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Interesting / educational trading articles

Postby foreman01 » Fri Sep 25, 2009 11:02 am

If you find something that makes you go "aha!" perhaps you would post it here.

I found this one this morning. It expalins why when Resistance (or support) is broken there is often a large momentum bar.

http://www.mrswing.com/articles/Lessons ... Stops.html
Last edited by foreman01 on Thu Oct 08, 2009 1:01 pm, edited 1 time in total.

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Postby foreman01 » Mon Sep 28, 2009 4:04 pm

http://www.fx360.com/commentary/kathy/2 ... ncies.aspx

Interesting analysis by Kathy Lien


edit: I think primarily it is her comments about the Swiss gvm likely to intervene if the swissie drops below 1.5000 (EUR/CHF I think she is referring to) that intrigues me. Kathy has been pointing this out for a while.
...

EDIT: two days after this post, Swiss gvm did indeed intervene sending eur/chr up about 150 points in a few minutes. (sure glad I had bought at 2$ a pip the night before :-)

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Postby foreman01 » Wed Oct 07, 2009 6:23 pm

Trading the 24/5 Forex Waves for Profit - article

"Just like surfing the ocean waves, there is a right time of day to catch the incoming or outgoing Forex tide waves. . . . "

Interesting article. Don't know how accurate, but does seem to explain why things happen at certain times of day and reverse at others.

http://news.forexdistrict.com/2009/colu ... or-profit/

I've quoted it here in case it disappears from the hosting site
Posted on August 29, 2009.

Trading the 24/5 Forex Waves for Profit

Just like surfing the ocean waves, there is a right time of day to catch the incoming or outgoing Forex tide waves. When the time comes and ?the surf is up?, there is also an exact right moment to harness the maximum power of the individual wave as it approaches (on the cusp of breaking) and rushes in to shore. This is what support and resistance is in Forex, why it is so important, and why knowing where these levels are, having them plotted on your charts and trading them, and only them, is critical to trading Forex successfully.

The 24 hour cycle in the trading day has very distinct moments of opportunity to profit due to higher liquidity (more market participants with deep pockets) than other times. Arriving late to the wave breaking party is something a trader learns to avoid. Arriving on time or just ahead of time has tremendous benefits, including reducing the risk of trade failure while simultaneously maximizing the potential to profit in full from a given move. Catching the wave as it breaks and riding it in to profit shores is what makes money in this market. Many other lesser waves may come and go. A good surfer knows that it is worth by-passing the distractions while waiting for the best waves.

Forex traders often keep very strange hours due to the wave-trading windows of opportunity (especially the US East Coast traders, often up in the middle of the night US time to catch the London/Europe wave).

This article is a brief summary of the global trading sessions in approximate order of wave-trading priority. Also included are several of the regular special events in the currency calendar year.

In approximate order of priority ?

1. London/Europe Open (Tide Coming In). This occurs from around 6.00 am London time, increasing in velocity by 7.00 am and in full swing by 8.00 am. In a bull market environment, Europe frequently sells the US Dollar down hard during this period of time while buying up their own currencies (subject to news data releases due and the US futures data). Being on board long at the beginning of this session (or when this session has finished selling EU or GU down in the wake of news and there is evidence of support coming in), is critical if market is going to head north that day. The price action begins here and generally continues tracking through until the US equity markets open. In a bear market, the reverse occurs, with price heading south with force during this time.

2. US Open. (Rip Tide Potential Beware). This session commences at 7am US ET. This is ?Game On? time when the serious counter-trend challenge often begins. The US commences work for the day ? it is the time of day when the USD is most likely to find or extend its support, or conversely, in a bull market, the US traders add their weight to the Dollar selling pressure. An hour earlier, at 6.00 am US EDT, the LIBOR rates (London Interbank Offered Rate ? the short term interest rate at which banks loan to each other for the next 24 hours) are set in London. It happens on occasion that once the daily LIBOR rates are set (especially on a Friday, ahead of the weekend LIBOR rates), a given currency that has been performing very well may be sold off hard immediately after the LIBOR fixings. Some traders prefer not to trade on Fridays for this and other reasons (including the Quad Witching* every quarter) related to volatility and unpredictability ahead of the weekend.

3. US Equities Pre-Open. (Tide Wave Pre-Peak). Typically in a bull market, equity markets do much of their buying in the first 1 or 2 hours of market open. This speculation is often reflected in the currency market as it tracks the futures data. The majors often gain ground at the USD?s expense during this time. Red futures in the time slot pre-open, of course, indicate that market may go short that day, hence look to trade the majors short if so.

4. US Close. (Tide Going Out). Typically this occurs from around 7.30 pm US EDT, picking up speed around 9.00 pm. The US traders are bedding down the Dollar for the night, often buying it up at this point through until around midnight. Usually a good time to short the majors, not normally a good time to open a long position. After midnight, Asia then takes over, often reversing this move in anticipation of the upcoming Europe session.

5. Overlap US and Europe while the Dow is trading. (Tide Peak). This time of day is the point when market is at its most liquid. All major players are present and participating fully. This often results either in tight grid-lock between bulls and bears, or when sentiment shifts as a result of good/bad earnings or good/bad economic data, in forceful moves in either direction.

New traders needing a free international digital time clock that can be set to 4 international time zones (e.g. London, Berlin, New York, Tokyo etc) can obtain one from here (scroll down for the free download version, very good) Free Qlock

Special Regular Events

Non-Farm Payrolls (NFP). is the premier event in the Forex monthly calendar, reported on the first Friday of each month. It is often characterized by high volatility (100 pips +/-) that frequently goes in one direction first (on immediate data release) but often retraces with equal force in the other direction. Potentially a very lucrative trading opportunity. Check your broker spreads before trading, spreads often widen considerably during this event.

End of Year Closing of Books. Typically, in December of each year, institutional trading houses close out their books for the year to log profit. This can generate extreme volatility in the currency market. If the USD has put in a good year for example, this is the time of year when it will be sold down hard regardless of fundamentals. Potentially very lucrative trading opportunities.

*Quad Witching

The day on which contracts for stock index futures, stock index options, stock options and single stock futures (SSF) all expire. Quadruple witching days occur on the third Friday of March, June, September and December. Volatility in the currency market can result due to traders closing out or adjusting positions to meet cash contract obligations due that day or to re-position for the new contract period. Something to note and forward schedule in your diary.

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Postby foreman01 » Thu Oct 08, 2009 12:45 pm

How Often Do You Do It?
http://news.forexdistrict.com/2009/colu ... you-do-it/

Guidelines and checklist from (so he says) a 2-5% daily profit trader.

Its a good read.


How Often Do You Do It?

Posted on August 29, 2009.
How Often Do You Do It?

Is it 12-15 times a day? Or just 3-4 times a day?
Maybe just once a day, once a week or once a month?

One of the things that attracted me to Forex was hearing about the acquaintance of a colleague who quit his job, moved into trading Forex full time after several years of trading successfully part-time. His seed capital for full-time trading was $10,000. His position size never varied. His average return was $30,000 per month. He took the excess out as self-payment, put it into other investments, and continued to trade with his $10k seed capital only in play. Smart man.

One of the great joys of Forex is that just a little goes a very long way. A trade well-timed, well-executed, on the cusp of a wave, is all it takes to keep your account balance looking healthy and growing daily. Just a 5% return per day builds up in a hurry. Over the space of one month, using the same position sizing for each trade, your return on investment is 100%.

Establishing a profit percentage per day target, whether it?s 2%, 5%, 10% or more (let?s try not to be greedy), is one means of helping to focus your attention on the task. When you reach your profit % target, put your tools down and go home, enjoy life, your job is done for the day. Tomorrow is another ?work? day, there?s always another train leaving, another wave coming tomorrow.

Choosing the right time of day and the right set of circumstances to execute a trade is important. Riding the wave in and out at market?s most liquid times, the moments of greatest potential velocity, helps. This occurs at the beginning of the Europe session (from 6am London time), the beginning of the US session (from 7am US ET), the overlap of the Europe/US sessions (when the Dow is trading) and as the US session closes.

Exercising the discipline to only trade when the deck is stacked as much as possible in your own favour, matters. One way to help with this is to write up a trade entry check-list, print it out in large letters, and stick it in plain view right next to your trade station. Before you hit the trigger, have you met your entry criteria?

This is a sample checklist below (the one I use for my trading style and signals, design your own to suit).

Trade Entry Checklist

1. Oscillator on floor or ceiling across 15M, 5M and 1M time frames.

2. Candles have good supporting evidence (wicks, hammers, engulfing).

3. Is price at Support/Resistance? Check fibs (daily and hourly).

4. Check Futures data (red or green? Price going up or down?)

5. Check News data due.

6. Check USD/JPY fibs and oscillator.

7. Check USD/CHF fibs and oscillator.

8. Check 50% retracement levels.

9. Review of daily, hourly candles.

10. Review of EMA?s.

11. Check time of day.

This post was written by:

Jade Gate - who has written 14 posts on Forex District.

Independent Analyst / Trader ? All copyrights reserved. Permission required.

Contact the author
? Levelling Out the Forex Playing Field
The Hidden Curse of Bias ?
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Bill [Moderator] 1 month ago
We all know this is not possible even for the most seasoned trader. Some days is just sideways and no money can be made. The correct philosopy (for those who want to earn and keep money) is:
Take what u get, not what you deserve.

You think u deserve 5% a day from forex trading? Be my guest. You might leave empty handed, or worse, lost your hands.

Take what u can get, not what you think you deserve
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Jade [Moderator] 1 month ago in reply to Bill 1 person liked this.
Hi there Bull,

Sounds like you might better focus attention on the stock market if what you are looking for is small returns. Forex is for venture risk capital only, not the bread and butter earnings of the stock market or cash interest rates.

If a trader, once through the apprenticeship, cannot pull a minimum of 2% per day out the Forex market, something is wrong. Most days I reach my 5% profit target with ease (some days more, some days a bit less), after which I then trade other instruments. This is my reality, day in, day out. I take out of Forex whatever realistic and safe trading opportunities it provides, as do other successful traders. Arriving at the point of trading competence in Forex is not simple or easy. One needs to work hard at it.

Happy and safe trading.
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Rene [Moderator] 1 month ago
THANKS VERY MUCH FOR SHARING ALL THE VALUABLE INFO. I HAVE READ SEVERAL OF YOUR ARTICLES AND I HAVE FOUND A GREAT DEAL OF VALUE IN THEM. COULD YOU ELABORATE ON THE FUTURES AS INDICATOR (EX. WHICH PAIRS WILL BE INFLUENCED BY FUTURES) I KNOW EUR JPY IS INFLUENCED BY DOW JONES.



THANK YOU.
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Jade [Moderator] 1 month ago in reply to Bill
Hi Rene, glad to hear the info has been of assistance. All the currencies are affected by the futures data. The futures sit on the cutting edge of risk appetite, as does the currency market. Forex currencies are an inter-connected system within themselves, and a system which is itself closely inter-related with other market instruments.

The pair most affected by the Dow is the AUD/USD - this often (but not always) trades in lock-step with the Dow and the S & P futures.
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Tunji [Moderator] 1 month ago
Jade,



I?ll have to agree with Bull. Forex is just like every other investment vehicle ? regardless of the leverage opportunities, you still need to be respectful of the market and don?t force it to dance to your tune. Expecting a 5%, 2%, or even any percentage of profit at all cost per day seems to me that you go into trading everyday believing the market has to obey you. That, to me, is suicidal for a trader/investor committed toward growing and sustaining his/her wealth for a long time.

Forex is profitable, but it still goes by the rules of ?NO HOLY GRAIL? and smartly ?CUT LOSSES & LET PROFITS RUN.? Patience and Discipline cannot be overemphasized in a successful trading career.



However, you made this statement I agree with: ?Exercising the discipline to only trade when the deck is stacked as much as possible in your own favour, matters.?



Enjoy your week.
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Jade [Moderator] 1 month ago in reply to Bill
Hi Tunji, One of the benefits in establishing a profit % target is that it focusses the trader's mind on the job - making money. Some traders get very hooked on attempting to capture all of a move, the market ends up "owning" them, instead of the other way around, i.e. the market exists to serve you and your income generation needs. How much an individual trader can extract out of the market is contingent upon timing and opportunity. As mentioned elsewhere, market will do it's own thing regardless of what we as traders might expect or want. What matters is positioning yourself to capture the opportunities that it does provide, on a daily basis. Some days I reach my % target and can see that there is a lot more to come, so I may stay in longer than usual. Other days, scraping 2% is a struggle. The good thing is that market doesn't "own" me the way it used to. I "own" it, and work it for my own benefit.
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Pete [Moderator] 1 month ago
Hi Jade,

What do you mean by 50% retracements, number 8.
Are those Fibo measures? or retracement of the moves

Thank you
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Jade [Moderator] 1 month ago in reply to Bill
Hi Pete,



Yes, they can be measured by using the fib indicator. Plotting both daily and hourly fibs (updating the hourly as the session progresses). You can also simply do the math, subtract high from low, divide by 2 and watch what happens to price around this level.

One trading technique that uses the 50% retrace for entry/exit signals is Median Line Forks. The premise is that price will either exhaust itself around the 50% mid-point or cross over the mid-point in which case, price generally continues in that direction until it hits the next line in the fork.
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Hercs [Moderator] 1 month ago
Hi Jade,

Why is the JPY and CHF Fibs and Oscillators important if I trade the Cable for instance?

Would appreciate your reply.

Best regards
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Jade [Moderator] 1 month ago in reply to Bill
Hi Hercs,

USD/JPY and USD/CHF matter because these two currencies are the primary drivers of price action on all the others. EUR/USD is very closely tied to traffic on USD/CHF (they are the mirror image opposites of each other, price moves on the Swissy and the Euro/Usd immediately follows suit.) GBP/USD is also influenced by traffic on the Swissy, but also by traffic on the USD/JPY. GBP/USD (also known as Cable) is also influenced by the EUR/GBP cross, especially when Europe is in session before the US begins work for the day. Checking all 3 before you trade Cable helps to eliminate the error rate.

Traders buy the USD/CHF and buy the Yen (i.e. sell USD/JPY) when risk aversion kicks in. Sometimes price can reach a support/resistance level on GBP (or EU) but because price has not yet reached support/resistance on the related Swissy or Yen currencies, Cable or Euro may not respond (or price may overshoot before recovering.) Checking USD/CHF and USD/JPY is one means to further "cover" yourself before hitting the trade entry trigger.

There are times when the Euro and Cable do respond at their own support/resistance levels regardless of what is going on with the Swissy or Yen, but checking these first just gives you a better handle on some of the variables influencing price action on the other majors.
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zade23 [Moderator] 18 hours ago
Hi Jade, thanks for your excellent advice and strategies used in trading the Forex Market. Further to your comment about

"USD/JPY and USD/CHF matter because these two currencies are the primary drivers of price action on all the others"

what effect does this have on the cable? is it a mirror opposite just as the EUR/USD?

Thanks

Zade

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Postby foreman01 » Tue Apr 29, 2014 3:05 pm

Some good stuff over here at Order Flow. I like this patterns article because real charts are used to support the traditional simplified drawings. And yes Bern, I have finally been making some money.

http://www.orderflowtrading.com/ForexNe ... terns.aspx

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Postby Jalarupa » Tue Apr 29, 2014 3:10 pm

WOOT!

I'm happy to hear this Randy!

We must Skype again soon :)
"our deepest fear is not that we are inadequate... our deepest fear is that we are powerful beyond measure... It is our light, not our darkness that most frightens us..."

I trade using <<FX SYNERGY>>

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Postby TheRumpledOne » Wed Apr 30, 2014 4:43 am

Thanks for sharing foreman01
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby TheRumpledOne » Wed Apr 30, 2014 4:45 am

Thanks for sharing foreman01
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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Re: Interesting / educational trading articles

Postby tiptip » Fri Jun 10, 2016 7:09 pm

would love to get articles that will build my skills and strategies since i want to be a successful trader. any recommendation?

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Re: Interesting / educational trading articles

Postby John S. » Fri Jun 10, 2016 8:17 pm

tiptip wrote:would love to get articles that will build my skills and strategies since i want to be a successful trader. any recommendation?


Yes, get off this board and every other board immediately. WAY TOO MUCH BS. Develop your own strategy that is testifiable, verifiable,repeatable. Anything other than that is gambling.

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