seen as a bullish signal, while a cross below the long-term moving average is seen as a bearish signal. MACD Convergence MACD Divergence Commodity Channel Index (CCI) CCI measures the difference between an asset's price change and its average price change. High positive readings indicate that the asset's price is above its average, which is seen as a bullish signal. Low negative readings indicate the asset's price is below its average, which is seen as a bearish signal. If the CCI value is above +100, this is seen as a signal of the start of an uptrend. If the CCI value is below -100, this is seen as a signal of the start of a downtrend. CCI Convergence CCI Divergence It is crucial to note that convergence and divergence are not guaranteed indicators of future price movements. Traders should use them in conjunction with other technical and fundamental analyses to aid their trading decisions. Traders should also be cautious of the fact that all indicators are lagging behind the current price action, and therefore they must be prepared to adjust their strategies accordingly. Trade safely and responsibly. BluetonaFX
Education
by BluetonaFX
4
Target Reached! EURUSD ReviewWe recently saw price bounce off our 1.0840 major support level really nicely to reach the 1.0910 level which was our forecasted TP was at. Dive into all the reasons why we forecasted the bounce to draw insightful lessons! Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘Name of third party provider). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Name of third party provider. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants. High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Forex Capital Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. FXCM EU LTD (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. FXCM Australia Pty. Limited (www.fxcm.com): ** Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com FXCM Markets LLC (www.fxcm.com): Losses can exceed deposits.
Long
by FXCM
MOST THINGS SUCCESSFUL TRADERS DO AND THE SECRET BEHIND FOREX A single formula for success for trading in the financial markets. Think of the markets as being like the ocean and the trader as a surfer. Surfing requires talent, balance, patience, proper equipment, and mindfulness of your surroundings. Would you go into water that had dangerous rip tides or was shark-infested? Hopefully not. The attitude to trading in the Forex markets is no different. By blending good analysis with effective implementation, your success rate will improve dramatically, and, like many skill sets, good trading comes from a combination of talent and hard work. Here are the four strategies to serve you well in all markets, but in this article, we will focus on the Forex markets. Approaching Forex Trading Before you trade, recognize the value of proper preparation. It's important to align your personal goals and temperament with relatable instruments and markets. For example, if you understand retail markets, then it makes sense to trade retail stocks rather than oil futures, about which you may know nothing. It also helps to begin by assessing the following three components: Given its low commissions and fees, the Forex market is very accessible to individual investors. However, before you trade, make sure you have a solid understanding of what the Forex market is and the smart ways to navigate it. Learn the basics and see real-time examples of the approaches and strategies detailed in my youtube video Time Frame The time frame indicates the type of trading that is appropriate for your temperament. Trading off a fifteen-minute chart suggests that you are more comfortable taking a position without exposure to overnight risk. On the other hand, choosing weekly charts indicates comfort with overnight risk and a willingness to see some days go contrary to your position. In addition, decide if you have the time and willingness to sit in front of a screen all day or if you prefer to do your research over the weekend and then make a trading decision for the week ahead based on your analysis. Remember that the opportunity to make substantial money in the Forex markets requires time. Short-term scalping, by definition, means small profits or losses. In this case, you will have to trade more frequently. Methodology Once you choose a time frame, find a consistent methodology. For example, some traders like to buy support and sell resistance. Others prefer buying or selling breakouts. Some like to trade using indicators, such as MACD (moving average convergence divergence) and crossovers. Once you choose a system or methodology, test it to see if it works on a consistent basis and provides an edge. If your system is reliable more than 60% of the time, you should consider that an edge, even if it's a small one. Test a few strategies, and when you find one that delivers a consistently positive outcome, stay with it and test it with a variety of instruments and various time frames. Market (Instrument) You will find that certain instruments trade much more orderly than others. Erratic trading instruments make it difficult to produce a winning system. Therefore, it is necessary to test your system on multiple instruments to determine that your system's "personality" matches the instrument being traded. For example, if you were trading the EUR/USD currency pair in the Forex market, you may find that Fibonacci support and resistance levels are more reliable. Your Forex Trading Attitude Behaviour is an integral part of the trading process, and thus your attitude and mindset should reflect the following four attributes: Patience Once you know what to expect from your system, have the patience to wait for the price to reach the levels that your system indicates for either the point of entry or exit. If your system indicates an entry at a certain level but the market never reaches it, then move on to the next opportunity. There will always be another trade. Discipline Discipline is the ability to be patient—to sit on your hands until your system triggers an action point. Sometimes, the price action won't reach your anticipated price point. At this time, you must have the discipline to believe in your system and not second-guess it. Discipline is also the ability to pull the trigger when your system indicates to do so. This is especially true for stop losses. Objectivity Objectivity or "emotional detachment" also depends on the reliability of your system or methodology. If you have a system that provides entry and exit levels that you find reliable, you don't need to become emotional or allow yourself to be influenced by the opinion of pundits. Your system should be reliable enough so that you can be confident in acting on its signals. Realistic Expectations Even though the market can sometimes make a much bigger move than you anticipate, being realistic means that you cannot expect to invest $100 in your trading account and make $1,000 each trade. Although there is no such thing as a "safe" trading time frame, a short-term mindset may involve smaller risks if the trader exercises discipline in picking trades. This is also known as the trade-off between risk and reward. Motivating Forex Trading Factors Instruments trade differently depending on the major players and their intent. For example, hedge funds vary in strategy and are motivated differently than mutual funds. Large banks that are trading in the spot currency markets usually have a different objective than currency traders buying or selling futures contracts. If you can determine what motivates the large players, you can often align that knowledge to your advantage. Alignment Pick a few currencies, stocks, or commodities, and chart them all in a variety of time frames. Then apply your particular methodology to all of them and see which time frame and instrument align with your system. This is how you discover alignment within your system. Repeat this exercise regularly to adapt to changing market conditions. Implementing a Forex Trading Strategy There is no such thing as only profitable trades, just as no system is a 100% sure thing. Even a profitable system, say with a 65% profit-to-loss ratio, still, has 35% losing trades. Therefore, the art of profitability is in the management and execution of the trade. Risk Control In the end, successful trading is all about risk control. Try to get your trade in the correct direction right out of the gate. Evaluate your trading system, make adjustments, and try again. Often, it is on the second or third attempt that your trade will move in the right direction. This practice requires patience and discipline to achieve success. The Bottom Line Trading is nuanced and requires as much art as science to execute successfully, which means that there is only a profit-making trade or a loss-making trade. Warren Buffet said that there are two rules in trading: Rule 1: Never lose money. Rule 2: Remember Rule 1.1 Stick a note on your computer that will remind you to take small losses often and quickly rather than wait for the big losses.
Education
by wakaman
Demo vs Live TradingWhen most new traders finally switch over from demo to live trading, they usually believe that their demo trading results can easily be replicated on a live account. Because of this misconception, many are left frustrated and demoralised when they finally realise that this is far from the case. Here are a few reasons why: Real money and real emotions Demo is risk-free Chasing losses on a live account Cutting profits short We have discussed the main differences between demo and live trading, but will delve further into the psychological barriers when live trading and how to overcome them in a future post. Stay tuned! BluetonaFX
Education
by BluetonaFX
4
Price BreakoutsHello traders 📊 On this picture here you can see 3 types of breakouts. On the left side you can see breakout examples in an downtrend and on the right side, you can see examples in an uptrend. Breakouts occur when price breaks a certain zone (support or resistance) and in many cases breakouts represent very important moment. This is usually good time to look for opportunity to trade. First type of breakout is "strong breakout". They occur once the price breaks certain zone with a strong candle and continue to move without pullback. Second type of breakout is "retest". Retests are very common and extremely useful. Some of the best trading opportunities are when retest occurs. This means that price went back to test previously broken zone and this is usually good place to buy or sell. Third type of breakout is "fake-out". This is the worst scenario as price quickly goes back after a breakout. Traders usually enter after a breakout, but once fake-out occurs, traders lose as price goes back quickly to hit stop loss. We can not know exactly when fake-out will occur, but the best way to protect your account from this is to wait for the candle to close and to avoid to trade when big news are about to release. Have a great day!
FOREXCOM:XAUUSDEducation
by SanShone
10
TYPES OF CURRENCY PAIRSWhen trading Forex, it is essential to know about the different types of currency pairs, as some pairs are much riskier to trade than others, especially for those with minimal trading experience. Major Currency Pairs Before we discuss major currency pairs, we should first list the major currencies individually. The eight major currencies are: US dollar (USD) Euro (EUR) British pound (GBP) Japanese yen (JPY) Swiss franc (CHF) Canadian dollar (CAD) Australian dollar (AUD) New Zealand dollar (NZD) As listed above, there are eight major currencies but there are only seven major pairs because a major pair includes the U.S. dollar. Major pairs are the most traded currency pairs on the forex market. They account for the highest average trade volume and have the most liquid markets, as well as the lowest risks and spreads offered by brokers. The seven major currency pairs are: EUR/USD – Euro / US dollar GBP/USD – British Pound / US dollar USD/JPY – US dollar / Japanese yen AUD/USD – Australian dollar / US dollar USD/CHF – US dollar / Swiss franc USD/CAD – US dollar / Canadian dollar NZD/USD – New Zealand dollar / US dollar Note that AUD/USD and USD/CAD are sometimes also referred to as commodity currencies. Minor Currency Pairs Minor currency pairs (also known as cross pairs or crosses) always include two major currencies but not the U.S. dollar. Crosses are not as popular and as highly traded as the major pairs. This means they can be riskier than a major pair and will attract wider spreads from brokers. Their liquidity can also be low at times, presenting a challenge for inexperienced traders in a thin volume environment. Here are a few examples of minor currency pairs: EUR/GBP – Euro / British pound EUR/JPY – Euro / Japanese yen GBP/JPY – British pound / Japanese yen AUD/NZD – Australian dollar / New Zealand dollar NZD/JPY – New Zealand dollar / Japanese yen GBP/CAD – British pound / Canadian dollar Exotic Currency Pairs Exotic currency pairs consist of a major currency paired with a currency from a developing and emerging nations as well as certain developed nations. These currency pairs trade in a far less liquid market compared to the majors and minors as they are traded less frequently. This causes their spreads to be much higher than those of the major and minor pairs. Here are a few examples of exotic currency pairs: EUR/TRY – Euro / Turkish lira USD/ZAR – US dollar / South African rand AUD/MXN – Australian dollar / Mexican peso USD/HKD – US dollar / Hong Kong dollar NZD/THB – New Zealand dollar / Thai baht CAD/NGN – Canadian dollar / Nigerian naira Risks and Spreads Major currency pairs have the most liquidity and as a result, attract lower spreads, whilst minor and exotic pairs are much riskier and attract wider spreads. Liquidity & Volatility Due to high liquidity in the major currency pairs market, they are consistent and predictable, whilst minor and exotic pairs can be volatile and extremely unpredictable at times. Please also see images below for visual examples of the difference in price behaviour of the different pair types. MAJOR PAIR & CROSS PAIR MAJOR PAIR & EXOTIC PAIR CROSS PAIR & EXOTIC PAIR Which is the best currency type to trade for new traders? We will be a posting an educational article on this in the future delving into details regarding this question. Trade safely and responsibly. BluetonaFX
Education
by BluetonaFX
5